Papa Johns 2006 Annual Report Download - page 87

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84
21. Employee Benefit Plans
We have established the Papa John’s International, Inc. 401(k) Plan (the “401(k) Plan”), as a defined
contribution benefit plan, in accordance with Section 401(k) of the Internal Revenue Code. The 401(k)
Plan is open to all employees who meet certain eligibility requirements and allows participating
employees to defer receipt of a portion of their compensation and contribute such amount to one or more
investment funds. At our discretion, we contribute a matching payment of up to 1.5% of a participating
employee’s earnings, which is subject to vesting based on an employee’s length of service with us. Costs
of the 401(k) Plan recognized in 2006 and 2005 were $372,000 and $425,000, respectively (none in
2004).
In addition, we maintain a nonqualified deferred compensation plan available to certain key employees
and directors. Under this plan, the participants may defer a certain amount of their compensation, which
is credited to the participants’ accounts. The participant-directed investments associated with this plan
are included in other long-term assets ($9.2 million and $6.7 million at December 31, 2006 and
December 25, 2005, respectively) and the associated liabilities ($10.0 million and $7.7 million at
December 31, 2006 and December 25, 2005, respectively) are included in other long-term liabilities in
the accompanying consolidated balance sheets. The Company makes no matching or other contribution to
the participants’ deferred compensation accounts.
Administrative costs of the 401(k) Plan and the nonqualified deferred compensation plan are paid by the
Company and are not significant.
PJUK, the Company’s United Kingdom subsidiary operation, provided a pension plan that was frozen in
1999. There are currently approximately 20 participants in the PJUK pension plan. The Company
recorded expense of $296,000, $178,000 and $153,000 associated with the pension plan for the fiscal
years ended 2006, 2005 and 2004, respectively. We have recorded a liability of $925,000, and a
corresponding entry to accumulated other comprehensive income ($584,000 net of tax), related to the
estimated unfunded pension obligation at December 31, 2006. The annual contributions and expense to
the PJUK pension plan are expected to approximate $350,000.