Cabela's 2012 Annual Report Download - page 113

103
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
The fair value of options granted is estimated on the date of the grant using the Black-Scholes option pricing
model. The expected volatility for 2012, 2011, and 2010 was based on the historical volatility of the Company’s
common stock. The fair value of options in the years presented was estimated using the Black-Scholes model with
the following weighted average assumptions:
2012 2011 2010
Risk-free interest rate based on the U.S. Treasury yield curve 0.84% 1.52 to 2.16% 2.26 to 2.35%
Dividend yield - - -
Expected volatility 48% 46% 45 to 46%
Weighted average expected life (in years) 4.7 5.0 5.0
Weighted average grant date fair value of options granted $ 15.72 $ 11.30 $ 7.02
Employee Stock Plans – The Cabela’s Incorporated 2004 Stock Plan (“the 2004 Plan”) provides for the
granting of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock,
restricted stock units, and other stock-based awards to employees, directors, and consultants. Options granted
under the 2004 Plan have a term of no greater than ten years from the grant date and are exercisable in accordance
with the vesting schedule determined at the time the awards are granted. As of December 29, 2012, excluding
restricted stock of 37,108, there were 3,719,474 awards outstanding and 1,940,486 additional shares authorized and
available for grant under the 2004 Plan. To the extent available, the Company will issue its treasury shares for the
exercise of stock options before issuing new shares. The Company has no options outstanding under its 1997 Stock
Option Plan and no shares available for grant.
Option Awards. During 2012, there were 229,540 non-qualified stock options granted to employees under the
2004 Plan at an exercise price of $35.17 per share and 18,000 non-qualified stock options granted to non-employee
directors at an exercise price of $34.44 per share. These options have an eight-year term and vest over four years
for employees and one year for non-employee directors. In addition, the Company issued 64,000 premium-priced
non-qualified stock options to its President and Chief Executive Officer under the 2004 Plan at an exercise price
of $40.45 (which is equal to 115% of the closing price of the Company’s common stock on March 2, 2012). The
premium-priced non-qualified stock options vest in three equal annual installments beginning on March 2, 2017,
and expire on March 2, 2020.
Nonvested Stock and Stock Unit Awards. During 2012, the Company issued 424,990 units of nonvested
stock under the 2004 Plan to employees at a weighted average fair value of $35.90 per unit. These nonvested stock
units vest evenly over four years on the grant date anniversary based on the passage of time. On March 2, 2012,
the Company also issued 64,000 units of performance-based restricted stock units under the 2004 Plan to certain
executives at a fair value of $35.17 per unit. These performance-based restricted stock units will begin vesting in
four equal installments on March 2, 2013, since the performance criteria was achieved.
Restricted Stock Awards. In 2008, 111,324 shares of restricted stock were issued to two executives under the
2004 Plan. The stock price on the date of grant was $10.48 per share resulting in a fair value of $1,167 of deferred
compensation which is being amortized to compensation expense over a five-year period. Compensation expense
related to these restricted stock awards, which is included in total stock-based compensation expense, was $233 in
each year 2012, 2011, and 2010. The remaining 37,108 shares of restricted stock will vest on July 7, 2013.