Papa Johns 2014 Annual Report Download - page 101

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(c) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December
28, 2014 that have materially affected, or are likely to materially affect, the Company’s internal control
over financial reporting.
Item 9B. Other Information
On February 19, 2015, the Compensation Committee of the Board of Directors approved new
employment agreements effective March 1, 2015, originally entered into for 3-year terms in March 2012,
with members of the Company’s executive leadership team (other than Founder, Chairman, President and
Chief Executive Officer, John H. Schnatter), including Senior Vice President and Chief Operating
Officer, Stephen M. Ritchie; Senior Vice President, Chief Financial Officer, Chief Administrative Officer
and Treasurer, Lance F. Tucker; and Senior Vice President and Chief Development Officer, Timothy C.
O’Hern (collectively, the “Employment Agreements”). The Employment Agreements are on substantially
the same terms as the prior agreements, and have a three-year term and automatically renew for
successive one-year terms unless either party gives written notice of termination at least 60 days prior to
the expiration of the current term. The Employment Agreements provide for a minimum annual base
salary (currently $550,000 in the case of Mr. Ritchie, $500,000 in the case of Mr. Tucker, and $395,000
in the case of Mr. O’Hern), annual cash bonus and equity awards opportunities, and benefits as afforded
to similarly situated employees. During the term of the Employment Agreements, base salary increases,
and the amount and terms of bonus awards and equity awards are at the discretion of the Compensation
Committee of the Board of Directors.
In the event the executive’s employment is terminated by the Company prior to the end of the term of the
Employment Agreement other than for “cause” (as defined in the Employment Agreement), the executive
is entitled to receive 9 months’ base salary, pro rata cash bonus for the year of termination and a credit for
an additional 6 months of service for purposes of vesting in outstanding stock options and time-based
restricted stock. In the event of an executive’s termination without cause following a change in control
before the end of the term of the Employment Agreement, or by the executive for “good reason”
following a change in control (as defined in the Employment Agreement), the executive is entitled to
receive the lesser of the total of the executive’s base salary and pro rata cash bonus through the remainder
of the term or 9 months’ base salary. In the case of termination of employment due to death or disability,
the Employment Agreements provide for payment of base salary through the date of termination and pro
rata cash bonus. In addition to the Employment Agreements, our equity plans provide for certain benefits
upon change in control, death and disability, as previously disclosed.
The foregoing summary of the Employment Agreements is qualified in its entirety by reference to the full
text of the Employment Agreements filed as Exhibits 10.1, 10.2, and 10.3 hereto and incorporated by
reference herein.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information regarding executive officers is included above under the caption “Executive Officers of the
Registrant” at the end of Part I of this Report. Other information regarding directors, executive officers
and corporate governance appearing under the captions “Corporate Governance,” “Item 1, Election of
Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance” and “Executive Compensation /
Compensation Discussion and Analysis” is incorporated by reference from the Company’s definitive