Cracker Barrel 2006 Annual Report Download - page 61

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May 2, 2009 and thereafter. In the event of a divesti-
ture of Logan’s, the Company must maintain a
maximum consolidated total leverage ratio of 3.75 to
1.0 from the closing date of the divestiture and
thereafter, as this ratio will determine the minimum
amount of any excess cash that the Company would
be required to pay down its Term Loan B. Financial
covenants also require that the Company maintain a
minimum consolidated interest coverage ratio (ratio
of earnings before interest, taxes, depreciation and
amortization to cash interest payable, as defined)
of 3.0 to 1.0 through April 27, 2007, 3.25 to 1.0 from
April 28, 2007 through May 2, 2008, 3.5 to 1.0 from
May 3, 2008 through May 1, 2009, 3.75 to 1.0 from
May 2, 2009 through April 30, 2010 and 4.0 to 1.0
from April 31, 2010 and thereafter. Subject to there
being no events of default, covenants under the 2006
Credit Facility permit the Company to declare and pay
cash dividends to its stockholders as long as the
Company has at least $100,000 available under its
Revolving Credit Facility and the aggregate amount
of such dividends paid during any fiscal year would be
less than 15% of Consolidated EBITDA from continuing
operations, as defined, for the fiscal year immediately
preceding the fiscal year in which such dividend is paid.
Additionally, the Company may increase its regular
quarterly cash dividend in any fiscal quarter by an
amount not to exceed the greater of $.01 or 10% of the
amount of the regular quarterly cash dividend paid
in the prior fiscal quarter. The Company’s subsidiaries
have fully and unconditionally guaranteed on a joint
and several basis the obligations under the 2006
Credit Facility and pledged their outstanding stock.
Contemporaneously with entering into the 2006 Credit
Facility, the Company terminated its then-existing
$300,000 revolving credit agreement; at the time of
termination, no amounts were outstanding.
In 2002, the Company issued $422,050 (face value
at maturity) of Senior Notes, maturing on April 2,
2032, and received proceeds totaling approximately
$172,756 prior to debt issuance costs. The Senior Notes
require no cash interest payments and were issued at
a discount representing a yield to maturity of 3.00%
per annum. The Senior Notes are redeemable at the
Company’s option on or after April 3, 2007, and the
holders of the Senior Notes may require the Company
to redeem the Senior Notes on April 3, 2007, 2012,
2017, 2022 or 2027, and in certain other circumstances.
In addition, each $1 (face value at maturity) Senior
Note is convertible into 10.8584 shares of the
Company’s common stock (approximately 4.6 million
shares in the aggregate). During the quarter ended
April 28, 2006, the Company’s credit ratings decreased
below the thresholds defined in the indenture and the
Senior Notes became convertible. As of September 29,
2006, the Company has received verification from the
Trustee that no holders have exercised their option
to convert. The Company has classified the Senior Notes
as long-term obligations due to the Company’s intent
and ability to refinance these Senior Notes on a
long-term basis. The Company’s closing share price, as
reported by Nasdaq, on July 28, 2006 was $32.41.
All subsidiaries of the Company have fully and
unconditionally guaranteed on a joint and several basis
the obligations under the Senior Notes. Each guarantor
is, directly or indirectly, a wholly-owned affiliate of
the parent company, CBRL Group, Inc., which has no
independent assets or operations.
The aggregate maturities of long-term debt subse-
quent to July 28, 2006 are as follows:
Year
2007 $ 8,000
2008 8,000
2009 8,000
2010 8,000
2011 8,000
2012 and thereafter 879,464
Total $919,464
7COMPENSATORY PLANS AND ARRANGEMENTS
In connection with the Company’s announced strategic
review, the Company’s Compensation and Stock Option
Committee (the “Committee”) of the Board approved,
pursuant to the Omnibus Plan (described below), the
“2006 Success Plan” for certain officers of the Company.
During 2006, the Company recorded expense of $2,791
for this plan as general and administrative expenses on
the accompanying Consolidated Statement of Income.
The maximum amount payable under the 2006 Success
Plan is $7,815. The amounts payable under the
2006 Success Plan will become earned and payable six
months after the completion or cessation of certain
of the Company’s strategic initiatives.