x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Indiana | 35-1537210 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
3308 North Mitthoeffer Road Indianapolis, Indiana | 46235 | |
(Address of principal executive offices) | (zip code) | |
Large accelerated filer | x | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ | |||
Emerging growth company | ¨ | |||||
Item 1. | Financial Statements |
May 27, 2017 | May 28, 2016 | February 25, 2017 | ||||||||||
(unaudited) | (unaudited) | |||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 75,979 | $ | 85,389 | $ | 90,856 | ||||||
Accounts receivable, net | 18,078 | 16,087 | 20,470 | |||||||||
Merchandise inventories, net | 341,420 | 324,726 | 331,146 | |||||||||
Income taxes receivable | 14,902 | — | 35,559 | |||||||||
Other current assets | 27,856 | 18,855 | 13,379 | |||||||||
Current assets held for sale | — | 28,733 | — | |||||||||
Total current assets | 478,235 | 473,790 | 491,410 | |||||||||
Property and equipment: | ||||||||||||
Land | 1,557 | 1,557 | 1,557 | |||||||||
Building | 44,336 | 43,825 | 44,249 | |||||||||
Leasehold improvements | 206,120 | 196,562 | 206,446 | |||||||||
Furniture, fixtures, and equipment | 284,274 | 257,250 | 281,730 | |||||||||
Construction in progress | 7,270 | 10,290 | 6,503 | |||||||||
543,557 | 509,484 | 540,485 | ||||||||||
Less accumulated depreciation | 299,114 | 272,102 | 292,588 | |||||||||
Total property and equipment, net | 244,443 | 237,382 | 247,897 | |||||||||
Other assets, net | 6,119 | 7,616 | 7,161 | |||||||||
Long-term assets held for sale | — | 49,066 | — | |||||||||
Total assets | $ | 728,797 | $ | 767,854 | $ | 746,468 | ||||||
May 27, 2017 | May 28, 2016 | February 25, 2017 | ||||||||||
(unaudited) | (unaudited) | |||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 168,136 | $ | 124,804 | $ | 166,614 | ||||||
Employee compensation | 8,576 | 10,790 | 15,407 | |||||||||
Accrued property and sales tax | 7,084 | 7,741 | 9,750 | |||||||||
Other liabilities and accrued expenses | 23,425 | 31,897 | 30,200 | |||||||||
Current liabilities held for sale | — | 12,622 | — | |||||||||
Total current liabilities | 207,221 | 187,854 | 221,971 | |||||||||
Commitments and contingencies | ||||||||||||
Deferred credits from landlords | 32,454 | 31,801 | 32,133 | |||||||||
Deferred income taxes | 28,526 | 22,459 | 32,226 | |||||||||
Other long-term liabilities | 7,491 | 9,261 | 8,640 | |||||||||
Long-term liabilities held for sale | — | 1,958 | — | |||||||||
Shareholders’ equity: | ||||||||||||
Preferred stock, $.01 par value; 1,000 shares authorized; none issued | — | — | — | |||||||||
Common stock, $.01 par value; 110,000 shares authorized; 60,145 shares issued | 601 | 601 | 601 | |||||||||
Shares outstanding - (May 27, 2017 – 40,148; May 28, 2016 – 41,447; February 25, 2017 – 40,337) | ||||||||||||
Additional paid-in capital | 246,458 | 239,411 | 245,335 | |||||||||
Retained earnings | 607,828 | 644,615 | 604,136 | |||||||||
Treasury stock, shares held - (May 27, 2017 – 19,610; May 28, 2016 – 18,311; February 25, 2017 – 19,421) | (401,782 | ) | (370,106 | ) | (398,574 | ) | ||||||
Total shareholders’ equity | 453,105 | 514,521 | 451,498 | |||||||||
Total liabilities and shareholders’ equity | $ | 728,797 | $ | 767,854 | $ | 746,468 | ||||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
Net sales | $ | 429,772 | $ | 430,044 | ||||
Cost of sales (including occupancy costs) | 302,345 | 296,867 | ||||||
Gross profit | 127,427 | 133,177 | ||||||
Selling, general, and administrative expenses | 112,412 | 117,549 | ||||||
Impairment charges and store closing costs | 2,158 | — | ||||||
Operating income | 12,857 | 15,628 | ||||||
Interest income, net | — | 6 | ||||||
Income from continuing operations before income taxes | 12,857 | 15,634 | ||||||
Income tax expense | 4,860 | 5,546 | ||||||
Net income from continuing operations | 7,997 | 10,088 | ||||||
Net income (loss) from discontinued operations, net of tax | 143 | (462 | ) | |||||
Net income | $ | 8,140 | $ | 9,626 | ||||
Basic earnings per share: | ||||||||
Continuing operations | $ | 0.20 | $ | 0.24 | ||||
Discontinued operations | — | (0.01 | ) | |||||
Basic earnings per share | $ | 0.20 | $ | 0.23 | ||||
Basic weighted average shares | 40,274 | 41,769 | ||||||
Diluted earnings per share: | ||||||||
Continuing operations | $ | 0.20 | $ | 0.24 | ||||
Discontinued operations | — | (0.01 | ) | |||||
Diluted earnings per share | $ | 0.20 | $ | 0.23 | ||||
Diluted weighted average shares | 40,362 | 41,890 | ||||||
Dividends declared per share | $ | 0.11 | $ | 0.10 | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
Operating activities: | ||||||||
Net income | $ | 8,140 | $ | 9,626 | ||||
Net income (loss) from discontinued operations | 143 | (462 | ) | |||||
Net income from continuing operations | 7,997 | 10,088 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Impairment charges and store closing costs | 2,158 | — | ||||||
Depreciation | 13,279 | 11,233 | ||||||
Deferred income taxes | (3,700 | ) | (3,581 | ) | ||||
Gain on disposals of property and equipment | (27 | ) | (29 | ) | ||||
Share-based compensation | 1,921 | 2,940 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 2,392 | 395 | ||||||
Merchandise inventories, net | (10,274 | ) | 23,240 | |||||
Other assets | (14,265 | ) | (1,659 | ) | ||||
Accounts payable | 3,624 | (20,400 | ) | |||||
Employee compensation | (6,502 | ) | (6,812 | ) | ||||
Income taxes receivable/payable | (13,153 | ) | 30,099 | |||||
Other liabilities and accrued expenses | (7,995 | ) | (2,537 | ) | ||||
Deferred credits from landlords | 321 | 1,298 | ||||||
Net cash (used in) provided by operating activities - continuing operations | (24,224 | ) | 44,275 | |||||
Net cash provided by operating activities - discontinued operations | 33,404 | 1,937 | ||||||
Net cash provided by operating activities | 9,180 | 46,212 | ||||||
Investing activities: | ||||||||
Capital expenditures for property and equipment | (14,080 | ) | (14,716 | ) | ||||
Proceeds from disposals of property and equipment | 14 | 351 | ||||||
Net cash used in investing activities - continuing operations | (14,066 | ) | (14,365 | ) | ||||
Net cash used in investing activities - discontinued operations | — | (150 | ) | |||||
Net cash used in investing activities | (14,066 | ) | (14,515 | ) | ||||
Financing activities: | ||||||||
Dividends paid to shareholders | (4,486 | ) | (4,291 | ) | ||||
Proceeds from issuance of common stock, net of settlement of tax withholding obligations | (182 | ) | (231 | ) | ||||
Purchases of treasury stock | (3,823 | ) | (21,281 | ) | ||||
Net cash used in financing activities - continuing operations | (8,491 | ) | (25,803 | ) | ||||
Net cash used in financing activities - discontinued operations | (1,500 | ) | — | |||||
Net cash used in financing activities | (9,991 | ) | (25,803 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (14,877 | ) | 5,894 | |||||
Cash and cash equivalents at beginning of period | 90,856 | 79,495 | ||||||
Cash and cash equivalents at end of period | $ | 75,979 | $ | 85,389 | ||||
Supplemental disclosure of noncash operating and investing activities: | ||||||||
Capital expenditures incurred but not yet paid as of May 27, 2017 and May 28, 2016 | $ | 1,001 | $ | 854 | ||||
Capital expenditures incurred but not yet paid as of February 25, 2017 and February 27, 2016 | $ | 3,111 | $ | 5,700 | ||||
Net sales | $ | 23,471 | ||
Cost of sales (including occupancy costs) | 16,837 | |||
Gross profit | 6,634 | |||
Selling, general, and administrative expenses | 7,350 | |||
Impairment charges and store closing costs | 35 | |||
Loss from discontinued operations before income tax benefit | (751 | ) | ||
Income tax benefit | 289 | |||
Net loss from discontinued operations, net of tax | $ | (462 | ) | |
ASSETS | ||||
Current assets: | ||||
Accounts receivable, net | $ | 943 | ||
Merchandise inventories, net | 27,582 | |||
Other | 208 | |||
Total current assets | 28,733 | |||
Property and equipment, net | 4,129 | |||
Goodwill | 44,029 | |||
Other assets, net | 908 | |||
Total assets | $ | 77,799 | ||
LIABILITIES | ||||
Current liabilities: | ||||
Accounts payable | $ | 8,309 | ||
Employee compensation | 874 | |||
Accrued property and sales tax | 601 | |||
Other liabilities and accrued expenses | 2,838 | |||
Total current liabilities | 12,622 | |||
Deferred credits from landlords | 1,902 | |||
Other long-term liabilities | 56 | |||
Total liabilities | $ | 14,580 | ||
Level 1: | Observable inputs such as quoted prices in active markets; | |
Level 2: | Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | |
Level 3: | Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |
May 27, 2017 | May 28, 2016 | February 25, 2017 | ||||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Non-qualified deferred compensation plan | $ | 4,688 | $ | — | $ | — | $ | 5,478 | $ | — | $ | — | $ | 5,517 | $ | — | $ | — | ||||||||||||||||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
Net income from continuing operations | $ | 7,997 | $ | 10,088 | ||||
Net income from continuing operations attributable to participating securities | 139 | 176 | ||||||
Net income from continuing operations available to shareholders | $ | 7,858 | $ | 9,912 | ||||
Net income (loss) from discontinued operations | $ | 143 | $ | (462 | ) | |||
Net income (loss) from discontinued operations attributable to participating securities | 3 | (9 | ) | |||||
Net income (loss) from discontinued operations available to shareholders | $ | 140 | $ | (453 | ) | |||
Net income available to shareholders | $ | 7,998 | $ | 9,459 | ||||
Basic earnings per share: | ||||||||
Weighted-average number of common shares outstanding | 40,274 | 41,769 | ||||||
Basic earnings per share: | ||||||||
Continued operations | $ | 0.20 | $ | 0.24 | ||||
Discontinued operations | — | (0.01 | ) | |||||
Basic earnings per share | $ | 0.20 | 0.23 | |||||
Diluted earnings per share: | ||||||||
Weighted-average number of common shares outstanding | 40,274 | 41,769 | ||||||
Dilutive effect of potential common shares(a) | 88 | 121 | ||||||
Diluted weighted-average number of common shares outstanding | 40,362 | 41,890 | ||||||
Diluted earnings per share: | ||||||||
Continued operations | $ | 0.20 | $ | 0.24 | ||||
Discontinued operations | — | (0.01 | ) | |||||
Diluted earnings per share | $ | 0.20 | $ | 0.23 | ||||
(a) | The computation of diluted earnings per share excludes options to purchase approximately 3.4 million and 3.0 million shares of common stock in the thirteen weeks ended May 27, 2017 and May 28, 2016, respectively, because the impact of such options would have been anti-dilutive. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Thirteen Weeks Ended | ||||||
Number of stores/shops | May 27, 2017 | May 28, 2016 | ||||
Finish Line: | ||||||
Beginning of period | 573 | 591 | ||||
Opened | — | 1 | ||||
Closed | (2 | ) | (6 | ) | ||
End of period | 571 | 586 | ||||
Branded shops within department stores: | ||||||
Beginning of period | 374 | 392 | ||||
Opened | 1 | — | ||||
Closed | — | — | ||||
End of period | 375 | 392 | ||||
Total: | ||||||
Beginning of period | 947 | 983 | ||||
Opened | 1 | 1 | ||||
Closed | (2 | ) | (6 | ) | ||
End of period | 946 | 978 | ||||
Square feet information | May 27, 2017 | May 28, 2016 | ||||
Finish Line: | ||||||
Square feet | 3,176,188 | 3,251,223 | ||||
Average store size | 5,563 | 5,548 | ||||
Branded shops within department stores: | ||||||
Square feet | 527,713 | 476,533 | ||||
Average shop size | 1,407 | 1,216 | ||||
Total: | ||||||
Square feet | 3,703,901 | 3,727,756 | ||||
Thirteen Weeks Ended | ||||||||||||||
Category | May 27, 2017 | May 28, 2016 | ||||||||||||
Footwear | $ | 405,552 | 94 | % | $ | 401,899 | 93 | % | ||||||
Softgoods | 24,220 | 6 | % | 28,145 | 7 | % | ||||||||
Total net sales | $ | 429,772 | 100 | % | $ | 430,044 | 100 | % | ||||||
Thirteen Weeks Ended | ||||||
May 27, 2017 | May 28, 2016 | |||||
Net sales | 100.0 | % | 100.0 | % | ||
Cost of sales (including occupancy costs) | 70.4 | 69.0 | ||||
Gross profit | 29.6 | 31.0 | ||||
Selling, general, and administrative expenses | 26.1 | 27.4 | ||||
Impairment charges and store closing costs | 0.5 | — | ||||
Operating income | 3.0 | 3.6 | ||||
Interest income, net | — | — | ||||
Income from continuing operations before income taxes | 3.0 | 3.6 | ||||
Income tax expense | 1.1 | 1.3 | ||||
Net income from continuing operations | 1.9 | 2.3 | ||||
Net income (loss) from discontinued operations, net of tax | — | (0.1 | ) | |||
Net income | 1.9 | % | 2.2 | % | ||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Brick and mortar net sales | $ | 276,686 | $ | 289,050 | ||||
Digital net sales | 70,031 | 67,913 | ||||||
Shops within department net sales | 83,055 | 73,081 | ||||||
Total net sales | $ | 429,772 | $ | 430,044 | ||||
Brick and mortar comparable sales (decrease) increase | (2.2 | )% | 1.8 | % | ||||
Digital comparable sales increase | 3.1 | % | 0.3 | % | ||||
Finish Line comparable sales (decrease) increase | (1.1 | )% | 1.5 | % | ||||
Shops within department stores comparable sales increase | 16.1 | % | 26.3 | % | ||||
• | A decrease in Finish Line net sales (composed of brick and mortar net sales and digital net sales) of 2.9% primarily due to a decrease in net Finish Line store count for the thirteen weeks ended May 27, 2017 as compared to the thirteen weeks ended May 28, 2016 as well as a decrease of 1.1% in Finish Line comparable store sales, which was due to a decrease in brick and mortar and digital conversion and traffic, partially offset by an increase in brick and mortar and digital average dollar per transaction; and |
• | An increase in shops within department stores net sales of 13.6%, primarily due to an increase in comparable sales, partially offset by a decrease in non-branded shop net sales. |
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Cost of sales (including occupancy costs) | $ | 302,345 | $ | 296,867 | ||||
Gross profit | $ | 127,427 | $ | 133,177 | ||||
Gross profit as a percentage of net sales | 29.6 | % | 31.0 | % | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Selling, general, and administrative expenses | $ | 112,412 | $ | 117,549 | ||||
Selling, general, and administrative expenses as a percentage of net sales | 26.1 | % | 27.4 | % | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Impairment charges and store closing costs | $ | 2,158 | $ | — | ||||
Impairment charges and store closing costs as a percentage of net sales | 0.5 | % | — | % | ||||
Number of stores/shops closed | 2 | 6 | ||||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Interest income, net | $ | — | $ | 6 | ||||
Interest income, net as a percentage of net sales | — | % | — | % | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Income tax expense | $ | 4,860 | $ | 5,546 | ||||
Income tax expense as a percentage of net sales | 1.1 | % | 1.3 | % | ||||
Effective income tax rate | 37.8 | % | 35.5 | % | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Net income from continuing operations | $ | 7,997 | $ | 10,088 | ||||
Net income from continuing operations as a percentage of net sales | 1.9 | % | 2.3 | % | ||||
Diluted earnings per share | $ | 0.20 | $ | 0.24 | ||||
Thirteen Weeks Ended | ||||||||
May 27, 2017 | May 28, 2016 | |||||||
(dollars in thousands) | ||||||||
Net income (loss) from discontinued operations, net of tax | $ | 143 | $ | (462 | ) | |||
Net income (loss) from discontinued operations as a percentage of net sales | — | % | (0.1 | )% | ||||
Diluted earnings (loss) per share from discontinued operations | $ | — | $ | (0.01 | ) | |||
Net sales | $ | 23,471 | ||
Cost of sales (including occupancy costs) | 16,837 | |||
Gross profit | 6,634 | |||
Selling, general, and administrative expenses | 7,350 | |||
Impairment charges and store closing costs | 35 | |||
Loss from discontinued operations before income tax benefit | (751 | ) | ||
Income tax benefit | 289 | |||
Net loss from discontinued operations, net of tax | $ | (462 | ) | |
May 27, 2017 | May 28, 2016 | February 25, 2017 | ||||||||||
Cash and cash equivalents | $ | 75,979 | $ | 85,389 | $ | 90,856 | ||||||
Merchandise inventories, net | $ | 341,420 | $ | 324,726 | $ | 331,146 | ||||||
Interest-bearing debt | $ | — | $ | — | $ | — | ||||||
Working capital | $ | 271,014 | $ | 285,936 | $ | 269,439 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risks |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Program | |||||||||
February 26, 2017 – April 1, 2017 | — | $ | — | — | 4,791,936 | ||||||||
April 2, 2017 – April 29, 2017 | 250,000 | 15.29 | 250,000 | 4,541,936 | |||||||||
April 30, 2017 – May 27, 2017 | — | — | — | 4,541,936 | |||||||||
250,000 | $ | 15.29 | 250,000 | ||||||||||
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
Exhibit Number | Description |
10.1 | General Release and Covenant Not to Sue dated March 1, 2017 between Bill Kirkendall and The Finish Line, Inc. (incorporated by reference to Exhibit 99.1 of the registrant’s Current Report on Form 8-K filed on Marcy 3,2017). |
10.2 | Employment Agreement dated May 15, 2016 between The Finish Line, Inc. and John Hall. |
10.3 | Employment Agreement dated February 5, 2016 between The Finish Line, Inc. and Melissa A. Greenwell. |
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. |
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. |
32 | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following materials from The Finish Line, Inc.’s Form 10-Q for the quarterly period ended May 27, 2017, formatted in an XBRL Interactive Data File: (i) Consolidated Balance Sheets-unaudited; (ii) Consolidated Statements of Income-unaudited; (iii) Consolidated Statements of Cash Flows-unaudited; and (iv) Notes to Consolidated Financial Statements-unaudited, with detailed tagging of notes and financial statement schedules. |
THE FINISH LINE, INC. | |||
Date: | June 23, 2017 | By: | /s/ Edward W. Wilhelm |
Edward W. Wilhelm | |||
Executive Vice President, Chief Financial Officer | |||
Exhibit Number | Description |
10.1 | General Release and Covenant Not to Sue dated March 1, 2017 between Bill Kirkendall and The Finish Line, Inc. (incorporated by reference to Exhibit 99.1 of the registrant’s Current Report on Form 8-K filed on March 3,2017). |
10.2 | Employment Agreement dated May 15, 2016 between The Finish Line, Inc. and John Hall. |
10.3 | Employment Agreement dated February 5, 2016 between The Finish Line, Inc. and Melissa A. Greenwell. |
31.1 | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. |
31.2 | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended. |
32 | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following materials from The Finish Line, Inc.’s Form 10-Q for the quarterly period ended May 27, 2017, formatted in an XBRL Interactive Data File: (i) Consolidated Balance Sheets-unaudited; (ii) Consolidated Statements of Income-unaudited; (iii) Consolidated Statements of Cash Flows-unaudited; and (iv) Notes to Consolidated Financial Statements-unaudited, with detailed tagging of notes and financial statement schedules. |
1. | Employment; Term. The Company hereby agrees to continue to employ Executive, and Executive hereby accepts such employment with the Company, in each case, on the terms and subject to the conditions hereinafter set forth. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by the Company for a one‑year period commencing on the Effective Date and ending on the first anniversary of the Effective Date (as such period may be extended pursuant to the terms hereof, the “Employment Term”) on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing with the first anniversary of the Effective Date and on each anniversary thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for an additional one‑year period, unless the Company or Executive provides the other party hereto with written notice at least 180 days before the next Extension Date that the Employment Term shall not be so extended (“Non-Renewal Notice”). |
2. | Position. |
(a) | While employed by the Company hereunder, Executive shall serve as the Company’s Executive Vice-president, Division President, Chief Merchandising Officer, reporting to the Company’s Chief Executive Officer (the “CEO”). In such position, Executive shall have such duties and authority as shall be determined from time to time by the CEO and/or the board of directors of the Company (the “Board”). |
(b) | While employed by the Company hereunder, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services to the Company either directly or indirectly, without the prior written consent of the Board or the CEO. |
(c) | Executive’s principal place of employment shall be at the Company’s corporate headquarters in Indianapolis, Indiana. Executive agrees to relocate his principal/primary family residence and domicile to Indianapolis (including surrounding communities) by not later than five months from the Effective Date. The Company agrees to provide temporary housing during a transition period that shall not extend beyond five (5) months from the Effective Date and further agrees to assist Executive with relocation expenses as provided in Exhibit A. |
3. | Base Salary. As compensation for services rendered to the Company, the Company shall initially pay Executive a base salary at the annual rate of $635,000. While employed by the Company hereunder, Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Board. Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.” |
4. | Bonus & Equity Programs. |
(a) | Annual. In addition to the Base Salary, while employed by the Company hereunder, Executive shall be eligible to participate in such annual and long‑term incentive bonus compensation programs or arrangements, and annual equity grants programs or arrangements, as determined from time to time by the Compensation Committee. For FY 2017 Executive shall be entitled to prorated participation in the annual bonus program and the long-term incentive bonus program, and shall also be entitled to participate in the annual equity grants. |
5. | Employee Benefits. While employed by the Company hereunder, Executive shall be eligible to participate in the Company’s employee benefit plans as in effect from time to time pursuant to the terms of those employee benefit plans. |
6. | Business Expenses. While employed by the Company hereunder, reasonable business expenses (including travel expenses) incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies. |
7. | Termination. Executive’s employment hereunder may be terminated by either party at any time and for any or no reason; provided that Executive will be required to give the Company advance written notice of any resignation of Executive’s employment (as set forth in this Section 7). Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates. |
(a) | By the Company For Cause or By Executive Resignation without Good Reason. |
(i) | Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) at any time upon delivery of written notice to Executive. Executive’s employment hereunder shall terminate automatically upon Executive’s resignation without Good Reason (as defined below); provided that Executive will be required to give the Company at least 30 days advance written notice of a resignation without Good Reason. |
(ii) | For purposes of this Agreement, “Cause” shall mean (A) the willful and continued failure by Executive to perform his or her duties with respect to the Company or its affiliates for a period of more than 30 days; (B) the willful or intentional engaging by Executive in conduct that causes material and demonstrable injury, monetarily or otherwise, to the Company including, without limitation, breach of fiduciary duty, fraud, misappropriation, embezzlement or theft; (C) Executive’s conviction for, or a plea of nolo contendere to, the commission of a felony or any other crime involving moral turpitude; or (D) Executive’s breach of this Agreement after notice from the Company and failure of Executive to cure within 10 days after receipt of notice from the Company. |
(iii) | If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive: |
(A) | the Base Salary through the date of termination (including payment for any accrued but unused vacation time); |
(B) | any earned but unpaid portion of Executive’s annual performance bonus (if any) for the fiscal year preceding the fiscal year in which such termination occurs; |
(C) | reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; and |
(D) | such employee benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company according to their terms (the amounts described in clauses (A) through (D) hereof, reduced by any amounts owed by Executive to the Company, being referred to as the “Accrued Rights”). |
(b) | Disability or Death. |
(i) | Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes (in the good faith judgment of the Board) physically or mentally incapacitated and is therefore unable for a period of three (3) consecutive months or for an aggregate of six (6) months in any twelve (12) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as “Disability”). |
(ii) | Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | if Executive was eligible to receive one or more bonuses for the fiscal year during which Executive’s employment is terminated (the “Termination Year”), an amount equal to a pro‑rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had he or she remained employed through the entire fiscal year (based on the Company’s actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the fiscal year in which the cash bonus was earned. |
(c) | By the Company Without Cause, Resignation of Executive with Good Reason or Non‑Renewal of Agreement. |
(i) | Executive’s employment hereunder may be terminated by the Company at any time without Cause (other than by reason of death or Disability). Executive’s employment hereunder may be terminated by Executive for Good Reason (as defined below). |
(ii) | For purposes of this Agreement, “Good Reason” shall mean if, other than for Cause, any of the following has occurred: (A) any material diminution in the Base Salary (except for across the board reductions for all similarly situated executives of the Company); (B) a material change in the geographic location of which Executive must perform the Services; (C) a material breach by the Company of this Agreement; or (D) if such termination of employment occurs within 30 days prior to two years following a Change in Control (as defined in Section 7(d)), a material diminution in Executive’s authority, duties or responsibilities. For Executive to have the right to resign for Good Reason, all of the following must timely occur: (x) Executive must provide the Company with notice of the occurrence of any of the Good Reason events within the 90 day period immediately following the first occurrence of such event and such notice must describe in detail the Good Reason event and the proposed cure to such event, (y) the Company must fail to cure such event with a period of 30 days from the date of receipt of such notice, and (z) the Notice of Termination is delivered by Executive to the Company within 90 days following the day on which the 30 day period set forth in the preceding clause (y) expires. |
(iii) | Except as set forth in Section 7(d), if Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, in either case, other than within the period that begins 30 days prior to a Change in Control and ends two years following a Change in Control, Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive’s continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum payment equal to 1.5 times the Base Salary, payable 60 days following the date of such termination of employment (the “Termination Date”); and |
(2) | continued provision of group health benefits to Executive and his or her dependents for 12 months following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period; and |
(3) | If Executive was eligible to receive one or more bonuses for the Termination Year, an amount equal to a pro‑rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had Executive remained employed through the entire fiscal year (based on the Company’s actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the fiscal year in which the cash bonus was earned. |
(iv) | Except as set forth in Section 7(d), if the Company provides Executive with a written Non-Renewal Notice and his/her employment is terminated by the Company without Cause on the last day of the Employment Term, Section 7(c)(iii) shall not apply and Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive's continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum cash payment equal to the Base Salary, payable 60 days following the Termination Date; |
(2) | continued provision of group health benefits to Executive and his/her dependents for one year following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period; and |
(3) | if Executive was eligible to receive one or more cash bonuses for the Termination Year, an amount equal to a pro-rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had he/she remained employed through the entire year (based on the Company's actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the year in which the cash bonus was earned. |
(d) | Change in Control. |
(i) | For purposes of this Agreement, “Change in Control” shall mean the consummation of one or more of the following: |
(A) | the sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are used in the Securities Exchange Act of 1934, as amended); |
(B) | any person or group is or becomes the beneficial owner, directly or indirectly, of more than 35% of the total voting power of the voting stock of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; |
(C) | a merger, consolidation or similar reorganization of the Company with or into another entity, if the shareholders of the common stock of the Company immediately prior to such transaction do not own a majority of the voting power of the voting stock of the surviving company or its parent immediately after the transaction in substantially the same proportions as immediately prior to such transaction; or |
(D) | during any 12‑month period, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by the Board (whether through the filling of a vacancy or otherwise) or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office, who were either directors at the |
(ii) | In the event of a Change in Control (determined without regard to subclause (A) of the definition set forth in Section 7(d)(i)), notwithstanding any provision in any equity compensation plan maintained by the Company or any award agreement between the Company and Executive, all stock options and awards of restricted stock granted to Executive, which are outstanding and have not otherwise vested shall be deemed vested immediately prior to the consummation of the Change in Control (determined without regard to subclause (A) of the definition set forth in Section 7(d)(i)). For purposes of this Section 7(d)(ii), the terms “stock option” and “restricted stock” should be read to include all other similar equity instruments. |
(iii) | If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, in either case, during the period that begins 30 days prior to a Change in Control (as defined below) and ends two years following a Change in Control, Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive’s continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum payment equal to 2.5 times the sum of (i) the Base Salary, plus (ii) Executive’s target annual bonus for Termination Year, plus (iii) the value of any other bonus the executive could have earned during the year of termination pursuant to the Company’s then existing bonus programs, payable 60 days following the Termination Date; and |
(2) | continued provision of group health benefits to Executive and his or her dependents for 24 months following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period. |
(e) | Release. Any compensation and benefits to be provided under Section 7(c)(iii)(B), Section 7(c)(iv)(B) or Section 7(d)(iii)(B), as applicable, shall be provided only if Executive timely executes and does not revoke a release and waiver agreement which shall be approved by the Company and shall contain, among such other terms and conditions determined by the Company, typical post separation terms and a general release and waiver of all claims that Executive may have against the Company and any of its affiliates relating to the employment and termination of employment of Executive (“Release”). The Release must be signed by Executive and become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein), prior to the 60th day after the date of termination of Executive’s employment (the “Termination Date”). If Executive fails to execute and furnish the Release, or if the Release furnished by Executive has not become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein) within such 60 day period, Executive will not be entitled to any payment or benefit under this Agreement other than the Accrued Rights. Any payment or benefit due or payable with such 60 days period shall be paid or begin on the 60th day after the date of termination. |
(f) | Parachute Taxes. Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company and all affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”), would, but for this Section 7(f), be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the following provisions shall apply: (i) if the Severance Payments, reduced by the sum of (A) the Excise Tax (as defined below) and (B) the total of the federal, state, and local income and employment taxes payable by Executive on the amount of the Severance Payments which are in excess of the Threshold Amount (as defined below), are greater than or equal to the Threshold Amount, Executive shall be entitled to the full benefits payable under this Agreement, and (ii) if the Threshold Amount is less than (A) the Severance Payments, but greater than (B) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of the federal, state, and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below |
(g) | Effect of Section 409A of the Code. It is intended that the payments and benefits provided under this Section 7 shall be exempt from the application of the requirements of Section 409A of the Code (“Section 409A”). Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible. To the extent that a payment or benefit provided pursuant to this Agreement is not exempt from the application of the requirements of Section 409A, then termination or cessation of employment of Executive under this Agreement shall be interpreted to mean “separation from service” as such term is defined in Section 409A. To the extent that none of these exceptions (or any other available exception) applies, then notwithstanding anything contained herein to the contrary, and to the extent required to comply with Section 409A, if a Participant is a “specified employee,” as determined under the Company’s policy for identifying specified employees on his or her Termination Date, then all amounts due under this Plan that constitute a “deferral of compensation” within the meaning of Section 409A, that are provided as a result of a separation from service (as defined in accordance with the default rules under Section 409A), and that would otherwise be paid or provided during the first six months following the Termination Date, shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) on the first business day that is more than six months after the date of the Termination Date (or, if the Participant dies during such six month period, on the date of the Participant’s death). With regard to any provision herein that provides for reimbursement of costs and expenses or in kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder. This Section 7(g) shall be interpreted in accordance with Treas. Reg. § 1.409A-3(i)(1)(iv)(A). The tax treatment of the benefits provided under this Agreement is not warranted or guaranteed. Neither the Company, its affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Executive (or any other individual claiming a benefit through Executive) as a result of this Agreement. Upon the inclusion of any amount into the Participant’s income as a result of the failure of this Agreement to comply with the requirements of Section 409A a distribution not to exceed the amount that shall be included in income shall be made as soon as is administratively practicable following the discovery of the failure of the Agreement to comply with Section 409A (this sentence shall be interpreted consistent with Treas. Reg. § 1.409A 3(j)(4)(vii)). |
(h) | Notice of Termination. Any termination of employment by the Company for Cause shall be communicated by written Notice of Termination to Executive in accordance with Section 11(h) hereof. In addition, any termination of employment by Executive for Good Reason shall be communicated by written Notice of Termination to the Company in accordance with Section 11(h) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall |
(i) | Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees that Executive shall automatically be deemed to have resigned, as of the date of such termination, from the Board (and any committees thereof) and the board of directors or similar governing body (and any committees thereof) of any of the Company’s affiliates, and any position in which Executive is acting on behalf of or as a representative of the Company (such as a trustee or administrative committee member with respect to a tax‑qualified retirement plan). |
8. | Non‑Competition; Non‑Solicitation. |
(a) | Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates. Both parties acknowledge that it is important for the Company to protect its legitimate business interests by restricting Executive’s ability to compete in a limited manner. The parties acknowledge and agree this limited non‑competition provision is drafted narrowly so as to safeguard the Company’s legitimate business interests while not unreasonably preventing or interfering with Executive’s ability to obtain other employment. For a period of one (1) year after separation from the Company, Executive shall not: |
(i) | directly or indirectly, in a competitive capacity, work for, advise, manage, own, or act as an agent or consultant for or a board member of or have any business connection or employment relationship with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”) which competes with the Company or its affiliates including, without limitation, in the athletic specialty and/or sporting goods retail industry (a “Competitive Business”) in the United States; |
(ii) | directly or indirectly, own or have a financial interest in, any Competitive Business, directly or indirectly, as a lender, guarantor, owner, member, partner, or shareholder; |
(iii) | directly or indirectly, in a competitive capacity, interfere with, or attempt to interfere with, business relationships between the Company or any of its affiliates and their respective customers, suppliers, partners, investors or vendors, with which Executive had direct or indirect contact during the last two (2) years of Executive’s employment with the Company; and/or |
(iv) | directly or indirectly, in a competitive capacity, interfere with, or attempt to interfere with, business relationships between the Company or any of its affiliates and their respective customers, suppliers, partners, investors or vendors, with which Executive had direct or indirect responsibility during the last two (2) years of Executive’s employment with the Company. |
(b) | Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Competitive Business that are publicly traded on a national or regional stock exchange or on the over‑the‑counter market if Executive (i) is not a controlling Person of, or a member of a group that controls, such Person and (ii) does not, directly or indirectly, own 1% or more of any class of securities of such Person. |
(c) | Employee agrees that Employee will not, for a period of one (1) year after separation from the Company, directly or indirectly, alone or in concert with others, solicit, encourage or seek to influence any employee of the Company or any of its affiliate to leave his or her employment with the Company or any of its affiliates |
(d) | It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. |
(e) | Executive understands and agrees that the restricted one (1) year time periods set forth herein are material terms of this Agreement and that the Company is entitled to Executive’s compliance with these terms for the full agreed-upon periods of time. Therefore, the restricted periods of time set forth herein will be tolled during any period of non-compliance. If the Company must seek injunctive relief or judicial intervention, the restricted time periods set |
(f) | The provisions of this Section 8 shall survive the cessation of Executive’s employment for any reason or no reason. |
9. | Confidentiality; Intellectual Property. |
(a) | Confidentiality. |
(i) | Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person (other than the Company); or (y) disclose, divulge, reveal, communicate, share, transfer or provide access to any Person outside the Company (other than its professional advisers who are bound by confidentiality obligations), any non‑public, proprietary or confidential information -including without limitation trade secrets, know‑how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, clients, partners, investors, personnel, compensation, recruiting, training, advertising, sales, marketing, promotions, store site selection, new store openings, government and regulatory activities and approvals - concerning the past, current or future business, activities and operations of the Company, its subsidiaries or affiliates and/or any third party that has disclosed or provided any of same to the Company on a confidential basis (“Confidential Information”) without the prior written authorization of the Board. |
(ii) | “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant; (b) made legitimately available to Executive without a confidentiality restriction by a third party without breach of any confidentiality obligation of that third party; or (c) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment. |
(iii) | Except as required by law, Executive shall not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the confidentiality of such terms. |
(iv) | Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware. |
(b) | The provisions of this Section 9 shall survive the cessation of Executive’s employment for any reason or no reason. |
10. | Relief. |
(a) | Executive understands that the Company will be irreparably damaged, in an amount that may be impossible to ascertain, if the provisions of Section 8 or 9 of this Agreement are not strictly adhered to and complied with by Executive. In the event of breach by Executive of any provision of Section 8 or 9 of this Agreement, Executive agrees that Company shall be entitled, in addition to reasonable attorneys’ fees, costs and remedies otherwise available to Company at law or in equity, to injunctions, both temporary, preliminary and permanent, enjoining and restraining such threatened, intended or actual breach, and Executive irrevocably consents to the issuance of such injunctive relief by any court of competent jurisdiction. Executive acknowledges that in addition to injunctive relief, the Company may recover monetary damages such as those related to misappropriation, actual damages and unjust enrichment and, in appropriate circumstances, exemplary damages in accordance with the Indiana Uniform Trade Secrets Act and/or other remedies available at law or equity. |
(b) | Executive acknowledges that (i) separate and distinct promises in this Agreement are reasonable, enforceable, and necessary in order to protect the Company’s legitimate business interests; (ii) after separation of employment from the Company, Executive will possess the Company’s trade secrets and confidential information which Executive will inevitably use if he or she were to engage in the conduct prohibited by Sections 8 and 9, that such use would be unfair and extremely detrimental to the Company; (iii) any violation will result in an irreparable injury to the Company; and (iv) the enforcement of Sections 8 or 9 by a remedy by way of injunction will not prevent Executive from earning a livelihood. |
(c) | Sections 8 and 9 of this Agreement shall be construed as independent of any other provision of this Agreement and shall survive the termination of this Agreement. The existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the Sections 8 and 9 of this Agreement. |
11. | Miscellaneous. |
(a) | Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without regard to conflicts of laws principles thereof. Any and all disputes between the parties which may arise pursuant to this Agreement will be heard and determined before an appropriate federal court in the Southern District of Indiana, or, if not maintainable therein, then in an appropriate Indiana state court in Marion County, Indiana. The parties acknowledge that such courts have jurisdiction to interpret and enforce the provisions of this Agreement, and the parties consent to, and waive any and all objections that they may have as to, personal jurisdiction and/or venue in such courts. Executive specifically consents to personal jurisdiction in the State of Indiana. Executive further understands and acknowledges that in the event the Company initiates litigation against Executive, the Company may need to prosecute such litigation in Executive’s forum state, in the State of Indiana or in such other state where Executive is subject to personal jurisdiction. Notwithstanding any rights to a jury trial for any claims, Executive waives any right to a jury trial, and agrees that any claim of any type hereunder lodged in any court will be tried, if at all, without a jury. |
(b) | Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto. |
(c) | No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. |
(d) | Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. |
(e) | Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force or effect. This Agreement may be assigned by the Company to a Person that is an affiliate or a successor in interest to any portion of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor Person. |
(f) | Set Off; No Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set‑off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates; provided, however, that in no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under Section 7 of this Agreement. |
(g) | Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. |
(h) | Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, |
(i) | Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates. |
(j) | Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding), which relates to events occurring during Executive’s employment hereunder. This provision shall survive any termination of this Agreement. |
(k) | Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. |
(l) | Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
(m) | Clawback. Notwithstanding anything herein to the contrary, Executive agrees that payments made to Executive may be subject to repayment pursuant to one or more clawback or recoupment policies of the Company as are in effect at any time and from time to time. |
(n) | Other Benefits. Any benefits received by Executive pursuant to this Agreement shall be in lieu of any severance policy or severance plan maintained by the Company or its affiliates (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment). Any economic or other benefit to Executive under this Agreement, other than the Accrued Benefits, will not be taken into account in determining any benefits to which Executive may be entitled under any profit sharing, retirement or other benefit or compensation plan maintained by the Company and its affiliates, unless provided otherwise in any such plan. |
(o) | Preparation and Review of Agreement. Executive acknowledges and agrees that Executive has carefully read this entire Agreement and has been given sufficient opportunity to discuss this Agreement with the Company before signing. The Company and Executive each acknowledge that each party to this Agreement has had the opportunity to be represented by counsel in connection with this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. |
(p) | No Other Agreements. Executive represents and warrants to the Company that (i) his or her execution, delivery and performance of this Agreement does not and shall not conflict with or result in the breach of or violation of any other agreement or instrument to which he or she is a party or by which he or she is bound; (ii) he or she is not a party to or bound by any Non-Competition / Non-Solicitation Agreement which is in conflict with or would be breached by the execution and performance of this Agreement; and (iii) upon the execution and delivery of this Agreement by Company it shall be valid and binding upon Employee. |
(q) | Disclosure of this Agreement. In order to preserve the Company’s rights under this Agreement, the Company may advise any third party of the existence of this Agreement and of its terms and may provide such third party copies hereof, and the Company shall have no liability for doing so. Executive shall notify each subsequent employer or Person using the services of Executive at any time within one (1) year following the cessation of Executive’s employment with the Company of the existence and provisions of this Agreement. Executive also shall immediately notify the Company, in writing, of the name, principal business address and area of business of any employment |
The Finish Line, Inc. By: Samuel M. Sato, CEO |
“Executive” John Hall |
▪ | Our intent is to reimburse the reasonable costs of your relocation. You will be eligible for a relocation package that includes two (2) trips for two people up to 3 days/2 nights each trip, reimbursement of pre-approved and reasonable relocation costs including selling costs not to exceed $100,000 (grossed-up for taxes), closing costs and relocating household items and vehicles (up to 3 vehicles + 2 recreational vehicles). Finish Line does not cap relocation expenses for executives, but does define reimbursable relocation items in the Finish Line Relocation Policy, which includes temporary housing in Indianapolis, use of a moving company provided by Finish Line, and selling (all realtor commissions for your current home) and closing costs (for the purchase of your new home) and incidental expenses (subject to receipts). Per IRS regulations, portions of this reimbursement are taxable (e.g. all expenses except for the physical move itself). You will also be eligible for reimbursement of reasonable weekly commuting costs (including airfare and airport parking), to and from Seattle to Indianapolis and Boulder for a period of up to five (5) months from your hire date. Finish Line will seek to gross up these payments to cover what is anticipated will be taxable portions of relocation expenses. |
▪ | The above relocation expenses will be reimbursed to you or paid on your behalf by the company in the form of a loan that will have no repayment obligation conditioned upon your continued employment for a period of not less than 12 months. In the event that you resign your employment with the Company without “Good Reason”, or are terminated for “Cause” before the conclusion of 12 months of employment, you will be required to repay the Company 100% of these expenses. To further clarify intent, examples of “Cause” include not being present for work and ethical or criminal misconduct, but would not include the quality of your work performance. |
1. | Employment; Term. Executive and the Company agree that if Executive is employed by the Company on February 28, 2016 (the “Effective Date”), then the Employment Agreement is automatically terminated and of no further force and effect on the Effective Date and this Agreement is effective as of the Effective Date. Beginning on the Effective Date, the Company hereby agrees to continue to employ Executive, and Executive hereby accepts such employment with the Company, in each case, on the terms and subject to the conditions hereinafter set forth. Subject to the provisions of Section 7 of this Agreement, Executive shall be employed by the Company in the position described below in Section 2 commencing on the Effective Date and ending on February 25, 2017 (as such period may be extended pursuant to the terms hereof, the “Employment Term”) on the terms and subject to the conditions set forth in this Agreement; provided, however, that commencing on February 26, 2017, and on each anniversary thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for a one‑year period, unless the Company or Executive provides the other party hereto with written notice at least 180 days before the next Extension Date that the Employment Term shall not be so extended (“Non-Renewal Notice”). |
2. | Position. |
(a) | Commencing on the Effective Date, Executive shall serve as the Company’s Chief Operating Officer. In such position, Executive shall have such duties and authority as shall be determined from time to time by the Company’s Chief Executive Officer (the “CEO”). |
(b) | While employed by the Company hereunder, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services to the Company either directly or indirectly, without the prior written consent of the CEO. |
(c) | Executive’s principal place of employment shall be at the Company’s corporate headquarters in Indianapolis, Indiana. |
3. | Base Salary. As compensation for services rendered to the Company, the Company shall pay Executive a base salary at the annual rate of $450,000. While employed by the Company hereunder, Executive shall be entitled to such increases in Executive’s base salary, if any, as may be determined from time to time in the sole discretion of the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”). Executive’s annual base salary, as in effect from time to time, is hereinafter referred to as the “Base Salary.” |
4. | Bonus & Equity Programs. |
5. | Employee Benefits. While employed by the Company hereunder, Executive shall be eligible to participate in the Company’s employee benefit plans as in effect from time to time pursuant to the terms of those employee benefit plans. |
6. | Business Expenses. While employed by the Company hereunder, reasonable business expenses (including travel expenses) incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies. |
7. | Termination. Executive’s employment hereunder may be terminated by either party at any time and for any or no reason; provided that Executive will be required to give the Company advance written notice of any resignation of Executive’s employment (as set forth in this Section 7). Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates. |
(a) | By the Company For Cause or By Executive Resignation without Good Reason. |
(i) | Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) at any time upon delivery of written notice to Executive. Executive’s employment hereunder shall terminate automatically upon Executive’s resignation without Good Reason (as defined below); provided that Executive will be required to give the Company at least 30 days advance written notice of a resignation without Good Reason. |
(ii) | For purposes of this Agreement, “Cause” shall mean (A) the willful and continued failure by Executive to perform his or her material duties with respect to the Company or its affiliates for a period of more than 30 days; (B) the willful or intentional engaging by Executive in conduct that causes material injury, monetarily or otherwise, to the Company including, without limitation, breach of fiduciary duty, fraud, misappropriation, embezzlement or theft; (C) Executive’s conviction for, or a plea of nolo contendere to, the commission of a felony or any other crime involving moral turpitude; or (D) Executive’s breach of this Agreement after notice from the Company and failure of Executive to cure within 10 days after receipt of notice from the Company. |
(iii) | If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive: |
(A) | the Base Salary through the date of termination (including payment for any accrued but unused vacation time); |
(B) | any earned but unpaid portion of Executive’s annual performance bonus (if any) for the fiscal year preceding the fiscal year in which such termination occurs; |
(C) | reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; and |
(D) | such employee benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company according to their terms (the amounts described in clauses (A) through (D) hereof, reduced by any amounts owed by Executive to the Company, being referred to as the “Accrued Rights”). |
(b) | Disability or Death. |
(i) | Executive’s employment hereunder shall terminate upon Executive’s death and may be terminated by the Company if Executive becomes (in the good faith judgment of the Board) physically or mentally incapacitated and is therefore unable for a period of three (3) consecutive months or for an aggregate of six (6) months in any twelve (12) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as “Disability”). |
(ii) | Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | if Executive was eligible to receive one or more bonuses for the fiscal year during which Executive’s employment is terminated (the “Termination Year”), an amount equal to a pro‑rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had he or she remained employed through the entire fiscal year (based on the Company’s actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the fiscal year in which the cash bonus was earned. |
(c) | By the Company Without Cause, Resignation of Executive with Good Reason or Non‑Renewal of Agreement. |
(i) | Executive’s employment hereunder may be terminated by the Company at any time without Cause (other than by reason of death or Disability). Executive’s employment hereunder may be terminated by Executive for Good Reason (as defined below). |
(ii) | For purposes of this Agreement, “Good Reason” shall mean if, other than for Cause, any of the following has occurred: (A) any material diminution in the Base Salary (except for across the board reductions for all similarly situated executives of the Company); (B) a material change in the geographic location of which Executive must perform the Services; (C) a material breach by the Company of this Agreement; or (D) if such termination of employment occurs within 30 days prior to two years following a Change in Control (as defined in Section 7(d)), a material diminution in Executive’s authority, duties or responsibilities. For Executive to have the right to resign for Good Reason, all of the following must timely occur: (x) Executive must provide the Company with notice of the occurrence of any of the Good Reason events within the 90 day period immediately following the first occurrence of such event and such notice must describe in detail the Good Reason event and the proposed cure to such event, (y) the Company must fail to cure such event with a period of 30 days from the date of receipt of such notice, and (z) the Notice of Termination is delivered by Executive to the Company within 90 days following the day on which the 30 day period set forth in the preceding clause (y) expires. |
(iii) | Except as set forth in Section 7(d), if Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, in either case, other than within the period that begins 30 days prior to a Change in Control and ends two years following a Change in Control, Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive’s continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum payment equal to 1.5 times the Base Salary, payable 60 days following the date of such termination of employment (the “Termination Date”); and |
(2) | continued provision of group health benefits to Executive and his or her dependents for twelve months following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period; and |
(3) | If Executive was eligible to receive one or more bonuses for the Termination Year, an amount equal to a pro‑rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had Executive remained employed through the entire fiscal year (based on the Company’s actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the fiscal year in which the cash bonus was earned. |
(iv) | Except as set forth in Section 7(d), if the Company provides Executive with a written Non-Renewal Notice and his/her employment is terminated by the Company without Cause on the last day of the Employment Term, Section 7(c)(iii) shall not apply and Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive's continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum cash payment equal to the Base Salary, payable 60 days following the Termination Date; |
(2) | continued provision of group health benefits to Executive and his/her dependents for one year following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period; and |
(3) | if Executive was eligible to receive one or more cash bonuses for the Termination Year, an amount equal to a pro-rated portion (based on the number of days in the Termination Year during which Executive was employed) of the annual cash bonus and any other cash bonus Executive would have received for the Termination Year had he/she remained employed through the entire year (based on the Company's actual performance for the Termination Year), payable when bonuses are generally paid to the Company’s executives for the Termination Year but no later than two and one half months after the end of the year in which the cash bonus was earned; provided that Executive shall not be required to refund to the Company any signing bonus or relocation reimbursement received prior to the Termination Date.. |
(d) | Change in Control. |
(i) | For purposes of this Agreement, “Change in Control” shall mean the consummation of one or more of the following: |
(A) | the sale, exchange, lease or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company to any “person” or “group” (as such terms are used in the Securities Exchange Act of 1934, as amended); |
(B) | any person or group is or becomes the beneficial owner, directly or indirectly, of more than 35% of the total voting power of the voting stock of the Company (or any entity which controls the Company or which is a successor to all or substantially all of the assets of the Company), including by way of merger, consolidation, tender or exchange offer or otherwise; |
(C) | a merger, consolidation or similar reorganization of the Company with or into another entity, if the shareholders of the common stock of the Company immediately prior to such transaction do not own a majority of the voting power of the voting stock of the surviving company or its parent immediately after the transaction in substantially the same proportions as immediately prior to such transaction; or |
(D) | during any 12‑month period, individuals who at the beginning of such period constituted the Board (together with any new directors whose election by the Board (whether through the filling of a vacancy or otherwise) or whose nomination for election by the shareholders of the Company was approved by a vote of a majority of the directors of the Company then still in office, who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors then in office. |
(ii) | In the event of a Change in Control (determined without regard to subclause (A) of the definition set forth in Section 7(d)(i)), notwithstanding any provision in any equity compensation plan maintained by the Company or any award agreement between the Company and Executive, all stock options and awards of restricted stock granted to Executive, which are outstanding and have not otherwise vested shall be deemed vested immediately prior to the consummation of the Change in Control (determined without regard to subclause (A) of the definition |
(iii) | If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, in either case, during the period that begins 30 days prior to a Change in Control (as defined below) and ends two years following a Change in Control, Executive shall be entitled to receive: |
(A) | the Accrued Rights; and |
(B) | subject to Section 7(e) and Executive’s continued compliance with the provisions of Sections 8 and 9 hereof: |
(1) | a lump sum payment equal to 2.5 times the sum of (i) the Base Salary, plus (ii) Executive’s target annual bonus for Termination Year, plus (iii) the value of any other bonus the executive could have earned during the year of termination pursuant to the Company’s then existing bonus programs, payable 60 days following the Termination Date; and |
(2) | continued provision of group health benefits to Executive and his or her dependents for 24 months following the Termination Date in accordance with the terms thereof and with the same cost as if Executive remained employed during such period. |
(e) | Release. Any compensation and benefits to be provided under Section 7(c)(iii)(B), Section 7(c)(iv)(B) or Section 7(d)(iii)(B), as applicable, shall be provided only if Executive timely executes and does not revoke a release and waiver agreement which shall be approved by the Company and shall contain, among such other terms and conditions determined by the Company, typical post separation terms and a general release and waiver of all claims that Executive may have against the Company and any of its affiliates relating to the employment and termination of employment of Executive (“Release”). The Release must be signed by Executive and become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein), prior to the 60th day after the date of termination of Executive’s employment (the “Termination Date”). If Executive fails to execute and furnish the Release, or if the Release furnished by Executive has not become effective and irrevocable in accordance with its terms (taking into account any applicable revocation period set forth therein) within such 60 day period, Executive will not be entitled to any payment or benefit under this Agreement other than the Accrued Rights. Any payment or benefit due or payable within such 60 day period shall be paid or begin on the 60th day after the date of termination. |
(f) | Parachute Taxes. Anything in this Agreement to the contrary notwithstanding, in the event that any compensation, payment or distribution by the Company and all affiliates to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Severance Payments”), would, but for this Section 7(f), be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), the following provisions shall apply: (i) if the Severance Payments, reduced by the sum of (A) the Excise Tax (as defined below) and (B) the total of the federal, state, and local income and employment taxes payable by Executive on the amount of the Severance Payments which are in excess of the Threshold Amount (as defined below), are greater than or equal to the Threshold Amount, Executive shall be entitled to the full benefits payable under this Agreement, and (ii) if the Threshold Amount is less than (A) the Severance Payments, but greater than (B) the Severance Payments reduced by the sum of (1) the Excise Tax and (2) the total of the federal, state, and local income and employment taxes on the amount of the Severance Payments which are in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum Severance Payments shall not exceed the Threshold Amount. For the purposes of this Section, “Threshold Amount” shall mean three times Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder less one dollar ($1.00) and “Excise Tax” shall mean the excise tax imposed by Section 4999 of the Code, and any interest or penalties incurred by Executive with respect to such excise tax. The determination as to which of the alternative provisions of this Section 7(f) shall apply to Executive shall be made by a nationally recognized accounting firm selected by the Company or one of its affiliates (the “Accounting Firm”). For purposes of determining which of the alternative provisions of this Section 7(f) shall apply, Executive |
(g) | Effect of Section 409A of the Code. It is intended that the payments and benefits provided under this Section 7 shall be exempt from the application of the requirements of Section 409A of the Code (“Section 409A”). Specifically, any taxable benefits or payments provided under this Agreement are intended to be separate payments that qualify for the “short term deferral” exception to Section 409A to the maximum extent possible, and to the extent they do not so qualify, are intended to qualify for the separation pay exceptions to Section 409A, to the maximum extent possible. To the extent that a payment or benefit provided pursuant to this Agreement is not exempt from the application of the requirements of Section 409A, then termination or cessation of employment of Executive under this Agreement shall be interpreted to mean “separation from service” as such term is defined in Section 409A. To the extent that none of these exceptions (or any other available exception) applies, then notwithstanding anything contained herein to the contrary, and to the extent required to comply with Section 409A, if a Participant is a “specified employee,” as determined under the Company’s policy for identifying specified employees on his or her Termination Date, then all amounts due under this Plan that constitute a “deferral of compensation” within the meaning of Section 409A, that are provided as a result of a separation from service (as defined in accordance with the default rules under Section 409A), and that would otherwise be paid or provided during the first six months following the Termination Date, shall be accumulated through and paid or provided (together with interest at the applicable federal rate under Section 7872(f)(2)(A) of the Code in effect on the Termination Date) on the first business day that is more than six months after the date of the Termination Date (or, if the Participant dies during such six month period, on the date of the Participant’s death). With regard to any provision herein that provides for reimbursement of costs and expenses or in kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder. This Section 7(g) shall be interpreted in accordance with Treas. Reg. § 1.409A-3(i)(1)(iv)(A). The tax treatment of the benefits provided under this Agreement is not warranted or guaranteed. Neither the Company, its affiliates nor their respective directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by Executive (or any other individual claiming a benefit through Executive) as a result of this Agreement. Upon the inclusion of any amount into the Participant’s income as a result of the failure of this Agreement to comply with the requirements of Section 409A a distribution not to exceed the amount that shall be included in income shall be made as soon as is administratively practicable following the discovery of the failure of the Agreement to comply with Section 409A (this sentence shall be interpreted consistent with Treas. Reg. § 1.409A 3(j)(4)(vii)). |
(h) | Notice of Termination. Any termination of employment by the Company for Cause shall be communicated by written Notice of Termination to Executive in accordance with Section 11(h) hereof. In addition, any termination of employment by Executive for Good Reason shall be communicated by written Notice of Termination to the Company in accordance with Section 11(h) hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated. |
(i) | Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees that Executive shall automatically be deemed to have resigned, as of the date of such termination, from the Board (and any committees thereof) and the board of directors or similar governing body (and any committees thereof) of any of the Company’s affiliates, and any position in which Executive is acting on behalf of or as a representative of the Company (such as a trustee or administrative committee member with respect to a tax‑qualified retirement plan). |
8. | Non‑Competition; Non‑Solicitation. |
(a) | Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company and its affiliates. Both parties acknowledge that it is important for the Company to protect its legitimate business interests by restricting Executive’s ability to compete in a limited manner. The parties acknowledge and agree this limited non‑competition provision is drafted narrowly so as to safeguard the Company’s legitimate business interests while not unreasonably preventing or interfering with Executive’s ability to obtain other employment. For a period of one (1) year after separation from the Company, Executive shall not: |
(i) | directly or indirectly, in a competitive capacity, work for, advise, manage, own, or act as an agent or consultant for or a board member of or have any business connection or employment relationship with any person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise whatsoever (“Person”) which competes with the Company or its affiliates including, without limitation, in the athletic specialty and/or sporting goods retail industry (a “Competitive Business”) in the United States; |
(ii) | directly or indirectly, own or have a financial interest in, any Competitive Business, directly or indirectly, as a lender, guarantor, owner, member, partner, or shareholder; |
(iii) | directly or indirectly, in a competitive capacity, interfere with, or attempt to interfere with, business relationships between the Company or any of its affiliates and their respective customers, suppliers, partners, investors or vendors, with which Executive had direct or indirect contact during the last two (2) years of Executive’s employment with the Company; and/or |
(iv) | directly or indirectly, in a competitive capacity, interfere with, or attempt to interfere with, business relationships between the Company or any of its affiliates and their respective customers, suppliers, partners, investors or vendors, with which Executive had direct or indirect responsibility during the last two (2) years of Executive’s employment with the Company. |
(b) | Notwithstanding anything to the contrary in this Agreement, Executive may, directly or indirectly own, solely as an investment, securities of any Person engaged in a Competitive Business that are publicly traded on a national or regional stock exchange or on the over‑the‑counter market if Executive (i) is not a controlling Person of, or a member of a group that controls, such Person and (ii) does not, directly or indirectly, own 1% or more of any class of securities of such Person. |
(c) | Employee agrees that Employee will not, for a period of one (1) year after separation from the Company, directly or indirectly, alone or in concert with others, solicit, encourage or seek to influence any employee of the Company or any of its affiliate to leave his or her employment with the Company or any of its affiliates |
(d) | It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable. Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein. |
(e) | Executive understands and agrees that the restricted one (1) year time periods set forth herein are material terms of this Agreement and that the Company is entitled to Executive’s compliance with these terms for the full agreed-upon periods of time. Therefore, the restricted periods of time set forth herein will be tolled during any period of non-compliance. If the Company must seek injunctive relief or judicial intervention, the restricted time periods set forth herein will not commence until Executive is judged by a court of competent jurisdiction to be in compliance with the terms of this Agreement. |
(f) | The provisions of this Section 8 shall survive the cessation of Executive’s employment for any reason or no reason. |
9. | Confidentiality; Intellectual Property. |
(a) | Confidentiality. |
(i) | Executive will not at any time (whether during or after Executive’s employment with the Company) (x) retain or use for the benefit, purposes or account of Executive or any other Person (other than the Company); or (y) |
(ii) | “Confidential Information” shall not include any information that is (a) generally known to the industry or the public other than as a result of Executive’s breach of this covenant; (b) made legitimately available to Executive without a confidentiality restriction by a third party without breach of any confidentiality obligation of that third party; or (c) required by law to be disclosed; provided that Executive shall give prompt written notice to the Company of such requirement, disclose no more information than is so required, and cooperate with any attempts by the Company to obtain a protective order or similar treatment. |
(iii) | Except as required by law, Executive shall not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the existence or contents of this Agreement; provided that Executive may disclose to any prospective future employer the provisions of Sections 8 and 9 of this Agreement provided they agree to maintain the confidentiality of such terms. |
(iv) | Upon termination of Executive’s employment with the Company for any reason, Executive shall (x) cease and not thereafter commence use of any Confidential Information or intellectual property (including without limitation, any patent, invention, copyright, trade secret, trademark, trade name, logo, domain name or other source indicator) owned or used by the Company, its subsidiaries or affiliates; (y) immediately destroy, delete, or return to the Company, at the Company’s option, all originals and copies in any form or medium (including memoranda, books, papers, plans, computer files, letters and other data) in Executive’s possession or control (including any of the foregoing stored or located in Executive’s office, home, laptop or other computer, whether or not Company property) that contain Confidential Information or otherwise relate to the business of the Company, its affiliates and subsidiaries, except that Executive may retain only those portions of any personal notes, notebooks and diaries that do not contain any Confidential Information; and (z) notify and fully cooperate with the Company regarding the delivery or destruction of any other Confidential Information of which Executive is or becomes aware. |
(b) | The provisions of this Section 9 shall survive the cessation of Executive’s employment for any reason or no reason. |
10. | Relief. |
(a) | Executive understands that the Company will be irreparably damaged, in an amount that may be impossible to ascertain, if the provisions of Section 8 or 9 of this Agreement are not strictly adhered to and complied with by Executive. In the event of breach by Executive of any provision of Section 8 or 9 of this Agreement, Executive agrees that Company shall be entitled, in addition to reasonable attorneys’ fees, costs and remedies otherwise available to Company at law or in equity, to injunctions, both temporary, preliminary and permanent, enjoining and restraining such threatened, intended or actual breach, and Executive irrevocably consents to the issuance of such injunctive relief by any court of competent jurisdiction. Executive acknowledges that in addition to injunctive relief, the Company may recover monetary damages such as those related to misappropriation, actual damages and unjust enrichment and, in appropriate circumstances, exemplary damages in accordance with the Indiana Uniform Trade Secrets Act and/or other remedies available at law or equity. |
(b) | Executive acknowledges that (i) separate and distinct promises in this Agreement are reasonable, enforceable, and necessary in order to protect the Company’s legitimate business interests; (ii) after separation of employment from the Company, Executive will possess the Company’s trade secrets and confidential information which Executive will inevitably use if he or she were to engage in the conduct prohibited by Sections 8 and 9, that such use would be unfair and extremely detrimental to the Company; (iii) any violation will result in an irreparable injury to the Company; and (iv) the enforcement of Sections 8 or 9 by a remedy by way of injunction will not prevent Executive from earning a livelihood. |
(c) | Sections 8 and 9 of this Agreement shall be construed as independent of any other provision of this Agreement and shall survive the termination of this Agreement. The existence of any claim or cause of action by Executive against |
11. | Miscellaneous. |
(a) | Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without regard to conflicts of laws principles thereof. Any and all disputes between the parties which may arise pursuant to this Agreement will be heard and determined before an appropriate federal court in the Southern District of Indiana, or, if not maintainable therein, then in an appropriate Indiana state court in Marion County, Indiana. The parties acknowledge that such courts have jurisdiction to interpret and enforce the provisions of this Agreement, and the parties consent to, and waive any and all objections that they may have as to, personal jurisdiction and/or venue in such courts. Executive specifically consents to personal jurisdiction in the State of Indiana. Executive further understands and acknowledges that in the event the Company initiates litigation against Executive, the Company may need to prosecute such litigation in Executive’s forum state, in the State of Indiana or in such other state where Executive is subject to personal jurisdiction. Notwithstanding any rights to a jury trial for any claims, Executive waives any right to a jury trial, and agrees that any claim of any type hereunder lodged in any court will be tried, if at all, without a jury. |
(b) | Entire Agreement/Amendments. This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto. |
(c) | No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. |
(d) | Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. |
(e) | Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force or effect. This Agreement may be assigned by the Company to a Person that is an affiliate or a successor in interest to any portion of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor Person. |
(f) | Set Off; No Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set‑off, counterclaim or recoupment of amounts owed by Executive to the Company or its affiliates; provided, however, that in no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under Section 7 of this Agreement. |
(g) | Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. |
(h) | Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. |
(i) | Prior Agreements. This Agreement supersedes all prior agreements and understandings (including verbal agreements) between Executive and the Company and/or its affiliates regarding the terms and conditions of Executive’s employment with the Company and/or its affiliates. |
(j) | Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding), which relates to events occurring during Executive’s employment hereunder. This provision shall survive any termination of this Agreement. |
(k) | Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. |
(l) | Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. |
(m) | Clawback. Notwithstanding anything herein to the contrary, Executive agrees that payments made to Executive may be subject to repayment pursuant to one or more clawback or recoupment policies of the Company as are in effect at any time and from time to time. |
(n) | Other Benefits. Any benefits received by Executive pursuant to this Agreement shall be in lieu of any severance policy or severance plan maintained by the Company or its affiliates (other than a stock option, restricted stock, share or unit, performance share or unit, supplemental retirement, deferred compensation or similar plan or agreement which may contain provisions operative on a termination of Executive’s employment or may incidentally refer to accelerated vesting or accelerated payment upon a termination of employment). Any economic or other benefit to Executive under this Agreement, other than the Accrued Benefits, will not be taken into account in determining any benefits to which Executive may be entitled under any profit sharing, retirement or other benefit or compensation plan maintained by the Company and its affiliates, unless provided otherwise in any such plan. |
(o) | Preparation and Review of Agreement. Executive acknowledges and agrees that Executive has carefully read this entire Agreement and has been given sufficient opportunity to discuss this Agreement with the Company before signing. The Company and Executive each acknowledge that each party to this Agreement has had the opportunity to be represented by counsel in connection with this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the party that drafted it has no application and is expressly waived. |
(p) | No Other Agreements. Executive represents and warrants to the Company that (i) his or her execution, delivery and performance of this Agreement does not and shall not conflict with or result in the breach of or violation of any other agreement or instrument to which he or she is a party or by which he or she is bound; (ii) he or she is not a party to or bound by any Non-Competition / Non-Solicitation Agreement which is in conflict with or would be breached by the execution and performance of this Agreement; and (iii) upon the execution and delivery of this Agreement by Company it shall be valid and binding upon Employee. |
(q) | Indemnification. The Company shall indemnify the Executive and hold him harmless to the extent provided under the Company's by-laws against in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney's fees), losses, and damages resulting from the Executive's performance of his duties and obligations to the Company. This provision shall survive the cessation of Executive's employment except where Executive was terminated for Cause. |
(r) | Disclosure of this Agreement. In order to preserve the Company’s rights under this Agreement, the Company may advise any third party of the existence of this Agreement and of its terms and may provide such third party copies hereof, and the Company shall have no liability for doing so. Executive shall notify each subsequent employer or Person using the services of Executive at any time within one (1) year following the cessation of Executive’s employment with the Company of the existence and provisions of this Agreement. Executive also shall immediately notify the Company, in writing, of the name, principal business address and area of business of any employment or similar relationship that Executive enters into within one (1) year following the termination (for whatever reason) of Executive’s employment with the Company. The expiration of this one (1) year notification period shall have no effect on the applicability or enforceability of the provisions of any other part of this Agreement. |
The Finish Line, Inc. By: Printed: _____________________ Its: _________________________ |
EXECUTIVE Melissa A. Greenwell |
1. | I have reviewed this quarterly report on Form 10-Q of The Finish Line, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | June 23, 2017 |
By: | /s/ Samuel M. Sato |
Samuel M. Sato | |
Chief Executive Officer and Director | |
1. | I have reviewed this quarterly report on Form 10-Q of The Finish Line, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report), that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | June 23, 2017 |
By: | /s/ Edward W. Wilhelm |
Edward W. Wilhelm | |
Executive Vice President, Chief Financial Officer | |
• | The Quarterly Report of the Company on Form 10-Q for the thirteen weeks ended May 27, 2017 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78); and |
• | The information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company. |
Date: | June 23, 2017 |
By: | /s/ Samuel M. Sato |
Samuel M. Sato | |
Chief Executive Officer and Director | |
By: | /s/ Edward W. Wilhelm |
Edward W. Wilhelm | |
Executive Vice President, Chief Financial Officer | |
Document and Entity Information - shares |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
Jun. 09, 2017 |
|
| Document And Entity Information [Abstract] | ||
| Entity Registrant Name | FINISH LINE INC /IN/ | |
| Entity Central Index Key | 0000886137 | |
| Current Fiscal Year End Date | --03-03 | |
| Entity Filer Category | Large Accelerated Filer | |
| Document Type | 10-Q | |
| Document Period End Date | May 27, 2017 | |
| Document Fiscal Year Focus | 2018 | |
| Document Fiscal Period Focus | Q1 | |
| Amendment Flag | false | |
| Entity Common Stock, Shares Outstanding | 40,146,954 | |
| Trading Symbol | FINL |
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - $ / shares |
May 27, 2017 |
Feb. 25, 2017 |
May 28, 2016 |
|---|---|---|---|
| Statement of Financial Position [Abstract] | |||
| Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
| Preferred stock, Shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
| Preferred stock, Shares issued | 0 | 0 | 0 |
| Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 |
| Common stock, Shares authorized | 110,000,000 | 110,000,000 | 110,000,000 |
| Common stock, Shares issued | 60,145,000 | 60,145,000 | 60,145,000 |
| Common stock, Shares outstanding | 40,148,000 | 40,337,000 | 41,447,000 |
| Treasury stock, Shares held | 19,610,000 | 19,421,000 | 18,311,000 |
Summary of Significant Accounting Policies |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation. The accompanying unaudited consolidated financial statements of The Finish Line, Inc., along with its consolidated subsidiaries (individually and collectively referred to as the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. Preparation of the financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. All intercompany transactions and balances have been eliminated. The Company has experienced, and expects to continue to experience, significant variability in sales, profits, and merchandise inventories from reporting period to reporting period due to back to school and holiday selling seasons. Therefore, the results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended February 25, 2017 (“fiscal 2017”), as filed with the Securities and Exchange Commission (“SEC”) on April 25, 2017. Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue from contracts with customers and has subsequently issued several amendments which clarify the guidance as well as provide guidance for implementation. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB approved a one year deferral of the effective date, to make it effective for annual or interim reporting periods beginning after December 15, 2017. The guidance allows for either a full retrospective or a modified retrospective transition method. The adoption of the new guidance could impact the timing, presentation, or disclosure of revenue recognition and related balance sheet accounts associated with the Company’s gift cards, loyalty programs, and product returns. The Company is currently assessing the impact of adopting this guidance within these areas and others, as well as the available transition methods, but does not, at this time, anticipate a material impact to its consolidated results of operations, financial position, or cash flows. In February 2016, the FASB issued guidance on accounting for leases. A primary purpose of the guidance is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Specifically, lessees will be required to recognize the rights and obligations resulting from leases classified as operating leases as assets and liabilities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently assessing the impact of adopting this guidance and its potential impact to its consolidated results of operations, financial position, cash flows, and related disclosures and is expecting the guidance to have a material impact due to the significant number of store leases that the Company has under contract. Other recently issued accounting pronouncements did not, or are not believed by management to have a material effect on the Company’s present or future consolidated financial statements. Recently Adopted Accounting Pronouncements. In July 2015, the FASB issued guidance on simplifying the measurement of inventory. The guidance, which applies to inventory that is measured using any method other than the last-in, first-out (“LIFO”) or retail inventory methods, requires that entities measure inventory at the lower of cost or net realizable value. The Company adopted the provisions of this guidance prospectively on February 26, 2017. The adoption of this guidance did not have a material impact to the Company’s consolidated results of operations, financial position, or cash flows. In March 2016, the FASB issued guidance on simplifying several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and accounting for forfeitures. The Company adopted the provisions of this guidance on February 26, 2017. The impact of the adoption resulted in the following: •Excess tax benefits (deficiencies) resulting from share-based compensation are now recorded within income tax expense when the awards vest or are settled, rather than within equity. Additionally, excess tax benefits are now excluded from assumed future proceeds in the Company's calculation of diluted shares for purposes of determining diluted earnings per share. The prospective adoption of this provision did not have a material effect on the Company's consolidated results of operations, financial position, or cash flows. The Company recorded excess tax deficiencies related to share-based compensation of approximately $0.2 million to income tax expense, whereas such expense previously would have been recorded in equity. In addition, the Company recorded approximately $0.1 million of previously unrecognized excess tax benefits as a cumulative-effect adjustment to beginning retained earnings. •The Company elected to continue to expense share-based awards based on awards ultimately expected to vest, which requires the Company to continue to estimate forfeitures on the date of their grant. •Excess tax benefits from share-based compensation arrangements are classified as cash flows from operations, rather than as cash flows from financing activities. The Company adopted this change retrospectively, which resulted in an immaterial increase to net cash provided by operating activities and an immaterial increase in cash flows used in financing activities for the thirteen weeks ended May 28, 2016. |
Discontinued Operations and Subsequent Event |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations and Subsequent Event | Discontinued Operations and Subsequent Event On February 24, 2017, the Company completed the sale of its JackRabbit division to affiliates of CriticalPoint Capital, LLC (the “Buyers”). The transaction took the form of a sale by the Company of its entire membership interest in its affiliated company, which owns JackRabbit, and a payment of $10.1 million. The Buyers acquired all JackRabbit assets, inventory, leasehold interests, customary liabilities, intellectual property, and the JackRabbit trademark and name pursuant to the purchase agreement. On June 23, 2017, the Company and the Buyers entered into a settlement agreement whereby the Company agreed to an adjustment of $1.0 million to the purchase price related to the closing net working capital balances of JackRabbit. This change in purchase price is payable in two installments during the thirteen weeks ending August 26, 2017. The sale of Jackrabbit resulted in an aggregate loss of $34.2 million, which represented the total cash payments to the Buyers on the date of sale of $10.1 million, additional purchase price agreed to on June 23, 2017 of $1.0 million, net assets assumed by the Buyers of $18.3 million, and one-time costs of approximately $4.8 million associated with the transaction. Net income from discontinued operations for the thirteen weeks ended May 27, 2017 represents one-time benefits recorded that were associated with the JackRabbit division. The following table presents key financial results of the Company included in “Net loss from discontinued operations, net of tax” for the thirteen weeks ended May 28, 2016 (in thousands):
The following table presents the major classes of assets and liabilities presented as held for sale as of May 28, 2016 related to JackRabbit (in thousands):
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Fair Value Measurements |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | Fair Value Measurements Fair value measurements are determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs. The Company utilizes a fair value hierarchy based upon the observability of inputs used in valuation techniques as follows:
The following table provides a summary of the recognized assets that are measured at fair value on a recurring basis (in thousands):
Included in Level 1 assets are mutual fund investments under a non-qualified deferred compensation plan. The Company estimates the fair value of these investments on a recurring basis using readily available market prices. There were no liabilities measured at fair value and there were no transfers into or out of Level 1, Level 2, or Level 3 assets or liabilities for any of the periods presented. Level 3 Valuation Techniques Financial assets and liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies, or similar techniques and at least one significant model assumption or input is unobservable. The Company has certain assets that are measured at fair value on a non-recurring basis and adjusted to fair value under certain circumstances that include those described in Note 9, Impairment Charges and Store Closing Costs. The categorization used to measure the implied fair value of long-lived assets is considered a Level 3 measurement due to the subjective nature of the observable inputs used to determine the fair value. |
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Debt Agreement |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Debt Disclosure [Abstract] | |
| Debt Agreement | Debt Agreement The Company has an unsecured $125 million credit facility with a syndicate of financial institutions, which expires on November 30, 2021 (the “Credit Facility”). The Credit Facility provides that, under certain circumstances, the Company may increase the maximum amount of the Credit Facility in an aggregate principal amount not to exceed $200 million. The Credit Facility is used by the Company, among other things, to issue letters of credit, support working capital needs, fund capital expenditures, and for other general corporate purposes. There were no outstanding borrowings as of May 27, 2017. Approximately $1.8 million in stand-by letters of credit were outstanding as of May 27, 2017. Accordingly, the total revolving credit availability was $123.2 million as of May 27, 2017. The Company’s ability to borrow in the future is subject to certain conditions, including compliance with certain covenants and making certain representations and warranties. The Credit Facility contains restrictive covenants that limit, among other things, mergers and acquisitions. In addition, the Company must maintain a maximum leverage ratio (as defined by the Credit Facility) and minimum consolidated tangible net worth (as defined by the 2017 Credit Agreement). The Company was in compliance with all such covenants as of May 27, 2017. The pricing grid is adjusted quarterly and is based on the Company’s leverage ratio. The minimum pricing is LIBOR plus 0.90% or Base Rate (as defined by the Credit Facility) and the maximum pricing is LIBOR plus 1.75% or Base Rate plus 0.75%. The Company is also subject to an unused commitment fee based on the Company’s leverage ratio with minimum pricing of 0.10% and maximum pricing of 0.25%. In addition, the Company is subject to a letter of credit fee based on the Company’s leverage ratio with minimum pricing of 0.40% and maximum pricing of 1.25%. |
Earnings Per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings Per Share Basic earnings per share is calculated by dividing net income associated with common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share assumes the issuance of additional shares of common stock by the Company upon exercise of all outstanding stock options and contingently issuable securities if the effect is dilutive, in accordance with the treasury stock method or two-class method (whichever is more dilutive). Restricted stock units without performance criteria are included as participating securities, since they have the right to share in dividends, if declared, equally with common shares. During periods of net income, participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities (“the two-class method”). During periods of net loss, no effect is given to participating securities since they do not share in the losses of the Company. When discontinued operations are reported, income from continuing operations represents the “control number” in determining whether potential shares of common stock are dilutive or anti-dilutive. Participating securities have the effect of diluting both basic and diluted earnings per share during periods of net income. The following is a reconciliation of the numerators and denominators used in computing earnings per share (in thousands, except per share amounts):
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Common Stock |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Equity [Abstract] | |
| Common Stock | Common Stock On July 21, 2011, the Company’s Board of Directors authorized a share repurchase program to repurchase shares of the Company’s common stock with subsequent amendments on March 26, 2015 and July 13, 2016 authorizing further share repurchases through December 31, 2019 (the “Share Repurchase Program”). The Company repurchased 0.3 million shares of its common stock at an average price of $15.29 per share for an aggregate amount of $3.8 million during the thirteen weeks ended May 27, 2017. As of May 27, 2017, there were 4.5 million shares remaining available to repurchase under the Share Repurchase Program. As of May 27, 2017, the Company held 19.6 million shares of its common stock as treasury shares at an average price of $20.49 per share for an aggregate carrying amount of $401.8 million. The Company’s treasury shares may be issued upon the exercise of employee stock options, under the Employee Stock Purchase Plan (“ESPP”), in the form of restricted stock, or for other corporate purposes. The number of shares of common stock reserved to be issued upon the exercise of options, restricted stock, or other awards is limited under the Finish Line, Inc. 2009 Incentive Plan Amended and Restated as of April 16, 2014, and further amended as of June 27 and July 14, 2016. Further purchases will occur from time to time as market conditions warrant and as the Company deems appropriate when judged against other alternative uses of cash. On April 13, 2017, the Company announced a quarterly cash dividend of $0.11 per share of the Company’s common stock. The Company declared dividends of $4.5 million during the thirteen weeks ended May 27, 2017, all of which was included in other liabilities and accrued expenses as of May 27, 2017. Further declarations of dividends remain at the discretion of the Company’s Board of Directors. |
Commitments and Contingencies |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Commitments and Contingencies The Company is subject, from time to time, to certain legal proceedings and claims in the ordinary course of conducting its business. The Company establishes a liability related to its legal proceedings and claims when it has determined that it is probable that the Company has incurred a liability and the related amount can be reasonably estimated. If the Company determines that an obligation is reasonably possible, the Company will, if material, disclose the nature of the loss contingency and the estimated range of possible loss, or include a statement that no estimate of loss can be made. The Company believes there are no pending legal proceedings in which the Company is currently involved which will have a material adverse effect on the Company’s financial position, results of operations, or cash flows. |
Share-Based Compensation |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
| Share-Based Compensation | Share-Based Compensation General Total share-based compensation expense for the thirteen weeks ended May 27, 2017 and May 28, 2016 was $1.9 million and $3.1 million ($2.9 million from continuing operations and $0.2 million from discontinued operations), respectively. Restricted Stock Activity The Company has granted shares of the Company’s common stock to non-employee directors, officers, and other key employees that are subject to restrictions. The shares of restricted stock granted to employees in fiscal year 2018 generally vest over a three-year period or vest upon the achievement of specified levels of earnings per share growth over a three-year period. The shares of restricted stock granted to employees prior to fiscal year 2018 generally cliff-vest after a three-year period or vest upon the achievement of specified levels of earnings per share growth over a three-year period. For performance-based awards, should the earnings per share growth criteria not be met over the three-year period, the shares will be forfeited. All restricted stock awards issued to non-employee directors cliff-vest after a one-year period from the grant date. During the thirteen weeks ended May 27, 2017 and May 28, 2016, the Company granted approximately 0.4 million restricted shares. |
Impairment Charges and Store Closing Costs |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Asset Impairment Charges [Abstract] | |
| Impairment Charges and Store Closing Costs | Impairment Charges and Store Closing Costs During the thirteen weeks ended May 27, 2017, the impairment charges and store closing costs represented a $2.0 million impairment of obsolete store fixtures and $0.2 million in store closing costs. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
|---|---|
May 27, 2017 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation | Basis of Presentation. The accompanying unaudited consolidated financial statements of The Finish Line, Inc., along with its consolidated subsidiaries (individually and collectively referred to as the “Company”), have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. Preparation of the financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included. All intercompany transactions and balances have been eliminated. The Company has experienced, and expects to continue to experience, significant variability in sales, profits, and merchandise inventories from reporting period to reporting period due to back to school and holiday selling seasons. Therefore, the results of the interim periods presented herein are not necessarily indicative of the results to be expected for any other interim period or the full year. |
| Recent Accounting Pronouncements and Recently Adopted Accounting Pronouncements | Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued guidance on revenue from contracts with customers and has subsequently issued several amendments which clarify the guidance as well as provide guidance for implementation. The guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB approved a one year deferral of the effective date, to make it effective for annual or interim reporting periods beginning after December 15, 2017. The guidance allows for either a full retrospective or a modified retrospective transition method. The adoption of the new guidance could impact the timing, presentation, or disclosure of revenue recognition and related balance sheet accounts associated with the Company’s gift cards, loyalty programs, and product returns. The Company is currently assessing the impact of adopting this guidance within these areas and others, as well as the available transition methods, but does not, at this time, anticipate a material impact to its consolidated results of operations, financial position, or cash flows. In February 2016, the FASB issued guidance on accounting for leases. A primary purpose of the guidance is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Specifically, lessees will be required to recognize the rights and obligations resulting from leases classified as operating leases as assets and liabilities. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective adoption, with early adoption permitted. The Company is currently assessing the impact of adopting this guidance and its potential impact to its consolidated results of operations, financial position, cash flows, and related disclosures and is expecting the guidance to have a material impact due to the significant number of store leases that the Company has under contract. Other recently issued accounting pronouncements did not, or are not believed by management to have a material effect on the Company’s present or future consolidated financial statements. Recently Adopted Accounting Pronouncements. In July 2015, the FASB issued guidance on simplifying the measurement of inventory. The guidance, which applies to inventory that is measured using any method other than the last-in, first-out (“LIFO”) or retail inventory methods, requires that entities measure inventory at the lower of cost or net realizable value. The Company adopted the provisions of this guidance prospectively on February 26, 2017. The adoption of this guidance did not have a material impact to the Company’s consolidated results of operations, financial position, or cash flows. In March 2016, the FASB issued guidance on simplifying several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and accounting for forfeitures. The Company adopted the provisions of this guidance on February 26, 2017. The impact of the adoption resulted in the following: •Excess tax benefits (deficiencies) resulting from share-based compensation are now recorded within income tax expense when the awards vest or are settled, rather than within equity. Additionally, excess tax benefits are now excluded from assumed future proceeds in the Company's calculation of diluted shares for purposes of determining diluted earnings per share. The prospective adoption of this provision did not have a material effect on the Company's consolidated results of operations, financial position, or cash flows. The Company recorded excess tax deficiencies related to share-based compensation of approximately $0.2 million to income tax expense, whereas such expense previously would have been recorded in equity. In addition, the Company recorded approximately $0.1 million of previously unrecognized excess tax benefits as a cumulative-effect adjustment to beginning retained earnings. •The Company elected to continue to expense share-based awards based on awards ultimately expected to vest, which requires the Company to continue to estimate forfeitures on the date of their grant. •Excess tax benefits from share-based compensation arrangements are classified as cash flows from operations, rather than as cash flows from financing activities. The Company adopted this change retrospectively, which resulted in an immaterial increase to net cash provided by operating activities and an immaterial increase in cash flows used in financing activities for the thirteen weeks ended May 28, 2016. |
Discontinued Operations and Subsequent Event (Tables) |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disposal Groups, Including Discontinued Operations | The following table presents key financial results of the Company included in “Net loss from discontinued operations, net of tax” for the thirteen weeks ended May 28, 2016 (in thousands):
The following table presents the major classes of assets and liabilities presented as held for sale as of May 28, 2016 related to JackRabbit (in thousands):
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Fair Value Measurements (Tables) |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Recognized Assets and Liabilities | The following table provides a summary of the recognized assets that are measured at fair value on a recurring basis (in thousands):
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Numerators and Denominators used in Computing Earnings Per Share | The following is a reconciliation of the numerators and denominators used in computing earnings per share (in thousands, except per share amounts):
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Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
Feb. 25, 2017 |
|
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
| Excess tax deficiencies related to share-based compensation | $ 0.2 | |
| Retained Earnings | Accounting Standards Update 2016-09 | ||
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
| Cumulative adjustment to retained earnings | $ 0.1 |
Discontinued Operations and Subsequent Event - Additional Information (Details) - JackRabbit - Discontinued Operations, Disposed of by Sale $ in Millions |
4 Months Ended | |
|---|---|---|
|
Feb. 24, 2017
USD ($)
|
Jun. 23, 2017
USD ($)
installment
|
|
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Payments to dispose of business | $ 10.1 | |
| Net assets assumed by buyers | 18.3 | |
| One-time transaction costs | $ 4.8 | |
| Subsequent Event | ||
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Settlement agreement, additional purchase price | $ 1.0 | |
| Settlement agreement, additional purchase price, number of installments | installment | 2 | |
| Loss on disposal | $ 34.2 |
Discontinued Operations and Subsequent Event - Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
May 28, 2016 |
|
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Net loss from discontinued operations, net of tax | $ 143 | $ (462) |
| JackRabbit | Discontinued Operations, Held-for-sale | ||
| Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
| Net sales | 23,471 | |
| Cost of sales (including occupancy costs) | 16,837 | |
| Gross profit | 6,634 | |
| Selling, general, and administrative expenses | 7,350 | |
| Impairment charges and store closing costs | 35 | |
| Loss from discontinued operations before income tax benefit | (751) | |
| Income tax benefit | 289 | |
| Net loss from discontinued operations, net of tax | $ (462) | |
Discontinued Operations and Subsequent Event - Balance Sheet (Details) - USD ($) $ in Thousands |
May 27, 2017 |
Feb. 25, 2017 |
May 28, 2016 |
|---|---|---|---|
| Current assets: | |||
| Total current assets | $ 0 | $ 0 | $ 28,733 |
| Current liabilities: | |||
| Total current liabilities | 0 | 0 | 12,622 |
| Deferred credits from landlords | $ 32,454 | $ 32,133 | 31,801 |
| JackRabbit | Discontinued Operations, Held-for-sale | |||
| Current assets: | |||
| Accounts receivable, net | 943 | ||
| Merchandise inventories, net | 27,582 | ||
| Other | 208 | ||
| Total current assets | 28,733 | ||
| Property and equipment, net | |||
| Property and equipment, net | 4,129 | ||
| Goodwill | 44,029 | ||
| Other assets, net | 908 | ||
| Total assets | 77,799 | ||
| Current liabilities: | |||
| Accounts payable | 8,309 | ||
| Employee compensation | 874 | ||
| Accrued property and sales tax | 601 | ||
| Other liabilities and accrued expenses | 2,838 | ||
| Total current liabilities | 12,622 | ||
| Deferred credits from landlords | 1,902 | ||
| Other long-term liabilities | 56 | ||
| Total liabilities | $ 14,580 |
Fair Value Measurements - Summary of Recognized Assets and Liabilities (Details) - Fair Value, Measurements, Recurring - Non-qualified deferred compensation plan - USD ($) $ in Thousands |
May 27, 2017 |
Feb. 25, 2017 |
May 28, 2016 |
|---|---|---|---|
| Level 1 | |||
| Assets | |||
| Non-qualified deferred compensation plan | $ 4,688 | $ 5,517 | $ 5,478 |
| Level 2 | |||
| Assets | |||
| Non-qualified deferred compensation plan | 0 | 0 | 0 |
| Level 3 | |||
| Assets | |||
| Non-qualified deferred compensation plan | $ 0 | $ 0 | $ 0 |
Debt Agreement - Additional Information (Details) - Second Amended and Restated Credit Agreement |
3 Months Ended |
|---|---|
|
May 27, 2017
USD ($)
| |
| Line of Credit Facility [Line Items] | |
| Unsecured revolving credit facility, maximum borrowing capacity | $ 125,000,000 |
| Revolving credit facility agreement, expiration date | Nov. 30, 2021 |
| Available increase in credit facility maximum borrowing capacity | $ 200,000,000 |
| Line of credit outstanding borrowings | 0 |
| Stand-by letters of credit outstanding | 1,800,000 |
| Revolving credit facility available for borrowing | $ 123,200,000 |
| Revolving credit facility commitment fee description | The 2017 Credit Agreement pricing grid is adjusted quarterly and is based on the Company’s leverage ratio. The minimum pricing is LIBOR plus 0.90% or Base Rate (as defined in the 2017 Credit Agreement) and the maximum pricing is LIBOR plus 1.75% or Base Rate plus 0.75%. The Company is also subject to an unused commitment fee based on the Company’s leverage ratio with minimum pricing of 0.10% and maximum pricing of 0.25%. In addition, the Company is subject to a letter of credit fee based on the Company’s leverage ratio with minimum pricing of 0.40% and maximum pricing of 1.25%. |
| Minimum | |
| Line of Credit Facility [Line Items] | |
| LIBOR rate | 0.90% |
| Commitment fee percentage | 0.10% |
| Letter of credit fee percentage | 0.40% |
| Maximum | |
| Line of Credit Facility [Line Items] | |
| LIBOR rate | 1.75% |
| Base rate | 0.75% |
| Commitment fee percentage | 0.25% |
| Letter of credit fee percentage | 1.25% |
Earnings Per Share - Additional Information (Details) - shares shares in Millions |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
May 28, 2016 |
|
| Earnings Per Share [Abstract] | ||
| Antidilutive shares excluded from computation of diluted earnings per share | 3.4 | 3.0 |
Common Stock - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |||
|---|---|---|---|---|
Apr. 13, 2017 |
May 27, 2017 |
May 28, 2016 |
Feb. 25, 2017 |
|
| Equity [Abstract] | ||||
| Treasury stock purchased (in shares) | 300 | |||
| Stock repurchase program, average price per share (in USD per share) | $ 15.29 | |||
| Treasury stock purchased | $ 3,800 | |||
| Shares available to repurchase (in shares) | 4,500 | |||
| Treasury stock, shares held (in shares) | 19,610 | 18,311 | 19,421 | |
| Treasury stock, average price per share (in USD per share) | $ 20.49 | |||
| Treasury stock, value | $ 401,782 | $ 370,106 | $ 398,574 | |
| Dividends declared per share (in USD per share) | $ 0.11 | $ 0.11 | $ 0.10 | |
| Common stock dividend declared | $ 4,500 | |||
Share-Based Compensation - Additional Information (Details) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
May 28, 2016 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Share-based compensation expense | $ 1.9 | $ 3.1 |
| Restricted Stock | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Grants in period (in shares) | 0.4 | 0.4 |
| Restricted Stock | Employee | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Performance period | 3 years | |
| Restricted Stock | Employee | Fiscal Year 2018 | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Award vesting period | 3 years | |
| Performance period | 3 years | |
| Restricted Stock | Employee | Prior to Fiscal 2018 | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Award vesting period | 3 years | |
| Performance period | 3 years | |
| Restricted Stock | Non Employee Director | Cliff Vesting | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Award vesting period | 1 year | |
| Continuing Operations | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Share-based compensation expense | $ 2.9 | |
| Discontinued Operations | ||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
| Share-based compensation expense | $ 0.2 | |
Impairment Charges and Store Closing Costs - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
May 27, 2017 |
May 28, 2016 |
|
| Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
| Impairment charges and store closing costs | $ 2,158 | $ 0 |
| Store closing costs | 200 | |
| Obsolete store fixtures | ||
| Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||
| Impairment charges and store closing costs | $ 2,000 | |
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