Noodles & Firm has been engaged on its menu to turnaround flagging gross sales. | Photograph: Shutterstock.
If huge adjustments come to Noodles & Firm within the subsequent yr—like say, a sale of the corporate—high executives have some new incentives to stay round.
The fast-casual chain’s board final week permitted an settlement for retention bonuses to be paid to 4 high execs within the occasion of a change in management, in accordance with a submitting with the U.S. Securities and Alternate Fee.
The chain earlier this yr stated it was exploring strategic options, together with a doable sale, but in addition the choice of refinancing debt or refranchising. Noodles is about two years into an tried turnaround to revive flagging gross sales.
The retention bonuses, nevertheless, would solely kick in if management of the corporate adjustments, together with the lack of a majority on the board by way of an precise or threatened election or proxy combat, for instance, in addition to an outright acquisition, merger or sale of belongings.
If any of these adjustments in management happen, President and CEO Joe Christina would get a bonus equal to 100% his base wage. CFO Michael Hynes would get a bonus of 75% his base wage.
And each Corey Kline, government vice chairman, expertise, and Chief Accounting Officer Kathy Lockhart would obtain bonuses value half their respective base wage.
The bonus would apply provided that the chief stays employed by the corporate for 90 days after closing, or is terminated with out trigger inside 30 days prior or 90 days after closing. The executives should additionally adhere to strict covenants, together with confidentiality and good religion cooperation to assist lead the corporate to no matter transaction ends in that change of management.
The correct to any bonus, nevertheless, expires on Dec. 31, 2026, if no change in management has occurred earlier than then.
Noodles can be dealing with two warnings in latest months that its inventory value has fallen too low, threatening the chain’s Nasdaq compliance. Noodles’ share value was 65 cents at shut on Monday, near the 52-week low of 55 cents.
Nonetheless, Noodles’ overhaul efforts look like displaying outcomes. Within the third quarter, the fast-casual chain’s same-store gross sales have been up 4% systemwide. And although site visitors was down 0.6% on the finish of the quarter, that quantity was trending up. In October, for instance, same-store gross sales have been up 8% with site visitors up 1.5%.
The Broomfield, Colorado-based chain can be within the strategy of a plan to shut as much as 49 underperforming eating places by the tip of subsequent yr.
The chain upgraded its projections for the yr, saying same-store gross sales are anticipated to vary between 3.6% to 4.2%, greater than earlier projections of a rise between 2.5% and 4%.
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