FORM DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement.
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)).
þ Definitive Proxy Statement.
o Definitive Additional Materials.
o Soliciting Material Pursuant to §240.14a-12.
Dicks Sporting Goods, Inc.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies: |
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Aggregate number of securities to which transaction applies: |
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Per unit price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it
was determined): |
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Proposed maximum aggregate value of transaction: |
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Total fee paid: |
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing. |
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Amount Previously Paid: |
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Form, Schedule or Registration Statement No.: |
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Filing Party: |
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Date Filed: |
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NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 3, 2009
To our Stockholders:
The 2009 annual meeting of stockholders of Dicks Sporting
Goods, Inc., a Delaware corporation (the Company),
will be held at the Hyatt Regency, 1111 Airport Boulevard,
Pittsburgh, PA 15231,
(724) 899-1234,
June 3, 2009, beginning at 1:30 p.m. local time. At
the meeting, the holders of the Companys issued and
outstanding Class B common stock and common stock will act
on the following matters:
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(1)
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Election of three (3) Class A Directors, each for
terms that expire in 2012;
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(2)
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Ratify the appointment of Deloitte & Touche LLP as the
Companys independent registered public accounting
firm; and
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(3)
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Any other matters that properly come before the meeting.
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All holders of record of shares of Dicks Sporting
Goods Class B common stock and common stock (NYSE:
DKS) at the close of business on April 6, 2009 are entitled
to vote at the meeting and any postponements or adjournments of
the meeting.
A list of stockholders entitled to vote at the meeting may be
examined by any stockholder, for any purpose germane to the
meeting, at 300 Industry Drive, RIDC Park West, Pittsburgh, PA
15275 beginning on May 20, 2009. To assure your
representation at the 2009 Annual Meeting, you are urged to cast
your vote, as instructed in the Notice of Internet Availability
of Proxy Materials, as promptly as possible. You may also
request a paper proxy card to submit your vote by mail, if you
prefer.
By order of the Board of Directors,
Edward W. Stack
Chairman of the Board
April 20, 2009
Pittsburgh, PA
TABLE OF
CONTENTS
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A-1
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i
300 Industry Drive, RIDC Park West
Pittsburgh, Pennsylvania 15275
PROXY
STATEMENT
This proxy statement contains information related to the annual
meeting of stockholders of Dicks Sporting Goods, Inc., a
Delaware corporation, to be held at the Hyatt Regency, 1111
Airport Boulevard, Pittsburgh, PA 15231,
(724) 899-1234,
June 3, 2009, beginning at 1:30 p.m. local time, and
at any postponements
and/or
adjournments thereof. In accordance with rules recently adopted
by the SEC, instead of mailing a printed copy of our proxy
materials to each stockholder of record, we are furnishing proxy
materials to our stockholders on the Internet. If you received a
Notice of Internet Availability of Proxy Materials by mail, you
will not receive a printed copy of the proxy materials other
than as described below. Instead, the Notice of Internet
Availability of Proxy Materials will instruct you as to how you
may access and review all of the important information contained
in the proxy materials. The Notice of Internet Availability of
Proxy Materials also instructs you as to how you may submit your
proxy over the Internet. If you received a Notice of Internet
Availability of Proxy Materials by mail and would like to
receive a printed copy of our proxy materials, you should follow
the instructions for requesting such materials included in the
Notice of Internet Availability of Proxy Materials.
It is anticipated that the Notice of Internet Availability of
Proxy Materials is first being sent to stockholders on or about
April 20, 2009. The proxy statement and the form of proxy
relating to the 2009 Annual Meeting are first being made
available to stockholders on or about April 20, 2009. In
accordance with SEC rules, the website, www.proxydocs.com/dks,
provides complete anonymity with respect to a stockholder
accessing the website.
ABOUT THE
MEETING
What is
the purpose of the annual meeting?
At our annual meeting, stockholders will act upon the matters
outlined in the notice of meeting on the cover page of this
proxy statement, including the election of three
(3) Class A Directors, ratification of our independent
registered public accounting firm for fiscal 2009 and to act on
any other matter to properly come before the meeting. In
addition, management will report on the performance of the
Company and respond to questions from stockholders.
Who is
entitled to vote at the meeting?
Only stockholders of record at the close of business on
April 6, 2009, the record date for the meeting, are
entitled to receive notice of and to participate in the annual
meeting. If you were a stockholder of record on that date, you
will be entitled to vote all of the shares that you held on that
date at the meeting or any postponements or adjournments of the
meeting.
What are
the voting rights of the holders of Dicks Sporting Goods
common stock and Class B common stock?
Holders of our common stock and Class B common stock have
identical rights, except that holders of the common stock are
entitled to one (1) vote for each share held of record and
holders of Class B common stock are entitled to ten
(10) votes for each share held of record on all matters
submitted to a vote of the stockholders,
1
including the election of directors. Stockholders do not have
cumulative voting rights. Holders of common stock and
Class B common stock vote together as a single class on all
matters presented to the stockholders for their vote or
approval, except as may otherwise be required by Delaware law.
Who can
attend the meeting?
Subject to space availability, all common stockholders and
Class B stockholders as of the record date, or their duly
appointed proxies, may attend the meeting. Since seating is
limited, admission to the meeting will be on a first-come,
first-served basis. Registration will begin at
1:00 p.m. If you attend, please note that you may be
asked to present valid picture identification, such as a
drivers license or passport. Cameras, recording devices
and other electronic devices will not be permitted at the
meeting.
Please also note that if you hold your shares in street
name (that is, through a broker or other nominee), you
will need to bring a copy of a brokerage statement reflecting
your stock ownership as of the record date and check in at the
registration desk at the meeting.
What
constitutes a quorum?
The presence at the meeting, in person or by proxy, of the
holders of record of the issued and outstanding shares of
capital stock representing a majority of the votes entitled to
be cast at the meeting constitutes a quorum, permitting the
meeting to conduct its business. As of the record date,
87,121,122 shares of common stock representing the same
number of votes and 25,251,554 shares of Class B
common stock representing 252,515,540 votes were issued and
outstanding. Thus, the presence of the holders of common stock
or Class B common stock or the combination thereof
representing at least 169,818,332 votes will be required to
establish a quorum.
Proxies received but marked as abstentions and broker non-votes
will be included in the calculation of the number of votes
considered to be present at the meeting to establish a quorum,
but will not be deemed a vote cast with respect to the matters
to be acted upon at the meeting.
How do I
vote?
As set forth in the Notice of Internet Availability of Proxy
Materials being mailed to all stockholders, you may cast your
vote online at www.proxydocs.com/dks. The Notice of Internet
Availability of Proxy Materials also provides three ways in
which you may request a paper copy of the proxy statement and
accompanying proxy card- via the internet
(www.investorelections.com/dks), telephone ((866)
648-8133) or
email (paper@investorelections.com). If you vote online or
request, receive, complete and return the paper proxy card to
the Company, it will be voted as you direct. Further, if you are
a registered stockholder and attend the meeting, you may deliver
your completed proxy card in person. If you hold your shares in
street name through a brokerage or other nominee,
follow the instructions on the Notice of Internet Availability
of Proxy Materials provided by your broker.
Can I
change or revoke my vote after I vote online or return my proxy
card?
Yes. Even after you have submitted your proxy online or via the
mail, you may change or revoke your vote at any time before the
proxy is exercised by filing with the Corporate Secretary of the
Company either a notice of revocation or a duly executed proxy
bearing a later date. The powers of the proxy holders will be
suspended if you attend the meeting in person and so request,
although attendance at the meeting will not by itself revoke a
previously granted proxy.
What are
the Boards recommendations?
Unless you give other instructions when you vote, the persons
named as proxy holders will vote in accordance with the
recommendation of the Board of Directors. The Boards
recommendation is set forth together with the description of
each item in this proxy statement. In summary, the Board
recommends a vote:
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for election of the nominated slate of Class A
Directors (see Item 1); and
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for ratification of Deloitte & Touche LLP as
our independent registered public accounting firm for fiscal
2009 (see Item 2).
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With respect to any other matter that properly comes before the
meeting, the proxy holders will vote as recommended by the Board
of Directors or, if no recommendation is given, in their own
discretion.
What vote
is required to approve each item?
Election of Directors. The affirmative vote of
a plurality of the votes cast at the meeting is required for the
election of directors. A properly executed proxy marked
WITHHOLD with respect to the election of one or more
directors will not be voted with respect to the director or
directors indicated, although it will be counted for purposes of
determining whether there is a quorum.
Other Items. For any other item, including
ratification of our independent registered public accounting
firm, the affirmative vote of a majority of the votes
represented in person or by proxy and entitled to vote on the
item will be required for approval. A properly executed proxy
marked ABSTAIN with respect to any such matter will
not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an
abstention will have the effect of a negative vote.
If you hold your shares in street name through a
broker or other nominee, your broker or nominee may not be
permitted to exercise voting discretion with respect to some of
the matters to be acted upon. Thus, if you do not give your
broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining
the number of shares necessary for approval. Shares represented
by such broker non-votes will, however, be counted
in determining whether there is a quorum.
We are a
controlled Company under the New York Stock Exchange
rules.
Because as of March 31, 2009, Edward W. Stack, our Chairman
and Chief Executive Officer, controlled approximately 67% of the
combined voting power of our common stock and Class B
common stock, we are a controlled company under the
New York Stock Exchanges Corporate Governance Standards,
and we have chosen to take advantage of all of the exemptions
available to controlled companies under
Section 303A of the New York Stock Exchange Corporate
Governance Standards.
3
STOCK
OWNERSHIP
Who are
the largest owners of the Companys stock?
Based on a review of filings with the SEC and information known
to us about our Class B common stock, the following are the
non-management beneficial holders of more than 5% of the
outstanding shares of Dicks Sporting Goods, Inc.
(i) common stock (or Class B common stock or stock
options that are convertible into or exercisable for more than
5% of the outstanding shares of our common stock within
60 days) or (ii) Class B common stock, as of
March 31, 2009:
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Percentage
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Amount and Nature
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Percentage
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of Class B
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Name and Address
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of Beneficial
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of Common
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Common
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Title of Class
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of Beneficial Owner
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Ownership(3)
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Stock(4)
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Stock(4)
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Common Stock
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Ronald Baron(1)
767 Fifth Avenue,
49th Floor
New York, NY 10153
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11,066,357 shares of common stock; shared power to vote and
direct disposition(1)
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12.70
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%
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Common Stock
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Wellington Management Company, LLP(2)
75 State Street
Boston, MA 02109
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5,831,279 shares of common stock(2)
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6.69
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%
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Class B Common Stock
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Frederick C. Heichemer & Nancy M. Heichemer(5)
c/o Dicks
Sporting Goods, Inc. 300 Industry Drive,
RIDC Park West
Pittsburgh, PA 15275
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1,270,000 shares of Class B common stock sole power to vote
and direct disposition
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(6
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5.03
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Common Stock and Class B Common Stock
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Denise Stack(5)
c/o Dicks
Sporting Goods,
Inc. 300 Industry Drive,
RIDC Park West
Pittsburgh, PA 15275
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4,000,000 shares of Class B common stock no voting power;
sole power to direct disposition; 3,350,000 shares
underlying stock options; no voting power; sole power to direct
disposition(7)
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7.78
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15.84
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%
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Share ownership amounts are based on figures set forth in
Amendment No. 4 to Schedule 13G, filed by Baron
Capital Group, Inc., BAMCO, Inc., Baron Capital Management,
Inc., Baron Growth Fund and Ronald Baron on February 12,
2009. Of the shares beneficially owned, Ronald Baron has shared
power to vote with respect to 9,767,857 shares and shared
power to direct disposition with respect to
11,066,357 shares of common stock. Amount includes
11,066,357 shares of common stock owned by Baron Capital
Group, Inc., 10,471,600 shares of common stock owned by
BAMCO, Inc., 594,757 shares of common stock owned by Baron
Capital Management, Inc. and 5,000,000 shares of common
stock owned by Baron Growth Fund. BAMCO, Inc. and Baron Capital
Management, Inc. are subsidiaries of Baron Capital Group, Inc.
Baron Growth Fund is an advisory client of BAMCO, Inc. Ronald
Baron owns a controlling interest in Baron Capital Group, Inc. |
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Share ownership amounts are based on figures set forth in the
Schedule 13G filed by Wellington Management Company, LLP on
February 17, 2009. Of the shares beneficially owned,
Wellington Management Company, LLP has shared power to vote with
respect to 4,353,999 shares and shared power to direct
disposition with respect to 5,785,479 shares of common
stock. Wellington Management Company, LLP, in its capacity as an
investment adviser, may be deemed to beneficially own
5,831,279 shares of common stock which are owned of record
by clients of Wellington Management Company, LLP. Those clients
have the right to receive, or the power to direct receipt of,
dividends from, or the proceeds from the sale of, such common
stock. No such client is known to have such right or power with
respect to more than five percent of common stock. |
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A person has beneficial ownership of shares if he has the power
to vote or dispose of the shares. This power can be exclusive or
shared, direct or indirect. In addition, a person is considered
by SEC rules to beneficially own shares underlying options or
convertible securities that are presently exercisable or become
exercisable within 60 days of March 31, 2009. The
shares listed in this table above include shares issuable upon
the exercise of options or other rights that are exercisable or
become exercisable within 60 days of March 31, 2009. |
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As of March 31, 2009, there were 87,112,461 shares of
our common stock outstanding and 25,251,554 shares of
Class B common stock outstanding. To calculate a
stockholders percentage of beneficial ownership of common
stock, we must include in the numerator and denominator those
shares of common stock underlying options or convertible
securities (such as our Class B common stock) that the
stockholder is considered to beneficially own. Shares of common
stock underlying options or convertible securities held by other
stockholders, however, are disregarded in this calculation.
Therefore, the denominator used in calculating beneficial
ownership among our stockholders may differ. |
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For the purposes of making communications only. |
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Less than 5%. |
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For additional information, see footnotes 1 and 2 to the
Beneficial Ownership Table on pages 6 and 7 of this proxy
statement. |
5
How much
stock do the Companys directors, nominees and executive
officers own?
The following table shows the amount of Dicks Sporting
Goods common stock and Class B common stock beneficially
owned (unless otherwise indicated) by our directors, nominees
for director, the executive officers named in the
Summary Compensation Table below and all of
our directors and executive officers as a group. Except as
otherwise indicated, all information is as of March 31,
2009.
A person has beneficial ownership of shares if he or she has the
power to vote or dispose of the shares. This power can be
exclusive or shared, direct or indirect. In addition, a person
is considered by the SEC rules to beneficially own shares
underlying options and convertible securities that are presently
exercisable or will become exercisable within 60 days of
March 31, 2009. The shares listed in this table below
include shares of common stock issuable upon the exercise of
options or other rights that are exercisable or will become
exercisable within 60 days of March 31, 2009.
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Shares Beneficially Owned
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Number
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Percent(16)
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Voting
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Name of Beneficial Owner
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Common Stock
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Class B
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Common Stock
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Class B
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Power
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Named Executive Officers, Nominees and Directors
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Edward W. Stack
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7,047,824(1
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22,725,380
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25.59%
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90.00
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%
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67.07
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Timothy E. Kullman
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76,974(3
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*
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*
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Joseph H. Schmidt
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183,279(4
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*
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*
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Gwen K. Manto
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335,398(5
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*
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*
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Jeffrey R. Hennion
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351,972(6
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*
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*
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Randall K. Zanatta
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405,000(7
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*
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*
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William J. Colombo
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1,269,476(8
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1.44%
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*
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Emanuel Chirico
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112,950(9
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*
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*
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Brian J. Dunn
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17,950(10
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*
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*
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David I. Fuente
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233,126(11
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*
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*
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Walter Rossi
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513,150(12
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*
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*
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Lawrence J. Schorr
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275,102(13
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*
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Catherine R. Smith
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*
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Larry D. Stone
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17,950(14
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*
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All Executive Officers and Directors as a group (16 persons)
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10,937,385(15
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22,725,380
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30.03%
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90.00
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67.27
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* |
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Percentage of shares of common stock beneficially owned does
not exceed one percent (1%). |
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(1) |
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Includes 59,244 shares of restricted stock subject to
vesting, 347,700 shares of common stock held by Richard T.
Stack, over which Edward W. Stack maintains sole voting power
and 12,100 shares held by Mr. Stacks children.
Mr. Stack disclaims beneficial ownership of the securities
owned by his children, and the inclusion of such shares shall
not be an admission that the reporting person is the beneficial
owner for the purposes of Section 16 under the Securities
Exchange Act of 1934. Amount also includes 6,522,500 shares
of common stock issuable upon exercise of options that were
exercisable within 60 days of March 31, 2009. Pursuant
to a Memorandum of Understanding (MOU) dated the
2nd day of March, 2009, Mr. Stacks former spouse
is entitled to receive the economic benefit with respect to
stock options exercisable for 3,350,000 shares of common
stock (the number of shares would be equitably adjusted for any
stock split, recapitalization or similar event), which includes
the right to request the exercise
and/or sale
of such stock options in accordance with the Companys
applicable policies, Section 16(b) limitations and the
terms of the MOU. Mr. Stack maintains voting power with
respect to any such stock underlying these options when such
option is exercised. Pursuant to an agreement dated
December 4, 2007, Mr. Stack amended an option issued
by Mr. Stack individually to his brother Martin Stack,
which, as amended, is exercisable for up to 759,800 shares
of common stock (the number of shares would be equitably
adjusted for any stock split, recapitalization or |
6
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similar event) owned by Mr. Stack for 36 months
starting December 2, 2009. Martin Stacks right to
exercise the option is subject to certain limitations.
Mr. Stack retains voting and dispositive power with respect
to the shares subject to this option. |
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(2) |
|
Amount also includes, as of March 31, 2009, approximately
447,637 Class B shares which have been pledged by Edward W.
Stack in connection with a loan facility established in January
of 2007. Pursuant to the terms of the loan facility, the number
of shares pledged fluctuates based on the Companys stock
price; however, the maximum number of Class B shares that
could be pledged in connection with the loan facility is
2.5 million. In addition, pursuant to the terms of the MOU,
Mr. Stacks former spouse owns 4,000,000 of the
Class B common stock included in the number of shares
owned; Mr. Stack retains voting but not dispositive power
with respect to the shares, in accordance with the terms of the
MOU. |
|
(3) |
|
Includes 63,125 shares of common stock issuable upon the
exercise of options that were exercisable within 60 days of
March 31, 2009 and 13,849 shares of restricted stock
subject to vesting. |
|
(4) |
|
Includes 156,250 shares of common stock issuable upon the
exercise of options that were exercisable within 60 days of
March 31, 2009 and 24,723 shares of restricted stock
subject to vesting. |
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(5) |
|
Includes 315,625 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 19,773 shares of restricted stock
subject to vesting. |
|
(6) |
|
Includes 300,985 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 13,849 shares of restricted stock
subject to vesting. Also includes 1,200 shares held by
Mr. Hennions children. Mr. Hennion disclaims
beneficial ownership of those securities, and the inclusion of
such shares shall not be an admission that the reporting person
is the beneficial owner for purposes of Section 16 under
the Securities Exchange Act of 1934. |
|
(7) |
|
Mr. Zanatta left as President and Chief Executive Officer
of Golf Galaxy, Inc. in July 2008. The information provided in
this table is based on the terms of the Agreement and General
Release entered into by the Company, Golf Galaxy, Inc. and
Mr. Zanatta in connection with his departure, as well as
the last Form 4 filed by Mr. Zanatta. Amount includes
330,000 shares of common stock issuable upon the exercise
of a stock option that remains exercisable until
February 13, 2012. Additional detail regarding
Mr. Zanattas departure is provided in Potential
Payments Upon Termination or
Change-in-Control
on page 43 of the proxy statement. |
|
(8) |
|
Includes 969,518 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. Also includes 2,400 shares held by
Mr. Colombos children. Mr. Colombo disclaims
beneficial ownership of those securities, and the inclusion of
such shares shall not be an admission that the reporting person
is the beneficial owner for the purposes of Section 16
under the Securities Exchange Act of 1934. |
|
(9) |
|
Includes 105,000 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(10) |
|
Includes 10,000 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(11) |
|
Includes 211,800 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(12) |
|
Includes 465,600 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(13) |
|
Includes 196,500 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(14) |
|
Includes 10,000 shares of common stock issuable upon
exercise of options that were exercisable within 60 days of
March 31, 2009 and 7,950 shares of restricted stock
subject to vesting. |
|
(15) |
|
A total of 9,739,403 shares of common stock are issuable
upon the exercise of options for all sixteen (16) executive
officers and directors as a group within 60 days of
March 31, 2009. |
|
(16) |
|
As of March 31, 2009, there were 87,112,461 shares of
common stock outstanding and 25,251,554 shares of
Class B common stock outstanding. To calculate an
individual director or executive officers percentage of
beneficial ownership of common stock, we must include in the
numerator and denominator those shares of |
7
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common stock underlying options or convertible securities (such
as our Class B common stock) that the director or executive
officer is considered to beneficially own. Shares of common
stock underlying options or convertible securities held by other
directors, executive officers and stockholders, however, are
disregarded in this calculation. Therefore, the denominator used
in calculating beneficial ownership among our directors and
executive officers may differ. |
Section 16(a)
Beneficial Ownership Reporting Compliance.
The Companys directors and its executive officers are
required under Section 16(a) of the Securities Exchange Act
of 1934 to file reports of ownership and changes in ownership of
the Companys common stock with the SEC. Based upon a
review of filings with the SEC and written representations that
no other reports were required to be filed, we believe that,
with the exception of one report for Mr. Colombo, which was
untimely filed by one business day due to an administrative
error, all of our directors and executive officers complied
during the Companys 2008 fiscal year with the reporting
requirements of Section 16(a) of the Securities Exchange
Act of 1934.
ITEM 1
ELECTION OF DIRECTORS
The Board is divided into three (3) classes, each
containing as nearly as possible an equal number of directors.
The current term of office of our Class A Directors expires
at the 2009 annual meeting while the term for Class B
Directors expires at the 2010 annual meeting and the term for
Class C Directors expires at the 2011 annual meeting. Upon
recommendation by the Governance and Nominating Committee of the
Board of Directors, the Board of Directors proposes that the
following nominees, William J. Colombo (a Class A
Director), David I. Fuente (a Class A Director) and Larry
D. Stone (a Class A Director) be elected for new terms of
three (3) years and until their successors are duly elected
and qualified as Class A Directors. Each of the nominees
has consented to serve if elected. If any of them become
unavailable to serve as a director, the Board may designate a
substitute nominee. In that case, the persons named as proxies
will vote for the substitute nominee designated by the Board.
Directors
Standing for Election.
The directors standing for election at the annual meeting are:
William J. Colombo, 53, became our Vice Chairman of the
Board in February 2008, after stepping down as President and
Chief Operating Officer, a position he held since 2002. From
late in 1998 to 2000, Mr. Colombo served as President of
dsports.com LLC, our internet commerce subsidiary.
Mr. Colombo served as Chief Operating Officer and an
Executive Vice President from 1995 to 1998. Mr. Colombo
joined us in 1988. From 1977 to 1988, he held various field and
district positions with J.C. Penney Company, Inc. (a retailing
company listed on the NYSE). He is also on the board of
directors of Gibraltar Industries (a leading manufacturer,
processor and distributor of products for the building,
industrial and vehicular markets listed on Nasdaq).
David I. Fuente, 63, has served on the Board since 1993.
Mr. Fuente is currently a member of the board of Office
Depot, Inc. (an office supply retailer listed on the NYSE) and
was Chairman of Office Depot from 1987 to 2001 and its Chief
Executive Officer from 1987 to 2000. He currently serves as a
director for Ryder System, Inc. (a truck leasing and logistics
company listed on the NYSE).
Larry D. Stone, 57, has served on the Board since
2007. Mr. Stone has served as President and Chief Operating
Officer for Lowes Companies Inc. (a home improvement
retailer listed on the NYSE) since December 2006, and before
that served as Senior Executive Vice President
Merchandising/Marketing since 2005. Mr. Stone served as
Senior Executive Vice President Store Operations for Lowes
from 2003 to 2005, and from 2001 to 2003, served as Executive
Vice President, Store Operations.
The Board of Directors
unanimously recommends that the stockholders vote
For the persons nominated by the Board as
Class A Directors.
8
Other
Directors Not Standing for Election at this Meeting.
Other than the current nominees, the six (6) remaining
members of the Board of Directors will continue to serve as
members of our Board. Our other directors who will serve after
the 2009 annual meeting are:
Emanuel Chirico, 51, has served on the Board since
December 2003. Mr. Chirico was named Chairman of the Board
of the Phillips-Van Heusen Corporation (apparel and footwear
company listed on the NYSE) on June 19, 2007 and was named
its Chief Executive Officer on February 27, 2006.
Previously, Mr. Chirico had been President, Chief Operating
Officer and a Director of Phillips-Van Heusen Corporation since
2005. Prior to that, Mr. Chirico had been Executive Vice
President and Chief Financial Officer of Phillips-Van Heusen
Corporation from 1999 until June 2005. From 1993 until 1999,
Mr. Chirico was Phillips-Van Heusen Corporations
controller. Prior to that, he was a partner at Ernst &
Young LLP. Mr. Chiricos current term of office as a
Class B Director expires at the 2010 annual meeting.
Brian J. Dunn, 48, has served on the Board since
2007. Mr. Dunn has been employed by Best Buy Co., Inc. (a
technology and entertainment products retailer listed on the
NYSE) since 1985. He was named Chief Executive Officer of Best
Buy, to be effective June 24, 2009, and has served as
President and Chief Operating Officer of Best Buy since
February 26, 2006, overseeing more than 800 stores in the
United States and Canada as well as several corporate groups
that directly support Best Buys stores. Mr. Dunn is
also responsible for overseeing the merchandising, customer
centricity, services and small business functions of Best Buy.
Prior to this appointment as President and Chief Operating
Officer, Mr. Dunn served as the companys
President Retail, North America from 2004 to 2006.
From 2002 to 2004, Mr. Dunn served as Executive Vice
President Best Buy U.S. Retail.
Mr. Dunns current term as a Class B Director
expires at the 2010 annual meeting.
Walter Rossi, 66, has served on the Board since 1993.
Mr. Rossi formerly served as Chief Executive Officer of
Naartjie Custom Kids, Inc. (a childrens apparel retailer),
Chief Executive Officer of Home Express (a retailer of home
furnishings), Chairman of the Retail Group at Phillips-Van
Heusen Corporation (apparel and footwear company listed on the
NYSE) and Chairman and Chief Executive Officer of Mervyns
(a department store chain). Mr. Rossis current term
of office as a Class B Director expires at the 2010 annual
meeting.
Edward W. Stack, 54, has served as our Chairman and Chief
Executive Officer since 1984 when the founder and Edward
Stacks father, Richard Dick Stack, retired
from our then two store chain. Mr. Stack has served us full
time since 1977 in a variety of positions, including President,
Store Manager and Merchandise Manager. Mr. Stack also
served as President during fiscal year 2008.
Mr. Stacks current term of office as a Class C
Director expires at the 2011 annual meeting.
Lawrence J. Schorr, 55, has served on the Board since
1985. Mr. Schorr currently serves as Chief Executive
Officer of Boltaron Performance Products, LLC (a privately owned
plastics manufacturing company). Mr. Schorr has held this
position for the last five years. He previously was President of
RRT-Recycle America, a subsidiary of WMX Technologies, Inc. He
formerly served in the same position for Resource Recycling
Technologies, Inc. (a solid waste material management company
listed on the American Stock Exchange). He has also served as a
partner and managing partner in the law firm of Levene, Gouldin
and Thompson LLP. Mr. Schorrs current term of office
as a Class C Director expires at the 2011 annual meeting.
Catherine R. Smith, 45, was elected to serve on the Board
in March 2009. Ms. Smith has served as Executive Vice
President and Chief Financial Officer of Centex Corporation (a
residential construction and financial services company listed
on the NYSE) since October 2006. Prior to that time, she served
as Executive Vice President and Chief Financial Officer of
Kennametal, Inc. (a supplier of tooling, engineered components
and advanced materials listed on NYSE) from April 2005 to
October 2006, and as Executive Vice President and Chief
Financial Officer of Bell Helicopter, a business segment of
Textron, Inc. (a global aircraft industry and finance company
listed on the NYSE), from October 2003 to April 2005. From
August 1986 through September 2003, Ms. Smith held various
financial positions including Vice President and Chief Financial
Officer of the Intelligence and Information Systems business
segment of Raytheon Company. Ms. Smiths current term
of office as a Class C Director expires at the 2011 annual
meeting.
9
How are
directors compensated?
Director
Compensation 2008
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Change in
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Pension Value
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and Non-
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Non-Equity
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qualified
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Fees Earned or
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Stock
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Incentive Plan
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Deferred
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All Other
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Paid in Cash
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Awards
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Option Awards
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Compensation
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Compensation
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Compensation
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Name(1)(2)
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($)
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($)(3)(4)
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($)(3)(5)
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($)
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Earnings
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($)(6)
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Total ($)
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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Emanuel Chirico
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$
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96,750
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$
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27,971
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$
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146,985
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$
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271,706
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William J. Colombo
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(7
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$
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27,971
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(7
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(7
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$
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27,791
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Brian J. Dunn
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$
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58,250
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$
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27,971
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$
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123,397
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$
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209,618
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David I. Fuente
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$
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89,750
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$
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27,971
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$
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146,985
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$
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264,706
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Walter Rossi
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$
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71,750
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$
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27,971
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$
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146,985
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$
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246,706
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Lawrence J. Schorr
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$
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100,250
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$
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27,971
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$
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146,985
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$
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275,206
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Larry D. Stone
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$
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68,750
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$
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27,971
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$
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123,397
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$
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220,118
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(1) |
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Mr. Stack is a member of the Board of Directors of the
Company. Mr. Stacks compensation for 2008 is reported
in the Summary Compensation Table and the
other tables set forth herein. As an executive officer of the
Company as of the end of fiscal 2008, Mr. Stack did not
receive any additional compensation in connection with his
service on the Board of Directors of the Company. |
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(2) |
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Ms. Smith, who was elected to the Board of Directors in
March of 2009, did not serve on the Board of Directors in 2008
and as such is not included in this table. |
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(3) |
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The values set forth in this column represent the dollar amount
recognized for financial statement reporting purposes in fiscal
2008, for the fair value of restricted stock (column c) and
stock option awards (column d) granted to each director in
accordance with FAS 123R. A discussion of the relevant
assumptions made in the valuation of each of the restricted
stock and stock option awards may be found in the
Stock-Based Compensation section of Note 11 of
the footnotes to the Companys financial statements, in the
Companys Annual Report on
Form 10-K
for the fiscal year ended January 31, 2009. |
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(4) |
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The aggregate number of shares underlying Company restricted
stock awards (vested and unvested) outstanding as of
January 31, 2009 for each director set forth in the table
is 3,950 shares. The grant date fair value with respect to
each restricted stock grant awarded to each director in the
fiscal year ended January 31, 2009, computed in accordance
with FAS 123R, was $27.87 per share for restricted stock
awarded on March 27, 2008. |
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(5) |
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No option grants were awarded to directors in the fiscal year
ended January 31, 2009. The aggregate number of shares
underlying Company option awards (vested and unvested)
outstanding as of January 31, 2009 for each director is:
Emanuel Chirico, 120,000; William J. Colombo, 1,063,268; Brian
J. Dunn, 40,000; David I. Fuente, 226,800; Walter Rossi,
480,600; Lawrence J. Schorr, 211,500; and Larry D. Stone, 40,000. |
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(6) |
|
Use by our officers and directors of aircraft that are owned or
leased by us for non-business purposes is governed by our travel
policy for non-business use of corporate aircraft, which is
described on page 37 of this proxy statement. Except where
indicated in the table above, all non-business use of aircraft
by any director during fiscal 2008 was billed to and paid for by
the director in accordance with our travel policy. |
|
(7) |
|
Mr. Colombo stepped down from his position as President and
Chief Operating Officer of the Company, effective
February 2, 2008. He has continued with the Company as the
Board of Directors Vice Chairman and otherwise as an
employee. Mr. Colombo does not receive any cash
compensation in connection with his service on the Board, but
does receive cash and other compensation as an employee of the
Company, which is disclosed on page 16 of this proxy
statement. |
Understanding
Our Director Compensation Table.
Beginning in fiscal 2001, non-employee directors were
compensated by means of an annual retainer of $20,000 plus
$7,500 per meeting ($3,750 for teleconferences) both paid in
cash. In addition to the annual retainer, each committee chair
receives $15,000 per committee chairmanship per year, except
that the audit committee chair
10
receives an annual retainer of $25,000. Each committee member
also receives a per committee meeting fee of $1,500 ($750 for
teleconferences). There are generally six (6) Board
meetings per year.
Currently, each director receives an initial option grant
exercisable for 20,000 shares of common stock upon his or
her first election to the Board. Historically, we have provided
each director with an additional annual option grant exercisable
for 10,000 shares for each year of service thereafter,
which vest over a four (4) year period from the date of
grant. Beginning with the annual grants made in fiscal 2008, the
Company introduced the inclusion of annual grants of restricted
stock in amounts determined by the Companys Compensation
Committee, but retained the flexibility to also make stock
option award grants when needed, as determined by the
Compensation Committee. The shares of restricted stock are
subject to a three-year cliff vest. Additionally, members of our
Board of Directors are reimbursed for their expenses incurred in
connection with attending any meeting.
How often
did the Board meet during fiscal 2008?
The Board of Directors met seven (7) times during fiscal
2008. Each director attended at least 75% of all Board of
Director meetings during fiscal 2008, either in person or via
teleconference, except for Mr. Dunn, who attended five
(5) of the seven (7) meetings. During fiscal 2008, the
Audit Committee met ten (10) times, the Compensation
Committee met six (6) times and the Governance and
Nominating Committee met four (4) times. Each member of the
Audit, Compensation and Governance and Nominating Committees
attended at least 75% of the committee meetings of which they
are a member, either in person or via teleconference.
What
committees has the Board established?
The Board of Directors has standing Compensation, Audit and
Governance and Nominating Committees. The following sets forth
Committee memberships as of the date of this proxy statement.
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Compensation
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Audit
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Governance and
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Director
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Committee
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Committee
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Nominating Committee
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Edward W. Stack
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William J. Colombo
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Emanuel Chirico
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X
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(c)
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Brian J. Dunn
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X
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David I. Fuente
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X
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(c)
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X
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Walter Rossi
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X
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Lawrence J. Schorr
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X
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X
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X
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(c)
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Catherine R. Smith
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X
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Larry D. Stone
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X
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The Audit
Committee
Messrs. Chirico (Chairperson), Rossi and Schorr were
members of the Audit Committee during fiscal 2008, which has
been established in accordance with Section 3(a)(58)A of
the Securities Exchange Act of 1934. We adopted an Audit
Committee charter that was effective upon completion of our
initial public offering, and which was amended in December 2003,
December 2004, March 2007 and in March 2009 to reflect various
rule changes promulgated by the New York Stock Exchange
(NYSE) and the SEC. As a result of the amendments
made to the Audit Committee Charter in March 2009, we have
included the current Audit Committee Charter in Appendix A
of this proxy statement, and our Audit Committee Charter as
amended is also available on the Investor Relations portion of
our website (www.dickssportinggoods.com). The Audit Committee
reviews the engagement of our independent auditors, makes
recommendations to the Board of Directors regarding the
selection of independent auditors and reviews the scope, fees
and results of any audit. Emanuel Chirico is qualified as the
audit committee financial expert within the meaning of the SEC
regulations, and the Board has determined that he has accounting
and financial management expertise within the meaning of the
standards of the NYSE. The Board has determined
11
that Mr. Chirico is independent as the term is defined in
Item 7(d)(3)(iv) of Schedule 14A, and the Board has
determined that all members of our Audit Committee are
independent within the meaning of the SEC regulations relating
to audit committee independence, the listing standards of the
NYSE and the Companys Corporate Governance Guidelines. A
printed copy of our Audit Committee Charter may be obtained by
contacting our Investor Relations Department at 300 Industry
Drive, RIDC Park West, Pittsburgh, PA 15275, or via email at
investors@dcsg.com.
The
Compensation Committee
Messrs. Fuente (Chairperson), Schorr and Stone comprise our
Compensation Committee. Our Compensation Committee Charter,
which was amended in December 2004 and March 2007 to reflect
changes in the NYSE and SEC rules relating to corporate
governance and compensation disclosure and discussion, is
available on the Investor Relations portion of our website
(www.dickssportinggoods.com), and a printed copy may be obtained
by contacting our Investor Relations Department, at 300 Industry
Drive, RIDC Park West, Pittsburgh, PA 15275, or via email at
investors@dcsg.com. Our Compensation Committee monitors our
stock and incentive and stock purchase plans, establishes the
terms and conditions of all equity awards, recommends an overall
compensation policy for the Company, discharges the Boards
responsibilities relating to compensation of the officers and
directors of the Company and advises the Board regarding
management succession. The Compensation Committee does have the
authority under its charter to delegate any of its duties and
responsibilities (or functions) to a subcommittee of the
Compensation Committee consisting of one or more members, as
appropriate, and has authorized a subcommittee consisting of our
Chairman and Chief Executive Officer, Executive Vice President,
Finance, Administration and Chief Financial Officer and Senior
Vice President- Human Resources, to issue interim equity award
grants as may be necessary, in compliance with the authorizing
resolutions and Delaware law.
The Companys compensation program for executives generally
has consisted of three key elements: a base salary, a
performance-based annual bonus payable in cash, and periodic
grants of stock-based compensation, such as stock options and
restricted stock. Under this approach, compensation for
executive officers involves a high proportion of pay that is
at risk, in the form of the annual bonus, which
takes into account personal performance but is also based, in
significant part, on the Companys performance. In
addition, stock-based compensation such as stock options and
restricted stock relate a significant portion of long-term
remuneration directly to stock price appreciation realized by
all of the Companys stockholders.
Base salaries for our executive officers other than our Chief
Executive Officer, including any annual or other adjustments,
are based upon recommendations by our Chief Executive Officer,
and take into account such factors as salary norms in comparable
businesses, a qualitative assessment of the nature of the
position, and the contribution and experience of the officer.
During fiscal 2008, recommendations relating to executive
officers subject to Section 162(m) of the Internal Revenue
Code were reviewed and approved by the Compensation Committee.
Awards of annual bonuses to executive officers who are subject
to Section 162(m) of the Internal Revenue Code were made by
the Compensation Committee and all other bonuses paid to
non-executive officers were made in accordance with a formula
established by the Compensation Committee and Chief Executive
Officer. Company management engaged the Hay Group to provide
consultation services regarding executive compensation in 2007
and 2008, and to assist in determining or recommending the
amount of executive compensation for fiscal 2008 and 2009. See
page 22 of this proxy statement under Compensation
Discussion and Analysis for more information regarding
the services provided by the Hay Group.
Under the Companys annual bonus program, executive
officers and certain other employees are eligible to receive
cash bonuses based upon the Companys attainment of
specific performance goals, primarily total Company earnings
before taxes and sales, as recommended by the Chief Executive
Officer and approved by the Compensation Committee. Target
incentive bonus opportunities are established at the beginning
of the fiscal year, as measured generally by earnings before
taxes and sales. A specified percentage of a bonus program
participants annual salary is used to determine any amount
to be paid. A minimum level of performance is established below
which no bonus award is paid, levels of performance at which
specified percentages of the bonus will be paid, and a maximum
level of performance above which no additional bonus would be
paid. For additional information regarding our Compensation
Committee processes and procedures for the consideration and
determination of executive officer compensation, see
Compensation Discussion and Analysis starting
on page 20 of this proxy statement.
12
During fiscal 2008, the Compensation Committee operated under
guidelines for equity awards which are generally applicable to
all eligible employees. Under these guidelines, grants of stock
options
and/or
restricted stock are generally made on an annual basis in
amounts that take into account such factors as market data on
total compensation packages, the value of equity awards at
targeted external companies, total stockholder return, share
usage and stockholder dilution. In appropriate cases, however,
special grants may be authorized outside of the annual-grant
framework. All decisions to grant stock options or restricted
stock are in the sole discretion of the Compensation Committee
and, except for grants to the Chief Executive Officer, are based
upon recommendations from the Chief Executive Officer. However,
in limited circumstances, a subcommittee consisting of our Chief
Executive Officer, Chief Financial Officer and Senior Vice
President- Human Resources has been delegated authority to grant
awards to non-executive officers in accordance with Delaware law.
Mr. Stack, our Chairman and Chief Executive Officer, is
eligible to participate in the same executive compensation
program available to other Company executive officers, and his
total annual compensation, including compensation derived from
the annual bonus program, was set by the Compensation Committee
based on the same factors as other executives. Payments earned
by Mr. Stack are included in the Summary
Compensation Table located on page 33 of this
proxy statement. Mr. Stack, as a greater than 5%
stockholder, is ineligible to participate in the Companys
employee stock purchase plan.
The
Governance and Nominating Committee
Messrs. Dunn, Fuente and Schorr (Chairperson) currently
comprise our Governance and Nominating Committee. Our Governance
and Nominating Committee charter is available on the Investor
Relations portion of our website (www.dickssportinggoods.com),
and a printed copy may be obtained by contacting our Investor
Relations Department at 300 Industry Drive, RIDC Park West,
Pittsburgh, PA 15275, or via email at investors@dcsg.com. This
Committee provides oversight and guidance to our Board of
Directors to ensure that the membership, structure, policies and
processes of the Board and its committees facilitate the
effective exercise of the Boards role in our governance.
The Committee reviews and evaluates the policies and practices
with respect to the size, composition and functioning of the
Board, evaluates the qualifications of and recommends to the
full Board candidates for election as directors, and reviews and
recommends to the full Board the compensation and benefits for
the Companys non-employee directors. On March 17,
2009, our Governance and Nominating Committee recommended (with
Mr. Fuente abstaining as to himself) to the Board of
Directors that Messrs. Colombo, Fuente and Stone stand for
election as Class A Directors.
Because the Company is a controlled company under
the NYSEs Corporate Governance Standards, we are not
required to have an independent nominating committee. However,
Messrs. Dunn, Fuente and Schorr would qualify as
independent under the standards applicable to non-controlled
companies under the NYSEs Corporate Governance Standards.
On March 18, 2009, the Board named David I. Fuente to act
as the presiding non-management director for a one-year term
(until the 2010 annual meeting proxy statement is filed or until
his successor is duly appointed and qualified).
How does
the Board select nominees for the Board?
Our Governance and Nominating Committee will consider candidates
for Board membership suggested by its members and other Board
members and management, and will, if warranted, utilize a
third-party search firm to assist in finding prospective
candidates. This Committee will consider director candidates
from stockholders for election at the 2010 annual meeting if
such nominees are submitted in accordance with the procedures
set forth in Additional Information Advance
Notice Procedures on page 47 of this proxy
statement.
Our Governance and Nominating Committee, at the direction of the
Committee Chair, makes an initial determination as to whether to
conduct a full evaluation of a prospective candidate. This
initial determination is based on whatever information is
provided to the Governance and Nominating Committee with the
recommendation of the prospective candidate, as well as the
Governance and Nominating Committees own knowledge of the
prospective candidate, which may be supplemented by inquiries to
the person making the recommendation or others. The preliminary
determination is based primarily on the need for additional
Board members to fill vacancies
13
or to expand the size of the Board, and the likelihood that the
prospective nominee can satisfy the evaluation factors described
below. If the Governance and Nominating Committee determines, in
consultation with the other Board members as appropriate, that
additional consideration is warranted, it may request that
additional information about the prospective nominees
background and experience be gathered and a report be prepared
for the Governance and Nominating Committee, and may utilize a
third-party search firm to assist in such evaluation. The
Governance and Nominating Committee then would evaluate the
prospective nominee against the standards and qualifications set
out in the Companys Corporate Governance Guidelines,
including independence, integrity, experience, sound judgment in
areas relevant to the Companys businesses and willingness
to commit sufficient time to the Board, all in the context of an
assessment of the perceived needs of the Board at that point in
time. The Governance and Nominating Committee will also measure
candidates against the criteria it sets, including skills and
attributes that reflect the values of the Company. Our
Governance and Nominating Committee is also responsible for
reviewing with the Board, on an annual basis, the criteria it
believes appropriate for Board membership.
Our Governance and Nominating Committee will also consider such
other relevant factors as it deems appropriate, including the
current composition of the Board, the balance of management and
independent directors, the need for Audit Committee expertise
and the evaluations of other prospective nominees. Depending on
the needs of the Company at the time, the prospective nominees
and such other factors as the Committee deems in its business
judgment to be relevant, the Governance and Nominating Committee
will take such other steps as are necessary to evaluate the
prospective nominee, including, if warranted, one or more
Governance and Nominating Committee members or members of the
Board interviewing the prospective nominee. After completing
this evaluation and other steps of the process, the Governance
and Nominating Committee would make a recommendation to the full
Board of Directors as to the persons who should be nominated by
the Board, and the Board determines the nominees after
considering the recommendation and report of the Governance and
Nominating Committee.
In 2008, our Governance and Nominating Committee determined,
given the continued growth of the Company, that expanding the
size of the Board by one (1) additional member was
advisable. Our Governance and Nominating Committee utilized a
third-party search firm, Crist Kolder Associates, to assist the
Governance and Nominating Committee in finding a candidate for
nomination to our Board who possessed the qualities that the
Governance and Nominating Committee and the Board desires in
members, which includes experience and sound judgment in areas
relevant to our business, independence and integrity. The search
firm helped to identify, evaluate and assist in building the
recommendation for Ms. Smith as a candidate. Ms. Smith
was interviewed by Mr. Schorr as Chairman of the Governance
and Nominating Committee, as well as by Messrs. Stack,
Rossi, and Chirico, and was determined to be an outstanding
candidate who possessed the qualities desired by the Governance
and Nominating Committee for inclusion on our Board, and as such
was recommended to the Board for nomination and elected in March
2009. Ms. Smith was determined not to have any affiliations
or conflicts of interest which would impact her ability to
exercise independent business judgment as a member of our Board.
Does the
Company have a Code of Ethics?
Our Code of Business Conduct and Ethics is applicable to all of
our officers, directors and employees, including our principal
executive officer, principal financial officer and principal
accounting officer. The Code of Business Conduct and Ethics is
available on the Investor Relations portion of our website
(www.dickssportinggoods.com), and a printed copy may be obtained
by contacting our Investor Relations Department at 300 Industry
Drive, RIDC Park West, Pittsburgh, PA 15275, or via email at
investors@dcsg.com. We intend to post amendments to or waivers
from the Code of Business Conduct and Ethics to the extent
applicable to our chief executive officer, principal financial
officer or principal accounting officer or directors.
How do
stockholders communicate with the Board?
Stockholders and other parties interested in communicating
directly with our Board of Directors, the presiding
non-management director or with the non-management directors as
a group may do so by writing to the Board of Directors or
presiding non-management director (as the case may be),
c/o General
Counsel, Dicks Sporting Goods, Inc., 300 Industry Drive,
RIDC Park West, Pittsburgh, PA 15275 or
e-mail at
investors@dcsg.com to the attention of the General Counsel.
Under our process for handling letters received by the Company
and addressed to non-management members of the Board of
Directors, our Governance and Nominating Committee has
instructed the
14
General Counsel to (i) review any such correspondence,
(ii) regularly forward to the Board of Directors a summary
of all such correspondence and (iii) regularly forward to
the presiding non-management director copies of all
correspondence that is addressed to the presiding non-management
director or the non-management directors as a group or that, in
the opinion of the General Counsel, is intended for the
presiding non-management director or the non-management
directors or that otherwise requires their attention. Directors
may at any time review a log of all correspondence received by
the Company that is addressed to members of the Board and
request copies of any such correspondence. Concerns relating to
accounting, internal controls or auditing matters are
immediately brought to the attention of the Companys
internal audit department and handled in accordance with
procedures established by the Audit Committee with respect to
such matters.
How does
the Board determine which directors are considered
independent?
On December 4, 2003, the Board adopted its Corporate
Governance Guidelines, which were amended in December 2004,
March 2007 and March 2009 to reflect certain rule changes made
by the NYSE and SEC relating to independence determinations and
listing standards. The Corporate Governance Guidelines adopted
by the Board meet the listing standards adopted by the NYSE for
controlled companies, and the full text of the
Corporate Governance Guidelines, as amended, can be found on the
Investor Relations portion of the Companys website
(www.dickssportinggoods.com), and a printed copy may be obtained
by contacting our Investor Relations Department at 300 Industry
Drive, RIDC Park West, Pittsburgh, PA 15275, or via email at
investors@dcsg.com.
Pursuant to the Corporate Governance Guidelines, the Board
undertook its annual review of existing director and director
nominee independence on March 17 and 18, 2009. During this
review, the Board considered transactions and relationships
between each director or nominee for director with the Company
(either directly or as a partner, stockholder or officer of any
organization that has a relationship with the Company). As
provided in the Corporate Governance Guidelines, the purpose of
this review was to determine whether any such relationships or
transactions were inconsistent with a determination that the
director or nominee for director is independent in accordance
with independence requirements implemented by the NYSE.
As a result of this review, the Board affirmatively determined
that Messrs. Chirico, Dunn, Rossi and Schorr and
Ms. Smith are, and that Messrs. Fuente and Stone would
be if elected, independent directors, in accordance with the
standards set forth in the Corporate Governance Guidelines and
in accordance with independence requirements implemented by the
NYSE Listing Standards.
Policy on
Annual Meeting Attendance
The Boards official policy with respect to Board
attendance at the annual meeting of stockholders is that the
Board strongly encourages its members to attend the
Companys annual meeting of stockholders; the Company also
expects that most of its directors will attend its 2009 annual
meeting. All of the then current members of the Board were in
attendance at last years annual meeting.
Compensation
Committee Interlocks and Insider Participation
Our Compensation Committee currently consists of
Messrs. Fuente, Schorr and Stone. Neither Mr. Fuente,
Mr. Schorr nor Mr. Stone has ever been an officer or
employee of ours or any of our subsidiaries. None of our
executive officers serve or have served as a member of the board
of directors, compensation committee or other board committee
performing equivalent functions of any entity that has one or
more executive officers serving as one of our directors or on
our Compensation Committee. Our Compensation Committee
customarily has met and discussed matters relating to the
compensation of our employees and key officers.
Certain
Relationships and Transactions with Related Persons
Some of our stockholders who own more than 5% of a class of our
common stock have registration rights to register shares of our
common stock under the Securities Act of 1933. They may request
that we register their shares of common stock with the SEC, and,
if all conditions under our registration rights agreement are
met, we must register their shares. We would be required to bear
specified expenses related to those registrations.
15
We lease two locations from Stack Associates, LLC, a New York
limited liability company established by the estate of Richard
Dick Stack, our founder and father of Edward W.
Stack, one of which continues to operate as one of our stores.
Our total monthly lease payments for the two locations is
$20,000. We paid $240,000 under these leases in fiscal year
2008. The amount we are paying per square foot under these
leases is comparable to the amounts we agreed to pay to
unaffiliated third parties for other new leases that were
entered into around the same time period.
We entered into an agreement with Edward W. Stack and Richard T.
Stack, dated November 12, 1992, which gives Edward W. Stack
an irrevocable proxy to vote all shares of Dicks Sporting
Goods, Inc. owned (including shares acquired in the future) by
Richard T. Stack. Also, on December 4, 2007, Edward W.
Stack amended an option agreement entered into with his brother
Martin Stack. As amended, the option is exercisable beginning
December 2, 2009 and for thirty-six (36) months
thereafter for up to seven hundred fifty-nine thousand eight
hundred (759,800) shares of common stock. The option is
exercisable at 75% of the then per share market price on the
date of exercise. Market price for purposes of that agreement is
defined as the mean between the high and low prices of the
Companys common stock on the national securities exchange
on the day on which the option is exercised, if the common stock
is then being traded on a national securities exchange, and if
the common stock is then being traded on such an exchange but
there are no sales on such day, the market price shall be deemed
to be the mean between the high and low prices of the common
stock on the national securities exchange on the day on which
the most recent sales occurred prior to the date of exercise;
and if the common stock is not then traded on such an exchange,
then the market price shall be deemed to be the mean between the
high and low bid and asked prices for the common stock on the
over-the-counter market on the day on which the option is
exercised.
On February 13, 2006, we entered into an Aircraft Sublease
Agreement with Corporate Air, LLC (Corporate Air).
Under that sublease we charter for business use an aircraft
owned by EWS, LLC (EWS), an entity owned by Edward
W. Stack. Corporate Air, an independent airline charter company,
has a master lease with EWS under which Corporate Air operates
and maintains this aircraft, hires pilots and other staff for
flight operations and also may act to charter the aircraft for
use by third parties. During the five (5) year sublease
term, we have the right to use this aircraft on a flight
available basis for one thousand five hundred (1,500) hours for
travel purposes. The sublease may be terminated on certain
conditions as set forth in the sublease and terminates
automatically if Corporate Air no longer has the right to
operate the aircraft under the master lease. Under this
arrangement, we pay Corporate Air a base fee of $150,000 per
month and an hourly charter rate of $1,900 per block hour of
actual usage. The hourly charter rate is subject to a fuel
surcharge adjustment, as set forth in the sublease. During
fiscal 2008, we paid Corporate Air $2,376,186 under the sublease.
We, along with two of our subsidiaries, currently sublease one
(1) store to and lease two (2) stores from Best Buy
Co., Inc., where Mr. Dunn serves as President and Chief
Operating Officer. Each lease was entered into pursuant to
arms length transactions prior to Mr. Dunns
election to our Board of Directors. The sublease was entered
into in 1999 for an initial term of five (5) years, with
four (4) extension options thereafter, each for an
additional five (5) year term. The annual rent that Best
Buy pays to us under this sublease is $201,811. The first lease
was entered into by our subsidiary Galyans Trading
Company, Inc. in 1999, for a twenty (20) year term and
annual rent of $1,496,263 per year. The second lease is held
through our wholly-owned subsidiary, Golf Galaxy, Inc. The
lease, entered into in 2004, has a term of ten (10) years
and two (2) months, and has annual rent payments of
$232,498.
On February 2, 2008, Mr. Colombo stepped down as the
President and Chief Operating Officer of the Company, but
continued with the Company as an employee and to serve as Vice
Chairman of the Board. In connection with his 2008 employment,
Mr. Colombo received an aggregate salary of $150,000, and
other compensation totaling $22,468, which amounts consisted of
professional fees and an annual vehicle allowance. In addition,
$802,753 was recognized for financial statement reporting
purposes in fiscal 2008 for the fair value of stock option
awards granted to Mr. Colombo while he served as President
and Chief Operating Officer of the Company, in accordance with
FAS 123R. All other amounts received by Mr. Colombo in
2008 were received in connection with his service as Vice
Chairman, and are reflected in the Director Compensation Table
on page 10 of this proxy statement.
16
Prior to the implementation of our related party policy, which
is discussed below, the Audit Committee, through its committee
charter, had the ability in its discretion to review and ratify,
approve or disapprove the Company entering into any transaction
between the Company or its subsidiaries and any related persons
that were required to be reported under SEC
Regulation S-K
Item 404, or any rules or regulations issued in connection
therewith. The Audit Committee reviewed and approved or ratified
the transactions set forth above in accordance with the terms of
its committee charter, with the exception of the retail lease
agreements entered into with Best Buy, which were reviewed and
approved by the full Board prior to Mr. Dunn being elected
to our Board, in accordance with the Companys related
party policy. As of March 2007, the Audit Committees
review and ratification, approval or disapproval of transactions
required to be reported under SEC
Regulation S-K
Item 404 must be conducted in accordance with the terms of
the Companys related party policy, which is discussed
below. Any potential related party transactions that are not
reviewed by the Audit Committee must be reviewed by the full
Board or another committee thereof, in accordance with the terms
of the policy.
In March of 2007, the Companys Board approved a policy
related to notification, review and approval or disapproval of
related party transactions that are reportable under SEC
Regulation S-K
Item 404. This related party policy covers our directors,
nominees, executive officers, and immediate family members of
our directors, nominees and executive officers. The policy also
may apply to any outside third-party company or entity in which
any of these persons owns more than 10% of the equity, serves as
an officer or equivalent or, in the case of directors or
immediate family members, is employed. Transactions with these
outside entities will initially be reviewed by the office of
General Counsel to determine if they are within the scope of the
policy. We obtain information regarding potential related party
transactions as part of our annual director and executive
officer questionnaires.
Transactions (or series of related transactions) that would fall
within the scope of the policy include those in which the amount
exceeds $120,000, other than compensation between a person
covered by the policy and the Company (and its subsidiaries).
Any new transaction and any amendment to a transaction that
falls within the scope of the policy is to be reviewed, and
approved or disapproved by the Audit Committee (or the full
Board in lieu of the Audit Committee).
Report of
the Audit Committee
The following Report of the Audit Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this Report by reference therein.
The charter of the Audit Committee of the Board of Directors,
which is available on the Investor Relations portion of our
website (www.dickssportinggoods.com), specifies that the purpose
of the Committee is to assist the Board of Directors in its
responsibility to:
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oversee the integrity of the audit process, financial reporting
and internal accounting controls of the Company;
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oversee the work of the Companys financial management, the
internal auditors employed by the Company and any registered
public accounting firm employed by the Company for the purpose
of preparing or issuing an audit report or related work;
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oversee managements development of, and adherence to, a
sound system of internal accounting and financial controls and
that internal auditors and outside auditors objectively assess
the Companys financial reporting, accounting practices and
internal controls; and
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provide an open avenue of communication between outside
auditors, internal auditors and the Board.
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In carrying out these responsibilities, the Audit Committee,
among other things:
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provides oversight on matters relating to its appointment and
oversight of the outside auditors;
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reviews matters concerning the appointment and oversight of the
internal auditors;
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17
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provides oversight and review of accounting principles and
practices and internal controls;
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provides oversight and monitoring of the Companys
financial statements and audits;
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oversees matters relating to communications with the outside
auditors and management;
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prepares an annual report to be included in the Companys
proxy statement relating to the annual report; and
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provides oversight to the extent it deems necessary on certain
other matters related to certain related party transactions.
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The Audit Committee met ten (10) times during fiscal 2008.
The Audit Committee schedules its meetings with a view to
ensuring that it devotes appropriate attention to all of its
tasks. The Audit Committees meetings include, whenever
appropriate, executive sessions with the Companys
independent auditors without the presence of the Companys
management.
As part of its oversight of the Companys financial
statements, the Audit Committee reviews and discusses with both
management and the Companys independent auditors all
annual financial statements and quarterly operating results
prior to their issuance. During fiscal 2008, management advised
the Audit Committee that each set of financial statements
reviewed had been prepared in accordance with generally accepted
accounting principles, and reviewed significant accounting and
disclosure issues with the Audit Committee. These reviews
included discussion with the outside auditors of matters
required to be discussed pursuant to Statement on Auditing
Standards No. 61 (Communication with Audit Committees)
as amended (AICPA, Professional Standards, Vol. 1. AV
Section 380) and as adopted by the Public Accounting
Oversight Board in Rule 3200T, including the adoption of,
or changes to, the Companys significant internal auditing
and accounting principles and procedures as suggested by the
outside auditors, internal audit and management and any
management letters provided by the outside auditors and the
response to those letters. The Audit Committee has also received
the written disclosures and the letter from the Companys
independent accountant, Deloitte & Touche LLP
(sometimes referred to as D&T), required by applicable
requirements of the Public Company Accounting Oversight Board
regarding D&Ts communications with the Audit
Committee concerning independence, and has had discussions with
D&T regarding their independence. The Audit Committee has
also received, reviewed and discussed with D&T the report
required by section 10A(k) of the Securities Exchange Act
of 1934.
Taking all of these reviews and discussions into account, the
undersigned Audit Committee members recommended to the Board of
Directors that the Board approve the inclusion of the
Companys audited financial statements in the
Companys Annual Report on
Form 10-K
for the fiscal year ended January 31, 2009, for filing with
the SEC.
Members of the Audit Committee
Emanuel Chirico (Chairperson)
Lawrence J. Schorr
Walter Rossi
18
ITEM 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Deloitte & Touche LLP has served as our independent
registered public accounting firm since the audit for the
11-month
period ended January 30, 1999. For 2008, D&T rendered
professional services in connection with the audit of our
financial statements, including review of quarterly reports and
review of filings with the SEC and provided tax services. They
are knowledgeable about our operations and accounting practices
and are well qualified to act as the independent registered
public accounting firm, and the Audit Committee has selected
D&T as such for 2009.
Audit and
Non-Audit Fees and Independent Public Accountants
The following table presents fees for professional audit
services rendered by Deloitte & Touche LLP for the
audit of the Companys annual financial statements for
fiscal 2007 and 2008, and fees billed for other services
rendered by D&T for fiscal 2007 and 2008.
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Fiscal 2007
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Fiscal 2008
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Audit Fees
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$
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925,188
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$
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1,040,645
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Audit-Related Fees
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295,824
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114,167
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Tax Fees
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246,510
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29,164
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All Other Fees
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Total all Fees
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$
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1,467,522
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$
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1,183,976
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Audit Fees. Amounts presented for fiscal 2007
and 2008 include $323,816 and $221,076 of fees incurred in
connection with review of Company compliance under the
Sarbanes-Oxley Act in fiscal 2007 and 2008, respectively.
Audit-Related Fees. Audit related fees paid in
fiscal year 2007 principally include fees relating to
acquisitions, procedures performed in connection with the
Companys financial statement restatement and audits of
employee benefit plans. Audit related fees in fiscal 2008
principally include fees relating to procedures performed in
connection with the goodwill and other intangible asset
impairment charge recorded by the Company, acquisitions and
audits of employee benefit plans.
Tax Fees. Tax fees set forth for fiscal 2007
and 2008 are for tax-related services related primarily to tax
compliance (including U.S. federal and state returns), tax
consulting and tax planning.
The Audit Committee pre-approves the terms of all auditing
services and the terms of any non-audit services which the
independent registered public accounting firm is permitted to
render under Section 10A(h) of the Securities Exchange Act
of 1934. The Audit Committee may delegate the pre-approval to
one of its members, provided that if such delegation is made,
the full Audit Committee at the next regularly scheduled meeting
shall be presented with any pre-approval decision made by that
member.
Representatives of D&T will be present at the Annual
Meeting of stockholders to respond to questions and to make
statements as they desire.
The Board of Directors
unanimously recommends that the stockholders vote
For
ratification of the
appointment of Deloitte & Touche LLP as the
Companys
independent registered
public accounting firm for Fiscal 2009.
EXECUTIVE
COMPENSATION
Compensation
Committee Report
The following Report of the Compensation Committee does not
constitute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates
this Report by reference therein.
19
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis set forth below with the
Companys management and, based upon such review and
discussion, the Compensation Committee recommended to the Board
that the Compensation Discussion and Analysis be included in
this Proxy Statement.
The full text of the Compensation Committees charter is
available on the Investor Relations portion of our website
(www.dickssportinggoods.com).
Respectfully submitted,
Members of the Compensation Committee
David I. Fuente (Chairperson)
Lawrence J. Schorr
Larry D. Stone
Compensation
Discussion and Analysis
Overview
This section of our proxy statement discusses the compensation
awarded to, earned by, or paid to the named executive officers
(we refer to the individuals who served as the Companys
Chief Executive Officer and Chief Financial Officer during
fiscal 2008, as well as the other individuals included in the
Summary Compensation Table on page 33,
as the named executive officers).
Role of
Compensation Committee
Our Compensation Committee is responsible for reviewing the
corporate goals and objectives relevant to the compensation of
the Chairman and Chief Executive Officer (who in fiscal 2008
also held the title of President), evaluating the Chairman and
Chief Executive Officer based on those goals and objectives and
setting his compensation based on that performance. The
Compensation Committee makes recommendations to our Board and
the Chairman and Chief Executive Officer related to the
compensation of other named executive officers and approves
those officers compensation. Additionally, as it relates
to all employee compensation other than his own, our Chairman
and Chief Executive Officer plays a central role in
establishing, reviewing and evaluating compensation matters.
Because our Chairman and Chief Executive Officer is key to our
business, holds a majority of the voting power of our capital
stock and has been operating the Company since 1984, he plays an
extremely significant role in establishing all policies at the
Company, including those related to other employees
compensation. For example, the Chairman and Chief Executive
Officer makes the initial determination of annual base salary
for all executive officers, in consultation with the head of
Human Resources, subject to review and approval by the
Compensation Committee, approves (as part of a subcommittee
appointed by the Compensation Committee) individual equity
awards for officers other than directors and executive officers,
and makes the final determination on whether new
and/or
revised compensation programs will be presented by management to
the Compensation Committee.
Under the rules promulgated by the New York Stock Exchange and
Rule 162(m) of the Internal Revenue Code, as amended, the
three members of our Compensation Committee are independent
non-employee directors for purposes of establishing compensation
for our named executive officers.
Objectives
and Philosophy
General. The Companys compensation
objectives and philosophy are grounded in our overall
goal which is to be the number one sports and
fitness specialty retailer for all athletes and outdoor
enthusiasts through the relentless improvement of everything we
do. We believe that, in order to pursue and achieve that goal,
we need to continue to grow our business in a very disciplined
way. Because we believe that financial discipline and focus are
20
critical elements to the Companys overall success, we use
earnings before taxes (EBT) as the primary metric to
measure our business goals for compensation purposes.
Compensation Philosophy. Our compensation
programs are designed to attract and retain executive leaders
who are results oriented, financially astute and focused on
continuous performance improvement. Consequently, our
compensation philosophy currently emphasizes at risk
pay by providing for market median compensation at target
performance and significant upside potential for above-target
performance through our variable pay programs. The chart below
provides the purpose and specific target market position for
each pay element.
|
|
|
|
|
Pay Component
|
|
Purpose
|
|
Philosophy/Target Market Position
|
|
Base salary
|
|
Compensate the executive relative to his/her individual skills,
experience, technical/functional knowledge and contributions to
the Company.
|
|
Retail market median with a willingness to pay up to the
75th percentile for critical skills in key functions.(a)
|
Performance based annual cash bonus
|
|
Encourage achievement of above-target
financial metrics
Focus efforts on continuous short-term
improvement
Align cross-functional objectives
through use of commonly utilized Company-wide metrics (e.g., EBT)
|
|
Retail market median for target performance with upside
potential at or above the 75th percentile for maximum
performance.(a)
|
Long-term stock based incentives
|
|
Drive behaviors that lead to long-term
growth and financial success
Create a balance between a short-term
and a long-term performance focus
Align executive and stockholder
interests
Retain key executive talent
Provide executive ownership opportunities
|
|
Retail market median for target performance with above median
discretionary awards for outstanding performance against key
financial metrics.
|
Retirement and welfare benefits
|
|
Provide tax-deferred retirement savings opportunities and
financial protection against illness, disability or death.
|
|
Competitive with the retail market. This component is part of
our broad-based benefit program and available to other employees
based on certain eligibility criteria.(b)
|
Perquisites and other additional benefits
|
|
Attraction and retention of key executive talent.
|
|
Competitive but limited use of executive perquisites.
|
|
|
|
(a) |
|
Percentile information derived from the Hay Retail Survey,
discussed below under Benchmarking Executive
Compensation. |
|
(b) |
|
Health benefits such as medical, dental and vision available to
our named executive officers are the same as those offered to
other full-time associates, with the exception of our Chairman
and Chief Executive Officer, whose medical plan contains a
higher level of coverage due to the critical nature of his role.
Retirement programs, as described below, are available to
certain managers and high-level individual contributors. |
Determining
Executive Compensation
Material increases or decreases in our named executive
officers compensation (other than our Chairman and Chief
Executive Officer) are determined by our Chairman and Chief
Executive Officer (through his recommendations to the
Compensation Committee) and reviewed and approved by our
Compensation Committee. These changes are determined based on
the circumstances related to the named executive officer
including individual performance, specific skills, knowledge and
experience, the internal value of the position held and external
market
21
competitiveness. Overall Company performance is an intrinsic
element of our variable pay programs. The annual bonus plan
payout for named executive officers is based solely on Company
financial metrics. Equity grants made under our 2002 Plan are
inherently performance based, as the executive officer receives
limited benefit from the grant unless the stock price rises
after the grant date. Company performance is also a
consideration in determining other aspects of compensation,
including base pay increases and Company contributions to
retirement programs.
Changes to our Chairman and Chief Executive Officers
compensation are determined based on the consolidated
performance of our Company and our subsidiaries. The
Compensation Committee, in determining compensation amounts for
the Chairman and Chief Executive Officer, also reviews and takes
into consideration the aggregate historic compensation awarded
to the Chairman and Chief Executive, both in terms of individual
elements of compensation (including the mix of fixed versus
variable pay components), as well as the aggregate value of the
Chairman and Chief Executive Officers equity ownership in
the Company.
Benchmarking
Executive Compensation
The current economic downturn has and will continue to have a
major impact on executive compensation. In the face of increased
financial and operational challenges, the Company remains
committed to a performance pay approach in determining executive
officer pay. During this period of economic volatility, the
challenge is to balance realistic performance expectations while
at the same time preserving the incentive to focus on our core
philosophy of relentless improvement in everything we
do. In addition, it is now more critical than ever to
ensure that we attract and retain the most capable and competent
leaders for our Company. To achieve the appropriate balance with
respect to these varying elements, the Compensation Committee
considers the pay mix between base and variable compensation in
setting executive officer pay to align with stockholder
interests and to be flexible enough to react to changing
economic conditions.
The Hay Group, a nationally known consulting company with a
strong emphasis in the retail sector, was originally engaged by
the Companys management in the fall of 2007 to conduct a
comprehensive market analysis for use in evaluating and
establishing executive compensation. In 2008 management engaged
the Hay Group to assist in developing a comprehensive review of
our executive officer total direct compensation. This data was
utilized by our Chairman and Chief Executive Officer to assist
him in developing recommendations to the Compensation Committee
regarding executive officer compensation. Each direct pay
component utilized by the Company was analyzed using the Hay
Group 2008 Retail Industry Total Remuneration Report (referred
to in this proxy statement as the Hay Retail
Survey), which includes 97 companies and provides
data by job title (controlling for differences in responsibility
and revenue). The Hay Group provides no other services to the
Company and the Compensation Committee believes the work
performed by The Hay Group for management does not in any way
impact the independence of the Compensation Committee members.
In addition, at the request of the Compensation Committee,
management in 2008 utilized the Hay Group to conduct a review of
the direct compensation components for our named executive
officers against a benchmark retail group, which we refer to as
the Peer Analysis. The Peer Analysis focused on base
pay, annual bonus and stock-based compensation. The Compensation
Committee approved the establishment of an Executive
Compensation Retail Peer Group using the following general
criteria for purposes of conducting the Peer Analysis:
|
|
|
|
|
publicly held specialty retailers;
|
|
|
|
retailers with revenues generally up to double the annual
revenues of the Company;
|
|
|
|
retailers with comparable financial metrics that consider both
short and longer-term performance such as Market Capitalization,
Sales, Return on Invested Capital and Total Shareholder
Return; and
|
|
|
|
companies with which we compete for executive talent.
|
The decision to include companies with up to double annual
revenues of the Company aligns with the aspirational nature of
our growth strategy, thereby reflecting the appropriate
recruitment universe from which we desire to attract executive
officer talent to support that strategy. Additionally, the
broader criteria ensures a sufficient number of companies are
included in our peer group to provide meaningful benchmarks.
Since the current economic conditions have affected most, if not
all, of these companies in a similar manner, the Compensation
22
Committee believes the peer group continues to represent a
proper benchmark for our executive officer compensation.
This peer group will be reviewed periodically by the
Compensation Committee and may change from time to time based on
each retailers continued relevance to the Companys
current or future business model, as well as the competitive
environment for executive talent. At its December 2008 meeting,
the Compensation Committee reviewed the peer group against
updated financial and operational metrics and determined that no
revisions were required at that time. The peer group is
comprised of the following companies:
|
|
|
Abercrombie and Fitch Co.
|
|
Charming Shoppes, Inc.
|
Advance Auto Parts, Inc.
|
|
Dollar Tree Stores, Inc.
|
American Eagle Outfitters, Inc.
|
|
Foot Locker, Inc.
|
AutoZone, Inc.
|
|
GameStop, Corp.
|
Barnes and Noble, Inc.
|
|
Collective Brands, Inc.
|
Bed Bath and Beyond Inc.
|
|
PetSmart, Inc.
|
Big Lots, Inc.
|
|
Ross Stores, Inc.
|
Borders Group, Inc.
|
|
Williams-Sonoma, Inc.
|
Cabelas Incorporated
|
|
|
Compensation
Program Design
The Compensation Committee, in consultation with our Chairman
and Chief Executive Officer, has designed our executive
compensation program to reward the achievement of specific
annual Company financial metrics and to align executives
interests with those of our stockholders by rewarding
performance that increases stockholder value. To that end, our
plans emphasize variable, performance-based pay.
Historically, we have not had a rigid policy or target for the
allocation between either cash and non-cash or short-term and
long-term incentive compensation. Rather, the Compensation
Committee, in consultation with our Chairman and Chief Executive
Officer, has maintained the flexibility to reallocate between
these variables as circumstances dictate. Set forth below is a
table for fiscal year 2008 that shows the percentage of
compensation for each of our named executive officers that is
considered to be at risk, as compared to the
percentages reflected in the Hay Retail Survey and our Peer
Group. Percentages used in this table reflect 2008 base pay,
2007 bonus paid in 2008 and the value of the 2008 annual equity
grant. The value of equity is derived using the fair market
value of the stock on March 26, 2008, the date before the
grant was approved and a Black Scholes factor (excluding
expected forfeiture rates). The above valuation methodology was
used to ensure the appropriate comparison with market data.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
|
2008 At Risk
|
|
|
|
|
|
Executive
|
|
|
|
Pay as a % of
|
|
|
|
|
|
Compensation
|
|
|
|
Total Direct
|
|
|
2008 Hay
|
|
|
Retail Peer
|
|
Position(1)
|
|
Compensation
|
|
|
Retail Survey
|
|
|
Group
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
86.4
|
%
|
|
|
76.5
|
%
|
|
|
75.4
|
%
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
|
65.9
|
%
|
|
|
55.3
|
%
|
|
|
68.6
|
%
|
Executive Vice President and Chief Operating Officer
|
|
|
66.0
|
%
|
|
|
36.3
|
%
|
|
|
61.0
|
%
|
Executive Vice President and Chief Merchandising Officer
|
|
|
70.2
|
%
|
|
|
33.5
|
%
|
|
|
66.8
|
%
|
Executive Vice President and Chief Marketing Officer
|
|
|
69.5
|
%
|
|
|
52.1
|
%
|
|
|
68.5
|
%
|
|
|
|
(1) |
|
Randall K. Zanatta, President and Chief Executive Officer- Golf
Galaxy, stepped down from his position in July 2008, and as such
is not included herein; for details regarding
Mr. Zanattas departure, see page 43 of this
proxy statement. |
Although the overall percentage of at-risk pay is high, the
components that make up this portion of our executive officer
compensation package are designed to mitigate excessive risk
taking by emphasizing long-term compensation and financial
performance metrics correlated with stockholder value. For
example, the annual bonus
23
plan consists of solid foundational metrics that focus not just
on sales, but on profitable sales. Also, our equity plan allows
for the issuance of a balance of both stock options and
restricted stock; the inclusion of restricted stock with a
three-year cliff vesting period shifts the emphasis from
short-term results and decisions, while the use of stock options
helps us to maintain a strong focus on long-term improvement.
The combination of strong profit orientation in the short-term
bonus plan and the balanced equity program design encourages our
executive officers to make thoughtful, sound business decisions
that support the Companys growth strategy while at the
same time protecting stockholder interests.
Compensation
Components
Consistent with the goals discussed above, the Companys
compensation program for executives consists of these elements:
Base Salary. Base salaries for our named
executive officers, other than the Chairman and Chief Executive
Officer, including any annual or other adjustments, are based
upon recommendations provided by our Chairman and Chief
Executive Officer, taking into account a qualitative assessment
of the nature of the position, overall Company performance, the
contributions and experience of the officer and external market
competitiveness.
Fiscal Year 2008. The base salaries
paid to our named executive officers for fiscal 2006, 2007 and
2008 are set forth in the Summary Compensation
Table located on page 33 of the proxy statement.
Fiscal Year 2009. During the
Compensation Committees meeting in March 2009, salary
recommendations for the named executive officers subject to
Section 162(m) of the Internal Revenue Code were reviewed
and discussed by the Compensation Committee and determined for
fiscal year 2009 as follows:
|
|
|
|
|
Position
|
|
2009 Base Salary
|
|
|
Chairman and Chief Executive Officer(1)
|
|
$
|
700,000
|
|
Executive Vice President, Finance, Administration, Chief
Financial Officer and Treasurer(2)
|
|
$
|
500,000
|
|
President and Chief Operating Officer(3)
|
|
$
|
675,000
|
|
Executive Vice President and Chief Merchandising Officer
|
|
$
|
643,750
|
|
Executive Vice President and Chief Marketing Officer
|
|
$
|
450,000
|
|
|
|
|
(1) |
|
During fiscal 2008, Mr. Stack also carried the title of
President. |
|
(2) |
|
Beginning in fiscal 2009, Mr. Kullman has added the title
of Treasurer to his existing position as Executive Vice
President, Finance, Administration and Chief Financial Officer. |
|
(3) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
With the exception of a base salary adjustment awarded to
Mr. Schmidt as a result of his promotion to President and
Chief Operating Officer, all other named executive officer 2009
base pay increases were postponed. In making this determination,
the Compensation Committee considered the current economic
conditions within the retail industry, each named executive
officers total pay position within the retail market and
the proposed pay mix including the actual incentive payout and
long-term equity grant value. The Compensation Committee will
re-evaluate business conditions later in the fiscal year, and
revisit the question of whether to award base salary adjustments
based on such evaluation.
Based on information derived from the Hay Retail Study, as
compared to certain other companies reviewed by the Hay Group,
our 2009 base salaries placed our Chief Executive Officer in the
25th percentile on a comparative basis, our Chief Financial
Officer in the 25th percentile, our President and Chief
Operating Officer in the 25th percentile, our Chief
Merchandising Officer in the 50th percentile and our Chief
Marketing Officer in the 75th percentile. The relatively
low ranking on a percentile basis demonstrates the
Companys philosophy of maintaining a lower percentage of
total compensation attributable to base pay, with a higher
percentage of total compensation based on variable pay elements,
so as to keep the Companys named executive officers
focused on continual improvement of the Companys
performance, which is expected to ultimately benefit the
Companys stockholders as well. However, at the same time
the Company recognizes the need to provide higher base pay
amounts for those positions that are most crucial to the success
of a retail company. After reviewing the competitive
24
market and peer group data along with the total compensation of
the named executive officers, the Compensation Committee
believes the base salaries above reflect appropriate levels of
base pay.
Annual Bonus. Under our annual bonus program,
executive officers and certain other employees are eligible to
receive cash bonuses based upon the Companys attainment of
specific performance goals as recommended by the Chairman and
Chief Executive Officer and approved by the Compensation
Committee.
Fiscal Year 2008. The Companys
annual incentive bonus opportunities applicable to the named
executive officers for fiscal year 2008 were established using
the following position-specific Company metrics (the 2008
Metrics):
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|
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|
|
|
|
|
|
|
|
Consolidated
|
|
|
Dicks
|
|
|
Dicks
|
|
Position(1)
|
|
EBT(2)
|
|
|
EBT
|
|
|
Sales
|
|
|
Chairman, Chief Executive Officer and President(3)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
|
|
|
|
|
80
|
%
|
|
|
20
|
%
|
Executive Vice President and Chief Operating Officer(4)
|
|
|
|
|
|
|
80
|
%
|
|
|
20
|
%
|
Executive Vice President and Chief Merchandising Officer
|
|
|
|
|
|
|
80
|
%
|
|
|
20
|
%
|
Executive Vice President and Chief Marketing Officer
|
|
|
|
|
|
|
80
|
%
|
|
|
20
|
%
|
|
|
|
(1) |
|
Randall K. Zanatta, President and Chief Executive Officer- Golf
Galaxy, stepped down from his position in July 2008, and as such
is not included herein; for details regarding
Mr. Zanattas departure, see page 43 of this
proxy statement. |
|
(2) |
|
Metric is determined as Earnings Before Taxes for the Company
and its wholly-owned subsidiaries. |
|
(3) |
|
During fiscal 2008, Mr. Stack also carried the title of
President. |
|
(4) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
After the 2008 Metrics were established for each named executive
officer (whether consisting of one metric or a combination of
metrics), the Company established the various percentage levels
for the 2008 Metrics at which bonus payments may be paid,
whether at the minimum, threshold, target or maximum percentage
amounts. These percentage levels were established based on
percent change from fiscal year 2007 results for the applicable
Metrics set forth above (consolidated EBT, Dicks Sporting
Goods EBT and Dicks Sporting Goods sales). The
Compensation Committee set the minimum, threshold, target and
maximum levels for the 2008 Metrics such that the relative
difficulty of achieving the target level is consistent from year
to year.
A specified percentage of the named executive officers
annual salary is used to determine the actual bonus amount to be
paid. For fiscal 2008, four (4) separate levels of
performance were established: (i) a minimum level of
performance below which no bonus award is paid; (ii) a
threshold level of performance; (iii) a target level of
performance; and (iv) a maximum level of performance above
which no additional bonus would be paid. The minimum level of
performance was a special addition for 2008, and was added by
the Compensation Committee in anticipation of the unique level
of economic volatility that would likely occur in 2008, and was
established in recognition of the importance of maintaining the
pay for performance nature of the bonus program, while at the
same time preserving its incentive and retentive
characteristics. The following sets forth the specific bonus
percentages payable for fiscal 2008 for our named executive
officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Position(1)
|
|
Minimum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Chairman, Chief Executive Officer and President(2)
|
|
|
80
|
%
|
|
|
160
|
%
|
|
|
200
|
%
|
|
|
400
|
%
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Executive Vice President and Chief Operating Officer(3)
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Executive Vice President and Chief Merchandising Officer
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Executive Vice President and Chief Marketing Officer
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
|
|
|
(1) |
|
Randall K. Zanatta, President and Chief Executive Officer- Golf
Galaxy, stepped down from his position in July 2008, and as such
is not included herein; for details regarding
Mr. Zanattas departure, see page 43 of this
proxy statement. |
25
|
|
|
(2) |
|
During fiscal 2008, Mr. Stack also carried the title of
President. |
|
(3) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
Each of the categories for the applicable 2008
Metric (i.e. Minimum, Threshold, Target and Maximum) has a
correlative relationship with the levels of specific bonus
percentages that are payable; that is, the Compensation
Committee looks at the percentage of the applicable 2008 Metrics
that the Company achieved during the 2008 fiscal year to
determine the actual payment amount. For example, if the
Threshold 2008 Metric was achieved, then the payment
amount owed would equal the corresponding Threshold
percentage for the named executive officer, based on the 2008
base salary amount. These amounts are determined on a
sliding scale, such that if the 2008 Metric achieved
is between the Threshold and Target amount, then the
corresponding percentage bonus payable would be a corresponding
percentage amount between the Threshold and Target percentages.
As a result of the Companys fiscal 2008 operating results,
and in connection with our 2008 bonus program, we paid
Mr. Stack, Mr. Kullman, Mr. Schmidt,
Ms. Manto and Mr. Hennion cash bonuses of $0,
$172,059, $215,074, $221,278 and $154,853 respectively. The
chart below summarizes the relationship between actual
performance against target and payouts to our named executive
officers.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
Target Payout
|
|
|
Actual Payout
|
|
|
Actual
|
|
|
|
Bonus
|
|
|
as a Percent of
|
|
|
as a Percent of
|
|
|
Performance
|
|
Position(1)
|
|
Received
|
|
|
Base Salary
|
|
|
Base Salary
|
|
|
Percent(2)
|
|
|
Chairman, Chief Executive Officer and President(3)
|
|
|
|
|
|
|
200
|
%
|
|
|
|
|
|
|
30.1
|
%
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
$
|
172,059
|
|
|
|
75
|
%
|
|
|
34.4
|
%
|
|
|
45.9
|
%
|
Executive Vice President and Chief Operating Officer(4)
|
|
$
|
215,074
|
|
|
|
75
|
%
|
|
|
34.4
|
%
|
|
|
45.9
|
%
|
Executive Vice President and Chief Merchandising Officer
|
|
$
|
221,278
|
|
|
|
75
|
%
|
|
|
34.4
|
%
|
|
|
45.9
|
%
|
Executive Vice President and Chief Marketing Officer
|
|
$
|
154,853
|
|
|
|
75
|
%
|
|
|
34.4
|
%
|
|
|
45.9
|
%
|
|
|
|
(1) |
|
Randall K. Zanatta, President and Chief Executive Officer- Golf
Galaxy, stepped down from his position in July 2008, and as such
is not included herein; for details regarding
Mr. Zanattas departure, see page 43 of this
proxy statement. |
|
(2) |
|
Actual performance is a weighted average for all named executive
officers except the Chairman, Chief Executive Officer and
President, and is based 80% on Dicks EBT and 20% on
Dicks Sales. If actual performance was separated out by
component, the percentages would be 43.6% and 55% respectively. |
|
(3) |
|
During fiscal 2008, Mr. Stack also carried the title of
President. |
|
(4) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
Each of the bonus payments are generally made for the most
recently completed fiscal year (assuming the performance levels
have been met) as soon as administratively practical after the
bonus amounts are determined and the Compensation Committee has
taken the action required under Section 162(m) of the
Internal Revenue Code. The Compensation Committee has retained
the right to pay bonuses outside of the Companys 2002 Plan
and that do not qualify and are not deductible by the Company as
compensation under Section 162(m) of the Internal Revenue
Code because the requirements of Section 162(m) have not
been met. Over the past three (3) years, we have achieved
at or near the maximum performance level twice.
Fiscal
Year 2009
For 2009, the bonus metrics for our named executive officers
will be based solely on Consolidated Earnings Before Taxes
(Consolidated EBT). The return to Consolidated EBT aligns with
the elimination of a separate management structure for Golf
Galaxy and the movement to a shared services management model.
Additionally, using a single Company-wide metric encourages
management to focus on profitable sales, appropriate expense
control and cross-functional operational efficiencies in a
holistic manner.
The Compensation Committee recognizes the continued economic
challenges facing our industry and believes it is especially
important during these times to provide a short-term incentive
plan that encourages and rewards performance results relative to
macro-economic conditions. Consequently, the additional minimum
payout
26
opportunity was retained for the 2009 plan year. The Company has
established the percentage levels for 2009 Consolidated EBT
metric at which bonus payments may be paid, whether at the
minimum, threshold, target or maximum percentage amounts. These
levels were established based on the midpoint of the expected
EBT range for 2009. While this represents a reduction from 2008
actual results, the Compensation Committee believes a
significant effort will be required to achieve this performance.
The maximum payout performance level aligns with 2008 actual EBT
performance which is well above the expected 2009 EBT range
maximum. In setting this stretch performance level, the
Compensation Committee intended to align extraordinary
performance with maximum payouts as well as support shareholder
interests within the context of the current unique economic
environment. The following table sets forth the applicable
target amounts for our 2009 Consolidated EBT metric:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Consolidated EBT
|
|
$
|
138,955,000
|
|
|
$
|
156,325,000
|
|
|
$
|
173,694,000
|
|
|
$
|
228,645,000
|
|
The following sets forth the levels of bonus percentages payable
for fiscal 2009 for our named executive officers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Position
|
|
Minimum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Chairman and Chief Executive Officer
|
|
|
80
|
%
|
|
|
160
|
%
|
|
|
200
|
%
|
|
|
400
|
%
|
Executive Vice President, Finance, Administration, Chief
Financial Officer and Treasurer(1)
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
President and Chief Operating Officer(2)
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Executive Vice President and Chief Merchandising Officer
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
Executive Vice President and Chief Marketing Officer
|
|
|
30
|
%
|
|
|
60
|
%
|
|
|
75
|
%
|
|
|
150
|
%
|
|
|
|
(1) |
|
In fiscal 2009, Mr. Kullman also assumed the title of
Treasurer. |
|
(2) |
|
As of February 1, 2009, Mr. Schmidt assumed the role
of President, in addition to Chief Operating Officer. |
Each of the levels set forth above for Consolidated
EBT (i.e. Minimum, Threshold, Target and Maximum) has a
correlative relationship with the levels of specific bonus
percentages that are payable; that is, the Compensation
Committee looks at the percentage of the applicable Consolidated
EBT metric that the Company achieves during the 2009 fiscal year
to determine the actual payment amount. These amounts are
determined on a sliding scale, such that if the
metric amount achieved is between two of the performance levels,
then the corresponding percentage bonus payable would be a
corresponding percentage amount between those performance levels.
In accordance with the requirements of Section 162(m) of
the Internal Revenue Code and our 2002 Plan, each of these
levels for fiscal 2009 was established by the Compensation
Committee prior to the end of the first quarter of that fiscal
year.
Stock Options. Our 2002 Plan is designed to
create a link between the creation of stockholder value and
long-term incentive compensation, provide our employees an
opportunity for increased equity ownership and attract and
retain associates who are focused on long-term performance.
During fiscal 2008, the Compensation Committee operated under
guidelines for stock option grants which are generally
applicable to all eligible employees. Under these guidelines,
stock option grants are generally made on an annual basis to
specified categories of employees in amounts that take into
account such factors as Company performance, total stockholder
return, share usage and stockholder dilution as well as market
competitiveness. Special grants may also be authorized by the
Compensation Committee outside of the annual-grant framework for
new hires and promotions, to recognize exceptional performance
or for retention purposes. Beginning in 2008, the Compensation
Committee delegated authority to a subcommittee consisting of
the Chairman and Chief Executive Officer, Executive Vice
President, Finance, Administration and Chief Financial Officer
and Senior Vice President, Human Resources to approve stock
option grants and grants of restricted stock to non-executive
officers for promotions, new hires and special retention
purposes during interim periods between meetings of the
Compensation Committee. The Compensation Committee is apprised
of these interim grants, and records of all such grants are
included in the Compensation Committee minute book.
27
Generally, all decisions to grant equity awards to our named
executive officers are in the sole discretion of the
Compensation Committee and, except for grants to the Chairman
and Chief Executive Officer, are based upon recommendations
provided by the Chief Executive Officer. Historically, annual
awards of stock options to named executive officers have been
made at a regularly scheduled Compensation Committee meeting
during the spring of each year. The exercise price of stock
option grants is determined by reference to the closing price of
our common stock on the last trading day prior to the date of
the grant or the date of the grant depending on the timing of
the Compensation Committee meeting during which the grants are
approved. Grants of stock options to newly hired named executive
officers who are eligible to receive them have been made at
special Compensation Committee meetings, in connection with
Board meetings or by unanimous written consent. We do not have
equity or other security ownership requirements or guidelines
applicable to our named executive officers nor do we have any
Company policies regarding hedging the economic risk of such
ownership.
Beginning in fiscal 2008, the Company revised the structure of
its annual equity awards by introducing a restricted stock
component to the annual grants. Specifically, the Companys
annual grant of equity awards for vice presidents and above
(including executive officers) was bifurcated, such that 40% of
the total value of the grant consisted of restricted stock, the
terms of which are discussed below, with the remaining 60%
awarded in a stock option. The 2008 annual equity grant for
non-employee directors, non-executive directors and other equity
eligible associates consisted entirely of shares of restricted
stock. Outside of the annual grant made to the named executive
officers in March of 2008, the Company also granted promotional
stock option awards in March of 2008 to Mr. Kullman in
connection with his promotion to Executive Vice President,
Finance, Administration and Chief Financial Officer from Senior
Vice President and Chief Financial Officer and Mr. Hennion
in connection with his promotion to Executive Vice President and
Chief Marketing Officer from Senior Vice President and Chief
Marketing Officer. See Grants of Plan-Based
Awards table located on page 35 of the proxy
statement for additional details on these grants.
Fiscal year 2008 equity awards (including both stock option and
restricted stock components) granted to our named executive
officers were generally between the 50th and
75th percentile of the Hay Retail Survey with the exception
of the Chairman and Chief Executive Officer, whose equity award
is below the 25th percentile. When compared against our
peer group, equity awards were generally between the
25th and 50th percentile. This is consistent with our
compensation philosophy, which provides for above median awards
only for outstanding Company performance. See the
Grants of Plan-Based Awards table located on
page 35 of the proxy statement for specific details on the
2008 grants.
Stock options granted under the 2002 Plan historically have a
ten (10) year maximum term from the date of grant, or
earlier upon employment termination, death or disability.
Commencing in fiscal year 2008, the maximum term for annual
stock option grants was reduced to seven (7) years,
pursuant to the terms of the individual award agreements.
Historically, most options have vested over four (4) years,
but in some instances options for new hires have vested over a
three (3) year period as a result of negotiations with the
new hire and in some cases cliff vest at the end of certain
periods. Vesting ceases upon termination of employment, unless a
specific agreement provides otherwise. Options that have vested
are generally exercisable for no more than ninety (90) days
(and options issued under our prior 1992 Stock Option Plan may
be exercisable for no more than thirty (30) days) following
termination, except in the case of death or disability, in which
case vested options are exercisable for twelve (12) months
(ninety (90) days for options issued under our prior 1992
Stock Option Plan), but in no event can an option be exercised
following its expiration date. Prior to the exercise of an
option, the holder has no rights as a stockholder with respect
to the shares subject to such option, including voting rights
and the right to receive dividends or dividend equivalents. All
options granted to our named executive officers are made with
exercise prices equal to the fair market value of the
Companys common stock in accordance with the plan under
which they are granted.
Restricted Stock. Beginning in fiscal year
2008, the Compensation Committee approved the use of restricted
stock for the annual grant as well as the new hire, promotion
and retention grant programs. Prior to 2008, the only issuances
of restricted stock by the Company were to certain employees of
Golf Galaxy, including Randall Zanatta, in connection with the
Companys acquisition of Golf Galaxy. These annual
restricted stock grants generally become 100% vested on the
third anniversary of the grant date, and were subject to
forfeiture if the recipient failed to remain employed by the
Company, or its subsidiary, during the vesting period. See
page 43 of the proxy statement for additional detail
regarding the treatment of restricted stock grants made to
Mr. Zanatta, who left employment
28
with the Company in July 2008. For 2008, the restricted stock
component constituted 40% of the total value of the grant with
the remaining 60% in stock options for vice presidents and above
(including executive officers), and 100% of the total value of
the grant for non-employee directors, non-executive directors
and other equity eligible associates. We believe that the
greater use of restricted stock enhances the retention aspect of
our equity program, more strongly encourages a long-term focus
in our executives and assists in reducing share usage and
stockholder dilution.
The 2009 equity grant reflects a number of considerations
resulting from the current volatile economic environment
including:
|
|
|
|
|
an increased emphasis on at risk pay as a percent of total
compensation to encourage continued attention to both short-term
and long-term results improvement;
|
|
|
|
an increased focus on individual performance and contributions
in achieving our business objectives;
|
|
|
|
maintaining a competitive compensation package for our executive
officers in a year where base pay may see little to no increase
and bonus payouts are greatly reduced;
|
|
|
|
the decreased retentive value of historical stock option
grants; and
|
|
|
|
reduction in the overall value of the annual grant resulting
from continued expense management and dilution reduction efforts.
|
The 2009 target equity grant is generally at 2008 share
levels. However, individual grant awards incorporate the
considerations listed above, and may be higher or lower than the
target grant level. With respect to the annual grant, final
equity awards for our named executive officers represent a
reduction in value ranging from 7% to 38%. In light of the
overall reduction in value of our named executive officers
total compensation as well as the decreased retentive value of
their historic stock option grants, a special Long-Term
Retention Grant was awarded to each executive officer in the
form of stock options that vest 100% on the fourth anniversary
of the grant date (cliff vest). The use of stock
options, which are inherently performance-based, combined with a
four-year cliff vesting period, provides a strong incentive to
our named executive officers to achieve sustainable long-term
results for our stockholders.
Retirement and Other Benefits. The
Companys retirement savings plan, established pursuant to
Section 401(k) of the Internal Revenue Code, covers all
salaried employees (including executive officers) and certain
hourly employees. Under the terms of the retirement savings
plan, the Company provides a discretionary matching contribution
which has typically been paid out at 50% of each
participants contribution up to 10% of the
participants compensation. The participant must be an
active employee on December 31st of the plan year to
receive that years matching contribution. All Company
contributions to the savings plan vest over a five (5) year
period, at 20% per year of service. The Compensation Committee
approves this match annually.
Supplemental Smart Savings Plan. The
Companys Supplemental Smart Savings Plan, which became
effective July 2006, allowed certain members of management to
annually defer up to 15% of their compensation (defined as base
salary, quarterly bonus compensation and annual incentive bonus
payments), and could elect to receive distributions from the
Supplemental Smart Savings Plan on the earlier of (i) a
specific date which occurs no earlier than the second plan year
following the plan year in which deferrals designated for
distribution were credited or the date the employees
employment is terminated for any reason, or (ii) the date
the employees employment is terminated for any reason. The
form of distribution could, at the executives election, be
paid in a single lump sum payment, or monthly, quarterly,
semi-annual or annual installments, with any installment term
between two (2) and fifteen (15) years.
We implemented the Supplemental Smart Savings Plan because
certain members of management had historically been restricted
in their ability to participate in the Companys existing
401(k) Plan because of qualified plan testing rules. The
Supplemental Smart Savings Plan was amended in December 2006 to
exclude executive officers from being eligible to participate in
the Supplemental Smart Savings Plan.
Under the current Supplemental Smart Savings Plan, the Company
provides a matching contribution of 50% of each
participants contributions up to 7%. The Company
established a rabbi grantor trust, with a third-party trust
29
company as trustee, for the purpose of providing the Company
with a vehicle to fund participant contributions and Company
matching amounts under the Supplemental Smart Savings Plan.
Officers Supplemental Savings Plan. On
March 21, 2007, our Compensation Committee approved the
implementation of the Dicks Sporting Goods Officers
Supplemental Savings Plan, referred to as the Officers
Plan, a voluntary nonqualified deferred compensation plan,
effective April 1, 2007. The Officers Plan was
implemented for the purpose of attracting high quality
executives and promoting in our key executives increased
efficiency and an interest in the successful operation of the
Company. Certain key executives, including our named executive
officers, are eligible to participate in the Officers
Plan. These executives are being afforded the opportunity to
participate in the Officers Plan because, as discussed
above, they are no longer eligible to participate in our
Supplemental Smart Savings Plan.
Under the Officers Plan, eligible participants have the
opportunity to defer up to 25% of their base salary and up to
100% of their annual bonus, with such deferred amounts being
allocated under the Officers Plan among a range of
investment choices. Participant deferral amounts are 100%
vested, and matching contributions become 100% vested after five
(5) years of plan participation, or upon a
participants death, disability or upon a change in control
of the Company. Eligible participants may elect to receive
distributions from the Officers Plan as a lump sum, in
annual installments with any installment term between two
(2) and twenty (20) years, or a combination of the two
options. Vested matching contributions may be distributed only
after a participant reaches age 55. Distributions are also
triggered upon a participants death or disability (as
defined in applicable treasury regulations) or in the event of
certain hardships or changes of control (each as defined under
Section 409A of the Internal Revenue Code).
Under the Officers Plan, we are required to match amounts
deposited into plan accounts at a rate of 20% of the
participants annual deferral, up to a $200,000 maximum
match per year. Matching amounts are contributed as one lump sum
following the end of the fiscal year, and the participant must
be an eligible participant as of December 31st to
receive the matching contribution for that year. We also have
the ability to make a discretionary matching contribution as we,
through our Board, may determine from time to time. The Company
established a rabbi grantor trust, with a third-party trust
company as trustee, for the purpose of providing the Company
with a vehicle to fund participant contributions and Company
matching amounts under the Officers Plan. We may at any
time direct the Officers Plans administrator to
amend or terminate the Officers Plan, except that no
amendment or termination may reduce a participants account
balance. For additional information regarding matching amounts
received by our named executive officers see the
Nonqualified Deferred Compensation table set
forth on page 41 of our proxy statement.
Employee Stock Purchase Plan. The Company has
an employee stock purchase plan, which provides that eligible
employees (including named executive officers) may purchase
shares of our common stock at a discount. There are two offering
periods in a fiscal year, one ending on June 30th and
the other on December 31st, or as otherwise determined by
the Companys Compensation Committee. The employees
purchase price is 85% of the lesser of the fair market value of
the stock on the first business day or the last business day of
the semi-annual offering period. Employees may purchase shares
having a fair market value of up to $25,000 for all purchases
ending within the same calendar year. Our Chairman and Chief
Executive Officer is not eligible to participate in the Employee
Stock Purchase Plan because he owns more than 5% of our voting
stock. In an effort to control costs, the Company has decided to
suspend indefinitely the Employee Stock Purchase Plan starting
with the July 1, 2009 purchase period.
Life Insurance. We pay the insurance premiums
on life insurance policies for the benefit of our Chairman and
Chief Executive Officer. The beneficiaries under each policy is
the executives spouse, a personal beneficiary chosen by
the Chairman and Chief Executive Officer (and prior to death he
may receive the cash surrender value of the policy), and the
Company, respectively. Attributed costs of the personal benefits
described above for our Chairman and Chief Executive Officer for
the fiscal year ended January 31, 2009, are included in
column (i) of the Summary Compensation
Table on page 33 of this proxy statement.
Perquisites and Other Personal Benefits. The
Company provides named executive officers with perquisites and
other personal benefits that our Chairman and Chief Executive
Officer and the Compensation Committee believe are reasonable
and consistent with our overall compensation program to better
enable us to attract and retain
30
our executive talent for key positions. Certain named executive
officers may be provided with use of automobiles leased by the
Company and in certain instances tax preparation service,
reimbursement for certain club dues, personal use of Company
owned or leased aircraft in accordance with our aircraft policy,
the use of administrative assistant services for personal
matters and the personal use of tickets acquired by the Company
for business entertainment when they become available because no
business use has been arranged. Attributed costs of these
benefits described above for the named executive officers for
the fiscal year ended January 31, 2009, are included in
column (i) of the Summary Compensation Table
and the related footnotes to the column on page 33 of
this proxy statement.
Written Employment Arrangements. We
historically have not entered into employment agreements with
our named executive officers. Except for certain officers of
Golf Galaxy, Inc. (which we acquired in February 2007) who
had employment agreements in place prior to our acquisition of
Golf Galaxy, and with whom we negotiated continuing employment
agreements in connection with the acquisition, and in some
limited instances for new hires, we have generally only provided
our executive officers with limited severance payments upon
termination of employment. In most cases, upon the termination
of a named executive officers employment by us we are only
obligated to pay to that named executive officer an amount equal
to the greater of (i) four (4) weeks of pay at the
named executive officers base salary or (ii) one
(1) week of pay for every year of employment with us. The
severance payment is payable bi-weekly over the
12-month
period following the named executive officers termination.
No severance payment is payable to the named executive officer
if the named executive officer voluntarily terminates employment
with us, retires or is terminated due to cause (as
defined in the agreement), death, or permanent disability. The
Company in its discretion may offer other arrangements to
employees who end employment with the Company. Aside from the
employment agreements discussed in this proxy statement, the
Company does not have any arrangements in place with the named
executive officers that would provide severance payments to them
upon a
change-in-control.
In some instances in connection with the negotiation of new
hires we have entered into offer letters with our executive
officers which have provided them written assurances of
additional elements of compensation as they join our Company. In
November 2005, the Company agreed to terms of employment with
Gwen Manto, our Executive Vice President and Chief Merchandising
Officer. Under her offer letter, Ms. Manto received an
initial gross annual salary of $600,000, and is eligible to
participate in the Companys management bonus plan.
Ms. Manto received a signing bonus of $385,000, which was
required to be refunded if her employment was voluntarily
terminated within one (1) year of starting employment, and
an initial stock option grant of 150,000 shares of common
stock, which cliff vested in January 2009. The Company also paid
to Ms. Manto the value of 8,000 units of unvested
restricted stock held by Ms. Manto in connection with her
previous employment at Sears, Roebuck and Company.
In February 2007, we acquired Golf Galaxy as our wholly-owned
subsidiary. Following our acquisition of Golf Galaxy, Randall K.
Zanatta, Golf Galaxys President and Chief Executive
Officer, continued to serve in that capacity until July 2008.
Because Mr. Zanatta previously had an employment agreement
in place with Golf Galaxy, we negotiated and entered into an
employment agreement with him, which was based on his pre-merger
agreement with Golf Galaxy, for a term of three (3) years.
Under the terms of his employment agreement, Mr. Zanatta
received a base salary, specified benefits, certain stock option
and restricted stock grants discussed below, and was eligible to
receive annual bonuses, based primarily on the performance of
Golf Galaxy but also the performance of overall Company goals.
Mr. Zanatta was entitled to severance if terminated without
cause (as defined in the employment agreement), and was subject
to certain non-compete and non-solicitation covenants set forth
in the employment agreement.
In connection with his employment, Mr. Zanatta received a
one-time special option exercisable for 330,000 shares of
our common stock, which, subject to vesting, is exercisable at
any time prior to February 13, 2012 or for such longer
period as is prescribed by our 2002 Plan, if still employed by
Golf Galaxy. Additionally, Mr. Zanatta received
150,000 shares of our restricted common stock, which, if
employed by the Company on February 13, 2010, would, with
respect to half of the shares, vest automatically, and would,
with respect to the other half of the shares, vest if certain
performance targets were achieved. This employment arrangement,
including the elements of severance in the agreement, arose out
of the assumption of Mr. Zanattas employment
agreement with Golf Galaxy that existed prior to our acquisition
of Golf Galaxy and as a result of negotiations between us and
Mr. Zanatta. The performance targets for
Mr. Zanattas performance-based restricted stock award
were a result of
31
negotiations with Mr. Zanatta. Those criteria are based on
Golf Galaxy and Company earnings metrics and savings and
synergies achievement. We believe that these targets represent
goals developed as the result of arms length negotiations
and as such are difficult to reach.
Effective July 18, 2008, Mr. Zanatta stepped down from
his position with Golf Galaxy. Pursuant to and subject to the
non-revocation of an Agreement and General Release dated
June 26, 2008, Golf Galaxy and the Company agreed to pay
Mr. Zanatta certain benefits upon his departure, including
a lump sum payment equal to $798,750, eligibility for additional
incentive bonus payments for the 2008 fiscal year (if and to the
extent the specified performance targets were actually
achieved), and a payment in lieu of or the continuation of
certain health, welfare and employee benefits for two
(2) years. Additionally, the stock option granted to
Mr. Zanatta exercisable for up to 330,000 shares and
all stock options previously granted to Mr. Zanatta that
were exercisable for Golf Galaxy common stock (which were
converted to options exercisable for Companys common stock
as a result of the acquisition of Golf Galaxy by the Company)
fully vested. The 75,000 shares of restricted common stock
granted to Mr. Zanatta that were to vest based only on the
passage of time fully vested. Mr. Zanatta forfeited any
rights to the additional 75,000 shares of restricted common
stock granted to him that were to vest based on the attainment
of certain performance metrics, as well as any other unvested
stock options or restricted shares previously granted by the
Company.
See the disclosure provided in the Summary Compensation
Table located on page 33 of the proxy statement
and page 43 of the proxy statement for additional
information regarding the severance paid to Mr. Zanatta
upon his departure from the Company.
In February 2007, we agreed to employment terms with
Mr. Kullman, who joined the Company in April 2007. The
offer letter provided to Mr. Kullman indicated that he
would receive an initial gross annual salary of $450,000, and be
eligible to participate in the Companys discretionary
management incentive plan with an initial target payout of 37.5%
of base pay. Mr. Kullman also received an initial stock
option grant exercisable for 100,000 shares, which vests at
25% per year starting on the first anniversary of the grant, and
an option grant exercisable for 50,000 shares, which vests
in its entirety on the fourth anniversary of the date of grant.
Mr. Kullman is also eligible to participate in the full
range of benefits and 401(k) plans offered to other Company
officers. In February 2008, Mr. Kullman was promoted to
Executive Vice President, Finance, Administration and Chief
Financial Officer, as a result of which his base salary was
increased to $500,000 and his 2008 management incentive plan
target increased to 75% of salary. In March 2008 he also
received a promotional stock option grant exercisable for
37,500 shares which vests at 25% per year starting on the
first anniversary of the grant. Effective February 1, 2009,
Mr. Kullman also assumed the title of Treasurer.
Effective February 2, 2008, William J. Colombo assumed the
role of Vice Chairman of the Companys Board of Directors
and stepped down as the Companys President and Chief
Operating Officer. In addition to serving as Vice Chairman of
the Companys Board, Mr. Colombo has agreed to
continue as an employee of the Company, to provide assistance
with respect to various projects as requested by our Chairman
and Chief Executive Officer, and receives compensation in
connection with such employment, as disclosed on page 16 of
the proxy statement.
Effective February 1, 2009, Joseph H. Schmidt assumed the
title of President of the Company, in addition to his role as
Chief Operating Officer, which he has held since February 2008.
On February 25, 2008, Diane Lazzaris began employment with
the Company as Senior Vice President-Legal, General Counsel and
Corporate Secretary, and on April 8, 2007 Kathryn Sutter
was promoted to Senior Vice President- Human Resources, and was
designated as an executive officer of the Company in December of
2008. Mr. Schmidt, Ms. Lazzaris and Ms. Sutter
are included as executive officers of the Company. Effective
April 13, 2009, Ms. Manto left as Executive Vice President
and Chief Merchandising Officer, as reported on the
Form 8-K filed by the Company on April 14, 2009.
Tax and
Accounting Implications
Deductibility of Executive
Compensation. Section 162(m) of the Internal
Revenue Code generally disallows a tax deduction to public
corporations for compensation over $1,000,000 paid for any
fiscal year to the corporations chief executive officer,
chief financial officer and three (3) other most highly
compensated executive officers as of the end of any fiscal year.
However, the statute exempts qualifying performance-based
compensation from the deduction limit if certain requirements
are met.
32
The Compensation Committee believes that it is generally in the
Companys best interest to attempt to structure
performance-based compensation, including stock option grants
and annual bonuses, to executive officers who may be subject to
Section 162(m) in a manner that satisfies the
statutes requirements. However, the Compensation Committee
also recognizes the need to retain flexibility to make
compensation decisions that may not meet Section 162(m)
standards when necessary to enable the Company to meet its
overall objectives, even if the Company may not deduct all of
the compensation. Accordingly, the Compensation Committee
expressly reserves the authority to approve non-deductible
compensation in appropriate circumstances. Further, because of
ambiguities and uncertainties as to the application and
interpretation of Section 162(m) and the regulations issued
thereunder, no assurance can be given, notwithstanding the
Companys efforts, that compensation intended by the
Company to satisfy the requirements for deductibility under
Section 162(m) does in fact do so.
In connection with the departure of Mr. Zanatta, the actual
severance payment amount received by Mr. Zanatta was less than
the amounts set forth below, as a result of tax witholding
amounts calculated in connection with the vesting of certain
equity awards and the application of Section 280G and 4999 of
the Internal Revenue Code.
Nonqualified Deferred Compensation. On
October 22, 2004, the American Jobs Creation Act of 2004
was signed into law, changing the tax rules applicable to
nonqualified deferred compensation arrangements. The Company
believes it is operating in good faith compliance with the
statutory provisions which were effective January 1, 2005.
Summary
Compensation Table
The following table discloses the compensation for Edward W.
Stack, the principal executive officer of the Company, Timothy
E. Kullman, the principal financial officer of the Company, the
other three (3) most highly compensated executive officers
of the Company or its subsidiaries who were serving as executive
officers at the fiscal year ended January 31, 2009 and
whose total annual compensation (excluding items described in
column (h) below) exceeded $100,000 and Randall K. Zanatta,
an individual for whom disclosure would have been provided
hereunder but for the fact that Mr. Zanatta was not serving
as an executive officer as of January 31, 2009
(collectively the named executive officers).
|
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|
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Change in
|
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|
|
|
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|
|
|
|
|
|
|
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|
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|
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Pension Value
|
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and
|
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|
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|
|
|
|
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Nonqualified
|
|
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|
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|
|
|
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Non-Equity
|
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Deferred
|
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|
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|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Principal Position
|
|
Year
|
|
|
($)(1)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)
|
|
|
($)(4)
|
|
|
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
Edward W. Stack,
|
|
|
2006
|
|
|
$
|
662,500
|
|
|
|
|
|
|
|
|
|
|
$
|
7,739,441
|
|
|
$
|
2,650,000
|
|
|
|
|
|
|
$
|
93,165
|
|
|
$
|
11,145,106
|
|
Chairman, Chief Executive
|
|
|
2007
|
|
|
$
|
698,077
|
|
|
|
|
|
|
|
|
|
|
$
|
5,687,220
|
|
|
$
|
2,792,308
|
|
|
|
|
|
|
$
|
323,648
|
|
|
$
|
9,501,253
|
|
Officer and President(5)
|
|
|
2008
|
|
|
$
|
700,000
|
|
|
|
|
|
|
$
|
187,381
|
|
|
$
|
2,178,252
|
|
|
|
|
|
|
|
|
|
|
$
|
305,556
|
(6)
|
|
$
|
3,371,189
|
|
Timothy E. Kullman,
|
|
|
2007
|
|
|
$
|
372,115
|
|
|
|
|
|
|
|
|
|
|
$
|
371,612
|
|
|
$
|
279,087
|
|
|
|
|
|
|
$
|
256,851
|
|
|
$
|
1,279,665
|
|
Executive Vice President Finance, Administration and Chief
Financial Officer
|
|
|
2008
|
|
|
$
|
500,000
|
|
|
|
|
|
|
$
|
27,964
|
|
|
$
|
544,119
|
|
|
$
|
172,059
|
|
|
|
|
|
|
|
|
|
|
$
|
1,244,142
|
|
Joseph H. Schmidt,
|
|
|
2008
|
|
|
$
|
625,000
|
|
|
|
|
|
|
$
|
69,914
|
|
|
$
|
570,056
|
|
|
$
|
215,074
|
|
|
|
|
|
|
|
|
|
|
$
|
1,480,044
|
|
Executive Vice President of Operations and Chief Operating
Officer(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gwen K. Manto,
|
|
|
2006
|
|
|
$
|
611,538
|
|
|
|
|
|
|
|
|
|
|
$
|
625,037
|
|
|
$
|
917,307
|
|
|
|
|
|
|
$
|
599,626
|
|
|
$
|
2,753,508
|
|
Executive Vice President
|
|
|
2007
|
|
|
$
|
624,038
|
|
|
|
|
|
|
|
|
|
|
$
|
956,610
|
|
|
$
|
831,097
|
|
|
|
|
|
|
$
|
222,627
|
|
|
$
|
2,634,372
|
|
and Chief Merchandising officer
|
|
|
2008
|
|
|
$
|
643,029
|
|
|
|
|
|
|
$
|
69,914
|
|
|
$
|
1,068,260
|
|
|
$
|
221,278
|
|
|
|
|
|
|
$
|
57,822
|
(8)
|
|
$
|
2,060,303
|
|
Jeffrey R. Hennion,
|
|
|
2008
|
|
|
$
|
450,000
|
|
|
|
|
|
|
$
|
22,008
|
|
|
$
|
463,914
|
|
|
$
|
154,853
|
|
|
|
|
|
|
$
|
17,864
|
(9)
|
|
$
|
1,108,639
|
|
Executive Vice President and Chief Marketing Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall K. Zanatta,
|
|
|
2007
|
|
|
$
|
362,596
|
|
|
|
|
|
|
|
|
|
|
$
|
2,112,741
|
|
|
$
|
131,935
|
|
|
|
|
|
|
$
|
11,098
|
|
|
$
|
2,618,370
|
|
President and Chief Executive Officer Golf Galaxy(10)
|
|
|
2008
|
|
|
$
|
225,860
|
|
|
|
|
|
|
$
|
616,173
|
(11)
|
|
$
|
748,304
|
(12)
|
|
|
|
|
|
|
|
|
|
$
|
805,723
|
(13)
|
|
$
|
2,396,060
|
|
33
|
|
|
(1) |
|
Salary amounts reflect payments earned during fiscal 2006, which
represented a 53 week fiscal year and fiscal 2007 and
fiscal 2008, which represented 52 week years. |
|
(2) |
|
The values set forth in this column represent the dollar amount
recognized for financial statement reporting purposes in fiscal
2008 for the fair value of restricted stock and stock option
awards granted to each named executive officer in accordance
with FAS 123R (disregarding any estimate of forfeitures
related to service-based vesting conditions). A discussion of
the relevant assumptions made in the valuation may be found in
the Stock-Based Compensation section of Note 11
of the footnotes to the Companys financial statements, in
the Companys Annual Report on
Form 10-K
for the fiscal year ended January 31, 2009. |
|
(3) |
|
Includes bonus payments earned in each of fiscal year 2006, 2007
and 2008, regardless of when paid. Under our 2002 Plan, the
relevant performance measures for the incentive bonus awards are
satisfied in fiscal 2006, 2007 or 2008, as applicable and thus
reportable in fiscal 2006, 2007 or 2008, as applicable, even
though payments are made, if any, in fiscal 2007, 2008 or 2009,
as applicable. |
|
(4) |
|
Use by our officers and directors of aircraft that are owned or
leased by us for non-business purposes is governed by our travel
policy for non-business use of corporate aircraft, which is
described on page 37 of this proxy statement. Except where
indicated in the table, all non-business use of aircraft by any
executive officer or director during fiscal 2008 was billed to
and paid for by the executive officer or director in accordance
with our travel policy. |
|
(5) |
|
Mr. Stacks title reverted back to Chairman and Chief
Executive Officer, effective February 1, 2009.
Mr. Stack did not receive any compensation from the Company
in 2008 in connection with his services as a director on the
Companys Board of Directors. |
|
(6) |
|
Personal benefits for fiscal 2008 include an annual vehicle
allowance, complimentary tickets to certain sporting events,
professional fees and country club dues. The amount shown also
includes a tax payment of $39,381 incurred as a result of
insurance, professional fees and country club dues, $41,697 of
insurance premiums paid in fiscal 2008 by us on two life
insurance policies for the benefit of Mr. Stack, for which
the beneficiaries under the policies, upon the executives
death, are the executives spouse and a personal
beneficiary of his choosing, respectively, and one disability
insurance policy for which the Company is beneficiary, and
$195,539 of matching contributions under the Companys
defined contribution plans. |
|
(7) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
|
(8) |
|
Amount for fiscal 2008 includes $57,822 of matching
contributions under the Companys defined contribution
plans. |
|
(9) |
|
Amount for fiscal 2008 includes $17,864 of matching
contributions under the Companys defined contribution
plans. |
|
(10) |
|
Mr. Zanatta stepped down as President and Chief Executive
Officer of Golf Galaxy effective July 18, 2008. |
|
(11) |
|
Includes forfeiture of 75,000 shares of restricted stock
granted February 13, 2007, and 7,898 shares of
restricted stock granted March 27, 2008, which were
forfeited in connection with Mr. Zanatta stepping down as
President and Chief Executive Officer of Golf Galaxy. |
|
(12) |
|
Includes forfeiture of 75,000 shares underlying a stock
option granted on June 6, 2007 at an exercise price of
$27.19 and 30,000 shares underlying a stock option granted
March 27, 2008, at an exercise price of $27.87, which were
forfeited in connection with Mr. Zanatta stepping down as
President and Chief Executive Officer of Golf Galaxy. |
|
(13) |
|
Includes severance payment totaling $798,750 and $6,973
continuation of benefits paid by the Company pursuant to
Mr. Zanattas severance agreement. As a result of tax
withholding amounts calculated in connection with the vesting of
certain equity awards at the time of Mr. Zanattas
departure and the application of Section 280G and 4999 of
the Internal Revenue Code, the actual payment amount received by
Mr. Zanatta was less than the amounts set forth herein. |
34
Grants of
Plan-Based Awards
The following table sets forth each award grant made to a named
executive officer in the 2008 fiscal year under plans
established by the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
All Other
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Number of
|
|
|
Option
|
|
|
or Base
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Equity Incentive
|
|
|
Shares of
|
|
|
Awards:
|
|
|
Price of
|
|
|
Fair Value
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Plan Awards
|
|
|
of Stock
|
|
|
Securities
|
|
|
Option
|
|
|
of Stock
|
|
|
|
Grant
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
or Units
|
|
|
Underlying
|
|
|
Awards
|
|
|
and Option
|
|
Name
|
|
Date
|
|
|
Threshold ($)
|
|
|
Target ($)
|
|
|
Maximum ($)
|
|
|
Underlying
|
|
|
Target(#)
|
|
|
Maximum(#)
|
|
|
or Units (#)
|
|
|
Options (#)
|
|
|
($/Sh) (2)
|
|
|
Awards (3)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
(l)
|
|
|
Edward W. Stack,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,694
|
|
|
|
90,000
|
|
|
$
|
27.87
|
|
|
$
|
12.22
|
|
Chairman, Chief Executive Officer and President(4)
|
|
|
|
|
|
$
|
560,000
|
|
|
$
|
1,400,000
|
|
|
$
|
2,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy E. Kullman,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,949
|
|
|
|
37,500
|
|
|
$
|
27.87
|
|
|
$
|
11.20
|
|
Executive Vice President
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
$
|
27.87
|
|
|
$
|
11.20
|
|
Finance, Administration and Chief Financial Officer
|
|
|
|
|
|
$
|
150,000
|
|
|
$
|
375,000
|
|
|
$
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph H. Schmidt,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,873
|
|
|
|
37,500
|
|
|
$
|
27.87
|
|
|
$
|
11.20
|
|
Executive Vice President and Chief Operating Officer(5)
|
|
|
|
|
|
$
|
187,500
|
|
|
$
|
468,750
|
|
|
$
|
973,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gwen K. Manto,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,873
|
|
|
|
37,500
|
|
|
$
|
27.87
|
|
|
$
|
11.20
|
|
Executive Vice President and Chief Merchandising Officer
|
|
|
|
|
|
$
|
192,908
|
|
|
$
|
482,272
|
|
|
$
|
964,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey R. Hennion,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,949
|
|
|
|
37,500
|
|
|
$
|
27.87
|
|
|
$
|
9.99
|
|
Executive Vice President and
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
$
|
27.87
|
|
|
$
|
9.99
|
|
Chief Marketing Officer
|
|
|
|
|
|
$
|
135,000
|
|
|
$
|
337,500
|
|
|
$
|
675,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall K. Zanatta,
|
|
|
3/27/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,898
|
(7)
|
|
|
30,000
|
(7)
|
|
$
|
27.87
|
|
|
$
|
11.20
|
|
President and Chief Executive Officer Golf Galaxy(6)
|
|
|
|
|
|
$
|
106,500
|
|
|
$
|
266,250
|
|
|
$
|
532,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Payments were made pursuant to our 2002 Plan, as set forth in
column (g) of our Summary Compensation
Table. Amounts were earned in fiscal 2008, but were
paid in fiscal 2009. The amounts set forth under column
(c) represent the minimum performance level amount payable
by the Company, assuming the minimum performance level was
achieved, to each named executive officer in fiscal 2008. |
|
(2) |
|
The exercise price of the stock options awarded were determined
in accordance with our 2002 Plan, which provides that the
exercise price for each share covered by an option shall be the
closing sale price for our common stock as quoted on the NYSE
for the last market trading day prior to the time of
determination. $27.87 was the closing price for our common stock
on March 26, 2008. |
|
(3) |
|
The full grant date fair value calculations are computed in
accordance with FAS 123R for those options and shares of
restricted stock awarded to the named executive officers in
fiscal 2008 under the Companys 2002 Plan (disregarding any
estimates of forfeitures related to service-based vesting
conditions). A discussion of the relevant assumptions made in
the valuation may be found in the Stock-Based
Compensation section of Note 11 of the footnotes to
the Companys financial statements in the Companys
Annual Report on
Form 10-K
for the fiscal year ended January 31, 2009. |
|
(4) |
|
Mr. Stacks title reverted back to Chairman and Chief
Executive Officer, effective February 1, 2009. |
|
(5) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer, effective February 1, 2009. |
|
(6) |
|
Mr. Zanatta stepped down as President and Chief Executive
Officer of Golf Galaxy effective July 18, 2008. |
|
(7) |
|
Award was forfeited upon Mr. Zanattas termination of
employment with the Company effective July 18, 2008. |
Understanding
Our Summary Compensation and Grants of Plan-Based Awards
Tables
Offer
Letters for Executive Officers
On November 28, 2005, the Company agreed to terms of
employment with Gwen Manto, whereby Ms. Manto agreed to
join the Company as Executive Vice President and Chief
Merchandising Officer. Ms. Manto joined the
35
Company in January 2006. Under the offer letter, Ms. Manto
received an initial gross annual salary of $600,000, and is
eligible to participate in the Companys management bonus
plan. Ms. Manto received a signing bonus of $385,000 and an
initial stock option grant of 150,000 shares, which cliff
vested January 9, 2009, three (3) years from her
starting employment date. The Company also paid to
Ms. Manto, in two yearly installments, the value of
8,000 units of unvested restricted stock held by
Ms. Manto in connection with her previous employment at
Sears, Roebuck and Company. These payments were made in two
installments during 2006 and 2007.
On February 13, 2007, we entered into an employment
agreement with Randall K. Zanatta, Golf Galaxys President
and Chief Executive Officer, in connection with our acquisition
of Golf Galaxy. Mr. Zanatta stepped down as Golf
Galaxys President and Chief Executive Officer effective
July 18, 2008. Mr. Zanattas employment agreement
was based on the prior agreement he had in place with Golf
Galaxy. Under the agreement, Mr. Zanatta received a base
salary (initially $355,000 per year), specified benefits, and
was entitled to receive an annual bonus, based primarily on the
performance of Golf Galaxy but also the performance of the
overall Company goals, in an amount equal to 0 to 150% of base
salary.
In addition to the above benefits, Mr. Zanatta received the
following stock option and restricted stock awards under his
employment agreement: a one-time special option exercisable for
330,000 shares of Company common stock, which, subject to
vesting, was exercisable at any time prior to February 13,
2012 or, if still employed by Golf Galaxy at that time, for such
longer period as is prescribed by our 2002 Plan, and
150,000 shares of Company restricted common stock, which,
if Mr. Zanatta continued to be employed by the Company on
February 13, 2010, would, with respect to half of the
shares, vest automatically, and would, with respect to the other
half of the shares, vest if certain performance targets were
achieved.
As set forth under his employment agreement, Mr. Zanatta
received severance in connection with his stepping down as
President and Chief Executive Officer of Golf Galaxy. See
Potential Payments Upon Termination or
Change-in-Control
on page 43 of this proxy statement for a description of the
severance received by Mr. Zanatta.
In February 2007, we agreed to employment terms with Timothy E.
Kullman, whereby Mr. Kullman agreed to join us as Senior
Vice President and Chief Financial Officer (now Executive Vice
President, Finance, Administration and Chief Financial Officer).
Mr. Kullman joined the Company in April 2007. Pursuant to
the offer letter, Mr. Kullman received an initial gross
annual salary of $450,000, and is eligible to participate in the
Companys discretionary management incentive plan.
Mr. Kullman also received an initial stock option grant
exercisable for 100,000 shares, which vests at 25% per year
starting on the first anniversary of the grant, and an option
grant exercisable for 50,000 shares, which vests in its
entirety on the fourth anniversary of the date of grant.
Mr. Kullman is also eligible to participate in the full
range of benefits and 401(k) plans offered to other Company
officers.
Option
Awards
The Companys 2002 Plan permits the granting of options,
both incentive stock options and non-qualified stock options, to
purchase shares of our common stock. The Companys 1992
Stock Plan also permitted the granting of both incentive stock
options and non-qualified stock options. The 1992 Stock Plan
terminated in 2002, such that no new options can be granted
under the 1992 Stock Plan, although certain options previously
granted under the 1992 Stock Plan remain exercisable.
Non-qualified stock options were granted to the Companys
named executive officers in fiscal 2008 as set forth in the
Grant of Plan Based Awards Table above. The option exercise
price for each share covered by an option was determined, in
accordance with the Companys 2002 Plan, as the closing
sale price for our common stock as quoted on the NYSE for the
last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source
as they deem reliable. The term of the option may not exceed
seven (7) years from the date of the grant. Generally,
options vest 25% per year over a four (4) year period on
each anniversary of the date of grant, although some options
have three (3) or four (4) year cliff vesting
features. See Potential Payments Upon Termination or
Change-in-Control
beginning on page 42 of this proxy statement for a
description of the effects of employment termination or a change
in control on stock option awards.
Restricted
Stock Awards
The Companys 2002 Plan also permits the granting of
restricted shares of our common stock. Beginning in fiscal 2008
the Company incorporated the use of restricted shares into its
overall compensation program. Shares of
36
restricted stock were granted to the Companys named
executive officers in fiscal 2008 as set forth in the Grant of
Plan Based Awards Table above and to the Companys
non-employee directors as set forth in the Director Compensation
Table on page 10 of this proxy statement. Generally,
restricted shares have three (3) year cliff vesting
features. See Potential Payments Upon Termination or
Change-in-Control
beginning on page 42 of this proxy statement for a
description of the effects of employment termination or a change
in control on restricted stock awards.
Incentive
Bonus Award
The Companys 2002 Plan allows for the payment of incentive
bonus awards to executive officers. Incentive bonus awards
payable to named executive officers in fiscal 2008 are reflected
in column (g) of the above Summary Compensation
Table. Each incentive bonus award confers the
opportunity to earn a future payment tied to the level of
achievement with respect to one or more performance criteria
established for a performance period, which is typically the
fiscal year, established by the Compensation Committee. Each
incentive bonus award is documented with respect to the minimum,
threshold, target and maximum amount payable, the performance
criteria and level of achievement versus these criteria that
shall determine the amount of such payment, the term of the
performance period as to which performance shall be measured for
determining the amount of any payment and the timing of any
payment earned by virtue of performance. The maximum amount
payable as a bonus may be a multiple of the target amount
payable, but the maximum amount payable pursuant to that portion
of an incentive bonus award granted under the 2002 Plan for any
fiscal year that is intended to satisfy the requirements for
performance-based compensation under
Section 162(m) of the Code shall not exceed $5,000,000.
The Compensation Committee establishes the performance criteria
and level of achievement versus these criteria that shall
determine the amount payable under an incentive bonus award at
each performance level, which criteria may be based on financial
performance
and/or
personal performance evaluations. The Compensation Committee may
specify the percentage of the incentive bonus that is intended
to satisfy the requirements for performance-based
compensation under Section 162(m) of the Code. For
additional detail regarding the targets and criteria utilized in
connection with the payment of the incentive bonus awards in
fiscal 2008, see Compensation Discussion and
Analysis on page 20 of this proxy statement.
The Compensation Committee determines the timing of payment of
any incentive bonus, and may provide for or permit an election
for the payment of any incentive bonus to be deferred to a
specified date or event. An incentive bonus may be payable in
equity or in cash or other property, including any award
permitted under the 2002 Plan. Notwithstanding satisfaction of
any performance goals, the amount paid under an incentive bonus
award on account of either financial performance or personal
performance evaluations may be reduced by the Compensation
Committee on the basis of such further considerations as the
Compensation Committee shall determine.
The Companys 2002 Plan allows the grant of awards that
qualify as performance-based compensation under
Section 162(m). One of the conditions to qualify as
performance-based is that the material terms of the performance
goals must be approved by the Companys stockholders at
least every five (5) years. The Board of Directors and our
stockholders approved the 2002 Plan prior to our initial public
offering, and was again approved by our stockholders at our 2003
and 2008 annual meetings, which preserved the tax status of
certain awards as performance-based, and thereby allowed the
Company to continue to fully deduct the compensation expense
related to such awards.
Travel
Policy
Our Compensation Committee and Board of Directors approved a
Company Travel Policy for Non-Business Use of Corporate Aircraft
in November 2004, which was filed with the SEC on a
Form 8-K.
Under the policy, certain of our executives (including the Chief
Executive Officer, President, Executive Vice Presidents, members
of the Board of Directors and other officers designated by the
Chief Executive Officer) may use any aircraft owned or leased by
us for non-business purposes. The frequency and priority of the
non-business use of the aircraft by these executives is
determined by our Chief Executive Officer. Except as approved by
our Chief Executive Officer or the Companys Compensation
Committee, the value of the non-business trip is billed to the
executive (done directly through our third-party aircraft
management company to the executive or director and paid by the
executive or director to our third-party aircraft management
company) at the aggregate incremental cost to the Company
37
determined in accordance with Item 402 of
Regulation S-K,
as amended (but no less than $500 per hour for each hour of
flight time), and in accordance with Federal Aviation
Administration regulations. In any limited instances where the
executive or director is not billed, any non-reimbursed travel
will be considered income to the executive or director and
reported for tax purposes in the executives earnings in
accordance with the base aircraft valuation formula, which is
also known as the standard industry fare level formula.
At least yearly, the Companys director of internal audit
conducts an internal audit of the non-business use of the
corporate aircraft to confirm adherence to the travel policy,
and prepares a report to the Companys Compensation
Committee relating to such audit.
Reference is also made to our Compensation Discussion
and Analysis on page 20 of this proxy statement,
which discusses compensation paid to our executive officers, how
each component of executive officer compensation is structured,
and the rationale for such structure.
38
Outstanding
Equity Awards At Fiscal Year End
The following table sets forth all unexercised options which
have been awarded to our named executive officers by the Company
and that are outstanding as of January 31, 2009.
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Value
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
of Shares or
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Unearned
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Options (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
Edward W. Stack,
|
|
|
2,035,000
|
|
|
|
|
|
|
|
|
|
|
$
|
3.00
|
|
|
|
10/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman,
|
|
|
3,696,000
|
|
|
|
|
|
|
|
|
|
|
$
|
11.44
|
|
|
|
10/21/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
144,000
|
|
|
|
|
|
|
|
|
|
|
$
|
12.63
|
|
|
|
01/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and President(1)
|
|
|
187,500
|
|
|
|
62,500
|
(2)
|
|
|
|
|
|
$
|
17.98
|
|
|
|
03/02/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
150,000
|
(3)
|
|
|
|
|
|
$
|
18.95
|
|
|
|
03/01/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
|
|
|
225,000
|
(4)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
90,000
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,694
|
(6)
|
|
$
|
260,871
|
|
|
|
|
|
|
|
|
|
Timothy E. Kullman,
|
|
|
25,000
|
|
|
|
75,000
|
(7)
|
|
|
|
|
|
$
|
29.32
|
|
|
|
04/09/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President,
|
|
|
|
|
|
|
50,000
|
(8)
|
|
|
|
|
|
$
|
29.32
|
|
|
|
04/09/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance, Administration
|
|
|
|
|
|
|
37,500
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Chief Financial Officer
|
|
|
|
|
|
|
15,000
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,949
|
(6)
|
|
$
|
43,478
|
|
|
|
|
|
|
|
|
|
Joseph H. Schmidt,
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
12.63
|
|
|
|
01/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
12.63
|
|
|
|
01/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Operating Officer(9)
|
|
|
15,000
|
|
|
|
5,000
|
(2)
|
|
|
|
|
|
$
|
17.98
|
|
|
|
03/2/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
35,000
|
(3)
|
|
|
|
|
|
$
|
18.95
|
|
|
|
03/1/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(10)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
37,500
|
(4)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,375
|
|
|
|
28,125
|
(11)
|
|
|
|
|
|
$
|
31.42
|
|
|
|
12/6/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,873
|
(6)
|
|
$
|
108,702
|
|
|
|
|
|
|
|
|
|
Gwen K. Manto
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
$
|
18.00
|
|
|
|
01/09/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President
|
|
|
62,500
|
|
|
|
62,500
|
(3)
|
|
|
|
|
|
$
|
18.95
|
|
|
|
03/01/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Chief Merchandising
|
|
|
31,250
|
|
|
|
93,750
|
(4)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
|
|
|
|
|
|
|
37,500
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,873
|
(6)
|
|
$
|
108,702
|
|
|
|
|
|
|
|
|
|
Jeffrey R. Hennion,
|
|
|
40,360
|
|
|
|
|
|
|
|
|
|
|
$
|
1.08
|
|
|
|
01/27/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
$
|
5.24
|
|
|
|
01/07/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Chief Marketing Officer
|
|
|
85,000
|
|
|
|
|
|
|
|
|
|
|
$
|
12.63
|
|
|
|
01/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
|
|
|
|
|
|
$
|
12.63
|
|
|
|
01/21/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
10,000
|
(2)
|
|
|
|
|
|
$
|
17.98
|
|
|
|
03/02/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
25,000
|
(3)
|
|
|
|
|
|
$
|
18.95
|
|
|
|
03/01/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(10)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
37,500
|
(4)
|
|
|
|
|
|
$
|
28.23
|
|
|
|
03/21/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37,500
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
(5)
|
|
|
|
|
|
$
|
27.87
|
|
|
|
03/27/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,949
|
(6)
|
|
$
|
43,478
|
|
|
|
|
|
|
|
|
|
Randall K. Zanatta,
|
|
|
330,000
|
|
|
|
|
|
|
|
|
|
|
$
|
27.30
|
|
|
|
02/13/2012(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and
Chief Executive Officer Golf Galaxy(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Mr. Stacks title reverted back to Chairman and Chief
Executive Officer, effective February 1, 2009. |
|
(2) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 3/2/2006, 3/2/2007, 3/2/2008 and
3/2/2009. |
|
(3) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 3/1/2007, 3/1/2008, 3/1/2009 and
3/1/2010. |
|
(4) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 3/21/2008, 3/21/2009, 3/21/2010 and
3/21/2011. |
|
(5) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 3/27/2009, 3/27/2010, 3/27/2011 and
3/27/2012. |
|
(6) |
|
Shares of common stock vest 100% on March 27, 2011. |
39
|
|
|
(7) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 4/9/2008, 4/9/2009, 4/9/2010 and
4/9/2011. |
|
(8) |
|
Stock Option vests in its entirety on April 9, 2011. |
|
(9) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
|
(10) |
|
Stock Option vests in its entirety on March 21, 2011. |
|
(11) |
|
Stock Option vests at the rate of 25% per year, with vesting
dates of 12/6/2008, 12/6/2009, 12/6/2010 and
12/6/2011. |
|
(12) |
|
Mr. Zanatta stepped down as President and Chief Executive
Officer of Golf Galaxy, Inc. effective July 18, 2008. For
additional disclosure regarding the treatment of outstanding
equity awards in connection with Mr. Zanattas
separation from the Company, see page 43 of this proxy
statement. |
|
(13) |
|
This Stock Option grant remains exercisable in its entirety
until February 13, 2012, in accordance with the terms of
that certain Agreement and General Release entered into by and
between the Company, Golf Galaxy and Mr. Zanatta in
connection with Mr. Zanattas separation from Golf
Galaxy. |
Option
Exercises And Stock Vested
The following table sets forth all options that were exercised
and restricted stock that vested by our named executive officers
by the Company during fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
Name
|
|
Exercise (#)
|
|
|
on Exercise ($)
|
|
|
Acquired on Vesting (#)
|
|
|
on Vesting ($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
Edward W. Stack,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman, Chief Executive Officer and President(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy E. Kullman,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph H. Schmidt,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Operating Officer(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gwen K. Manto,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Merchandising Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey R. Hennion,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Marketing Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randall K. Zanatta,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Executive Officer Golf Galaxy(3)
|
|
|
81,830
|
(3)
|
|
$
|
679,758
|
|
|
|
75,000
|
|
|
$
|
1,218,000
|
|
|
|
|
(1) |
|
Mr. Stacks title reverted back to Chairman and Chief
Executive Officer, effective February 1, 2009. |
|
(2) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
|
(3) |
|
Mr. Zanatta, who stepped down as President and Chief
Executive Officer of Golf Galaxy effective July 18, 2008,
exercised stock options for 59,730 shares on
August 21, 2008, with a market price of $20.5468 and the
following exercise prices: $7.41 (15,440 shares), $8.17
(13,510 shares), $10.37 (13,026 shares), $18.14
(8,104 shares) and $16.91 (9,650 shares); and stock
options for 22,100 shares on August 22, 2008, with a
market price of $21.6210 and the following exercise prices:
$10.37 (4,344 shares), $18.14 (8,106 shares) and
$16.91 (9,650 shares). |
40
Pension
Benefits
The Company did not have in fiscal 2008, and currently does not
have, any plans that provide for payments or other benefits at,
following, or in connection with the retirement of our named
executive officers, other than tax qualified defined
contribution plans
and/or
nonqualified defined contribution plans.
Nonqualified
Deferred Compensation
The following table sets forth amounts contributed during fiscal
2008 under the Companys defined contribution or other
plans that provide for the deferral of compensation on a basis
that is not tax-qualified.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
|
|
|
Balance
|
|
|
|
Contributions
|
|
|
Contributions
|
|
|
Earnings
|
|
|
Aggregate
|
|
|
at Last Fiscal
|
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
in Last Fiscal
|
|
|
Withdrawals/
|
|
|
Year
|
|
Name
|
|
Year ($)
|
|
|
Year ($)
|
|
|
Year ($)
|
|
|
Distributions ($)
|
|
|
End ($)
|
|
(a)
|
|
(b)(1)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
Edward W. Stack,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman, Chief Executive Officer and President(2)
|
|
$
|
977,693
|
|
|
$
|
195,539
|
|
|
$
|
(76,593
|
)
|
|
|
|
|
|
$
|
1,436,031
|
|
Timothy E. Kullman,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President, Finance, Administration and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
$
|
3,049
|
|
|
|
|
|
|
$
|
152,899
|
|
Joseph H. Schmidt,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Operating Officer(3)
|
|
$
|
3,365
|
|
|
|
|
|
|
$
|
1,583
|
|
|
|
|
|
|
$
|
228,173
|
|
Gwen K. Manto,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Merchandising Officer
|
|
$
|
267,053
|
|
|
$
|
54,372
|
|
|
$
|
(207,577
|
)
|
|
|
|
|
|
$
|
384,803
|
|
Jeffrey R. Hennion,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Marketing Officer
|
|
$
|
78,646
|
|
|
$
|
14,414
|
|
|
$
|
(53,630
|
)
|
|
|
|
|
|
$
|
244,279
|
|
Randall K. Zanatta,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President and Chief Executive Officer Golf Galaxy(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Amounts set forth in this table reflect amounts deferred and
contributed under the Companys Officers Supplemental
Savings Plan, which became effective April 1, 2007, and
which was thereafter available to the named executive officers
in lieu of the Companys Supplemental Smart Savings Plan,
which was effective July 2006 through December 2006 for the
Companys executive officers, and which continues for
non-executive officers. |
|
(2) |
|
Mr. Stacks title reverted back to Chairman and Chief
Executive Officer, effective February 1, 2009. |
|
(3) |
|
Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
|
(4) |
|
Mr. Zanatta, who stepped down as President and Chief
Executive Officer of Golf Galaxy effective July 18, 2008,
was not eligible to participate in the Companys
Officers Supplemental Savings Plan. |
Dicks
Sporting Goods Supplemental Smart Savings Plans and
Officers Supplemental Savings Plan
In July 2006, the Company established the Dicks Sporting
Goods Supplemental Smart Savings Plan, which allowed certain
members of management to annually defer a portion of their
existing compensation. The Supplemental Smart Savings Plan was
implemented because certain members of management had
historically been restricted in their ability to participate in
the Companys existing 401(k) Plan because of qualified
plan testing rules. In December 2006, the Company made certain
technical amendments to the Supplemental Smart Savings Plan
which caused certain executives to no longer be eligible to
participate in the Supplemental Smart Savings Plan.
41
On March 21, 2007, our Compensation Committee approved the
implementation of the Dicks Sporting Goods Officers
Supplemental Savings Plan, a voluntary nonqualified deferred
compensation plan effective April 1, 2007, for the purpose
of attracting high quality executives and promoting in its key
executives increased efficiency and an interest in the
successful operation of the Company. Certain key executives (or
other participants as the Board of Directors of the Company may
determine) are eligible to participate in the Officers
Plan, including our named executive officers. These executives
are being afforded the opportunity to participate in the
Officers Plan because they are no longer eligible to
participate in the Supplemental Plan.
Under the Officers Plan, eligible participants have the
opportunity to defer up to 25% of their base salary and up to
100% of their annual bonus, and may allocate amounts deferred
under the Officers Plan among a range of investment
choices. Participant deferral amounts are 100% vested, and
matching contributions become 100% vested after five years of
plan participation, or upon the participants death,
disability or upon a change in control of the Company. Eligible
participants may elect to receive distributions from the
Officers Plan as a lump sum, in annual installments with
any installment term between two and twenty years, or a
combination of the two options. Vested matching contributions
may be distributed only after a participant reaches age 55.
Distributions are also triggered upon a participants death
or disability (as defined in applicable treasury regulations) or
in the event of certain hardships or changes of control (each as
defined under Section 409A of the Internal Revenue Code).
Under the Officers Plan, the Company is required to match
amounts deposited into plan accounts at a rate of 20% of the
participants annual deferral, up to a $200,000 maximum
match per year. Matching amounts are contributed as one lump sum
following the end of the year, and the participant must be an
eligible participant as of December 31st to receive
the matching contribution for that year. The Company also has
the ability to make a discretionary matching contribution as
determined from time to time by the Board. The Company
established a rabbi grantor trust, with a third-party trust
company as trustee, for the purpose of providing the Company
with a vehicle to fund participant contributions and Company
matching amounts under the Officers Plan.
The Officers Plan is intended to constitute a
non-qualified, unfunded plan for federal tax purposes and for
purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended and is also intended to comply
with Internal Revenue Code Section 409A, and contains
restrictions to help ensure compliance. Our obligations to pay
deferred compensation under the Officers Plan are
unsecured general obligations of the Company. We may amend or
terminate the Officers Plan at any time in whole or in
part; provided that no amendment or termination may reduce the
amount credited to accounts at the time of such amendment or
termination.
For additional discussion of the terms of the Officers
Plan, see Compensation Discussion and Analysis
beginning on page 20 of this proxy statement.
Potential
Payments Upon Termination or
Change-in-Control
As described under Compensation Discussion and
Analysis on page 20 of this proxy statement, our
named executive officers do not have employment agreements with
the Company, with the exception of Randall Zanatta, whose
contract entitled him to receive severance if terminated without
cause or if he resigned for good reason, as defined in the
employment agreement. Mr. Zanatta stepped down as President
and Chief Executive Officer of Golf Galaxy effective
July 18, 2008. A description of the severance received by
Mr. Zanatta in connection with his departure is set forth
below.
There are no contracts, agreements, plans or arrangements,
whether written or unwritten, that provide for severance
payments to a named executive officer at, following, or in
connection with a change in control of the Company. The
information below describes and quantifies certain compensation
that would become payable under our existing plans and
arrangements if the named executive officers employment
had terminated on January 31, 2009, given the named
executive officers compensation and service levels as of
such date and, if applicable, based on our closing stock price
on January 30, 2009 (January 31, 2009 was a Saturday).
These benefits are in addition to benefits available generally
to salaried employees, such as distributions under our 401(k)
savings plan, subsidized retiree medical benefits, disability
benefits and accrued vacation pay.
42
Due to the number of factors that affect the nature and amount
of any benefits provided upon the events discussed below, such
as the timing during the year of any such event and the
Companys stock price, any actual amounts paid or
distributed may be different.
Mr. Zanattas Severance. Pursuant to
the terms of Mr. Zanattas employment agreement with
the Company, which was based on his pre-merger agreement with
Golf Galaxy, Mr. Zanatta was entitled to severance if he
was terminated without cause, and was subject to certain
non-compete and non-solicitation covenants set forth in the
employment agreement. Mr. Zanatta stepped down as President
and Chief Executive Officer of Golf Galaxy, effective
July 18, 2008. In connection with his separation, the
Company, Golf Galaxy and Mr. Zanatta entered into an
Agreement and General Release, pursuant to which the Company and
Golf Galaxy agreed to pay Mr. Zanatta certain benefits upon
his departure. These benefits included a lump sum payment equal
to $798,750, eligibility for additional incentive bonus payments
for the 2008 fiscal year (if and to the extent the specified
performance targets were actually achieved), and a payment in
lieu of or the continuation of certain health, welfare and
employee benefits for two (2) years. The amount of these
benefits are set forth in the Summary Compensation
Table on page 33 of this proxy statement.
In addition, the stock option previously granted to
Mr. Zanatta exercisable for 330,000 shares of the
Companys common stock at an exercise price of $27.30 per
share vested in its entirety and remains exercisable until
February 13, 2012 in accordance with the terms of the Stock
Option Agreement entered into with respect to the option award.
All stock options previously granted to Mr. Zanatta that
were exercisable for Golf Galaxy common stock (which converted
to options exercisable for Companys common stock as a
result of the acquisition of Golf Galaxy by the Company) also
fully vested, and remained exercisable for the period specified
in the individual option award agreement, or if no period was
specified, then for six (6) months from the date they
vested, after which time the options expired. The
75,000 shares of restricted common stock granted to
Mr. Zanatta on February 13, 2007 that were to vest
based only on the passage of time fully vested, and
Mr. Zanatta forfeited any rights to an additional
75,000 shares of restricted common stock granted to him on
February 13, 2007 that were to vest based on the attainment
of certain performance metrics. All other equity grants
previously awarded to Mr. Zanatta that had not vested as of
July 18, 2008 were forfeited. As a result of the vesting of
the restricted stock award and stock option discussed above,
Mr. Zanatta incurred additional withholding tax obligations
pursuant to Sections 280G and 4999 of the Internal Revenue
Code and associated regulations, which reduced the amount of the
cash payment that he received upon his separation.
Payment of the benefits discussed above were contingent on
Mr. Zanattas full compliance with certain
confidentiality, non-competition, non-inducement and disclosure
and assignment obligations set forth in his employment
agreement. Specifically, Mr. Zanattas employment
agreement provided that Mr. Zanatta would not, for a period
of two (2) years after his employment with the Company
ceased, without Golf Galaxys consent, directly or
indirectly, own, manage, operate, join, control or participate
in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, consultant
or otherwise with (i) any business or organization in the
United States, Canada or Mexico that sells or markets golf
equipment, apparel, accessories or services directly to
consumers, whether through retail or direct marketing channels,
including, but not limited to, via catalogs
and/or the
internet
and/or
(ii) any entity that owns
and/or
operates a store specializing in the sale of goods having at
least twenty-five thousand (25,000) square feet of selling space
dedicated substantially to the retail sale of hard and soft line
sporting goods and apparel, including single stores, stores that
are part of regional or nationwide chains, specialty stores, the
internet and any other sales establishments otherwise meeting
the foregoing criteria within fifty (50) miles of where the
Company or its subsidiaries operates such a store, or has
specific plans to open such a store within one year after
Mr. Zanattas separation from Golf Galaxy, and
Mr. Zanatta had been informed of such planned store
opening; provided, that Mr. Zanatta is not prohibited from
being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so
long as he has no active participation in the business of such
corporation. Failure to comply with the terms of this
non-competition obligation (or the confidentiality,
non-inducement or disclosure and assignment obligations) would
obligate Mr. Zanatta to repay the severance received.
Other Severance Agreements. Other than
Mr. Zanatta, all of our named executive officers have
executed agreements with us providing them with limited
severance payments upon termination under certain circumstances.
Terminated named executive officers are not provided with
severance if the named executive officer voluntarily
43
terminates employment with us, retires, is terminated as a
result of death or permanent disability or the executive officer
is terminated for the following reasons: (i) fraud or
felonious conduct, (ii) embezzlement or misappropriation of
Company funds or property, (iii) material breach of the
non-competition, non-disclosure and confidentiality covenants
set forth in the severance agreement or any material violation
of the provisions of the Companys employee handbook,
(iv) gross negligence, or (v) employees
consistent inability or refusal to perform, or willful
misconduct in or disregard of the performance of his or her
duties and obligations, under certain circumstances. Upon the
termination of employment of a named executive officer for any
reason other than those set forth above, we are obligated to pay
to that named executive officer an amount equal to the greater
of four (4) weeks of pay at the named executive
officers base salary or one (1) week of pay for every
year of employment with us. The severance payment is payable
bi-weekly over the
12-month
period following the executive officers termination. The
Company in its discretion may offer other arrangements to
employees who end employment with the Company. Each named
executive officer has agreed to comply with certain
non-competition covenants in connection with execution of the
severance agreements.
The cash severance amounts that would be payable to each named
executive officer if their employment had been terminated on
January 31, 2009 are set forth below. Due to his departure
in July 2008, Mr. Zanatta has not been included in the
below table; all severance amounts paid to Mr. Zanatta in
connection with his departure are set forth in the
Summary Compensation Table set forth on
page 33 of this proxy statement.
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Involuntary Not
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For Cause
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Voluntary
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For Cause
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Termination
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Termination
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Death
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Disability
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Retirement
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Termination
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Edward W Stack,
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Chairman, Chief Executive Officer and President(1)
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$
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417,308
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Timothy E. Kullman,
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Executive Vice President, Finance, Administration and Chief
Financial Officer
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$
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38,462
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Joseph H. Schmidt,
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Executive Vice President and Chief Operating Officer(2)
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$
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216,346
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Gwen K. Manto,
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Executive Vice President and Chief Merchandising Officer
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$
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49,519
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Jeffrey R. Hennion,
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Executive Vice President and Chief Marketing Officer
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$
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77,885
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(1) |
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Mr. Stacks title reverted back to Chairman and Chief
Executive Officer effective February 1, 2009. |
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Mr. Schmidt assumed the title of President and Chief
Operating Officer effective February 1, 2009. |
Stock Option Awards. The following sets forth
the applicable provisions of our 1992 Stock Plan and 2002 Plan
with respect to exercisability of stock options upon termination
or
change-in-control.
Prior to his departure, Mr. Zanatta also had stock options
through the Golf Galaxy, Inc. 1996 Stock Option and Incentive
Plan and Golf Galaxy, Inc. 2004 Stock Incentive Plan, the
treatment of which are discussed on page 43 of this proxy
statement, and as such are not otherwise discussed below.
1992 Stock Plan. In the event that a named
executive officer is terminated without cause as determined by
the committee charged with administering the 1992 Stock Plan,
currently the Compensation Committee, the non-vested portion of
any stock option will be deemed cancelled on the termination
date and the vested portion, if any, of the stock option as of
the date of such termination will remain exercisable for the
lesser of a period of thirty (30) days following
termination or until the expiration date of the stock option. In
the event that the named executive officer is terminated for
cause as determined by the Compensation Committee (defined as
(i) fraud or felonious conduct; (ii) embezzlement or
misappropriation of funds or property; (iii) consistent
refusal to perform, or willful misconduct in or disregard of the
performance of duties and obligations; (iv) gross
negligence; or (v) breach
44
of employment agreement, if applicable), all outstanding
options, whether or not vested, shall be immediately forfeited.
In the event that the named executive officer voluntarily
terminates his employment due to a total and permanent
disability (within the Companys standard guidelines) or
due to the employees death, the non-vested portion of any
stock option will be deemed cancelled on the termination date
and the vested portion, if any, of the stock option as of the
date of such termination will remain exercisable for the lesser
of a period of ninety (90) days following termination or
expiration of the stock option.
In the event of a merger or consolidation of the Company with or
into another corporation or the sale of all or substantially all
of the Companys assets, a holder of stock options under
the 1992 Stock Plan is entitled to receive, at their
election (a) upon the due exercise of the option or
(b) upon the effective date of the reorganization, sale,
merger, consolidation or similar transaction, the cash,
securities, evidence of indebtedness, other property or any
combination of those items that optionee would have been
entitled to receive for common stock acquired through the
exercise of said option (net of exercise price) immediately
prior to the effective date of the transaction.
2002 Plan. In the event that a named executive
officers continuous status as an employee is terminated
(defined in the 2002 Plan as the absence of any interruption or
termination of the employment relationship, except in the case
of (i) sick leave, (ii) military leave, (iii) any
other leave of absence approved by the Board, provided such
period does not exceed ninety (90) days, unless
reemployment is guaranteed by contract, statute or Company
policy, or (iv) transfers between locations of the Company
or between the Company and its subsidiaries), the non-vested
portion of any stock option will be deemed cancelled on the
termination date and the vested portion, if any, of the stock
option as of the date of such termination will, unless otherwise
set forth in the award, remain exercisable for the lesser of a
period of ninety (90) days following termination or until
the expiration date of the stock option. Except as otherwise set
forth in the option award itself, in the event that the named
executive officer voluntarily terminates employment due to a
total and permanent disability (as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as
amended) or due to the employees death, the non-vested
portion of any stock option will be deemed cancelled on the
termination date and the vested portion, if any, of the stock
option as of the date of such termination will remain
exercisable for the lesser of a period of twelve
(12) months following termination or until the expiration
date of the stock option. In each case, our 2002 Plan grants the
administrator the ability to set other periods of time with
respect to the period in which an award can be exercised, as set
forth in the document evidencing such option or award.
In the event of a merger or consolidation of the Company with or
into another corporation or the sale of all or substantially all
of the Companys assets, the Board may authorize all
outstanding stock options or awards to be assumed or an
equivalent stock option or right to be substituted by the
successor corporation or parent or subsidiary of such successor
corporation. In the event that the successor corporation does
not agree to assume the stock options or rights, or to
substitute an equivalent stock option or stock appreciation
right, the Board shall provide for employees to have the right
to exercise all stock options previously granted to such
employee, including those not otherwise exercisable at the time.
The following table sets forth the market value of equity awards
under FAS 123R that each named executive officer would be
eligible to receive via exercise if the executive was terminated
or became totally disabled or died as of January 31, 2009,
and does not indicate any shares currently held; it is simply
the value of the option grants that are currently exercisable.
Due to his separation in July of 2008, Mr. Zanatta has not
been included in the below table.
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Executive Officer
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Upon Termination, Death or Disability(1)
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Edward W. Stack
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$
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16,300,350
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Timothy E. Kullman
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$
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0
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Joseph H. Schmidt
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$
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0
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Gwen Manto
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$
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0
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Jeffrey R. Hennion
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$
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400,775
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(1) |
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Amounts are based on the closing sale price of the
Companys Common Stock on January 30, 2009 (the last
trading day prior to January 31, 2009, which is a
Saturday), and assume full exercise of all options exercisable,
but do not include any acceleration of vesting which could occur
pursuant to a
change-in-control
under the terms of our stock option plans. |
45
Employee Stock Purchase Plan. Under the terms
of our Employee Stock Purchase Plan, referred to as our ESPP,
upon a participants termination of service, defined as the
earliest of his or her retirement (defined as voluntary
termination of employment on or after attaining age 55),
death, resignation, discharge or permanent separation from
service with the Company, for any reason other than death or
resignation, no payroll deductions may be made from his or her
payroll, and the entire balance credited under his or her ESPP
account will be automatically refunded. Upon a
participants retirement, the participant may elect to have
the entire amount credited to his or her account (as of the date
of retirement) refunded, or to have the entire amount credited
under his or her account held in the account and used to
purchase shares as provided under the ESPP in accordance with
all applicable requirements of the Internal Revenue Code that
apply to the ESPP.
In the event that the Company is dissolved or liquidated, or is
a party to a merger or consolidation in which the Company is not
the surviving entity, every purchase right outstanding under the
ESPP will terminate.
Officers Supplemental Savings
Plan. Under the terms of the Officers Plan,
in the event of a participants retirement or early
retirement (defined below), the participant is entitled to
receive an amount equal to the total balance of the
participants account and matching company account, which
is payable in a single lump sum unless the participant has
elected to receive the distribution in installments. Upon
termination of employment other than by reason of retirement,
early retirement, death or termination for cause (defined
below), the participant is entitled to receive a termination
benefit equal to the vested balance of the participants
accounts, payable in a single lump sum; provided, that the
vested portion of the Companys matching account is payable
in a single lump sum on the date the participant attains age
fifty-five (55). If a participant is terminated for cause
(defined below), the participant forfeits to the Company all
rights to both vested and unvested contributions of the Company
credited to the participants accounts, and is entitled to
receive a benefit equal to the remaining balance of the
participants accounts, payable in a single lump sum.
Retirement is defined in the Officers Plan as termination
of employment, other than a termination for cause, on or after
the date on which the participant has both attained age
fifty-five (55) and completed at least five (5) years
of participation in the Officers Plan, and early
termination is termination of employment, other than for cause,
on or after the date on which the participant has completed at
least five (5) years of participation. Termination for
cause is defined in the Officers Plan as termination of
employment by reason of (i) a substantial intentional
failure to perform duties as an employee or to comply with any
material provision of his or her employment agreement with the
Company, where such failure is not cured within thirty
(30) days after receiving written notice from the Company
specifying in reasonable detail the nature of the failure;
(ii) a breach of fiduciary duty to the Company by reason of
receipt of personal profits; (iii) conviction of a felony;
or (iv) any other willful and gross misconduct committed by
the participant.
Distributions are also triggered upon a participants death
or disability (as defined in applicable treasury regulations) or
in the event of certain hardships or changes of control (each as
defined under Section 409A of the Internal Revenue Code). A
change in control is defined in the Officers Plan as any
of: (i) the dissolution or liquidation of the Company;
(ii) a reorganization, merger or consolidation of the
Company with one or more corporations as a result of which the
Company is not the surviving corporation; (iii) approval by
the stockholders of the Company of any sale, lease, exchange or
other transfer (in one or a series of transactions) of all or
substantially all of the assets of the Company;
(iv) approval by the stockholders of the Company of any
merger or consolidation of the Company in which the holders of
voting stock of the Company immediately before the merger or
consolidation will not own 50% or more of the voting shares of
the continuing or surviving corporation immediately after such
merger or consolidation; or (v) a change of 50% (rounded to
the next whole person) in the membership of the Board of
Directors of the Company within a twelve (12) month period,
unless the election or nomination for election by stockholders
of each new director within such period was approved by the vote
of two-thirds (2/3) (rounded to the next whole person) of the
directors then still in office who were in office at the
beginning of the twelve (12) month period. Notwithstanding
the foregoing, no event shall constitute a change in
control for purposes of acceleration of distributions on
termination of the Officers Plan if it is not a
change in the ownership or effective control of the
corporation, or in the ownership of a substantial
portion of the assets of the corporation, corporate
dissolution, or with approval of a bankruptcy court
pursuant to 11 U.S.C. Section 503(b)(1)(A)
within the meaning of Code Section 409A.
46
Life Insurance Benefits. The Company currently
pays the premiums for life insurance policies for the benefit of
our Chairman and Chief Executive Officer, for which the
beneficiaries under the policies, upon his death, is his spouse
and a personal beneficiary designated by Mr. Stack. For
detail regarding the premiums paid by the Company, see footnote
6 of the Summary Compensation Table on
page 34. If our Chairman and Chief Executive Officer had
died on January 31, 2009, the spouse of Mr. Stack
would have received $2,413,407 under the first policy, and a
personal beneficiary designated by Mr. Stack would have
received $4,000,000 with respect to the second policy.
OTHER
MATTERS
As of the date of this proxy statement, we know of no business
that will be presented for consideration at the annual meeting
other than the items referred to above. If any other matter is
properly brought before the meeting for action by stockholders,
proxies properly provided to the Company will be voted in
accordance with the recommendation of the Board of Directors or,
in the absence of such a recommendation, in accordance with the
judgment of the proxy holder.
ADDITIONAL
INFORMATION
Householding of Proxy
Materials. The SEC has adopted rules that permit
companies and intermediaries such as brokers to satisfy delivery
requirements for proxy statements with respect to two
(2) or more stockholders sharing the same address by
delivering a single proxy statement addressed to those
stockholders. This process, which is commonly referred to as
householding, potentially provides extra convenience
for stockholders and cost savings for companies. The Company and
some brokers household proxy materials, delivering a single
proxy statement to multiple stockholders sharing an address
unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your
broker or us that they or we will be householding materials to
your address, householding will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you
no longer wish to participate in householding and would prefer
to receive a separate proxy statement, please notify your broker
if your shares are held in a brokerage account or us if you hold
registered shares. We will deliver promptly upon written or oral
request a separate copy of the annual report or proxy statement,
as applicable, to a security holder at a shared address to which
a single copy of the documents was delivered. You can notify us
by sending a written request to Dicks Sporting Goods,
Inc., Investor Relations, 300 Industry Drive, RIDC Park West,
Pittsburgh, PA 15275 or call us at
(724) 273-3400
if you would like to receive separate copies of mailed materials
relating to future meetings, or you are sharing an address and
you wish to request delivery of a single copy of mailed
materials if you are now receiving multiple copies.
In accordance with rules recently adopted by the SEC, instead of
mailing a printed copy of our proxy materials to each
stockholder of record, we are furnishing proxy materials to our
stockholders on the Internet. If you received a Notice of
Internet Availability of Proxy Materials by mail and would like
to receive a printed copy of our proxy materials, you should
follow the instructions for requesting such materials included
in the Notice of Internet Availability of Proxy Materials.
Advance Notice Procedures. Under our bylaws,
no business may be presented by any stockholder before an annual
meeting unless it is properly presented before the meeting by or
at the direction of the Board or by a stockholder entitled to
vote who has delivered written notice to our General Counsel
(containing certain information specified in the bylaws about
the stockholder and the proposed action) at least 150 days
prior to the anniversary date of the preceding years
annual meeting that is, with respect to the 2010
annual meeting, by January 4, 2010. These requirements are
separate from and in addition to the SECs requirements
that a stockholder must meet in order to have a stockholder
proposal included in the Companys proxy statement.
47
Stockholder Proposals for the 2010 Annual
Meeting. Stockholders interested in submitting a
proposal for inclusion in the proxy materials for the annual
meeting of stockholders in 2010 may do so by following the
procedures prescribed in SEC
Rule 14a-8.
To be eligible for inclusion, stockholder proposals must be
received by the Companys Office of General Counsel no
later than December 18, 2009. Proposals should be sent to
General Counsel, Dicks Sporting Goods, Inc., 300 Industry
Drive, RIDC Park West, Pittsburgh, Pennsylvania 15275.
Proxy Solicitation and Costs. The proxies
being solicited hereby are being solicited by the Board of
Directors of the Company. The cost of soliciting proxies will be
borne by the Company. We have not retained an outside firm to
aid in the solicitation. Officers and regular employees of the
Company may, but without compensation other than their regular
compensation, solicit proxies by further mailing or personal
conversations, or by telephone, telex, facsimile or electronic
means. We will, upon request, reimburse brokerage firms and
others for their reasonable expenses in forwarding solicitation
material to the beneficial owners of stock.
48
Appendix A
Audit
Committee Charter
DICKS SPORTING GOODS, INC.
Charter of the Audit Committee
of the Board of Directors
As Amended March 18, 2009
CHARTER
OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTOR OF
DICKS SPORTING GOODS, INC. (THE
COMPANY)
PURPOSES
AND RESPONSIBILITIES
The Audit Committee has been created to implement and to support
the oversight function of the Board of Directors (the
Board) to promote quality financial reporting,
accounting policies, internal controls and independent and
objective outside auditors.
The Audit Committee has responsibility to:
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oversee the integrity of the audit process, financial reporting
and internal accounting controls of the Company;
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oversee the work of the Companys financial management
(Management), the internal auditors, if any,
employed by the Company (the Internal Auditors) and
any registered public accounting firm employed by the Company
for the purpose of preparing or issuing an audit report or
related work (the Outside Auditors);
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oversee Managements development of, and adherence to, a
sound system of internal accounting and financial controls and
that the Internal Auditors and the Outside Auditors objectively
assess the Companys financial reporting, accounting
practices and internal controls; and
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provide an open avenue of communication between the Outside
Auditors, the Internal Auditors and the Board.
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The Audit Committee will adopt policies and procedures for
carrying out its responsibilities. Such policies and procedures
should be flexible so the Audit Committee may react to changing
conditions and ensure that the Companys internal controls
and accounting and financial reporting practices meet all legal
requirements and are of the highest quality. The Audit Committee
shall have the authority as it determines necessary to retain at
the Companys expense independent legal, accounting or
other advisors to the Audit Committee. The Company will provide
for appropriate funding, as determined by the Audit Committee
for (i) the payment of compensation to any registered
public accounting firm engaged for the purpose of preparing or
issuing an audit report or preparing other audit, review or
attest services for the Company, (ii) compensation to any
advisor employed by the Audit Committee and (iii) ordinary
administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.
While the Audit Committee has the specific responsibilities and
powers set forth in this Charter, it is recognized that members
of the Audit Committee are not employees of the Company and, as
such, do not bear any of the responsibilities of Management and
the Outside Auditors. While the Audit Committee has the
responsibilities and powers set forth in this Charter, it has no
duty or obligation to plan or conduct any audit or to determine
or certify that the Companys financial statements and
disclosures are complete, accurate, fairly presented,
and/or
presented in accordance with generally accepted accounting
principles and applicable rules and regulations. The foregoing
are the responsibilities of Management and the Outside Auditors.
The Outside Auditors are responsible for auditing the
Companys financial statements and for reviewing the
Companys unaudited interim financial statements. The Audit
Committee does not guarantee any report of the Outside Auditors.
Each member of the Audit Committee shall be entitled to rely on
(a) the integrity of those persons and organizations within
and outside the Company that provide financial and other
information to the Audit Committee and (b) the accuracy and
completeness of such information provided to the Audit Committee
by such persons or organizations, absent actual knowledge to the
contrary (which shall be promptly reported to the Board).
MEMBERSHIP
OF THE COMMITTEE
1. The Audit Committee shall consist of no fewer than three
members, as determined annually by the Board on the
recommendation of the Governance and Nominating Committee. The
members of the Audit Committee shall meet the independence and
expertise requirements of the New York Stock Exchange, any other
exchange on which
A-1
the Companys securities are traded, Section 10A(m)(3)
of the Securities Exchange Act of 1934 (the Exchange
Act) and the rules and regulations of the Securities and
Exchange Commission (the Commission). Audit
Committee members shall not serve simultaneously on the audit
committees of more than two other public companies without the
approval of the full Board.
2. The members of the Audit Committee shall be appointed
annually by the Board on the recommendation of the Governance
and Nominating Committee. Audit Committee members may be
replaced by the Board at any time. The Board shall designate the
Chairman or Chairwoman (Chairperson) of the Audit
Committee.
3. The Board and its committees will exercise its business
judgment to determine a directors eligibility to serve on
the Audit Committee.
MEETINGS
OF THE AUDIT COMMITTEE
4. The Audit Committee will meet or hold telephonic
meetings as often as it deems appropriate to discharge its
responsibilities, but shall meet at least four times each year.
The Audit Committee may ask members of Management, the Outside
Auditors, the Internal Auditors or others to attend any of its
meetings and to provide any information it may deem appropriate.
5. To the extent it deems necessary, the Audit Committee
will meet either as part of Audit Committee meetings or
otherwise with Management, the Outside Auditors and the Internal
Auditors, either with all or one or more of such group being
present at any meeting, to discuss matters for which the Audit
Committee has responsibility and shall at least twice each
fiscal year meet separately with Management, the Outside
Auditors and the Internal Auditors either as part of Audit
Committee meetings or otherwise.
SPECIFIC
RESPONSIBILITIES OF THE AUDIT COMMITTEE
Appointment
and Oversight of the Outside Auditors.
6. The Outside Auditors are ultimately accountable to the
Board and the Audit Committee. The Audit Committee shall be
directly responsible for the appointment, retention,
termination, compensation and terms of engagement, evaluation
and oversight of the work of the Outside Auditor (including
resolution of disagreements between Management and the Outside
Auditor regarding financing reporting). The Outside Auditor
shall report directly to the Audit Committee.
7. The Audit Committee will preapprove the terms (including
compensation) of all auditing services (including the providing
of any comfort letters in connection with securities
underwritings), the terms of any non-audit services which the
Outside Auditors or an affiliate of the Outside Auditors are
permitted to render under Section 10A(h) of the Securities
Exchange Act of 1934 and the compensation for such services. The
Audit Committee may delegate the preapproval to one of its
members, provided that if such delegation is made, the full
Audit Committee at the next regularly scheduled meeting shall be
presented with any preapproval decision made by that member.
8. The Audit Committee shall also, at least annually,
obtain and review the Outside Auditors report on the
Companys internal quality-control procedures and any
material issues raised by the most recent internal
quality-control review, or peer review, of the Outside Auditors,
or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years,
respecting one or more independent audits carried out by the
Outside Auditors, and any steps taken to deal with any such
issues; and (to assess the Outside Auditors independence)
all relationships between the independent auditor and the
Company.
9. The Audit Committee shall be responsible for requiring
that the Outside Auditors submit to it on a periodic basis a
formal written statement delineating all relationships between
the Outside Auditors and the Company, including the disclosures
regarding the Outside Auditors independence required by the
Public Company Accounting Oversight Board (PCAOB)
Ethics and Independence Rule 3526, as in effect from time
to time or as otherwise required by any rules of the Public
Company Accounting Oversight Board.
10. The Audit Committee shall be responsible for actively
engaging in a dialogue with the Outside Auditors with respect to
any disclosed relationships or services that may impact the
objectivity and independence of the
A-2
Outside Auditors and for taking appropriate action in response
to the Outside Auditors report to satisfy itself of the
Outside Auditors independence.
11. The Audit Committee shall set clear hiring policies for
employees or former employees of the Outside Auditors.
Appointment
and Oversight of Internal Auditors.
12. The Audit Committee will review and concur in the
appointment, replacement, reassignment or dismissal of the
Companys head of Internal Auditors and the compensation
package for such person.
13. The Audit Committee will, as it deems necessary,
evaluate the Internal Auditors and their impact on the
accounting practices, internal controls and financial reporting
of the Company.
14. The Audit Committee will assist Board oversight of the
performance of the Companys internal audit function.
Oversight
and Review of Accounting Principles and Practices and Internal
Controls.
15. The Audit Committee will, as it deems necessary,
exercise oversight of, and review and discuss with Management,
the Outside Auditors and the Internal Auditors:
A. significant financial reporting issues and judgments
made in connection with the preparation of the Companys
financial statements, the clarity of the financial disclosures
made, changes in the Companys accounting principles or
practices, the application of particular accounting principles
and disclosure practices by Management to new transactions or
events and the development, selection and disclosure of critical
accounting estimates and analysis of alternative assumptions or
estimates and the effect of such estimates on the Companys
financial statements;
B. potential major changes in generally accepted accounting
principles and the effect of those changes on the Companys
financial statements;
C. changes in accounting principles, financial reporting
policies and internal controls proposed to be implemented by the
Company;
D. significant litigation, contingencies and claims against
the Company and material accounting issues that require
disclosure in the Companys financial statements;
E. information regarding any second opinions
sought by Management from an independent auditor with respect to
the accounting treatment of a particular event or transaction;
F. Managements compliance with the Companys
processes, procedures and internal controls;
G. the adequacy and effectiveness of the Companys
internal accounting and financial controls and the
recommendations of Management, the Outside Auditors and Internal
Auditors for the improvement of accounting practices and
internal controls; and
H. disagreements between Management and the Outside
Auditors or the Internal Auditors regarding the application of
any accounting principles or any other matter and the Audit
Committee shall resolve any such disagreements.
Oversight
and Monitoring of the Companys Financial Statements and
Audits.
16. The Audit Committee will review and discuss the annual
audited financial statements (prior to the filing of its
Form 10-K)
and quarterly financial statements (prior to the filing of its
Form 10-Q)
with Management, the Internal Auditors and the Outside Auditor,
including reviewing the Companys specific disclosures
under managements discussion and analysis in those
reports. The Audit Committee will recommend to the Board whether
the audited financial statements should be included in the
Companys
Form 10-K.
A-3
17. The Audit Committee will, as it deems necessary:
A. review and discuss with Management, and to the extent
the Audit Committee deems necessary or appropriate, the Internal
Auditors and the Outside Auditor, the Companys disclosure
controls and procedures that are designed to ensure that the
reports the Company files with the Commission comply with the
Commissions rules and forms.
B. review and discuss quarterly reports from the Outside
Auditor on:
(i) all critical accounting policies and practices to be
used;
(ii) all alternative treatments under GAAP for policies and
practices related to material items that have been discussed
with Management, including ramifications of the use of such
alternative disclosures and treatments, and the treatment
preferred by the Outside Auditor;
(iii) the internal controls adhered to by the Company,
Management, and the Companys financial, accounting and
internal auditing personnel, and the impact of each on the
quality and reliability of the Companys financial
reporting;
(iv) other material written communications between the
Outside Auditor and Management, such as any management letter or
schedule of unadjusted differences.
C. discuss in advance with Management the Companys
practice with respect to the types of information to be
disclosed and the types of presentations to be made in earnings
press releases, including the use, if any, of pro
forma or adjusted non-GAAP information, as
well as financial information and earnings guidance provided to
analysts and rating agencies.
D. discuss with Management and the Outside Auditor the
effect of regulatory and accounting initiatives as well as
off-balance sheet structures and aggregate contractual
obligations on the Companys financial statements.
E. discuss with Management the Companys major
financial risk exposures and the steps Management has taken to
monitor and control such exposures, including the Companys
risk assessment and risk management policies.
F. discuss with the Outside Auditor the matters required to
be discussed by Statement on Auditing Standards
(SAS) No. 61, as amended (AICPA Professional
Standards, Vol. 1. AU Section 380), and as adopted by the
PCAOB in Rule 3200T, relating to the conduct of the audit.
In particular, discuss:
(i) the adoption of, or changes to, the Companys
significant internal auditing and accounting principles and
practices as suggested by the Outside Auditor, Internal Auditors
or Management; and
(ii) the management letter provided by the Outside Auditor
and the Companys response to that letter.
G. receive and review disclosures, including any
qualifications attached to the disclosure, made to the Audit
Committee by the Companys Chief Executive Officer and
Chief Financial Officer during their certification process for
the Companys
Form 10-K
and
Form 10-Q
about (a) any significant deficiencies in the design or
operation of internal controls or material weakness therein,
(b) any fraud involving Management or other associates who
have a significant role in the Companys internal controls
and (c) any significant changes in internal controls or in
other factors that could significantly affect internal controls
subsequent to the date of the evaluation.
H. discuss with the Outside Auditors any problems
difficulties or disputes with Management encountered during the
course of the audit and Managements response.
I. in accordance with section 303A of the NYSE Listed
Company Manual, generally discuss earnings press releases, as
well as financial information and earnings guidance provided to
analysts and rating agencies.
A-4
Communications
with the Outside Auditors.
18. The Outside Auditors shall report directly to the Audit
Committee and the Audit Committee will, as it deems necessary,
communicate with the Outside Auditors to:
A. obtain information concerning accounting principles
adopted by the Company, internal controls of the Company,
Management, the Companys financial, accounting and
internal auditing personnel and the impact of each on the
quality and reliability of the Companys financial
reporting;
B. obtain the information required to be disclosed to the
Company by PCAOB requirements in connection with the conduct of
an audit, including topics covered by AICPA Professional
Standards, AU Sections 316, 317 and 325;
C. obtain the report required to be delivered to the Audit
Committee by the Outside Auditors on critical accounting
policies and practices, on alternative treatments of financial
information within generally accepted accounting principles that
the Outside Auditors discussed with Management and on other
material written communications between the Outside Auditors and
Management.
D. require the Outside Auditors to review the financial
information included in the Companys Quarterly Reports on
Form 10-Q
in accordance with
Rule 10-01(d)
of
Regulation S-X
of the Securities and Exchange Commission (the
Commission) prior to the Company filing such reports
with the Commission and to provide to the Company for inclusion
in the Companys Quarterly Reports on
Form 10-Q
any reports of the Outside Auditors required by
Rule 10-01(d).
Communications
with the Internal Auditors.
19. The Audit Committee will, as it deems necessary,
communicate with the Internal Auditors to obtain information
concerning accounting principles adopted by the Company,
internal controls of the Company, Management, the Companys
financial and accounting personnel and the impact of each on the
quality and reliability of the Companys financial
statements.
Communications
with Management.
20. The Audit Committee will, as it deems necessary,
communicate with Management to obtain information concerning
accounting principles adopted by the Company, internal controls
of the Company, the Outside Auditors, the Companys
financial, accounting and internal auditing personnel and the
impact of each on the quality and reliability of the
Companys financial statements.
Audit
Committee Reports.
21. The Audit Committee will prepare annually a report for
inclusion in the Companys proxy statement relating to its
annual shareholders meeting. In that report, the Audit Committee
will state whether it has: (i) reviewed and discussed the
audited financial statements with Management;
(ii) discussed with the Outside Auditors the matters
required to be discussed by Statement on Auditing Standards
No. 61, as amended (AICPA Professional Standards, Vol. 1.
AU Section 380), and as adopted by the PCAOB in
Rule 3200T, as that statement may be modified or
supplemented from time to time; (iii) received from the
Outside Auditors the written disclosures and the letter required
by applicable requirements of the PCAOB regarding the Outside
Auditors communications with the audit committee
concerning independence, and has had discussions with the
Outside Auditors regarding the Outside Auditors
independence; (iv) received, reviewed and discussed with
the Outside Auditors the report required by section 10A(k)
of the Securities Exchange Act of 1934 and (v) based on the
review and discussions referred to in clauses (i), (ii),
(iii) and (iv) above, recommended to the Board that
the audited financial statements be included in the
Companys Annual Report on
Form 10-K
for the last fiscal year for filing with the Commission.
22. To the extent such information is not included in the
annual report of the Audit Committee to be included in the
Companys proxy statement relating to its annual
shareholders meeting, the Audit Committee will also report at
least annually to the Board on significant results of its
activities and compliance with this Charter.
A-5
23. The Audit Committee will report regularly to the Board
and review with the Board any issues that arise with respect to
the quality or integrity of the Companys financial
statements, the Companys compliance with legal or
regulatory requirements, the performance and independence of the
Companys independent auditors, or the performance of the
internal audit function.
Related
Party Transactions.
24. The Audit Committee will review and ratify, approve or
disapprove all transactions occurring from the effective date of
the Companys Related Party Transaction Policy (the
Policy), between the Company or its subsidiaries and
any related persons that are required to be reported under SEC
Regulation S-K
Item 404, or any rules or regulations issued in connection
therewith. The Audit Committees review and ratification,
approval or disapproval shall be conducted in accordance with
the terms of the Policy, as amended; any potential related party
transactions that are not reviewed by the Audit Committee shall
be reviewed by the full Board or another committee thereof, in
accordance with the terms of the Policy, as amended.
Additional
Responsibilities.
25. The Audit Committee will:
A. as it deems necessary, conduct or authorize
investigations into any matters within the Audit
Committees scope of responsibilities. The Audit Committee
shall be empowered to retain independent counsel and other
professionals to assist in the conduct of any investigation;
B. create a procedure for the confidential, anonymous
submission by Company employees of concerns regarding
questionable accounting or auditing matters;
C. create a procedure for the receipt, retention and
treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters;
D. conduct an annual performance evaluation of the Audit
Committee.
The
Charter.
The Board and the Audit Committee shall review and update this
Charter annually and otherwise as circumstances dictate.
A-6
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ANNUAL MEETING OF DICKS SPORTING GOODS, INC.
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June 3, 2009 |
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1:30 P.M. (Local Time) |
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Hyatt Regency, 1111 Airport Blvd, Pittsburgh, PA 15231 |
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See Voting Instruction on Reverse Side. |
Please make your marks like this: x Use dark black pencil or pen only
Board of Directors Recommends a Vote FOR proposals 1 and 2.
1: Election of Class A Directors, each for terms that expire in 2012.
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01 William J. Colombo
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03 Larry D. Stone |
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02 David I. Fuente |
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Vote For
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Withhold Vote
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*Vote For |
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All Nominees
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From All Nominees
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All Except |
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*INSTRUCTIONS: To withhold
authority to vote for any
nominee, mark the
Exception box and write
the number(s) in the space
provided to the right.
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Ratify the appointment of Deloitte & Touche LLP as
the Companys
independent registered public
accounting firm. |
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To attend the meeting and vote your
shares in person, please mark this
box.
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Authorized Signatures - This section must
be completed for your Instructions to be
executed.
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Please Sign Here
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Please Date Above
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Please Sign Here
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Please Date Above
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Please sign exactly as your name(s) appears on your stock
certificate. If held in joint tenancy, all
persons should
sign. Trustees, administrators, etc., should include title
and authority. Corporations
should provide full name of
corporation and title of authorized officer signing the
proxy. |
Annual Meeting of Dicks Sporting Goods, Inc.
to be held on Wednesday, June 3, 2009
for Holders as of April 6, 2009
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INTERNET
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MAIL |
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Go To
www.proxypush.com/dks
Cast your vote online.
View Meeting Documents.
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Mark, sign and date your Voting Instruction Form.
Detach your Voting Instruction Form.
Return your Voting Instruction Form in the
postage-paid envelope provided. |
By signing the proxy, you revoke all prior proxies and appoint Edward W. Stack, Timothy
E. Kullman and Diane E. Lazzaris, and each of them acting in the absence of the other,
with full power of substitution to vote your shares on matters shown on the Voting
Instruction form and any other matters that may come before the Annual Meeting and all
adjournments.
All votes must be received by 5:00 P.M., Eastern Time, June 2, 2009.
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PROXY TABULATOR FOR |
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DICKS SPORTING GOODS, INC.
P.O. BOX 8016
CARY, NC 27512-9903 |
Revocable Proxy Dicks Sporting Goods, Inc.
Annual Meeting of Shareholders
June 3, 2009, 1:30 p.m. (Local Time)
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints Edward W. Stack, Timothy E. Kullman
and Diane E. Lazzaris, each with full power of substitution,
to act as proxies for the undersigned, with full power of
substitution, and to vote all shares of common stock of Dicks
Sporting Goods, Inc. (the Company) and hereby appoints
Edward W. Stack as proxy for the undersigned, with full power
of substitution, and to vote all shares of class B common
stock of the Company that the undersigned is entitled to vote
at the Annual Meeting of Shareholders on Wednesday, June 3,
2009 at the Hyatt Regency, 1111 Airport Blvd, Pittsburgh, PA
15231, and any and all adjournments or postponements thereof,
as set forth below.
This proxy is revocable and will be voted as directed, but if
no instructions are specified, this proxy will be voted:
FOR the nominees for directors specified and for ratification
of Deloitte & Touche LLP as the Companys independent
registered public accounting firm
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)