<PAGE>
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
PJ America, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
PJ AMERICA, INC.
2300 Resource Drive
Birmingham, Alabama 35242
April 12, 1999
Dear Stockholder:
On behalf of the entire PJ America management team, I invite you to join us
for the Company's upcoming Annual Meeting of Stockholders. The meeting will
begin at 11:00 am (Eastern Daylight time) on Tuesday, May 25, 1999 at the Hyatt
Regency Hotel, 320 West Jefferson Street, Louisville, Kentucky.
In addition to the formal items of business to be brought before the
meeting, we will discuss our 1998 results and answer your questions.
Thank you for your support of PJ America. We look forward to seeing you on
May 25th.
Sincerely,
/s/ Douglas S. Stephens
-----------------------------------
Douglas S. Stephens
President and C.E.O.
<PAGE>
PJ AMERICA, INC.
2300 Resource Drive
Birmingham, Alabama 35242
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 1999
To the Stockholders:
The Annual Meeting of Stockholders of PJ America, Inc. (the "Company") will
be held at the Hyatt Regency, 320 West Jefferson Street, Louisville, Kentucky on
Tuesday, May 25, 1999 at 11:00 a.m. (E.D.T.), for the following purposes:
(1) To elect two directors to serve until the 2002 annual meeting of
stockholders or until their successors are elected and qualified;
(2) Consider, ratify and approve an amendment to the PJ America, Inc. 1996
Stock Ownership Incentive Plan to increase the number of shares available
for issuance, thereunder;
(3) To ratify the appointment of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending December 26, 1999;
(4) To transact such other business as may properly come before the meeting or
any adjournment thereof.
A Proxy Statement describing matters to be considered at the Annual Meeting
is attached to this Notice. Only stockholders of record at the close of business
on April 1, 1999, are entitled to receive notice and to vote at the meeting.
By Order of the Board of Directors
/s/ Michael M. Fleishman
------------------------------------
Michael M. Fleishman
Secretary
Birmingham, Alabama
April 12, 1999
IMPORTANT:
----------
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN PROVIDED.
IN THE EVENT YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON
<PAGE>
PJ AMERICA, INC.
2300 Resource Drive
Birmingham, Alabama 35242
_______________
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 25, 1999
_______________
GENERAL INFORMATION
This Proxy Statement and accompanying proxy are being furnished in
connection with the solicitation of proxies by the Board of Directors (the
"Board") of PJ America, Inc., a Delaware corporation (the "Company"), to be
voted at the Company's Annual Meeting of Stockholders (the "Annual Meeting") and
any adjournments thereof. The Annual Meeting will be held at the Hyatt Regency
Hotel, 320 West Jefferson, Louisville, Kentucky on Tuesday, May 25, 1999, at
11:00 a.m. (E.D.T.) for the purposes set forth in this Proxy Statement and the
accompanying Notice of Annual Meeting. This Proxy Statement and accompanying
proxy are first being mailed to stockholders on or about April 12, 1999.
A stockholder signing and returning a proxy has the power to revoke it at
any time before the shares subject to it are voted by (i) notifying the
Secretary of the Company in writing of such revocation, (ii) filing a duly
executed proxy bearing a later date or (iii) attending the Annual Meeting and
voting in person. If the proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the proxy will be voted FOR the
nominees for director named in the Proxy Statement, FOR the amendment to the
1996 Stock Ownership Incentive Plan, FOR the ratification of Ernst & Young LLP
as the Company's independent auditors for the 1999 fiscal year and in the
discretion of proxy holders on such other business as may properly come before
the Annual Meeting.
The original solicitation of proxies by mail may be supplemented by
telephone and other means of communication and through personal solicitation by
officers, directors and other employees of the Company, at no compensation.
Proxy materials are being distributed by Corporate Investor Communications, Inc.
for a fee of approximately $1,000. Proxy materials will also be distributed
through brokers, custodians and other like parties to the beneficial owners of
the Company's Common Stock, par value $.01 per share (the "Common Stock"), and
the Company will reimburse such parties for their reasonable out-of-pocket and
clerical expenses incurred in connection therewith.
1
<PAGE>
RECORD DATE AND VOTING SECURITIES
The Board has fixed the record date (the "Record Date") for the Annual
Meeting as the close of business on April 1, 1999, and all holders of record of
Common Stock on this date are entitled to receive notice of and to vote at the
Annual Meeting and any adjournment thereof. A list of stockholders entitled to
vote at the Annual Meeting will be available for inspection by any stockholder
for any purpose reasonably related to the Annual Meeting for a period of ten
days prior to the Annual Meeting at the Company's principal executive offices at
2300 Resource Drive, Birmingham, Alabama 35242. At the Record Date, there were
5,800,310 shares of Common Stock outstanding. For each share of Common Stock
held on the Record Date, a stockholder is entitled to one vote on each matter to
be considered at the Annual Meeting. A majority of the outstanding shares
present in person or by proxy is required to constitute a quorum to transact
business at the meeting.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the inspectors of election appointed for the meeting, who also will determine
whether a quorum exists. Abstentions or "withheld" votes will be treated as
present and entitled to vote for purposes of determining a quorum, but as
unvoted for purposes of determining the approval of matters submitted to the
stockholders. Since Delaware law treats only those shares voted "for" a matter
as affirmative votes, abstentions or withheld votes will have the same effect as
negative votes or votes "against" a particular matter. If a broker indicates
that it does not have discretionary authority as to certain shares to vote on a
particular matter, such shares will not be considered as present and entitled to
vote with respect to that matter.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL HOLDERS
The following table sets forth certain information as of the Record Date
with respect to the beneficial ownership of the common stock by (i) each
director or nominee for director of the Company, (ii) each of the executive
officers named in the summary compensation table in this Proxy Statement, (iii)
all directors and executive officers as a group and (iv) each person known to
the Company to be the beneficial owner of more than 5% of the outstanding common
stock.
<TABLE>
<CAPTION>
Number of Percent of
Directors and Executive Officers Shares (1) Class (2)
- --------------------------------------------------------------------------
<S> <C> <C>
Richard F. Sherman (3) 342,639 (4) 5.9%
Douglas S. Stephens (3) 292,464 (5) 5.0%
D. Ross Davison 14,375 (6) *
James S. Riekel 59,544 (7) 1.0%
Robert W. Curtis, Jr. 15,211 (8) *
John D. Rose - *
Michael M. Fleishman 241,530 (9) 4.2%
Martin T. Hart 132,000 (10) 2.3%
Frank O. Keener 361,603 (11) 6.2%
Stephen P. Langford (3) 214,164 (11) 3.7%
Charles W. Schnatter 19,883 (12) *
All directors and executive officers
as a group (11 persons, including
those named above) 1,693,413 29.2%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Numbers of Percent of
Other 5% Beneficial Owners Shares (1) Class (2)
- ------------------------------------------------------------------------
<S> <C> <C>
Maynard Capital Partners, L.L.C.
5151 Glenwood Avenue
Raleigh, North Carolina 27612 674,606 (13) 11.6%
</TABLE>
- ----------------------
* Represents less than 1% of class
(1) Based upon information furnished to the Company by the named persons, and
information contained in filings with the Securities and Exchange
Commission (the "Commission"). Under the rules of the Commission, a person
is deemed to beneficially own shares over which the person has or shares
voting or investment power or which the person has the right to acquire
beneficial ownership within 60 days. Unless otherwise indicated, the named
persons have sole voting and investment power with respect to shares shown.
(2) Based on 5,800,310 shares outstanding as of April 1, 1999, the Record Date
for the Annual Meeting.
(3) Mr. Sherman's address is 202 Schooner Lane, Duck Key, Florida 33050. Mr.
Stephen's address is PJ America, Inc., 2300 Resource Drive, Birmingham,
Alabama 35242. Mr. Fleishman's address is Greenebaum Doll & McDonald PLLC,
3300 National City Tower, Louisville, Kentucky 40202. Mr. Keener's address
is 4613 Granny White Pike, Nashville, Tennessee 37220. Mr. Langford's
address is 2300 Resource Drive, Birmingham, Alabama 35242.
(4) Includes 305,581 shares held by Mr. Sherman, as trustee of the Richard
Sherman Trust, and 20,058 shares held by his family members. Includes
options to purchase 17,000 shares exercisable within 60 days of the record
date.
(5) Includes options to purchase 50,000 shares exercisable within 60 days of
the record date.
(6) Includes options to purchase 14,375 shares exercisable within 60 days of
the record date.
(7) Includes options to purchase 21,250 shares exercisable within 60 days of
the record date.
(8) Includes options to purchase 13,625 shares exercisable within 60 days of
the record date.
(9) Includes 13,000 shares held by Mr. Fleishman's wife, and 3,000 shares held
by Mr. Fleishman's wife as custodian for their minor child. Mr. Fleishman
disclaims beneficial ownership of shares owned by his wife. Also includes
options to purchase 17,000 shares exercisable within 60 days of the record
date.
(10) Includes an aggregate of 100,000 shares held by H Investment Company LLP.
Includes an option to purchase 7,000 shares exercisable within 60 days of
the record date.
(11) Includes options to purchase 7,000 shares exercisable within 60 days of the
record date.
(12) Mr. Schnatter is a director and Senior Vice President, General Counsel and
Secretary of Papa John's International, Inc. ("PJI"). Excludes 225,000
shares of common stock beneficially owned by PJI pursuant to a presently
exercisable warrant. Mr. Schnatter disclaims beneficial ownership of the
securities underlying this warrant. Includes an option to purchase 7,000
shares exercisable within 60 days of the record date.
(13) As disclosed in a Schedule 13G filed with the Commission. Reflects
beneficial ownership (based on sole or shared voting or dispositive power)
of the reporting entity and its affiliates as of December 31, 1998.
3
<PAGE>
1. ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide for a classified board of
directors with three classes of directors each nearly as equal in number as
possible. Each class serves for a three-year term and one class is elected each
year. The Board of Directors is authorized to fix the number of directors within
the range of three to fifteen members, and the Board size is currently fixed at
seven members. Michael M. Fleishman and Martin T. Hart are the members of the
class to be elected at the Annual Meeting, for a three-year term expiring at the
annual meeting to be held in 2002. The remaining five directors will continue to
serve in accordance with their previous elections.
It is intended that shares represented by proxies received in response to
this Proxy Statement will be voted for the nominees listed below, unless
otherwise directed by a stockholder in his or her proxy. Although it is not
anticipated that the nominees will decline or be unable to serve, if that should
occur, the proxy holders may, in their discretion, vote for substitute nominees.
Directors are elected by a plurality of the votes cast.
Set forth below is information concerning the nominees and the other
directors who will continue in office, each of whom is currently a member of the
Board.
<TABLE>
<CAPTION>
Director
Name Age Position or Office Since
- --- --- ------------------ --------
<S> <C> <C> <C>
NOMINEES FOR ELECTION TO THE BOARD
For a 3-Year Term Expiring in 2002
Martin T. Hart 63 Director 1992
Michael M. Fleishman 54 Vice Chairman, Director 1991
and Secretary
DIRECTORS CONTINUING IN OFFICE
Term Expiring in 2001
Richard F. Sherman 55 Chairman and Director 1991
Frank O. Keener 56 Director 1991
Douglas S. Stephens 35 Director, Chief Executive 1991
Officer and President
DIRECTORS CONTINUING IN OFFICE
Term Expiring in 2000
Stephen P. Langford 45 Director 1991
Charles W. Schnatter 37 Director 1996
</TABLE>
4
<PAGE>
Martin T. Hart has served as a director of the Company or certain
predecessors since 1992. Mr. Hart is a Denver-based private investor. Mr. Hart
has been a Trustee of MassMutual Corporate Investors and MassMutual
Participation Investors since 1991. Mr. Hart serves on the Board of Directors of
Schuler Homes, Inc., Optical Securities Group, Inc., T-Netix, Inc., and Ardent
Software, Inc.
Michael M. Fleishman has served as a director and Secretary of the Company
or certain predecessors since 1991. In June 1997 he became Vice Chairman of the
Board. Since 1970, Mr. Fleishman or his professional service corporation has
been a member of the law firm of Greenebaum Doll & McDonald PLLC, which provides
legal services to the Company. Mr. Fleishman served as a director of Chi-Chi's,
Inc. from 1983 to 1987. Mr. Fleishman also served as a director of Rally's
Hamburgers, Inc. from 1988 through April 1996.
Richard F. Sherman has served as director and Chairman of the Board of the
Company or certain predecessors since 1991. Mr. Sherman is a private investor
who has been a franchisee and a consultant to Papa John's International, Inc.
("PJI") since 1991. From 1993 to present, Mr. Sherman has been a director of
PJI. From 1987 to 1991, Mr. Sherman was Chairman of the Board and President of
Rally's Hamburgers, Inc. From 1984 to 1987, Mr. Sherman was President and a
director of Church's Chicken, Inc. From 1971 to 1984, Mr. Sherman was Group
Executive Vice President and director of Hardee's Food Systems, Inc. and its
parent, Imasco USA, Inc. Mr. Sherman also serves on the board of directors of
Taco Cabana, Inc., and Reed's Jewelers, Inc.
Frank O. Keener has served as a director of the Company or certain
predecessors since 1991. From 1993 to 1998, Mr. Keener served as Executive Vice
President of First American National Bank, Nashville, Tennessee. From 1991 to
1993, Mr. Keener served as Senior Vice President of Dominion Banks. From 1989 to
1990, Mr. Keener was President and Chief Executive Officer of the Kentucky
Lottery Corporation.
Douglas S. Stephens has served as a director, President and Chief Executive
Officer of the Company or certain predecessors since 1991. From 1989 to 1991,
Mr. Stephens was the Vice President of Information Systems for the Kentucky
Lottery Corporation. From 1986 to 1989, Mr. Stephens was a systems consultant
for Andersen Consulting, a division of Arthur Andersen, LLP, an international
professional services firm.
Stephen P. Langford has served as a director of the Company or certain
predecessors since 1991. Mr. Langford has been involved in the television
industry since 1979. From November, 1998 to present (and from 1987 to 1997), Mr.
Langford is the General Sales Manager of WAVE TV, an NBC affiliate. From January
1997 to October 1998, Mr. Langford was the General Manager of WFIE NBC-14. Mr.
Langford currently serves on the Executive Board of the Sales Advisory Council
of the Television Bureau of Advertising and as Chairman of the fifth district of
the American Advertising Federation.
Charles W. Schnatter has served as a director of the Company since August
1996. Mr. Schnatter has served as General Counsel and Secretary of PJI since
1991 and has been a director and a Senior Vice President of PJI since 1993. From
1988 to 1991, Mr. Schnatter was an attorney with Greenebaum Doll & McDonald
PLLC. Mr. Schnatter was a franchisee of PJI from 1989 to 1997.
5
<PAGE>
Meetings of the Board of Directors
The Board met on four occasions during 1998. Each director attended at
least 75% of the meetings of the Board and its committees on which such director
served during his period of service in 1998.
Committees of the Board of Directors
In addition to an Executive Committee, which is comprised of Richard F.
Sherman and Douglas S. Stephens, the Board of Directors has standing
Compensation and Audit Committees. The Board does not have a nominating
committee or other committee serving a similar function.
The Compensation Committee is comprised of Messrs. Sherman, Fleishman, Hart
and Langford. The functions of the Compensation Committee are to review and
approve annual salaries and bonuses for all corporate officers and management
personnel, review, approve and recommend to the Board of Directors the terms and
conditions of all employee benefit plans and administer the 1996 Stock Ownership
Incentive Plan. The Compensation Committee met twice in 1998.
The Audit Committee is comprised of Messrs. Sherman, Schnatter, Hart and
Keener. The functions of the Audit Committee are to recommend annually to the
Board of Directors the appointment of the independent public accountants of the
Company, discuss and review the scope and the fees of the prospective annual
audit and review the results thereof with the independent public accountants,
review and approve non-audit services of the independent public accountants,
review compliance with accounting and financial policies of the Company, review
the adequacy of the financial organization of the Company and review
management's procedures and policies relative to the adequacy of the Company's
internal accounting controls and compliance with federal and state laws relating
to accounting practices. The Audit Committee met twice in 1998.
Compensation of Directors
Directors who are not also employees of the Company are eligible to
participate in the Company's 1996 Non-Employee Directors Stock Option Plan (the
"Directors Plan"). Under the terms of the Director Plan, directors received an
initial, one-time grant of an option to purchase 12,000 shares of common stock
at the initial public offering price. All other options have been and will be
granted at fair market value at the date of the grant. In addition, new non-
employee directors, upon their initial election to the Board, will be awarded an
initial option to purchase 12,000 shares of Common Stock upon joining the board.
Each non-employee director is eligible to receive an additional option to
purchase 4,000 shares of common stock on each anniversary date of the initial
grant. Options vest in four equal annual installments, beginning on the first
anniversary of their grant date.
Richard Sherman and Michael Fleishman, Chairman and Vice Chairman of the
Board, respectively also receive an option to purchase an additional 5,000
shares on each July 1, which options vest after six months.
Non-employee directors also receive reimbursement of reasonable out-of-
pocket expenses incurred in connection with their attendance at Board and
Committee meetings. Directors who are employees of the Company do not receive
additional compensation for services rendered as a director.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long-
term compensation paid, earned or accrued by the Company's Chief Executive
Officer and its other executive officers for services rendered in all capacities
to the Company for the years indicated.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE (1)
Long-Term
Compensation
Awards
-------------
Securities
Other Underlying
Name and Annual Stock
Principal Position Year Salary ($) Bonus ($) Compensation (2) Options (#)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Douglas S. Stephens 1998 $100,000 $20,000 $ 0 41,368
President and Chief 1997 80,000 0 0 25,000
Executive Officer 1996 80,000 47,250 0 62,500
D. Ross Davison 1998 $ 80,000 $20,000 $ 0 26,321
Chief Financial 1997 75,000 15,000 31,833 17,500
Officer and Treasurer 1996 37,500 7,500 0 27,500
James S. Riekel 1998 $ 80,000 $12,500 $51,056 26,321
Vice President - 1997 60,000 30,000 0 15,000
Regional Operations 1996 10,000 5,000 0 20,000
Robert W. Curtis Jr. (3) 1998 $ 65,000 $27,500 $ 0 21,934
Vice President -
Regional Operations
John D. Rose (3) 1998 $ 22,500 $ 0 $ 0 36,321
Vice President - Real
Estate & Development
</TABLE>
- -----------------------
(1) Except as otherwise indicated, perquisites and other personal benefits paid
to each named executive officer were less than 10% of the officer's annual
salary and bonus.
(2) Reimbursement for moving expenses.
(3) First became an executive officer of the Company in 1998.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information as to stock options granted to
the named executive officers during the 1998 fiscal year. The Company does not
grant stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
% of
Total
Options Potential Realizable
# of Securities Granted to Exercise Value at Assumed
Underlying Employees or Base Annual Rates of Stock
Options in Fiscal Price Expiration Price Appreciation
Name Granted (1) (3) Year ($/Share) Date for Option Term (2)
- ----------------------------------------------------------------------------------------------------------
5% ($) 10% ($)
-------- --------
<S> <C> <C> <C> <C> <C> <C>
Douglas S. Stephens 41,368 10.5% $13.25 10/08/08 $344,720 $873,568
D. Ross Davison 26,321 6.7% $13.25 10/08/08 $219,333 $555,821
James S. Riekel 26,321 6.7% $13.25 10/08/08 $219,333 $555,821
Robert W. Curtis Jr. 21,934 5.6% $13.25 10/08/08 $182,776 $463,180
John D. Rose 36,321 9.2% $13.25 10/08/08 $302,663 $766,991
</TABLE>
- ------------------------
(1) All options were awarded under the 1996 Stock Ownership Incentive Plan (the
"Incentive Plan"), have a term of 10 years and vest immediately in the
event of a change in control of the Company.
(2) Assumed annual appreciation rates are set by the Securities and Exchange
Commission and are not a forecast of future appreciation. The amounts shown
are pre-tax and assume the options will be held throughout the entire ten-
year term. If the Company's Common Stock does not increase in value, the
options are valueless.
(3) These options become exercisable in four equal annual installments
beginning October 8, 1999.
8
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Set forth below is information with respect to unexercised stock options
held by the named executive officers at the end of the Company's 1998 fiscal
year. There were no exercises in 1998. Also, there were no SARs outstanding at
the 1998 fiscal year-end.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
Fiscal Year-End (#) Fiscal Year-End ($) (1)
--------------------- -----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Douglas S. Stephens 43,750 85,118 $230,688 $432,563
D. Ross Davison 22,500 48,821 115,738 244,184
James S. Riekel 17,500 43,821 89,150 217,596
Robert W. Curtis Jr. 11,750 33,684 61,465 168,503
John D. Rose 0 36,321 0 177,246
</TABLE>
- ---------------------
(1) Based on the difference between the option exercise price and the last
reported sale price of the Common Stock ($18.13) as reported on the Nasdaq
Stock Market on December 24, 1998, the last trading day of the Company's
1998 fiscal year.
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report includes a discussion of the Compensation Committee's
philosophy on executive compensation, the primary components of the Company's
compensation program and a description of the Chief Executive Officer's
compensation package during 1998.
Compensation Principles. The Compensation Committee is responsible for
advising the Board of Directors on matters relating to the compensation of the
Company's executive officers and administering the Company's 1996 Stock
Ownership Incentive Plan (the "Incentive Plan"). The Compensation Committee
believes the following principles are important in compensating executive
officers:
. Compensation awarded by the Company should be effective in attracting,
motivating and retaining key executives;
. Incentive compensation should be awarded based on the achievement of
growth or operational targets at the Company, as appropriate to the
executive officer; and
. Executive officers should have an equity interest in the Company to
encourage them to manage the Company for the long-term benefit of
stockholders.
The Company's executive officers are compensated through a combination of
salary, stock option or cash bonuses and awards under the Incentive Plan, each
of which is discussed below.
Annual Salary. The Committee reviews salary levels on an annual basis with
the Chief Executive Officer and the Company's other senior managers, and makes
adjustments as appropriate or necessary to keep employees motivated. The
Committee gives great weight to the Chief Executive Officer's recommendations as
to annual salary levels of the Company's executive officers.
Bonus Programs. The Board of Directors of the Company established a 1998
Bonus Program at the beginning of the 1998 fiscal year. Under the Bonus Program,
executive officers and other key employees are eligible to earn cash bonuses
based on the achievement of operating or earnings goals established at the
beginning of each fiscal year by the Board of Directors.
1996 Stock Ownership Incentive Plan Awards. In October 1996, the
Compensation Committee and Board of Directors established the Company's 1996
Stock Ownership Incentive Plan (the "1996 Plan"). The 1998 grants of options to
purchase shares of Common Stock were granted with an exercise price of $13.25
per share, the fair market value on the date of grant, and will become
exercisable in four equal semi-annual installments, beginning on October 8,
1999. In 1998, options (ranging from 21,934 to 41,368 shares) were awarded to
executive officers under the Incentive Plan.
The 1996 Stock Ownership Plan ("1996 Plan") provides for the granting of
any of the following awards to eligible employees of the Company and its
subsidiaries: (i) stock options which do not constitute "incentive stock
options" within the meaning of section 422 of the Internal Revenue Code of 1986,
as amended ("non qualified stock options"); (ii) incentive stock options; (iii)
restricted shares; and (iv) performance units. The 1996 Plan is intended to
provide incentives and rewards for employees to support the implementation of
the Company's business plan and to associate the interests of employees with
those of the Company's stockholders.
10
<PAGE>
The Committee believes that stock options and other equity-based incentives
are a valuable tool in encouraging executive officers and other employees to
align their interests with the interests of the stockholders and to manage the
Company for the long-term. Non-qualified options to purchase 125,944 shares of
the Company's Common Stock were granted to all executive officers (including the
Company's Chief Executive Officer) in 1998, with an exercise price equal to the
fair market value of the underlying Common Stock on the date of the grant. The
options become exercisable in four equal annual installments, beginning on
October 8, 1999.
Compensation of Chief Executive Officer. Consistent with the compensation
policies and components described above, the Board of Director determined the
salary and bonus received by Douglas S. Stephens, Chief Executive Officer and
President of the Company, for services rendered in 1998. Mr. Stephens received a
base salary of $100,000 for 1998, and a bonus of $20,000. Mr. Stephens also
received a non-qualified option to purchase 41,368 shares of the Company's
Common Stock pursuant to the 1996 Plan described above for his actual and
potential contribution to the Company.
OBRA Deductibility Limitation. The Omnibus Budget Reconciliation Act of
1993 ("OBRA") limits the deduction by public companies of compensation of
certain executive officers to $1 million per year, per executive officer, unless
certain criteria are met. The Company has determined not to take any action at
this time with respect to its compensation plans to seek to meet these criteria.
COMPENSATION COMMITTEE
Richard F. Sherman
Michael M. Fleishman
Martin T. Hart
Stephen P. Langford
11
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Merger. The Company acquired the business and operations of Extra Cheese,
Inc., Twice the Cheese, Inc., Textra Cheese Corp., PJVA, Inc., and PJV, Inc.
(the "Predecessor Companies") in a reorganization. Pursuant to an Agreement
dated June 10, 1996 as amended July 10, 1996, and a Plan of Merger (the
"Reorganization"), the stockholders of the Predecessor Companies received shares
of Common Stock of the Company in the proportion determined by the respective
boards of directors of each of the Predecessor Companies through arm's length
negotiations. The factors considered by each of the Predecessor Companies in
determining exchange ratio included revenues, financial condition and results of
operations, and past and projected earnings for each Predecessor Company. An
aggregate of 3,000,000 shares of Common Stock was issued to the stockholders of
the Predecessor Companies in the Reorganization. The following officers,
directors and 5% stockholders of the Company received the number of shares of
Common Stock listed opposite their name in the Reorganization.
<TABLE>
<CAPTION>
Number
Name of Shares
---- ---------
<S> <C>
Douglas S. Stephens 292,464
Richard F. Sherman 661,551
James S. Riekel 60,294
Michael M. Fleishman 356,430
Martin T. Hart 248,711
Frank O. Keener 522,603
Stephen P. Langford 292,464
Michael J. Grisanti 248,713
Jack A. Laughery 324,080
</TABLE>
Indemnification Agreement. The Predecessor Companies and each of their
stockholders (which includes certain officers, directors and 5% stockholders of
the Company) entered into an Indemnification Agreement (the "Indemnification
Agreement") pursuant to which the stockholders of the Predecessor Companies made
customary representations and warranties to the Company with respect to the
business, assets, financial condition and operations of the Predecessor
Companies. In addition, the stockholders of the Predecessor Companies have
indemnified the Company which ended April 30, 1998, against breaches of such
representations and warranties as well as other breaches of the Indemnification
Agreement, or breaches of the June 10, 1996 Agreement (as amended July 10, 1996)
or the Plan of Merger. The stockholders of the Predecessor Companies had
established an escrow account in support of such indemnities, which has been
funded with an aggregate of $1,000,000 in cash and 300,000 shares of Common
Stock received in the Reorganization. As no claims were made in connection with
the reorganization, such funds were returned to the stockholders of the
Predecessor Companies. In general, the Indemnification Agreement provided the
sole remedy for claims brought in connection with the Reorganization and the
aggregate amount of the claims was limited to the cash and shares deposited in
the escrow account.
12
<PAGE>
Registration Rights Agreement. The Company has granted certain
registration rights to the stockholders of the Predecessor Companies, who
received shares of Common Stock of the Company in connection with the
Reorganization. The Company also has granted certain registration rights to PJI
in connection with the warrant issued to PJI to purchase 225,000 shares of
Common Stock. The Company will pay the fees and expenses of the registrations,
while such stockholders and PJI will pay all underwriting discounts and
commissions. These registration rights expire October 30, 2001, and are subject
to certain conditions and limitations, including the right of underwriters to
limit the number of shares owned by such stockholders and PJI included in such
registration.
PJI Warrant. In connection with the Company's initial public offering, the
Company issued a warrant to PJI to purchase 225,000 shares of Common Stock. The
purchase price for each share of Common Stock is $11.25 per share was equal to
90% of the initial public offering price per share. The warrant was issued in
consideration for, among other things, the rights to enter into development
agreements for Ventura, Kern, San Luis Obispo and Santa Barbara counties in
California; Vancouver, Canada and the surrounding area; and Puerto Rico; as well
as PJI's waiver of its $3,000 per market transfer fee with respect to the
restaurants acquired in the Reorganization as well as any other Papa John's
restaurants acquired by the Company prior to October 30, 1997. The Company
expects to pay all standard development and franchise fees in connection with
opening restaurants in these territories. The warrant is exercisable in whole
or in part at any time prior to October 30, 2001. In addition, the warrant will
be transferable subject to applicable securities laws restrictions.
Other Transactions and Agreements
Right of First Refusal (Iowa markets). PJIowa, LC holds the Papa John's
Development and franchise rights for Papa John's restaurants in Iowa, including
the Moline and Rock Island, Illinois areas, but excluding the Council Bluffs
area. The Company has obtained a right of first refusal to acquire such
franchise and development rights; however, there is no agreement or
understanding between the Company and PJIOWA, LC or its stockholders for the
Company to acquire such entity or any of its assets. PJIOWA, LC is owned in
part by the following officers, directors and/or 5% stockholders of the Company:
Messrs. Riekel (2.5%), Sherman (21.0%), Laughery (21.0%), Hart (18.0%) and
Grisanti (18.0%). The right of first refusal expires in August 2001.
Acquisition of PJ Utah, LLC. In September 1998, PJ America, Inc. purchased
PJ Utah, LLC, which owned a 30 store Papa John's Pizza territory in Utah (12
restaurants operating at the time of acquisition). The purchase price was $.8
million in cash plus the assumption of $2.5 million of debt, which was
immediately repaid. PJ Utah, LLC, was previously owned by the following
officers, directors and/or 5% stockholders of the Company: Messrs. Davison
(2.0%), Fleishman (11.5%), Grisanti (7.75%), Hart (7.75%), Keener (16.75%),
Langford (9.25%), Laughery (10.25%), Riekel (2.0%), Sherman (19.5%) and Stephens
(9.25%).
Prior to the acquisition of PJ Utah, LLC, the Company provided operational
supervision and managerial services (e.g., payroll, accounting, tax, human
resources and other administrative services) to PJ Utah, LLC on a fee for
service basis. The cost to PJ Utah, LLC for such services was $20,000 per
month. The Predecessor Companies began providing such services on August 1,
1996, and believes these fees were comparable to fees that would be charged by
unaffiliated third parties for comparable services. PJ Utah, LLC paid
management fees of $160,000 to the Company in 1998.
13
<PAGE>
Acquisition of PJ Louisiana, Inc. In May 1998, the Company acquired a 22
restaurant territory in Southern Louisiana, which included nine existing
restaurants, five restaurants under development, and development rights for
eight additional restaurants. The purchase price was $4.3 million in cash and a
short term note payable to sellers, plus the assumption of $1.4 million of debt,
which was immediately retired. PJ Louisiana, Inc. was owned by the following
officers and directors: Messrs. Keener (19.0%), Fleishman (19.5%), Langford
(19.5%), Sherman (19.5%), Stephens (19.5%), and Curtis (2.5%). Prior to the
acquisition. PJ Louisiana, Inc. paid management fees of $28,000 in 1998.
14
<PAGE>
Comparison of Five-Year Cumulative Total Returns
Performance Graph for
PJ America, Inc.
Prepared by the Center for Research in Security Prices
Produced on 03/12/99 including data to 12/24/1998
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 10/1996 12/1996 06/1997 12/1997 06/1998 12/1998
- ---------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PJ AMERICA, INC. 100.0 116.8 103.8 88.5 109.2 110.7
Nasdaq Stock Market (US Companies) 100.0 106.1 119.4 125.0 154.7 180.5
NASDAQ Stocks (SIC 5800-5899 US Companies) 100.0 99.8 92.8 84.8 90.0 76.3
Eating and drinking places
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 10/25/1996.
</TABLE>
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10% of the
Company's Common Stock, to file initial stock ownership reports and reports of
changes in ownership with the Securities and Exchange Commission and The Nasdaq
Market. Based on a review of these reports and written representations from the
reporting persons, the Company believes that all applicable Section 16(a)
reporting requirements were complied with for all Common Stock transactions in
1998.
16
<PAGE>
PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1996 STOCK
OWNERSHIP INCENTIVE PLAN
The Board of Directors has adopted, and recommends that stockholders
approve, an amendment to the Company's 1996 Stock Ownership Incentive Plan (the
"Incentive Plan"). This amendment is being made to increase the number of shares
of Common Stock reserved for issuance under the Incentive Plan from 600,000
shares to 1,000,000 shares. At March 27, 1999, options to purchase 690,082
shares of Common Stock were outstanding. At March 27, 1999, 236,718 shares would
have been available for issuance under the Incentive Plan if this amendment is
approved. The Company has issued an option to purchase 41,368, 26,321, 26,321,
21,934, and 36,321 shares to Douglas S. Stephens, D. Ross Davison, James S.
Riekel, Robert W. Curtis Jr. and John D. Rose respectively and options to
purchase 11,017 shares to employees who are not executive officers, subject to
approval of this amendment. The proposed amendment does not affect the provision
in the Incentive Plan that limits the maximum aggregate number of shares of
restricted stock (which is limited to 20% of shares subject to the plan) which
may be issued under the Incentive Plan.
Upon stockholder approval of the amendment, the Company intends to file a
registration statement on Form S-8 under the Securities Act of 1933, as amended,
with respect to the additional shares issuable under the Incentive Plan.
Description of the Incentive Plan
The Incentive Plan was approved by the Company's Board of Directors and
stockholders in 1996. The Incentive Plan permits the award to the Company's
employees of performance units (which may be paid in cash or shares of Common
Stock), restricted stock and stock options. The Incentive Plan currently
reserves for issuance an aggregate of 600,000 shares of Common Stock, no more
than 225,000 shares of which may be issued in the form of restricted shares. The
Incentive Plan is intended to advance the interests of the Company and its
stockholders by encouraging employees, who are largely responsible for the long-
term success and development of the Company, to acquire and retain an ownership
interest in the Company. The Company believes that equity incentives represented
by stock options enhance the Company's ability to attract and retain needed
personnel. The amendment to the Incentive Plan increases the number of shares of
Common Stock reserved for issuance under the Incentive Plan by 400,000 shares.
Employees of the Company are eligible to receive awards under the Incentive
Plan when designated by the committee responsible for administering the
Incentive Plan (the "Committee"). The Committee may designate eligible employees
as it deems appropriate. At December 27, 1998, the Company had approximately
4,000 employees.
Restricted stock consists of shares of Common Stock which are sold or
transferred by the Company to an employee at a price which may be below their
fair market value or for no payment, but subject to restrictions on their sale
or other transfer by the employee.
Performance units are rights to receive a payment from the Company which
may be payable in cash or shares of Common Stock or both, provided certain
performance standards are met. The Incentive Plan provides that the Committee
will determine the performance goals based on business
17
<PAGE>
income on equity for a region, subsidiary or other unit of the Company
("Performance Goals"). The Committee may establish more than one level of
performance criteria such that a portion of the maximum number of performance
units is allocated if a level (other than the highest level) is attained. The
Committee also determines the number of performance units to be granted. The
Committee is required to establish Performance Goals applicable to a fiscal year
within 90 days of the commencement of that year. Moreover, the Committee is
required to certify that the Performance Goals have been satisfied prior to the
payment of any units. To date, no performance units have been awarded under the
Incentive Plan.
The Committee may also grant stock options under the Incentive Plan. The
Committee determines the number and the purchase price of the shares of Common
Stock subject to an option, the term of each option and the time or times during
its term when the option becomes exercisable. The term of a stock option may not
exceed ten years from the date of grant and generally may not be exercised
earlier than six months after the date of grant. No stock option will be issued
with an exercise price below the fair market value of a share of Common Stock on
the date of grant. On the Record Date, the closing price per share of the
Company's Common Stock as reported on the Nasdaq Stock Market was $23.13.
Stock options granted under the Incentive Plan may be either incentive
stock options ("ISOs") which quality under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), or stock options that do not so qualify
("NQSOs"). ISOs granted to any employee holding more than 10% of the combined
voting power of all classes of stock of the Company must be granted with an
exercise price of not less than 100% of fair market value. To date, no ISOs have
been awarded under the Incentive Plan. Optionees may exercise options under the
Incentive Plan by paying cash, tendering shares of Common Stock or through a
cashless exercise procedure. Upon a Change in Control (as defined in the
Incentive Plan) of the Company, all outstanding options will become fully vested
and immediately exercisable.
The number of shares of Common Stock available for issuance under the
Incentive Plan will be adjusted in the event of a merger, consolidation,
reorganization, stock dividend, stock split or other change in corporate
structure or capitalization affecting the Common Stock. Shares of Common Stock
subject to, but not delivered under, an award terminating or expiring for any
reason generally will be available for the grant of future awards under the
Incentive Plan.
The Incentive Plan will terminate on the earliest to occur of (i) the date
when all shares of Common Stock available under the Incentive Plan have been
acquired through the exercise of options, lapse of restrictions or payment of
benefits under the Incentive Plan, (ii) October 24, 2006, or (iii) such earlier
date as the Board of Directors may determine. The Board may amend, modify or
terminate the Incentive Plan, but may not, without the prior approval of
stockholders, make any amendment which would materially increase the benefits
accruing to participants under the Incentive Plan, materially increase the total
number of shares of Common Stock which may be issued under the Incentive Plan or
materially modify the class of employees eligible to participate in the
Incentive Plan, if such approval is required by the Code, Section 16 of the
Securities Exchange Act of 1934 ("Exchange Act") and the rules
18
<PAGE>
promulgated thereunder, any national securities exchange or system on which the
Common Stock is then listed or reported or a regulatory body having jurisdiction
over the Company. No amendments of the Incentive Plan will impair the rights of
any participant without such participant's consent.
Federal Income Tax Consequences
Because tax results may vary due to individual circumstances, participants
in the Incentive Plan are urged to consult their personal tax advisors regarding
tax consequences of awards or grants, or the sale of any shares received, under
the Incentive Plan. The Federal income tax consequences of awards under the
Incentive Plan, as described below, will not be impacted by the proposed
amendment.
Non Qualified Stock Options
The granting of a NQSO does not produce taxable income to the optionee or a
tax deduction to the Company. Taxable ordinary income will generally be
recognized by the optionee at the time of exercise in am amount equal to the
excess of the fair market value of the shares purchased at the time of exercise
over the aggregate option price. The Company is entitled to a corresponding
Federal income tax deduction. The tax basis for the shares acquired is the
option price plus the taxable income recognized.
Incentive Stock Options
In the case of an ISO, an optionee will not recognize any taxable income at
the time of grant and the Company will not be entitled to a Federal income tax
deduction. No income will be recognized by an optionee at the time of exercise
of the ISO. If the optionee holds the shares acquired upon exercise of the ISO
for at least two years from the date of grant of the ISO and at least one year
from the date of exercise, the optionee would realize taxable long-term capital
gain or loss upon a subsequent sale of the shares at a price different from the
option price. If the foregoing holding period is met, no deduction would be
allowed to the Company for Federal income tax purposes at any time. If, however,
the optionee disposes of the shares prior to satisfying the required holding
period, generally (1) the optionee would realize ordinary income in the year of
such disposition in am amount equal to the difference between (a) the fair
market value of such shares on the date of exercise or (b) the sales price,
whichever is less, and the option price; (2) the Company would be entitled to a
deduction for such year in the amount of the ordinary income so realized; and
(3) the optionee would realize capital gain in am amount equal to the difference
between (a) the amount realized upon the sale of the shares and (b) the option
price plus the amount of ordinary income, if any, realized upon the disposition.
Restricted Stock
In the absence of an election under section 83(b) of the Code ("Section
83(b) Election"), a participant who received restricted stock will recognize no
income at the time of issuance. When the restriction period expires with respect
to shares of restricted stock, a participant will recognize ordinary income
equal to the fair market value of the shares as of the date the restrictions
expire over the amount paid for such shares (if any). The participant's basis
for the shares is equal to the amount paid (if any) plus the ordinary income
recognized, and the holding period begins just after the restriction period
ends.
19
<PAGE>
An employee may, however, make a Section 83(b) Election to include in income in
the year of purchase or grant the excess of the fair market value of the shares
(computed without regard to the restrictions) on the date of purchase or grant
over their purchase price. The Company will be entitled to a deduction in the
same year and in the same amount as income is recognized by the participant. If
a Section 83(b) election is made, a participant's basis for the shares will be
the amount paid for the shares, if any, plus the ordinary income recognized.
Performance Units
Generally, performance units granted to a participant will be taxable to
the participant in the amount of cash and the fair market value of shares
received. The Company will be entitled to a deduction for such amount at the
time it is includible in the income of the participant.
The affirmative vote of the holders of a majority of the shares of Common
Stock present, in person or by proxy, at the Annual Meeting is required for the
approval of the above-described amendment to the Incentive Plan. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO INCREASE THE
NUMBER OF SHARES AVAILABLE FOR ISSUANCE UNDER THE INCENTIVE PLAN. Shares of
Common Stock covered by proxies executed and received in the accompanying form
will be voted in favor of the amendment, unless otherwise specified on the
proxy.
20
<PAGE>
3. RATIFICATION OF THE SELECTION OF AUDITORS
The Board of Directors will request stockholders to ratify its selection of
Ernst & Young LLP, independent auditors, to examine the consolidated financial
statements of the Company for the fiscal year ending December 26, 1999. Ernst &
Young LLP has audited the Company's financial statements since 1996.
Representatives of Ernst & Young LLP will be present at the Annual Meeting to
make a statement if they desire to do so and respond to questions by
stockholders. The affirmative vote of a majority of the shares represented at
the meeting is required for the ratification of the Board's selection of Ernst &
Young LLP as the Company's auditors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT
AUDITORS OF THE COMPANY.
OTHER BUSINESS
The Board of Directors is not aware of any other matters to be presented at
the Annual Meeting other than those set forth in the Notice of Annual Meeting
and routine matters incident to the conduct of the meeting. If any other matters
should properly come before the Annual Meeting or any adjournment or
postponement thereof, the persons named in the proxy, or their substitutes,
intend to vote on such matters in accordance with their best judgement.
STOCKHOLDER PROPOSALS
Any stockholder proposal intended to be presented at next year's Annual
Meeting of Stockholders must be received by the Company by December 12, 1999, to
be considered for inclusion in the Company's proxy materials for such meeting.
If a stockholder intends to present a proposal at next year's Annual Meeting of
Stockholders, but has not sought the inclusion of such proposal in the Company's
proxy materials, such proposal must be received by the Secretary of the Company
prior to (Date would be 45 days prior to the actual mailing date in 2000) or the
Company's appointed proxies for next year's Annual Meeting will be entitled to
use their discretionary voting authority should such proposal then be raised,
without any discussion of the matter in the Company's proxy materials. In
addition, a stockholder who wishes to introduce a proposal at an annual meeting
of stockholders, regardless of whether the stockholder wants the proposal
included in the Company's proxy materials, must comply with certain requirements
set forth in the Company's Certificate of Incorporation. A copy of the
Certificate of Incorporation may be obtained by written request to the Chief
Financial Officer of the Company at its principal executive offices at 2300
Resource Drive, Birmingham, Alabama 35242.
ANNUAL REPORT
The Company's Annual Report to Stockholders on Form 10-K for the fiscal
year ending December 27, 1998, accompanies this Proxy Statement.
By Order of the Board of Directors
/s/ Michael M. Fleishman
---------------------------
Michael M. Fleishman
Secretary
Birmingham, AL
April 12, 1999
21
<PAGE>
PJ AMERICA, INC.
2300 RESOURCE DRIVE
BIRMINGHAM, ALABAMA 35242
ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The undersigned, a
stockholder of PJ AMERICA, INC., a Delaware corporation (the "Company"), hereby
appoints RICHARD F. SHERMAN, DOUGLAS S. STEPHENS and D. ROSS DAVISON, and each
of them, as the true and lawful attorneys and proxies with full power of
substitution, for and in the name, place and stead of the undersigned, to vote
all shares of common stock of the Company as designated below which the
undersigned would be entitled to vote if he were present at the annual meeting
of Stockholders to be held at the Hyatt Regency Hotel, 320 West Jefferson
Street, Louisville, Kentucky, at 11:00 a.m. (EDT), on May 25, 1999, and at any
adjournment thereof.
THE BOARD OF DIRECTORS PROPOSES AND RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES SET FORTH BELOW AND FOR PROPOSAL NOS. 2 AND 3.
1. ELECTION OF DIRECTORS:
[_] FOR all nominees listed below (except as marked to the contrary below)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below
Michael M. Fleishman and Martin T. Hart.
(or any substitute nominee should any of the above become unavailable for
any reason)
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
__________________________________________________
2. AMENDMENT TO THE PJ AMERICA, INC. 1996 STOCK OPTION INCENTIVE PLAN: To
increase the number of shares available for issuance under the plan.
3. RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS: Ratify the
appointment of ERNST & YOUNG LLP as PJ America, Inc.'s Independent
Certified Accountants for the fiscal year ending December 26, 1999.
[_] FOR
[_] AGAINST
[_] ABSTAIN
4. DISCRETIONARY AUTHORITY: In their discretion, the Proxies are authorized
to vote in accordance with their judgement upon such other business as may
properly come before the meeting or any adjournment thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE
STOCKHOLDER. IF NO SPECIFIC DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
NOMINEES SET FORTH IN PROPOSAL NO. 1 AND FOR PROPOSAL NOS. 2 AND 3 AND, IN THE
DISCRETION OF THE PROXIES, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
The undersigned hereby revokes any proxy or proxies heretofore given, and
ratifies and confirms all that the proxies appointed hereby or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof.
The undersigned hereby acknowledges receipt of a copy of the Notice of
Annual Meeting and Proxy Statement, both dated April 12, 1999, and a copy
of the Company's Annual Report for the fiscal year ended December 28, 1998.
Please mark, sign, date, and return this proxy in the enclosed envelope.
No postage is required if mailed within the United States.
Date: __________________ , 1999 _______________________________________
Signature
Date: __________________ , 1999 _______________________________________
Signature (if jointly held)
When shares are held by joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, the President or other authorized officer
should sign in the full corporate name. If a partnership, an authorized
person should sign in partnership name.
