SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 14, 2000
PAPA JOHN'S INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-21660 61-1203323
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2002 Papa John's Boulevard
Louisville, Kentucky 40299
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (502) 261-7272
Item 5. OTHER EVENTS
On February 14, 2000, the Board of Directors of Papa John's
International, Inc. (the "Company") approved a Stockholder Protection Rights
Agreement (the "Rights Plan"). The Board approved the Rights Plan in order
to preserve the long-term value of the Company for its stockholders. In
connection with the adoption of the Rights Plan, the Board has declared a
dividend of one Right for each share of the Company's common stock ("Common
Stock") outstanding at the close of business on March 1, 2000. A summary of
the Rights is set forth below.
DISTRIBUTION AND The Board of Directors has declared a dividend
TRANSFER OF RIGHTS of one Right for each share of Common Stock of
Papa John's International, Inc. (the "Company"),
outstanding at the close of business on
March 1, 2000. Prior to the Separation Time
(as defined below), the Rights will be evidenced
by and traded with the certificates for the Common
Stock. After the Separation Time, the Company or
the Rights Agent will mail Rights certificates to
the Company's stockholders and the Rights will
become transferable apart from the Common Stock.
EXERCISE OF RIGHTS FOR After the Separation Time, each Right (other
PREFERRED STOCK than Rights held by an Acquiring Person) will
entitle the holder to purchase for the exercise
price ("Exercise Price") a fraction of a share
of the Company's Series A Participating
Preferred Stock with economic terms similar to
those of one share of the Company's Common
Stock. The initial exercise price (which is
subject to amendment or adjustment as provided
in the Rights Plan) is $130 per share.
SEPARATION TIME In general, the Rights will separate from the
Common Stock and become exercisable (the
"Separation Time") at the close of business on
the earlier of: (a) the tenth business day after
the date on which any person commences a tender
or exchange offer which, if consummated, would
result in such person becoming an Acquiring
Person (as defined below) and (b) the Flip-In
Date (as defined below).
ACQUIRING PERSON In general, the term "Acquiring Person" means any
person who is a beneficial owner of 15% (40% in
the case of the Company's Founder and CEO,
John H. Schnatter, his immediate family,
affiliates and associates) or more of the
outstanding shares of Common Stock.
FLIP-IN In the event that a Flip-In Date occurs, each
Right (other than Rights held by an Acquiring
Person) will constitute the right to purchase
from the Company, upon exercise of the Right,
for the Exercise Price, a number of shares of
the Company's Common Stock having a then current
market value of twice the Exercise Price. In
general, the Flip-In Date is the tenth business
day after any "Stock Acquisition Date." The
Stock Acquisition Date means the first date of
public announcement by the Company that any
person has become an Acquiring Person.
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FLIP-OVER TRANSACTION OR Prior to the Expiration Time (as defined
EVENT below), the Company may not enter into any
agreement relating to a Flip-Over Transaction or
Event, unless and until, the Company has entered
into a supplemental agreement with the Flip-Over
Entity for the benefit of the holders of the
Rights. The supplemental agreement must
provide, among other things, that upon
consummation or occurrence of the Flip-Over
Transaction or Event, each Right will constitute
the right to purchase a number of shares of the
Flip-Over Entity having an aggregate market
price equal to twice the Exercise Price for an
amount equal to the Exercise Price. In general,
a Flip-Over Transaction or Event means (a) a
consolidation, merger or share exchange
occurring after the Flip-In Date and involving
the Company if, at the time of the transaction
or the time when the Company enters into any
agreement for a consolidation, merger or share
exchange, the Acquiring Person controls the
Company's Board of Directors and either (i) the
person with whom the transaction occurs is the
Acquiring Person (or a related person); or (ii)
any term or arrangement concerning the treatment
of shares held by the Acquiring Person is not
the same as the terms or arrangements applicable
to shares held by other holders of the Common
Stock; or (b) a sale or transfer of more than
50% of the assets of the Company to any person
if, at the time of the sale or transfer, or the
time when any agreement relating to the sale or
transfer is entered into by the Company, the
Acquiring Person controls the Company's Board of
Directors. In general, a Flip-Over Entity is
the entity issuing securities into which shares
of the Company's Common Stock are being
converted or exchanged in a merger,
consolidation or exchange or the entity
receiving the greatest portion of the Company's
assets or earning power in an asset sale.
EXCHANGE PROVISION At any time after a Flip-In Date and prior to
the time that an Acquiring Person becomes the
beneficial owner of more than 50% of the
outstanding shares of Common Stock, the Board
may elect to exchange all Rights (other than
Rights held by the Acquiring Person) for shares
of Common Stock at an exchange ratio of one
share of Common Stock per Right, subject to
adjustment.
REDEMPTION OF RIGHTS Rights will be redeemable at the Company's
option for $0.001 per Right at any time prior to
a Flip-In Date.
EXPIRATION OF THE RIGHTS The Rights will expire on the earliest of: (1)
February 14, 2010; (2) the redemption or
exchange of the Rights; or (3) the merger of the
Company into another corporation pursuant to an
agreement approved by the Board of Directors and
entered into prior to a Flip-In Date.
AMENDMENT OF RIGHTS The terms of the Rights and the Rights Plan may
be amended in any respect without the approval
of the holders of Rights prior to the close of
business on the Flip-In Date. After the Flip-In
Date, the Rights and the Rights Plan may be
amended in order to cure any ambiguities or
inconsistencies or to effect other changes the
Company deems necessary or desirable and which
do not materially adversely affect the interests
of the holders of Rights in general.
VOTING RIGHTS The Rights will not have any voting rights.
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ANTI-DILUTION PROVISIONS The Rights will have the benefit of certain
customary anti-dilution provisions.
TAXES The Rights distribution should not be taxable
for federal income tax purposes. However,
following an event which renders the Rights
exercisable, or upon redemption of the Rights,
stockholders may recognize taxable income.
The Rights are designed to protect and maximize the value of the
outstanding equity interests in the Company in the event of an unsolicited
attempt. The Rights Plan was approved in order to deter coercive takeover
tactics which might unfairly pressure stockholders or deprive them of the
full value of their shares.
The Rights may have the effect of making more difficult or discouraging
an acquisition of the Company deemed undesirable by the Board of Directors.
The Rights may cause substantial dilution to a person who attempts to acquire
the Company on terms or in a manner not approved by the Company's Board of
Directors.
The Rights are not intended to prevent a takeover of the Company.
Subject to the restrictions described above, the Rights may be redeemed by
the Company at any time prior to the Separation Time. Accordingly, the
Rights Plan should not interfere with any merger or business combination
approved by the Board of Directors.
The Rights Plan, which includes the form of Rights certificate, is
included as an exhibit to this Form 8-K to which reference is hereby made.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Plan.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) Not Applicable.
(c) Exhibits:
Exhibit 4--Stockholder Protection Rights Agreement dated February 14,
2000, by and between Papa John's International, Inc. and
National City Bank, as Rights Agent (including the form of
Certificate of Designation of Rights and Preferences and
the form of Rights Certificate, filed as an exhibit to the
Company's Form 8-A dated February 14, 2000, is incorporated
herein by reference.
Exhibit 99.1--Press Release Dated February 14, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAPA JOHN'S INTERNATIONAL, INC.
Date: February 14, 2000 By: /s/ E. Drucilla Milby
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E. Drucilla Milby
Senior Vice President,
Chief Financial Officer
and Treasurer
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