Einstein Bros 2013 Annual Report Download - page 69

10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312514073832/d629623d10k.htm[9/11/2014 10:05:27 AM]
as appropriate to allow timely decisions regarding required disclosure.
Based on the evaluation of our disclosure controls and procedures as of December 31, 2013, our chief executive officer and our chief
financial officer have concluded that, as of such date, our disclosure controls and procedures were effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. In accordance with Rules
13a-15(f) and 15d-15(f) under the Exchange Act, our internal control over financial reporting is a process designed under the supervision of our
chief executive officer and our chief financial officer to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of our financial statements for external reporting purposes in accordance with accounting principles generally accepted in the United
States of America.
Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary
to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America; that
receipts and expenditures are being made only in accordance with authorizations of our management and directors; and provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on
our financial statements.
As of December 31, 2013, our management conducted an assessment of the effectiveness of our internal control over financial reporting
based on the framework and criteria established in Internal Control—Integrated Framework (the “1992 Framework”) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this assessment, management has determined that our internal control
over financial reporting was effective as of December 31, 2013.
The effectiveness of our internal control over financial reporting as of December 31, 2013 has been audited by Grant Thornton LLP, an
independent registered public accounting firm, as stated in their report dated February 27, 2014, appearing under the heading “Report of
Independent Registered Public Accounting Firm,” in Part II, Item 8 of this report.
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Changes in Internal Control over Financial Reporting
During the fourth quarter of 2013, there were no changes to our internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
On February 24, 2014, Einstein Noah Restaurant Group, Inc. (the “Company”) entered into a letter agreement with John A. Coletta (the
“Agreement”).
The Agreement includes compensation and benefits for Mr. Coletta in connection with the Company’ s desire to ensure continuity of
management. The Agreement is effective February 24, 2014 and continues in effect while Mr. Coletta remains employed by the Company, unless
sooner terminated by its terms or extended by the parties and provides the following:
• Immediately prior to the consummation of a change in control (as defined in the Agreement): (i) all outstanding stock options become
fully-vested and, if applicable, the option exercise period is extended for two years following the date of a qualifying termination of the
executive; and (ii) all outstanding restricted stock units and other equity awards become fully-vested and payable.
• Subject to continuous employment through the consummation of a change in control, the Company shall pay Mr. Coletta a transaction
success bonus in the form of a lump-sum cash payment. The amount of the transaction bonus varies based on the level of consideration
received by the Company in the transaction. The potential transaction success bonus range for Mr. Coletta is $75,000-$300,000. If
Mr. Coletta’ s employment is terminated prior to the transaction by the Company without cause or by the executive for good reason (as
defined in the Agreement), the Company shall pay the transaction success bonus to the executive at the time and in the amount the
executive would otherwise receive.
• If on or within 24 months following the consummation of a change in control, Mr. Coletta’ s employment with the Company is
terminated by the Company without cause or by the executive for good reason (each a “Qualifying Termination”), in addition to all
accrued but unpaid salary, accrued vacation and unused paid time off, the Company will provide the executive a lump-sum cash
payment, continued benefits, and outplacement services as follows: