Hibbett Sports 2011 Annual Report Download - page 45

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Our plans allow for a variety of equity awards including stock options, restricted stock awards, stock appreciation
rights and performance awards. As of January 29, 2011, we had only granted awards in the form of stock options, restricted
stock units (RSUs) and performance-based units (PSUs) to our employees and in the form of stock options to our Board
members. The annual grant made for Fiscal 2011, Fiscal 2010 and Fiscal 2009 to employees consisted solely of RSUs. We have
also awarded PSUs to our Named Executive Officers (NEOs) and expect the Compensation Committee of the Board will
continue to grant PSUs to our NEOs in the future. The terms and vesting schedules for stock-based awards vary by type of grant
and generally vest upon time-based conditions. Upon exercise, stock-based compensation awards are settled with authorized but
unissued company stock. On March 17, 2009, the Compensation Committee of the Board awarded a grant of 46,800 non-
qualified stock options to our then Chief Executive Officer (now Executive Chairman) that vest equally over four years and have
an eight-year life.
The compensation cost that has been charged against income for these plans was as follows (in thousands):
January 29, January 30, January 31,
2011 2010 2009
Stock-based compensation expense by type:
Stock options 792$ 1,799$ 1,968$
Restricted stock unit awards 3,937 2,278 1,482
Employee stock purchase 67 80 96
Director deferred compensation - - 10
Total stock-based compensation expense 4,796 4,157 3,556
Income tax benefit recognized 1,666 1,277 941
Stock-based compensation expense, net of income tax 3,130$ 2,880$ 2,615$
Fiscal Year Ended
Stock-based and deferred stock compensation expenses are included in store operating, selling and administrative
expenses. There is no capitalized stock-based compensation cost.
The income tax benefit recognized in our consolidated financial statements, as disclosed above, is based on the amount
of compensation expense recorded for book purposes. The actual income tax benefit realized in our income tax return is based on
the intrinsic value, or the excess of the market value over the exercise or purchase price, of stock options exercised and restricted
stock unit awards vested during the period. The actual income tax benefit realized for the deductions considered on our income
tax returns for the fiscal year ended January 29, 2011, was from option exercises and restricted stock releases and totaled $4.4
million. The actual income tax benefit realized for the deductions considered on our income tax returns for the fiscal years ended
January 30, 2010 and January 31, 2009, was from option exercises and totaled $0.5 million and $0.6 million, respectively.
Stock Options
Stock options are granted with an exercise price equal to the closing market price of our common stock on the date of
grant. Vesting and expiration provisions vary between equity plans, but options typically vest over a four- or five-year period in
equal installments beginning on the first anniversary of the grant date and typically expire on the eighth or tenth anniversary of
the date of grant. Grants awarded to outside directors under both the DEP and Deferred Plan vest immediately upon grant and
expire on the tenth anniversary of the date of grant.
Following is the weighted average fair value of each option granted during the fiscal year ended January 29, 2011. The
fair value was estimated on the date of grant using the Black-Scholes pricing model with the following weighted average
assumptions for each period:
July 31, October 30,
2010 2010
Grant date Mar 17 Mar 31 Jun 30 Sep 30 Dec 1 Dec 31
Exercise price $25.86 $25.58 $23.96 $24.95 $34.66 $36.90
Weighted average fair value at date of grant $10.17 $10.12 $9.76 $9.91 $13.60 $14.40
Expected option life (years) 4.63 4.63 4.63 4.67 4.67 4.67
Expected volatility 43.54 43.55 46.60 45.87 44.59 43.61
Risk-free interest rate 2.19% 2.34% 1.64% 1.18% 1.51% 1.85%
Dividend yield None None None None None None
Quarter Ended
2010
May 1,
2011
January 29,