<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Einstein/Noah Bagel Corp.
(Name of Issuer)
Common Stock, $.01 par value per share
(Title of Class of Securities)
282577-10-5
(CUSIP Number)
Donald J. Bingle
Vice President and General Counsel
Boston Chicken, Inc.
14103 Denver West Parkway, P.O. Box 4086
Golden, Colorado 80401-4086
303-278-9500
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
November 26, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a Statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ].
The information required in the remainder of this cover page (the page numbered
2 herein) shall not be deemed to be "filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act.
<PAGE> 2
CUSIP No. 282577-10-5 13D Page 2 of 19 Pages
----------- --- ----
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Boston Chicken, Inc.
I.R.S. Identification No.: 36-3904053
- ---------------------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC;00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------------------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 17,539,410*
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 17,539,410*
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
- ---------------------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,539,410*
- ---------------------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
- ---------------------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.2%
- ---------------------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*SEE ITEM 5 OF TEXT BELOW.
<PAGE> 3
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this Statement relates is the
common stock, $.01 par value per share (the "Common Stock"), of Einstein/Noah
Bagel Corp., a Delaware corporation (the "Issuer"). The principal executive
offices of the Issuer are located at 14123 Denver West Parkway, Golden,
Colorado 80401.
ITEM 2. IDENTITY AND BACKGROUND
(a) - (c) This Statement is being filed by Boston Chicken, Inc., a
Delaware corporation (the "Reporting Person"). The Reporting Person operates
and franchises food service stores under the name "Boston Market". Its
principal executive offices are located at 14103 Denver West Parkway, P.O. Box
4086, Golden, Colorado 80401-4086.
Appendix A attached to this Statement and incorporated by reference herein
sets forth with respect to each executive officer and director of the Reporting
Person and each person who may be deemed to control the Reporting Person (a
"controlling person"), his or her: (a) name; (b) business address; (c) present
principal occupation or employment and the name, principal business, and
address of any corporation or other organization in which such employment is
conducted; and (d) citizenship.
(d) During the last five years, neither the Reporting Person nor (to
the knowledge of the Reporting Person) any executive officer, director, or
controlling person of the Reporting Person has been convicted in a criminal
proceeding (excluding traffic violations and similar misdemeanors).
(e) During the last five years, neither the Reporting Person nor (to
the knowledge of the Reporting Person) any executive officer, director or
controlling person of the Reporting Person has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction which
resulted in a judgment, decree or final order (i) enjoining future violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or (ii) finding a violation with respect to such laws.
(f) See Appendix A.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The Issuer commenced its business in March 1995 through the combination of
three regional bagel retailers. In connection therewith, in March 1995, the
Reporting Person agreed to make a senior secured convertible loan to the Issuer
in the amount of $80.0 million. The loan was secured by substantially all the
Issuer's and its subsidiaries' assets, and allowed the Issuer to draw on a line
of credit through March 1998, in order to provide partial funding for store
development and working capital. Under the loan agreement between the
Reporting Person and the Issuer, the Reporting Person has been entitled to
satisfy a portion of its funding obligations in cash or in shares of the
Reporting Person's common stock. The Reporting Person agreed to a limited
guarantee of the price of any shares of its common stock delivered to the
Issuer in
<PAGE> 4
satisfaction of the Reporting Person's obligations under such loan agreement
and thereafter sold by the Issuer.
In February 1996, in connection with the acquisition by the Issuer of all
the outstanding capital stock of Noah's New York Bagels, Inc., the Reporting
Person increased the amount available under the loan from $80.0 million to
$120.0 million. As of November 26, 1996, the Reporting Person had issued to the
Issuer in satisfaction of a portion of its funding obligations under such loan,
2,701,615 shares of registered common stock of the Reporting Person. The
remaining portion of the Reporting Person's funding obligations have been
satisfied in cash obtained from the Reporting Person's working capital.
On June 17, 1996, pursuant to the terms of the Amended and Restated Loan
Agreement, dated May 17, 1996, between the Issuer and the Reporting Person (the
"Amended and Restated Loan Agreement"), the Reporting Person converted $80.0
million outstanding under the loan into Common Stock at a conversion price of
$6.38 per share, and converted the remaining $40.0 million outstanding under
the loan into Common Stock at a conversion price of $14.42 per share. The
Issuer issued an aggregate of 15,307,421 shares of Common Stock in the loan
conversion. Of those shares, 510,246 were issued to BC Equity Funding, L.L.C.,
a Delaware limited liability company ("BCEF"), of which the Reporting Person is
manager. The shares issued to BCEF were subsequently distributed to its
members, and the Reporting Person disclaims any beneficial ownership of such
shares. The remaining 14,797,175 shares were issued to the Reporting Person.
On August 7, 1996, in connection with the closing of the Issuer's
underwritten initial public offering of 3,105,000 shares of Common Stock and
its non-underwritten concurrent public offering of 425,000 shares of Common
Stock, the Reporting Person purchased 2,000,000 shares of Common Stock from the
Issuer pursuant to a Concurrent Private Placement Agreement dated August 1,
1996 between the Issuer and the Reporting Person (the "Concurrent Private
Placement Agreement"). The purchase price for such shares was $15.81 per
share, the price paid by the public in the underwritten public offering, net of
underwriting discount, and was paid in cash obtained from the Reporting
Person's working capital. The Concurrent Private Placement Agreement included
customary terms and provisions, representations and warranties and
indemnification obligations.
On December 3, 1996, in connection with the closing of an underwritten
public offering by the Issuer of 2,500,000 shares of Common Stock, the Reporting
Person purchased 500,000 shares of Common Stock from the Issuer (the "Reported
Acquisition") pursuant to the terms of a Concurrent Offering Purchase Agreement
dated November 26, 1996 between the Issuer and the Reporting Person (the
"Concurrent Offering Purchase Agreement"). The purchase price for such shares
was $28.575 per share, the price paid by the public in the underwritten public
offering, net of underwriting discount, and was paid in cash obtained from the
Reporting Person's working capital. The Concurrent Offering Purchase Agreement
includes customary terms, representations, warranties and other provisions.
<PAGE> 5
ITEM 4. PURPOSE OF TRANSACTION
The purpose of the Reported Acquisition was to permit the Reporting Person
to continue to maintain a meaningful percentage interest in the equity of the
Issuer and to help assure that the Reporting Person's ownership of the Issuer's
Common Stock remains in excess of 50 percent of the total outstanding shares of
Common Stock of the Issuer. Such ownership is intended to permit the Issuer to
control the affairs and policies of the Issuer, elect the Issuer's board of
directors, approve or disapprove any matter submitted to a vote of the
stockholders of the Issuer, including certain fundamental corporate transactions
requiring stockholder approval, and consolidate for financial reporting purposes
the Issuer's financial results with those of the Issuer.
The Reporting Person may make additional purchases of Common Stock or other
securities of the Issuer in order to maintain majority ownership and/or voting
control of the Issuer or for other purposes. The Concurrent Private Placement
Agreement permits the Reporting Person to maintain ownership of shares of
Common Stock having up to 52% of the voting power of all the outstanding shares
of capital stock of the Issuer having the power generally to vote in the
election of directors pursuant to an option (the "BCI Option") to purchase
newly issued shares of Common Stock for cash or registered shares of the
Reporting Person's common stock at a per share exercise price equal to the (i)
weighted average price per share at which the Common Stock was issued or sold
in a transaction pursuant to which the BCI Option becomes exercisable, in the
case of a transaction in which such price per share is readily ascertainable,
or (ii) in all other cases, the average of the closing sale prices for the
Common Stock on the Nasdaq National Market (or such other principal exchange or
market on which the Common Stock may then be trading) for the five trading days
ending on the fifth trading day prior to the date of the transaction pursuant
to which the BCI Option becomes exercisable, but subject in each case to
adjustments for issuance of shares of Common Stock in connection with
recapitalizations, dividends, stock splits, consolidations of shares, and other
diluting events. In the event payment is made in registered shares of the
Reporting Person's common stock, the Reporting Person will guarantee the price
at which those shares can be sold at the market within a limited time period.
The BCI Option will terminate if (i) the Reporting Person sells or transfers
shares of Common Stock and as a result owns less than a majority of the then
outstanding shares of the Issuer's voting stock or (ii) the percentage of
outstanding shares of voting stock of the Issuer owned by the Reporting Person,
calculated as described below, is reduced below 50% other than as a result of
the Reporting Person's voluntary sale or transfer of shares of Common Stock and
the Reporting Person fails to acquire a sufficient number of shares of Common
Stock so that it owns at least a majority of the then outstanding shares of
voting stock of the Issuer by July 31 of the calendar year next following the
calendar year in which such reduction occurs. In addition, the percentage
ownership level of 52% is subject to reduction to the extent voluntary sales or
transfers by the Reporting Person reduce its ownership of the outstanding
shares of voting stock of the Issuer to less than 52% but do not otherwise
result in termination of the BCI Option. In determining the percentage
ownership of voting stock of the Issuer owned by the Reporting Person for
purposes of the BCI Option, the Concurrent Private Placement Agreement excludes
(i) 701,177 shares of Common Stock subject to options granted by the Reporting
Person (described under Item 6), (ii) any shares of Common Stock held by
officers, directors, or employees of the Reporting Person, and (iii) any shares
of Common Stock held by any person or entity that would not be counted under
generally accepted accounting principles in determining
<PAGE> 6
whether the Reporting Person owns a majority of the voting stock for
consolidated financial statement reporting purposes. As so calculated, the
Reporting Person as of December 3, 1996 owns approximately 51.6% of the voting
stock of the Issuer and, accordingly, has the right to purchase as of such date
242,235 additional shares of Common Stock to maintain its ownership of voting
stock of the Issuer at 52%.
In determining whether to acquire additional Common Stock, whether pursuant
to the BCI Option or otherwise, the Reporting Person will consider various
relevant factors, including, but not limited to, its evaluation of the Issuer's
business prospects and financial condition, amounts and prices of available
securities of the Issuer, the market for the Issuer's securities, other
opportunities available to the Reporting Person, and general market and
economic conditions. Purchases may be made pursuant to the BCI Option, on the
open market or directly from the Issuer in negotiated transactions. In
addition, the Reporting Person may from time to time enter into other
arrangements with other holders of Common Stock for purposes of maintaining
voting control of the Issuer, including voting agreements or proxies with
respect to Common Stock of the Issuer.
Except as set forth in this Item 4, neither the Reporting Person nor (to
the Reporting Person's knowledge) any of the executive officers, directors or
controlling persons of the Reporting Person has any current plans or proposals
which relate to or would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D, although the Reporting Person does not
rule out the possibility of effecting or seeking to effect any such actions in
the future.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Reporting Person has been informed by the Issuer that there
were 32,138,982 issued and outstanding shares of Common Stock as of December 3,
1996. The Reporting Person is the beneficial owner as of December 3, 1996 of
17,539,410 shares of Common Stock, which represents approximately 54.2% of the
issued and outstanding shares of Common Stock (including for this purpose
shares of Common Stock for which the BCI Option is exercisable as of December
3, 1996). The beneficial ownership of the Common Stock as of December 3,
1996 of each director, executive officer and controlling person of the
Reporting Person is set forth below:
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTORS OF THE COMMON STOCK PERCENT
THE REPORTING PERSON OF THE ISSUER OF CLASS
<S> <C> <C>
Scott A. Beck1 131,651 2, 3 *
Dean L. Buntrock 100,712 4 *
Mark R. Goldston1 149,447 5 *
Arnold C. Greenberg 12,500 *
J. Bruce Harreld 2,500 *
M. Howard Jacobson 1,000 6 *
Saad J. Nadhir 7,386 2 *
Peer Pedersen 126,239 *
Mark W. Stephens 105,639 *
Laurence M. Zwain 7,381 *
EXECUTIVE OFFICERS OF COMMON STOCK PERCENT
THE REPORTING PERSON OF THE ISSUER OF CLASS
Donald J. Bingle 3,520 *
Mark A. Link 4,010 *
John Todd 2,500 *
DIRECTORS AND EXECUTIVE COMMON STOCK PERCENT
OFFICERS AS A GROUP OF THE ISSUER OF CLASS
All directors and executive
officers as a group (13 persons) 654,485 2.0%
</TABLE>
1 Also a member of the board of directors of the Issuer.
2 Excludes the aggregate number of shares of Common Stock beneficially
owned by the Reporting Person that may be deemed to be beneficially owned
by such person because such person may be deemed to be a controlling
person of the Reporting Person. Such person disclaims beneficial
ownership of such
shares.
3 Includes 17,948 shares of Common Stock held by a limited partnership, of
which Mr. Beck is the general partner.
4 Includes 56,250 shares of Common Stock that are beneficially owned by a
limited liability company, of which Mr. Buntrock is the manager.
5 Includes 117,189 shares of Common Stock that are also shown elsewhere
in this Statement as beneficially owned by the Reporting Person. See
Item 5(b)(i) below.
6 Includes 500 shares of Common Stock held by Mr. Jacobson's spouse and
excludes 1,500 shares of Common Stock owned by his children. Mr.
Jacobson disclaims beneficial ownership of such shares.
* Less than one percent
The Common Stock beneficially owned by the Reporting Person includes
242,235 shares of Common Stock that the Reporting Person has the right to
acquire within 60 days of December 3, 1996 through the exercise of the BCI
Option. To the knowledge of the Reporting Person, the
<PAGE> 8
Common Stock owned by all executive officers, directors and controlling persons
of the Reporting Person include 284,014 shares of Common Stock that such persons
have the right to acquire within 60 days of December 3, 1996 through the
exercise of warrants or stock options as follows: Scott A. Beck -- 55,432; Dean
L. Buntrock -- 56,250; Mark R. Goldston -- 117,189; Peer Pedersen -- 47,813;
Mark W. Stephens -- 1,529; Mark A. Link -- 1,020; and Laurence M. Zwain --
4,781.
(b) The Reporting Person and, to the knowledge of the Reporting Person,
each of its executive officers, directors and controlling persons referred to
in paragraph (a) above has the sole power to vote, or to direct the vote, and
the sole power to dispose of, or direct the disposition of, the shares of
Common Stock beneficially owned by such person except as follows:
(i) The Reporting Person has granted options to purchase 701,177
shares of Common Stock to certain individuals (as described under Item 6),
of which options held by Mark R. Goldston to purchase 117,189 shares of
Common Stock are exercisable within 60 days of December 3, 1996.
(ii) 27,716 shares of Common Stock beneficially owned by Scott A.
Beck, 28,125 shares of Common Stock beneficially owned by Dean L.
Buntrock, 23,906 shares of Common Stock beneficially owned by Peer
Pedersen, and 2,390 shares of Common Stock beneficially owned by Laurence
M. Zwain represent each such person's equity interest in shares subject to
outstanding warrants (the "Bagel Funding Warrants") of the Issuer that are
currently held by Bagel Store Development Funding, L.L.C. ("Bagel
Funding"), of which each such person is a member. The manager of Bagel
Funding is the Issuer. Bagel Funding is required to distribute the Bagel
Funding Warrants to its members on the later of (i) six months after the
date of the closing of an underwritten initial public offering of the
Issuer or (ii) four months after all committed capital has been
contributed to Bagel Funding, but in no event later than the date that is
six months prior to the expiration date of the Bagel Funding Warrants.
The Bagel Funding Warrants expire on December 29, 2000.
(c) During the past 60 days, the Reporting Person effected only the
transactions described in Item 3 with respect to the Common Stock. To the
knowledge of the Reporting Person, the following are the only transactions in
the Common Stock effected by an executive officer, director or controlling
person of the Reporting Person in the past 60 days:
<TABLE>
<CAPTION>
NAME DATE AMOUNT PRICE TRANSFER TYPE
<S> <C> <C> <C> <C>
Dean L. Buntrock 11/27/96 42,462 not applicable Distribution from partnership
Peer Pedersen 11/27/96 76,426 not applicable Distribution from partnership
</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
The Concurrent Private Placement Agreement described in Item 3 prohibits
the Issuer from taking certain actions without the consent of the Reporting
Person as long as the BCI
<PAGE> 9
Option has not been terminated, including altering any rights attaching to the
Common Stock, offering or issuing any equity securities or debt securities
convertible into equity securities in either case other than Common Stock,
distributing assets or securities of the Issuer having a fair market value in
excess of 10% of the Issuer's consolidated gross assets or consolidated gross
revenues measured as of the immediately preceding fiscal year end, and filing a
petition in bankruptcy.
In connection with the Concurrent Private Placement Agreement, the Issuer
entered into a registration agreement with the Reporting Person (the "Boston
Chicken Registration Agreement"), pursuant to which the Issuer granted to the
Reporting Person five demand and unlimited piggyback registration rights under
the Securities Act with respect to the shares of Common Stock purchased by the
Reporting Person in the Concurrent Private Placement or otherwise owned by it,
including shares of Common Stock subject to the BCI Option ("Registrable
Securities"), for which the Issuer will bear substantially all of the expenses
in connection with such registrations (other than underwriting discounts or
commissions). The Reporting Person's demand registration rights under the
Boston Chicken Registration Agreement became exercisable on September 27, 1996.
In addition, the Issuer has agreed in connection with the Reporting Person's
first demand registration, to waive the requirement of the Stockholder
Registration Agreement, if it is still applicable, that the holders of the
Registrable Securities agree not to sell up to 30% of such Registrable
Securities for certain periods and the Reporting Person has agreed to consent to
such waiver. The Concurrent Offering Purchase Agreement provides that the
shares of Common Stock purchased by the Reporting Person pursuant thereto
constitute Registrable Securities under the Boston Chicken Registration
Agreement.
The Reporting Person has agreed not to sell shares of Common Stock
purchased in the Reported Acquisition or otherwise owned by it for a period
of at least 180 days after November 26, 1996, subject to certain exceptions,
without the consent of Merrill Lynch & Co. ("Merrill Lynch"). The Reporting
Person also agreed not to sell shares of Common Stock purchased pursuant to the
Concurrent Private Placement Agreement prior to August 1, 1997, without the
consent of Merrill Lynch. The directors, executive officers and controlling
persons of the Reporting Person have also agreed to contractual lockup
provisions restricting their sale of certain shares of Common Stock owned by
them for varying periods, without the consent of Merrill Lynch. The lock-up
period with respect to 301,456 shares of Common Stock held by such persons ends
on January 28, 1997, the lock-up period with respect to 32,362 shares of Common
Stock held by such persons ends on August 1, 1997, and the lock-up period with
respect to 107,670 shares of Common Stock held by such persons ends on August
1, 1998.
The Reporting Person has entered into option agreements with each of Mark
R. Goldston, Saad J. Nadhir, Mark W. Stephens, John Todd, Anthony Wedo and
Laurence M. Zwain permitting each such person to purchase shares of Common Stock
from the Reporting Person at an exercise price (after adjustment in certain
cases for a stock split) of $6.38 per share. Except in the case of the option
granted to Mr. Goldston, each option becomes exercisable with respect to 10% of
the total number of shares subject to the option on the first anniversary of the
date of the grant of the
<PAGE> 10
option, an additional 20% on the second anniversary of the date of the grant of
the option, an additional 30% on the third anniversary of the date of the grant
of the option, and the balance on the fourth anniversary of the date of the
grant of the option. The option granted to Mr. Goldston became exercisable with
respect to 34% of the total number of shares of Common Stock subject to the
option on the date of the grant of the option, an additional 33% will become
exercisable on the first anniversary of the date of the grant of the option and
the balance will become exercisable on the second anniversary of the date of the
grant of the option. The number of shares of Common Stock beneficially owned by
the Reporting Person that are subject to such options is as follows: Mark R.
Goldston, 344,673 shares; Saad J. Nadhir, 156,740 shares; Mark W. Stephens,
78,336 shares; John Todd, 19,593 shares; Anthony Wedo, 39,618 shares; and
Laurence M. Zwain, 62,667 shares.
In connection with the formation of the Company, the Issuer granted
options to purchase an aggregate of 224,300 shares of Common Stock to certain
officers and employees of the Reporting Person at an exercise price of $5.88
per share, including options granted to executive officers of the Reporting
Person as follows: Mark W. Stephens, Vice Chairman of the Board and Chief
Financial Officer, 15,294 shares; Donald J. Bingle, Vice President, General
Counsel and Secretary, 10,195 shares; and Mark A. Link, Vice President -
Financial Reporting, 10,195 shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
See Exhibit Index appearing elsewhere herein, which is incorporated
herein by reference.
<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
BOSTON CHICKEN, INC.
By: /s/ Donald J. Bingle
--------------------
Vice President
<PAGE> 12
APPENDIX A
The following individuals are executive officers or directors of Boston
Chicken. Each individual is a citizen of the United States, and unless
otherwise noted, the business address of each executive officer of the
Reporting Person is 14103 Denver West Parkway, P.O. Box 4086, Golden, Colorado
80401-4086.
<TABLE>
<CAPTION>
TITLE AT
NAME REPORTING PERSON
<S> <C>
Scott A. Beck Co-Chairman of the Board, Chief Executive Officer, and
Director
Saad J. Nadhir Co-Chairman of the Board, President, and Director
Mark W. Stephens Vice Chairman of the Board, Chief Financial Officer,
and Director
Laurence M. Zwain Vice Chairman of the Board, President and Chief
Executive Officer of Boston Market, and Director
Mark R. Goldston Vice Chairman of the Board and Director
Donald J. Bingle Vice President, Secretary, and General Counsel
Mark A. Link Vice President-Financial Reporting
John Todd Chief Financial Officer of Boston Market
</TABLE>
<PAGE> 13
DEAN L. BUNTROCK DIRECTOR
Mr. Buntrock is the Chairman of the Board and Chief Executive Officer of WMX
Technologies, Inc. ("WMX"), a Delaware corporation. Mr. Buntrock is also
Chairman of Waste Management International plc, a subsidiary of WMX. He is
also a director of Wheelabrator Technologies Inc., a subsidiary of WMX, First
Chicago/NBD Corporation, and The First National Bank of Chicago. Mr.
Buntrock's business address is 3003 Butterfield Road, Oak Brook, Illinois
60521.
ARNOLD C. GREENBERG DIRECTOR
Mr. Greenberg is an attorney and self-employed private investor. He formerly
served as the Chairman of the Board of Directors and Chief Executive Officer of
Coleco Industries, Inc.
J. BRUCE HARRELD DIRECTOR
Mr. Harreld is Senior Vice President-Strategy of International Business
Machines Corporation. Mr. Harreld's business address is Old Orchard Road,
Armonk, New York 10504.
M HOWARD JACOBSON DIRECTOR
Mr. Jacobson is a Senior Advisor to Bankers Trust, Private Bank. Mr. Jacobson
also serves as a director of Allmerica Property and Casualty Companies, Inc.,
ImmuLogic Pharmaceutical Corporation, and Wyman-Gordon Company.
PEER PEDERSEN DIRECTOR
Mr. Pedersen is Chairman of the Board of Pedersen & Houpt, P.C., a Chicago,
Illinois law firm. Mr. Pedersen also serves as a director of WMX, Aon
Corporation, Extended Stay America, Inc. and Latin America Growth Fund. Mr.
Pedersen's business address is 161 N. Clark Street, Suite 3100, Chicago,
Illinois 60601-3224.
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION*
<S> <C>
1. Amended and Restated Loan Agreement, dated May 17, 1996, between the Issuer
and the Reporting Person (incorporated by reference to Exhibit 10.1(a) to the Issuer's
Registration Statement of Form S-1 (Registration No. 333-04725)).
2. First Amendment to the Loan Agreement dated July 19, 1996 (incorporated by
reference to Exhibit 10.1(b) to the Issuer's Registration Statement on Form S-1
(Registration No. 333-04725)).
3. Second Amendment to the Loan Agreement dated September 16, 1996 (incorporated
by reference to Exhibit 10.1(c) to the Issuer's Registration Statement on Form S-1
(Registration No. 333-12395)).
4. Concurrent Private Placement Agreement, dated August 1, 1996 between the
Reporting Person and the Issuer (incorporated by reference to Exhibit 10.3 to the
Reporting Person's Quarterly Report on Form 10-Q for the quarter ended July 14, 1996).
5. Concurrent Offering Purchase Agreement, dated November 26, 1996 between the
Reporting Person and the Issuer (incorporated by reference to Exhibit 4.7 to the
Issuer's Registration Statement on Form S-1 (Registration No. 333-15915).
6. Registration Agreement, dated August 1, 1996 between the Reporting Person and the
Issuer (incorporated by reference to Exhibit 10.3 to the Reporting Person's Quarterly
Report on Form 10-Q for the quarter ended July 14, 1996).
7. Option Agreement between the Company and Mark W. Stephens dated as of April 23, 1996
(incorporated by reference to Exhibit 10.4 to the Reporting Person's Quarterly Report on
Form 10-Q for the quarter ended July 14, 1996).
8. Option Agreement between the Company and Laurence M. Zwain dated as of April 23, 1996
(incorporated by reference to Exhibit 10.5 to the Reporting Person's Quarterly Report on
Form 10-Q for the quarter ended July 14, 1996).
9. Option Agreement between the Company and Mark R. Goldston dated as of April 23, 1996
(incorporated by reference to Exhibit 10.6 to the Reporting Person's Quarterly Report on
Form 10-Q for the quarter ended July 14, 1996).
10. Option Agreement between the Company and Saad J. Nadhir dated as of July 25, 1996
(incorporated by reference to Exhibit 10.7 to the Reporting Person's Quarterly Report on
Form 10-Q for the quarter ended October 6, 1996).
11. Option Agreement between the Company and John Todd dated as of July 29, 1996
(incorporated by reference to Exhibit 10.8 to the Reporting Person's Quarterly Report on
Form 10-Q for the quarter ended October 6, 1996).
12. Option Agreement between the Company and Anthony Wedo dated as of April 23, 1996.
- -------------------
</TABLE>
* For all documents incorporated by reference that have been filed by
the Issuer, the Issuer's file number under the Securities Exchange Act
of 1934 is 0-21097.
<PAGE> 1
EXHIBIT 12
OPTION AGREEMENT
This Option Agreement (this "Agreement") is made as of this 23rd day
of April, 1996, between Boston Chicken, Inc., a Delaware corporation ("BCI")
and Anthony Wedo ("Grantee").
1. GRANT OF OPTION. Subject to the terms and conditions of this
Agreement, BCI hereby grants to Grantee the right and option (the "Option") to
purchase from BCI 174.08 shares of common stock, $.01 par value per share, of
Einstein Bros. Bagels, Inc. ("EBBI") (the "Option Shares"), which number of
Option Shares may be adjusted pursuant to Section 9 below.
2. EXERCISE PRICE. The purchase price for each Option Share
shall be $1,436.14 per share (the "Exercise Price").
3. VESTING. Subject to termination of the Option as provided
herein, the Option may be exercised, at any time and from time to time on or
after April 23, 1997 but such Option shall not be exercisable for more than a
percentage of the aggregate number of Option Shares in accordance with the
following schedule:
<TABLE>
<CAPTION>
Cumulative
Date Percentage
---- ----------
<S> <C>
On or after April 23, 1997 to April 22, 1998 up to 10%
April 23, 1998 to April 22, 1999 up to 30%
April 23, 1999 to April 22, 2000 up to 60%
April 23, 2000 to April 22, 2001 up to 100%
</TABLE>
4. PROCEDURE FOR EXERCISE. If Grantee elects to exercise the
Option, Grantee shall deliver to BCI: (i) a notice of exercise (the "Exercise
Notice") in the form set forth on Exhibit A attached hereto, and (ii) full
payment of the Exercise Price for the Option Shares to be purchased. The date
on which the Exercise Notice and the Exercise Price for the Option Shares to be
purchased are received by BCI is referred to herein as the "Exercise Date." As
soon as practicable after the Exercise Date, BCI will deliver to Grantee one or
more properly executed EBBI stock certificates, in the name of Grantee,
evidencing the Option Shares so purchased, subject to appropriate restrictive
legends.
5. PAYMENT OF EXERCISE PRICE. The Exercise Price shall be paid
by Grantee by delivery of a certified check drawn on any state or national bank
or savings and loan association.
6. PARTIAL EXERCISE. One or more partial exercises of the Option
shall be permitted from time to time.
<PAGE> 2
7. EXPIRATION. The Option and this Agreement shall expire and
become void upon the earlier of five (5) years from the date hereof or at such
time as Grantee is no longer an employee of BCI, or a subsidiary or area
developer of BCI, regardless of the cause for such termination; provided,
however, that the Option and this Agreement shall not terminate and the Option
shall accelerate and immediately become 100% vested in the event of Grantee's
death or permanent disability during his employment with BCI, or a subsidiary
or area developer of BCI.
8. RESTRICTIONS ON OPTION AND OPTION SHARES. The Option shall be
exercisable only by Grantee. The Option may not be sold, pledged, assigned or
otherwise transferred without the prior written consent of BCI in its sole
discretion. Any purported transfer or transaction in violation of this Section
8. shall be null and void ab initio.
9. ADJUSTMENTS. In the event of any change in the number of
shares of common stock of EBBI outstanding by reason of any stock split, stock
dividend, split-up, split-off, spin-off, recapitalization, merger,
consolidation, reorganization, combination or exchange of shares, sale by EBBI
of all or part of its assets, distribution to shareholders of EBBI other than a
normal cash dividend, or other extraordinary or unusual event occurring after
the date hereof and prior to exercise of the Option in full, the number and
kind of shares of common stock of EBBI or other property for which the Option
may then be exercised and the Exercise Price per Option Share shall be adjusted
so as to reflect such change.
10. NO RIGHTS AS A STOCKHOLDER. Unless and until a certificate or
certificates representing such Option Shares of common stock of EBBI shall have
been issued to Grantee, Grantee shall not be or have any of the rights or
privileges of a stockholder of EBBI with respect to shares of common stock of
EBBI acquirable upon exercise of the Option.
11. TAX WITHHOLDING. As a condition to any exercise of the
Option, BCI shall require Grantee to deposit with BCI such federal and state
income, employment and other taxes, if any, as may be required to be withheld
under applicable law. Such withholding shall be paid in cash.
12. TAX CONSEQUENCES. Grantee is solely responsible for learning,
understanding, and accepting the tax consequences to him of the receipt and
exercise of the Option and the disposition of the Option Shares.
13. INVESTMENT REPRESENTATIONS. Grantee, as a condition to this
Agreement and the exercise of the Option, represents and warrants that the
Option and the Option Shares have been and will be acquired for its own account
and not with a view to the resale or other distribution thereof. Grantee
further represents that he is an accredited investor within the meaning of
Regulation D under the Securities Act of 1933, as amended, that he has made all
inquires concerning the Option and the Option Shares, he deems appropriate, and
has received satisfactory responses to such inquires. Grantee understands that
the Option and the Option Shares have not been and will not be registered under
the Securities Act of 1933 and, therefore, cannot be sold or transferred unless
either they are subsequently registered under such Act (as well as under any
applicable state securities laws) or an exemption from such registration is
available.
2
<PAGE> 3
14. GOVERNING LAW. THE PARTIES INTEND THIS AGREEMENT TO BE
GOVERNED BY THE LAWS OF THE STATE OF COLORADO. If the scope of any provision
contained herein is too broad to permit enforcement of such provision to its
full extent, then such provision shall be enforced to the maximum extent
permitted by law. If any provision of this Agreement shall be construed to be
illegal or invalid, the legality or validity of any other provision hereof
shall not be affected thereby, and any illegal or invalid provision of this
Agreement shall be severable, and all other provisions shall remain in full
force and effect.
15. AMENDMENT. This Agreement, and each section hereof, may be
amended only in writing, signed by the party against whom enforcement of any
such amended provision is sought.
16. HEADINGS. Any headings of sections of this Agreement are
solely for the convenience of the parties and are not a part of this Agreement
nor are they to be used in its interpretation.
17. COUNTERPARTS. This Agreement may be executed in several
counterparts; each such counterpart shall be considered as an original
agreement and all such executed counterparts shall constitute an Agreement.
18. NOTICES. Any notice, request, instruction, or other document
required to be given under this Agreement by either party to the other shall be
in writing and delivered in person or by courier, or by facsimile transmission
or mailed by certified mail, postage prepaid, return receipt requested (such
mailed notice to be effective on the date such receipt is acknowledged) as
follows:
To BCI:
General Counsel
Boston Chicken, Inc.
14103 Denver West Parkway
Golden, Colorado 80401
Facsimile: (303) 384-5339
To Grantee:
Anthony Wedo
14103 Denver West Parkway
Golden, Colorado 80401
Facsimile: (303) 384-5339
Notices sent for next day delivery by Federal Express or other reliable courier
shall
3
<PAGE> 4
be deemed given the next business day after sending, notices transmitted
by fax or personally delivered shall be deemed given when so transmitted or
delivered, respectively, and notices sent by certified or registered mail shall
be deemed given on the fifth business day after sending.
19. SUCCESSORS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors.
20. ENTIRE AGREEMENT. This Agreement and exhibits hereto contain
the entire agreement of the parties hereto with respect to the transactions
and relationships contemplated herein, and supersedes all prior understandings
and agreements of the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BOSTON CHICKEN, INC.
BY: /s/ DONALD J. BINGLE /s/ ANTHONY WEDO
--------------------------------- -----------------------------------
TITLE: VICE PRESIDENT ANTHONY WEDO
4
<PAGE> 5
EXHIBIT A
EXERCISE NOTICE
_________________
Date
Boston Chicken, Inc.
14103 Denver West Parkway
Golden, Colorado 80401
Attention: General Counsel
Dear Sir:
I wish to exercise the option granted on ________________, 1996 and
evidenced by that Option Agreement dated ___________________, 1996 to the
extent of ______________ shares of the common stock of Einstein Bros. Bagels,
Inc., at the option price of $1,436.14 per share. My check in the amount of
$________________ in payment of the entire purchase price and tax withholding
for these shares accompanies this letter.
Please issue a certificate for these shares in the following name:
_____________________________
Name
_____________________________
Street Address
_____________________________
City/State/Zip
Very truly yours,
______________________________
Signature
______________________________
Typed or Printed Name
______________________________
Social Security Number
