El Pollo Loco 2016 Annual Report Download - page 30

·establishadvancenoticerequirementsfornominationsforelectiontoourboardofdirectorsorforproposingmattersthatcanbeactedonbystockholdersat
stockholdermeetings;and
·providethat,onorafterthedatethatLLCceasestobeneficiallyownatleast40%ofthetotalvoteseligibletobecastintheelectionofdirectors,a75%
supermajorityvotewillberequiredtoamendorrepealprovisionsrelatingto,amongotherthings,theclassificationoftheboardofdirectors,thefillingof
vacanciesontheboardofdirectors,andtheadvancenoticerequirementsforstockholderproposalsanddirectornominations.
Inaddition,oursecuredrevolvingcreditfacilityimposes,andweanticipatethatdocumentsgoverningourfutureindebtednessmayimpose,limitationsonour
abilitytoenterintochangeofcontroltransactions.Underoursecuredrevolvingcreditfacility,theoccurrenceofachangeofcontroltransactioncanconstitutean
eventofdefaultpermittingaccelerationofthedebt,therebyimpedingourabilitytoenterintochangeofcontroltransactions.
Theforegoingfactors,aswellassignificantcommonstockownershipbyTrimaranandFreemanSpogli,couldimpedeamerger,takeover,orotherbusiness
combination,ordiscourageapotentialinvestorfrommakingatenderofferforourcommonstock,which,undercertaincircumstances,couldreducethemarket
valueofourcommonstock.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2. PROPERTIES
AsofDecember30,2015,ourrestaurantsystemconsistedof433restaurants,comprisedof186company-operatedrestaurantsand247franchisedrestaurants,
locatedinCalifornia,Arizona,Nevada,Texas,andUtah.Inaddition,wecurrentlylicenseourbrandtotworestaurantsinthePhilippines.Wehavenotincluded
thesetwolicensedrestaurantsaspartofourunitcountaspresentedinthisannualreport.Thetablebelowsetsforththelocations(bystate)forallrestaurantsin
operation.
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State
Company-
Operated Franchised Total
California   155   213   368
Nevada   19   5   24
Arizona   2   18   20
Texas   9   10   19
Utah   1   1   2
Total   186   247   433
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Ourrestaurantsareeitherfree-standingfacilities,typicallywithdrive-thrucapability,orin-line.Atypicalrestaurantgenerallyrangesfrom2,200to3,000square
feet,withseatingforapproximately70people.Foramajorityofourcompany-operatedrestaurants,weleaselandonwhichourrestaurantsarebuilt.Ourleases
generallyhavetermsof20years,withtwoorthreerenewaltermsoffiveyears.Restaurantleasesprovideforaspecifiedannualrent,andsomeleasescallfor
additionalorcontingentrentbasedonrevenueabovespecifiedlevels.Generally,ourleasesare“net”leasesthatrequireustopayaproratashareoftaxes,
insurance,andmaintenancecosts.Weown15properties,currentlyoperating12andlicensingthreetofranchisees.Inaddition,weoperate174company-operated
restaurantsonleasedrealestate,anownedoperatingunitwithadditionalparkingonleasedrealestate,andhaveanother17leasedsitesthataresubleasedor
assignedtofranchiseeswhooperateElPolloLocorestaurants.WealsohaveoneclosedunitandtwounitssubleasedforusesotherthanElPolloLoco.
Weleaseourheadquarters,consistingofapproximately24,890squarefeetinCostaMesa,California,foratermexpiringin2018,plusonefive-yearextension
option.Ourheadquartersislocatedat3535HarborBoulevard,Suite100,CostaMesa,California92626,andourtelephonenumberis(714)599-5000.Webelieve
thatourcurrentofficespaceissuitableandadequateforitsintendedpurposesandournear-termexpansionplans.
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