Panera Bread 2013 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2013 Panera Bread annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 88

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88

PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
63
Restricted stock of the Company under the 2005 LTIP is granted at no cost to participants. While participants are generally entitled
to voting rights with respect to their respective shares of restricted stock, participants are generally not entitled to receive accrued
cash dividends, if any, on restricted stock unless and until such shares have vested. The Company does not currently pay a dividend,
and has no current plans to do so. For awards of restricted stock to date under the 2005 LTIP, restrictions limit the sale or transfer
of these shares during a five year period whereby the restrictions lapse on 25 percent of these shares after two years and thereafter
25 percent each year for the next three years, subject to continued employment with the Company. In the event a participant is
no longer employed by the Company, any unvested shares of restricted stock held by that participant will be forfeited. Upon
issuance of restricted stock under the 2005 LTIP, unearned compensation is recorded at fair value on the date of grant to stockholders’
equity and subsequently amortized to expense over the five year restriction period. The fair value of restricted stock is based on
the market value of the Company’s stock on the grant date. As of December 31, 2013, there was $35.4 million of total unrecognized
compensation cost related to restricted stock included in additional paid-in capital in the Consolidated Balance Sheets. This
unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 3.7 years. For
fiscal 2013, fiscal 2012, and fiscal 2011, restricted stock expense was $9.2 million, $7.6 million and $7.7 million, net of capitalized
compensation expense of $0.6 million, $0.5 million, and $0.5 million, respectively. For fiscal 2013, fiscal 2012, and fiscal 2011,
the income tax benefit related to restricted stock expense was $3.4 million, $3.0 million, and $2.9 million, respectively. A summary
of the status of the Company’s restricted stock activity is set forth below:
Restricted
Stock
(in
thousands)
Weighted
Average
Grant-Date
Fair Value
Non-vested at December 25, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 $ 94.98
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 165.62
Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (123) 70.76
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27) 103.25
Non-vested at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 $ 124.26
Under the deferred annual bonus match award portion of the 2005 LTIP, eligible participants receive an additional 50 percent of
their annual bonus, which is paid three years after the date of the original bonus payment provided the participant is still employed
by the Company. For fiscal 2013, fiscal 2012, and fiscal 2011, compensation expense related to deferred annual bonus match
awards was $2.1 million, $2.3 million, and $1.9 million, net of capitalized compensation expense of $0.1 million, $0.2 million,
and $0.2 million, respectively, and was included in general and administrative expenses in the Consolidated Statements of
Comprehensive Income.
Stock options under the 2005 LTIP are granted with an exercise price equal to the quoted market value of the Company’s common
stock on the date of grant. In addition, stock options generally vest 25 percent after two years from the date of grant and thereafter
25 percent each year for the next three years and have a six-year term. The Company uses historical data to estimate pre-vesting
forfeiture rates. As of December 31, 2013, there was no unrecognized compensation cost related to non-vested options. Stock-
based compensation expense related to stock options was as follows for the periods indicated (in thousands):
For the fiscal year ended
December 31,
2013
December 25,
2012
December 27,
2011
Charged to general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . $ 222 $ 421 $ 1,122
Income tax benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (83)(163)(428)
Total stock-based compensation expense, net of tax . . . . . . . . . . . . . . . . . . . $ 139 $ 258 $ 694
Effect on basic earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.01 0.02
Effect on diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.01 0.02