Einstein Bros 2007 Annual Report Download - page 78

http://www.sec.gov/Archives/edgar/data/949373/000104746908002111/a2183061z10-k.htm[9/11/2014 10:12:02 AM]
January 3,
2006
January 2,
2007
January 1,
2008
(in thousands of dollars)
Cash paid during the year to date period ended:
Interest related to:
$160 Million Notes $ 31,200 $ 3,293 $ —
Term Loans — 10,855 11,111
$25 Million Subordinated Note — 1,412 825
Other 884 575 319
Prepayment penalty upon redemption of debt $ — $ 4,800 $ 240
Non-cash investing activities:
Non-cash purchase of equipment through capital leasing $ 33 $ 205 $ 24
Non-cash addition of leasehold improvements provided by lessor $ — $ — $ 1,672
Change in accrued expenses for purchases of property and equipment $ (289) $ 2,955 $ (2,125)
19. RELATED PARTY TRANSACTIONS
E. Nelson Heumann is the chairman of our board of directors and is a current employee of Greenlight. Greenlight and its affiliates beneficially
own approximately 67.6 percent of our common stock on a fully diluted basis. As a result, Greenlight has sufficient voting power without the vote
of any other stockholders to determine what matters will be submitted for approval by our stockholders, to approve actions by written consent
without the approval of any other stockholders, to elect all of our board of directors, and among other things, to determine whether a change in
control of our company occurs.
Greenlight owned $35.0 million of our $160 Million Notes when we called the Notes for redemption in January 2006. The Notes were
redeemed from the proceeds of our refinancing in February 2006 as further described in Note 11.
We entered into the Subordinated Note with Greenlight in February 2006, and paid it in full during the second quarter of 2007. The
Subordinated Note had a maturity date of February 28, 2013, carried a fixed interest rate of 13.75% per annum and required a quarterly cash
interest payment in arrears at 6.5% and quarterly paid-in kind interest that is added to the principal balance outstanding at 7.25%. Total interest
expense related to the Subordinated Note with Greenlight was $3.0 million for the year ended January 2, 2007, and $1.7 million for the year ended
January 1, 2008. The Note was redeemed from the proceeds of our secondary offering and amended debt facility in June 2007 as further described
in Note 11.
During 2006, we issued 429,645 shares of our common stock to Greenlight in connection with cashless exercises of certain warrants
previously granted by us. Greenlight surrendered 56,953 shares of common stock to us in connection with such cashless exercises. We issued these
warrants in private financing transactions that occurred between 2000 and 2003.
On December 8, 2003, we entered into a consulting agreement with Ms. Jill B. W. Sisson to provide legal, consulting and advisory services to
us and to serve as General Counsel and Secretary. Currently, Ms. Sisson receives $18,750 per month under this agreement. In addition, Ms. Sisson
has
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EINSTEIN NOAH RESTAURANT GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
19. RELATED PARTY TRANSACTIONS (Continued)
been granted options under the 2003 Executive Employee Incentive Plan, of which 102,199 are currently outstanding. Certain options vest in part,
upon length of service and in part, upon the achievement of specified financial goals by us. Ms. Sisson is eligible to receive annual additional
premium compensation based upon company performance and personal performance. Ms. Sisson will also be reimbursed for reasonable and
necessary out-of-pocket expenses. The agreement provides for non-solicitation of our employees for a year after termination of the agreement, and