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Filed Pursuant to Rule 424(b)(3)
File No. 333-80927
PROSPECTUS
PANERA BREAD COMPANY
454,179 SHARES OF COMMON STOCK
$.0001 PAR VALUE PER SHARE
This Prospectus relates to the offer and sale of 454,179 shares of our
Class A Common Stock that certain of our stockholders may occasionally sell.
This Prospectus covers only the reoffer and resale of up to 454,179 shares of
our Class A Common Stock by the selling stockholders, 61,679 of which shares are
currently owned by one of the selling stockholders and up to 392,500 shares of
Class A Common Stock which we may issue to such selling stockholders upon their
exercise of warrants. See "Selling Stockholders." When this Prospectus refers to
"common stock" it is referring to the Class A Common Stock unless otherwise
specifically stated.
The shares of common stock covered by this Prospectus may be sold by
the selling stockholders: l) to or through one or more underwriters, 2) directly
to purchasers, through agents, 3) on the NASDAQ National Market in typical
brokerage transactions, 4) in negotiated transactions, or otherwise. The selling
stockholders may sell the shares of common stock covered by this Prospectus: 1)
at market prices prevailing at the time of sale, 2) at prices related to the
then-prevailing market price, or 3) at negotiated prices, but Panera will not
receive proceeds from the sale of the shares of common stock by the selling
stockholders. No minimum purchase is required and no arrangement has been made
to have funds received by such selling stockholders and/or such registered
representatives placed in an escrow, trust or similar account or arrangement,
unless the proceeds come from a purchaser residing in a state in which the sale
of those securities has not yet been qualified. See "Plan of Distribution."
The common stock is traded on the Nasdaq National Market ("Nasdaq")
under the symbol "PNRA." The shares of common stock to be offered for sale
pursuant to this Prospectus may be offered for sale on Nasdaq or in privately
negotiated transactions. On June 22, 1999, the closing price for the common
stock as reported on Nasdaq was $6.50 per share.
YOU SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION SET FORTH IN
"RISK FACTORS" BEGINNING ON PAGE 1 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is June 22, 1999
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TABLE OF CONTENTS
<TABLE>
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Page
<S> <C>
The Company.................................... 1
Forward-Looking Statements..................... 1
Risk Factors................................... 1
Use of Proceeds................................ 4
Selling Stockholders........................... 5
Plan of Distribution........................... 6
Transfer Agent ................................ 7
Legal Matters ................................. 7
Experts ....................................... 8
Recent Developments............................ 8
Indemnification ............................... 8
</TABLE>
ABOUT THIS PROSPECTUS
This Prospectus is part of a Registration Statement that we filed with
the Securities and Exchange Commission; it provides you with a general
description of the securities offered. You should read this Prospectus together
with additional information described under the heading WHERE YOU CAN FIND MORE
INFORMATION.
We are complying with the SEC's plain English program. This is an
initiative launched by the SEC to make prospectuses and other information more
understandable to the general investor. To see more detail, you should read the
exhibits filed with this Registration Statement.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
Securities and Exchange Commission, as required. You may copy and inspect the
reports, proxy statements and other information at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, or at the SEC's Regional Offices at 7 World Trade Center, New York, New
York 10048, or at 500 West Madison Street, Chicago, Illinois 60661. The Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549
may also provide, at prescribed rates, copies of such material. The SEC also
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants, including Panera, that file
electronically with the SEC. The address of such site is http://www.sec.gov. Our
common stock is quoted on the Nasdaq National market under the symbol "PNRA".
You may inspect reports and other information concerning Panera at the National
Association of Securities Dealers, Inc. 1735 K Street, N.W., Washington, D.C.
20006.
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 15 or 15(d) of the Securities Exchange Act of 1934
until this offering terminates:
(1) Our Annual Report on Form 10-K for the fiscal year ended December
26, 1998, filed March 26, 1999 as amended on April 26, 1999.
(2) Our Quarterly Report on Form 10-Q for the quarter ended April 17,
1999, filed June 1, 1999.
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(3) Our Proxy Statement filed January 25, 1999, relative to a Special
Meeting of Stockholders on March 4, 1999 in connection with the sale of our Au
Bon Pain Division.
(4) The description of our Class A Common Stock contained in our
Registration Statement on Form 8-A filed May 2, 1991 and Form 8-A filed November
1, 1996 and any amendments thereto.
(5) All other reports filed pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934 since the end of the fiscal year covered by
the annual report referred to in (1) above.
You can request copies of these filings at no cost by contacting our
Director of Investor Relations, in writing at 7930 Big Bend Boulevard Webster
Groves, MO 63119, or by phone at (314) 918-7779.
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED BY US TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, YOU SHOULD NOT RELY ON ANY OTHER INFORMATION OR REPRESENTATION.
ALL INFORMATION IN THIS PROSPECTUS IS STATED AS OF THE DATE OF THIS PROSPECTUS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES COVERED BY THIS PROSPECTUS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN
WHICH SUCH OFFER OF SOLICITATION MAY NOT BE LAWFULLY MADE. THERE MAY BE CHANGES
IN THE AFFAIRS OF PANERA AFTER THE DELIVERY OF THIS PROSPECTUS OR THE SALE OF
THE COMMON STOCK. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE ON THE FRONT OF THIS PROSPECTUS.
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THE COMPANY
AS THE FOLLOWING IS A SUMMARY, IT DOES NOT CONTAIN ALL OF THE
INFORMATION THAT THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS
(INCLUDING THE NOTES THERETO) INCORPORATED INTO THIS PROSPECTUS PROVIDE. YOU
SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER THE HEADING "RISK
FACTORS."
Panera Bread Company is a Delaware corporation. Panera's principal
office is located at 7930 Big Bend Boulevard, Webster Groves, Missouri 63119 and
the telephone number is (314) 918-7779.
FORWARD-LOOKING STATEMENTS
This Prospectus contains or incorporates certain forward-looking
statements, including statements containing the words "believes", "anticipates",
"expects" and other, similar words. You should be aware that those
forward-looking statements involve known and unknown risks and uncertainties
which may cause:
- the actual results,
- our financial condition,
- our performance,
- our achievements, or
- industry results
to be worse than the future results, performance or achievements stated in, or
implied by, those forward-looking statements.
Do not rely on any forward-looking statements. Although we believe that
the expectations reflected in these forward-looking statements are reasonable,
we cannot assure you that the actual results or developments we anticipate will
be realized, or even if realized, that they will have the expected effects on
our business or operations. We assume no obligation to update any
forward-looking statements to reflect future events or developments.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE. YOU SHOULD
CAREFULLY CONSIDER THE FOLLOWING MATTERS IN CONNECTION WITH AN INVESTMENT IN THE
COMMON STOCK IN ADDITION TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY
THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "WOULD," "COULD,"
"INTEND," "PLAN," "EXPECT," "ANTICIPATE," "ESTIMATE," OR "CONTINUE," OR THE
NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE
FOLLOWING MATTERS CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS
WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS, INCLUDING RISKS AND
UNCERTAINTIES, THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
IN SUCH FORWARD-LOOKING STATEMENTS. ANY OF THE FOLLOWING RISKS COULD MATERIALLY
ADVERSELY AFFECT OUR BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION AND
COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT.
THE SALE OF AU BON PAIN DIVISION MAY HAVE AN ADVERSE EFFECT ON THE COMPANY
Effective May 16, 1999, we transferred substantially all of the
operating assets, store leases, contracts, franchise agreements, and liabilities
associated with the Company's bakery/cafe division known as Au Bon Pain to two
wholly-owned subsidiaries. Immediately
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thereafter, the two subsidiaries merged and we sold the stock of the combined
entity to ABP Corporation. Currently, our operations consist of the Panera
Bread/Saint Louis Bread Company Division and it is not clear if the sale of the
Au Bon Pain division will have a material adverse effect on our business,
financial condition or operating results.
IF CERTAIN KEY PERSONNEL LEAVE THE COMPANY, THE COMPANY MAY SUFFER ADVERSE
CONSEQUENCES
Upon the completion of the sale of the Au Bon Pain division, certain
management personnel, including Louis I. Kane (former Co-Chairman) and Anthony
J. Carroll (former Chief Financial Officer) left their positions with Panera.
Our future performance depends on the continued contributions of the remaining
key management personnel, including Ronald M. Shaich, Chairman and Chief
Executive Officer, Richard C. Postle, President and Chief Operating Officer and
William B. Moreton, Chief Financial Officer. We may not succeed in hiring,
training and retaining suitable management level employees. Management may be
unable to successfully manage our operations or achieve any expansion plans. Our
growth and earnings depend on our ability to attract and retain such personnel
and the inability to do so could have a material adverse effect on our business,
financial condition or results of operations.
DUE TO THE SALE, THE COMPANY MAY HAVE DECREASED BUYING POWER WHICH COULD
NEGATIVELY EFFECT OPERATING RESULTS
We may not have the same ability to obtain favorable pricing
arrangements or volume discounts from our suppliers now that the sale of the Au
Bon Pain division has been completed. Loss of such arrangements could have a
material adverse effect on our business, financial condition or results of
operations.
CHANGES IN OPERATING SYSTEMS MAY CAUSE DISRUPTIONS
As a result of the sale, we may will be replacing most operating
systems. We may experience substantial costs and delays in replacing such
systems which could materially adversely affect our business, financial
condition or results of operations.
COMPETITION IN THE RESTAURANT INDUSTRY MAY AFFECT EXPANSION AND OPERATING
RESULTS
The restaurant industry is highly competitive. While management
believes that our restaurants are distinctive in design and operating concept,
we are aware that there are other restaurant chains with similar concepts, some
of which have greater financial resources than we have. We cannot give
assurances that other restaurant chains won't adopt a similar concept or be more
successful in establishing restaurants utilizing a similar concept. In
particular, we cannot give assurances that the sale of the Au Bon Pain division
will increase or improve our ability to successfully compete in the industry.
Our reduction in size and resources resulting from the sale may adversely affect
our ability to compete in the marketplace, which may have a material adverse
effect on our business, financial condition or results of operations.
THERE IS UNCERTAINTY REGARDING PANERA'S ABILITY TO ACHIEVE AND MANAGE EXPANSION
Our future success and continued growth may depend on the ability to
expand our operations. Expansion depends on a number of factors, including our
ability to hire, train, retain and assimilate competent management and other
employees, the adequacy of our financial resources and our ability to identify
new markets in which we can successfully compete and adapt our management
information and other systems to accommodate expanded operations. In
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addition, we may enter new markets in which we have no prior operating
experience. We are uncertain whether we will be able to achieve any planned
expansion or that such expansion will be profitable. Any expansion (including
growth through acquisitions) will place increasing pressure on our management
controls. The failure to manage successfully any planned expansion would
adversely affect our business.
DIFFICULTIES IN OBTAINING FINANCING MAY AFFECT THE ABILITY TO GROW
Future expansions through development of new product concepts or growth of
existing operations will require significant capital. To the extent that we are
not able to generate sufficient capital, we will need to obtain third party
financing. We may not be able to obtain such financing on favorable terms, if at
all. If we cannot obtain sufficient financing, we may be unable to pursue our
growth strategy, which would have a material adverse effect on our ability to
increase our revenues.
A FLUCTUATING STOCK PRICE PROVIDES UNCERTAINTY OF INVESTMENT VALUE
The market price of our common stock has fluctuated significantly since
the initial public offering. The market price of the common stock may be subject
to continuous fluctuations in the future. The common stock is traded on the
Nasdaq National Market which has experienced and is likely to continue
experiencing significant price and volume fluctuations that could adversely
affect the market price of the common stock without regard to our operating
performance. We believe that factors such as quarterly fluctuations in financial
results, announcements of new products or announcements by us or competitors may
cause the market price of the common stock to fluctuate, perhaps substantially.
These factors, as well as general economic conditions such as recessions or high
interest rates, may adversely affect the market price of the common stock.
PANERA HAS NEVER PAID A DIVIDEND AND DOES NOT INTEND TO IN THE FORESEEABLE
FUTURE
We have not paid any cash dividends to our stockholders since our
inception and we do not plan on paying any cash dividends in the foreseeable
future. We intend to reinvest earnings, if any, in the development and expansion
of the business.
THERE ARE LIMITATIONS ON OFFICERS AND DIRECTORS' LIABILITIES
Pursuant to our Certificate of Incorporation, as authorized under
applicable Delaware law, (a) our directors are not liable for monetary damages
for breach of fiduciary duty, except in connection with a breach of duty of
loyalty, for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, for dividend payments or stock
repurchases illegal under Delaware law or for any transaction in which a
director has derived an improper personal benefit, and (b) we shall indemnify
our officers and directors to the fullest extent permitted by Delaware law for
expenses, fines and judgments (including reasonable attorney's fees) incurred in
the defense and settlement of any actions against such persons in connection
with their having served as officers and directors with respect to matters in
which the director or officer acted in good faith and in a manner he reasonably
believed to be not opposed to the best interest of Panera, and, with respect to
any criminal action, had reasonable cause to believe his conduct was lawful. For
a more detailed explanation of these provisions, see "Indemnification."
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ANTITAKEOVER PROVISIONS IN PANERA'S CHARTER DOCUMENTS AND DELAWARE LAW AND THE
SHAREHOLDERS RIGHTS PLAN COULD HINDER THE ACQUISITION OF PANERA AND DEPRESS THE
PRICE OF THE COMMON STOCK
Our Certificate of Incorporation, as amended, and Shareholders Rights
Plan, as well as Delaware corporate law, contain provisions that could delay,
defer or prevent a change in control of Panera and, therefore, could adversely
affect the prevailing market price of Panera's common stock. Some of the
provisions impose various procedural and other requirements that could make it
more difficult for stockholders to cause certain corporate actions. Other
provisions allow us to issue, without stockholder approval, preferred stock
having rights senior to those of the common stock. We may issue the preferred
stock in one or more series, the terms of which may be determined at the time of
issuance by the board of directors, without further action by stockholders, and
may include voting rights, preferences as to dividends and liquidation,
conversion and redemption rights and sinking fund provisions. The issuance of
any preferred stock could adversely affect the rights of the holders of the
common stock, and therefore reduce the value of the common stock. In particular,
specific rights granted to future holders of preferred stock could be used to
restrict Panera's ability to merge with or sell its assets to at third party. In
addition, a Shareholders Rights Plan adopted by Panera in 1996 provides certain
rights to existing stockholders in the even of certain potential takeover
actions.
THE FUTURE SALES OF COMMON STOCK OR OTHER SECURITIES MAY DILUTE THE VALUE OF THE
COMMON STOCK
The board of directors has the authority, without action or vote of the
stockholders, to issue all or part of any authorized but unissued shares of
common stock, including shares authorized but unissued under Panera's stock
option plans. Any such issuance will dilute the percentage of ownership interest
of stockholders and may further dilute the book value of the common stock. In
addition, option holders may exercise their options at a time when we would
otherwise be able to obtain additional equity capital on more favorable terms.
The sale, or availability for sale, of a substantial number of shares
of common stock in the public market as a result of or following this offering
could adversely affect the common stock's market and could impair our ability to
raise additional capital through the sale of equity securities.
USE OF PROCEEDS
The selling stockholders will not pay any of the proceeds from the sale
of the shares of common stock to Panera. We expect to incur expenses in
connection with this offering in the amount of approximately $7,500 for filing,
legal, accounting and miscellaneous fees and expenses. We will not pay for such
expenses as commissions and discounts of brokers, dealers or agents or the fees
and expenses of counsel for the selling stockholders.
See "Selling Stockholders" and "Plan of Distribution."
SELLING STOCKHOLDERS
This Prospectus relates to the offer and sale from time to time by the
selling stockholders named in this Prospectus of up to 454,179 shares of common
stock, 61,679 of which have already been issued to one of the selling
stockholders and 392,500 of which we may issue to them upon their exercise of
common stock purchase warrants that they hold.
We are registering the warrant shares and issued shares to permit
public secondary trading of the shares from time to time by the selling
stockholders. We are paying for the
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registration of such securities but will not pay for the fees and expenses of
the selling stockholders, their attorneys or other representatives, as a result
of the sale of such securities by the selling stockholders. See "Use of
Proceeds" and "Plan of Distribution."
Sixty-one thousand six hundred seventy-nine (61,679) of the shares of
the common stock covered by this Prospectus have already been issued. We will
issue the remaining shares of common stock covered by this Prospectus to the
selling stockholders only upon the exercise by such stockholders of the warrants
they currently hold. We issued the warrants to the selling stockholders on July
24, 1996 pursuant to an investment agreement. We cannot predict when, and to
what extent the selling stockholders will, if at all, exercise the warrants. The
current purchase price for the shares issuable under the warrants is $5.62. The
warrants provide for price adjustments upon certain events. When purchased from
us, the warrant shares may be sold publicly hereunder.
The following table sets forth, to the best of our knowledge,
information concerning the selling stockholders, the number of shares to be
offered and sold by the selling stockholders and the amount of common stock that
will be owned by the selling stockholders following the offering (assuming sale
of all shares of common stock being offered hereby) by the selling stockholders.
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Percentage of
Ownership of Number of Shares Ownership of Common Stock
Common Stock of Common Stock Common Stock Owned After
Selling Stockholder Prior to Offering- to be Offered After Offering Offering
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1. Capital Trust 89,179(1) 89,179(1) 0 *
Investments, Ltd.
2. Allied Capital 103,200(2) 103,200(2) 0 *
Corporation
3. Allied Capital 111,800(3) 111,800(3)
0 *
Corporation II
4. Princes Gate 112,392(4) 112,392(4) 0 *
Investors, L.P.
5. Acorn Partnership 10,823(5) 10,823(5) 0 *
I, L.P.
6. PGI Investments 10,714(6) 10,714(6) 0 *
Limited
7. PGI Sweden AB 10,714(7) 10,714(7) 0 *
8. Gregor von Opel 5,357(8) 5,357(8) 0 *
</TABLE>
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* Less than 1%.
(1) Includes 61,679 issued shares and 27,500 warrant shares.
(2) Includes 103,200 warrant shares.
(3) Includes 111,800 warrant shares.
(4) Includes 112,392 warrant shares.
(5) Includes 10,823 warrant shares.
(6) Includes 10,714 warrant shares.
(7) Includes 10, 714 warrant shares.
(8) Includes 5,357 warrant shares.
The selling stockholders may sell the common stock covered by this
Prospectus at any price. Sales of these securities at less than the market price
may depress the market price of the common stock. It is anticipated that the
sale of these securities, when made, will be made through customary channels
either through broker-dealers acting as agents or brokers for the seller, or
through broker-dealers acting as principals, who, may then resell the shares in
the over-the-counter market, or at private sales in the over-the-counter market
or otherwise, at negotiated prices related to prevailing market prices at the
time of the sales, or by a combination of such methods. As a result, the period
for the sale of such securities by the selling stockholders may occur over an
extended period of time.
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PLAN OF DISTRIBUTION
The common stock offered by this Prospectus may be offered and sold
from time to time by the selling stockholders. As used herein, "selling
stockholders" includes those individuals or entities who may have had shares of
common stock given to them as a gift by a named selling stockholder or after the
date of this Prospectus and any individuals or entities who may have shares of
common stock pledged to them as collateral by a named selling stockholder after
the date of this Prospectus. See "Selling Stockholders." The shares of common
stock covered by this Prospectus may be sold by the selling stockholders in one
or more types of transactions (which may include block transactions) on Nasdaq,
in the over-the-counter market, in negotiated transactions, through put or call
options transactions relating to the shares of common stock, through short sales
of shares of common stock, or a combination of such methods of sale, or
otherwise at prices and at terms then prevailing or at prices related to the
then current market price, or in negotiated transactions. The shares of common
stock may be sold by one or more of the following methods: (a) a block trade in
which the broker or dealer so engaged will attempt to sell the shares of common
stock as agent but may position and resell a portion of the block as principal
in order to facilitate the transaction; (b) a purchase by a broker or dealer as
principal, and the resale by such broker or dealer for its account pursuant to
this Prospectus, including resale to another broker or dealer; or (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
Thus, the period of distribution of these shares of common stock may occur over
an extended period of time. This offering will terminate on the date on which
all shares offered have been sold.
The selling stockholders may effect such transactions by selling the
shares of common stock directly to purchasers or to or through a broker or
dealer, who may act as an agent or principal. Such broker or dealer may receive
compensation in the form of discounts, concessions, or commissions from the
selling stockholders and/or the purchasers of shares of common stock for whom
such broker or dealer may act as agent or to whom he sells as principal, or both
(which compensation as to a particular broker or dealer might be in excess of
customary commissions). We know of no existing arrangements between any selling
stockholder, broker, dealer, underwriter or agent relating to the sale or
distribution of the shares of common stock.
The selling stockholders will not pay any of the proceeds from the sale
of the shares of common stock to us. We expect to incur expenses in connection
with this offering in the amount of approximately $7,500 for filing, legal,
accounting and miscellaneous fees and expenses. We will not pay for such
expenses as commissions and discounts of brokers, dealers or agents or the fees
and expenses of counsel for the selling stockholders. See "Selling Stockholders"
and "Plan of Distribution". We may receive up to approximately $2,954,563.20
from the selling stockholders' exercise of the warrants. We cannot predict when
and to what extent the selling stockholders will, if at all, exercise the
warrants. We intend to apply the proceeds of any exercise of the warrants to our
general corporate and working capital requirements.
In offering the securities, the selling stockholders and any
broker-dealers and any other participating broker-dealers who execute sales for
the selling stockholders may be deemed to be "underwriters" within the meaning
of Section 2(11) of the Securities Act of 1933, as amended, in connection with
such sales, and any profits realized by the selling stockholders and the
compensation such broker-dealer may be deemed to be underwriting discounts and
commissions. In addition, any shares covered by this Prospectus which qualify
for sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
We intend to advise the selling stockholders that while they are
selling the securities, they (1) are required to comply with Regulation M under
the Exchange Act (as described in more detail below), (2) may not engage in any
stabilization activity, except as permitted under the Exchange Act, (3) are
required to furnish each broker-dealer (who may offer this common stock)
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copies of this Prospectus, and (4) may not bid for or purchase any securities of
Panera or attempt to induce any person to purchase any securities except as
permitted under the Exchange Act.
Regulation M under the Exchange Act prohibits, with certain exceptions,
participants in a distribution from bidding for or purchasing, for an account in
which the participant has a beneficial interest, any of the securities that are
the subject of the distribution. Regulation M also governs bids and purchases
made in order to stabilize the price of a security in connection with a
distribution of the security.
TRANSFER AGENT
The transfer agent for Panera's common stock is Boston EquiServe
Limited Partnership, 150 Royall Street, Canton, Massachusetts 02021.
LEGAL MATTERS
Certain legal matters relating to the common stock offered by this
Prospectus have been passed upon for us by Gadsby & Hannah LLP, 225 Franklin
Street, Boston, Massachusetts 02110.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K of Au Bon Pain Co., Inc. (renamed Panera Bread
Company) for the year ended December 26, 1998 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
RECENT DEVELOPMENTS
Except as described in an Annual Report on Form 10-K, a Quarterly
Report on Form 10-Q that we have filed with the SEC, no material changes have
occurred since the end of our fiscal year ended December 26, 1998.
INDEMNIFICATION
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of Panera
pursuant to the following provisions, or otherwise, we have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
Delaware General Corporation Law, Section 102(b)(7), enables a
corporation in its original certificate of incorporation or an amendment thereto
validly approved by stockholders to eliminate or limit personal liability of
members of its Board of Directors for violations of a director's fiduciary duty
of care. However, the elimination or limitation shall not apply where there has
been a breach of the duty of loyalty, failure to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which is deemed illegal or obtaining an improper
personal benefit. Section Nine of our Certificate of Incorporation includes the
following language:
A Director of the Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except for liability (i) for any breach
of the Director's duty of loyalty to the Corporation or its
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stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
under Section 174 of the General Corporation Law of Delaware [GCL], or
(iv) for any transaction from which the Director derived an improper
personal benefit. If the GCL is amended to authorize corporate action
further eliminating or limiting the personal liability of Directors,
then the liability of a Director of the Corporation shall be eliminated
or limited to the fullest extent permitted by the GCL, as so amended.
Any repeal or modification of this Section 9 by the stockholders of the
Corporation shall not adversely affect any right or protection of a
Director of the Corporation existing at the time of such repeal or
modification.
Delaware General Corporation Law, Section 145, permits a corporation
organized under Delaware law to indemnify directors and officers with respect to
any matter in which the director or officer acted in good faith and in a manner
he reasonably believed to be not opposed to the best interests of the Company,
and, with respect to any criminal action, had reasonable cause to believe his
conduct was lawful. Section Ten of the Company's Certificate of Incorporation
includes the following language:
10.1 The Corporation shall indemnify any person who was or is a party
or witness, or is threatened to be made a party or witness, to any threatened,
pending or completed action, suit or proceeding (including, without limitation,
an action, suit or proceeding by or in the right of the Corporation), whether
civil, criminal, administrative or investigative (including a grand jury
proceeding), by reason of the fact that he or she (a) is or was a Director,
officer, employee or agent of the Corporation or, (b) as a Director, officer,
employee or agent of the Corporation, is or was serving at the request of the
Corporation as a Director, officer, employee, agent, partner or trustee (or in
any similar position) of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the fullest extent authorized or
permitted by the GCL and any other applicable law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with any appeal thereof; PROVIDED, HOWEVER, that, except as provided
in Section 10.2 hereof with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such person in connection
with an action, suite or proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such person in connection with an action, suit
or proceeding (or part thereof) initiated by such person only if the initiation
of such action, suit or proceeding (or part thereof) was authorized by the Board
of Directors. Such right to indemnification shall include the right to payment
by the Corporation of expenses incurred in connection with any such action,
(b) The Corporation may indemnify any person who was or is a
party of is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent or another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect to any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
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(c) To the extent that a director, officer, employee or agent
of the Corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsection (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsection (a) and (b) of this
section (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsection (a) and (b)
of this section. Such determination shall be made (1) by the Board by a majority
vote of a quorum consisting of directors who were not parties to such action,
suit or proceeding, or (2) if such a quorum is not obtainable, or even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal administrative or
investigative action, suit or proceeding may be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director, or officer to repay such
amount if it shall ultimately be determined that such person is not entitled to
be indemnified by the Corporation as authorized in the section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office.
(g) The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against and incurred by such person in any such capacity, or arising
out of such person's status as such, whether or not the Corporation would have
the power to indemnify a person against such liability under this section.
(h) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs, executor
and administrator of such a person.
(i) If a claim for indemnification pursuant to this section is
not paid in full by the Corporation within thirty (30) days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expenses of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the applicable standard of conduct
set forth in the GCL for the Corporation to indemnify the claimant for the
amount
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claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the corporation (including its Board, independent legal
counsel or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in the GCL, nor an actual determination by the Corporation (including its
Board, independent legal counsel or stockholders) that the claimant has not met
such applicable standard of conduct.
We maintain a directors, officers and corporate liability insurance
policy in the amount of five million dollars ($5,000,000).
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