Papa Johns 2008 Annual Report Download - page 96

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17. Share Repurchase Program
The Papa John’s Board of Directors has authorized the repurchase of up to $100.0 million of common
stock during 2008, of which $62.3 million remained available at December 28, 2008 for repurchase
through the end of 2009. Funding for the share repurchase program has been provided through a credit
facility, operating cash flow, stock option exercises and cash and cash equivalents.
Subsequent to year-end (through February 17, 2009), an additional 264,000 shares with an aggregate cost
of $4.8 million were repurchased. As of February 17, 2009, approximately $57.5 million remained
available for repurchase of common stock under this authorization.
18. 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 would not become exercisable until a
person or group acquired beneficial ownership of 15% or more of the Company’s common stock in a
transaction that was not approved in advance by the Board of Directors. In December 2002, the Board of
Directors of the Company adopted an amendment to the Rights Plan to permit a stockholder who
becomes the owner of 15% or more of the Company’s outstanding common stock due to the Company’s
repurchase of outstanding shares to acquire up to an additional 1% of the outstanding shares without
triggering the Rights Plan’s dilution provisions. The Company’s Founder Chairman and Interim Chief
Executive Officer, John Schnatter, who owns approximately 21% 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.
19. Equity Compensation
We award stock options and restricted stock from time to time under the Papa John’s International, Inc.
2008 Omnibus Incentive Plan (the “Omnibus Plan”) and other such agreements as may arise. Shares of
common stock authorized for issuance under the Omnibus Plan are approximately 3.7 million, which
includes 1.7 million shares transferred in from the Papa John’s International, Inc. 1999 Team Member
Stock Ownership Plan (the “1999 Plan”) and 183,000 shares transferred in from the Papa John’s
International, Inc. 2003 Stock Option Plan for Non-Employee Directors. Approximately 3.0 million
shares were available for future issuance under the Omnibus Plan as of December 28, 2008. Option
awards are generally granted with an exercise price equal to the market price of the Company’s stock at
the date of grant. Options granted prior to 2003 generally expire ten years from the date of grant and vest
over one to five-year periods, except for certain options awarded under a previous, multi-year operations
compensation program that vested immediately upon grant. Options granted after 2005 generally expire
five years from the date of grant and vest over a 24- or 36-month period.