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Noodles & Company has announced plans to provide retention bonuses to key executives if ownership of the company changes, something management has already announced it’s considering.
It’s offering a 100% bonus of base salary to president and CEO Joseph Christina, 75% to chief financial officer Michael Hynes, and 50% each to executive vice president for technology Corey Kline and chief accounting officer Kathy Lockhart.
“The agreements represent an incentive for continued service to the company and support of the company’s continued review of strategic alternatives to explore ways to maximize stockholder value,” it said in a filing with the Securities & Exchange commission on Friday. The bonuses would be payable if the executive remains with the company for 90 days following the closing of a change of control, or if they’re terminated without cause within 30 days prior to or 90 days after the closing.
The right to the bonus will expire on Dec. 31, 2026.
The move comes after Noodles retained financial services firm Piper Sandler to explore ways to maximize shareholder value in the face of its weak share price, including possible sale.The filing was made after market on Friday, when shares in the company closed at 61 cents, well below the dollar threshold required by the Nasdaq exchange.
Noodles has been out of compliance with the exchange’s rules since June 24, and this is the second time it has been out of compliance in the past year.
The latest filing defines a change in control as any time the incumbent board of directors ceases to constitute a majority of the board, when the current stockholders no longer own more than 50% of the combined voting power and/or shares of the company, or when “substantially all” of the company’s assets are sold to a party or parties not currently affiliated with Noodles & Company.
Christina was promoted to CEO from president and chief operating officer at the end of August, following the resignation of Drew Madsen for personal reasons and has largely continued his predecessor’s efforts to streamline operations, improve food and service quality, close underperforming restaurants, and reevaluate the chain’s value proposition.
The changes appear to be bearing fruit, and in the most recent quarter, ended Sept. 30, Noodles reported a 4% increase in same-store sales as well as improved restaurant margins.
However it still booked a net loss and a decline in revenue, as well as an anemic share price.
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