UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

FORM 11-K

 

 

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. 401(k) Plan

 

Financial Statements and Schedule

 

Years ended December 31, 2002 and 2001

 

Contents

 

Report of Independent Auditors

Financial Statements

Statements of Net Assets Available for Benefits

Statements of Changes in Net Assets Available for Benefits

Notes to Financial Statements

Schedule

Schedule H, Line 4i—Schedule of Assets (Held At End of Year)

 

 

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 (the Plan) as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended.  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 auditing standards generally accepted in the United States.  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, 2002 and 2001, and the changes in its net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

 

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole.  The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting Disclosure under the Employee Retirement Income Security Act of 1974.  This supplemental schedule is the responsibility of the Plan’s management.  The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

 

 

	/s/ Ernst & Young LLP
June 6, 2003
Louisville, Kentucky

 

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Papa John’s International, Inc. 401(k) Plan

 

Statements of Net Assets Available for Benefits

 

		December 31
		2002			2001
Assets
Investments at fair value:
Papa John’s International, Inc. common stock		$	482,268		$	425,801
Mutual funds		8,950,394			8,948,916
Interest bearing cash		20,404			18,341
Participant loans		664,367			633,935
Investments at contract value:
Guaranteed investment contract		1,988,092			1,235,567
Total investments		12,105,525			11,262,560
Receivables:
Contributions:
Participants		43,551			48,103
Employer		444,840			477,984
Loan payments		5,355			—
Interest		849			992
Total receivables		494,595			527,079
Net assets available for benefits		$	12,600,120		$	11,789,639

 

See accompanying notes.

 

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Papa John’s International, Inc. 401(k) Plan

 

Statements of Changes in Net Assets Available for Benefits

 

		December 31
		2002			2001
Changes in net assets attributable to:
Investment loss:
Net depreciation in fair value of investments		$	(1,829,071	)	$	(1,365,634	)
Interest and dividend income		163,626			138,894
Net investment loss		(1,665,445		)	(1,226,740		)
Contributions:
Participants		2,896,825			2,971,152
Rollover		408,699			327,076
Employer		427,746			477,984
Total contributions		3,733,270			3,776,212
Benefits paid to participants		(1,238,294		)	(1,426,045		)
Administrative fees		(19,050		)	(19,050		)
Net increase		810,481			1,104,377
Net assets available for benefits at beginning of year		11,789,639			10,685,262
Net assets available for benefits at end of year		$	12,600,120		$	11,789,639

 

See accompanying notes.

 

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Papa John’s International, Inc. 401(k) Plan

 

Notes to Financial Statements

 

December 31, 2002

 

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 from 1 to 20 percent 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. During 2002 and 2001, the Company contributed, to participants actively employed on the last day of each plan year, an amount equal to 25 percent of the pretax contributions made by participants during such plan year up to 6 percent of eligible compensation.

 

The contributions are allocated at the direction of the participant among selected investments. Each fund’s investment income or loss, less any investment management fee, 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. Participant contributions and the earnings on those contributions are immediately vested to the participant. Company discretionary contributions vest subject to a five-year graded vesting schedule. In order to receive vesting credit in a Plan year, participants must have had at least 1,000 hours of service in the Plan year. Vested contributions 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. Forfeited balances of terminated participants’ non-vested accounts are used to reduce future Company contributions. The Summary Plan Description provides a more complete description of the Plan’s provisions.

 

Certain Plan administrative expenses are paid directly by the Company.

 

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100 percent vested in their accounts.

 

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2. Significant Accounting Policies

 

Investments

 

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. Mutual funds are stated at fair value as determined by quoted market prices. Outstanding participant loan balances are stated at cost which approximates fair value.

 

The Plan’s investment options include a guaranteed investment contract with MetLife, which is a benefit-responsive investment contract. MetLife maintains the contributions in a general account. The account is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The average yield and crediting interest rate on such investments was 5.0% in 2002 and 6.35% in 2001. The crediting interest rate changes annually and is based on an agreed upon formula with the issuer. The contract is included in the accompanying financial statements at contract value as reported to the Plan by MetLife. Contract value represents contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise.

 

Contributions

 

Contributions from participants are recorded when the Company makes payroll deductions. Discretionary employer contributions are determined, funded and recorded annually. Contributions receivable represent amounts not yet deposited into the participants’ individual accounts.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

 

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3. Investments

 

The Plan’s investments (including investments bought, sold, and held during the year) appreciated (depreciated) in fair value during the years as follows:

 

 

Individual investments that represent 5% or more of the fair value of the Plan’s net assets are as follows:

 

		December 31
		2002			2001
Mutual funds:
Janus Adviser Aggressive Growth Retirement Fund		$	1,257,392		$	1,506,891
Fidelity Advisor Growth & Income Fund		1,650,180			1,949,354
CDC Nvest Star Advisers Fund		757,233			918,887
Janus Adviser Balanced Retirement Fund		760,403			1,078,418
CDC Nvest Bond Income Fund		1,739,788			1,141,767
Henssler Equity Fund		729,587			765,347
Janus Adviser Worldwide Growth Retirement Fund		629,631			679,131
State Street Research Aurora Fund		696,024			371,124
Participant Loans		664,367			633,935
Investment at contract value:
MetLife Guaranteed Investment Contract		1,988,092			1,235,567

 

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4. Tax Status

 

MetLife, the Plan’s record keeper, received an opinion letter from the Internal Revenue Service stating that the form of the prototype non-standardized profit sharing plan is acceptable under Section 401 of the Internal Revenue Code (“IRC”) for use by employers for the benefit of their employees. The Company has adopted this prototype non-standardized profit sharing plan and is therefore relying on the letter issued to MetLife with respect to the Plan’s qualification under 401(a) of the IRC. The Company believes the Plan is being operated in compliance with the applicable requirements of the IRC, and therefore, the Plan is qualified and the related trust is tax exempt.

 

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Schedule

 

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Papa John’s International, Inc. 401(k) Plan

 

EIN:  61-1203323, Plan Number:  001

 

Schedule H, Line 4i-Schedule of Assets

(Held At End of Year)

 

December 31, 2002

 

Identity of Issue or Borrower		Description of Investment, Including Shares Held or Rate of Interest		Current Value
Common Stock:
* Papa John’s International, Inc.		17,298 shares		$	482,268
Mutual Funds:
Janus Adviser Aggressive Growth Retirement Fund		81,174 shares		1,257,392
Fidelity Advisor Growth & Income Fund		126,548 shares		1,650,180
CDC Nvest Star Advisers Fund		60,969 shares		757,233
Janus Adviser Balanced Retirement Fund		36,210 shares		760,403
CDC Nvest Bond Income Fund		154,237 shares		1,739,788
Henssler Equity Fund		70,356 shares		729,587
Janus Adviser Worldwide Growth Retirement Fund		29,136 shares		629,631
State Street Research Aurora Fund		26,978 shares		696,024
Janus Adviser Growth Retirement Fund		16,713 shares		254,200
American Century Ultra Fund		10,713 shares		225,195
Fidelity Advisor High Yield Fund		20,532 shares		150,703
Other		12,827 shares		100,058
				8,950,394
Investment Contract:
*MetLife Guaranteed Investment Contract		175,569 shares		1,988,092
Interest Bearing Cash		20,404 shares		20,404
Participant Loans		5.25 % to 10.50 % per annum		664,367
				$	12,105,525

 

* Represents party-in-interest to the Plan.

 

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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 on its behalf by the undersigned hereunto duly authorized.

 

	PAPA JOHN’S INTERNATIONAL, INC. 401(k) PLAN
Date:  June 27, 2003		By:	/s/ J. David Flanery
			J. David Flanery
			Senior Vice President of Finance (Principal Accounting Officer)

 

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EXHIBIT INDEX

 

Exhibit Number		Description
23		Consent of Ernst & Young LLP.
99.1		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.2		Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

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