Papa Johns 2009 Annual Report Download - page 97

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15. Lease Commitments and Contingencies (continued)
In addition, as a condition of the sale of our former Perfect Pizza operations in the United Kingdom in
March 2006, we remain contingently liable for payment under approximately 62 lease arrangements,
primarily associated with Perfect Pizza restaurant sites for which the Perfect Pizza franchisor is primarily
liable. The leases have varying terms, the latest of which expires in 2017. As of December 27, 2009, the
potential amount of undiscounted payments we could be required to make in the event of non-payment by
the new owner of Perfect Pizza and associated franchisees was $5.8 million. We have not recorded a
liability with respect to such leases at December 27, 2009 or December 28, 2008, as our cross-default
provisions with the Perfect Pizza franchisor significantly reduce the risk that we will be required to make
payments under these leases.
We are subject to claims and legal actions in the ordinary course of business. We believe that all such
claims and actions currently pending against us are either adequately covered by insurance or would not
have a material adverse effect on us if decided in a manner unfavorable to us.
16. Share Repurchase Program
The Company’s Board of Directors authorized the repurchase of up to $775.0 million of common stock
through December 31, 2010, of which $33.8 million remained available at December 27, 2009 for
repurchase. 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 16, 2010), an additional 43,000 shares with an aggregate cost
of $967,000 were repurchased. As of February 16, 2010, approximately $32.8 million remained available
for repurchase of common stock under this authorization.
17. Stockholder Protection Rights Agreement
On February 14, 2010, our stockholder rights plan expired. As a result, each outstanding share of our
common stock is no longer accompanied by a right. The holders of common stock were not entitled to
any payment as a result of the expiration of the rights plan and the rights issued thereunder.
18. 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 2.7 million
shares were available for future issuance under the Omnibus Plan as of December 27, 2009. 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. Options granted after 2005 generally expire five years from the date of
grant and vest over a 24- or 36-month period.