Einstein Bros 2013 Annual Report Download - page 57

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
Company has determined that this interest rate swap agreement qualifies as a cash flow hedge.
Using quoted prices based on observable inputs (a Level 2 fair value measurement), the Company has recorded liabilities for these cash flow
hedges of $147,000 ($89,000 net of taxes) as of December 31, 2013. The fair values of these cash flow hedges will be adjusted regularly, with a
corresponding adjustment to other comprehensive income within equity.
72
Table of Contents
EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
10. STOCKHOLDERS’ EQUITY
Common Stock
The Company declared quarterly dividends to common stockholders totaling $8.5 million and $8.8 million during fiscal 2012 and 2013,
respectively. The Company intends to pay regular quarterly dividends at the discretion of its Board. The issuance of a dividend is dependent on a
variety of factors, including, but not limited to, available cash and the overall financial condition of the Company. The issuance of a dividend is
also subject to legal restrictions and the terms of the Company’ s Senior Credit Facility.
On May 3, 2012, the Company announced that its Board authorized a review of strategic alternatives, including a possible business
combination or sale of the Company, to maximize value for all stockholders. On December 6, 2012, the Company announced that its Board had
completed its review and elected to recapitalize the Company by amending its existing credit facility and declared a one-time cash dividend of
$4.00 per share ($68.8 million in total) payable to holders of record of the Company’ s common stock as of the close of business on December 17,
2012. The payment date of the dividend was December 27, 2012. The Company recorded expenses towards this review as Strategic Alternatives
Expense on the consolidated statements of income and comprehensive income.
Series A Junior Participating Preferred Stock
In June 1999, the Board authorized the issuance of 700,000 shares of Series A junior participating preferred stock. There were no shares
issued or outstanding during fiscal years 2012 and 2013.
11. STOCK-BASED COMPENSATION
As of December 31, 2013, the Company had three stock-based compensation plans under which it was still issuing awards: the 2011
Omnibus Incentive Plan, the Equity Plan for Non-Employee Directors and a Stock Appreciation Rights Plan. Outstanding awards previously issued
under inactive or suspended plans will continue to vest and remain exercisable in accordance with the terms of the respective plans.
2011 Omnibus Incentive Plan
On May 3, 2011, the 2011 Omnibus Incentive Plan (the “Omnibus Plan”) became effective after approval by the Board and the Company’ s
stockholders. The Omnibus Plan provides for the granting of incentive stock options, nonqualified stock options, SARs, restricted stock, RSUs,
performance shares, performance units, cash-based awards and other stock based awards. All of the Company’ s employees and third party service
providers are eligible to receive awards. The Omnibus Plan will terminate automatically in May 2021, unless terminated by the Board at an earlier
date. The Board has the authority to amend, modify or terminate the Omnibus Plan, subject to any required approval by the Company’ s
stockholders under applicable law or upon advice of counsel. No such action may affect any options previously granted under the Omnibus Plan
without the consent of the holders. Options generally are granted with an exercise price equal to the fair market value on the date of grant and have
a contractual life of ten years. Vesting can either be based on the passage of time or on the achievement of performance goals. The Omnibus Plan
provides for the issuance of up to 1,000,000 shares of common stock to eligible individuals through the various forms of permitted awards. The
maximum number of shares for which options or stock appreciation rights may be granted to any participant is 300,000 per year and the maximum
number of shares that may be paid to any participant in the form of restricted stock, restricted stock units, performance shares or other stock based
awards is 300,000 shares per year. The maximum aggregate amount that may be paid under an award of performance units, cash-based awards or
any other award payable in cash, in each case that are performance-based compensation, is $5.0 million. As of December 31, 2013, there were
224,994 shares remaining available for issuance under the Omnibus Plan.
73
Table of Contents