Baskin Robbins 2011 Annual Report Download - page 102

existing stockholders. The Company did not receive any proceeds from the sales of shares by the existing
stockholders. The Company used a portion of the net proceeds from the initial public offering to repay the
remaining $375.0 million outstanding under the senior notes, with the remaining net proceeds being used for
working capital and general corporate purposes.
On November 22, 2011, certain existing stockholders sold 22,000,000 shares of our common stock at a price of
$25.62 per share, less underwriting discounts and commissions, in a secondary public offering. Additionally, the
underwriters exercised their option to purchase an additional 1,937,986 shares, which were also sold by certain
existing stockholders. The Company did not receive any proceeds from the sales of shares by the existing
stockholders. The Company incurred approximately $984 thousand of expenses in connection with the offering,
which were paid by the Company in accordance with the registration rights and coordination agreement (see note
18(a)).
(b) Common Stock
Prior to the initial public offering, our charter authorized the Company to issue two classes of common stock,
Class L and common. The rights of the holders of Class L and common shares were identical, except with respect
to priority in the event of a distribution, as defined. The Class L common stock was entitled to a preference with
respect to all distributions by the Company until the holders of Class L common stock had received an amount
equal to the Class L base amount of approximately $41.75 per share, plus an amount sufficient to generate an
internal rate of return of 9% per annum on the Class L base amount, compounded quarterly. Thereafter, the
Class L and common stock shared ratably in all distributions by the Company. Class L common stock was
classified outside of permanent equity in the consolidated balance sheets at its preferential distribution amount, as
the Class L stockholders controlled the timing and amount of distributions. The Class L preferred return of
9% per annum, compounded quarterly, was added to the Class L preferential distribution amount each period and
recorded as an increase to accumulated deficit. Dividends paid on the Class L common stock reduced the Class L
preferential distribution amount.
Immediately prior to the initial public offering, each outstanding share of Class L common stock converted into
approximately 0.2189 of a share of common stock plus 2.2149 shares of common stock, which was determined
by dividing the Class L preference amount, $38.8274, by the initial public offering price net of the estimated
underwriting discount and a pro rata portion, based upon the number of shares sold in the offering, of the
estimated offering-related expenses. As such, the 22,866,379 shares of Class L common stock that were
outstanding at the time of the offering converted into 55,652,782 shares of common stock.
The changes in Class L common stock were as follows (in thousands):
Fiscal year ended
December 31, 2011 December 25, 2010 December 26, 2009
Shares Amount Shares Amount Shares Amount
Common stock, Class L, beginning of
year .............................. 22,995 $ 840,582 22,981 $1,232,001 22,918 $1,127,863
Issuance of Class L common stock ....... 65 2,270 14 754 63 2,648
Repurchases of Class L common stock .... — (113) — (3,197) — (3,070)
Retirement of treasury stock ............. (194) — — — — —
Cash dividends paid ................... — — — (500,002) — —
Accretion of Class L preferred return ...... — 45,102 — 111,026 — 104,560
Conversion of Class L shares to common
shares ............................ (22,866) (887,841) — — — —
Common stock, Class L, end of year ...... — $ — 22,995 $ 840,582 22,981 $1,232,001
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