Cracker Barrel 2012 Annual Report Download - page 48

Types of Share-Based Awards
Nonvested Stock. e Company’s nonvested stock awards
include its long-term performance plans which were
established by the Commiee for the purpose of rewarding
certain ocers with shares of the Company’s common
stock if the Company achieved certain performance targets.
e stock awards under the long-term performance
plans are calculated or estimated based on achievement of
nancial performance measures.
Nonvested stock awards consist of the Company’s
common stock and generally vest over 2–5 years. Generally,
the fair value of each nonvested stock award which does
not accrue dividends is equal to the market price of the
Company’s stock at the date of grant reduced by the present
value of expected dividends to be paid prior to the vesting
period, discounted using an appropriate risk-free interest rate.
Other nonvested stock awards accrue dividends and their
fair value is equal to the market price of the Company’s stock
at the date of the grant. Dividends are forfeited for any
nonvested stock awards that do not vest.
e following table summarizes the performance periods
and vesting periods for the Company’s long-term perfor-
mance plans:
Long-Term Performance Plan
(“LTPP”) Performance Period Vesting Period (in Years)
2010 LTPP 2010 3
2011 LTPP 2011 - 2012 2
2012 LTPP 2012 - 2013 2
e following table summarizes the shares that have
been accrued under the 2011 LTPP and the 2012 LTPP at
August 3, 2012:
(Shares in thousands)
2012 LTPP 140
2011 LTPP 97
A summary of the Company’s nonvested stock activity as
of August 3, 2012, and changes during 2012 is presented in
the following table:
(Shares in thousands)
Weighted-
Average
Grant Date
Nonvested Stock Shares Fair Value
Unvested at July 29, 2011 339 $ 42.31
Granted 43 46.22
Vested (302) 42.96
Forfeited — —
Unvested at August 3, 2012 80 $ 41.97
e following table summarizes the total fair value of
nonvested stock that vested for each of the three years:
2012 2011 2010
Total fair value of nonvested stock $ 12,981 $ 4,393 $ 2,667
Performance-Based Market Stock Units. In 2011, the
Company began awarding MSU Grants instead of stock
options. Pursuant to the approval of the 2010 Omnibus Plan
on December 1, 2010, the stock options granted on
September 22, 2011 were defeased and replaced with MSU
Grants to seven executives. e stock option awards would
have vested at a cumulative rate of 33% per year beginning on
the rst anniversary of the grant date. e MSU Grants will
vest at the end of the three-year performance period. e
defeasance of the stock options and the replacement award of
the MSU Grants were accounted for as a modication and
resulted in incremental compensation expense of $1,221.
e number of MSU Grants that will ultimately be
awarded and will vest at the end of the applicable three-year
performance period for each annual plan is based on total
shareholder return, which is dened as increases in the
Company’s stock price plus dividends paid during the
performance period. e number of shares awarded may
increase up to 150% of target in direct proportion to any
percentage increase in total shareholder return during the
performance period. e probability of the actual shares
expected to be earned is considered in the grant date
valuation; therefore, the expense will not be adjusted to
reect the actual units earned. In addition to a service
46