Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Cracker Barrel Old Country Store, Inc. and Subsidiaries FY 2018 Annual Bonus Plan (the
2018 Annual Bonus Plan)
On September 27, 2017, the Compensation Committee (the Committee) of the Board of
Directors (the Board) of Cracker Barrel Old Country Store, Inc. (the Company) adopted the 2018 Annual Bonus Plan in order to reward executive officers of the Company and its subsidiaries if the Company successfully meets
established performance targets. The payment of a bonus is dependent upon the Company achieving a threshold level of operating income from continuing operations during fiscal year 2018 (the Performance Goal), in which case executive
officers will be eligible to receive a bonus of up to a maximum of 200% of target. The Company intends for payments under the 2018 Annual Bonus Plan to qualify as performance based compensation under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the Code), to the maximum amount allowed under the Companys 2010 Omnibus Stock and Incentive Plan (the Omnibus Plan). If the Performance Goal is not met, no bonus will be paid to any
executive officer.
The Committee also approved target and maximum potential bonuses for each of the Companys executive officers
under the 2018 Annual Bonus Plan, with the exception of the target and maximum potential bonuses for the Companys President and Chief Executive Officer, Sandra B. Cochran, which were approved by the independent members of the Board on the
Committees recommendation. The following table indicates the target and maximum potential bonuses established for 2018, expressed as a percentage of base salary, for which each of the named executive officers would be eligible depending on the
Companys performance in 2018:
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Name
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2018 Target
Bonus Percentage
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2018 Maximum
Bonus Percentage
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Sandra B. Cochran
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115
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%
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230
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%
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Jill M. Golder
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70
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%
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140
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%
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Nicholas V. Flanagan
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70
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%
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140
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%
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Beverly K. Carmichael
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60
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%
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120
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%
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Laura A. Daily
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60
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%
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120
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%
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In no case can an executives actual award under the 2018 Annual Bonus Plan exceed the maximum potential award,
regardless of the Companys 2018 performance.
A copy of the 2018 Annual Bonus Plan is filed as Exhibit 10.1 to this Current Report
on Form 8-K and incorporated herein by reference. The foregoing description is qualified in its entirety by reference to such exhibit.
Cracker Barrel
Old Country Store, Inc. and Subsidiaries FY 2018 Long-Term Incentive Program (the 2018 Long-Term Incentive Program)
On
September 27, 2017, the Committee established the 2018 Long-Term Incentive Program to govern long-term incentive equity awards designed to reinforce alignment of the interests of the Companys executive officers with those of shareholders
and to serve as a retention tool. The 2018 Long-Term Incentive Program consists of three components: (i) the 2018 Long-Term Performance Plan (the 2018 LTPP); (ii) the 2018 Performance-Based Restricted Stock Unit Award (the
2018 Performance-Based RSU Award); and (iii) the 2018 Time-Based Restricted Stock Unit Award (the 2018 Time-Based RSU Award). The 2018 LTPP provides for awards of performance shares tied to the Companys successful
achievement of a pre-determined return on invested capital goal over fiscal years
2018 and 2019 (the LTPP Performance Goal). The 2018 Performance-Based RSU Award provides for awards of performance-based restricted stock units, with cliff vesting after three years
from the date of grant, that may be increased or decreased by 25% of the target award amounts depending on the Companys total shareholder return (Relative TSR) relative to a peer group of companies approved by the Committee (the
Peer Group) over fiscal years 2018, 2019 and 2020. The 2018 Time-Based RSU provides for awards of time-based restricted stock units that cliff-vest after three years from the date of grant, subject to the executives continued
employment with the Company on the vesting date. At the time of grant, the value of each eligible participants target awards under the 2018 Long-Term Incentive Program were allocated approximately as follows: 50% under the 2018 LTPP, 25% under
the 2018 Performance-Based RSU Award, and 25% under the 2018 Time-Based RSU Award.
The Committee also approved equity award percentages
that represent the target opportunities for awards under the 2018 LTPP (the LTPP Percentage), 2018 Performance-Based RSU Award (the Performance-Based RSU Percentage) and 2018 Time-Based RSU Award (the Time-Based RSU
Percentage), in each case expressed as a percentage of the executive officers base salary. The LTPP Percentage, Performance-Based RSU Percentage and Time-Based RSU Percentage for the named executive officers were established by the
Committee simultaneously with the establishment of the 2018 LTPP, 2018 Performance-Based RSU Award and 2018 Time-Based RSU Award, respectively, with the exception of Ms. Cochrans LTPP Percentage, Performance-Based RSU Percentage and
Time-Based RSU Percentage, which were approved by the independent members of the Board on the Committees recommendation. Set forth below are each named executive officers LTPP Percentage, Performance-Based RSU Percentage and Time-Based
RSU Percentage, as well as total target award opportunity, under the 2018 Long-Term Incentive Program:
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Name
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LTPP
Percentage
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Performance-
Based RSU
Percentage
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Time-Based
RSU Percentage
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Total
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Sandra B. Cochran
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185
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%
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92.5
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%
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92.5
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%
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370
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%
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Jill M. Golder
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60
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%
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30
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%
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30
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%
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120
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%
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Nicholas V. Flanagan
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60
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%
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30
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%
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30
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%
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120
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%
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Beverly K. Carmichael
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50
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%
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25
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%
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25
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%
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100
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%
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Laura A. Daily
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37.5
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%
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18.75
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%
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18.75
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%
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75
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%
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Under the 2018 LTPP, each named executive officers realized award, if any, relative to the target award
will be determined based on the Companys performance relative to the LTPP Performance Goal during the two-year performance period.
Under the 2018 Performance-Based RSU Award, the Companys Relative TSR over the three-year performance period will be measured against an
under/overachievement scale with specified thresholds and may result in an adjustment to the realized award relative to the target award, as set forth in the table below (there is no interpolation within the percentile ranges):
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Performance Range of Companys
Relative TSR versus Peer Group
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Percentage Adjustment in Number
of
Target Performance-Based RSU Shares
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75th Percentile or Above (Maximum)
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+25%
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Between 25th and 75th Percentile
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No adjustment
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25th Percentile or Below
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-25%
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The Company intends for awards under the 2018 LTPP and the 2018 Performance-Based RSU Award to
qualify as performance based compensation under Section 162(m) of the Code to the maximum amount allowed under the Omnibus Plan. Accordingly, as with the 2018 Annual Bonus Plan, eligibility to receive awards under the 2018 LTPP and
2018 Performance-Based RSU Award is dependent upon the Companys achievement of pre-determined operating income performance goals during the applicable performance periods. If the applicable operating income performance goal for the 2018 LTPP
or the 2018 Performance-Based RSU Award is not met, then no award will be made under the applicable plan to any named executive officer. If, however, the applicable operating income performance goal is met, then each named executive officer
participating in the applicable plan will become eligible to receive an equity award determined according to the Companys performance relative to the LTPP Performance Goal and the Companys Relative TSR during the performance period, as
applicable. The 2018 Time-Based RSU Award is not conditioned upon the achievement of any pre-determined performance goals and does not qualify as performance based compensation under Section 162(m) of the Code.
A copy of the 2018 Long-Term Incentive Program is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by
reference. The foregoing description is qualified in its entirety by reference to such exhibit.