Cracker Barrel 2008 Annual Report Download - page 72

70
The 2007 MTIRP award was calculated during 2007 based
on achievement of qualified financial performance
measures, but restricted until vesting occurs on the last day
of 2009. The 2007 award will be paid in the form of either
50% nonvested stock and 50% cash or 100% nonvested
stock, based upon the election of each officer. At August 1,
2008, the nonvested stock and cash earned under the 2007
MTIRP was 63,098 shares and $346, respectively. Cash
dividends on the 2007 MTIRP nonvested stock earned shall
accrue from August 3, 2007 and be payable, along with
the remainder of the award, to participants on the payout
date on August 3, 2009.
Stock Ownership Plan
The Committee established the Stock Ownership
Achievement Plan (“Stock Ownership Plan”) pursuant to the
Omnibus Plan, for the purpose of rewarding certain
executive officers of the Company for early achievement of
target stock ownership levels in 2005 and in the future.
Upon meeting the stock ownership levels at an earlier date
than required and upon approval by the Committee, the
Company will award unrestricted shares to those certain
officers on the first Monday of the next fiscal year. The
Stock Ownership Plan reward is expensed over the year
during which those certain officers achieve the stock
ownership target, beginning when the target is met. On
August 4, 2008, August 6, 2007 and July 31, 2006, the
Company issued 2,100, 2,500 and 2,400 unrestricted shares
of common stock less shares withheld for taxes to the
certain executive officers that earned the award in 2008,
2007 and 2006, respectively.
2008 Long-Term Performance Plan
The Committee established the FY2008 Long-Term
Performance Plan (“2008 LTPP”) pursuant to the Omnibus
Plan, for the purpose of rewarding certain officers with
shares of the Company’s common stock if the Company
achieved certain performance targets. During 2008, the
2008 LTPP was rescinded and replaced with discretionary
cash bonuses for all non-executive team members to be
paid in September 2008. See “Nonvested and Restricted
Stock” in this Note for a discussion of the executive
team’s new awards.
Stock Options
A summary of the Company’s stock option activity as of
August 1, 2008, and changes during 2008 is presented in
the following table:
(Shares in thousands)
Weighted-
Average
Weighted- Remaining Aggregate
Average Contractual Intrinsic
Fixed Options Shares Price Term Value
Outstanding at August 3, 2007 2,991 $30.48
Granted 262 39.56
Exercised (79) 29.46
Forfeited/Expired (163) 34.41
Outstanding at August 1, 2008 3,011 $31.09 5.15 $5,278
Exercisable 2,329 $28.70 4.22 $5,278
The weighted-average grant-date fair values of options
granted during 2008, 2007, and 2006 were $11.99, $13.10,
and $10.93, respectively. The intrinsic value for stock
options is defined as the difference between the current
market value and the grant price. The total intrinsic values
of options exercised during 2008, 2007 and 2006 were
$785, $16,298, and $17,055, respectively.
During 2008, cash received from options exercised was
$306 and the tax deficiency realized for the tax deductions
from stock options exercised totaled $1,071.
The fair value of each option award is estimated on the
date of grant using a binomial lattice-based option
valuation model, which incorporates ranges of assumptions
for inputs as shown in the following table. The assumptions
are as follows:
•
The expected volatility is a blend of implied volatility
based on market-traded options on the Company’s
common stock and historical volatility of the Company’s
stock over the contractual life of the options.
•
The Company uses historical data to estimate option
exercise and employee termination behavior within the
valuation model; separate groups of employees that
have similar historical exercise behavior are considered
separately for valuation purposes. The expected life of
options granted is derived from the output of the option
valuation model and represents the period of time the
options are expected to be outstanding.
•
The risk-free interest rate is based on the U.S. Treasury
yield curve in effect at the time of grant for periods
within the contractual life of the option.