Panera Bread 2010 Annual Report Download - page 80

Share Repurchase Authorization
During fiscal 2010, fiscal 2009, and fiscal 2008, the Company purchased shares of Class A common stock
under authorized share repurchase authorizations. Repurchased shares may be retired immediately and resume the
status of authorized but unissued shares or may be held by the Company as treasury stock. See Note 12 for further
information with respect to the Company’s share repurchase authorizations.
17. Stock-Based Compensation
The Company accounts for its stock-based compensation arrangements in accordance with the accounting
standard for share-based payments in the Company’s consolidated financial statements and accompanying notes,
which requires the Company to measure and record compensation expense in its consolidated financial statements
for all stock-based compensation awards using a fair value method.
As of December 28, 2010, the Company had one active stock-based compensation plan, the 2006 Stock
Incentive Plan (“2006 Plan”), and had options and restricted stock outstanding (but can make no future grants) under
two other stock-based compensation plans, the 1992 Equity Incentive Plan (“1992 Plan”) and the 2001 Employee,
Director, and Consultant Stock Option Plan (“2001 Plan”).
2006 Stock Incentive Plan
In the first quarter of fiscal 2006, the Company’s Board of Directors adopted the 2006 Plan, which was
approved by the Company’s stockholders in May 2006. The 2006 Plan provided for the grant of up to
1,500,000 shares of the Company’s Class A common stock (subject to adjustment in the event of stock splits
or other similar events) as incentive stock options, non-statutory stock options and stock settled appreciation rights
(collectively “option awards”), restricted stock, restricted stock units, and other stock-based awards. Effective
May 13, 2010, the Plan was amended to increase the number of the Company’s Class A common stock shares
available to grant to 2,300,000. As a result of stockholder approval of the 2006 Plan, effective as of May 25, 2006,
the Company will grant no further stock options, restricted stock or other awards under the 2001 Plan or the 1992
Plan. The Company’s Board of Directors administers the 2006 Plan and has sole discretion to grant awards under the
2006 Plan. The Company’s Board of Directors has delegated the authority to grant awards under the 2006 Plan,
other than to the Company’s Chairman and Chief Executive Officer, to the Company’s Compensation and Stock
Option Committee (“the Committee”).
Long-Term Incentive Program
In the third quarter of 2005, the Company adopted the 2005 Long Term Incentive Plan (“2005 LTIP”) as a
sub-plan under the 2001 Plan and the 1992 Plan. In May 2006, the Company amended the 2005 LTIP to provide that
the 2005 LTIP is a sub-plan under the 2006 Plan. Under the amended 2005 LTIP, certain directors, officers,
employees, and consultants, subject to approval by the Committee, may be selected as participants eligible to
receive a percentage of their annual salary in future years, subject to the terms of the 2006 Plan. This percentage is
based on the participant’s level in the Company. In addition, the payment of this incentive can be made in several
forms based on the participant’s level including performance awards (payable in cash or common stock or some
combination of cash and common stock as determined by the Committee), restricted stock, choice awards of
restricted stock or options, or deferred annual bonus match awards. On July 23, 2009, the Committee further
amended the 2005 LTIP to permit the Company to grant stock settled appreciation rights (“SSARs”) under the
choice awards and to clarify that the Committee may consider the Company’s performance relative to the
performance of its peers in determining the payout of performance awards, as further discussed below. For fiscal
2010, fiscal 2009 and fiscal 2008, compensation expense related to performance awards, restricted stock, and
deferred annual bonus match was $19.3 million, $12.1 million, and $6.9 million, respectively.
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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)