Papa Johns 2000 Annual Report Download - page 63

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Through December 31, 2000, a total of 7.6 million shares with an aggregate cost of $187.9 million and an
average price of $24.67 per share were repurchased under this program and placed in treasury.
Subsequent to year-end, an additional 319,500 shares with an aggregate cost of $7.2 million were
repurchased.
15. Share Repurchase and Common Equity Put Options (continued)
At December 31, 2000, 250,000 common equity put options were outstanding, all of which were sold in the
third quarter 2000. The options expire at various dates through July 2001 and have exercise prices
between $19.50 and $21.99. The $5.2 million total exercise price of the options outstanding is reflected in
the balance sheet in common equity put options at December 31, 2000, and the related offset, net of
premiums received, is recorded in treasury stock.
16. Stockholder Protection Rights Agreement
On February 14, 2000, the Board of Directors of the Company adopted a Stockholder Protection Rights
Agreement (the “Rights Plan”). Under the terms of the Rights Plan, one preferred stock purchase right
was distributed as a dividend on each outstanding share of Papa John’ s common stock held of record as of
the close of business on March 1, 2000. The rights generally will not become exercisable until a person or
group acquires beneficial ownership of 15% or more of the Company’ s common stock in a transaction that
is not approved in advance by the Board of Directors. The Company’ s Founder and CEO, John
Schnatter, who currently owns more than 25% of the outstanding common stock, will be excluded from
operation of the Rights Plan unless (together with his affiliates and family members) he acquires more
than 40% of the Company’ s common stock.
If the rights are triggered, then each right owned by a stockholder other than the unapproved acquirer
entitles its holder to purchase shares of Company common stock at 50% of its market price. In addition,
after the rights are triggered, if the Company is acquired by an unapproved acquirer in a merger or other
business combination transaction, each right that has not previously been exercised will entitle its holder to
purchase, at the right’ s current exercise price, common shares of such other entity having a value of twice
the right’ s exercise price. The Company may redeem the rights for a nominal amount at any time prior to
an event that causes the rights to become exercisable.
17. Stock Options
In accordance with SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS 123), we have
elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to
Employees” (APB 25), and related Interpretations in accounting for our employee stock options because,
as discussed below, the alternative fair value accounting provided for under SFAS 123 requires the use of
option valuation models that were not developed for use in valuing employee stock options. Under APB
25, because the exercise price of our employee stock options equals or exceeds the market price of the
underlying stock on the date of grant, no compensation expense is recognized.
We award stock options from time to time under the Papa John’ s International, Inc. 1993 Stock
Ownership Incentive Plan (the “1993 Plan”), the Papa John’ s International, Inc. 1993 Non-Employee
Directors Stock Option Plan (the “Directors Plan”) and the Papa John’ s International, Inc. 1999 Team
Member Stock Ownership Plan (the “1999 Plan”). Shares of common stock authorized for issuance are