Papa Johns 1999 Annual Report Download - page 64

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Notes to Consolidated Financial Statements (continued)
14. Advertising Litigation
On August 12, 1998, Pizza Hut, Inc. filed suit against us in the United States District Court for the Northern District of Texas,
claiming that our “Better Ingredients. Better Pizza.”slogan constitutes false and deceptive advertising in violation of the Lanham
Trademark Act. The trial began on October 25, 1999. On November 18, 1999, the jury returned a verdict that our “Better Ingredients.
Better Pizza.”slogan is false and deceptive. On January 3, 2000, the court announced its judgment, awarding Pizza Hut $468,000
in damages and ordering us to cease all use of the “Better Ingredients. Better Pizza.”slogan. Under the judge’s order, we were to
cease using the slogan in print and broadcast advertising by January 24, 2000, phase out printed promotional materials and other
items containing the slogan (except signage) by March 3, 2000 and remove the slogan from restaurant signage by April 3, 2000.
However, we filed an appeal of the verdict and the court’s order and a motion for stay of the court’s order pending outcome of the
appeal. On January 21, 2000, the United States Court of Appeals for the Fifth Circuit granted a stay of the District Court
judgment pending our appeal. Oral arguments related to the appeal are scheduled to begin in April 2000.
We estimated that the pre-tax costs of complying with the court’s order and certain related costs could approximate $12.0 to
$15.0 million, of which $6.1 million was recorded as a pre-tax charge against 1999 earnings. If our appeal is successful, the timing,
and possibly the amount, of costs to be incurred could be favorably impacted.
15. Share Repurchase
The Papa John’s Board of Directors has authorized the repurchase of up to $150.0 million of common stock under a share
repurchase program that began December 9, 1999, and runs through December 31, 2000. Funding for the share repurchase program
will be provided through a combination of our existing cash and investments, $150.0 million credit facility and operating cash flows.
Through December 26, 1999, a total of 1.3 million shares with an aggregate cost of $31.7 million were repurchased under this
program and placed in treasury. Subsequent to year-end through March 17, 2000, an additional 3.4 million shares with an aggregate
cost of $87.4 million were repurchased.
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