***PRELIMINARY DRAFT***
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 12, 1994
TO OUR STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of Stockholders
of NATIONAL PIZZA COMPANY (the "Company") will be held at the
Memorial Auditorium, 503 North Pine, Pittsburg, Kansas, on Tuesday, July
12, 1994, at 10:00 a.m., central daylight savings time, for the
following purposes:
1. To elect two directors to serve a three-year term and
until their successors are elected and qualified;
2. To approve and adopt the 1994 Stock Option Plan;
3. To approve and adopt an amendment to the Company's
Restated Articles of Incorporation to change the Company's
name to NPC International, Inc.
4. To transact such other business as may properly come
before the meeting or any adjournment of the meeting.
Only Class A stockholders of record at the close of business on
June 7, 1994, will be entitled to vote at the meeting. The annual
report for the year ended March 29, 1994, is enclosed herewith. A
complete list of stockholders entitled to notice of and to vote at
the meeting will be available and open to the examination of any
stockholder for any purpose germane to the meeting during ordinary
business hours on and after July 1, 1994, at the office of the Company,
720 West 20th Street, Pittsburg, Kansas 66762.
All stockholders are cordially invited to attend the meeting. For
the convenience of those Class A stockholders who do not expect to
attend the meeting in person and desire to have their stock voted, a
form of proxy and an envelope, for which no postage is required,
are enclosed. Any
stockholder who later finds he can be present at the meeting, or for
any other reason desires to do so, may revoke this proxy at any time
before it is voted.
Please complete, sign, date and mail promptly the accompanying
proxy card in the return envelope furnished for that purpose, even
if you currently plan to attend the meeting.
By Order of the Board of Directors,
David G. Short
Secretary
Pittsburg, Kansas
June 8, 1994
<PAGE>
NATIONAL PIZZA COMPANY
720 W. 20TH STREET
PITTSBURG, KANSAS 66762
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 12, 1994
SOLICITATION AND REVOCATION OF PROXY
This Proxy Statement is furnished in connection with the
solicitation of proxies in the form enclosed by and on behalf of the
Board of Directors of National Pizza Company (the "Company"), to be
voted at its Annual Meeting of Stockholders to be held at the
Memorial Auditorium, 503 North Pine, Pittsburg, Kansas at 10:00 a.m.
on Tuesday, July 12, 1994. The mailing address of the principal
executive offices of the Company is 720 West 20th Street, Pittsburg,
Kansas 66762. The individuals named as proxies are O. Gene
Bicknell and James K. Schwartz. Proxies may be solicited by use of
the mails, by personal interview, or by telephone and may be solicited
by officers and directors, and by other employees of the Company.
Brokers, nominees, fiduciaries, and other custodians will be
requested to forward soliciting material to the beneficial owners of
shares and will be reimbursed for their expenses in forwarding such
material. All costs of solicitation of proxies will be borne by the Company.
Only holders of record of Class A Common Stock, $.01 par value
per share (the "Class A Stock"), as of the close of business on June 7,
1994, are entitled to vote at the meeting or any adjournment or
postponement thereof. All shares of Class A Stock represented by proxies
received will be voted in accordance with instructions contained
therein. In the absence of voting instructions, the shares will be
voted FOR the nominees listed herein.
A holder of Class A Stock ("Class A Stockholder") giving a proxy
has the power to revoke it any time before it is voted by notifying
the Secretary of the Company in writing, by submitting a substitute
proxy having a later date or by voting in person at the meeting.
This Proxy Statement and form of proxy are first being mailed to
stockholders on June 14, 1994.
ALL CLASS A STOCKHOLDERS ARE URGED TO COMPLETE, DATE, EXECUTE
AND RETURN THE FORM OF PROXY SENT TO THEM WITH THIS PROXY STATEMENT.
VOTING SECURITIES
At the close of business on June 7, 1994, the record date for
the determination of stockholders entitled to vote at the Annual Meeting,
there were 12,582,321 shares of Class A Stock outstanding, which
represent all of the voting securities of the Company. Each share of
Class A Stock is entitled to one vote. All shares of Class A Stock
have cumulative voting rights in the election of directors, and there
are no conditions precedent to the exercise of those rights.
Cumulative voting means a Class A Stockholder is entitled to cast a
total number of votes equal to the number of his shares multiplied by
the number of directors to be elected, and can cast them all for one
nominee or can divide them as he sees fit among as many nominees as
he chooses. A Class A Stockholder may divide his cumulative votes
among the nominees by marking the enclosed proxy card according to
instructions on the card. If a Class A Stockholder does not allocate
his votes, then such stockholder's cumulative votes will be
allocated equally among the nominees for whom authority to vote is
granted. Only Class A Stockholders of record at the close of business
on June 7, 1994, will be entitled to vote at the meeting. An
affirmative vote of the majority of the outstanding shares of Class A
Stock present at the meeting in person or by proxy is required for
approval of each proposal. Votes submitted as abstentions on any
proposal will be counted as votes against such proposal. Broker non-
votes will not count for or against any proposal because such shares
will not be counted as shares present at the meeting. A broker
"non-vote" occurs when a nominee holding shares for a beneficial
holder does not have discretionary voting power and does not receive
voting instructions from the beneficial owner.
The Company also has outstanding shares of common stock
designated Class B Common Stock, par value $.01 per share (the "Class
B Stock"). Class B Stock has no voting rights, other than those
required by law. Under the Kansas General Corporation Code, holders of
Class B Stock ("Class B Stockholders") will be entitled to vote on
proposals to increase or decrease the number of authorized
shares of Class B Stock, to change the par value of the
Class B Stock, or to alter or change the powers, preferences
or special rights of the shares of Class B Stock so as to
affect them adversely.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of June 7, 1994,
certain information as to the number of shares of Class A Stock
beneficially owned by each person who is known by the Company to own
beneficially more than 5% of its outstanding shares of Class A Stock.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership Class
<S> <C> <C>
O. Gene Bicknell (1) (2) 7,998,301 62.3%
100 North Pine Street
Pittsburg, Kansas 66762
<FN>
(1) Includes 22,500 shares of Class A Stock owned by Pitt Plastics,
Inc., a corporation controlled by Mr. Bicknell.
(2) Includes options for 258,750 Class A stock under the
NonQualified Plan (as defined below) which are exercisable
within 60 days. Does not include options held which are not
exercisable within 60 days. See "Executive Compensation."
</TABLE>
PROPOSAL NUMBER ONE
ELECTION OF TWO DIRECTORS
The Board of Directors of the Company is comprised of six
directors and is divided into three classes. At each annual meeting of
stockholders, members of one of the classes, on a rotating basis, are
elected for three year terms.
The two persons designated by the Board of Directors as nominees
for election at this meeting to serve a three year term and until
their successors are elected and qualified are Fran D. Jabara and
Robert E. Cressler, both of whom are currently directors. Each of the
nominees has indicated he is willing and able to serve as a director.
If a nominee becomes unable or unwilling to serve, the accompanying
proxy may be voted for the election of such other person as shall be
designated by the Board of Directors.
Shares of Class A Stock represented by all proxies received by
the Board of Directors and not marked to withhold authority to vote
for any individual director or for all directors will be voted (unless
one or both nominees are unable or unwilling to serve) for the election
of the nominees named above. Each director requires an affirmative vote
of the majority of the outstanding shares of the Class A Stock present
at the meeting or person or by proxy to be elected to the Board of
Directors.
Mr. Bicknell has informed the Company that he intends to vote
his shares of Class A Stock FOR the election of the nominees named
above. If his Class A shares are voted in this manner, the vote
required for election of the nominees listed above will be achieved,
regardless of how other shares of Class A Stock are voted.
Nominees for Directors to Serve a Three-Year Term to Expire in 1997:
FRAN D. JABARA, Age 69, President of Jabara Ventures Group.
Mr. Jabara was elected a director of the Company in May 1984. He
is currently President of Jabara Ventures Group, a venture capital
firm. From September, 1949 to August, 1989 he was a distinguished
professor of business at Wichita State University, Wichita, Kansas.
He is also a director of Union National Bank, Wichita, Kansas.
ROBERT E. CRESSLER, Age 55, Partner in FRAC Enterprises.
Mr. Cressler was first elected a director of the Company in
April 1985. He has been for more than the past five years a partner
in FRAC Enterprises, which previously operated Pizza Hut
restaurants and continues to operate other businesses,
including Nutri/Systems franchises.
Continuing Directors - Not Standing for Election This Year
Directors with Terms Expiring in 1995:
O. GENE BICKNELL, Age 61, Chairman of the Board of the Company.
Mr. Bicknell has been Chairman of the Board of Directors of the
Company and its predecessors since 1962.
GORDON W. ELLIOTT, Age 58, Vice Chairman of the Company.
Mr. Elliott has been a Director of the Company since its formation
in 1974. In addition, Mr. Elliott was President of the Company from
1970 until June 1, 1992, when he retired and became Vice Chairman
following the appointment of J. Mitchell Boyd as President of the
Company. Mr. Elliott serves in a consulting capacity to the Company.
Directors with Terms Expiring in 1996:
J. MITCHELL BOYD, Age 55, President and Chief Executive Officer of
the Company. Mr. Boyd was appointed President of the Company on
June 1, 1992, and was named a Director on January 28, 1993. Mr.
Boyd was appointed Chief Executive Officer on July 13, 1993.
From December, 1989 to June, 1992, Mr. Boyd pursued various
personal business interests. From 1986 to December, 1989, he was
vice chairman and chief executive officer of Shoney's Inc., a
publicly-held restaurant company. In April 1989, he was elected
chairman of Shoney's Inc., and he retired in December, 1989.
JOHN W. CARLIN, Age 53, President of Midwest Superconductivity,
Inc. Mr. Carlin is currently President of Midwest
Superconductivity, Inc., a high technology research company. Mr.
Carlin was first elected a Director in 1987. He was the
Visiting Professor of Public Administration and
International Management at Wichita State University from
1987 to 1988, and Governor of the State of Kansas from January, 1979
to January, 1987.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met four times during the fiscal year
ended March 29, 1994. On October 19, 1993 the Board of Directors voted to
combine the Compensation and Stock Option Committees into one committee,
for ease of administration.
The Company's standing Compensation and Stock Option Committee
met once and the Company's standing Audit Committee met twice during the
last fiscal year. The Company does not have a Nominating Committee. The
normal duties of such a committee are carried out by the entire
Board of Directors. During the last fiscal year, none of the Company's
Directors attended fewer than 75% of the meetings of the Board of Directors
or any committee of which he was a member.
AUDIT COMMITTEE. The Audit Committee is comprised of Messrs.
Carlin, Jabara and Cressler. The Audit Committee recommends to the
Board of Directors the independent auditors that will conduct the
annual audit of the Company, and also reviews the Company's
accounting practices and control systems and reviews the
qualifications and performance of the proposed independent auditors.
COMPENSATION AND STOCK OPTION COMMITTEE. The Compensation and
Stock Option Committee is comprised of Messrs. Bicknell, Jabara and
Cressler. The Committee reviews and recommends to the Board of Directors
the levels, amounts, and types of compensation paid to executive officers
and directors of the Company. The Committee also determines the number
of options to be granted to the Company's executive management and
receives and reviews executive management's recommendations regarding
options to be granted to all other Company employees. All
recommendations of the Committee are submitted to the Board of
Directors for approval.
DIRECTOR COMPENSATION
Non-employee Directors are paid a fee of $750 for each Board
meeting attended and $750 per month as additional Director's
compensation.
COMPENSATION AND STOCK OPTION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
The Compensation and Stock Option Committee is currently comprised
of Messrs. Bicknell, Jabara and Cressler. Mr. Bicknell, Chairman of the
Board of the Company, chairs the Committee. Messrs. Jabara and
Cressler have never been employed by the Company.
The Board of Directors, in January, 1993, authorized the purchase
of certain real estate comprised principally of ten Pizza Hut
restaurants owned by Mr. Bicknell. The Company engaged an outside
appraisal company to perform a MAI appraisal of the properties. The
Board of Directors upon review of the proposal and the appraisals, and
with Mr. Bicknell abstaining from any participation in the vote,
approved the purchase of these sites for the appraised values totaling
$4.9 million. At March 29, 1994, the Company had completed the
transactions on all of these properties.
The Company currently leases six restaurants, a parking lot and
a corporate aircraft from Mr. Bicknell and one restaurant from Mr.
Elliott. Management believes these leases are at least as favorable as
could be obtained from unrelated parties.
STOCK OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth, as of March 29, 1994, the
beneficial ownership of shares of Class A Stock and Class B Stock by all
directors and nominees, by the Named Executive Officers (as defined
below) and by the directors and executive officers as a group.
<TABLE>
<CAPTION>
Name and Title Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership (1) Class
Class A Class B Class A Class B
<S> <C> <C> <C> <C>
O. Gene Bicknell (2)
Chairman and Director 7,998,301 7,865,578 62.3% 62.1%
Gordon W. Elliott
Vice Chairman and Director 342,258 452,258 2.7% 3.6%
J. Mitchell Boyd
President and
Chief Executive Officer 1,000 14,250 * *
Marty D. Couk
Senior Vice President-
Pizza Hut Operations 3,750 6,431 * *
Robert McDevitt
Vice President - Marketing ---- 5,014 ---- *
Gerald A. Brunotts
President, Romacorp, Inc. ---- ---- ---- ----
John W. Carlin
Director ---- ---- ---- ----
Robert E. Cressler
Director ---- ---- ---- ----
Fran D. Jabara
Director 1,999 1,999 * *
All executive officers
and directors as a group 8,347,308 8,354,280 65.0% 65.9%
<FN>
(1) Includes options for 262,500 shares of Class A Stock and 241,125
shares of Class B Stock which could be exercised within 60 days.
Does not include options held which are not exercisable within 60
days.
(2) Includes 22,500 shares each of Class A Stock and Class B Stock
owned by Pitt Plastics, Inc., a corporation controlled by Mr.
Bicknell.
* Less than 1% ownership.
</TABLE>
EXECUTIVE COMPENSATION
The following table summarizes, for each of the three fiscal years
ended March 29, 1994, March 30, 1993, and March 31, 1992, the
compensation awarded, paid to or earned by (i) the Chief Executive Officer
(the "CEO") of the Company as of March 29, 1994, and (ii) each of
the four most highly compensated executive officers (other than the CEO)
who served as executive officers of the Company or its subsidiaries
as of March 29, 1994, whose annual compensation exceeded $100,000 for
the fiscal year ended March 29, 1994, ((i) and (ii) collectively,
the "Named Executive Officers"). The Company does
not currently award stock appreciation rights, restricted stock and
other long term incentives (other than stock options) under its
executive compensation program. No amounts reportable as Other
Annual Compensation were earned, paid or accrued to the Named
Executive Officers during the fiscal year ended March 29, 1994.
<TABLE>
Summary Compensation Table
<CAPTION>
Long Term
Annual Compensation Compensation
Name and Fiscal Option All Other
Principal Year Award Compensation
Position (1) Salary Bonus (#) (2)
<S> <C> <C> <C> <C> <C>
O. Gene Bicknell
Chairman 1994 $300,000 $ 60,000 ---- $16,022
of the Board (3) 1993 300,000 100,000 235,000 17,544
1992 275,000 95,000 15,000 ----
J. Mitchell Boyd
President and
Chief Executive 1994 152,000 60,000 5,000 450
Officer (4) 1993 116,846 30,000 65,000 288
Marty D. Couk
Senior Vice 1994 89,231 39,432 7,500 3,550
President - Pizza 1993 69,039 8,297 ---- 2,588
Hut Operations 1992 61,216 7,475 ---- ----
Robert M. McDevitt
Vice President 1994 100,000 20,000 ---- 174
Marketing (5) 1993 64,230 4,166 20,000 102
Gerald A. Brunotts
President 1994 101,539 ---- 10,000 288
Romacorp, Inc. (6)
<FN>
(1) For the fiscal year ended on the last Tuesday in March for the year
noted.
(2) Consists of the Company's 1993 profit sharing plan contributions, the
amounts included in 1993 income from group-term life insurance coverage in
excess of $50,000 and, in the case of Mr. Bicknell, the economic benefit
derived from split-dollar life insurance policies paid for by Company (see
footnote below), in the following amounts: Bicknell, $4,695 profit
sharing, $702 group insurance, $10,625 split-dollar insurance; Boyd, $450
group insurance; Couk, $3,484 profit sharing, $66 group insurance;
McDevitt, $174 group insurance; and Brunotts, $288 group insurance.
Pursuant to SEC transition rules, the fiscal 1992 figures for other
compensation are not required to be disclosed.
(3) The Company pays 100% of the premiums on two split-dollar policies
insuring the life of Mr. Bicknell. The policies state the Company is
entitled to be reimbursed all premiums it paid, without interest, from the
proceeds with the residual to be paid to a named beneficiary. The Company
receives a statement from the insurance company specifying the economic
benefit derived by Mr. Bicknell under this arrangement, based upon the
Company's rights under the policy.
(4) Mr. Boyd joined the Company on June 1, 1992.
(5) Mr. McDevitt joined the Company on August 10, 1992 and terminated in
May, 1994.
(6) Mr. Brunotts joined the Company on May 12, 1993.
</TABLE>
Stock Options
The following two tables set forth information for the last completed
fiscal year relating to (i) grants to and exercises by the Named Executive
Officers of stock options pursuant to the Company's Amended and Restated
1984 Non-Qualified Stock Option Plan (the "Non-Qualified Plan"), and (ii)
holdings at March 29, 1994, by the Named Executive Officers of unexercised
options granted pursuant to the Non-Qualified Plan. The Company currently
does not award stock appreciation rights under its executive compensation
program.
<TABLE>
Options Grants in the Fiscal Year Ended March 29, 1994
<CAPTION>
Potential
Realizable
Value at
Assumed
% of Total Annual Rates
Options of Stock Price
Granted to Exercise Appreciation
Options Common Employees or Base Expi- for Option
Granted Stock in Fiscal Price ration Term (2)
Name (1) Class Year ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald A. Brunotts 10,000 B 6.0% 6.00 8/23/03 37,800 95,400
J. Mitchell Boyd 5,000 B 3.0% 6.00 1/3/04 18,900 47,700
<FN>
(1) Options are generally exercisable starting 12 months after the grant date,
with 25% of the shares covered thereby becoming exercisable at that time
and with an additional 25% of the option shares becoming exercisable
on each successive anniversary date, with full vesting occurring on the
fourth anniversary date. All options were granted at the market price on
the date of grant and expire ten years from such date, subject
to earlier termination in certain events related to termination of
employment. The Non-Qualified Plan provides that in the event of a
merger, reorganization or consolidation, as a
result of which the Company is not the surviving
or acquiring corporation, all options become immediately exercisable
after approval of the transaction by the Board of Directors. The exercise
price and tax withholding obligations related to exercise may be paid by
delivery of already owned shares or by offset of the underlying shares,
subject to certain conditions.
(2) The values presented in these two columns are required disclosures
under federal securities laws based on assumed stock price appreciation
rates. THESE ASSUMED APPRECIATION RATES ARE NOT DERIVED FROM THE
HISTORIC OR PROJECTED PRICES OF THE COMPANY'S STOCK OR RESULTS OF
OPERATIONS OR FINANCIAL CONDITION AND THEY SHOULD NOT BE VIEWED AS A
PREDICTION OF POSSIBLE PRICES FOR THE COMPANY'S STOCK IN THE FUTURE.
</TABLE>
<TABLE>
Aggregated Option Exercises in Fiscal 1994 and
Option Value at March 29,1994
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Shares Options at Options at
Acquired Common March 29, 1994 March 29, 1994
on Value Stock Exercisable/ Exercisable/
Name Exercise Realized Class Unexercisable Unexercisable
<S> <C> <C> <C> <C> <C>
O. Gene Bicknell -0- -0- A 208,750 / 226,250 $ 0 / $ 0
B 157,500 / 57,500 0 / 0
J. Mitchell Boyd -0- -0- B 14,250 / 55,750 0 / 0
Marty D. Couk -0- -0- A 3,750 / 0 1,041 / 0
B 5,625 / 5,625 416 / 0
Robert M. McDevitt -0- -0- B 5,000 / 15,000 0 / 0
Gerald A. Brunotts -0- -0- B 0 / 10,000 0 / 0
</TABLE>
EMPLOYMENT CONTRACTS
There are no employment contracts with any executives of the
Company. Mr. Boyd, President and Chief Executive Officer of the
Company, has a compensatory arrangement which would require the payment
of the equivalent of six months salary and bonus in the event of
termination as a result of a change in control of the Company. In those
circumstances, Mr. Boyd would receive under the agreement a payment in
excess of $100,000, given his current compensation level.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation for the Company's Chief Executive Officer and
its other executives is administered by the Compensation and Stock
Option Committee. In fiscal year 1994, the Compensation Committee
and Stock Option Committee was combined; the resulting Committee was
composed of Mr. O. Gene Bicknell, the Chairman of the Company, and
two non-employee Directors, Messrs. Jabara and Cressler. Following
review and approval by the Compensation and Stock Option Committee,
all issues pertaining to executive compensation are submitted to the
full Board of Directors for approval and ratification. In fiscal
1994, the Board of Directors unanimously approved all
recommendations of the Compensation and Stock Option Committee.
Executive compensation is comprised of three primary components:
a base salary, a non-guaranteed performance bonus and stock option
grants. The first two are based generally upon short-term results, with
the latter offered as a long-term incentive to the executive.
The Committee reviews competitive salaries for companies in
similar types of businesses and seeks to establish rates believed to be
competitive so that the Company is able to attract and retain qualified
and experienced executives. Base salaries
are reviewed annually taking into account
competitive salaries in the industry and the performance of the
Company during the previous fiscal year. Compensation surveys
reviewed by the Committee include many of the peer companies reflected
in the following Performance Graph, because both the surveys and the
graph are based upon the same standard industrial code as that of the
Company.
Annual bonuses, if granted, are based upon the current performance
of the Company and the individual executive's contribution to the
Company. Bonuses are determined by the Compensation and Stock Option
Committee and then proposed to the full Board for ratification and
approval. Executives also participate in the National Pizza Company
Profit Sharing Plan along with store management and corporate staff,
to the extent they meet the qualification requirements for the Plan.
The Company utilizes long-term awards in the form of stock options
to strengthen the link between executive pay and performance. Stock
options issued pursuant to the Non-Qualified Plan are an integral
part of the executive officer compensation which the Committee believes
will align the interests of the Company's executives with those of its
stockholders. Such options focus the executives on long-term decisions
which will enhance the value of the Company's stock, thereby building
stockholder value.
The Compensation and Stock Option Committee does not impose
strict formulas or specific criteria in determining the overall
compensation for the Chief Executive Officer and the other executive
officers. Factors considered by the Compensation and Stock Option
Committee in determining compensation for the Company's executive
officers for the 1994 fiscal year include (i) the achievement of
minimum performance standards (generally a function of prior year
performance), (ii) current year performance in relation to
performance of the Company's competitors, (iii) overall stockholder
return (in the form of stock price appreciation), (iv) the
organizational level at which the executive functions, (v) the
individual executive's success in performing the requisite duties and
responsibilities of his or her office, and (vi) compensation levels
for executives at companies which are similar in size and complexity to
the Company.
It is the Compensation and Stock Option Committee's general
philosophy to pay the Chief Executive Officer and the other executive
officers a base salary at levels below that of other companies in the
same business as the Company and to utilize options as a significant
component of the overall compensation package. The Committee believes
that Company performance is reflected over time in the corresponding
price of the Company's stock and that improving the stock price
benefits the stockholders collectively in addition to the individual
executive.
Chief Executive Officer Compensation
The Compensation and Stock Option Committee utilizes the same
factors in determining the compensation of its Chief Executive Officer
as it does for all executives of the Company. Although there are
specific discussions regarding overall company performance and the
Chief Executive Officer's contribution in achieving those results,
there is no unique criterion applied to the Chief Executive Officer
that is not also applied to other key executives of the Company, as
outlined above. Mr. Bicknell does not participate in Committee
deliberations regarding his own compensation, nor does he participate
in the discussion or vote when such matters are before
the Board of Directors, of which he is a member. Likewise, Mr. Boyd,
the Chief Executive Officer of the Company and also a member of the
Board of Directors, refrains from discussions and votes before the
Board involving Mr. Bicknell's or his own compensation.
O. Gene Bicknell
Fran D. Jabara
Robert E. Cressler
COMPARATIVE PERFORMANCE GRAPH
Below is a graph comparing the total return on an indexed basis of
a $100 investment in (i) the Company's Common Stock, (ii) a peer group of
the Company and (iii) the overall broad equity market in which the
Company participated. The Company's index includes the average of Class
A Stock and Class B Stock share prices subsequent to when the Class B
stock was issued in July, 1991. Management considers the Company's peer
group to be all publicly-held companies with a primary Standard
Industrial Code between 5800 and 5899 (Eating and Drinking
Establishments) in existence during the reporting period. The broad
equity market index consists of all NASDAQ companies. All indices
are based upon total return, weighted for market capitalization and
with dividends reinvested; they are published by and available
through the University of Chicago's Center for Research in Security
Prices. The historical stock price performance shown on this graph is not
indicative of future price performance.
<TABLE>
<CAPTION>
Index 3/89 3/90 3/91 3/92 3/93 3/94
<S> <C> <C> <C> <C> <C> <C>
National Pizza Company 100.0 177.8 235.6 164.9 119.0 107.8
Peer Group 100.0 115.7 135.5 193.2 212.8 220.0
NASDAQ Market 100.0 109.7 125.4 160.2 180.9 200.3
</TABLE>
TRANSACTIONS WITH MANAGEMENT
The Board of Directors in January, 1993, authorized the purchase
of certain real estate comprised principally of ten Pizza Hut
restaurants owned by Mr. Bicknell, the Chairman of the Company. The
Company engaged an outside appraisal company to perform a MAI appraisal
of the properties. The Board of Directors upon review of the proposal
and the appraisals, and with the Chairman abstaining from any
participation in the vote, approved the purchase of these sites for the
appraised values. At March 29, 1994, the Company had completed the
transactions on all of these properties. Due to the delay in closing
the sale of the final two properties, the Company extended a $1,000,000
loan to Mr. Bicknell during the fiscal year ended March 29, 1994, all
except $50,000 of which was repaid by year end.
The Company currently leases six restaurants, a parking lot and
a corporate aircraft from Mr. Bicknell and one restaurant from Mr.
Elliott. Management believes these leases are at least as favorable as
could be obtained from unrelated parties.
PROPOSAL NUMBER TWO
APPROVAL OF THE 1994 STOCK OPTION PLAN
In accordance with the expiration on May 23, 1994, of
the Company's 1984 Stock Option Plan (the "1984 Plan"), no further
options may be granted under the 1984 Plan, although options
previously granted will remain outstanding for the duration of their
terms. An aggregate of 2,791,450 shares of the Company's Common
Stock is currently reserved for
issuance under the 1984 Plan. Such currently reserved shares will
be returned to authorized but unissued and unreserved capital stock of
the Company. On May 3, 1994, subject to stockholder approval, the
Company's Board of Directors adopted the 1994 Stock Option Plan (the
"1994 Plan") in contemplation of the expiration of the 1984 Plan. The
Board of Directors believes that the ability to grant stock options is
an important factor in attracting, motivating and retaining key
employees and executive officers essential to the success of the
Company.
The Company intends to register the 1994 Plan on Form S-8
under the Securities Act of 1933 as soon as is practicable after
receiving stockholder approval.
Summary of Option Plan Terms
General
An aggregate of 2,791,450 shares of the Company's Class
A Stock and Class B Stock (the "Common Stock") would be reserved for use
in connection with options granted under the 1994 Plan. Any shares of
Common Stock subject to issuance upon exercise of options but which are
not issued because of a surrender, lapse, expiration or termination of
any such option prior to issuance of the shares will again be available
to be made subject to awards under the 1994 Plan. The following summary
of the 1994 Plan is qualified in its entirety by the specific language
of the 1994 Plan, a copy of which is attached hereto as Exhibit A.
Purpose
The purpose of the 1994 Plan is to establish and continue
as close an identity as is feasible between the interests of the
Company or its Subsidiaries and those of its or their respective
employees. The 1994 Plan will serve to reward employees for past
services and retain those employees in the service of the Company or
any subsidiary and to induce new executives and other key employees to
become associated with the Company or its Subsidiaries.
Administration
The Compensation and Stock Option Committee (the "Committee")
of the Board will administer the 1994 Plan for all eligible persons.
All stock option grants are currently being administered by the
Committee. All questions of interpretation of
the 1994 Plan are determined by the Board of Directors or the
Committee, and such determinations are final and binding upon all
participants.
Eligibility
Options may be granted under the 1994 Plan to key employees
of the Company who have executive, managerial, supervisory or
professional responsibilities. Officers shall be treated as "key
employees" for this purpose, whether or not they are also directors.
Price and Exercisability
Option agreements shall specify the number of shares
covered thereby and the option exercise price, which shall not be less
than the fair market value of the shares as of the date of grant of
the option. Option agreements may contain such terms, provisions and
conditions not inconsistent with the 1994 Plan as may be determined
by the Board of
Directors or the Committee. The price of option grants under the 1994
Plan shall be determined by the Committee at the date of grant of the options.
Options shall be exercisable, in whole or in installments, and at
such times, and shall expire at such time, as shall be provided by the
Committee in the notice to the employee of the grant of the options.
The Committee has the power to set the time within which each option
may be exercisable or the events upon which all or a portion of
each option shall be exercisable and the term of each option.
An option is nontransferable by the optionee, other than by
will or the laws of descent and distribution, and is exercisable only
by the optionee or the optionee's guardian or legal representative
during his lifetime or, in the event of death, by a person who acquires
the right to exercise the option by bequest or inheritance or by reason
of the death of the optionee.
Options granted under the 1994 Plan may be either incentive
stock options as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or nonqualified stock options.
Options may be exercised by payment of the option price (i)
in cash or by check, bank draft or money order payable to the order of
the Company, (ii) by tender to the Company of shares of Common Stock
(other than shares of Common Stock to be issued upon exercise of the
Option), (iii) a combination of the foregoing or (iv) such other
consideration as the Committee may deem appropriate.
An option is exercised by giving written notice of exercise
to the Company, specifying the number of full shares of Common Stock
to be purchased, and tendering payment to the Company of the purchase
price.
Options issued in the form of incentive stock options shall,
in addition to being subject to all applicable terms, conditions,
restrictions and/or limitations
established by the Committee, comply with the
requirements of Section 422 of the Code (or any successor section
thereto), including, without limitation, the requirement that the
exercise price of an incentive stock option not be less than 100% of
the fair market value of the Common Stock on the date of grant, the
requirement that each incentive stock option, unless sooner exercised,
terminated or canceled, expire no later than 10 years from its date of
grant, and the requirement that the aggregate fair market value
(determined on the date of grant) of the Common Stock with respect to
which incentive stock options are exercisable for the first time by an
optionee during any calendar year (under the 1994 Plan or any other plan
of the Company or any Subsidiary) not exceed $100,000.
Terms of Options Granted to Employees
In addition to the above, each option normally shall be
subject to the following terms and conditions:
(a) Termination of Employment: If the optionee's status
as an employee terminates for any reason other than death or
permanent and total disability, options under the 1994 Plan may
be exercised within three months of the date of termination, but
only to the extent the option was exercisable on the termination
date; provided that if an optionee is terminated for cause, the
ability to exercise any options under the 1994 Plan shall
terminate on the termination date.
(b) Disability of Optionee: If an optionee should
become totally and permanently disabled while employed by the
Company, options may be exercised within twelve months after
termination of employment due to such disability, but only to the
extent such option would have been exercisable on the termination
date.
(c) Death of Optionee: If an optionee should die
while employed by the Company, options may be exercised by the person
or persons to whom the rights pass by will or the laws of descent
and distribution, or if no person has such right, by the
executors or administrators at any time within twelve months after
death, but only to the extent the options would have been
exercisable on the date of death.
Adjustments upon Changes in Capitalization
In the event any change is made in the Company's
capitalization which results from a stock dividend, recapitalization,
reorganization, merger, consolidation, split-up, combination, or
exchange of shares, or rights offering to purchase Common Stock at
a price substantially below fair market value, or any similar change
affecting the Common Stock,
appropriate adjustment shall be made with respect to shares and
options available under the 1994 Plan; provided that if the adjustment by
itself or with other adjustments not previously made would not require a
change of at least 1% in the number of shares available under
the 1994 Plan, no adjustment shall be made at that time.
Adjustments Upon Change of Control
In the event any of the following transactions (each a "Change
of Control Event") occurs, outstanding options may, in the
Committee's discretion, become immediately vested, fully earned and
exercisable, as appropriate, and the Company shall permit the exercise
of such options. A Change of Control Event has occurred if: (i)
any person or entity becomes the beneficial owner, directly or
indirectly, of securities representing 25% or more of the combined
voting power of the Company's outstanding securities other than any
person who is such a beneficial owner as of the date of the 1994
Plan; (ii) during any consecutive two year period after the
effective date of the 1994 Plan, the persons who were directors or
whose nomination for election had previously been approved at the
beginning of that period cease to be a majority of the Board; (iii) the
stockholders approve a merger or consolidation of the Company with
any other Company other than one (A) in which the voting securities
of the Company do not represent at least 75% of the combined voting
power of the securities of the surviving Company or (B) which is
not effected to implement a
recapitalization in which no person or entity acquires more
than 50% of the combined voting power of the securities other than
any person who is such a beneficial owner as of the date of the 1994 Plan;
or (iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition of all or substantially all of the Company's assets.
Amendment and Termination
The Board of Directors may suspend or terminate the 1994 Plan
at any time or from time to time may amend it in any manner without
approval of the stockholders; provided, however, that stockholder approval
is required to the extent necessary to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, as amended, or applicable
provisions of the Code, or any successor rule or provision or any other
applicable law or regulation.
Tax Information Regarding Stock Options
Options granted under the 1994 Plan may be either incentive
stock options, as defined in Section 422 of the Code, or
nonqualified stock options.
If an option granted under the 1994 Plan is an incentive
stock option, the optionee will recognize no income upon grant of the
incentive stock option and incur no tax liability due to the exercise
unless the optionee is subject to the alternative minimum tax. Upon
the sale or exchange of the shares at least two years after grant of
the option and one year after receipt of the shares of the optionee, any
gain or loss will be treated as long-term capital gain or loss. Under
such circumstances, the Company will not be entitled to any
deduction for federal income tax purposes. If
these holding periods are not satisfied, the optionee will
recognize ordinary income equal to the difference between the exercise
price and the lower of the fair market value of the stock at the date
of the option exercise or the sale price of the stock. The Company
will be entitled to a deduction in the same amount as the
ordinary income recognized by the optionee. Any gain or loss
recognized on such a premature
disposition of the shares in excess of the amount treated as
ordinary income will be characterized as long-term or short-term
capital gain or loss, depending on the holding period.
All other options which do not qualify as incentive stock
options are referred to as nonqualified stock options. An optionee
will not recognize any taxable income at the time he is granted a
nonqualified stock option. However, upon its exercise, the optionee will
recognize ordinary income for tax
purposes measured by the excess of the then fair
market value of the shares over the option price. Upon resale of such
shares by the optionee, any difference between the sales price and
the exercise price, to the extent not recognized as ordinary income as
provided above, will be treated as capital gain or loss.
The Company will be entitled to a tax deduction in the amount
and at the time that the optionee recognizes ordinary income with
respect to shares acquired upon exercise of a nonqualified stock option.
The foregoing is only a summary of the effect of federal
income taxation upon the optionee and the Company with respect to the
grant and exercise of options under the 1994 Plan, does not purport to
be complete, and does not discuss the income tax laws of any
municipality, state or foreign country in which an optionee may reside.
Required Vote
The affirmative vote of the holders of a majority of the Class
A Stock entitled to vote and present in person or represented by proxy at
the meeting will be required to approve the adoption of the 1994 Plan.
Class B Stockholders are not entitled to vote on this proposal. The
Board of Directors considers the 1994 Plan to be in the best
interests of the Company and its stockholders and unanimously
recommends a vote "FOR" approval thereof.
Mr. Bicknell has informed the Company that he intends to vote
his shares FOR approval of the 1994 Plan. If his shares are voted in
this manner, then the vote required for ratification
will be achieved, regardless of how other shares of Class A Stock are voted.
PROPOSAL NUMBER THREE
AMENDMENT TO THE COMPANY'S CHARTER TO CHANGE THE NAME OF THE COMPANY
The Board proposes an amendment to the Company's Restated Articles
of Incorporation to change the name of the Company to NPC International,
Inc. The form of the Certificate of Amendment to the Restated
Articles of Incorporation setting forth such amendment is attached
hereto as Exhibit B and is incorporated by reference as if set forth in
full herein.
The Board believes that it would be in the best interest of
the Company and its stockholders to continue its operations under a new
name. The Company has recently acquired two restaurant chains, Skipper's
and Tony Roma's, that do not serve pizza. In addition, there are
Tony Roma's restaurants in countries all over the world. The Board
believes that the Company would
benefit from a name that reflects the Company's
diversification and status as an international organization.
Upon the filing of the Certificate of Amendment, stock
certificates that previously represented stock of the Company in the
name of "National Pizza Company" shall be deemed to represent shares
of NPC International, Inc., without any further action by the
stockholders, the Company or any other party. It will not be
necessary for stockholders to exchange their existing
stock certificates for certificates bearing the name NPC
International, Inc. However, stockholders may, if they wish,
surrender their existing Certificates to the Company's transfer agent in
return for a stock certificate in the new name.
The affirmative vote of a majority of the outstanding shares of
Class A Stock is required for approval of the proposal. The Board
recommends a vote "FOR" the adoption of this proposal.
Mr. Bicknell has informed the Company that he intends to vote
his shares of Class A Stock FOR ratification of the proposed amendment.
If his Class A shares are voted in this manner, the vote required for
ratification will be achieved, regardless of how other shares of Class
A Stock are voted.
AUDITORS
The Audit Committee recommended and the Board of Directors
approved the selection of Ernst & Young to audit the Financial
Statements for the year ended March 29, 1994. The Audit Committee
has not recommended auditors for Fiscal 1995 and, as is its custom,
is expected to make a selection at the Committee's meeting in July
1994. Ernst and Young was appointed as the independent auditors on
September 21, 1989. See "Election of Directors" for information
regarding the Company's Audit Committee.
A representative of Ernst & Young will be present at the
Annual Meeting with the opportunity to make a statement if he desires to
do so and will be available to respond to appropriate questions.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders of the Company intended to be presented
at the Annual Meeting of Stockholders to be held in 1994 must be
received at the principal executive offices of the Company by the Board
of Directors for inclusion in the proxy statement and form of proxy
relating to that meeting no later than February 8, 1995.
MISCELLANEOUS
No business other than that described is expected by the Board
of Directors to come before this meeting, but should any other
matters requiring the vote of stockholders arise, the proxy holders
will vote thereon according to their best judgment.
By Order of the Board of Directors
David G. Short
Secretary
Pittsburg, Kansas
June 14, 1994
<PAGE>
EXHIBIT A
NATIONAL PIZZA COMPANY
1994 STOCK OPTION PLAN
(As approved by the Board of Directors on May 3, 1994
subject to stockholder approval on July 12, 1994)
I
PURPOSE
.1 Statement of Purpose. The purpose of this Plan is to
establish and continue as close an identity as is feasible between the
interests of the Corporation or its Subsidiaries and those of its or their
respective employees. The Plan will serve to reward employees for past
services and serve to retain those employees in the service of the
Corporation or any Subsidiary and to induce new executives and other key
employees to become associated with the Corporation or its Subsidiaries.
It is for the accomplishment of these several objectives that this Plan is
formulated and adopted.
.2 Establishment. The Plan shall be effective as of May 3, 1994
(the "Effective Date"), and subject to the provisions of Section
8.1, Awards may be granted hereunder for a period of ten years after such
date. The Plan shall continue in effect until all matters relating to
Awards granted hereunder and administration of the Plan have been settled.
.3 Stockholder Approval. The Plan shall be approved by the
holders of a majority of the outstanding shares of Common Stock, which
approval must occur within the period ending 12 months after the date the
Plan is adopted by the Board.
II
DEFINITIONS
When used herein, the following terms shall have the meaning
set forth below:
.1 "Award" means any Option granted under the Plan to a
Participant by the Committee pursuant to such terms, conditions,
restrictions and/or limitations, if any, as the Committee may establish by
the Award Notice or otherwise.
.2 "Award Notice" means any written instrument that
establishes the terms, conditions, restrictions, and/or limitations
applicable to an Award in addition to those established by this Plan and by
the Committee's exercise of its administrative powers.
.3 "Board" means the Board of Directors of the Corporation.
.4 "Change of Control Event" means each of the following:
(a) any person or entity becomes the beneficial owner
(as defined in the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Corporation (not
including any securities acquired directly from the Corporation or
its affiliates) representing 25% or more of the combined voting
power of the Corporation's then outstanding securities other than
any person who is such a beneficial owner as of the date hereof; or
(b) during any period of two consecutive years (not
including any period prior to the Effective Date of the Plan),
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a person
or entity who has entered into an agreement with the Corporation to
effect a transaction described in clause (a), (b) or (d) of this
paragraph) whose election to the Board or nomination for election by
the Corporation's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously approved, cease for any
reason to constitute a majority thereof; or
(c) the stockholders of the Corporation approve a
merger or consolidation of the Corporation with any other
corporation, other than (i) a merger or consolidation which would
result in the voting securities of the Corporation outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation, at least 75% of the combined voting
power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Corporation (or similar transaction) in
which no person or entity acquires more than 50% of the combined
voting power of the Corporation's then outstanding securities other
than any person who is such a beneficial owner as of the date
hereof; or
(d) the stockholders of the Corporation approve a plan
of complete liquidation of the Corporation or an agreement for the
sale or disposition by the Corporation of all or substantially all
the Corporation's assets.
.5 "Code" means the Internal Revenue Code of 1986, as
amended. Reference in the Plan to any section of the Code shall be deemed
to include any amendments or successor provisions to such section and any
regulations under such section.
.6 "Committee" means the members of the Board's Stock
Option Committee, or such other committee of the Board, authorized to
administer the Plan under Article III hereof. The Committee shall consist
of not less than two directors, each of whom is, and within the 12 months
preceding his or her appointment to the Committee has been, a
"disinterested person" within the meaning of Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
.7 "Common Stock" means either the Class A voting or Class
B non-voting common stock, par value $.01 per share, of the Corporation,
and after substitution, such other stock as shall be substituted therefor
as provided in Article VII.
.8 "Corporation" means National Pizza Company, a Kansas
corporation.
.9 "Date of Grant" means the date on which the granting of
an Award is authorized by the Committee or such later date as may be
specified by the Committee in such authorization.
.10 "Eligible Employee" means any employee of the
Corporation or a Subsidiary who satisfies the requirements of Article IV.
.11 "Fair Market Value" means (A) during any such time as
either class of Common Stock is not listed upon an established stock
exchange or the NASDAQ/National Market System, the mean between dealer
"bid" and "ask" prices of such class of Common Stock in the over-the-
counter market on the day for which such value is to be determined, as
reported by the National Association of Securities Dealers, Inc. or (B)
during such time as either class of Common Stock is listed upon an
established stock exchange or exchanges or the NASDAQ/National Market
System, the highest closing price of such class of Common Stock on such
stock exchange or exchanges or the NASDAQ/National Market System on the day
for which such value is to be determined, or if no sale of either class of
Common Stock shall have been made on any stock exchange or the
NASDAQ/National Market System that day, on the next preceding day on which
there was a sale of such class of Common Stock.
.12 "Incentive Stock Option" means an Option within the
meaning of Section 422 of the Code.
.13 "Non-Qualified Stock Option" means an Option which is
not intended to be an Incentive Stock Option.
.14 "Option" means an Award granted under Article VI of the
Plan and includes Non-Qualified Stock Options and Incentive Stock Options
to purchase shares of either class of Common Stock.
.15 "Participant" means an Eligible Employee to whom an
Award has been granted by the Committee pursuant to the Plan.
.16 "Plan" means the Corporation's 1994 Stock Option Plan.
.17 "Subsidiary" means any corporation of which a majority
of the outstanding voting stock or voting power is beneficially owned
directly or indirectly by the Corporation.
III
ADMINISTRATION OF THE PLAN
.1 Administration by the Committee. The Committee shall
administer the Plan. Unless otherwise provided in the by-laws of the
Corporation or the resolutions adopted from time to time by the Board
establishing the Committee, the Board may from time to time remove members
from, or add members to, the Committee; vacancies on the Committee,
howsoever caused, shall be filled by the Board; the Committee shall hold
meetings at such times and places as it may determine; a majority of the
Committee shall constitute a quorum; and the acts of a majority of the
members present at any meeting at which a quorum is present or acts reduced
to or approved in writing by a majority of the members of the Committee
shall be the valid acts of the Committee.
Subject to the provisions of the Plan, the Committee shall
have exclusive power to:
(a) Select the Eligible Employees to participate in
the Plan.
(b) Determine the time or times when Awards will be
made.
(c) Determine the form of an Award, whether a Non-
Qualified or Incentive Stock Option, the number and class of shares
of Common Stock subject to the Award, all the terms, conditions,
restrictions and/or limitations, if any, of an Award, including the
exercise price, the time and conditions of exercise or vesting, and
the terms of any Award Notice, which may include the waiver or
amendment of prior terms and conditions or acceleration or early
vesting or payment of an Award under certain circumstances
determined by the Committee.
(d) Grant waivers of Plan terms, conditions,
restrictions, and limitations.
(e) Accelerate the vesting, exercise, or payment of an
Award or the performance period of an Award when such action or
actions would be in the best interest of the Corporation.
(f) Take any and all other action it deems necessary
or advisable for the proper operation or administration of the Plan.
The Committee shall also have the authority to grant Awards in
replacement of Awards previously granted under this Plan or any other stock
option or other incentive plan of the Corporation or a Subsidiary.
.2 Committee to Make Rules and Interpret Plan. The
Committee shall have the authority, subject to the provisions of the Plan,
to establish, adopt, or revise such rules and regulations and to make all
such determinations relating to the Plan as it may deem necessary or
advisable for the administration of the Plan. The Committee's
interpretation of the Plan or any Awards granted pursuant thereto and all
decisions and determinations by the Committee with respect to the Plan
shall be final, binding, and conclusive on all parties unless otherwise
determined by the Board.
IV
ELIGIBILITY
Awards may be granted under the Plan to key employees of the
Corporation or a Subsidiary who have executive, managerial, supervisory or
professional responsibilities. Officers shall be treated as "key
employees" for this purpose, whether or not they are also directors.
V
GRANT OF AWARDS; SHARES SUBJECT TO PLAN
.1 Committee to Grant Awards. The Committee may, from time
to time, grant Awards to one or more Eligible Employees, provided, however,
that:
(a) Subject to Article VII, an aggregate of 1,145,725
shares of Class A Common Stock and an aggregate of 1,645,725 shares
of Class B Common Stock are hereby reserved for use in connection
with Awards granted under the Plan. The shares of Common Stock so
used may be unreserved shares held in the treasury, however
acquired, or shares of Common Stock which are authorized but
unissued. Any shares of Common Stock subject to issuance upon
exercise of Awards but which are not issued because of a surrender,
lapse, expiration or termination of any such Award prior to issuance
of the shares shall once again be available for issuance in
satisfaction of Awards, so long as the holder of any such Award
received no benefits of Common Stock ownership (including but not
limited to dividends) from the shares of Common Stock related to
such Award.
(b) Any shares of either class of Common Stock issued
by the Corporation through the assumption or substitution of
outstanding grants from an acquired company shall reduce the number
of such shares available for grants under the Plan.
(c) The Committee shall, in its sole discretion,
determine the manner in which fractional shares arising under this
Plan shall be treated.
.2 Six-Month Holding Period. With respect to Awards
granted hereunder to any Participant who is, or within the preceding six
months was, subject to the provisions of Section 16 of the Exchange Act (an
"Insider Participant"), each such Award may not be transferred and must be
held by such Insider Participant for a period of six months from the Date
of Grant. Nothing in this Section 5.2 shall be deemed to prohibit the
exercise of Options within the six month period following the Date of
Grant, but the shares of Common Stock received by an Insider Participant
pursuant to the exercise of such an Option must be held and not transferred
for a period of six months from the Date of Grant of the Option so
exercised.
VI
GRANTING OF OPTIONS
.1 Grant of Options. Subject to the provisions of the Plan
and such other terms and conditions as it may deem appropriate, the
Committee may, from time to time, grant Options to Eligible Employees.
Subject to the provisions of Section 6.2, each grant of an Option shall be
evidenced by an Award Notice executed by the Corporation and the
Participant, which shall contain such terms and conditions and shall be in
such form as the Committee may from time to time approve.
.2 Conditions of Options. Each Option granted hereunder
shall be subject to the following conditions:
(a) Exercise Price. Each Award Notice shall state the
exercise price which shall be set by the Committee at the Date of
Grant.
(b) Form of Payment. The exercise price of an Option
may be paid: (i) in cash or by check, bank draft or money order
payable to the order of the Corporation; (ii) in shares of the same
class of Common Stock purchasable under the Option (other than
shares of Common Stock to be issued upon exercise of the Option);
(iii) a combination of the foregoing; or (iv) such other
consideration as the Committee may deem appropriate. In addition to
the foregoing, subject to the discretion of the Committee, any
Option granted under the Plan may be exercised by a broker-dealer
acting on behalf of a Participant if (A) the broker-dealer has
received from the Participant or the Corporation a fully- and duly-
endorsed agreement evidencing such Option and instructions signed by
the Participant requesting the Corporation to deliver the shares of
Common Stock subject to such Option to the broker-dealer on behalf
of the Participant and specifying the account into which such shares
should be deposited, (B) adequate provision has been made with
respect to the payment of any withholding taxes due upon such
exercise of, or in the case of an Incentive Stock Option, the
disposition of such shares and (C) the broker-dealer and the
Participant have otherwise complied with Section 220.3(e)(4) of
Regulation T, 12 CFR, Part 220 and any successor rules and
regulations applicable to such exercise ("Cashless Exercise");
provided, however, that an Insider Participant may not elect to
utilize a Cashless Exercise within six (6) months of the date the
Option is granted (unless death or disability occurs prior to the
expiration of such six-month period), and any such election must be
made during any period beginning on the third business day following
the date of release of a summary statement of the Corporation's
quarterly or annual sales and earnings and ending on the twelfth
business day following such date (the "Window Period"). The
Committee shall establish appropriate methods for accepting shares
of either class of Common Stock, and may impose such conditions as
it deems appropriate on the use of such shares of Common Stock in
payment of the exercise price. Common Stock used to exercise an
Option shall be valued at its then Fair Market Value.
(c) Exercise of Options. Options granted under the
Plan shall be exercisable, in whole or in installments, and at such
times, and shall expire at such time, as shall be provided by the
Committee in the Award Notice. Exercise of an Option shall be by
written notice stating the election to exercise in the form and
manner determined by the Committee. Every share of Common Stock
acquired through the exercise of an Option shall be deemed to be
fully paid at the time of exercise and payment of the exercise
price.
(d) Other Terms and Conditions. Among other
conditions that may be imposed by the Committee, if deemed
appropriate, are those relating to: (i) the period or periods and
the conditions of exercisability of any Option; (ii) the minimum
periods during which Participants must be employed by the
Corporation or its Subsidiaries, or must hold Options before they
may be exercised; (iii) the minimum periods during which shares
acquired upon exercise must be held before sale or transfer shall be
permitted; (iv) conditions under which such Options or shares may be
subject to forfeiture; and (v) the frequency of exercise or the
minimum or maximum number of shares that may be acquired at any one
time.
(e) Special Restrictions Relating to Incentive Stock
Options. Options issued in the form of Incentive Stock Options
shall, in addition to being subject to all applicable terms,
conditions, restrictions and/or limitations established by the
Committee, comply with the requirements of Section 422 of the Code
(or any successor section thereto), including, without limitation,
the requirement that the exercise price of an Incentive Stock Option
not be less than 100% of the Fair Market Value of the Common Stock
on the Date of Grant, the requirement that each Incentive Stock
Option, unless sooner exercised, terminated or cancelled, expire no
later than 10 years from its Date of Grant, and the requirement
that the aggregate Fair Market Value (determined on the Date of
Grant) of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during
any calendar year (under this Plan or any other plan of the
Corporation or any Subsidiary) not exceed $100,000.
(f) Application of Funds. The proceeds received by
the Corporation from the sale of shares of Common Stock pursuant to
the exercise of Options will be used for general corporate purposes.
VII
STOCK ADJUSTMENTS
.1 Adjustment of Shares Available; Recapitalization. In
the event of any change in either class of Common Stock of the Corporation
by reason of any stock dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination, or exchange of shares, or rights
offering to purchase such class of Common Stock at a price substantially
below fair market value, or of any similar change affecting such class of
Common Stock, the number and kind of shares which thereafter may be issued
upon the issuance of an Award and the number and kind of shares subject to
Awards and the purchase price per share under outstanding Award Notices
shall be appropriately adjusted consistent with such change in such manner
as the Committee may deem equitable to prevent substantial dilution or
enlargement of the rights granted to, or available for, Participants under
the Plan; provided, however, that no adjustment of the number of shares of
either class of Common Stock available under the Plan or to which any Award
relates that would otherwise be required shall be made unless and until
such adjustment either by itself or with other adjustments not previously
made would require an increase or decrease of at least 1% in the number of
shares of such class of Common Stock available under the Plan or to which
any Award relates immediately prior to the making of such adjustment (the
"Minimum Adjustment"). Any adjustment representing the change of less than
such minimum amount shall be carried forward and made as soon as such
adjustment together with other adjustments required by this Section 7.1 and
not previously made would result in a Minimum Adjustment. Notwithstanding
the foregoing, any adjustment required by this Section 7.1 which otherwise
would not result in a Minimum Adjustment shall be made with respect to
shares of Common Stock relating to any Award immediately prior to exercise.
.2 Fractional Shares. No fractional shares of either class
of Common Stock or units of other securities shall be issued pursuant to
any such adjustment, and any fractions resulting from any such adjustment
shall be eliminated in each case by rounding downward to the nearest whole
share without payment to the Participant.
.3 Rights of Participants and the Corporation. Except as
hereinbefore expressly provided in this Article VII, a Participant, unless
the Committee provides otherwise in the Award Notice, shall have no rights
by reason of any subdivision or consolidation of shares of stock of any
class or the payment of any stock dividend or any other increase or
decrease in the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger or consolidation or spin-off of assets or
stock of another corporation, and any issue by the Corporation of shares of
stock of any class shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or Option exercise price of
shares of Common Stock subject to an outstanding Option.
The grant of an Option pursuant to this Plan shall not affect
in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer
all or any part of its business or assets.
VIII
GENERAL
.1 Amendment or Termination of Plan. The Board may suspend
or terminate the Plan at any time. In addition, the Board may, from time
to time, amend the Plan in any manner, but may not without stockholder
approval adopt any amendment which would:
(a) increase the aggregate number of shares of either
class of Common Stock available under the Plan (except by operation
of Article VII);
(b) materially increase the benefits accruing to
Insider Participants under the Plan; or
(c) materially modify the requirements as to
eligibility for participation in the Plan;
provided, that any amendment to the Plan shall require approval of the
stockholders if, in the opinion of counsel to the Corporation, such
approval is required by Section 16 or any other section of the Exchange
Act, or any other Federal or state law or any regulations or rules
promulgated thereunder.
.2 Termination of Employment. Each Award granted under
this Plan shall be subject to the following conditions:
(a) if a Participant dies while an employee of the
Corporation or a Subsidiary, his/her Award may be exercised to the
extent that the Participant could have done so at the date of
his/her death by the person or persons to whom the Participant's
rights under the Award pass by will or the laws of descent and
distribution, or if no such person has such right, by his/her
executors or administrators, at any time, or from time to time,
within twelve months after the date of the Participant's death (if
otherwise within the period which the Committee has established for
the exercise of an Award).
(b) If a participant's employment by the Corporation
or a Subsidiary shall terminate because he/she is permanently and
totally disabled (within the meaning of Section 22(e)(3) of the
Code), he/she may exercise his/her Award, to the extent that he/she
could have done so at the date of his/her termination of employment,
at any time, or from time to time, within twelve months of such
termination (if otherwise within the period which the Committee has
established for the exercise of an Award).
(c) If a Participant's employment by the Corporation
or a Subsidiary shall terminate for any reason other than death or
permanent and total disability as aforesaid, he/she may exercise
his/her Award, to the extent that he/she could have done so at the
date of his/her termination of employment, at any time, or from time
to time, within three months of the date of termination (if
otherwise within the period which the Committee has established for
the exercise of an Award).
(d) Notwithstanding anything in this Section 9.3 to
the contrary, if the employment of a Participant who is an employee
is terminated for cause, his/her ability to exercise such Award
shall terminate on the date of his/her termination of employment.
.3 Nonassignability. No Options awarded under the Plan
shall be subject in any manner to alienation, anticipation, sale, transfer,
assignment, pledge, or encumbrance, except for transfer by will or the laws
of descent and distribution. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of, or to subject to execution, attachment
or similar process, any Option, contrary to the provisions hereof, shall be
void and ineffective, shall give no right to any purported transferee, and
may, at the sole discretion of the Committee, result in forfeiture of the
Award involved in such attempt.
.4 Withholding Taxes. The Corporation shall be entitled to
deduct from any payment under the Plan, regardless of the form of such
payment, the amount of all applicable income and employment taxes required
by law to be withheld with respect to such payment or may require the
Participant to pay to it such tax prior to and as a condition of the making
of such payment. In accordance with any applicable administrative
guidelines it establishes, the Committee may allow a Participant to pay the
amount of taxes required by law to be withheld from an Award by withholding
from any payment of Common Stock due as a result of such Award, or by
permitting the Participant to deliver to the Corporation, shares of the
same class of Common Stock purchasable under the Award, having a Fair
Market Value, on the date of payment, equal to the amount of such required
withholding taxes; provided, however, that in the event the Participant is,
or within the preceding six months has been an Insider Participant, such an
election may not be made within six months of the date the Award is granted
(unless death or disability of the Participant occurs prior to the
expiration of such six-month period), and must be made either six months
prior to the date of payment or during the Window Period.
.5 Amendments to Awards. The Committee may at any time
unilaterally amend the terms of any Award Notice for any Awards, whether or
not presently exercisable, earned, paid or vested, to the extent it deems
appropriate; provided, however, that any such amendment which is adverse to
the Participant shall require the Participant's consent.
.6 Change of Control. Upon a Change of Control Event,
Awards granted under the Plan to any Participant may, in the discretion of
the Committee, be immediately vested, fully earned and exercisable, as
appropriate, and the Corporation shall permit the exercise of such Awards.
.7 Regulatory Approval and Listings. The Corporation shall
use its best efforts to file with the Securities and Exchange Commission as
soon as practicable following the Effective Date, and keep continuously
effective and usable, a Registration Statement on Form S-8 with respect to
shares of both classes of Common Stock subject to Awards hereunder.
Notwithstanding anything contained in this Plan to the contrary, the
Corporation shall have no obligation to issue or deliver certificates
representing shares of either class of Common Stock prior to:
(a) the obtaining of any approval from, or
satisfaction of any waiting period or other condition imposed by,
any governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable,
(b) the admission of such shares to listing on the
stock exchange on which such class of Common Stock may be listed,
and
(c) the completion of any registration or other
qualification of said shares under any state or Federal law or
ruling of any governmental body which the Committee shall, in its
sole discretion, determine to be necessary or advisable.
.8 Right to Continued Employment. Participation in the
Plan shall not give any Participant any right to remain in the employ of
the Corporation or any Subsidiary. The Corporation or, in the case of
employment with a Subsidiary, the Subsidiary, reserves the right to
terminate the employment of any Eligible Employee at any time. Further,
the adoption of this plan shall not be deemed to give any Eligible Employee
any right to be selected as a Participant or to be granted an Award.
.9 Beneficiaries. Each Participant shall file with the
Committee a written designation of one or more persons as the beneficiary
(the "Beneficiary") who shall be entitled to receive the amount, if any,
payable under the Plan upon his or her death. A Participant may, from time
to time, revoke or change his Beneficiary designation without the consent
of any prior Beneficiary by filing a new designation with the Committee.
The last such designation received by the Committee shall be controlling;
provided, however, that no designation, or change or revocation thereof,
shall be effective unless received by the Committee prior to the
Participant's death, and in no event shall be effective as of a date prior
to such receipt.
If such Beneficiary designation is not in effect at the time
of a Participant's death, or if no designated Beneficiary survives the
Participant, or such designation conflicts with law, the payment of the
amount, if any, payable under the Plan upon his or her death shall be made
to the Participant's estate. If the Committee is in doubt as to the right
of any person to receive such amount, the Committee may retain such amount,
without liability or any interest thereon, until the rights thereon are
determined, or the Committee may pay such amount into any court of
appropriate jurisdiction and such payment shall be a complete discharge of
the liability of the Plan, the Corporation and the Committee therefor.
.10 Indemnification. Each person who is or shall have been
a member of the Committee or of the Board shall be indemnified and held
harmless by the Corporation against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by such person in
connection with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he may be involved by reason of
any action or failure to act under the Plan and against and from any and
all amounts paid by such person in satisfaction of judgment in any such
action, suit, or proceeding against such person. He or she shall give the
Corporation an opportunity, at its own expense, to handle and defend the
same before he or she undertakes to handle and defend it on his or her own
behalf. The foregoing right of indemnification shall not be exclusive of
any other rights of indemnification to which such persons may be entitled
under the Corporation's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Corporation may have to indemnify
or hold harmless any such person.
.11 Reliance on Reports. Each member of the Committee and
each member of the Board shall be fully justified in relying or acting in
good faith upon any report made by the independent public accountants of
the Corporation and its Subsidiaries and upon any other information
furnished in connection with the Plan by any person or persons other than
himself. In no event shall any person who is or shall have been a member
of the Committee or of the Board be liable for any determination made or
other action taken or any omission to act in reliance upon any such report
or information or for any action taken, including the furnishing of
information, or failure to act, if in good faith.
.12 Relationship to Other Benefits. No payment under the
Plan shall be taken into account in determining any benefits under any
pension, retirement, profit sharing, group insurance or other benefit plan
of the Corporation or any Subsidiary.
.13 Expenses. The expenses of administering the Plan shall
be borne by the Corporation subject to such allocation to its Subsidiaries
as it deems appropriate.
.14 Construction. Masculine pronouns and other words of
masculine gender shall refer to both men and women. The titles and
headings of the sections in the Plan are for convenience of reference only,
and in the event of any conflict, the text of the plan, rather than such
titles or headings, shall control.
.15 Governing Law. The Plan shall be governed by and
construed in accordance with the laws of the State of Kansas except as
superseded by applicable Federal law.
IN WITNESS WHEREOF, National Pizza Company has caused this
1994 Stock Option Plan to be executed by its Board of Directors this 3rd
day of May, 1994.
NATIONAL PIZZA COMPANY
By: David G. Short
Title: Secretary
<PAGE>
EXHIBIT B
CERTIFICATE OF AMENDMENT TO
RESTATED ARTICLES OF
INCORPORATION
OF NATIONAL PIZZA COMPANY
NATIONAL PIZZA COMPANY, a corporation organized and existing under
and by virtue of the Kansas General Corporation Code ("KGCC")
pursuant to Section 17-6602 of the KGCC,
DOES HEREBY CERTIFY:
FIRST, that the Board of Directors of National Pizza
Company ("Company") adopted a resolution setting forth a proposed
amendment to the
Restated Articles of Incorporation of the Corporation, and instructing
the officers of the Corporation to obtain the necessary stockholder
approval. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that the Board of Directors of the Company hereby
approves, adopts, and declares the advisability of an amendment to
Article FIRST to the Restated Articles of Incorporation of the Company,
which Article FIRST shall read as follows in its entirety:
"FIRST: The name of the Corporation is NPC International, Inc."
SECOND, that the stockholders of the Company, at the
Stockholders meeting held in Pittsburg, Kansas on July 12, 1994,
approved and adopted the amendment.
THIRD, that the amendment was duly adopted in accordance with
the provisions of Section 17-6602 of the Kansas General Corporation Code.
IN WITNESS WHEREOF, the Certificate of Amendment has been
duly executed this 3rd day of May, 1994.
NATIONAL PIZZA COMPANY
By: David G. Short
Title: Secretary
<PAGE>
NATIONAL PIZZA COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS For Annual
Meeting of Stockholders July 12, 1994
The undersigned hereby appoint O. Gene Bicknell and James
K. Schwartz, and each of them in the order named with full power of
substitution, the proxy or proxies of the undersigned to act at the
Annual Meeting of Stockholders of National Pizza Company to be held at 10:00
A.M. at the Memorial Auditorium, 503 N. Pine, Pittsburg, Kansas, 66762
on Tuesday, July 12, 1994, and any adjournment or postponements thereof,
and to vote all shares of said Class A Common Stock which the undersigned
would be entitled to vote if personally present.
(1) TO ELECT TWO DIRECTORS:
___ FOR all nominees listed below (except as marked to the contrary below).
___ WITHHOLD AUTHORITY to vote for all nominees listed below:
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name below.
Fran D. Jabara _____% Robert E. Cressler _____%
You are allowed to accumulate votes in voting for the nominees.
Unless indicated otherwise, the proxies named herein will accumulate
your votes and will allocate them equally among the nominees for whom
authority to vote is granted. If you wish to allocate those votes
other than equally, indicate the percentage of your cumulative votes to
be allocated to each nominee in the blank beside their name. IF THE
TOTAL PERCENTAGE OF VOTES ALLOCATED TO SUCH NOMINEES DOES NOT EQUAL 100%,
THEN THE PROXY MAY NOT BE VALID.
(2) TO APPROVE AND ADOPT THE 1994 STOCK OPTION PLAN:
For ______
Against ______
Withhold Authority _____
(3) TO APPROVE AND ADOPT AN AMENDMENT TO THE COMPANY'S RESTATED
ARTICLES OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO
NPC INTERNATIONAL, INC.
For ______
Against ______
Withhold Authority _____
(4) In the discretion of such proxies, upon such other matters as
may properly come before the meeting or any adjournment thereof.
IF NOT OTHERWISE DIRECTED, SHARES REPRESENTED BY THIS PROXY WILL BE
VOTED IN FAVOR OF THE MATTERS SET FORTH ABOVE.
(OVER-PLEASE SIGN ON REVERSE SIDE)
Receipt is acknowledged of Notice of and Proxy Statement for said
meeting and of the Annual Report to Stockholders for the year ended
March 29, 1994.
Dated _________________________________,1994
_______________________________________ (Seal)
_______________________________________ (Seal)
Please sign here exactly as your name appears at the left.
When signing as attorney, executor, administrator, trustee
or guardian, please give your full title as such. Each joint
owner or trustee should sign the proxy.
PLEASE SIGN, DATE AND MAIL TODAY IN THE ENCLOSED PREPAID ENVELOPE,
or mail to American Stock Transfer, 40 Wall Street, New York, NY 10005
