Einstein Bros 2009 Annual Report Download - page 14

Form 10-K
http://www.sec.gov/Archives/edgar/data/949373/000119312510040721/d10k.htm[9/11/2014 10:09:50 AM]
cash flow. Similar rules and limitations may apply for state income tax purposes as well.
Risk Factors Relating to Our Common Stock
We have a majority stockholder.
Greenlight Capital, L.L.C. and its affiliates (“Greenlight”) beneficially own approximately 65% of our common stock as of December 29,
2009. 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 elect all of the members of our board of directors, and to determine whether a change in control of the Company
occurs. Greenlight’ s interests on matters submitted to stockholders may be different from those of other stockholders. Greenlight has voted its
shares to elect our current board of directors, and the chairman of our board of directors is a current employee of Greenlight.
We have listed our common stock on the NASDAQ Global Market. NASDAQ rules require us to have an audit committee consisting entirely
of independent directors. However, under NASDAQ rules, if a single stockholder holds more than 50% of the voting power of a listed company,
that company is considered a controlled company, and is exempt from several other corporate governance rules, including the requirement that
companies have a majority of independent directors and independent director involvement in the selection of director nominees and in the
determination of executive compensation. As a result, our stockholders do not have, and may never have, the protections that these rules are
intended to provide. The Company currently has a majority of independent directors on the board of directors.
Future sales of shares of our common stock by our stockholders could cause our stock price to fall.
If a substantial number of shares of our common stock are sold in the public market, the market price of our common stock could fall. The
perception among investors that these sales will occur could also produce this effect. Sales of our common stock by our majority stockholder,
Greenlight, or a perception that Greenlight will sell their shares could cause a decrease in the market price of our common stock.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
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Table of Contents
ITEM 2. PROPERTIES
Our Properties
Our headquarters, manufacturing and commissary facilities and all of our restaurants are located on leased premises. Lease terms are usually
five to 10 years, with two or three five year renewal option periods, for total lease terms that average approximately 11 to 20 years. The average
company-owned restaurant is approximately 1,800 to 2,500 square feet in size with approximately 30—40 seats and is generally located in a
neighborhood or regional shopping center.
Information with respect to our headquarters, production and commissary facilities is presented below:
Location Facility
Square
Feet
Lease
Expiration
Lakewood, Colorado Headquarters, Support Center, Test Kitchen 44,574 5/31/2017
Whittier, California Manufacturing Facility and USDA Approved Commissary 54,640 11/30/2013
Walnut Creek, California Administration Office-Noah’ s 1,672 3/31/2013
Carrolton, Texas USDA Approved Commissary 26,820 7/31/2011
Orlando, Florida USDA Approved Commissary 7,422 10/31/2010
Denver, Colorado USDA Approved Commissary 9,200 10/14/2013
Grove City, Ohio USDA Approved Commissary 20,644 8/31/2012
Our Current Restaurants
As of December 29, 2009, we owned and operated, franchised or licensed 683 restaurants. Our current base of company-owned restaurants
under our core brands includes 350 Einstein Bros. restaurants, 76 Noah’ s restaurants and one Manhattan Bagel restaurant. Also, we franchise 71
Manhattan Bagel restaurants and six Einstein Bros. restaurants, and license 176 Einstein Bros. restaurants and two Noah’ s restaurants. In support of
our strategy to only license the Einstein Bros. brand, we recently converted three of our Noah’ s licensed restaurants to the Einstein Bros.
brand. We anticipate converting the remaining two Noah’ s licensed restaurants to Einstein Bros. by the end of the first quarter of 2010. In addition,
we had one company-owned restaurant which we owned and operated under a non-core brand, which we closed during the first quarter of 2010.
The following table details our restaurant openings and closings for each respective fiscal year: