e10vq

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [x] No [ ]

As of November 10, 2003, 28,083,371 shares and 1,862,381 shares of the registrant’s Class A and Class B Common Stock, respectively, $.0001 par value, were outstanding.


PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS (unaudited)
	Consolidated Balance Sheets as of October 4, 2003 and December 28, 2002	3
	Consolidated Statements of Operations for the twelve and forty weeks ended October 4, 2003 and October 5, 2002	4
	Consolidated Statements of Cash Flows for the forty weeks ended October 4, 2003 and October 5, 2002	5
	Notes to Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18
ITEM 4.	CONTROLS AND PROCEDURES	18
PART II	OTHER INFORMATION
ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K	19

PANERA BREAD COMPANY
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share information)


				October 4, 2003			December 28, 2002

			ASSETS
Current Assets:
	Cash and cash equivalents			$	45,114		$	29,924
	Investments in government securities				9,039			4,102
	Trade accounts receivable, less allowance of $53 in 2003 and $33 in 2002				9,082			7,462
	Other accounts receivable				1,329			2,097
	Inventories				6,673			5,191
	Prepaid expenses				2,767			1,826
	Deferred income taxes				4,948			8,488
	Other				134			172

			Total current assets		79,086			59,262
Property and equipment, net					116,593			99,313
Other assets:
	Investments in government securities				—			5,047
	Goodwill				23,123			18,970
	Deposits and other				6,295			5,554
	Deferred income taxes				—			294

			Total other assets		29,418			29,865

			Total assets	$	225,097		$	188,440

			LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	5,499		$	5,987
	Accrued expenses				28,089			24,935
	Current portion of deferred revenue				1,116			1,403

			Total current liabilities		34,704			32,325
Deferred income taxes					1,510			—
Other long-term liabilities					1,495			262

			Total liabilities		37,709			32,587
Minority interest					3,660			2,197
Commitments and contingencies (Note E)
Stockholders’ equity:
	Common stock, $.0001 par value:
		Class A, 75,000,000 shares authorized; 28,185,439 issued and 28,076,439 outstanding in 2003; and 27,446,448 issued and 27,337,448 outstanding in 2002			3			3
		Class B, 10,000,000 shares authorized: 1,862,381 issued and outstanding in 2003 and 1,977,363 in 2002			—			—
	Treasury stock, carried at cost				(900	)		(900	)
	Additional paid-in capital				120,179			110,120
	Retained earnings				64,446			44,433

			Total stockholders’ equity		183,728			153,656

			Total liabilities and stockholders’ equity	$	225,097		$	188,440

The accompanying notes are an integral part of the consolidated financial statements.

PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except share and per share amounts)


					For the twelve weeks ended				For the forty weeks ended

					October 4, 2003		October 5, 2002		October 4, 2003			October 5, 2002

Revenues:
	Bakery-cafe sales				$	62,752	$	50,270	$	195,023		$	157,939
	Franchise royalties and fees					8,735		6,699		26,568			20,099
	Fresh dough sales to franchisees					12,541		8,502		39,618			26,712

		Total revenue				84,028		65,471		261,209			204,750
Costs and expenses:
	Cost of food and paper products					17,336		15,301		54,883			48,335
	Labor					19,165		14,776		59,672			46,959
	Occupancy					4,188		3,368		13,303			11,118
	Other operating expenses					8,737		6,528		27,365			21,112

		Total bakery-cafe expenses				49,426		39,973		155,223			127,524
	Fresh dough cost of sales to franchisees					10,809		7,975		34,875			24,749
	Depreciation and amortization					4,708		3,244		14,329			10,171
	General and administrative expenses					7,322		5,735		23,177			18,628
	Pre-opening expenses					307		259		834			791

		Total costs and expenses				72,572		57,186		228,438			181,863

Operating profit						11,456		8,285		32,771			22,887
Interest expense						7		11		36			25
Other expense, net						265		76		589			267
Minority interest						133		61		254			131

Income before income taxes and cumulative effect of accounting change						11,051		8,137		31,892			22,464
Income taxes						4,034		2,970		11,640			8,199

Income before cumulative effect of accounting change						7,017		5,167		20,252			14,265
Cumulative effect to December 28, 2002 of accounting change, net of tax benefit						—		—		(239	)		—

		Net income			$	7,017	$	5,167	$	20,013		$	14,265

Per share data:
		Basic earnings per common share:
			Before cumulative effect of accounting change		$	0.23	$	0.18	$	0.68		$	0.49
			Cumulative effect of accounting change			—		—		(0.01	)		—

				Net income	$	0.23	$	0.18	$	0.67		$	0.49

		Diluted earnings per common share:
			Before cumulative effect of accounting change		$	0.23	$	0.17	$	0.67		$	0.48
			Cumulative effect of accounting change			—		—		(0.01	)		—

				Net income	$	0.23	$	0.17	$	0.66		$	0.48

Weighted average shares of common and common equivalent shares outstanding
	Basic					29,895		29,072		29,666			28,834

	Diluted					30,794		30,094		30,398			29,902

The accompanying notes are an integral part of the consolidated financial statements.

PANERA BREAD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)


				For the forty weeks ended

				October 4, 2003			October 5, 2002

Cash flows from operations:
	Net income			$	20,013		$	14,265
	Adjustments to reconcile net income to net cash provided by operating activities:
		Cumulative effect of accounting change, net of tax			239			—
		Depreciation and amortization			14,329			10,171
		Tax benefit from exercise of stock options			5,710			5,183
		Deferred income taxes			5,481			2,943
		Minority interest			254			131
		Other			116			70
	Changes in operating assets and liabilities:
		Trade and other accounts receivable			(825	)		(2,676	)
		Inventories			(1,356	)		(1,095	)
		Prepaid expenses			(941	)		122
		Accounts payable			(488	)		153
		Accrued expenses			3,802			(1,171	)
		Deferred revenue			(259	)		31
		Other			209			(136	)

			Net cash provided by operating activities		46,284			27,991

Cash flows used in investing activities:
	Purchase of investments				—			(9,200	)
	Additions to property and equipment				(29,094	)		(20,838	)
	Acquisitions				(6,813	)		(3,267	)
	Increase in deposits and other				(746	)		(615	)

			Net cash used in investing activities		(36,653	)		(33,920	)

Cash flows from financing activities:
	Exercise of employee stock options				3,777			2,337
	Proceeds from note receivable				—			248
	Proceeds from issuance of common stock				573			720
	Investments by minority interest owner				1,209			686

			Net cash provided by financing activities		5,559			3,991

Net increase (decrease) in cash and cash equivalents					15,190			(1,938	)
Cash and cash equivalents at beginning of period					29,924			18,052

Cash and cash equivalents at end of period				$	45,114		$	16,114

The accompanying notes are an integral part of the consolidated financial statements.

The accompanying unaudited consolidated financial statements of Panera Bread Company and its subsidiaries (the “Company”) have been prepared in accordance with instructions to Form 10-Q, and therefore do not include all information and footnotes normally included in financial statements prepared in conformity with accounting principles generally accepted in the United States. They should be read in conjunction with the consolidated financial statements included in the Company’s Form 10-K/A for the fiscal year ended December 28, 2002.

The consolidated financial statements consist of the accounts of Panera Bread Company, its wholly owned subsidiaries Panera, LLC and Pumpernickel, Inc., and its indirect consolidated subsidiaries Pumpernickel Associates, LLC, Panera Enterprises, Inc., Artisan Bread, LLC, which has a majority interest in Cap City Bread, LLC operating 25 bakery-cafes, and Asiago Bread, LLC, which has a majority interest in 12 bakery-cafes. All intercompany balances and transactions have been eliminated in consolidation.

The accompanying unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair presentation of its financial position and results of operations for the interim periods. Interim results are not necessarily indicative of the results that may be expected for the entire year.

Certain reclassifications have been made to conform previously reported data to the current presentation.

In accordance with Statement of Financial Accounting Standards No. 123 (SFAS 123), “Accounting for Stock-Based Compensation,” as amended by SFAS 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an Amendment of SFAS 123,” the Company elected to follow the provisions of Accounting Principles Board Opinion No. 25 (APB 25), “Accounting for Stock Issued to Employees,” and provide the required pro forma disclosure in the footnotes to the financial statements as if the measurement provisions of SFAS 123 had been adopted. Accordingly, no compensation costs have been recognized in the Consolidated Statements of Operations for the stock option plans as the exercise price of stock options equals the market price of the underlying stock on the grant date. Had compensation costs for the Company’s stock option plans been determined under the fair value based method and recognition provisions of SFAS 123 at the grant date, the Company’s net income and earnings per share for the twelve and forty weeks ended October 4, 2003 and October 5, 2002 would have been as follows (in thousands, except per share amounts):


		For the twelve weeks ended						For the forty weeks ended

		October 4, 2003			October 5, 2002			October 4, 2003			October 5, 2002

Net income, as reported		$	7,017		$	5,167		$	20,013		$	14,265
Deduct:
	Compensation expense determined using Black-Scholes, net of tax		(743	)		(537	)		(1,959	)		(1,543	)

Pro forma net income		$	6,274		$	4,630		$	18,054		$	12,722

Net income per share:
	Basic, as reported	$	0.23		$	0.18		$	0.67		$	0.49
	Basic, pro forma	$	0.21		$	0.16		$	0.61		$	0.44
	Diluted, as reported	$	0.23		$	0.17		$	0.66		$	0.48
	Diluted, pro forma	$	0.20		$	0.15		$	0.59		$	0.43
Weighted average shares used in compensation:
	Basic		29,895			29,072			29,666			28,834
	Diluted		30,794			30,094			30,398			29,902

The effects of applying SFAS 123 in this pro-forma disclosure may not be representative of the effects on reported net income for the full fiscal year or for future periods.

Beginning December 29, 2002, the Company recognizes the future cost to comply with lease obligations at the end of a lease as it relates to tangible long-lived assets in accordance with the provisions of SFAS 143. A liability for the fair value of an asset retirement obligation along with a corresponding increase to the carrying value of the related long-lived asset is recorded at the time a lease agreement is executed. The Company amortizes the amount added to property and equipment and recognizes accretion expense in connection with the discounted liability over the life of the respective lease. The estimated liability is based on experience in closing bakery-cafes and the related external cost associated with these activities. Revisions to the liability could occur due to changes in estimated costs to close bakery-cafes or changes in estimated lease term.

Upon adoption of SFAS 143, the Company recorded a discounted liability of approximately $0.8 million, increased net property and equipment by approximately $0.4 million, and recognized a one-time cumulative effect charge of approximately $0.2 million (net of deferred tax benefit of approximately $0.1 million). The liability is included in other long-term liabilities in the Consolidated Balance Sheets. The effects on earnings from continuing operations before cumulative effect of accounting change for the twelve and forty weeks ended October 4, 2003 and October 5, 2002, assuming adoption of SFAS 143 as of December 30, 2001, were not material to net income or related per share amounts.

The Company is a prime tenant or guarantor for certain operating leases of four franchisee locations and 82 locations of the former Au Bon Pain Division, or its franchisees. The leases have terms expiring on various dates from November 30, 2003 to February 1, 2014, and the guarantees have a potential amount of future rental payments of approximately $41.2 million. The obligation from leases or guarantees will continue to decrease over time as these operating leases expire or are not renewed. As these guarantees were initiated prior to December 31, 2002, the Company has not recorded a liability for these leases or guarantees. Also, the Company has not had to make any payments related to the leases or guarantees. Au Bon Pain and the respective franchisees continue to have primary liability for these operating leases.

Company been required to repurchase the 25 bakery-cafes in operation at October 4, 2003 at the contractually determined value based on the minority interest owner’s right to sell, a payment of $5.8 million would have been required.

The Company uses a minority interest ownership structure to facilitate operation of its bakery-cafes in certain markets. After 5 years from a bakery-cafe opening, the Company and each minority interest owner have rights, which could, if exercised, permit/require the Company to purchase the minority interest owner’s interest in their respective bakery-cafe or region at a stated multiple of cash flow. The Company has not recorded a liability for these purchase rights. Had the Company been required to repurchase the 12 bakery-cafes in operation at October 4, 2003 at the contractually determined value based on the minority interest owners’ right to sell, a payment of $0.7 million would have been required.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except for per share data):


		For the twelve weeks ended				For the forty weeks ended

		October 4, 2003		October 5, 2002		October 4, 2003			October 5, 2002

Amounts used for basic and diluted per share calculations:
Income before cumulative effect of accounting change		$	7,017	$	5,167	$	20,252		$	14,265
Cumulative effect of accounting change, net of tax			—		—		(239	)		—

Net income		$	7,017	$	5,167	$	20,013		$	14,265

Weighted average number of shares outstanding – basic			29,895		29,072		29,666			28,834
Effect of dilutive securities:
	Employee stock options		899		1,022		732			1,068

Weighted average number of shares outstanding – diluted			30,794		30,094		30,398			29,902

Basic earnings per common share:
Before cumulative effect of accounting change		$	0.23	$	0.18	$	0.68		$	0.49
Cumulative effect of accounting change			—		—		(0.01	)		—

Net income		$	0.23	$	0.18	$	0.67		$	0.49

Diluted earnings per common share:
Before cumulative effect of accounting change		$	0.23	$	0.17	$	0.67		$	0.48
Cumulative effect of accounting change			—		—		(0.01	)		—

Net income		$	0.23	$	0.17	$	0.66		$	0.48

For the twelve weeks ended October 4, 2003 and October 5, 2002, options for 0.3 million shares were excluded in calculating diluted earnings per share as the exercise price exceeded fair market value and inclusion would have been antidilutive. For the forty weeks ended October 4, 2003 and October 5, 2002, options for 0.7 million shares and 0.1 million shares, respectively, were excluded in calculating diluted earnings per share, as the exercise price exceeded fair market value and inclusion would have been antidilutive.

The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating activities of the bakery-cafes owned by the Company, which includes the majority-owned bakery-cafes. The Company-owned bakery-cafes conduct business under the Panera Bread or Saint Louis Bread Company names. These bakery-cafes sell fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complementary products through on-premise sales.

The Franchise Operations segment is comprised of the operating activities of the franchise business unit which licenses qualified operators to conduct business under the Panera Bread Company name and also of the costs to monitor the operations of these bakery-cafes. Under the terms of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera Bread Company name.

The Fresh Dough Operations segment supplies fresh dough items and other proprietary sweet good items to both Company-owned and franchise-owned bakery-cafes. The fresh dough is sold to both Company-owned and franchised bakery-cafes at a cost equal to 27% of the retail value of the product. The sales and related costs to the franchise bakery-cafes are separately stated line items in the Consolidated Statements of Operations. The operating profit related to the sales to Company-owned bakery-cafes is classified as a reduction of the costs in the food and paper products line item on the Consolidated Statements of Operations.

Segment information for total assets and capital expenditures is not presented as such information is not used in measuring segment performance or allocating resources among segments.


			For the twelve weeks ended						For the forty weeks ended

			October 4, 2003			October 5, 2002			October 4, 2003			October 5, 2002

			(in thousands)
Revenues:
	Company bakery-cafe operations		$	62,752		$	50,270		$	195,023		$	157,939
	Franchise operations			8,735			6,699			26,568			20,099
	Fresh dough operations			20,052			14,590			63,453			43,266
	Intercompany sales eliminations			(7,511	)		(6,088	)		(23,835	)		(16,554	)

		Total Revenues	$	84,028		$	65,471		$	261,209		$	204,750

Segment operating profit:
	Company bakery-cafe operations		$	13,327		$	10,295		$	39,800		$	30,413
	Franchise operations			7,526			5,872			23,081			17,381
	Fresh dough operations			1,732			528			4,743			1,964

		Total segment operating profit	$	22,585		$	16,695		$	67,624		$	49,758

Total segment operating profit			$	22,585		$	16,695		$	67,624		$	49,758
Depreciation and amortization				(4,708	)		(3,244	)		(14,329	)		(10,171	)
Unallocated general and administrative expenses				(6,114	)		(4,907	)		(19,690	)		(15,909	)
Pre-opening expenses				(307	)		(259	)		(834	)		(791	)
Interest expense				(7	)		(11	)		(36	)		(25	)
Other expense, net				(265	)		(76	)		(589	)		(267	)
Minority interest				(133	)		(61	)		(254	)		(131	)

	Income before income taxes and cumulative effect of accounting change		$	11,051		$	8,137		$	31,892		$	22,464

On January 9, 2003, the Company purchased from a franchisee substantially all of the assets of four operating bakery-cafes as well as the area development rights for the Louisville and Lexington, Kentucky markets for a purchase price of $5.5 million. Of the purchase price, $5.0 million was paid in cash at the acquisition date and $0.5 million was paid, with interest, in cash six months from the acquisition date. The acquisition price was paid with cash on hand. The Consolidated Statements of Operations include the results of operations of the four operating bakery-cafes from the date of acquisition. The pro forma impact of the acquisition on prior periods is not presented, as the impact is not material to reported results. The Company allocated the purchase price to the assets acquired in the acquisition at their estimated fair values with the remainder allocated to goodwill as follows: $1.7 million to fixed assets, $0.1 million to inventories, and $3.7 million to goodwill.

On February 1, 2003, the Company purchased from a franchisee substantially all of the assets of one operating bakery-cafe, the furniture, fixtures, and equipment of two closed locations, and the area development rights for the Dallas market for a cash purchase price of $1.3 million with a commitment to purchase the furniture, fixtures, and equipment of an additional bakery-cafe when it is closed for approximately $0.2 million. The acquisition price was paid with cash on hand. The Consolidated Statements of Operations

include the results of operations of the one operating bakery-cafe from the date of acquisition. The pro forma impact of the acquisition on prior periods is not presented, as the impact is not material to reported results. The Company allocated the purchase price to the assets acquired in the acquisition at their estimated fair values with the remainder allocated to goodwill as follows: $0.9 million to fixed assets and $0.4 million to goodwill.

In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46 (FIN 46), “Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51.” The primary objective of this interpretation is to provide guidance on the identification of, and financial reporting for, entities over which control is achieved through means other than voting rights; such entities are known as variable-interest entities (VIE’s). This interpretation applies immediately to VIE’s created after January 31, 2003 and in the first fiscal year or interim period beginning after June 15, 2003, to VIE’s in which an enterprise held an interest prior to February 1, 2003. In October 2003, the FASB issued FASB Staff Position (FSP) No. FIN 46-6, “Effective Date of FASB Interpretation 46.” This interpretation deferred the effective date for applying FIN 46 to an interest held in a VIE or potential VIE that was created before February 1, 2003 until the end of the first interim or annual period ending after December 15, 2003, except if the company had already issued statements reflecting a VIE in accordance with FIN 46. The Company was not a party to any VIE’s created after January 31, 2003 and intends to adopt FIN 46 when required in fiscal 2003. The Company does not expect adoption of FIN 46 to have a significant impact on the Company’s financial statements.

In May 2003, the FASB issued SFAS 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.” This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires an issuer classify a financial instrument within its scope as a liability, or an asset in some circumstances. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except that certain provisions have been deferred pursuant to FSP No. FAS 150-3. There was no impact on the Company’s financial statements upon adoption in fiscal 2003.

On November 2, 2003, the Company purchased from a franchisee substantially all of the assets of twelve bakery-cafes, one of which is under construction, as well as the area development rights for the Toledo, Ohio and Ann Arbor, Michigan markets for a purchase price of approximately $14.1 million plus the assumption of certain liabilities including those associated with bakery-cafe construction. Of the purchase price, $13.4 million was paid in cash at the acquisition date and $0.7 million will be paid, with interest, four months from the acquisition date. The acquisition price was paid with cash on hand. The Consolidated Statements of Operations will include the results of operations from the operating bakery-cafes from the date of the acquisition. The pro forma impact of the acquisition on prior periods is not presented, as the impact is not material to reported results. After completion of its purchase price allocation, the Company expects a substantial portion of this allocation will be classified as goodwill as in previous acquisitions.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Panera Bread Company (including its wholly owned subsidiaries, Panera, LLC and Pumpernickel, Inc., and its indirect subsidiaries) may be referred to as the “Company,” “Panera Bread,” or in the first person notation of “we,” “us,” and “ours” in the following discussion. The term “Company-owned bakery-cafes” refers to Company-operated and majority-owned bakery-cafes in the following discussion.

The Company’s fiscal year ends on the last Saturday in December. The Company’s fiscal year consists of 13 four-week periods, with the first, second, and third quarters ending 16 weeks, 28 weeks, and 40 weeks, respectively, into the fiscal year.

The Company has included in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” information on franchised and system-wide comparable bakery-cafe sales increases and franchise and system-wide average weekly sales. Management believes inclusion of system-wide sales information, particularly average weekly sales, is useful in assessing consumer acceptance of the Company’s bakery-cafe concept as it measures the impact of both comparable sales and new stores. Franchised sales information also provides an understanding of the Company’s revenues as royalties from franchisees are based on their sales.

The Company’s revenues are derived from Company-owned bakery-cafe sales, fresh dough sales to franchisees, and franchise royalties and fees. Fresh dough sales to franchisees are the sales of dough products to our franchisees. Franchise royalties and fees include royalty income and franchise fees. The cost of food and paper products, labor, occupancy, and other operating expenses relate primarily to Company-owned bakery-cafe sales. The cost of fresh dough sales relates to the sale of fresh dough products and sweet goods to our franchisees. General and administrative, depreciation, and pre-opening expenses relate to all areas of revenue generation.

The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Company’s Consolidated Statements of Operations for the periods indicated. Percentages may not add due to rounding:


				For the twelve weeks ended						For the forty weeks ended

				October 4, 2003			October 5, 2002			October 4, 2003			October 5, 2002

Revenues:
	Bakery-cafe sales				74.7	%		76.8	%		74.7	%		77.1	%
	Franchise royalties and fees				10.4			10.2			10.1			9.8
	Fresh dough sales to franchisees				14.9			13.0			15.2			13.1

			Total revenue		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
	Bakery-cafe expenses (1):
		Cost of food and paper products			27.6	%		30.4	%		28.1	%		30.6	%
		Labor			30.5			29.4			30.6			29.7
		Occupancy			6.7			6.7			6.8			7.0
		Other operating expenses			13.9			13.0			14.0			13.4

			Total bakery-cafe expenses		78.8			79.5			79.6			80.7

	Fresh dough cost of sales to franchisees (2)				86.2			93.8			88.0			92.7
	Depreciation and amortization				5.6			5.0			5.5			5.0
	General and administrative expenses				8.7			8.8			8.9			9.1
	Pre-opening expenses				0.4			0.4			0.3			0.4

Operating profit					13.6			12.7			12.5			11.2
Interest expense					—			—			—			—
Other expense, net					0.3			0.1			0.2			0.1
Minority interest					0.2			0.1			0.1			0.1

Income before income taxes and cumulative effect of accounting change					13.2			12.4			12.2			11.0
Income taxes					4.8			4.5			4.5			4.0

Income before cumulative effect of accounting change					8.4			7.9			7.8			7.0
Cumulative effect to December 28, 2002 of accounting change, net of tax					—			—			0.1			—

			Net income		8.4	%		7.9	%		7.7	%		7.0	%

The following table sets forth certain information and other data relating to Company-owned and franchise operated bakery-cafes:


				For the twelve weeks ended						For the forty weeks ended

				October 4, 2003			October 5, 2002			October 4, 2003			October 5, 2002

Number of bakery-cafes:
	Company-owned (includes majority-owned):
		Beginning of period			144			123			132			110
		New bakery-cafes opened			5			3			15			16
		Acquired from franchisee (1)			—			—			5			3
		Bakery-cafes closed			—			(1	)		(3	)		(4	)

			End of period		149			125			149			125

	Franchise operated:
		Beginning of period			387			291			346			259
		New bakery-cafes opened			24			20			71			56
		Sold to company (1)			—			—			(5	)		(3	)
		Bakery-cafes closed			(2	)		—			(3	)		(1	)

			End of period		409			311			409			311

	System-wide:
		Beginning of period			531			414			478			369
		New bakery-cafes opened			29			23			86			72
		Bakery-cafes closed			(2	)		(1	)		(6	)		(5	)

			End of period		558			436			558			436

As of October 4, 2003, the total backlog of active additional franchise commitments in place was 423 bakery-cafes. We expect these bakery-cafes to open over the next ten years according to the timetable established in the ADA, with the majority opening in the next five to six years. The ADA requires a franchisee to develop a specified number of bakery-cafes on or before specific dates. If developers fail to develop bakery-cafes on schedule, the Company has the right to terminate the ADA and develop Company-owned locations or develop locations through new area developers in that market.

Increases in comparable bakery-cafe sales for the twelve and forty weeks ended October 4, 2003 and October 5, 2002 were as follows:

Comparable bakery-cafe sales exclude the closed locations and are based on sales for bakery-cafes that have been in operation for at least 18 four-week periods in the reporting period.

The increase in comparable sales for the twelve weeks ended October 4, 2003 increased at a slower rate than the increase in comparable sales for the twelve weeks ended October 5, 2002 as a result of several factors. These factors include the negative impact

of the power outage and related lack of safe drinking water and hurricane Isabel, and the impact of ROI based real estate decisions relating to new stores that negatively impacted existing store performance in 2003 compared to 2002. During the second quarter of 2003, the Company began to implement increased staffing and other initiatives that focused on quality and speed of customer service in Company-owned bakery-cafes. The implementation of these initiatives will occur on a trailing basis at franchised bakery-cafes, as the Company initially tests changes in Company-owned bakery-cafes before recommending changes to its franchise partners.

The increase in comparable sales for the forty weeks ended October 4, 2003 increased at a slower rate than the increase in comparable sales for the forty weeks ended October 5, 2002 as a result of the more difficult winter weather in the first quarter of 2003 compared to the first quarter of 2002 as well as the factors discussed above relating to the twelve weeks ended October 4, 2003 compared the twelve weeks ended October 5, 2002.

Total revenues for the twelve weeks ended October 4, 2003 increased 28.2% to $84.0 million compared to $65.5 million for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003 total revenues increased 27.5% to $261.2 million compared to $204.8 million for the forty weeks ended October 5, 2002. The growth in total revenues for the twelve and forty weeks ended October 4, 2003, as compared to the prior year, is primarily due to the opening of 129 new bakery-cafes since the end of the third quarter of 2002 as well as increases in system-wide average weekly sales (excluding closed locations) of 0.8% and 1.1% for the twelve and forty weeks, respectively.

Bakery-cafe sales for the twelve weeks ended October 4, 2003 for the Company increased 24.9% to $62.8 million from $50.3 million for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, bakery-cafe sales increased 23.5% to $195.0 million from $157.9 million for the forty weeks ended October 5, 2002. The increase in bakery-cafe sales is primarily due to the opening of 22 new Company-owned bakery-cafes since the end of the third quarter of 2002 and the 2.2% and 1.6% increase in comparable bakery-cafe sales for the twelve and forty weeks ended October 4, 2003, respectively. The average weekly sales per Company-owned bakery cafe (excluding closed locations) and the number of operating weeks for the twelve and forty weeks ended October 4, 2003 and October 5, 2002 are as follows:

Franchise royalties and fees rose 29.9% for the twelve weeks ended October 4, 2003 to $8.7 million from $6.7 million for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, franchise royalties and fees rose 32.3% to $26.6 from $20.1 million for the forty weeks ended October 5, 2002. The components of franchise royalties and fees are as follows (in thousands):

The increase in royalty revenue can be attributed primarily to the addition of 107 franchised bakery-cafes opened since October 5, 2002. Royalties are based on franchise sales. The average weekly sales per franchise operated bakery-cafe (excluding closed locations) and the number of operating weeks for the twelve and forty weeks ended October 4, 2003 and October 5, 2002 are as follows:

Fresh dough sales to franchisees increased 47.1% to $12.5 million for the twelve weeks ended October 4, 2003 from $8.5 million for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, fresh dough sales to franchisees increased 48.3% to $39.6 million from $26.7 million for the forty weeks ended October 5, 2002. The increase was primarily driven by the increased number of franchise bakery-cafes opened described previously as well as a shift in certain product being distributed through the fresh dough facility system rather than a third party.

The cost of food and paper products includes the costs associated with the fresh dough operations that sell fresh dough products to Company-owned bakery-cafes as well as the cost of food and paper products supplied by third party vendors and distributors. The costs associated with the fresh dough operations that sell fresh dough products to the franchised bakery-cafes are excluded and are shown separately as fresh dough cost of sales to franchisees in the Consolidated Statements of Operations. The cost of food and paper products decreased to 27.6% of bakery-cafe sales for the twelve weeks ended October 4, 2003, compared to 30.4% of bakery-cafe sales for the twelve weeks ended October 5, 2002. This decrease in the cost of food and paper products as a percentage of bakery-cafe sales is primarily due to the Company’s improved leveraging of its fresh dough manufacturing and distribution costs as it opens more bakery-cafes in fiscal 2003. For the twelve weeks ended October 4, 2003, there was an average of 32.9 bakery-cafes per fresh dough facility compared to an average of 28.4 for the twelve weeks ended October 5, 2002. Additionally, lower ingredient costs, including the benefits of our new sweet goods contract that commenced during the first quarter of fiscal 2003, further benefited food cost. For the forty weeks ended October 4, 2003, the cost of food and paper products decreased to 28.1% of bakery-cafe sales from 30.6% of bakery-cafe sales for the forty weeks ended October 5, 2002. The improvement in the cost of food and paper products as a percentage of bakery-cafe sales for the forty weeks ended October 4, 2003 is primarily due to the improved leveraging of our fresh dough operations in fiscal 2003. For the forty weeks ended October 4, 2003, there was an average of 32.2 bakery-cafes per fresh dough facility compared to an average of 27.2 for the forty weeks ended October 5, 2002.

Labor expense was $19.2 million, or 30.5% of bakery-cafe sales, for the twelve weeks ended October 4, 2003 compared to $14.8 million, or 29.4% of bakery-cafe sales, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, labor expense was $59.7 million, or 30.6% of bakery-cafe sales, compared to $47.0 million, or 29.7% of bakery-cafe sales, for the forty weeks ended October 5, 2002. The labor expense as a percentage of bakery-cafe sales increased between the twelve and forty weeks ended October 4, 2003 and the twelve and forty weeks ended October 5, 2002 as a result of our customer service initiatives in fiscal 2003 related to quality and speed of service as well as the expansion of our table delivery service testing and the continued commitment to training and staffing our bakery-cafes.

Occupancy costs were $4.2 million, or 6.7% of bakery-cafe sales, for the twelve weeks ended October 4, 2003 compared to $3.4 million, or 6.7% of bakery-cafe sales, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, occupancy costs were $13.3 million, or 6.8% of bakery-cafe sales, compared to $11.1 million, or 7.0% of bakery-cafe sales, for the forty weeks ended October 5, 2002. The occupancy cost as a percentage of bakery-cafe sales declined for the forty weeks ended October 4, 2003 due to the leveraging of these costs over higher sales volumes.

Other bakery-cafe operating expenses were $8.7 million, or 13.9% of bakery-cafe sales, for the twelve weeks ended October 4, 2003 compared to $6.5 million, or 13.0% of bakery-cafe sales, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, other bakery-cafe operating expenses were $27.4 million, or 14.0% of bakery-cafe sales, compared to $21.1 million, or 13.4% of bakery-cafe sales, for the forty weeks ended October 5, 2002. The increase in other bakery-cafe operating expenses for the twelve and forty weeks ended October 4, 2003 is primarily due to increased organizational costs for field management including recruiting and training as well as higher repair and maintenance costs.

For the twelve weeks ended October 4, 2003, fresh dough cost of sales to franchisees was $10.8 million, or 86.2% of fresh dough sales to franchisees, compared to $8.0 million, or 93.8% of fresh dough sales to franchisees, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, fresh dough cost of sales was $34.9 million, or 88.0% of fresh dough sales to franchisees, compared to $24.7 million, or 92.7% of fresh dough sales to franchisees, for the forty weeks ended October 5, 2002. The

decrease in the fresh dough cost of sales rate in fiscal 2003 was primarily due to favorable ingredient costs and the impact of the favorable change in our sweet goods supply agreement, which was completed during the first quarter of fiscal 2003.

Depreciation and amortization was $4.7 million, or 5.6% of total revenue, for the twelve weeks ended October 4, 2003 compared to $3.2 million, or 5.0% of total revenue, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, depreciation and amortization was $14.3 million, or 5.5% of total revenue, compared to $10.2 million, or 5.0% of total revenue, for the forty weeks ended October 5, 2002. The increase in depreciation and amortization as a percentage of total revenue for the twelve and forty weeks ended October 4, 2003 compared to the twelve and forty weeks ended October 5, 2002 is primarily due to increased capital expenditures.

General and administrative expenses were $7.3 million, or 8.7% of total revenue, and $5.7 million, or 8.8% of total revenue, for the twelve weeks ended October 4, 2003 and October 5, 2002, respectively. For the forty weeks ended October 4, 2003, general and administrative expenses were $23.2 million, or 8.9% of total revenue, compared to $18.6 million, or 9.1% of total revenue, for the forty weeks ended October 5, 2002. The decrease in general and administrative expenses as a percentage of total revenue for the twelve and forty weeks ended October 4, 2003 compared to the twelve and forty weeks ended October 5, 2002 is primarily the result of higher revenues in fiscal 2003, which help leverage general and administrative expenses.

Pre-opening expenses, which consist primarily of labor costs and food costs, of $0.3 million, or 0.4% of total revenue, and $0.8 million, or 0.3% of total revenue, for the twelve and forty weeks ended October 4, 2003, respectively, were consistent with the $0.3 million, or 0.4% of total revenue, and $0.8 million, or 0.4% of total revenue, of pre-opening expenses for the twelve and forty weeks ended October 5, 2002, respectively.

Operating profit for the twelve weeks ended October 4, 2003 increased to $11.5 million, or 13.6% of total revenue, from $8.3 million, or 12.7% of total revenue, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, operating profit increased to $32.8 million, or 12.5% of total revenue, from $22.9 million, or 11.2% of total revenue, for the forty weeks ended October 5, 2002. Operating profit for the twelve and forty weeks ended October 4, 2003 rose as a result of operating leverage that results from opening 129 bakery-cafes since the end of the third quarter of fiscal 2002 as well as the factors described above.

Minority interest represents the portion of the Company’s operating profit that is attributable to the ownership interest of our minority interest owner. The Company believes that providing a minority interest owner the opportunity to participate in the success of the bakery-cafe will enable the Company to attract and retain experienced and highly motivated minority interest owners, which will result in a better customer experience. The Company expects to use the minority interest ownership structure where appropriate as an alternative to Company-owned or franchised bakery-cafes to facilitate the development and operation of bakery-cafes.

The provision for income taxes increased to $4.0 million for the twelve weeks ended October 4, 2003 compared to $3.0 million for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, the provision for income taxes increased to $11.6 million from $8.2 million for the forty weeks ended October 5, 2002. The tax provision for the twelve and forty weeks ended October 4, 2003 and October 5, 2002 reflects a consistent combined federal, state, and local effective tax rate of 36.5%.

Income before cumulative effect of accounting change for the twelve weeks ended October 4, 2003 increased $1.9 million, or 35.8%, to $7.0 million, or $.23 per diluted share, compared to income before cumulative effect of accounting change of $5.2 million, or $0.17 per diluted share, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, income before cumulative effect of accounting change increased $6.0 million, or 42.0%, to $20.3 million, or $.67 per diluted share, compared to income before cumulative effect of accounting change of $14.3 million, or $0.48 per diluted share for the forty weeks ended on October 5, 2002. The increase in income before cumulative effect of accounting change in 2003 was primarily due to an increase in bakery-cafe sales, franchise royalties and fees, and fresh dough sales to franchisees as well as the leveraging of fresh dough facilities.

Effective December 29, 2002, the Company adopted the provisions of SFAS 143, “Accounting for Asset Retirement Obligations.” SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. This Statement requires the Company to record an estimate for costs of retirement obligations that may be incurred at the end of lease terms of existing bakery-cafes or other facilities. Upon adoption of SFAS 143, the Company recognized a one-time cumulative effect charge of approximately $0.2 million (net of deferred tax benefit of approximately $0.1 million), or $.01 per diluted share. For further information, see “Note C — Adoption of SFAS 143” in the notes to consolidated financial statements above.

Net income for the twelve weeks ended October 4, 2003 increased to $7.0 million, or $.23 per diluted share, compared to net income of $5.2 million, or $0.17 per diluted share, for the twelve weeks ended October 5, 2002. For the forty weeks ended October 4, 2003, net income increased $5.7 million, or 39.9%, to $20.0 million, or $.66 per diluted share, compared to net income of $14.3 million, or $0.48 per diluted share, for the forty weeks ended on October 5, 2002. The increase in net income for the twelve and forty weeks ended October 4, 2003 is consistent with the factors described above.

Cash and cash equivalents were $45.1 million at October 4, 2003 compared to $29.9 million at December 28, 2002. The Company’s principal requirements for cash are capital expenditures for the development of new bakery-cafes, for maintaining or remodeling existing bakery-cafes, for purchasing existing franchise bakery-cafes, for developing, remodeling and maintaining fresh dough facilities and for enhancements of information systems. For the forty weeks ended October 4, 2003, the Company met its requirements for capital with cash from operating activities.

Funds provided by operating activities for the forty weeks ended October 4, 2003 were $46.3 million compared to $28.0 million for the forty weeks ended October 5, 2002. Funds provided by operating activities increased primarily as a result of increases in net income, depreciation and amortization, tax benefit from exercise of stock options, deferred income taxes, and accrued expenses.

The Company invested $9.1 million in United States Treasury Notes and Mortgage Backed Government Notes. Investments are classified as short-term or long-term in the accompanying consolidated balance sheets based upon their stated maturity dates. As of October 4, 2003, all investments are classified as held-to-maturity as the Company has the intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums to maturity, which approximates fair value at October 4, 2003.

Total capital expenditures of $35.9 million for the forty weeks ended October 4, 2003 were primarily related to the opening of 15 Company-owned bakery-cafes, the construction of 3 fresh dough facilities, the maintaining or remodeling of existing bakery-cafes and fresh dough facilities, and the purchase of five bakery-cafes and the development rights from our franchisees in the Louisville/Lexington, Kentucky and Dallas, Texas markets. Capital expenditures for the forty weeks ended October 4, 2003 were primarily funded from cash generated by operating activities. Total capital expenditures of $24.1 million for the forty weeks ended October 5, 2002 were primarily related to the opening of 16 Company-owned bakery-cafes, the construction of 2 fresh dough facilities, the maintenance and remodeling of existing bakery-cafes and fresh dough facilities, and the acquisition of three operating bakery-cafes, one bakery-cafe under construction, and the area development rights for the Jacksonville, Florida market.

In December 2000, the Company entered into a three-year revolving credit agreement that allows borrowings up to $10.0 million at LIBOR plus 1.0% (approximately 2.2% at October 4, 2003). As of October 4, 2003, the Company had $9.7 million available under the line of credit with $0.3 million used for standby letters of credit to collateralize premium and claim obligations for the workers’ compensation program. The Company was in compliance with all covenants associated with this agreement as of October 4, 2003. The Company intends to enter into a three-year revolving line of credit agreement by the end of fiscal 2003 allowing borrowings up to $10.0 million.

Financing activities provided $5.6 million for the forty weeks ended October 4, 2003, which included $3.8 million from the exercise of stock options and $1.2 million resulting from capital investments by our minority interest owner. The financing activities for the forty weeks ended October 5, 2002 provided $4.0 million, which included $2.3 million from the exercise of stock options, $0.7

million from the issuance of common stock under employee benefit plans, $0.2 million in proceeds on payment of a note receivable from a minority interest owner, and $0.7 million resulting from capital investments by our minority interest owner.

The Company had working capital of $44.4 million at October 4, 2003 and $26.9 million at December 28, 2002. The Company has experienced no liquidity difficulties and has historically been able to finance its operations through internally generated cash flow, cash from the exercise of employee stock options, and, when necessary, borrowings under its revolving line of credit.

The Company anticipates total capital expenditures for fiscal year 2003 of approximately $62 to $65 million principally for the opening of approximately 28 new Company-owned bakery-cafes, the acquisition from franchisees of seventeen bakery-cafes in the Louisville/Lexington, Kentucky, Dallas, Texas, Toledo, Ohio, and Ann Arbor, Michigan markets, the construction of three fresh dough facilities, the maintaining and remodeling of existing bakery-cafes, and the remodeling and expansion of existing fresh dough facilities. The Company expects 2003 new bakery-cafes will require, on average, an investment per bakery-cafe (excluding pre-opening expenses which are expensed as incurred) of approximately $0.8 million, which is net of estimated landlord allowance. The Company expects to fund these expenditures principally through internally generated cash flow and cash from the exercise of employee stock options, supplemented, where necessary, by borrowings on its revolving line of credit.

Our capital requirements, including development costs related to the opening or acquisition of additional bakery-cafes and fresh dough facilities and remodeling expenditures, have and will continue to be significant. Our future capital requirements and the adequacy of available funds will depend on many factors, including the pace of expansion, real estate markets, site locations and the nature of the arrangements negotiated with landlords. The financial success or lack of success on the part of our franchisees and minority interest owners could also affect our ability to fund our capital requirements. We believe that our cash flow from operations supplemented, where necessary, by borrowings on our revolving line of credit, and the exercise of employee stock options, will be sufficient to fund our capital requirements for the foreseeable future.

Matters discussed in this report, including any discussion, express or implied, of the Company’s anticipated growth, operating results, and future earnings per share, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The statements, identified by the words “believe”, “positioned”, “estimate”, “project”, “target”, “continue”, “will”, “intend”, “expect”, “future”, “anticipates”, and similar expressions, express management’s present belief, expectations or intentions regarding the Company’s future performance. The Company’s actual results could differ materially from those set forth in the forward-looking statements due to known and unknown risks and uncertainties and could be negatively impacted by a number of factors. These factors include but are not limited to the following: the availability of sufficient capital to the Company and the developers party to franchise development agreements with the Company; variations in the number and timing of bakery-cafe openings; public acceptance of new bakery-cafes; competition; national and regional weather conditions; changes in restaurant operating costs, particularly food and labor; and other factors that may affect retailers in general. These and other risks are discussed from time to time in the Company’s SEC reports, including its Form 10-K/A for the year ended December 28, 2002.

There were no material changes in the Company’s critical accounting policies since the end of the most recent fiscal year. For further information, see the “Critical Accounting Policies & Estimates” section of Item 7 of the Company’s Annual Report on Form 10-K/A for the year ended December 28, 2002.

The Company, pursuant to an agreement with its former president as a minority interest owner, is developing and managing up to 50 bakery-cafes in the Northern Virginia and Central Pennsylvania markets. After October 2006, the Company and the minority interest owner each have rights which could, if exercised, permit/require the Company to purchase the bakery-cafes at contractually determined values based on multiples of cash flows. The Company has not recorded a liability for these purchase rights. Had the Company been required to repurchase the 25 bakery-cafes in operation at October 4, 2003 at the contractually determined value based on the minority interest owner’s right to sell, a payment of $5.8 million would have been required.

No material changes have taken place in the quantitative and qualitative information about market risk since the end of the most recent fiscal year. For further information, see Item 7A of the Company’s Annual Report on Form 10-K/A for the year ended December 28, 2002.

Evaluation of disclosure controls and procedures. Our chief executive officer and chief financial officer have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-14(c) and 15d-14(d) under the Securities and Exchange Act of 1934) as of October 4, 2003. Based on that review, they have concluded that, as of such date, our disclosure controls and procedures were effective to ensure that material information relating to us would be made known to them.

Changes in internal controls. There were no significant changes in our internal controls or, to the knowledge of our chief executive officer and chief financial officer, in other factors that could significantly affect our internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses, during our most recent fiscal quarter.


Exhibit No.		Description

10.1		Form of Panera, L.L.C. Confidential and Proprietary Information and Non-Competition Agreement executed by Senior Vice Presidents

31.1		Certification by Chief Executive Officer

31.2		Certification by Chief Financial Officer

32		Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer and Chief Financial Officer

Form 8-K (items 7 and 9) filed on July 24, 2003, with respect to comparable store sales and average weekly sales.

Form 8-K (item 9) filed on August 1, 2003, announcing the webcast presentation at Adams, Harkness, & Hill’s 23rd Annual Summer Seminar.

Form 8-K (item 9) filed on August 7, 2003, announcing its second quarter earnings.

Form 8-K/A (items 7 and 12) filed on August 7, 2003, amending its second quarter earnings filing.

Form 8-K (items 7 and 12) filed on August 21, 2003, with respect to comparable store sales and average weekly sales.

Form 8-K (item 9) filed on September 15, 2003, announcing the webcast presentation at the Banc of America Securities 33rd Annual Investment Conference.

Form 8-K (items 7, 9, and 12) filed on September 18, 2003, with respect to comparable store sales and average weekly sales.

Form 8-K (item 9) filed on September 29, 2003, announcing the webcast presentation at the RBC Capital Markets Consumer Conference 2003.

Form 8-K (items 7 and 9) filed on October 2, 2003, reaffirming its third quarter earnings guidance.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


EXHIBIT
NUMBER		DESCRIPTION

10.1		Form of Panera, L.L.C. Confidential and Proprietary Information and Non-Competition Agreement executed by Senior Vice Presidents

31.1		Certification by Chief Executive Officer

31.2		Certification by Chief Financial Officer

32		Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer and Chief Financial Officer

20 EX-10.1 3 c81073exv10w1.htm EX-10.1 CONFIDENTIAL AND PROPIETARY INFORMATION exv10w1

Form of
PANERA, L.L.C.
CONFIDENTIAL AND PROPRIETARY INFORMATION
AND NON-COMPETITION AGREEMENT

I, _______________, in consideration of the offer of employment to me by Panera, L.L.C. (“Panera” and/or “Company”) or to continue employment with Panera, as the case may be, and the compensation and other consideration that may hereafter be paid to me, agree to the following:

I warrant that I am free to enter into the terms of this Panera, L.L.C. Confidential And Proprietary Information And Non-Competition Agreement (“Agreement”) and that I have no obligations inconsistent with unrestrained employment by Panera and I further represent and warrant that my performance of all the terms of this Agreement and as an employee of Panera does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by Panera. Moreover, I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict herewith.

I understand and agree that nothing in this Agreement or any discussions I have had with Panera or any of its representatives shall be construed to give me any right or assurance of continued employment by Panera; and that my employment relationship with Panera is terminable at will, with or without notice, with or without reason, by either Panera or me.

I agree that during the term of my employment with Panera I will not engage in any other employment, occupation, consulting or other business activity related to the business in which Panera is now involved or becomes involved during the term of my employment, nor will I engage in any other activities that conflict with my obligations to Panera, including, but not limited to, soliciting franchisees or potential franchisees for personal gain and/or benefit.

4.1 I shall keep confidential the terms of this Agreement. A breach of this confidentiality undertaking shall relieve the Company of any of its undertakings and obligations set forth herein.

4.2 The provisions of subsection 4.1 notwithstanding, it shall not be deemed a violation of my duty to keep the terms hereof confidential should:

(i) disclosure be compelled by applicable law or by order of either a court of competent jurisdiction or governmental or administrative authority.

(ii) disclosure of this Agreement be made by me to members of my immediate family, or to professionals consulted by me for advise regarding this Agreement, including, without limitation, lawyers and certified public accountants; provided that any person to whom such disclosure is authorized shall agree to be bound by the terms of paragraph 4.

5.1 I understand and acknowledge that in the course of my employment, I have received and/or will receive and/or may receive and/or have access to certain “Confidential Information” (as defined below) of Panera. I hereby acknowledge that such Confidential Information constitutes a valuable and proprietary asset of Panera which Panera desires to protect.

5.2 For purposes of this Agreement, “Confidential Information” shall include, but not be limited to, the following: this Agreement; trade secrets; operating techniques, procedures and methods; product specifications; customer lists;

account information; price lists; discount schedules; budgets, correspondence with customers, vendors, competitors, employees, partners, franchisees or any other entity or person; drawings; software; samples; leads from any source; marketing techniques; procedures and methods; employee lists; internal financial reports (including, but not limited to, internal sales and/or profit and loss reports) of the Company and its affiliates and/or franchisees; sourcing lists; and recruiting lists; and any other such proprietary information, but shall not include any such information which has become generally known to or available for use by the public other than by my act(s) or omission(s).

5.3 I agree that during the term of this Agreement and at any time thereafter, I will not, without the authorization of Panera: (i) disclose any Confidential Information to any person or entity for any purpose whatsoever; or (ii) make use of any Confidential Information for my own purposes or for the benefit of any other person or entity, other than Panera, and it is expressly understood and agreed that this prohibition shall include not using any such Confidential Information in competing with Panera at any time.

6.1 I covenant and agree that I will not engage in any “Competitive Activity” (as defined below) at any time during my employment with the Company and/or within the fifty-two (52) week period following the date of my termination from the Company for any reason or no reason.

(i) being employed by, or directly or indirectly, advising, consulting in, or acting in any way as an agent for any company listed on Attachment A (the “Listed Competitors”); or

(ii) directly or indirectly engaging in, being employed by, advising, consulting in, or acting in any way as an agent for any entity engaged, in whole or in part, in any retail food establishment (including any restaurant or bakery, but excluding any exclusively based pizza concept) in which any of the following categories constitutes more than twenty percent (20%) of its revenues (an “Other Competitor”): (a) bakery goods and breads; (b) sandwiches, soups and/or salads, other than those ordered through a wait person taking orders at a table (the term “sandwiches” shall not include hamburgers); or (c) coffee and coffee-based drinks; as well as any business (without regard to revenue) that manufactures, wholesales and/or distributes fresh or frozen dough or bakery products which is or may be competitive with or adverse to the Company’s business and which is within a 100 mile radius of where the Company is engaged in business or where the Company is attempting to engage in business or where the Company may reasonably be expected to engage in business within the 12 months immediately following my termination; or

(iii) providing any services, directly or indirectly, to any division or direct or indirect parent company of any Listed Competitor (including the parent companies listed on Attachment A), or any Other Competitor, or to any other affiliated company of a Listed Competitor or Other Competitor; other than any entity that owns a minority interest in a Listed Competitor or Other Competitor solely as a passive investor, without any involvement in the management of such Listed Competitor or Other Competitor; or

(iv) having, or acquiring any interest in (whether as proprietor, partner, stockholder, consultant, officer, director, or any type of principal whatsoever) in any Listed Competitor, Other Competitor or in any division, or direct or indirect parent company of any Listed Competitor or Other Competitor, except that the direct or indirect ownership of five percent (5%) or less of the stock of a company whose shares are listed on a national securities exchange or are quoted on the National Association of Securities Dealers Automated Quotation System shall not be deemed having or acquiring any such interest; or

(v) directly or indirectly being employed by, advising, consulting in, or acting in any way as an agent for any entity or individual: (a) which is a franchisee of the Company, or (b) which was a franchisee of the Company at any time within the twelve (12) months immediately prior to my termination from the Company, or (c) which the Company is and/or was attempting to secure as a franchisee at any time within the twelve (12) immediately prior to my termination from the Company, or (d) which the Company may reasonably be expected to secure as a franchisee at any time within the twelve (12) months immediately following my termination or (e) which is or was an equity owner of 10% or more of a Company franchisee; or

(vi) having, or acquiring any interest in (whether as proprietor, partner, stockholder, consultant, officer, director, or any type of principal whatsoever) any entity: (a) which is a franchisee of the Company, or (b) which was a

franchisee of the Company at any time within the twelve (12) months immediately prior to my termination from the Company, or (c) which the Company is and/or was attempting to secure as a franchisee at any time within the twelve (12) months immediately prior to my termination from the Company, or (d) which the Company may reasonably be expected to secure as a franchisee at any time within the twelve (12) months immediately following my termination, or (e) which includes an entity or individual equity owner that is or was an equity owner of 10% or more of a Company franchisee; except that the direct or indirect ownership of five percent (5%) or less of the stock of a company whose shares are listed on a national securities exchange or are quoted on the National Association of Securities Dealers Automated Quotation System shall not be deemed having or acquiring any such interest.

6.3 Both during the term of my employment with the Company and at any time within the twenty-four (24) month period following my termination from the Company for any reason or no reason, I hereby agree not to directly or indirectly solicit or otherwise attempt to induce, influence, or encourage any employee and/or independent contractor and/or consultant and/or supplier and/or franchisee of the Company to terminate and/or modify in any way his/her and/or its employment or other such business relationship with the Company.

6.4 For purposes of Section 6, references to “the Company’s business” and/or “where the Company is engaged in business” and/or “where the Company is attempting to engage in business” and/or “where the Company may reasonably be expected to engage in business”, shall mean any and/or all current and/or future franchisee operation(s) as well as any current and/or future Company operation(s).

6.5 At any time I may request a waiver, in whole or in part, of Section 6 by notifying the Company in writing of my request. Within 15 days of my providing the Company with relevant information pertaining to such a waiver request and my providing such written information as the Company may request regarding the potential violation of these Covenants Not To Compete), the Company, through the Chief Executive Officer and/or his/her designee, will consider such a request and communicate with me.

7.1 Upon the occurrence of a “Separation Event”, as defined below, and provided I comply with all of the obligations contained in this Agreement (including, but not limited to Section 6), Panera agrees to: (i) pay me fifty-two (52) weeks of my “Base Pay” as defined in Section 7.2 below; (ii) at my option, continue my health and dental insurance for this same fifty-two (52) week period, with then existing employee premium payments (if any) to be deducted from my Separation Pay, with COBRA notification to follow; (iii) at my option, allow me to make my lawful contribution(s) to Panera’s then existing 401K plan for this same fifty-two (52) week period.

7.2 “Base Pay” shall mean my annualized base salary at the time of the “Separation Event” as pre-established by the Company, plus my annual car allowance, if applicable. Unless specifically mentioned in the preceding sentence, Base Pay shall not include any bonus, incentive compensation (including, but not limited to, stock options) or other benefits or allowances I may otherwise be entitled to receive as of the effective date of the Separation Event. If no base salary has been pre-established by the Company, then Base Pay shall mean my previous year’s annualized base salary as reflected in my most recent Form W-2 from Panera, plus my annual car allowance, if applicable. Unless specifically mentioned in the preceding sentence, excluded from this calculation of my base salary (and, accordingly, to be subtracted from my prior year’s Form W-2) are any bonuses, incentive compensation (including, but not limited to, stock options) or other benefits or allowances he received in the prior year.

7.3 Panera agrees that the above described Separation Pay shall be made in substantially equal installments following my termination and disbursement shall be on the dates on which I would have received his regular salary payments.

7.4 The above described Separation Pay will be reduced (dollar for dollar, or the equivalent thereof) solely by any business compensation and/or benefits I receive and/or earn during the severance period from any business source, including, without limitation, salary, bonus(es), benefits, consulting fees, income from self-employment, stocks, stock options, equity rights, or otherwise (for purposes of this Section 7.4 hereinafter “compensation and/or benefits”), other than (i) from Panera or (ii) from the sale of Panera equity. For purposes of this Section 7.4, “compensation and/or benefits” as above defined shall not include inheritances, income received at any time from passive investments and/or income received from active investments provided such active investments are in existence prior to my termination and are otherwise in compliance with this Agreement. I shall promptly notify Panera of any and all such compensation and/or benefits. In the event the severance benefits then payable are less than the dollar for dollar compensation and/or benefits (or the equivalent thereof) I receive and/or earn during fifty-two (52) week period following the Separation Event, I shall immediately pay the Company the difference up to the total value of the severance benefits.

7.5 Panera shall have no obligation to pay the above described Separation Pay or any other compensation to me
if:

(ii) I fail to comply with the all of my obligations contained in this Agreement.

7.6 For purposes of this Agreement, a “Separation Event” shall mean and be limited to the termination of my employment with Panera other than (i) by Panera for cause (as defined below), (ii) as a result of my death or permanent disability (unless termination for a disability is pursuant to Section 7.8 below), or (iii) by my voluntary separation of services and employment with, or resignation from, Panera.

7.7 For purposes of this Agreement, “cause” shall include, for example, but is not limited to, dishonesty; conviction of a felony or other crime involving moral turpitude; willful misconduct; gross dereliction and/or gross neglect of duties; a material breach of the terms of this Agreement which continues uncured for fifteen (15) days after Panera has given written notice to me specifying in reasonable detail the material breach; or conflict of interest; in each case determined in good faith by Panera consistent with the examples set forth herein.

7.8 Panera may terminate my employment if, at any time during my employment, I become disabled so that I am unable to perform the essential functions of my employment, with reasonable accommodation, for a period of ninety (90) days in the aggregate during any 180-day period. The determination of my disability for purposes of this Section 7.8 shall be made by a qualified physician acceptable to both parties. In the event that Panera and I are unable to agree upon a qualified physician, each party shall select a qualified physician, and in the event those two physicians are unable to agree upon a determination as to my disability, a third neutral physician (“Neutral Physician”) acceptable to the parties shall be selected. The determination of disability by the Neutral Physician shall be final and binding for purposes of this Agreement. In the event my employment is terminated pursuant to this Section 7.8, said termination shall be deemed a “Separation Event” pursuant to Section 7.6 entitling me to “Separation Pay”, provided I comply with the obligations contained in this Agreement, including Section 7 and its subparts. In addition to any reductions in Severance Pay provided for in Section 7.4, any Severance Pay made pursuant to this Section 7.8 shall also be offset dollar for dollar by any payments made in the aggregate to me under Panera’s then existing Salary Continuation and/or Long-Term Disability Plan(s).

7.9 If I shall voluntarily terminate my employment with, or resign from, the Company I shall provide the Company at least sixty (60) calendar days’ prior written notice thereof and I will be expected to continue to perform my duties consistent with the Company’s good faith expectations up to the date of my voluntary termination or resignation.

7.10 All severance payments required to be made by Panera pursuant to this Agreement to me shall be subject to the withholding of such amounts, if any, relating to tax (including federal and state withholding, social security and other applicable taxes) and other payroll deductions Panera may reasonably determine it should withhold pursuant to applicable law or regulation or agreement.

7.11 In addition to my other obligations contained in this agreement, in order to receive any severance benefits as provided above, I shall voluntarily agree to and sign at or about the time of my termination a full and complete release in the form appended hereto as Attachment B. It is agreed and understood that prior to the execution by me of Attachment B, the Company may modify Attachment B for the sole purpose of complying with any changes in the law.

When I leave the employ of Panera, I will deliver to Panera any and all drawings, notes, memoranda, specifications, devices, formulas, and any other documents pertaining to Panera and/or Panera’s business, including, but not limited to, computer files, together with all copies thereof, and any other material containing or disclosing any Confidential Information as defined in Section 5 above (collectively “such Documents”). The above shall include any and all such Documents contained on, for example, a home computer system. I further agree not to retain in any way any such Documents, and I will, for example, first return such Documents and then delete such Documents from any home computer system. I further agree that any property situated on Panera’s premises and/or owned by Panera, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Panera personnel at any time with or without notice.

Except as herein otherwise provided, any benefits arising out of or connected with my employment shall cease as of the effective date of a Separation Event or other termination of active employment, as applicable. The foregoing shall not relieve Panera of its obligations under the law pertaining to my benefits following the effective date of a Separation Event or other termination of employment.

I acknowledge that Panera’s remedy at law for a breach of Sections 4, 5, 6 and 8 of this Agreement would be inadequate and I hereby expressly agree that Panera shall be entitled to apply to any court, having jurisdiction, for an injunction restraining me in the event of a breach, actual or threatened, of the covenants contained in this Agreement without the necessity of proof of actual damages. Such right shall be in addition to any other remedies provided for herein or otherwise available at law or equity. I further waive any requirement that a bond be posted or that irreparable damage be demonstrated as a condition to any injunctive relief.

Any controversy or claim arising out of or relating to my employment with Panera (including, but not limited to, applicable state and/or federal law), this Agreement, or the breach hereof (“claims”), except for claims which may be enforced pursuant to Section 10, shall be settled exclusively by arbitration before a single arbitrator which shall be held in the City of Boston, in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The provisions hereof shall be a complete bar and defense to any suit, action or proceeding instituted in any federal, state or local court or before any administrative tribunal with respect to any matter which is arbitrable as herein set forth. The provision of this section with respect to arbitration shall survive the termination or expiration of this Agreement. Nothing herein contained shall be deemed to give any arbitrator any authority, power, or right to alter, change, amend, modify, add to, or subtract from any provisions of this Agreement the arbitrator shall have no authority to award punitive damages or attorney’s fees to any party. The decision of the arbitrator shall be final and conclusive. Judgment on an award rendered by the arbitrator may be entered in any court of competent jurisdiction.

Any notices required or permitted hereunder shall be given to the appropriate party at the address specified below or at such other address as the party shall specify in writing. Such notice shall be deemed given upon personal delivery to the appropriate address or if sent by certified or registered mail, three (3) days after the date of mailing.

I agree that I will advise any prospective employer of the covenants and restrictions of this Agreement before accepting any offer from another employer and such notification shall not be a breach of Section 4.1.

This Agreement and all obligations of Panera hereunder including, but not limited to, any Severance obligation, shall terminate upon my death. In the event of a termination upon my death, monies or compensation owed by Panera to me up to the date of termination shall be paid to my estate or designee.

15.1 Except as limited by Section 11 above, I agree and consent that this Agreement and any dispute arising hereunder shall be governed by the laws of the Commonwealth of Massachusetts and its applicable courts shall have jurisdiction over such matters; and I agree and consent to waive trial by jury in any action or proceeding between the parties.

15.2 No waiver by Panera of any breach of this Agreement shall be a waiver of any preceding or succeeding breach. No waiver by Panera of any right under this Agreement shall be construed as a waiver of any other right. Panera shall not be required to give notice to enforce strict adherence to all terms of this Agreement.

15.3 In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein, and each provision of this Agreement shall, if necessary, be deemed to be independent of each other and each supported by valid consideration. If moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

15.4 To the extent necessary to provide Panera with the full and complete benefit of this Agreement, the provisions in this Agreement and my obligations hereunder shall survive the termination of this Agreement and shall not be affected by such termination. The provisions of this Agreement shall also survive the assignment of this Agreement by Panera to any successor in interest or other assignee.

15.5 This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Panera, its successors, and its assigns.

15.6 The captions and headings throughout this Agreement are for convenience and reference only, and they shall in no way be held or deemed to define, modify or add to the meaning, scope or intent of any provision of this Agreement.

15.7 This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

15.8 This Agreement may be executed simultaneously in any number of counterparts, each of which when so executed and delivered shall be deemed to be an original but all of which counterparts shall together constitute but one agreement.

15.9 By signing below, I acknowledge receiving a copy of this Agreement; I acknowledge and agree that I am entering into this Agreement voluntarily and of my own free will; and I acknowledge and agree that I have not been coerced or suffered any duress in order to induce me to enter into this Agreement.

I acknowledge that I have been expressly advised by Panera to review this Agreement with an attorney prior to executing it.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND THE MEANING OF ITS VARIOUS TERMS AND THE CONSEQUENCES OF SIGNING THIS AGREEMENT.

I HAVE BEEN GIVEN MORE THAN REASONABLE TIME TO CONSIDER AND ACCEPT THE CONDITIONS OF THIS AGREEMENT.

NOTE: The following lists are not intended to include all of Panera’s competitors or their affiliates, but are merely illustrative.

Atlanta Bread Company
Au Bon Pain, ABP Corporation
Bruegger’s Bagel Bakeries
Cosi, Inc.
Corner Bakery
Einstein Bros.
Great Harvest Bread Co.
Krispy Kreme
La Brea Bakery
la Madeleine French Bakery and Café
Montana Mills Bread Company, Inc.
Schlotzsky’s, Inc.
Starbucks Corporation
Tim Hortons

Compass Group plc
Bruegger’s Corporation
Brooker International, Inc.
Great Harvest Franchising, Inc.
Krispy Kreme Doughnut Corporation
IAWS plc
Groupe Le Duff

I, ____________, of ____________, ____________, for good and adequate consideration (including the consideration described in the attached Agreement), do hereby release and absolutely and forever discharge Panera, L.L.C., its owners, predecessors, successors, affiliates, assigns, officers, employees, franchisees, insurers, attorneys, investors and agents (hereinafter “Panera”), from any and all suits, claims, demands, debts, sums of money, damages, interest, attorneys’ fees, expenses, actions, causes of action, judgments, accounts, promises, contracts, agreements, and any and all claims in law or in equity, whether now known or unknown, which I ever had, now have, or which I, my heirs, executors, administrators or assigns, hereafter can, shall or may have against Panera arising from any events occurring from the beginning of time to this date, including, without limitation of the foregoing generality, all of same arising directly or indirectly out of, in connection with and/or in any manner relating to my employment with and/or separation from Panera, including, but expressly not limited to, any claims which I may have to recover damages of any kind, including back pay, front pay, damages asserted for physical and emotional injuries, or any claim to reinstatement and/or employment, or any claims, actions, complaints or charges brought by me or on my behalf or which could have been brought by me or on my behalf under the Employment Retirement Income Security Act of 1974 (“ERISA”), the Americans with Disabilities Act (“ADA”), Title VII of the Civil Rights Act, 42 U.S.C. §§2000(e) et seq., the Age Discrimination in Employment Act (“ADEA”) or under any other federal, state, municipal, city, town or common law.

I further waive my right to any monetary recovery should any federal, state, or local administrative agency pursue any claim(s) on my behalf arising out of or related in any way to my employment with Panera and/or separation from employment with Panera.

1. This General Release is a part of an Agreement between me and Panera that is written in a manner which I understand and which entitles me to receive money and other things of value to which under my employment arrangement I would not have received apart from that Agreement.

2. By this General Release, Panera has given me written notice to consult an attorney and I have been given the opportunity to consult with counsel of my own choosing.

3. I have been given adequate time (including in excess of 21 days) to consider the agreement before signing it, including this General Release.

4. I have the right to revoke this General Release within eight (8) days of signing it by notifying Scott G. Blair, Esq., 42 Charles Street, Hingham, Massachusetts 02043 in writing of my intention to do so.

5. By signing this General Release, I understand that I am waiving any rights or claims arising under ERISA, ADA, ADEA, TITLE VII or under any other federal, state, municipal, city, town or common law.

I acknowledge that the execution of this General Release is my own free, voluntary and knowing act and deed.

EX-31.1 4 c81073exv31w1.htm EX-31.1 CERTIFICATION BY CHIEF EXECUTIVE OFFICER exv31w1

I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended October 4, 2003 of Panera Bread Company;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the periods covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

EX-31.2 5 c81073exv31w2.htm EX-31.2 CERTIFICATION BY CHIEF FINANCIAL OFFICER exv31w2

I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended October 4, 2003 of Panera Bread Company;

(a)

(b)

(c)

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Panera Bread Company on Form 10-Q for the period ended October 4, 2003, as filed with the Securities and Exchange Commission, we, Ronald M. Shaich, Chief Executive Officer, and Mark E. Hood, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

The Quarterly Report fully complies with the requirements of Section 13(a) of the Securities and Exchange Act of 1934; and

The information contained in this Quarterly Report fairly presents, in all material respects, the financial condition and results of operation of Panera Bread Company.

A signed original of this written statement required by Section 906 has been provided to Panera Bread Company and will be retained by Panera Bread Company and furnished to the Securities and Exchange Commission or its Staff upon request.


(Mark one)

[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended October 4, 2003

		or

[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		[For the transition period from to ]


Delaware		04-2723701
(State or other jurisdiction		(I.R.S. Employer of
incorporation or organization)		Identification No.)

6710 Clayton Road, Richmond Heights, MO		63117
(Address of principal executive offices)		(Zip code)


PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
	CONSOLIDATED BALANCE SHEETS
	CONSOLIDATED STATEMENTS OF OPERATIONS
	CONSOLIDATED STATEMENTS OF CASH FLOWS
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
EX-10.1 Confidential and Propietary Information
EX-31.1 Certification by Chief Executive Officer
EX-31.2 Certification by Chief Financial Officer
EX-32 Certification Pursuant to Section 906


	October 4, 2003		December 28, 2002

Compensation and employment related taxes	$	8,172	$	6,875
Capital expenditures		3,773		4,421
Rent		2,393		2,206
Advertising		1,681		2,037
Unredeemed gift certificates		814		1,857
Insurance		2,589		1,412
Taxes, other than income tax		4,194		1,393
Other		4,473		4,734

	$	28,089	$	24,935


	For the twelve weeks ended				For the forty weeks ended

	October 4, 2003		October 5, 2002		October 4, 2003		October 5, 2002

Company-owned average weekly sales	$	35,609	$	34,050	$	34,636	$	33,396
Company-owned number of operating weeks		1,763		1,477		5,631		4,725

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	Panera Bread Company (REGISTRANT)
Dated: November 14, 2003	By:	/s/ Ronald M. Shaich

	Ronald M. Shaich Chairman and Chief Executive Officer

Dated: November 14, 2003	By:	/s/ Mark E. Hood

	Mark E. Hood Senior Vice President, Chief Financial Officer (Chief Accounting Officer)


		(i)		All notices to me shall be addressed to me at:
				__________________________
				__________________________


		(ii)		All notices to Panera shall be addressed to Panera at:

				63 Kendrick Street

				Needham, NA 02494

				Attention: CEO


		EXECUTED UNDER SEAL

		Signature


		Date


		Name (typed or printed)

		SUBSCRIBED AND SWORN TO before me this ______ day of ____________ , 20___


		Notary Public


Dated: November 14, 2003

		/s/ RONALD M. SHAICH

		Ronald M. Shaich Chairman and Chief Executive Officer