Noble Roman’s, Inc. Awards Legacy Directors Compensatory Stock Options. Shareholder Seeks “Say on Pay” Vote.

Florida -- Free-Press-Release.com-- Feb 3, 2011 -- INDIANAPOLIS, February 3, 2011 – Noble Roman’s Inc. (NROM) awarded stock options for 1.8 million shares to three long-term directors—CEO Paul Mobley, his son Scott Mobley and Douglas Coape-Arnold—last week. The Company did not publicly announce the grants. Shareholders learned of the grants through Form 4 filings made by the directors individually with the Securities and Exchange Commission (SEC).

Including stock options awarded in April 2010, the three directors in the last year have received grants exceeding 10% of NROM shares currently outstanding.

The options replace 1.6 million warrants that the three directors received in 1999 tied to an incentive program designed to create value for shareholders. The three directors modified the terms of their original agreement in 2008, benefiting themselves by extending for 18 months the expiration date of 1.0 million warrants the three owned.

The remaining 600,000 warrants (with an exercise price of $.93 share) were due to expire last week. Cashless exercise of those warrants would have netted the three directors about 75,000 shares of NROM stock.

“ It’s shocking,” said Kevin McBride, a long-term investor in NROM who owns 967,500 shares. “Because they are the majority of the Board, they can turn a right to receive 75,000 shares into options for 1,800,000 shares with their three votes.”

“Ten years ago, these three men made an agreement with shareholders that they would benefit as shareholders benefited. When they failed to create meaningful value, they unilaterally extended, and have now expanded, this benefit for themselves.”

“I communicated my objection to Paul Mobley,” continued Mr. McBride. “He justified the grant as a replacement for salary give-ups he and his son have made. However, Paul and his son’s cash compensation have increased by 88% between 2000 and 2009, while the company’s non-restaurant sales have increased by only 27%. In fact, salaries, cash incentives and consulting payments to these three men exceeded 10% of the company’s total sales in 2009. That seems excessive to me.”

New “Say on Pay” Rules Give Shareholders More Rights

Last week the SEC enacted new rules requiring companies to regularly conduct a separate shareholder advisory vote to approve the compensation of executives. Smaller public companies are not immediately required to act on these rules. (To learn more, Google: wsj.com say on pay zweig)

“Despite the exemption, I call on Noble Roman’s Inc. to voluntarily give shareholders a ‘say on pay’ vote at the upcoming shareholder meeting. This is an especially relevant request given last week’s actions by both the company and the SEC,” said Mr. McBride.

Finally, Mr. McBride urged shareholders to consider the advice of legendary investor Benjamin Graham: “Poor management is often paid more than it deserves; but here if the stockholders bestir themselves at all, they should devote their efforts to changing the personnel rather than the pay.”

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Kevin mcbride
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