El Pollo Loco 2016 Annual Report Download - page 82

EL POLLO LOCO HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. RELATED PARTY TRANSACTIONS
TrimaranPolloPartners,L.L.C.(“LLC”),ownsapproximately43.7%oftheCompany’soutstandingcommonstock.ThislargepositionmeansthatLLCandits
majorityowners—predecessorsandaffiliatesof,andcertainfundsmanagedby,TrimaranCapitalPartnersandFreemanSpogli&Co.(collectively,“Trimaran”and
“FreemanSpogli,”respectively)—possesssignificantinfluencewhenstockholdersvoteonmatterssuchaselectionofdirectors,mergers,consolidationsand
acquisitions,thesaleofallorsubstantiallyalloftheCompany’sassets,decisionsaffectingtheCompany’scapitalstructure,amendmentstotheCompany’s
certificateofincorporationorby-laws,andtheCompany’swindingupanddissolution.SolongasLLCmaintainsatleast40%ownership,(i)anymemberofthe
boardofdirectorsmayberemovedatanytimewithoutcausebyaffirmativevoteofamajorityoftheCompany’scommonstock,and(ii)stockholdersrepresenting
40%orgreaterownershipmaycausespecialstockholdermeetingstobecalled.
OnNovember18,2005,theCompanyenteredintoaMonitoringandManagementServicesAgreement(the“Agreement”)withTrimaranFundManagement,
L.L.C.(“FundManagement”),anaffiliateofTrimaranandofcertaindirectors,whichprovidedforannualfeesof$500,000andreasonableexpenses.This
AgreementwasamendedonDecember26,2007toaddanaffiliateofFreemanSpogli,FreemanSpogli&Co.V,L.P.,asapartysharinginthefeespayableunder
theAgreement.DuringtheyearsendedDecember31,2014,andDecember25,2013,$343,000and$624,000,respectively,werepaidpursuanttothisAgreement.
Theseamountswereincludedingeneralandadministrativeexpensesintheaccompanyingconsolidatedstatementsofoperations.TheAgreementterminatedasof
theCompany’sIPO.


16. STOCK SPLIT, AUTHORIZATION OF ADDITIONAL SHARES, AND INITIAL PUBLIC OFFERING
OnJuly14,2014,HoldingsamendeditscertificateofincorporationtoincreasethenumberofsharesthatHoldingsisauthorizedtoissueto200millionsharesof
commonstock,parvalue$0.01pershare.TheamendmentofthecertificateofincorporationeffectedaninternalrecapitalizationpursuanttowhichHoldings
effectedan8.56381-for-1stocksplitonitsoutstandingcommonstock.
Accordingly,allcommonshareandpershareamountsintheconsolidatedfinancialstatementsandthesenotestheretohavebeenadjustedtoreflectthe8.56381-
for-1stocksplitasthoughitoccurredatthebeginningoftheinitialperiodpresented.
OnJuly24,2014,Holdingsamendedandrestateditscertificateofincorporationto,amongotherthings,increaseitsauthorizedsharecountto300,000,000shares
ofstock,including200,000,000sharesofcommonstockand100,000,000sharesofpreferredstock,eachparvalue$0.01pershare.OnJuly30,2014,Holdings
completeditsinitialpublicofferingof8,214,286sharesofcommonstockatapricetothepublicof$15.00pershare(the“IPO”),including1,071,429sharessoldto
theunderwriterspursuanttotheiroptiontopurchaseadditionalshares.Afterunderwritingdiscounts,commissions,andfeesandexpensesofIPOofferingand
distribution,assetforthinourregistrationstatementfortheIPOonFormS-1,theCompanyreceivednetIPOproceedsofapproximately$112.3million.The
Companyusedtheseproceedsprimarilytorepayinwholea$100millionsecondlientermloan(the“SecondLienTermLoan”).


79