Cabela's 2007 Annual Report Download - page 81

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75
CABELA’S INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Except Share and Per Share Amounts)
2007
Ratio Required to be Considered
Actual
“Adequately-
Capitalized”
“Well-
Capitalized”
Amount Ratio Amount Ratio Amount Ratio
Total Capital to Risk-Weighted Assets .......... $118,030 16.8 % $56,102 8.0% $70,127 10.0 %
Tier I Capital to Risk-Weighted Assets . . . . . . . . . 114,336 16.3 28,051 4.0 42,076 6.0
Tier I Capital to Average Assets ............... 114,336 27.6 16,568 4.0 20,710 5.0
2006
Ratio Required to be Considered
Actual
“Adequately-
Capitalized”
“Well-
Capitalized”
Amount Ratio Amount Ratio Amount Ratio
Total Capital to Risk-Weighted Assets .......... $96,629 19.2% $40,352 8.0% $50,440 10.0%
Tier I Capital to Risk-Weighted Assets . . . . . . . . . 94,169 18.7 20,176 4.0 30,264 6.0
Tier I Capital to Average Assets ............... 94,169 33.5 11,249 4.0 14,061 5.0
18. STOCK BASED COMPENSATION AND STOCK OPTION PLANS
Effective January 1, 2006, we adopted the provisions of FAS 123R, which requires the measurement and
recognition of compensation expense for all share-based payment awards made to employees and directors including
employee stock option awards and employee stock purchases made under an employee stock purchase plan. We
previously applied the recognition and measurement provisions of APB Opinion No. 25 and related interpretations.
We recorded share-based compensation expense of $4,944 ($3,115 after-tax, or $0.05 per diluted share) and
$3,615 ($2,259 after-tax, or $.03 per diluted share) for 2007 and 2006, respectively. Compensation expense related to
our share-based payment awards is recorded in selling, distribution, and administrative expenses in the consolidated
statements of income. There was no share-based compensation capitalized in assets as of December 29, 2007, or
December 30, 2006.
During the year ended December 30, 2006, share-based compensation expense was recorded for awards granted
since 2004 but not yet vested as of January 1, 2006. For these awards, we continue to recognize compensation
expense using the accelerated or graded method of amortization. Compensation cost for awards granted after the
adoption date is recognized using a straight-line amortization method over the vesting period. As of December 29,
2007, the total unrecognized deferred share-based compensation balance for unvested shares issued, net of expected
forfeitures, was approximately $7,725, net of tax, which is expected to be amortized over a weighted average period
of 3.5 years.
The fair value of options granted on and subsequent to May 1, 2004, is estimated on the date of the grant using
the Black-Scholes option pricing model. The expected volatility for 2007 was based on the historical volatility of our
common stock. For 2006 and 2005, the expected volatility was derived using a historical volatility model as well as
comparisons to peers in our market sector since we have only been a public company since June 2004.