x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Tennessee
(State or other jurisdiction of
incorporation or organization)
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62-1749513
(I.R.S. Employer
Identification Number)
|
|
305 Hartmann Drive, P.O. Box 787
Lebanon, Tennessee
(Address of principal executive offices)
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37088-0787
(Zip code)
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Title of each class | Name of each exchange on which registered | |
Common Stock (Par Value $.01) | The NASDAQ Stock Market LLC | |
(NASDAQ Global Select Market) |
Large accelerated filer
þ
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Accelerated filer
¨
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|||
Non-accelerated filer
¨
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Smaller reporting company
¨
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Document from which Portions
are Incorporated by Reference
|
Part of Form 10-K
into which incorporated
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||
1.
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Proxy Statement for Annual Meeting of
Shareholders to be held December 20, 2011
(the “2011 Proxy Statement”)
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Part III
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PART I | |||
PAGE
|
|||
5
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ITEM 1.
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6
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ITEM 1A.
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11
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ITEM 1B.
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22
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ITEM 2.
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22
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ITEM 3.
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22
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23
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PART II | |||
ITEM 5.
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25
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ITEM 6.
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26
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ITEM 7.
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27
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ITEM 7A.
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41
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ITEM 8.
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42
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ITEM 9.
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68
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ITEM 9A.
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68
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ITEM 9B.
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70
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PART III | |||
ITEM 10.
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71
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ITEM 11.
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71
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ITEM 12.
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71
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ITEM 13.
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71
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ITEM 14.
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71
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PART IV | |||
ITEM 15.
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72
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73
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74
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●
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fluctuating currency exchange rates;
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●
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foreign government regulations;
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●
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foreign currency exchange control regulations;
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●
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import/export restrictions and product testing regulations;
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●
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foreign political and economic instability;
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●
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disruptions due to labor stoppages, strikes or slowdowns, or other disruptions, involving our vendors or the transportation and handling industries; and
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●
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tariffs, trade barriers and other trade restrictions by the U.S. government on products or components shipped from foreign sources.
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●
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require a substantial portion of our cash flow from operations for the payment of principal of, and interest on, our indebtedness and reduce our ability to use our cash flow to fund working capital, capital expenditures and general corporate requirements or to pay dividends; and
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●
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limit our flexibility to adjust to changing business and market conditions and make us more vulnerable to a downturn in general economic conditions as compared to our competitors.
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●
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our ability to control construction and development costs of new stores;
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●
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our ability to manage the local, state or other regulatory, zoning and licensing processes in a timely manner;
|
|
●
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our ability to appropriately train employees and staff the stores;
|
|
●
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consumer acceptance of our stores in new markets;
|
|
●
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our ability to manage construction delays related to the opening of any facility; and
|
|
●
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our ability to secure required governmental approvals and permits in a timely manner, or at all.
|
·
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increases and decreases in average weekly sales, restaurant and retail sales and restaurant profitability;
|
·
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the rate at which we open new stores, the timing of new store openings and the related high initial operating costs;
|
·
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changes in advertising and promotional activities and expansion to new markets; and
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·
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impairment of long-lived assets and any loss on store closures.
|
·
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responding to proxy contests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees;
|
·
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perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; and
|
·
|
if individuals are elected to our board of directors with a specific agenda, it may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.
|
Name
|
Age
|
Position with the Company
|
Sandra B. Cochran
|
53
|
President and Chief Executive Officer
|
Michael A. Woodhouse
|
66
|
Executive Chairman
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Lawrence E. Hyatt
|
56
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Senior Vice President and Chief Financial Officer
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N. B. Forrest Shoaf
|
61
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Senior Vice President, Secretary & Chief Legal Officer
|
Doug Barber
|
54
|
Executive Vice President and Chief People Officer
|
Christopher A. Ciavarra
|
40
|
Senior Vice President, Marketing
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Nicholas V. Flanagan
|
45
|
Senior Vice President, Restaurant Operations
|
Edward A. Greene
|
56
|
Senior Vice President, Strategic Initiatives
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Terry A. Maxwell
|
52
|
Senior Vice President, Retail Operations
|
P. Douglas Couvillion
|
47
|
Vice President, Corporate Controller and Principal Accounting Officer
|
ITEM 5.
|
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURI
TIES
|
Fiscal Year 2011
|
Fiscal Year 2010
|
|||||||||||||||||||||||
Prices
|
Dividends |
Prices
|
Dividends
|
|||||||||||||||||||||
High
|
Low
|
Paid
|
High
|
Low
|
Paid
|
|||||||||||||||||||
First
|
$ | 54.58 | $ | 43.65 | $ | 0.20 | $ | 36.90 | $ | 25.67 | $ | 0.20 | ||||||||||||
Second
|
57.79 | 50.27 | 0.22 | 41.57 | 32.07 | 0.20 | ||||||||||||||||||
Third
|
53.54 | 47.01 | 0.22 | 53.43 | 36.18 | 0.20 | ||||||||||||||||||
Fourth
|
53.86 | 42.79 | 0.22 | 52.60 | 45.26 | 0.20 |
Period
|
Total Number
of Shares
Purchased
|
Average Price
Paid Per
Share (1)
|
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
Maximum Number of
Shares (or Approximate
Dollar Value) that May
Yet Be Purchased
Under the Plans or
Programs
|
|||||||||||
4/30/11 – 5/27/11
|
-- | $ | -- | -- |
Indeterminate (2)
|
||||||||||
5/28/11 – 6/24/11
|
176,600 | $ | 44.84 | 176,600 |
Indeterminate (2)
|
||||||||||
6/25/11 – 7/29/11
|
-- | $ | -- | -- |
Indeterminate (2)
|
||||||||||
Total for the quarter
|
176,600 | $ | 44.84 | 176,600 |
Indeterminate (2)
|
(1)
|
Average price paid per share is calculated on a settlement basis and includes commissions and fees.
|
(2)
|
Pursuant to previously announced plans on August 3, 2010, we were authorized to repurchase shares solely to offset share dilution that might result from share issuances under our equity compensation plans, subject to a maximum amount of $65,000. On September 13, 2011, we announced that we have been authorized to repurchase up to $65,000 of our common stock.
|
(Dollars in thousands except percentages and share data)
|
||||||||||||||||||||
For each of the fiscal years ended
|
||||||||||||||||||||
July 29,
2011
(a)
|
July 30,
2010
(b)
|
July 31,
2009
(c)(d)
|
August 1,
2008
(d)
|
August 3,
2007
(d)(e)
|
||||||||||||||||
Selected Income Statement Data:
|
||||||||||||||||||||
Total revenue
|
$ | 2,434,435 | $ | 2,404,515 | $ | 2,367,285 | $ | 2,384,521 | $ | 2,351,576 | ||||||||||
Income from continuing operations
|
85,208 | 85,258 | 65,957 | 65,303 | 75,983 | |||||||||||||||
(Loss) income from discontinued operations, net of tax
|
-- | -- | (31 | ) | 250 | 86,082 | ||||||||||||||
Net income
|
85,208 | 85,258 | 65,926 | 65,553 | 162,065 | |||||||||||||||
Basic net income per share:
|
||||||||||||||||||||
Income from continuing operations
|
3.70 | 3.71 | 2.94 | 2.87 | 2.75 | |||||||||||||||
(Loss) income from discontinued operations, net of tax
|
-- | -- | -- | 0.01 | 3.11 | |||||||||||||||
Net income per share
|
3.70 | 3.71 | 2.94 | 2.88 | 5.86 | |||||||||||||||
Diluted net income per share:
|
||||||||||||||||||||
Income from continuing operations
|
3.61 | 3.62 | 2.89 | 2.79 | 2.52 | |||||||||||||||
(Loss) income from discontinued operations, net of tax
|
-- | -- | -- | 0.01 | 2.71 | |||||||||||||||
Net income per share
|
3.61 | 3.62 | 2.89 | 2.80 | 5.23 | |||||||||||||||
Dividends declared per share
(f)
|
$ | 0.88 | $ | 0.80 | $ | 0.80 | $ | 0.72 | $ | 0.56 | ||||||||||
Dividends paid per share
|
$ | 0.86 | $ | 0.80 | $ | 0.78 | $ | 0.68 | $ | 0.55 | ||||||||||
As Percent of Total Revenue:
|
||||||||||||||||||||
Cost of goods sold
|
31.7 | % | 31.0 | % | 32.3 | % | 32.4 | % | 31.7 | % | ||||||||||
Labor and related expenses
|
37.1 | 37.8 | 38.7 | 38.2 | 38.0 | |||||||||||||||
Other store operating expenses
|
18.6 | 18.2 | 17.8 | 17.7 | 17.4 | |||||||||||||||
Store operating income
|
12.6 | 13.0 | 11.2 | 11.7 | 12.9 | |||||||||||||||
General and administrative expenses
|
5.7 | 6.1 | 5.1 | 5.4 | 5.7 | |||||||||||||||
Impairment and store dispositions, net
|
-- | 0.1 | 0.1 | -- | -- | |||||||||||||||
Operating income
|
6.9 | 6.8 | 6.0 | 6.3 | 7.2 | |||||||||||||||
Income before income taxes
|
4.8 | 4.8 | 3.8 | 3.9 | 5.0 | |||||||||||||||
Selected Balance Sheet Data:
|
||||||||||||||||||||
Working capital (deficit)
|
$ | (21,188 | ) | $ | (73,289 | ) | $ | (66,637 | ) | $ | (44,080 | ) | $ | (74,388 | ) | |||||
Total assets
|
1,310,884 | 1,292,067 | 1,245,181 | 1,313,703 | 1,265,030 | |||||||||||||||
Long-term debt
|
550,143 | 573,744 | 638,040 | 779,061 | 756,306 | |||||||||||||||
Interest rate swap liability
|
51,604 | 66,281 | 61,232 | 39,618 | 13,680 | |||||||||||||||
Other long-term obligations
(g)
|
105,661 | 93,822 | 89,670 | 83,224 | 53,819 | |||||||||||||||
Shareholders’ equity
|
268,034 | 191,617 | 135,622 | 92,751 | 104,123 |
Selected Cash Flow Data:
|
||||||||||||||||||||
Purchase of property and equipment, net
|
$ | 77,686 | $ | 69,891 | $ | 67,842 | $ | 87,849 | $ | 96,447 | ||||||||||
Share repurchases
|
33,563 | 62,487 | -- | 52,380 | 405,531 | |||||||||||||||
Selected Other Data:
|
||||||||||||||||||||
Common shares outstanding at end of year
|
22,840,974 | 22,732,781 | 22,722,685 | 22,325,341 | 23,674,175 | |||||||||||||||
Stores open at end of year
|
603 | 593 | 588 | 577 | 562 | |||||||||||||||
Average Unit Volumes
(h)
:
|
||||||||||||||||||||
Restaurant
|
$ | 3,234 | $ | 3,226 | $ | 3,209 | $ | 3,282 | $ | 3,339 | ||||||||||
Retail
|
837 | 832 | 841 | 898 | 917 | |||||||||||||||
Comparable Store Sales
(i)
:
|
||||||||||||||||||||
Period to period increase (decrease) in comparable store sales:
|
||||||||||||||||||||
Restaurant
|
0.2 | % | 0.8 | % | (1.7 | )% | 0.5 | % | 0.7 | % | ||||||||||
Retail
|
0.7 | (0.9 | ) | (5.9 | ) | (0.3 | ) | 3.2 | ||||||||||||
Memo: Number of stores in comparable base
|
583 | 569 | 550 | 531 | 507 |
(a)
|
Includes impairment charges of $3,219 before taxes and pre-tax gains on store dispositions of $4,109. Our debt refinancing in the fourth quarter of fiscal 2011 resulted in additional interest expense of $5,136 related to transaction fees and the write-off of deferred financing costs. During the fourth quarter of fiscal 2011, as part of our cost reduction and organization streamlining initiative, we incurred severance charges of $1,768, which are included in general and administrative expenses.
|
(b)
|
Includes impairment charges of $2,672 before taxes.
|
(c)
|
Includes impairment charges of $2,088 before taxes. We completed sale-leaseback transactions involving 15 of our stores and our retail distribution center in the fourth quarter of fiscal 2009 (see Note 10 to the Consolidated Financial Statements). Net proceeds from the sale-leaseback transactions together with excess cash flow from operations were used to pay down $142,759 of long-term debt.
|
(d)
|
Logan’s Roadhouse, Inc. was divested in fiscal 2007 and is presented as a discontinued operation.
|
(e)
|
Fiscal 2007 consisted of 53 weeks while all other periods presented consisted of 52 weeks. The estimated impact of the additional week was to increase consolidated fiscal 2007 results as follows: total revenue, $46,283; store operating income, 0.1% of total revenue; operating income, 0.2% of total revenue; income from continuing operations, 0.1% of total revenue; and diluted income from continuing operations per share, $0.14.
|
(f)
|
On September 12, 2011, our Board of Directors declared a dividend of $0.25 per share payable on November 7, 2011 to shareholders of record on October 21, 2011.
|
(g)
|
The increase in other long-term obligations in fiscal 2008 as compared to fiscal 2007 is primarily because of the adoption of accounting guidance for uncertain tax positions. The liability for uncertain tax positions is included in other long-term obligations beginning in fiscal 2008; in prior years, the liability was included in income taxes payable as a current liability.
|
(h)
|
Average unit volumes include sales of all stores. Fiscal 2007 includes a 53
rd
week while all other periods presented consist of 52 weeks.
|
(i)
|
Comparable store sales consist of sales of stores open at least six full quarters at the beginning of the year; and are measured on comparable calendar weeks.
|
ITEM 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIO
NS
|
|
·
|
Executive Overview – a general description of our business, the restaurant industry and our key performance indicators.
|
|
·
|
Results of Operations – an analysis of our consolidated statements of income for the three years presented in our Consolidated Financial Statements.
|
|
·
|
Liquidity and Capital Resources – an analysis of our primary sources of liquidity, capital expenditures and material commitments.
|
|
·
|
Critical Accounting Estimates – a discussion of accounting policies that require critical judgments and estimates.
|
Relationship to Total Revenue
|
Period to Period
Increase (Decrease)
|
|||||||||||||||||||
2011
|
2010
|
2009
|
2011
vs 2010
|
2010
vs 2009
|
||||||||||||||||
Total revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 1 | % | 2 | % | ||||||||||
Cost of goods sold
|
31.7 | 31.0 | 32.3 | 4 | (2 | ) | ||||||||||||||
Gross profit
|
68.3 | 69.0 | 67.7 | -- | 4 | |||||||||||||||
Labor and other related expenses
|
37.1 | 37.8 | 38.7 | -- | (1 | ) | ||||||||||||||
Other store operating expenses
|
18.6 | 18.2 | 17.8 | 3 | 4 | |||||||||||||||
Store operating income
|
12.6 | 13.0 | 11.2 | (2 | ) | 18 | ||||||||||||||
General and administrative
|
5.7 | 6.1 | 5.1 | (5 | ) | 21 | ||||||||||||||
Impairment and store dispositions, net
|
-- | 0.1 | 0.1 | (122 | ) | 34 | ||||||||||||||
Operating income
|
6.9 | 6.8 | 6.0 | 2 | 16 | |||||||||||||||
Interest expense
|
2.1 | 2.0 | 2.2 | 5 | (6 | ) | ||||||||||||||
Income before income taxes
|
4.8 | 4.8 | 3.8 | -- | 28 | |||||||||||||||
Provision for income taxes
|
1.3 | 1.3 | 1.0 | -- | 26 | |||||||||||||||
Income from continuing operations
|
3.5 | 3.5 | 2.8 | -- | 29 | |||||||||||||||
Net income
|
3.5 | 3.5 | 2.8 | -- | 29 |
2011
|
2010
|
2009
|
||||||||||
Revenue in dollars
|
||||||||||||
Total Revenue:
|
||||||||||||
Restaurant
|
$ | 1,934,049 | $ | 1,911,664 | $ | 1,875,688 | ||||||
Retail
|
500,386 | 492,851 | 491,597 | |||||||||
Total revenue
|
$ | 2,434,435 | $ | 2,404,515 | $ | 2,367,285 |
2011
|
2010
|
2009
|
||||||||||
Revenue by percentage relationships
|
||||||||||||
Total Revenue:
|
||||||||||||
Restaurant
|
79.4 | % | 79.5 | % | 79.2 | % | ||||||
Retail
|
20.6 | 20.5 | 20.8 | |||||||||
Total revenue
|
100.0 | % | 100.0 | % | 100.0 | % |
2011
|
2010
|
2009
|
||||||||||
Restaurant
|
$ | 62.2 | $ | 62.0 | $ | 61.7 | ||||||
Retail
|
16.1 | 16.0 | 16.2 |
Period to Period
Increase (Decrease)
|
||||||||
2011 vs 2010
|
2010 vs 2009
|
|||||||
(583 Stores)
|
(569 Stores)
|
|||||||
Restaurant
|
0.2 | % | 0.8 | % | ||||
Retail
|
0.7 | (0.9 | ) | |||||
Restaurant & Retail
|
0.3 | 0.4 |
2011
(583 Stores)
|
2010
(569 Stores)
|
2009
(550 Stores)
|
||||||||||
Restaurant
|
$ | 3,238 | $ | 3,238 | $ | 3,228 | ||||||
Retail
|
833 | 829 | 838 | |||||||||
Total
|
$ | 4,071 | $ | 4,067 | $ | 4,066 |
2011
|
2010
|
2009
|
||||||||||
Cost of Goods Sold:
|
||||||||||||
Restaurant
|
$ | 511,728 | $ | 489,781 | $ | 501,051 | ||||||
Retail
|
260,743 | 256,037 | 263,858 | |||||||||
Total Cost of Goods Sold
|
$ | 772,471 | $ | 745,818 | $ | 764,909 |
2011
|
2010
|
2009
|
||||||||||
Impairment
|
$ | 3,219 | $ | 2,672 | $ | 2,088 | ||||||
Gains on disposition of stores
|
(4,109 | ) | -- | -- | ||||||||
Store closing costs
|
265 | 128 | -- | |||||||||
Total
|
$ | (625 | ) | $ | 2,800 | $ | 2,088 |
2011
|
2010
|
2009
|
||||||||||
Net cash provided by operating activities of continuing operations
|
$ | 138,212 | $ | 212,106 | $ | 164,171 | ||||||
Net cash used in investing activities of continuing operations
|
(69,489 | ) | (69,626 | ) | (9,087 | ) | ||||||
Net cash used in financing activities of continuing operations
|
(64,149 | ) | (106,389 | ) | (155,406 | ) | ||||||
Net cash used in operating activities of discontinued operations
|
-- | -- | (47 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents
|
$ | 4,574 | $ | 36,091 | $ | (369 | ) |
Payments due by Year
|
||||||||||||||||||||
Contractual Obligations (a)
|
Total
|
2012
|
2013-2014 | 2015-2016 |
After 2016
|
|||||||||||||||
Term loan payable on or before July 8, 2016 (b)
|
$ | 231,250 | -- | $ | 43,750 | $ | 187,500 | -- | ||||||||||||
2011 Revolving Credit Facility expiring on July 8, 2016 (b)
|
318,750 | -- | -- | 318,750 | -- | |||||||||||||||
Note payable (c)
|
255 | $ | 109 | 146 | -- | -- | ||||||||||||||
Operating leases excluding billboards (d)
|
752,929 | 37,312 | 75,818 | 76,430 | $ | 563,369 | ||||||||||||||
Operating leases for billboards
|
30,996 | 18,372 | 12,624 | -- | -- | |||||||||||||||
Purchase obligations (e)
|
149,721 | 79,562 | 62,065 | 8,078 | 16 | |||||||||||||||
Other long-term obligations (f)
|
45,525 | 829 | 11,301 | 106 | 33,289 | |||||||||||||||
Total contractual cash obligations
|
$ | 1,529,426 | $ | 136,184 | $ | 205,704 | $ | 590,864 | $ | 596,674 |
Amount of Commitment Expirations by Year
|
||||||||||||||||||||
Total
|
2012
|
2013-2014 | 2015-2016 |
After 2016
|
||||||||||||||||
2011 Revolving Credit Facility expiring on July 8, 2016 (b)
|
$ | 500,000 | -- | -- | $ | 500,000 | -- | |||||||||||||
Standby letters of credit
|
29,981 | 29,981 | -- | -- | -- | |||||||||||||||
Guarantees (g)
|
1,802 | 507 | $ | 636 | $ | 228 | $ | 431 | ||||||||||||
Total commitments
|
$ | 531,783 | $ | 30,488 | $ | 636 | $ | 500,228 | $ | 431 |
(a)
|
At July 29, 2011, the entire liability for uncertain tax positions (including penalties and interest) is classified as a long-term liability. At this time, we are unable to make a reasonably reliable estimate of the amounts and timing of payments in individual years because of uncertainties in the timing of the effective settlement of tax positions. As such, the liability for uncertain tax positions of $19,547 is not included in the contractual cash obligations and commitments table above.
|
(b)
|
Using our expected principal payments and projected interest rates, we will have interest payments of $42,612, $58,064, and $33,989 in 2012, 2013-2014 and 2015-2016, respectively. The projected interest rates for our swapped portion of our outstanding borrowings are our fixed rates under our interest rate swaps (see Note 2 to the Consolidated Financial Statements) plus our current credit spread of 2.00%. The projected interest rate for our unswapped portion of our outstanding borrowings is the three-year swap rate at July 29, 2011 of 1.23% plus our current credit spread. Based on having $318,750 outstanding borrowings under our 2011 Revolving Credit Facility at July 29, 2011 and our current unused commitment fee as defined in the 2011 Credit Facility, our unused commitment fees in 2012 would be $461; however, the actual amount will differ based on actual usage of the 2011 Revolving Credit Facility in 2012.
|
(c)
|
The note payable consists of a five-year note with a vendor in the original principal amount of $507 and represents the financing of prepaid maintenance for telecommunications equipment. The note payable is payable in monthly installments of principal and interest of $9 through October 16, 2013 and bears interest at 2.88%. Principal and interest payments for the note payable are included in the contractual cash obligations and commitments table above.
|
(d)
|
Includes base lease terms and certain optional renewal periods, for which at the inception of the lease, it is reasonably assured that we will exercise.
|
(e)
|
Purchase obligations consist of purchase orders for food and retail merchandise; purchase orders for capital expenditures, supplies, other operating needs and other services; and commitments under contracts for maintenance needs and other services. We have excluded contracts that do not contain minimum purchase obligations. We excluded long-term agreements for services and operating needs that can be cancelled within 60 days without penalty. We included long-term agreements and certain retail purchase orders for services and operating needs that can be cancelled with more than 60 days notice without penalty only through the term of the notice. We included long-term agreements for services and operating needs that only can be cancelled in the event of an uncured material breach or with a penalty through the entire term of the contract. Because of the uncertainties of seasonal demands and promotional calendar changes, our best estimate of usage for food, supplies and other operating needs and services is ratably over either the notice period or the remaining life of the contract, as applicable, unless we had better information available at the time related to each contract.
|
(f)
|
Other long-term obligations include our Non-Qualified Savings Plan ($29,665, with a corresponding long-term asset to fund the liability; see Note 12 to the Consolidated Financial Statements), Deferred Compensation Plan ($4,453), FY2009, FY2010 and FY2011 Long-Term Retention Incentive Plans ($1,779), FY2011 District Manager Long-Term Performance Plan ($430) and FY2010 and FY2011 Long-Term Performance Plans ($9,198).
|
(g)
|
Consists solely of guarantees associated with properties that have been assigned. We are not aware of any non-performance under these arrangements that would result in us having to perform in accordance with the terms of those guarantees.
|
|
·
|
management believes are most important to the accurate portrayal of both our financial condition and operating results and
|
|
·
|
require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
|
|
·
|
Impairment of Long-Lived Assets and Provision for Asset Dispositions
|
|
·
|
Insurance Reserves
|
|
·
|
Retail Inventory Valuation
|
|
·
|
Tax Provision
|
|
·
|
Share-Based Compensation
|
|
·
|
Unredeemed Gift Cards
|
|
·
|
Legal Proceedings
|
·
|
The expected volatility is a blend of implied volatility based on market-traded options on our stock and historical volatility of our stock over the contractual life of the options.
|
·
|
We use historical data to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected life of options granted is derived from the output of the option valuation model and represents the period of time the options are expected to be outstanding.
|
·
|
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option.
|
·
|
The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
|
/s/ Deloitte & Touche LLP |
Nashville, Tennessee
|
September 27, 2011 |
(In thousands except share data) | ||||||||
ASSETS
|
July 29, 2011
|
July 30, 2010
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 52,274 | $ | 47,700 | ||||
Property held for sale
|
950 | -- | ||||||
Accounts receivable
|
12,279 | 13,530 | ||||||
Income taxes receivable
|
7,898 | -- | ||||||
Inventories
|
141,547 | 144,079 | ||||||
Prepaid expenses and other current assets
|
9,000 | 8,609 | ||||||
Deferred income taxes
|
21,967 | 22,341 | ||||||
Total current assets
|
245,915 | 236,259 | ||||||
Property and Equipment:
|
||||||||
Land
|
288,779 | 287,591 | ||||||
Buildings and improvements
|
712,451 | 698,396 | ||||||
Buildings under capital leases
|
3,289 | 3,289 | ||||||
Restaurant and other equipment
|
435,960 | 410,411 | ||||||
Leasehold improvements
|
222,496 | 210,326 | ||||||
Construction in progress
|
10,898 | 11,532 | ||||||
Total
|
1,673,873 | 1,621,545 | ||||||
Less: Accumulated depreciation and amortization of capital leases
|
664,709 | 617,442 | ||||||
Property and equipment – net
|
1,009,164 | 1,004,103 | ||||||
Other assets
|
55,805 | 51,705 | ||||||
Total
|
$ | 1,310,884 | $ | 1,292,067 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 99,679 | $ | 116,218 | ||||
Current maturities of long-term debt and other long-term obligations
|
123 | 6,765 | ||||||
Taxes withheld and accrued
|
32,335 | 32,987 | ||||||
Income taxes payable
|
-- | 7,624 | ||||||
Accrued employee compensation
|
49,194 | 59,874 | ||||||
Accrued employee benefits
|
29,247 | 30,937 | ||||||
Deferred revenues
|
32,630 | 27,544 | ||||||
Accrued interest expense
|
7,857 | 10,535 | ||||||
Other accrued expenses
|
16,038 | 17,064 | ||||||
Total current liabilities
|
267,103 | 309,548 | ||||||
Long-term debt
|
550,143 | 573,744 | ||||||
Interest rate swap liability
|
51,604 | 66,281 | ||||||
Other long-term obligations
|
105,661 | 93,822 | ||||||
Deferred income taxes
|
68,339 | 57,055 | ||||||
Commitments and Contingencies (Notes 10 and 16)
|
||||||||
Shareholders’ Equity:
|
||||||||
Preferred stock – 100,000,000 shares of $.01 par value authorized; no shares issued
|
-- | -- | ||||||
Common stock – 400,000,000 shares of $.01 par value authorized; 2011 – 22,840,974 shares issued and outstanding; 2010 – 22,732,781 shares issued and outstanding
|
228 | 228 | ||||||
Additional paid-in capital
|
7,081 | 6,200 | ||||||
Accumulated other comprehensive loss
|
(38,032 | ) | (48,849 | ) | ||||
Retained earnings
|
298,757 | 234,038 | ||||||
Total shareholders’ equity
|
268,034 | 191,617 | ||||||
Total
|
$ | 1,310,884 | $ | 1,292,067 |
(In thousands except share data)
Fiscal years ended
|
||||||||||||
July 29, 2011
|
July 30, 2010
|
July 31, 2009
|
||||||||||
Total revenue
|
$ | 2,434,435 | $ | 2,404,515 | $ | 2,367,285 | ||||||
Cost of goods sold
|
772,471 | 745,818 | 764,909 | |||||||||
Gross profit
|
1,661,964 | 1,658,697 | 1,602,376 | |||||||||
Labor and other related expenses
|
904,229 | 908,211 | 916,256 | |||||||||
Other store operating expenses
|
451,957 | 437,136 | 421,594 | |||||||||
Store operating income
|
305,778 | 313,350 | 264,526 | |||||||||
General and administrative expenses
|
139,222 | 145,882 | 120,199 | |||||||||
Impairment and store dispositions, net
|
(625 | ) | 2,800 | 2,088 | ||||||||
Operating income
|
167,181 | 164,668 | 142,239 | |||||||||
Interest expense
|
51,490 | 48,959 | 52,177 | |||||||||
Income before income taxes
|
115,691 | 115,709 | 90,062 | |||||||||
Provision for income taxes
|
30,483 | 30,451 | 24,105 | |||||||||
Income from continuing operations
|
85,208 | 85,258 | 65,957 | |||||||||
Loss from discontinued operations, net of tax
|
-- | -- | (31 | ) | ||||||||
Net income
|
$ | 85,208 | $ | 85,258 | $ | 65,926 | ||||||
Basic net income per share:
|
||||||||||||
Income from continuing operations
|
$ | 3.70 | $ | 3.71 | $ | 2.94 | ||||||
Loss from discontinued operations, net of tax
|
-- | -- | -- | |||||||||
Net income per share
|
$ | 3.70 | $ | 3.71 | $ | 2.94 | ||||||
Diluted net income per share:
|
||||||||||||
Income from continuing operations
|
$ | 3.61 | $ | 3.62 | $ | 2.89 | ||||||
Loss from discontinued operations, net of tax
|
-- | -- | -- | |||||||||
Net income per share
|
$ | 3.61 | $ | 3.62 | $ | 2.89 | ||||||
Basic weighted average shares outstanding
|
22,998,200 | 23,007,856 | 22,458,971 | |||||||||
Diluted weighted average shares outstanding
|
23,634,675 | 23,579,752 | 22,787,633 |
Common Stock
|
Additional
Paid-In
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Loss
|
Earnings
|
Equity
|
|||||||||||||||||||
Balances at August 1, 2008
|
22,325,341 | $ | 223 | $ | 731 | $ | (27,653 | ) | $ | 119,450 | $ | 92,751 | ||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
-- | -- | -- | -- | 65,926 | 65,926 | ||||||||||||||||||
Change in fair value of interest rate swap, net of tax benefit of $4,445 (See Note 6)
|
-- | -- | -- | (17,169 | ) | -- | (17,169 | ) | ||||||||||||||||
Total comprehensive income
|
-- | -- | -- | (17,169 | ) | 65,926 | 48,757 | |||||||||||||||||
Cash dividends declared - $.80 per share
|
-- | -- | -- | -- | (18,131 | ) | (18,131 | ) | ||||||||||||||||
Share-based compensation
|
-- | -- | 6,946 | -- | -- | 6,946 | ||||||||||||||||||
Exercise of share-based compensation awards
|
397,344 | 4 | 4,358 | -- | -- | 4,362 | ||||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
-- | -- | 937 | -- | -- | 937 | ||||||||||||||||||
Balances at July 31, 2009
|
22,722,685 | 227 | 12,972 | (44,822 | ) | 167,245 | 135,622 | |||||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
-- | -- | -- | -- | 85,258 | 85,258 | ||||||||||||||||||
Change in fair value of interest rate swap, net of tax benefit of $1,022 (See Note 6)
|
-- | -- | -- | (4,027 | ) | -- | (4,027 | ) | ||||||||||||||||
Total comprehensive income
|
-- | -- | -- | (4,027 | ) | 85,258 | 81,231 | |||||||||||||||||
Cash dividends declared - $.80 per share
|
-- | -- | -- | -- | (18,465 | ) | (18,465 | ) | ||||||||||||||||
Share-based compensation
|
-- | -- | 13,193 | -- | -- | 13,193 | ||||||||||||||||||
Exercise of share-based compensation awards
|
1,362,096 | 14 | 37,446 | -- | -- | 37,460 | ||||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
-- | -- | 5,063 | -- | -- | 5,063 | ||||||||||||||||||
Purchases and retirement of common stock
|
(1,352,000 | ) | (13 | ) | (62,474 | ) | -- | -- | (62,487 | ) | ||||||||||||||
Balances at July 30, 2010
|
22,732,781 | 228 | 6,200 | (48,849 | ) | 234,038 | 191,617 | |||||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
-- | -- | -- | -- | 85,208 | 85,208 | ||||||||||||||||||
Change in fair value of interest rate swaps, net of tax expense of $3,860 (See Note 6)
|
-- | -- | -- | 10,817 | -- | 10,817 | ||||||||||||||||||
Total comprehensive income
|
-- | -- | -- | 10,817 | 85,208 | 96,025 | ||||||||||||||||||
Cash dividends declared - $.88 per share
|
-- | -- | -- | -- | (20,489 | ) | (20,489 | ) | ||||||||||||||||
Share-based compensation
|
-- | -- | 9,796 | -- | -- | 9,796 | ||||||||||||||||||
Exercise of share-based compensation awards
|
784,793 | 7 | 20,533 | -- | -- | 20,540 | ||||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
-- | -- | 4,108 | -- | -- | 4,108 | ||||||||||||||||||
Purchases and retirement of common stock
|
(676,600 | ) | (7 | ) | (33,556 | ) | -- | -- | (33,563 | ) | ||||||||||||||
Balances at July 29, 2011
|
22,840,974 | $ | 228 | $ | 7,081 | $ | (38,032 | ) | $ | 298,757 | $ | 268,034 |
(In thousands)
|
||||||||||||
Fiscal years ended
|
||||||||||||
July 29, 2011
|
July 30, 2010
|
July 31, 2009
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 85,208 | $ | 85,258 | $ | 65,926 | ||||||
Loss from discontinued operations, net of tax
|
-- | -- | 31 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
|
||||||||||||
Depreciation and amortization
|
62,788 | 61,024 | 59,286 | |||||||||
(Gain) loss on disposition of property and equipment
|
(1,418 | ) | 4,697 | 4,421 | ||||||||
Impairment
|
3,219 | 2,672 | 2,088 | |||||||||
Share-based compensation
|
9,796 | 13,193 | 6,946 | |||||||||
Excess tax benefit from share-based compensation
|
(4,108 | ) | (5,063 | ) | (937 | ) | ||||||
Changes in assets and liabilities:
|
||||||||||||
Accounts receivable
|
1,251 | (800 | ) | 754 | ||||||||
Income taxes receivable
|
(7,898 | ) | 4,078 | 3,794 | ||||||||
Inventories
|
2,532 | (6,655 | ) | 18,530 | ||||||||
Prepaid expenses and other current assets
|
(391 | ) | 584 | 1,788 | ||||||||
Other assets
|
(803 | ) | (5,642 | ) | 2,009 | |||||||
Accounts payable
|
(16,539 | ) | 24,050 | (1,021 | ) | |||||||
Taxes withheld and accrued
|
(652 | ) | 906 | 2,622 | ||||||||
Income taxes payable
|
(3,516 | ) | 12,687 | -- | ||||||||
Accrued employee compensation
|
(10,680 | ) | 9,880 | 3,809 | ||||||||
Accrued employee benefits
|
(1,690 | ) | (1,696 | ) | (1,608 | ) | ||||||
Deferred revenues
|
5,086 | 5,016 | (90 | ) | ||||||||
Accrued interest expense
|
(2,678 | ) | 156 | (2,106 | ) | |||||||
Other accrued expenses
|
(1,669 | ) | (613 | ) | (672 | ) | ||||||
Other long-term obligations
|
12,576 | 5,002 | (1,953 | ) | ||||||||
Deferred income taxes
|
7,798 | 3,372 | 554 | |||||||||
Net cash provided by operating activities of continuing operations
|
138,212 | 212,106 | 164,171 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(77,962 | ) | (70,132 | ) | (68,104 | ) | ||||||
Proceeds from insurance recoveries of property and equipment
|
276 | 241 | 262 | |||||||||
Proceeds from sale of property and equipment
|
8,197 | 265 | 58,755 | |||||||||
Net cash used in investing activities of continuing operations
|
(69,489 | ) | (69,626 | ) | (9,087 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of long-term debt
|
687,000 | 349,600 | 620,200 | |||||||||
Proceeds from exercise of share-based compensation awards
|
20,540 | 37,460 | 4,362 | |||||||||
Principal payments under long-term debt and other long-term obligations
|
(717,263 | ) | (414,572 | ) | (762,530 | ) | ||||||
Purchases and retirement of common stock
|
(33,563 | ) | (62,487 | ) | -- | |||||||
Deferred financing costs
|
(5,125 | ) | (2,908 | ) | (768 | ) | ||||||
Dividends on common stock
|
(19,846 | ) | (18,545 | ) | (17,607 | ) | ||||||
Excess tax benefit from share-based compensation
|
4,108 | 5,063 | 937 | |||||||||
Net cash used in financing activities of continuing operations
|
(64,149 | ) | (106,389 | ) | (155,406 | ) | ||||||
Cash flows from discontinued operations:
|
||||||||||||
Net cash used in operating activities of discontinued operations
|
-- | -- | (47 | ) | ||||||||
Net cash used in discontinued operations
|
-- | -- | (47 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents
|
4,574 | 36,091 | (369 | ) | ||||||||
Cash and cash equivalents, beginning of year
|
47,700 | 11,609 | 11,978 | |||||||||
Cash and cash equivalents, end of year
|
$ | 52,274 | $ | 47,700 | $ | 11,609 |
|
·
|
Level 1 – quoted prices (unadjusted) for an identical asset or liability in an active market.
|
|
·
|
Level 2 – quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.
|
|
·
|
Level 3 – unobservable and significant to the fair value measurement of the asset or liability.
|
Years
|
|
Buildings and improvements
|
30-45
|
Buildings under capital leases
|
15-25
|
Restaurant and other equipment
|
2-10
|
Leasehold improvements
|
1-35
|
From August 3, 2006 to May 2, 2007
|
$ | 525,000 | ||
From May 3, 2007 to May 5, 2008
|
650,000 | |||
From May 6, 2008 to May 4, 2009
|
625,000 | |||
From May 5, 2009 to May 3, 2010
|
600,000 | |||
From May 4, 2010 to May 2, 2011
|
575,000 | |||
From May 3, 2011 to May 2, 2012
|
550,000 | |||
From May 3, 2012 to May 3, 2013
|
525,000 |
·
|
The expected volatility is a blend of implied volatility based on market-traded options on the Company’s common stock and historical volatility of the Company’s stock over the contractual life of the options.
|
·
|
The Company uses historical data to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected life of options granted is derived from the output of the option valuation model and represents the period of time the options are expected to be outstanding.
|
·
|
The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the option.
|
·
|
The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the option.
|
Year Ended
|
||||
July 29, 2011
|
||||
Dividend yield range
|
1.6% | |||
Expected volatility
|
43% | |||
Risk-free interest rate
|
0.8% |
2010
|
2009
|
|||||||
Store operating income as previously reported
|
$ | 310,550 | $ | 262,438 | ||||
Impairment and store dispositions, net
|
2,800 | 2,088 | ||||||
Store operating income as currently reported
|
$ | 313,350 | $ | 264,526 |
1
st
Quarter 2011
|
2
nd
Quarter 2011
|
|||||||
Store operating income as previously reported
|
$ | 82,292 | $ | 85,540 | ||||
Impairment and store dispositions, net
|
83 | 1 | ||||||
Store operating income as currently reported
|
$ | 82,375 | $ | 85,541 |
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value as
of July 29,
2011
|
|||||||||||||
Cash equivalents*
|
$ | 29,548 | $ | -- | $ | -- | $ | 29,548 | ||||||||
Deferred compensation plan assets**
|
29,665 | -- | -- | 29,665 | ||||||||||||
Total assets at fair value
|
$ | 59,213 | $ | -- | $ | -- | $ | 59,213 | ||||||||
Interest rate swap liability (see Note 6)
|
$ | -- | $ | 51,604 | $ | -- | $ | 51,604 | ||||||||
Total liabilities at fair value
|
$ | -- | $ | 51,604 | $ | -- | $ | 51,604 |
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value as
of July 30,
2010
|
|||||||||||||
Cash equivalents*
|
$ | 35,250 | $ | -- | $ | -- | $ | 35,250 | ||||||||
Deferred compensation plan assets**
|
25,935 | -- | -- | 25,935 | ||||||||||||
Total assets at fair value
|
$ | 61,185 | $ | -- | $ | -- | $ | 61,185 | ||||||||
Interest rate swap liability (see Note 6)
|
$ | -- | $ | 66,281 | $ | -- | $ | 66,281 | ||||||||
Total liabilities at fair value
|
$ | -- | $ | 66,281 | $ | -- | $ | 66,281 |
July 29, 2011
|
July 30, 2010
|
|||||||
Retail
|
$ | 108,829 | $ | 113,674 | ||||
Restaurant
|
19,200 | 17,586 | ||||||
Supplies
|
13,518 | 12,819 | ||||||
Total
|
$ | 141,547 | $ | 144,079 |
July 29, 2011
|
July 30, 2010
|
|||||||
2011 Revolving credit facility expiring on July 8, 2016
|
$ | 318,750 | $ | -- | ||||
Term loan payable on or before July 8, 2016
|
231,250 | -- | ||||||
Term loans payable on or before April 27, 2013
|
-- | 347,559 | ||||||
Term loans payable on or before April 27, 2016
|
-- | 232,585 | ||||||
Note payable
|
246 | 346 | ||||||
550,246 | 580,490 | |||||||
Current maturities
|
(103 | ) | (6,746 | ) | ||||
Long-term debt
|
$ | 550,143 | $ | 573,744 |
Year
|
||||
2012
|
$ | 103 | ||
2013
|
18,857 | |||
2014
|
25,036 | |||
2015
|
25,000 | |||
2016
|
481,250 | |||
Total
|
$ | 550,246 |
Balance Sheet Location
|
July 29, 2011
|
July 30, 2010
|
|||||||
Interest rate swap (See Note 3)
|
Interest rate swap liability
|
$ | 51,604 | $ | 66,281 |
Amount of Income (Loss) Recognized in
AOCL on Derivative (Effective Portion)
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Cash flow hedges:
|
||||||||||||
Interest rate swaps
|
$ | 14,677 | $ | (5,049 | ) | $ | (21,614 | ) |
2011
|
2010
|
2009
|
||||||||||
Restaurant
|
$ | 1,934,049 | $ | 1,911,664 | $ | 1,875,688 | ||||||
Retail
|
500,386 | 492,851 | 491,597 | |||||||||
Total revenue
|
$ | 2,434,435 | $ | 2,404,515 | $ | 2,367,285 |
2011
|
2010
|
2009
|
||||||||||
Impairment
|
$ | 3,219 | $ | 2,672 | $ | 2,088 | ||||||
Gains on disposition of stores
|
(4,109 | ) | -- | -- | ||||||||
Store closing costs
|
265 | 128 | -- | |||||||||
Total
|
$ | (625 | ) | $ | 2,800 | $ | 2,088 |
Year
|
Minimum
|
Contingent
|
Total
|
|||||||||
2011
|
$ | 39,391 | $ | 179 | $ | 39,570 | ||||||
2010
|
39,793 | 519 | 40,312 | |||||||||
2009
|
33,929 | 535 | 34,464 |
Year
|
||||
2012
|
$ | 37,312 | ||
2013
|
37,692 | |||
2014
|
38,126 | |||
2015
|
38,144 | |||
2016
|
38,286 | |||
Later years
|
563,369 | |||
Total
|
$ | 752,929 |
Year
|
||||
2012
|
$ | 18,372 | ||
2013
|
9,314 | |||
2014
|
3,310 | |||
Total
|
$ | 30,996 |
(Shares in thousands)
|
||||||||||||||||
Fixed Options
|
Shares
|
Weighted-
Average
Price
|
Weighted-Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding at July 30, 2010
|
1,805 | $ | 33.68 | |||||||||||||
Granted
|
159 | 50.02 | ||||||||||||||
Exercised
|
(656 | ) | 35.29 | |||||||||||||
Forfeited
|
-- | -- | ||||||||||||||
Canceled
|
(184 | ) | 46.23 | |||||||||||||
Outstanding at July 29, 2011
|
1,124 | $ | 33.01 | 5.43 | $ | 13,604 | ||||||||||
Exercisable
|
860 | $ | 34.07 | 4.71 | $ | 9,487 |
(Shares in thousands)
|
||||||||
Nonvested Stock
|
Shares
|
Weighted-Average
Grant Date Fair
Value
|
||||||
Unvested at July 30, 2010
|
491 | $ | 34.89 | |||||
Granted
|
35 | 49.78 | ||||||
Vested
|
(182 | ) | 24.12 | |||||
Forfeited
|
(7 | ) | 45.55 | |||||
Unvested at July 29, 2011
|
337 | $ | 42.03 |
|
·
|
will not be redeemable.
|
|
·
|
will entitle holders to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater.
|
|
·
|
will entitle holders upon liquidation either to receive $1 per share or an amount equal to the payment made on one share of common stock, whichever is greater.
|
|
·
|
will have the same voting power as one share of common stock.
|
|
·
|
if shares of the Company’s common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.
|
July 29, 2011
|
July 30, 2010
|
|||||||
Deferred tax assets:
|
||||||||
Financial accruals without economic performance
|
$ | 56,954 | $ | 60,687 | ||||
Other
|
15,068 | 9,821 | ||||||
Deferred tax assets
|
$ | 72,022 | $ | 70,508 | ||||
Deferred tax liabilities
|
||||||||
Excess tax depreciation over book
|
$ | 90,361 | $ | 79,503 | ||||
Other
|
28,033 | 25,719 | ||||||
Deferred tax liabilities
|
118,394 | 105,222 | ||||||
Net deferred tax liability
|
$ | 46,372 | $ | 34,714 |
2011
|
2010
|
2009
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | 17,231 | $ | 29,114 | $ | 20,307 | ||||||
State
|
5,577 | (88 | ) | 3,320 | ||||||||
Deferred:
|
||||||||||||
Federal
|
9,019 | 336 | (1,157 | ) | ||||||||
State
|
(1,344 | ) | 1,089 | 1,635 | ||||||||
Total income tax provision
|
$ | 30,483 | $ | 30,451 | $ | 24,105 |
2011
|
2010
|
2009
|
||||||||||
Provision computed at federal statutory income tax rate
|
$ | 40,492 | $ | 40,498 | $ | 31,521 | ||||||
State and local income taxes, net of federal benefit
|
3,050 | 495 | 1,697 | |||||||||
Employer tax credits for FICA taxes paid on employee tip income
|
(8,351 | ) | (8,062 | ) | (6,383 | ) | ||||||
Other employer tax credits
|
(5,098 | ) | (3,769 | ) | (3,740 | ) | ||||||
Other-net
|
390 | 1,289 | 1,010 | |||||||||
Total income tax provision
|
$ | 30,483 | $ | 30,451 | $ | 24,105 |
July 29, 2011
|
July 30, 2010
|
July 31, 2009
|
||||||||||
Balance at beginning of year
|
$ | 12,965 | $ | 21,956 | $ | 22,879 | ||||||
Tax positions related to the current year:
|
||||||||||||
Additions
|
2,616 | 2,195 | 3,168 | |||||||||
Reductions
|
-- | -- | -- | |||||||||
Tax positions related to prior years:
|
||||||||||||
Additions
|
987 | 44 | 90 | |||||||||
Reductions
|
(24 | ) | (4,458 | ) | (2,146 | ) | ||||||
Settlements
|
-- | (4,980 | ) | (127 | ) | |||||||
Expiration of statute of limitations
|
(2,377 | ) | (1,792 | ) | (1,908 | ) | ||||||
Balance at end of year
|
$ | 14,167 | $ | 12,965 | $ | 21,956 |
2011
|
2010
|
2009
|
||||||||||
Income from continuing operations per share numerator
|
$ | 85,208 | $ | 85,258 | $ | 65,957 | ||||||
Loss from discontinued operations, net of tax, per share numerator
|
$ | -- | $ | -- | $ | (31 | ) | |||||
Net income per share numerator
|
$ | 85,208 | $ | 85,258 | $ | 65,926 | ||||||
Income from continuing operations, loss from discontinued operations, net of tax, and net income per share denominator:
|
||||||||||||
Basic weighted average shares outstanding
|
22,998,200 | 23,007,856 | 22,458,971 | |||||||||
Add potential dilution:
|
||||||||||||
Stock options and nonvested stock and stock awards
|
636,475 | 571,896 | 328,662 | |||||||||
Diluted weighted average shares outstanding
|
23,634,675 | 23,579,752 | 22,787,633 |
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
|||||||||||||
2011
|
||||||||||||||||
Total revenue
|
$ | 598,691 | $ | 640,277 | $ | 582,525 | $ | 612,942 | ||||||||
Gross profit
|
418,938 | 420,887 | 402,751 | 419,388 | ||||||||||||
Income before income taxes
|
33,702 | 40,642 | 19,586 | 21,761 | ||||||||||||
Income from continuing operations
|
23,734 | 28,777 | 15,154 | 17,543 | ||||||||||||
Net income
|
23,734 | 28,777 | 15,154 | 17,543 | ||||||||||||
Income from continuing operations per share - basic
|
$ | 1.04 | $ | 1.24 | $ | 0.66 | $ | 0.77 | ||||||||
Net income per share – basic
|
$ | 1.04 | $ | 1.24 | $ | 0.66 | $ | 0.77 | ||||||||
Income from continuing operations per share – diluted
|
$ | 1.01 | $ | 1.20 | $ | 0.64 | $ | 0.75 | ||||||||
Net income per share – diluted
|
$ | 1.01 | $ | 1.20 | $ | 0.64 | $ | 0.75 |
2010
|
||||||||||||||||
Total revenue
|
$ | 581,183 | $ | 632,616 | $ | 578,233 | $ | 612,483 | ||||||||
Gross profit
|
403,712 | 420,718 | 405,192 | 429,075 | ||||||||||||
Income before income taxes
|
26,215 | 36,092 | 19,645 | 33,757 | ||||||||||||
Income from continuing operations
|
18,024 | 25,393 | 14,428 | 27,413 | ||||||||||||
Net income
|
18,024 | 25,393 | 14,428 | 27,413 | ||||||||||||
Income from continuing operations per share - basic
|
$ | 0.79 | $ | 1.11 | $ | 0.62 | $ | 1.18 | ||||||||
Net income per share – basic
|
$ | 0.79 | $ | 1.11 | $ | 0.62 | $ | 1.18 | ||||||||
Income from continuing operations per share – diluted
|
$ | 0.78 | $ | 1.09 | $ | 0.61 | $ | 1.14 | ||||||||
Net income per share – diluted
|
$ | 0.78 | $ | 1.09 | $ | 0.61 | $ | 1.14 |
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLO
SURE
|
ITEM 9A.
|
CONTROLS AND PROCEDU
RES
|
|
/s/ Sandra B. Cochran |
Sandra B. Cochran
|
|
President and Chief Executive Officer
|
|
/s/Lawrence E. Hyatt | |
Lawrence E. Hyatt
|
|
Senior Vice President and Chief Financial Officer |
/s/ Deloitte & Touche LLP |
Nashville, Tennessee
|
September 27, 2011 |
1.
|
All schedules have been omitted since they are either not required or not applicable, or the required information is included in the consolidated financial statements or notes thereto.
|
2.
|
The exhibits listed in the accompanying Index to Exhibits immediately following the signature page to this Annual Report on Form 10-K.
|
CRACKER BARREL OLD COUNTRY STORE, INC. | ||
|
By:
|
/s/Sandra B. Cochran
|
Sandra B. Cochran,
|
||
President and Chief Executive Officer
|
Name |
Title
|
|
/s/Sandra B. Cochran
|
|
|
Sandra B. Cochran |
President, Chief Executive Officer and Director
|
|
/s/Lawrence E. Hyatt | ||
Lawrence E. Hyatt | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | |
/s/P. Douglas Couvillion | ||
P. Douglas Couvillion | Vice President, Corporate Controller and Principal Accounting Officer | |
/s/Michael A. Woodhouse | ||
Michael A. Woodhouse
|
Executive Chairman and Director | |
/s/James W. Bradford | ||
James W. Bradford | Director | |
/s/Robert V. Dale | ||
Robert V. Dale
|
Director | |
/s/Richard J. Dobkin | ||
Richard J. Dobkin | Director | |
Robert C. Hilton | Director | |
/s/Charles E. Jones, Jr. | ||
Charles E. Jones, Jr. | Director | |
/s/B.F. Lowery | ||
B.F. Lowery | Director | |
/s/William W. McCarten | ||
William W. McCarten | Director | |
/s/Martha M. Mitchell | ||
Martha M. Mitchell | Director | |
/s/Coleman H. Peterson | ||
Coleman H. Peterson | Director | |
/s/Andrea M. Weiss | ||
Andrea M. Weiss | Director | |
/s/Jimmie D. White | ||
Jimmie D. White | Director |
INDEX TO EXHIBI
TS
|
|
Exhibit
|
|
3(I), 4(a)
|
Charter of Cracker Barrel Old Country Store, Inc. (1)
|
3(II), 4(b) | Articles of Amendment to Charter of Cracker Barrel Old Country Store, Inc (2) |
3(III), 4(c)
|
Bylaws of Cracker Barrel Old Country Store, Inc. (as amended to date) (3)
|
4(d), 10(a)
|
Credit Agreement dated as of July 8, 2011, among Cracker Barrel Old Country Store, Inc., the Subsidiary Guarantors named therein, the Lenders party thereto, and Wells Fargo Bank, National Association as Administrative Agent and Collateral Agent (4)
|
4(e)
|
Rights Agreement, dated as of September 22, 2011, between Cracker Barrel Old Country Store, Inc. and American Stock Transfer & Trust Company, LLC, as rights agent (5)
|
10(b)
|
CBRL Group, Inc. 2000 Non-Executive Stock Option Plan
†
(6)
|
10(c)
|
The Company's 1989 Non-Employee Director's Stock Option Plan, as amended
†
(7)
|
10(d)
|
CBRL Group, Inc. Form of Restricted Stock Award Notice
†
(8)
|
10(e)
|
Form of Stock Option Award under the CBRL Group, Inc. 2002 Omnibus Incentive Compensation Plan
†
(9)
|
10(f)
|
Change-in-Control Agreement with N.B. Forrest Shoaf, dated May 12, 2005
†
(10)
|
10(g)
|
Change-in-Control Agreement for Edward A. Greene dated June 22, 2006
†
(11)
|
10(h)
|
Master Lease, dated July 21, 2000 between Country Stores Property I, LLC as Lessor, and Cracker Barrel Old Country Store, Inc., as Lessee, for lease of 21 Cracker Barrel Old Country Store® sites (12)
|
10(i)
|
Master Lease dated July 31, 2000 between Country Stores Property I, LLC as Lessor, and Cracker Barrel Old Country Store, Inc. as Lessee, for lease of 9 Cracker Barrel Old Country Store® sites*
|
10(j)
|
Master Lease dated July 31, 2000 between Country Stores Property II, LLC as Lessor, and Cracker Barrel Old Country Store, Inc. as Lessee, for lease of 23 Cracker Barrel Old Country Store® sites*
|
10(l)
|
Master Lease dated July 31, 2000 between Country Stores Property III, LLC as Lessor, and Cracker Barrel Old Country Store, Inc. as Lessee, for lease of 12 Cracker Barrel Old Country Store® sites*
|
10(l)
|
Change-in-Control Agreement with Douglas E. Barber, dated April 23, 2008
†
(13)
|
10(m)
|
Cracker Barrel Old Country Store, Inc. Amended and Restated Stock Option Plan (as amended to date)
†
(14)
|
10(n)
|
Cracker Barrel Old Country Store, Inc. Corporate Policy Severance Benefits Policy (as amended to date)
†
(15)
|
Change-in-Control Agreement with Sandra B. Cochran, dated March 11, 2009, as amended September 12, 2011
†
(filed herewith)
|
|
10(p)
|
Cracker Barrel Old Country Store, Inc. and Subsidiaries FY 2010 Annual Bonus Plan
†
(16)
|
10(q)
|
Cracker Barrel Old Country Store, Inc. and Subsidiaries FY 2010 Long-Term Performance Plan
†
(17)
|
(1)
|
Incorporated by reference to Exhibit 3(i), 4.1 to the Company
’
s Quarterly Report on Form 10-Q under the Securities Exchange Act of 1934 (“Exchange Act”) for the quarterly period ended October 31, 2008.
|
(2)
|
Incorporated by reference to Exhibit 3.1 to the Company ’ s Registration Statement on Form 8-A filed under the Exchange Act on September 23, 2011. |
(3)
|
Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on September 16, 2009.
|
(4)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on July 11, 2011
|
(5)
|
Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed under the Exchange Act on September 23, 2011
|
(6)
|
Incorporated by reference to Exhibit 10(i) to the Company’s Annual Report on Form 10-K under the Exchange Act for the fiscal year ended August 2, 2002.
|
(7)
|
Incorporated by reference to the Cracker Barrel Old Country Store, Inc. Annual Report on Form 10-K under the Exchange Act for the fiscal year ended August 2, 1991 (File No. 0-7536).
|
(8)
|
Incorporated by reference to Exhibit 10(j) to the Company’s Annual Report on Form 10-K under the Exchange Act for fiscal year ended July 29, 2005.
|
(9)
|
Incorporated by reference to Exhibit 10(l) to the Company’s Annual Report on Form 10-K under the Exchange Act for fiscal year ended July 29, 2005.
|
(10)
|
Incorporated by reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K under the Exchange Act for fiscal year ended July 29, 2005.
|
(11)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-K under the Exchange Act for fiscal year ended July 28, 2006.
|
(12)
|
Incorporated by reference to Exhibit 10.R to the Company’s Annual Report on Form 10-K under the Exchange Act for the fiscal year ended July 28, 2000.
|
(13)
|
Incorporated by reference to Exhibit 10(o) to the Company’s Annual Report on Form 10-K under the Exchange Act for the fiscal year ended August 1, 2008.
|
(14)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q under the Exchange Act for the quarterly period ended January 30, 2009.
|
(15)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q under the Exchange Act for the quarterly period ended May 1, 2009.
|
(16)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on September 16, 2009.
|
(17)
|
Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q under the Exchange Act for the quarterly period ended October 30, 2009.
|
(18)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q under the Exchange Act for the quarterly period ended January 29, 2010.
|
(19)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on August 3, 2010.
|
(20)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q under the Exchange Act for the quarterly period ended October 29, 2010.
|
(21)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on December 7, 2010.
|
(22)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on December 7, 2010.
|
(23)
|
Incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on December 17, 2010.
|
(24)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on August 2, 2011.
|
(25)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on August 2, 2011.
|
(26)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on September 15, 2011.
|
(27)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current report on Form 8-K filed under the Exchange Act on September 15, 2011.
|
*Document not filed because essentially identical in terms and conditions to Exhibit 10(h).
|
|
**Document not filed because essentially identical in terms and conditions to Exhibit 10(f).
|
|
†
Denotes management contract or compensatory plan, contract or arrangement.
|
CRACKER BARREL OLD COUNTRY STORE, INC. | ||
|
By:
|
/s/N.B.F.Shoaf |
Name:
|
N.B.F. Shoaf | |
Title: | SVP | |
EXECUTIVE | ||
/s/Sandra B. Cochran | ||
Sandra B. Cochran
|
Page
|
|||
Section 1.
|
Operation of Plan and Definitions
|
1
|
|
Section 2.
|
Participation
|
7
|
|
Section 3.
|
Contributions
|
7
|
|
3.1.
|
Supplemental Savings Contributions
|
7
|
|
3.2.
|
Supplemental Matching Contributions
|
7
|
|
3.3.
|
Crediting of Contributions
|
7
|
|
Section 4.
|
Investment of Accounts
|
8
|
|
4.1.
|
Investment Direction
|
8
|
|
4.2.
|
Investment Funds
|
8
|
|
Section 5.
|
Valuations and Crediting
|
8
|
|
5.1.
|
Valuations
|
8
|
|
5.2.
|
Credits to and Charges Against Accounts
|
8
|
|
5.3.
|
Expenses
|
9
|
|
Section 6.
|
Vesting and Separation from Service
|
9
|
|
6.1.
|
Vested Percentage
|
9
|
|
6.2.
|
Forfeiture
|
9
|
|
Section 7.
|
Benefits
|
9
|
|
7.1.
|
Forms of Benefit Payments
|
9
|
|
7.2.
|
Retirement Benefit
|
10
|
|
7.3.
|
Death Benefit
|
10
|
|
7.4.
|
Beneficiary Designation
|
10
|
|
7.5.
|
In-Service Distributions due to Unforeseeable Emergency
|
11
|
|
7.6.
|
Distributions on a Specified Date
|
11
|
|
7.7.
|
Withholding
|
11
|
|
7.8
|
Special 2008 Distribution Election Right
|
11
|
|
Section 8.
|
The Plan Administrator
|
12
|
|
8.1.
|
Plan Administrator
|
12
|
|
8.2.
|
Engagement of Assistants and Advisors
|
12
|
|
8.3.
|
Compensation
|
12
|
|
8.4.
|
Indemnification of the Plan Administrator
|
13
|
|
Section 9.
|
Authority and Responsibilities of the Company
|
13
|
|
Section 10.
|
Claims Procedures
|
13
|
|
10.1.
|
Claims
|
13
|
|
10.2.
|
Appeal of Adverse Benefit Determinations
|
14
|
|
10.3.
|
Notification of Benefit Determination on Review
|
14
|
|
10.4.
|
Definitions
|
16
|
|
Section ll.
|
Amendment, Termination, Mergers and Consolidations
|
16
|
|
11.1.
|
Amendment
|
16
|
|
11.2.
|
Termination
|
17
|
|
11.3.
|
Permanent Discontinuance of Contributions
|
17
|
Section 12.
|
Participating Employers
|
17
|
|
12.1.
|
Adoption by Other Corporations
|
17
|
|
12.2.
|
Requirements of Participating Employers
|
17
|
|
12.3.
|
Designation of Agent
|
17
|
|
12.4.
|
Eligible Person Transfers
|
17
|
|
12.5.
|
Discontinuance of Participation
|
17
|
|
12.6.
|
Plan Administrator’s Authority
|
18
|
|
Section 13.
|
Miscellaneous Provisions
|
18
|
|
13.1.
|
Nonalienation of Benefits
|
18
|
|
13.2.
|
No Contract of Employment
|
18
|
|
13.3.
|
Severability
|
18
|
|
13.4.
|
Successors
|
18
|
|
13.5.
|
Captions
|
18
|
|
13.6.
|
Gender and Number
|
18
|
|
13.7.
|
Controlling Law
|
19
|
|
13.8
|
Title to Assets
|
19
|
|
13.9.
|
Payments to Minors, Etc.
|
19
|
|
13.10.
|
Acknowledgments
|
19
|
|
13.11.
|
Entire Agreement; Successors
|
19
|
|
13.12.
|
Tax Effects
|
19
|
Years of Continuous Employment |
Vested Percentage
|
|
less than 1
|
0%
|
|
1 but less than 2
|
20%
|
|
2 but less than 3
|
40%
|
|
3 but less than 4
|
60%
|
|
4 but less than 5
|
80%
|
|
5 or more
|
100%
|
Cracker Barrel Old Country Store, Inc.
|
||
|
By:
|
/s/ John Rains |
Title: |
VP Compensation & Benefits
|
Name and Address of Employer: | Cracker Barrel Old Country Store, Inc. |
P. O. Box 787 | |
Lebanon, TN 37085-0787 | |
Employer Identification Number: | 62-1749513 |
Cracker Barrel Old Country Store, Inc. | |||
By | |||
Title: |
Assistant Secretary
|
Top Hat Plan Exemption
Pension and Welfare Benefits Administration
Room N-5644
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210
|
ARTICLE I
|
DEFINITIONS AND CONSTRUCTION
|
ARTICLE II
|
ADMINISTRATION
|
ARTICLE III
|
PARTICIPATION
|
ARTICLE IV
|
BENEFITS
|
ARTICLE V
|
VESTING
|
ARTICLE VI
|
TRUST
|
ARTICLE VII
|
PAYMENT OF BENEFITS
|
ARTICLE VIII
|
IN-SERVICE DISTRIBUTIONS
|
ARTICLE IX
|
NATURE OF THE PLAN
|
ARTICLE X
|
AMENDMENT AND TERMINATION
|
ARTICLE XI
|
CLAIMS PROCEDURE
|
ARTICLE XII
|
MISCELLANEOUS
|
|
(1)
|
such an election may not take effect until at least 12 months after the date on which it is made, and
|
|
(2)
|
except in the case of a payment of benefits as the result of the Member's death or Disability, or a distribution as the result of an Unforseeable Emergency, as described in Article VIII, the first payment with respect to which the election is made must be deferred for a period of at least 5 years from the date on which the payment would otherwise have been made.
|
|
(1)
|
The specific reason or reasons for the adverse determination; |
|
(2)
|
Reference to the specific Plan provisions on which the determination is based;
|
|
(3)
|
A description of any additional material or information necessary for the Member or beneficiary claimant to perfect the claim and an explanation of why such material or information is necessary;
|
|
(4)
|
A description of the Plan's review procedures as described in Section 12.2 and the time limits applicable to such procedures, including a statement of the Member or beneficiary claimant's right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.
|
|
(1)
|
The specific reason or reasons for the adverse determination; |
|
(2)
|
Reference to the specific plan provisions on which the determination is based;
|
|
(3)
|
A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits. For purposes of this Section, determination of whether documents, records, and other information shall be considered "relevant" shall be made in accordance with the definition provided in Section 12.4(c);
|
|
(4)
|
A statement of the Member or beneficiary claimant's right to bring a civil action under Section 502(a) of ERISA.
|
|
(1)
|
General Rule
. Except as provided in paragraph (2) of this Section, the Committee shall notify a Member or beneficiary claimant in accordance with paragraph (a) of this Section of the Plan's benefit determination on review within a reasonable period of time, but not later than 60 days after receipt of the claimant's request for review by the Plan, unless the Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determines that an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review.
|
|
(2)
|
Special Rule
. In the event that the Committee holds regularly scheduled meetings at least quarterly, paragraph (1) of this Section shall not apply, and the Committee shall instead make a benefit determination no later than the date of the meeting of the Committee that immediately follows the Plan's receipt of a request for review, unless the request for review is filed within 30 days preceding the date of such meeting. In such case, a benefit determination may be made by no later than the date of the second meeting following the Plan's receipt of the request for review. If special circumstances require further extension of time for processing, a benefit determination shall be rendered not later than the third meeting of the Committee following the Plan's receipt of the request for review. If such an extension of time for review is required because of special circumstances, the Committee shall provide the claimant with written notice of the extension, describing the special circumstances and the date as of which the benefit determination will be made, prior to the commencement of the extension. The Committee shall notify the claimant, in accordance with paragraph (a) of this Section, of the benefit determination as soon as possible, but no later than 5 days after the benefit determination is made.
|
|
(3)
|
Calculating Time Periods
. For purposes of this Section 12.3, the period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is filed in accordance with the reasonable procedures of a Plan, without regard to whether all the information necessary to make a benefit determination on review accompanies the filing. In the event that a period of time is extended as permitted pursuant to paragraph (1) or (2) of this Section due to a claimant's failure to submit information necessary to decide a claim, the period for making the benefit determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
|
|
(1)
|
was relied upon in making the benefit determination; |
|
(2)
|
was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; and demonstrates compliance with the administrative processes and safeguards designed to ensure and to verify that benefit claim determinations are made in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated Members or beneficiaries.
|
Cracker Barrel Old Country Store, Inc. | ||
|
By:
|
John W. Rains
|
Title: |
VP Compensation & Benefits
|
|
(a)
|
Subject to early termination or acceleration pursuant to Section 10, CBRL will pay Executive at the rate of $15,011.58, semi-monthly, for sixteen (16) consecutive months, in accordance with CBRL’s regular payroll policies with such payments commencing on the first regularly scheduled pay period which occurs after the expiration of the Revocation Period. In the event of the death or disability of Executive, the foregoing payments will continue to be made to Executive’s estate, heirs, or conservator, as applicable. CBRL will have the right to deduct from compensation payable to Executive under this Agreement, social security taxes, and all federal, state, and municipal taxes and charges as may now be in effect and that may be enacted or required after the effective date of this Agreement as charges on the compensation of Executive. CBRL will be responsible for the payment of any employer matching amounts of such taxes.
|
|
(b)
|
Throughout the course of his employment, Executive has received awards under various equity plans (collectively, the “Equity Awards”). Executive and CBRL agree that to the extent there are such Equity Awards which are currently scheduled to vest in 2012 (during the Consulting Term), such Equity Awards shall continue to vest as set forth in Attachment B and shall become payable or exercisable in accordance with the terms of the applicable plans, provided Executive continues to provide the services described in Section 2 throughout the Consulting Term.
|
|
(c)
|
Until the earlier of: (i) the end of the Consulting Term or (ii) Executive’s obtaining other employment at which he receives health insurance benefits irrespective of their scope and coverage, CBRL, subject to Executive’s payment of contributions applicable to plan participants, shall continue to provide all group health and life insurance benefits for Executive and his dependents at the same level as for other CBRL senior level executives. Afterwards, CBRL will have no obligation to provide further life insurance benefits, but upon payment of the appropriate premiums, Executive will have the right to continue his participation in CBRL’s group health coverage plan under the applicable COBRA regulations. Executive shall not be entitled to any other benefits as a consultant to CBRL.
|
|
(d)
|
Executive will be paid any bonus earned under the CBRL FY2012 Annual Bonus Plan (“ABP”), in accordance with the terms of, and at the time specified in, the ABP, prorating, for purposes of service under the ABP, Executive’s Employment through the Employment Termination Date. Executive’s services as a Consultant pursuant to Section 2 of this Agreement shall not count in the determination of any employment or service requirement for an award under the ABP.
|
|
(e)
|
CBRL shall reimburse Executive for his reasonable out-of-pocket expenses in connection with his activities and the services that he is requested to perform under Section 2; provided that the request for reimbursement of such expenses is accompanied by documentation satisfactory to CBRL and, provided further, that any expense in excess of $500.00 must be approved in advance in writing by CBRL.
|
|
(f)
|
CBRL shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with the Executive’s Form W-4 on file with CBRL, and all applicable federal employment taxes.
|
|
(a)
|
CBRL shall report all payments and other benefits paid or provided pursuant to Section 2 and Section 3 of this Agreement to the extent required by, and in accordance with, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). In the event that CBRL or the Executive reasonably and in good faith determines that any payment to be made or benefit to be provided to the Executive hereunder would result in the application of Section 409A, CBRL shall, in consultation with the Executive, modify the Agreement to the extent possible and in the least restrictive manner reasonably available in order to exclude such compensation from the definition of “deferred compensation” within the meaning of such Section 409A or in order to comply with the provisions of Section 409A and/or any rules, regulations or other regulatory guidance issued under such statutory provision and without any diminution in the value of the payments to the Executive. Notwithstanding the foregoing, under no circumstance shall CBRL be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Executive due to any failure to comply with Section 409A, or for any interest on account of any delay in payment deemed necessary to comply with Section 409A.
|
|
(b)
|
It is intended that (i) each payment or installment of payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two (2) year exception) and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay). Notwithstanding anything to the contrary herein, if it is determined (i) that on the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or at such other time that CBRL determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of CBRL, and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six (6) months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death. Any payments delayed pursuant to this Section 4(b) shall be made in a lump sum on the first day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death. It is intended that this Agreement shall comply with the provisions of Section 409A of the Code and the Treasury Regulations relating thereto so as not to subject Executive to the payment of additional taxes and interest under Section 409A of the Code. In furtherance of this intent, this Agreement shall be interpreted, operated, and administered in a manner consistent with these intentions.
|
|
(c)
|
To the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement (including any reimbursements under Section 3(e) hereof) or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, such payments shall be made in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.
|
|
(d)
|
Except for any disgorgement or forfeiture of benefits provided for under this Agreement, including Section 10(a) herein, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A of the Code and the Treasury Regulations promulgated thereunder be subject to offset by any other amount unless otherwise permitted by Section 409A of the Code.
|
|
(e)
|
For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by CBRL in its sole discretion.
|
|
(f)
|
By accepting this Agreement, Executive hereby agrees and acknowledges that CBRL does not make any representations with respect to the application of Section 409A of the Code to any tax, economic or legal consequences of any payments payable to Executive hereunder. Further, by the acceptance of this Agreement, Executive acknowledges that (i) Executive has obtained independent tax advice regarding the application of Section 409A of the Code to the payments due to Executive hereunder, (ii) Executive retains full responsibility for the potential application of Section 409A of the Code to the tax and legal consequences of payments payable to Executive hereunder and (iii) CBRL shall not indemnify or otherwise compensate Executive for any violation of Section 409A of the Code that my occur in connection with this Agreement.
|
|
(a)
|
“Competitive Position” shall mean any employment, consulting, advisory, directorship, agency, promotional or independent contractor arrangement between Executive and any person or Entity engaged, wholly or in material part, or that is an investor or prospective investor in an Entity that is engaged wholly or in material part in the restaurant business that is the same or similar to that in which CBRL or any of CBRL’s subsidiaries or affiliates (collectively the “CBRL Entities”) is engaged, at the Employment Termination Date, whereby Executive is required to or does perform services on behalf of or for the benefit of such person or Entity which are substantially similar to the services in which Executive participated or that he directed or oversaw while employed by CBRL.
|
|
(b)
|
“Confidential Information” shall mean the proprietary or confidential data, information, documents or materials (whether oral, written, electronic or otherwise) belonging to or pertaining to the CBRL Entities, other than “Trade Secrets” (as defined below), which is of tangible or intangible value to any of the CBRL Entities and the details of which are not generally known to the competitors of the CBRL Entities. Confidential Information shall also include: any items that any of the CBRL Entities have marked “CONFIDENTIAL” or some similar designation or are otherwise identified as being confidential, at the time disclosed to executive.
|
|
(c)
|
“Entity” or “Entities” shall mean any business, individual, partnership, joint venture, agency, governmental agency, body or subdivision, association, firm, corporation, limited liability company or other entity of any kind.
|
|
(d)
|
“Restricted Period” shall mean the twenty-four (24) month period following the Employment Termination Date;
provided, however
that the Restricted Period shall be extended for a period of time equal to any period(s) of time within the twenty-four (24) month period following the Employment Termination Date that Executive is determined by a final non-appealable judgment from a court of competent jurisdiction to have engaged in any conduct that violates this Section 8 or any sub-sections thereof, the purpose of this provision being to secure for the benefit of CBRL the entire Restricted Period being bargained for by CBRL for the restrictions upon Executive’s activities.
|
|
(e)
|
“Territory” shall mean each of the United States of America.
|
|
(f)
|
“Trade Secrets” shall mean information or data of or about any of the CBRL Entities, including, but not limited to, the store operating model known as Seat 2 Eat, technical or non-technical data, recipes, formulas, patterns, compilations, programs (
e.g
., advertising or promotional schedules), devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential suppliers that: (1) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (3) any other information which is defined as a “trade secret” under applicable law.
|
|
(g)
|
“Work Product” shall mean all tangible work product (e.g., menus, advertising materials), property, data, documentation, “know-how,” concepts or plans, inventions, improvements, techniques and processes relating to the CBRL Entities that were conceived, discovered, created, written, revised or developed by Executive during the term of his employment with CBRL.
|
|
(a)
|
In recognition of the need of the CBRL Entities to protect their legitimate business interests, Confidential Information and Trade Secrets, Executive hereby covenants and agrees that Executive shall regard and treat Trade Secrets and all Confidential Information as strictly confidential and wholly-owned by the CBRL Entities and shall never, for any reason, in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, misappropriate or otherwise communicate any such item or information to any third party or Entity for any purpose other than in accordance with this Agreement or as required by applicable law, court order or other legal process.
|
|
(b)
|
Executive shall exercise best efforts to ensure the continued confidentiality of all Trade Secrets and Confidential Information, and he shall immediately notify CBRL of any unauthorized disclosure or use of any Trade Secrets or Confidential Information of which Executive becomes aware. Executive shall assist the CBRL Entities, to the extent reasonably necessary and at the sole expense of the CBRL Entities, in the protection of or procurement of any intellectual property protection or other rights in any of the Trade Secrets or Confidential Information.
|
|
(c)
|
All Work Product shall be owned exclusively by the CBRL Entities. To the greatest extent possible, any Work Product shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C. §§ 101 et seq., as amended), and Executive hereby unconditionally and irrevocably transfers and assigns to the applicable CBRL Entity all right, title and interest Executive currently has or may have by operation of law or otherwise in or to any Work Product, including, without limitation, all patents, copyrights, trademarks (and the goodwill associated therewith), trade secrets, service marks (and the goodwill associated therewith) and other intellectual property rights. Executive agrees to execute and deliver to the applicable CBRL Entity any transfers, assignments, documents or other instruments which CBRL may deem necessary or appropriate, from time to time, to protect the rights granted herein or to vest complete title and ownership of any and all Work Product, and all associated intellectual property and other rights therein, exclusively in the applicable CBRL Entity.
|
|
(d)
|
Executive also recognizes that all writings, illustrations, drawings and other similar materials which embody or otherwise contain Trade Secrets, Confidential Information or Work Product that any CBRL Entity may have produced during his employment or which may have been given to Executive in connection with his employment are the property of CBRL, and it is Executive’s obligation to immediately return any such materials to CBRL.
|
|
(a)
|
Executive understands and acknowledges that his violation of Section 7.1 or Section 8 or any sub-section thereof would cause irreparable harm to CBRL and CBRL would be entitled to an injunction by any court of competent jurisdiction enjoining and restraining Executive from any employment, service, or other act prohibited by this Agreement. The parties agree that nothing in this Agreement shall be construed as prohibiting CBRL from pursuing any remedies available to it for any breach or threatened breach of Section 7.1 or Section 8 or any sub-section thereof, including, without limitation, the recovery of actual damages from Executive or any person or entity acting in concert with Executive. CBRL shall receive injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived by Executive. If any part of Section 7.1 or Section 8 or any sub-section thereof is found to be unreasonable, then it may be amended by appropriate order of a court of competent jurisdiction to the extent deemed reasonable. Furthermore and in recognition that certain provisions in this Agreement are being agreed to by CBRL in reliance upon Executive’s compliance with Sections 7.1 and 8, in the event of a breach by Executive of any of the provisions of Section 7.1 or Section 8 or any sub-sections thereof, damages to CBRL would be difficult to determine and, in the event of such breach by Executive, the Consulting Term shall immediately terminate without any action on the part of CBRL and: (a) CBRL shall be released from its obligation to make any further payments or provide benefits to Executive under Section 3 hereof; (b) CBRL shall be released from its obligations under Section 7.2 hereof, and (c) any Equity Awards shall cease to vest as of the date of such breach, and the unvested portion thereof shall be immediately forfeited and thereafter not be distributed to Executive, or be exercisable by Executive, as applicable. If either CBRL or Executive brings suit to compel performance of, to interpret, or to recover damages for the breach of this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorneys’ fees in addition to costs and necessary disbursements otherwise recoverable. Additionally, if Executive breaches any of the provisions of Section 8, the value of any Equity Awards that vested during the Consulting Term that are received by Executive shall be disgorged to CBRL.
|
|
(b)
|
In recognition that certain provisions in this Agreement are being agreed to by Executive in reliance upon CBRL’s compliance with Sections 3 and 7.2, in the event of a breach by CBRL of any of the provisions of Section 3 or any subsections thereof or Section 7.2, Executive will be entitled, at his option, to: (i) a release from his obligations to provide further consulting services under Section 2; (ii) a release from his obligations and restrictions provided for in Section 8; (iii) to the extent permitted by Section 409A of the Code, accelerate the payment of all amounts under Section 3(a); and (iv) to the extent provided for in the Omnibus Plan, accelerate the receipt of and immediately vest any then unvested Equity Awards that would have vested during the Consulting Term;
provided, however
, that notwithstanding the forgoing, Executive shall not be entitled to the releases set forth in subsections (i) and (ii) above or the acceleration of Equity Awards set forth in subsections (iii) and (iv) unless Executive shall first have given CBRL five (5) days prior notice (which notice shall describe the breach of CBRL) and CBRL shall not cure such breach during said five (5) day period. The foregoing remedies are in addition to and not in lieu of any other contractual, legal, or equitable remedies that may be available to Executive. If either Executive or CBRL brings suit to compel performance of, to interpret, or to recover damages for the breach of this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorneys’ fees in addition to costs and necessary disbursements otherwise recoverable.
|
|
(c)
|
CBRL shall defend, hold harmless and indemnify Executive in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a consultant of CBRL during all or any portion of the Consulting Term or provided services to CBRL against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of CBRL and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Notwithstanding the preceding sentence, no indemnity shall be paid by CBRL: (i) in connection with any proceeding by or in the right of CBRL in which Executive is adjudged liable to CBRL; (ii) if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such indemnity is not lawful; or (iii) in connection with any proceeding charging improper personal benefit to Executive if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such personal benefit was improper.
|
|
(a)
|
That he has carefully read this Agreement, and understands its contents, meaning and intent; and
|
|
(b)
|
That, understanding this document, he has freely and voluntarily executed it with the advice of counsel aforesaid, without compulsion, coercion or duress.
|
/s/Terry Maxwell | ||
Terry Maxwell
|
||
Date: | Sept. 12, 2011 |
CRACKER BARREL OLD COUNTRY STORE, INC. | ||
|
By:
|
/s/N.B.F. Shoaf |
Title: | SVP | |
Date: | 12 Sep 2011 |
EXECUTIVE | |
Terry Maxwell | |
CRACKER BARREL OLD COUNTRY STORE, INC. | |
Chief Executive Officer |
EXHIBIT 31.1 | CERTIFICATION |
|
1.
|
I have reviewed this Annual Report on Form 10-K of Cracker Barrel Old Country Store, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
EXHIBIT 31.2 | CERTIFICATION |
|
1.
|
I have reviewed this Annual Report on Form 10-K of Cracker Barrel Old Country Store, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Lawrence E. Hyatt, Senior Vice President
and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date: September 27, 2011 |
By:
|
/s/Sandra B. Cochran |
Sandra B. Cochran
|
||
President and Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date:
September 27, 2011
|
By:
|
/s/Lawrence E. Hayatt |
Lawrence E. Hyatt, | ||
Senior Vice President and Chief Financial Officer |