Papa Johns 2006 Annual Report Download - page 84

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81
18. Share Repurchase Program
The Papa John’s Board of Directors has authorized the repurchase of up to $675.0 million of common
stock under a share repurchase program that began December 9, 1999, and runs through December 30,
2007. Funding for the share repurchase program has been provided through a credit facility, operating
cash flow, stock option exercises and the liquidation of available investments, cash and cash equivalents.
Through December 31, 2006, a total of 38.1 million shares with an aggregate cost of $602.2 million have
been repurchased under this program.
Subsequent to year-end (through February 20, 2007), an additional 793,000 shares with an aggregate cost
of $22.9 million were repurchased.
19. 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 and Executive Chairman, John
Schnatter, who owns approximately 27% 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.