Exhibit 10.3
DICK’S SPORTING GOODS, INC.
STOCK OPTION AGREEMENT
Granted Under the
2002 STOCK PLAN
     Unless otherwise defined herein, each capitalized term used in this Stock
Option Agreement shall have the meaning given such term in the Dick’s Sporting
Goods, Inc. 2002 Stock Plan (the “Plan”).
I. NOTICE OF STOCK OPTION GRANT
Optionee’s Name: Randall K. Zanatta
     The undersigned Optionee has been granted an Option to purchase Common
Stock of the Company, subject to the terms and conditions of the Plan and this
Agreement, as follows:

     
Date of Grant:
  November 16, 2006
 
   
Exercise Price Per Share:
  $54.59
 
   
Number of Shares of Common Stock (the “Shares”) Granted:
  165,000
 
   
Type of Shares:
  Common Stock
 
   
Type of Option:
  o Incentive Stock Option
 
   
 
  þ Nonstatutory Stock Option (i.e., Non-Qualified Stock Options)
 
   
Term/Expiration Date:
  10 years

     
Vesting Schedule:
  This Option shall become exercisable in the following installments prior to
the Expiration Date:  
 
  • 55,000 Shares on February 13, 2008;  
 
  • 55,000 Shares on February 13, 2009; and  
 
  • 55,000 Shares on February 13, 2010.  
 
  The vested portion of this Option shall remain exercisable for at least five
(5) years from February 13, 2007. Whether or not Optionee is employed with the
Company. Should Optionee remain employed with the Company following the
expiration of such five-year period, the vested portion of this Option shall be
exercisable in accordance with the terms set forth below.
 
   
Termination Period:
  If Optionee ceases to be an Employee, the portion of this Option that has not
vested as of the date of termination shall:  
 
 
(i)   vest immediately, if Optionee’s employment with the Company is terminated
for a reason other than Cause or by Optionee for Good Reason (each as defined in
Optionee’s employment agreement with the Company and Golf Galaxy, Inc., dated
February 13, 2007), or
 
 
 
(ii)  expire immediately, if Optionee’s employment is terminated for any reason
other than as set forth in clause (i), including the death or disability of
Optionee.
 
 
  Subject to the five-year period described above, the portion of this Option
that has vested but has not yet been exercised shall be exercisable for a period
of (x) 90 days following the date of termination, as set forth in Section 6(b)
of the Plan, in the event of termination of Optionee’s status in accordance with
the Plan, or (y) 12 months in event of termination as a result of total and
permanent disability or death as set forth in Section 6(b) of the Plan.

 

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II. AGREEMENT
     1. Grant of Option. The Administrator of the Company hereby grants to the
Optionee named in the Notice of Stock Option Grant (the “Optionee”), an option
(the “Option”) to purchase the number of Shares set forth in the Notice of Stock
Option Grant, at the exercise price per Share set forth in the Notice of Stock
Option Grant (the “Exercise Price”), and subject to the terms and conditions of
the Plan, which is incorporated herein by reference. In the event of a conflict
between the terms and conditions of the Plan and this Option Agreement, the
terms and conditions of the Plan shall prevail.
     If designated in the Notice of Stock Option Grant as an Incentive Stock
Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option
as defined in Section 422 of the Code. Nevertheless, to the extent that the
Option fails to meet the requirements of an ISO under Code Section 422, this
Option shall be treated as a Nonstatutory Stock Option (“NSO”).
     2 Exercise of Option.
     (a) Right to Exercise. This Option shall be exercisable during its term in
accordance with the Vesting Schedule set out in Section I. Notice of Stock
Option Grant and with the applicable provisions of the Plan and this Option
Agreement.
     3. Method of Exercise. This Option shall be exercisable by utilizing the
instructions attached as Exhibit A (the “Exercise Information”).
     No Shares shall be issued pursuant to the exercise of an Option unless such
issuance and such exercise complies with the Code and any other applicable law
or regulation, including the requirements of the NYSE. Assuming such compliance,
for income tax purposes the Shares shall be considered transferred to the
Optionee on the date on which the Option is exercised with respect to such
Shares.
     4. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of the Optionee:
     (a) cash or check;
     (b) consideration received by the Company under a formal “brokerage
cashless exercise” program adopted by the Company acceptable to the Board of
Directors in its sole discretion in connection with the Plan or the delivery of
a properly executed exercise notice together with irrevocable instructions to a
broker registered under the Securities Exchange Act of 1934, as amended, to
promptly deliver to the Company the amount of proceeds required to pay the
Exercise Price; or
     (c) surrender of other Shares which, (i) in the case of Shares acquired
upon exercise of a stock option, have either been owned by the Optionee for more
than six (6) months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (ii) have a Fair Market Value on the date of
surrender equal to the aggregate Exercise Price of the Exercised Shares.
     5. Withholding. Notwithstanding any provisions of the Plan or this
Agreement to the contrary, whenever shares of Common Stock are to be issued to
the Optionee, the Optionee shall also remit to the Company (or, in the case of a
“brokerage cashless exercise,” or other exercise the Company shall have the
right to withhold) an amount sufficient to satisfy federal, state and local
withholding requirements prior to delivery of any certificate for shares. If an
Optionee makes a disposition of shares acquired upon the exercise of an
Incentive Stock Option within either two years after the Option was granted or
one year after its exercise by the Optionee, the Optionee shall promptly notify
the Company in accordance with Section 8(d) of this Agreement and the Company
shall have the right to require the Optionee to pay the Company an amount
sufficient to satisfy federal, state and local tax withholding requirements, if
any.
     6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by Optionee. The terms of the
Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
     7. Term of Option. This Option may be exercised only within the term set
out in Section I. Notice of Stock Option Grant, and may be exercised during such
term only in accordance with the Plan and the terms of this Option.

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     8. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal tax consequences of exercise of this Option
and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE
TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A
TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
     (a) Exercise of ISO. If this Option qualifies as an ISO, there will be no
regular federal income tax liability upon the exercise of the Option, although
the excess, if any, of the Fair Market Value of the Shares on the date of
exercise over the Exercise Price will be treated as an adjustment to the
alternative minimum tax for federal tax purposes and may subject the Optionee to
the alternative minimum tax in the year of exercise.
     (b) Exercise of Nonstatutory Stock Option. There may be a regular federal
income tax liability upon the exercise of a Nonstatutory Stock Option. The
Optionee will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the Fair Market Value
of the Shares on the date of exercise over the Exercise Price. If Optionee is an
Employee or a former Employee, the Company will be required to withhold from
Optionee’s compensation or collect from Optionee and pay to the applicable
taxing authorities an amount in cash equal to a percentage of this compensation
income at the time of exercise, and may refuse to honor the exercise and refuse
to deliver Shares if such withholding amounts are not delivered at the time of
exercise.
     (c) Disposition of Shares. In the case of an NSO, if Shares are held for at
least one year, any gain realized on disposition of the Shares will be treated
as long-term capital gain for federal income tax purposes. In the case of an
ISO, if Shares transferred pursuant to the Option are held for at least one year
after exercise and at least two years after the Date of Grant, any gain realized
on disposition of the Shares will also be treated as long-term capital gain for
federal income tax purposes. If Shares purchased under an ISO are disposed of
within one year after exercise or two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (1) the Fair Market Value of the Shares on the date of
exercise, or (2) the sale price of the Shares. Any additional gain will be taxed
as capital gain, short-term or long-term depending on the period that the ISO
Shares were held.
     (d) Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (1) the date two years after the Date of Grant, or (2) the date one
year after the date of exercise, the Optionee shall immediately notify the
Company in writing of such disposition. Optionee agrees that Optionee may be
subject to income tax withholding by the Company on the compensation income
recognized by the Optionee.
     9. Entire Agreement, Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of the State of Delaware.
     10. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS AN EMPLOYEE, NON-EMPLOYEE DIRECTOR OR CONSULTANT, AS THE
CASE MAY BE, AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT FOR THE VESTING PERIOD, FOR ANY
PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR
THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP WITH THE COMPANY AT ANY
TIME, WITH OR WITHOUT CAUSE.
     11. Incorporation of Plan. Optionee acknowledges receipt of a copy of one
of the following: (i) the Company’s annual report for its last fiscal year,
(ii) the Company’s Form 10-K for its last fiscal year, or (iii) the last
prospectus filed by the Company, and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Option subject to all
of the terms and provisions thereof. Optionee has reviewed the Plan and this

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Option in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Option and fully understands all provisions of the
Option. Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions arising
under the Plan or this Option.

                  OPTIONEE:       DICK’S SPORTING GOODS, INC.:    
 
               
/s/ Randall K. Zanatta
      By:   William R. Newlin    
 
Signature
         
 
Authorized Officer    
 
               
Randall K. Zanatta
               
 
Print Name
               

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Exhibit A
Smith Barney is the service provider that we use to manage our stock option
program.
Please take a minute to review the steps necessary to view your options:

  •   If this is the first time that you have been granted stock options: you
will need to activate your account. To do so, you’ll need an Internet User Name
and Password. Smith Barney will mail two (2) letters to you at the home address
we have on file. The first letter will contain your temporary Internet User Name
and Trading PIN (required it you wish to sell shares of Dick’s Sporting Goods
on-line). The second letter will contain your temporary Password.     •   Once
you have received your temporary User Name and temporary Password, you will need
to log onto the Smith Barney website at http://www.benefitaccess.com. Once you
log onto the site, you will need to create your own unique User Name and
Password. Once this is done please view your options. If everything is correct,
click the ‘accept’ button. The buttons are located to the right of the grant on
the grant summary page. If for some reason you choose not to accept the grant,
you may click on the ‘reject’ button. Grants must be in ‘accepted’ status in
order to be exercised.     •   You may also access your account information by
phone. You can utilize Smith Barney’s Voice Response System by calling
1-800-367-4777. When prompted for the stock number, enter 315274. Customer
Service Representatives are available from 8:00 AM and 6:00 PM Eastern Time.

If you have any questions you may contact:

  •   Chris Grebenc (for Corporate Associates) at (724) 273-3107     •   Debbie
Victorelli (for Field Associates) at (724) 273-3818

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