Panera Bread 2010 Annual Report Download - page 85

•Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the
time of grant and with a maturity that approximates the option awards expected term.
•Dividend yield — The dividend yield is based on the Company’s anticipated dividend payout over the
expected term of the option awards.
The weighted-average fair value of option awards granted and assumptions used for the Black-Scholes option
pricing model were as follows for the periods indicated:
December 28,
2010
December 29,
2009
December 30,
2008
For the Fiscal Year Ended
Fair value per option awards ..................... $27.97 $21.70 $15.54
Assumptions:
Expected term (years) ........................ 5.0 5.0 4.5
Expected volatility ........................... 41.0% 41.8% 36.5%
Risk-freeinterestrate......................... 1.8% 2.4% 2.5%
Dividend yield .............................. 0.0% 0.0% 0.0%
1992 Equity Incentive Plan
The Company adopted the 1992 Plan in May 1992. A total of 8,600,000 shares of Class A common stock were
authorized for issuance under the 1992 Plan as awards, which could have been in the form of stock options (both
qualified and non-qualified), stock appreciation rights, performance shares, restricted stock, or stock units, to
employees and consultants. 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 1992 Plan.
2001 Employee, Director, and Consultant Stock Option Plan
The Company adopted the 2001 Plan in June 2001. A total of 3,000,000 shares of Class A common stock were
authorized for issuance under the 2001 Plan as awards, which could have been in the form of stock options to
employees, directors, and consultants. As a result of stockholder approval of the 2006 Plan, effective as of May 25,
2006, the Company will grant no further stock options under the 2001 Plan.
1992 Employee Stock Purchase Plan
The Company maintains a 1992 Employee Stock Purchase Plan (“ESPP”) which was authorized to issue
825,000 shares of Class A common stock. The ESPP gives eligible employees the option to purchase Class A
common stock (total purchases in a year may not exceed 10 percent of an employee’s current year compensation) at
85 percent of the fair market value of the Class A common stock at the end of each calendar quarter. There were
approximately 28,000, 36,000, and 44,000 shares purchased with a weighted-average fair value of purchase rights
of $11.41, $7.95, and $6.41 during fiscal 2010, fiscal 2009, and fiscal 2008, respectively. For fiscal 2010, fiscal
2009, and fiscal 2008, the Company recognized expense of approximately $0.3 million in each of the respective
years related to stock purchase plan discounts. Effective May 13, 2010, the Plan was amended to increase the
number of the Company’s Class A common stock shares authorized for issuance 925,000. Cumulatively, there were
approximately 820,000 shares issued under this plan as of December 28, 2010, 790,000 shares issued under this plan
as of December 29, 2009, and 754,000 shares issued under this plan as of December 30, 2008.
18. Defined Contribution Benefit Plan
The Panera Bread Company 401(k) Savings Plan (the “Plan”) was formed under Section 401(k) of the Internal
Revenue Code (“the Code”). The Plan covers substantially all employees who meet certain service requirements.
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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)