Papa Johns 2015 Annual Report Download - page 94

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81
18. Equity Compensation (continued)
Restricted Stock and Restricted Stock Units
We granted shares of restricted stock that are time-based and generally vest in equal installments over
three years (76,000 in 2015, 89,000 in 2014 and 157,000 in 2013). Upon vesting, the shares are issued
from treasury stock. These restricted shares are intended to focus participants on our long-range
objectives, while at the same time serving as a retention mechanism. We consider time-based restricted
stock awards to be participating securities because holders of such shares have non-forfeitable dividend
rights. We declared dividends totaling $110,000 ($0.63 per share) in 2015, $128,000 ($0.53 per share) in
2014 and $86,000 ($0.25 per share) in 2013 to holders of time-based restricted stock.
Additionally, we granted stock settled performance-based restricted stock units to executive management
(12,000 in 2015, 17,000 in 2014, and 3,000 in 2013). The vesting of these awards (a three-year cliff vest)
is dependent upon the Company’s achievement of a compounded annual growth rate of earnings per share
and the achievement of certain sales and unit growth metrics. Upon vesting, the shares are issued from
authorized shares.
The fair value of both time-based restricted stock and performance-based restricted stock units is based on
the market price of the Company’s shares on the grant date. Information pertaining to these awards during
2015 is as follows (shares in thousands):
Weighted
Average
Grant-Date
Shares Fair Value
Total as of December 28, 2014 286 31.81
Granted 88 64.44
Incremental Performance Shares* 70 18.78
Forfeited (13) 52.10
Vested (247) 24.43
Total as of December 27, 2015
184
51.21
$
*Additional shares from the 2012 performance-based restricted stock unit grant due to exceeding the
initial 100% target resulting in a 207% payout.
19. 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 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 may make matching contribution payments, which are subject to vesting
based on an employee’s length of service with us.
In addition, we maintain a non-qualified deferred compensation plan available to certain 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 ($17.9 million and $18.2 million at December 27, 2015 and December
28, 2014, respectively) and the associated liabilities ($18.5 million and $17.6 million at December 27,
2015 and December 28, 2014, respectively) are included in other long-term liabilities in the
accompanying consolidated balance sheets.