11-K: Annual report of employee stock purchase, savings and similar plans
Published on June 25, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1998
OR
[ ] Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
Commission File Number: 0-21660
A. Full title of the Plan:
PAPA JOHN'S INTERNATIONAL, INC., 401(K) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
PAPA JOHN'S INTERNATIONAL, INC.
11492 Bluegrass Parkway, Suite 175
Louisville, Kentucky 40299-2334
Telephone: (502) 266-5200
________________________________________________________________________________
Financial Statements
and Schedules
Papa John's International, Inc. 401(k) Plan
December 31, 1998 and 1997
and Year Ended December 31, 1998
with Report of Independent Auditors
Papa John's International, Inc. 401(k) Plan
Financial Statements
and Schedules
December 31, 1998 and 1997
and Year Ended December 31, 1998
Contents
Report of Independent Auditors............................................ 1
Financial Statements
Statements of Net Assets Available for Benefits........................... 3
Statement of Changes in Net Assets Available for Benefits................. 5
Notes to Financial Statements............................................. 6
Schedules
Schedule of Assets Held for Investment Purposes........................... 9
Schedule of Reportable Transactions....................................... 10
Report of Independent Auditors
401(k) Plan Committee
Papa John's International, Inc.
We have audited the accompanying statements of net assets available for benefits
of the Papa John's International, Inc. 401(k) Plan as of December 31, 1998 and
1997, and the related statement of changes in net assets available for benefits
for the year ended December 31, 1998. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 1998 and 1997, and the changes in its net assets available for
benefits for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purpose of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The Fund Information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for benefits and the changes in net assets available
for benefits of each fund. The supplemental schedules and Fund Information have
been subjected to auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
June 3, 1999
Louisville, Kentucky
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Papa John's International, Inc. 401(k) Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1998
See accompanying notes.
3
Papa John's International, Inc. 401(k) Plan
Statement of Net Assets Available for Benefits, with Fund Information
December 31, 1997
See accompanying notes.
4
Papa John's International, Inc. 401(k) Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
Year Ended December 31, 1998
See accompanying notes.
Papa John's International, Inc. 401(k) Plan
Notes to Financial Statements
December 31, 1998 and 1997
1. Description of Plan
Papa John's International, Inc. (the "Company") established the Papa John's
International, Inc. 401(k) Plan (the "Plan") on October 1, 1995. The Plan is a
defined contribution plan available to all employees of the Company, and its
subsidiaries, who have attained the age of twenty-one, completed one year of
service and who work at least 1,000 hours annually. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Participants may voluntarily elect to contribute up to 15% of their annual
eligible wages to their account within the Plan. The Company may, at its
discretion, make matching or profit sharing contributions to the Plan. No such
Company contributions were made during 1998 or 1997.
The contributions are allocated among eight alternative mutual funds and Company
common stock at the direction of the participant. Each fund's investment income
or loss, less any investment management fees, is allocated to participant
accounts based on their proportionate interest in the fund. The value of
participant accounts will fluctuate with the market value of the securities in
which the fund is invested. The contributions and the earnings on those
contributions are immediately vested to the participant and are payable upon
retirement, death or disability, termination of employment, or earlier for
hardship reasons. Participants may also borrow from their account through
participant loans. The Summary Plan Description provides for a more complete
description of the Plan's provisions.
Certain Plan administrative expenses are paid by the Company.
2. Significant Accounting Policies
Investments
Mutual funds are stated at fair value as determined by quoted market prices.
Papa John's International, Inc. common stock is stated at fair value as
determined by the last reported sales price on the last business day of the plan
year. Participant loans are stated at an
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2. Significant Accounting Policies (continued)
estimated fair value based on their outstanding balances.
Contributions from Participants
Contributions from participants are recorded when the Company makes payroll
deductions. Contributions receivable from participants represent amounts
collected from participants that have not yet been deposited into the
participants' individual accounts.
Excess Contributions Refundable to Participants
The Plan is subject to certain contribution limits for highly-compensated
participants as defined by the Internal Revenue Code (the "IRC"). Calculations
performed subsequent to the Plan year-end indicated that excess contributions
refundable to participants amounted to $21,376 as of December 31, 1997. There
were no excess contributions refundable to participants as of December 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the amounts reported in these financial statements and
accompanying notes. Actual results could differ from those estimates.
3. Investments
During the year ended December 31, 1998, the Plan's investments (including
investments bought, sold, as well as held during the year) appreciated in fair
value as follows:
4. Tax Status
The Company amended the Plan effective January 1, 1998. The Plan is in the
process of applying for a determination letter from the Internal Revenue Service
stating that the Plan, as amended, is qualified under Section 401(a) of the
Internal Revenue Code (the "Code"). However, the Plan Administrator believes
that the Plan is qualified and, therefore, the related trust is exempt from
taxation.
7
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants are completely vested with respect to the balance of
their account.
6. Year 2000 Issue (unaudited)
The Company has determined that it will be necessary to take certain steps in
order to ensure that the Plan's information systems are prepared to handle year
2000 dates. The Company is taking a two phase approach. The first phase
addresses internal systems that must be modified or replaced to function
properly. Both internal and external resources are being utilized to replace or
modify existing software applications, and test the software and equipment for
the year 2000 modifications. The Company anticipates substantially completing
this phase of the project by September 1999. The Company will pay for the costs
related to the year 2000 project which are believed to be immaterial to its
financial position.
For the second phase of the project, the Company is querying its significant
vendors with respect to year 2000 issues. Based on the responses received from
approximately 75% of the vendors, the Company is not aware of any vendors with a
year 2000 issue that would materially impact the operations of the Plan.
However, the Company has no means of ensuring that vendors will be year 2000
ready. The inability of vendors to complete their year 2000 resolution process
in a timely fashion could materially impact the Plan, although the actual impact
of non-compliance by vendors is not determinable.
8
Schedules
Papa John's International, Inc. 401(k) Plan
EIN: 61-1203323, Plan Number: 001
Line 27a-Schedule of Assets Held for Investment Purposes
December 31, 1998
* Represents party in interest to the Plan.
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Papa John's International, Inc. 401(k) Plan
EIN: 61-1203323, Plan Number: 001
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
There were no category (i), (ii), or (iv) transactions during 1998.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrator has duly caused this annual report to be signed by the undersigned
hereunto duly authorized.
PAPA JOHN'S INTERNATIONAL, INC.,
401(K) PLAN
Date: June 25, 1999 By: /s/ E. Drucilla Milby
------------- ---------------------------------
E. Drucilla Milby
President, Chief Executive Officer
and Treasurer
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