Papa Johns 2009 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2009 Papa Johns annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

91
18. Equity Compensation (continued)
We recorded stock-based employee compensation expense of $5.8 million in 2009, $2.6 million in 2008
and $4.9 million in 2007. The total income tax benefit recognized in the income statement for share-
based compensation arrangements was $2.1 million in 2009, $930,000 in 2008 and $1.8 million in 2007.
At December 27, 2009, there was $5.7 million of unrecognized compensation cost related to nonvested
option awards and restricted stock, of which the Company expects to recognize $4.2 million in 2010,
$1.3 million in 2011 and $200,000 in 2012.
Stock Options
Options exercised included 612,000 shares in 2009, 260,000 shares in 2008 and 765,000 shares in 2007.
The total intrinsic value of the options exercised during 2009, 2008 and 2007 was $4.3 million, $2.8
million and $10.4 million, respectively. Cash received upon the exercise of stock options was $9.8
million, $4.6 million and $12.2 million during 2009, 2008 and 2007, respectively, and the related tax
benefits realized were approximately $1.5 million, $1.0 million and $3.9 million during the
corresponding periods.
Information pertaining to option activity during 2009 is as follows (number of options and aggregate
intrinsic value in thousands):
Weighted
Weighted Average
Number Average Remaining Aggregate
of Exercise Contractual Intrinsic
Options Price Term Value
Outstanding at December 28, 2008 2,629 $25.34
Granted 997 22.48
Exercised (612) 16.07
Cancelled (878) 29.18
Outstanding at December 27, 2009
2,136
$25.08
2.84
$4,870
Vested or expected to vest at December 27, 2009 2,080 $25.15 2.92 $4,766
Exercisable at December 27, 2009 1,025 $25.87 1.69 $2,946
The following is a summary of the significant assumptions used in estimating the fair value of options
granted in 2009, 2008 and 2007:
2009 2008 2007
Assumptions (weighted average):
Risk-free interest rate 1.3% 2.7% 4.7%
Expected dividend yield 0.0% 0.0% 0.0%
Expected volatility 0.41 0.30 0.28
Expected term (in years) 3.7 3.8 3.5
The risk-free interest rate for the periods within the contractual life of an option is based on the U.S.
Treasury yield curve in effect at the time of grant. The estimated volatility is based on the historical
volatility of our stock and other factors. The expected term of options represents the period of time that
options granted are expected to be outstanding.