Cracker Barrel 2008 Annual Report Download - page 70

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or after April 3, 2007, and the holders of the Senior Notes
could have required 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 was convertible into 10.8584
shares of the Company’s common stock (approximately 4.6
million shares in the aggregate). During the third quarter of
2006, the Company’s credit ratings decreased below the
thresholds defined in the indenture and the Senior Notes
became convertible.
During the third quarter of 2007, pursuant to the put
option, the Company repurchased $20 in principal amount
at maturity of the Senior Notes. In addition, during the
third quarter of 2007, the Company completed an exchange
offer in which $375,931 (face value at maturity) of its
$422,030 (face value at maturity) Senior Notes were
exchanged for New Notes due 2032. The New Notes were
substantially the same as the Senior Notes except that
the New Notes had a net share settlement feature which
allowed the Company, upon conversion of a New Note, to
settle the accreted principal amount of the debt for cash
and issue shares of the Company’s common stock for the
conversion value in excess of the accreted value. The Senior
Notes required the issuance of the Company’s common
stock upon conversion.
In connection with the Company’s redemption of its
Senior Notes and New Notes on June 4, 2007, holders of
approximately $401,000 principal amount at maturity
outstanding elected to convert their notes into common
stock rather than have them redeemed. The Company
issued 395,775 shares of its common stock upon conversion
and paid approximately $179,720 upon redemption. In
addition, the Company purchased $20,000 in principal
amount at maturity of the Senior Notes for approximately
$9,836. The Company obtained funds for the redemption
by drawing on its Delayed-Draw Term Loan facility and
using cash on hand.
9COMPENSATORY PLANS AND ARRANGEMENTS
In connection with the Company’s 2006 strategic
initiatives, the Compensation Committee (the “Committee”)
of the Company’s Board of Directors approved, pursuant to
the Company’s 2002 Omnibus Incentive Compensation Plan
(described below), the “2006 Success Plan” for certain
officers of the Company. The maximum amount payable
under the 2006 Success Plan was $6,647 by the Company
and $1,168 by Logan’s. On June 6, 2007, the Company paid
$6,647 under this plan. During 2007, the Company
recorded expense of $2,137 for this plan as general and
administrative expenses from continuing operations and
recorded $2,136 related to CBRL Group officers and $206
related to Logan’s officers as discontinued operations.
During 2006, the Company recorded expense of $1,187 for
this plan as general and administrative expenses from
continuing operations and recorded $1,187 related to CBRL
Group officers and $417 related to Logan’s officers as
discontinued operations.
10 SHARE-BASED COMPENSATION
Stock Compensation Plans
The Company’s employee compensation plans are
administered by the Committee. The Committee is authorized
to determine, at time periods within its discretion and
subject to the direction of the Board, which employees will
be granted options and other awards, the number of shares
covered by any awards granted, and within applicable
limits, the terms and provisions relating to the exercise of
any awards.
Directors Plan
In 1989, the Board adopted the Cracker Barrel Old Country
Store, Inc. 1989 Stock Option Plan for Non-employee
Directors (“Directors Plan”). The stock options were granted
with an exercise price equal to the fair market value of the
Company’s common stock as of the date of grant and expire
one year from the retirement of the director from the
Board. An aggregate of 1,518,750 shares of the Company’s
common stock was authorized by the Company’s
shareholders under this plan. Owing to the overall plan
limit, no shares have been granted under this plan since
1994. At August 1, 2008, there were outstanding options
for 244,762 shares under this plan.
Employee Plan
The CBRL Group, Inc. 2000 Non-Executive Stock Option Plan
(“Employee Plan”) covered employees who are not officers