Since the company`s inception, the company has required its executives to enter into a five- to seven-year employment contract and to pay the company the right to obtain a percentage of their restaurants` annual cash flow for the duration of the agreement. After the conclusion of the employment contract, the company generally grants managers stock options equal to an amount prescribed by its formula in its employment contract. Stock option grants under this plan are issued at the company`s weighted average closing price for the previous three months and may be exerciseable for up to 10 years. Options expire five years after options become exerciseable. In January 2003, FASB adopted Interpretation 46 (FIN 46), consolidation of variable rate firms. This interpretation of Bulletin 51, Consolidated Financial Statements, relates to the consolidation of variable rate entities by companies in which an entity records the majority of the company`s expected losses, receives the majority of the expected residual returns from the companies or both on the basis of ownership, contract or other financial interests in the business. Interpretation requires that, where an entity holds a dominant financial interest in a variable interest business, the assets, liabilities and results of the entity`s activities at variable rates must be included in the consolidated financial statements. When I interviewed for the job, the CEO personally did not give me any new equipment. When I was hired, I did not receive a new staff manual. I was told it was because the restaurant ran out of supplies the day I started. I didn`t sign anything with respect to tipping or tipping pools, and I was never asked to sign a tip-out agreement that defined how to distribute the tip-out. In addition, I was not informed of the person who received funds from the tipp-out or the allocation of funds.
The benefits and losses of each partnership are shared on the basis of the respective interest rates of the partnership, as well as cash distributions and capital contributions, with the exception of those provided in the management agreement.