<PAGE>
SCHEDULE 14A INFORMATION
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
May 4, 2000
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, June 20, 2000 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 1999 results and answer your questions.
Thank you for your support of PJ America. We look forward to seeing you on
June 20th.
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 June 20, 2000
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, June 20, 2000 at 11:00 a.m. (E.D.T.), for the following purposes:
(1) To elect two directors to serve until the 2003 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
Non-Employee Directors Stock Incentive Plan to increase the number of
shares available for issuance, thereunder;
(3) 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;
(4) To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000;
(5) 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 28, 2000, 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
May 4, 2000
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
June 20, 2000
_______________
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, June 20, 2000, 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 May 4, 2000.
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 Non-Employee Directors Stock Incentive Plan, 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 2000 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 28, 2000, 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
4,797,148 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) 278,663 (4) 5.7%
Douglas S. Stephens (3) 324,681 (5) 6.8%
D. Ross Davison 17,830 (6) *
James S. Riekel 56,742 (7) 1.2%
Robert W. Curtis, Jr. 11,359 (8) *
John D. Rose 9,080 (9) *
Michael M. Fleishman (3) 231,430 (10) 4.7%
Martin T. Hart 137,000 (11) 2.9%
Frank O. Keener (3) 336,603 (12) 7.0%
Stephen P. Langford (3) 219,164 (12) 4.6%
Charles W. Schnatter 24,883 (13) *
All directors and executive officers
as a group (11 persons, including
those named above) 1,647,435 34.3%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Numbers of Percent of
Other 5% Beneficial Owners Shares (1) Class (2)
- -------------------------------------------------------------------------
<S> <C> <C>
John M. Day
5151 Glenwood Avenue
Raleigh, North Carolina 27612 451,106 (14) 9.4%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 707,200 (14) 14.7%
T. Rowe Price Associates, Inc.
P.O. Box 89000
Baltimore, Maryland 21289-9999 566,800 (14) 11.8%
</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 4,797,148 shares outstanding as of April 28, 2000, 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 251,663 shares held by Mr. Sherman, as trustee of the Richard
Sherman Trust. Includes options to purchase 27,000 shares exercisable
within 60 days of the Record Date.
(5) Includes options to purchase 82,217 shares exercisable within 60 days of
the Record Date.
(6) Includes options to purchase 17,830 shares exercisable within 60 days of
the Record Date.
(7) Includes options to purchase 36,580 shares exercisable within 60 days of
the Record Date.
(8) Includes options to purchase 11,359 shares exercisable within 60 days of
the Record Date.
(9) Includes options to purchase 9,080 shares exercisable within 60 days of the
Record Date.
(10) 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 27,000 shares exercisable within 60 days of the Record
Date.
(11) Includes an aggregate of 100,000 shares held by H Investment Company LLP.
Includes an option to purchase 12,000 shares exercisable within 60 days of
the Record Date.
(12) Includes options to purchase 12,000 shares exercisable within 60 days of
the Record Date.
3
<PAGE>
(13) 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 12,000
shares exercisable within 60 days of the Record Date.
(14) 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, 1999.
4
<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. Stephen P. Langford and Charles W. Schnatter 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 2003. 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 2003
Stephen P. Langford 46 Director 1991
Charles W. Schnatter 38 Director 1996
DIRECTORS CONTINUING IN OFFICE
Term Expiring in 2002
Martin T. Hart 64 Director 1992
Michael M. Fleishman 55 Vice Chairman, Director 1991
and Secretary
DIRECTORS CONTINUING IN OFFICE
Term Expiring in 2001
Richard F. Sherman 56 Chairman and Director 1991
Frank O. Keener 57 Director 1991
Douglas S. Stephens 36 Director, Chief Executive 1991
Officer and President
</TABLE>
5
<PAGE>
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 October, 1998 to present (and from 1987 to 1997), Mr.
Langford is the General Manager of WAVE TV, an NBC affiliate. From January 1997
to October 1998, Mr. Langford was the General Manager of WFIE NBC-14.
Charles W. Schnatter has served as a director of the Company since August
1996. Mr. Schnatter has served as General Counsel and Secretary of Papa John's
International, Inc. ("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 has been a franchisee of
PJI since 1989.
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, and in 1999 he was elected a member of the
Executive Committee. 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 1996.
Richard F. Sherman has served as director and Chairman of the Board of the
Company or certain predecessors since 1991, and in 1999 he was elected a member
of the Executive Committee. Mr. Sherman is a private investor who has been a
franchisee and a consultant to 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, and in 1999 he was
elected a member of the Executive Committee. 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.
6
<PAGE>
Meetings of the Board of Directors
The Board met on four occasions during 1999. 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 1999.
Committees of the Board of Directors
In addition to an Executive Committee, which is comprised of Richard F.
Sherman, Michael Fleishman 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 1999.
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 1999.
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, 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 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.
7
<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 1999 $150,000 $ 0 $ 0 32,500
President and Chief 1998 100,000 20,000 0 41,368
Executive Officer 1997 80,000 0 0 25,000
D. Ross Davison 1999 $100,000 $ 0 $ 0 15,000
Chief Financial 1998 80,000 20,000 0 26,321
Officer and Treasurer 1997 75,000 15,000 31,833 17,500
James S. Riekel 1999 $100,000 $ 0 $ 0 15,000
Vice President - 1998 80,000 12,500 51,056 26,321
Regional Operations 1997 60,000 30,000 0 15,000
</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.
8
<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 1999 fiscal year. The Company does not
grant stock appreciation rights ("SARs").
<TABLE>
<CAPTION>
% of
Total
# of Options Potential Realizable
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 32,500 14.0% $15.88 11/05/09 $324,573 $822,530
D. Ross Davison 15,000 6.5% $15.88 11/05/09 $149,803 $379,629
James S. Riekel 15,000 6.5% $15.88 11/05/09 $149,803 $379,629
</TABLE>
- ------------
(1) All options were awarded under the 1996 Stock Ownership Incentive Plan (the
"Incentive Plan"), have a term of 10 years and vest immediately in the
event of a change in control of the Company.
(2) Assumed annual appreciation rates are set by the Securities and Exchange
Commission and are not a forecast of future appreciation. The amounts
shown are pre-tax and assume the options will be held throughout the entire
ten-year term. If the Company's Common Stock does not increase in value,
the options are valueless.
(3) These options become exercisable in four annual installments of 10%, 20%,
30% and 40% beginning November 5, 2000.
9
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Set forth below is information with respect to unexercised stock options
held by the named executive officers at the end of the Company's 1999 fiscal
year. Also, there were no SARs outstanding at the 1999 fiscal year-end.
<TABLE>
<CAPTION>
Number of Unexercised Options Value of Unexercised
at In-the-Money Options at Fiscal
Fiscal Year-End (#) Year-End ($) (2)
------------------------------- ------------------------------
Shares
Acquired Value
Name on Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------ ------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Douglas S. Stephens 0 0 82,217 79,151 $207,644 $116,684
D. Ross Davison 26,875 $242,578 17,830 41,616 43,086 65,042
James S. Riekel 0 0 35,580 39,741 86,055 59,417
</TABLE>
____________________
(1) The Value Realized represents the difference between the fair market value
on the date of exercise and the total option exercise price.
(2) Based on the difference between the option exercise price and the last
reported sale price of the Common Stock ($15.50) as reported on the Nasdaq
Stock Market on December 23, 1999, the last trading day of the Company's
1999 fiscal year.
10
<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 1999.
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 1999
Bonus Program at the beginning of the 1999 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 Incentive Plan.
The 1999 grants of options to purchase shares of Common Stock were granted with
an exercise price of $15.88 per share, the fair market value on the date of
grant, and will become exercisable in four annual installments of 10%, 20%, 30%,
and 40% beginning on November 5, 2000. In 1999, options (ranging from 15,000 to
32,500 shares) were awarded to executive officers under the Incentive Plan.
The Incentive 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 (the "Code") ("NQSOs");
(ii) ("ISOs"); (iii) restricted shares; and (iv) performance units. The
Incentive 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. (See "Proposal
to Approve an Amendment to the Company's 1996 Stock Ownership Incentive Plan")
11
<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. NQSOs to purchase 92,500 shares of the Company's
Common Stock were granted to all executive officers (including the Company's
Chief Executive Officer) in 1999, 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 annual installments of 10%, 20%, 30%, and 40%
beginning on November 5, 2000.
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 1999. Mr. Stephens received a
base salary of $150,000 for 1999. Mr. Stephens also received a NQSO to purchase
32,500 shares of the Company's Common Stock pursuant to the Incentive Plan
described above for his actual and potential contribution to the Company. Mr.
Stephens did not receive a bonus in 1999.
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
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
PJI Warrant. In connection with the Company's initial public offering in
October, 1996, 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 which is 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. 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%), 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.
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
of the Company, which was immediately retired. PJ Louisiana, Inc. was previously
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%).
PJ Louisiana, Inc. paid management fees of $28,000 in 1998.
13
<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 03/23/2000 including data to 12/23/1999
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 10/1996 12/1996 12/1997 12/1998 12/1999
- ---------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PJ AMERICA, INC. 100.0 116.0 88.5 110.7 94.7
Nasdaq Stock Market (US Companies) 100.0 106.4 125.0 180.7 330.6
NASDAQ Stocks (SIC 5800-5899 US Companies) 100.0 100.2 84.7 75.7 60.4
Eating and drinking places
</TABLE>
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.
14
<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
1999.
15
<PAGE>
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S 1996 NON-
EMPLOYEE DIRECTORS STOCK OPTION INCENTIVE PLAN
Proposed Amendment
The Board of Directors has adopted, and recommends that shareholders
approve an amendment to the Company's Stock Option Plan for Non-Employee
Directors (the "Director Plan") to increase the number of shares of Common Stock
reserved for issuance under the Director Plan from 160,000 to 240,000 shares. At
April 28, 2000, options to purchase 174,000 shares of Common Stock under the
Directors Plan were outstanding, and 76,000 shares would have been available for
issuance under the Directors Plan if this amendment had been in effect.
Description of the Director Plan
The Directors Plan was approved by the stockholders and Board of Directors
of the Company in 1996. The Directors Plan currently reserves for issuance an
aggregate 160,000 shares of Common Stock. The Director Plan is intended to
promote the interests of the Company and its stockholders by encouraging non-
employee directors of the Company to acquire an ownership interest in the
Company. Under the terms of the Directors Plan, non-employee directors who do
not otherwise hold options to purchase shares of Common Stock upon their initial
election to the Board of Directors are awarded options to purchase 12,000 shares
of Common Stock upon joining the Board. Each director (regardless of option
ownership) is eligible to receive an additional option to purchase 4,000 shares
of Common Stock annually. All options are granted at fair market value and, as
to the requirement described in this paragraph, vest in equal one-fourth
installments, beginning on the first anniversary of such option's date of grant.
Non-Employee directors are eligible to receive awards under the Director
Plan. There are currently six non-employee directors.
The Directors Plan also provides that, in addition to other options granted
under the Director Plan, any non-employee director who serves as the Chairman or
Vice Chairman of the Board of Directors shall receive an annual award of options
to purchase 5,000 shares of Common Stock. Those options vest six months after
such option's date of grant.
Only NQSOs may be granted under the Directors Plan and the options are
granted an exercise price equal to the fair market value of the Common Stock on
of grant. Generally, in the event of a "change of control" (as defined in the
Directors Plan) of the Company, all outstanding stock options become fully
vested and immediately exercisable in their entirety. In addition, the optionee
will be permitted to sell the option to the Company generally for an amount
equal to the excess of the (i) the fair market value over (ii) the per share
exercise price for such shares under the stock option.
The Board may at any time terminate, and, from time to time, may amend or
modify the Directors Plan; provided, however, that no amendment may impair the
rights of a participant with respect to outstanding options without the
optionee's consent. Any such action of the Board may be taken without the
approval of the Company's stockholders, but only to the extent that such
stockholder approval is not required by applicable law or regulation. The
Directors Plan will terminate ten years from its effective date.
16
<PAGE>
The options granted pursuant to the Directors Plan are non-qualified. 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 an 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. For a description of the tax treatment of
the options granted under the Director Plan, see "Federal Income Tax
Consequences--Non Qualified Stock Options" on page 20.
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 proposed amendment to the Director Plan. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE "FOR" RATIFICATION AND APPROVAL OF THE AMENDMENT TO THE
DIRECTOR 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.
17
<PAGE>
3. 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 1,000,000
shares to 1,500,000 shares. At April 28, 2000, options to purchase 791,762
shares of Common Stock were outstanding. At April 28, 2000, 547,387 shares would
have been available for issuance under the Incentive Plan if this amendment is
approved. 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 and amended in 1999. 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 1,000,000 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 500,000 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 26, 1999, the Company had approximately
5,000 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
18
<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 $11.25.
Stock options granted under the Incentive Plan may be either ISOs or 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
19
<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 an 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 an 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.
20
<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.
21
<PAGE>
4. 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 31, 2000. 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 10, 2000, 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 2001) 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 26, 1999, accompanies this Proxy Statement.
By Order of the Board of Directors
/s/ Michael M. Fleishman
---------------------------
Michael M. Fleishman
Secretary
Birmingham, AL
May 4, 2000
22
<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 June 20, 2000, 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, 3 AND 4.
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
Stephen P. Langford and Charles W. Schnatter. (or any substitute nominee
should either 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 PLAN FOR NON-EMPLOYEE
DIRECTORS: To increase the number of shares available for issuance under the
plan.
[_] FOR
[_] AGAINST
[_] ABSTAIN
3. AMENDMENT TO THE PJ AMERICA, INC. 1996 STOCK OPTION INCENTIVE PLAN: To
increase the number of shares available for issuance under the plan.
[_] FOR
[_] AGAINST
[_] ABSTAIN
4. 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 31, 2000.
[_] FOR
[_] AGAINST
[_] ABSTAIN
5. 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 May 4, 2000, and a copy of
the Company's Annual Report for the fiscal year ended December 26, 1999.
Please mark, sign, date, and return this proxy in the enclosed envelope.
No postage is required if mailed within the United States.
Date: __________________ , 2000 __________________________________________
Signature
Date: __________________ , 2000 __________________________________________
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.
