720 West 20th Street
Pittsburg, KS 66762
______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 13, 1999
______________________________
TO OUR STOCKHOLDERS:
Notice is hereby given that the Annual Meeting of
Stockholders of NPC International, Inc. (the "Company") will be
held at the Memorial Auditorium, 503 North Pine, Pittsburg,
Kansas, on Tuesday, July 13, 1999 at 10:00 a.m. Central Time, to
consider and take action with respect to the following:
1. To elect three directors to serve a three-year
term and until their successors are elected and
qualified; and
2. To transact such other business as may properly
come before the meeting or any adjournment of
the meeting.
Only Stockholders of record at the close of business on May
25, 1999, will be entitled to notice and to vote at the meeting or
any adjournment or postponement thereof. The transfer books of
the company will not be closed. The annual report to Stockholders
for the year ended March 30, 1999, is enclosed herewith.
All Stockholders are cordially invited to attend the meeting.
For the convenience of those 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 or she can be
present at the meeting or for any other reason desires to do so,
may revoke this proxy if done so in writing to the Secretary of
the Company at any time before it is voted, by submitting a
substitute proxy or by voting in person at the meeting.
Please complete, sign, date and mail promptly the 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,
Troy D. Cook
Secretary
Pittsburg, Kansas
May 27, 1999
NPC INTERNATIONAL, INC.
720 W. 20TH STREET
PITTSBURG, KANSAS 66762
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 13, 1999
This Proxy Statement is furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors
of NPC International, Inc. (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.
Central Time on Tuesday, July 13, 1999. The mailing address of the
principal executive office 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 appropriate
expenses in forwarding such material. All costs of solicitation of
proxies will be borne by the Company.
Only stockholders of record of the Common Stock, $.01 par
value per share (the "Common Stock"), as of the close of business
on May 25, 1999, are entitled to vote on the issues presented for
a vote at the meeting or any adjournment or postponement thereof.
At the close of business on May 25, 1999, the record date for the
determination of Stockholders entitled to vote at the Annual
Meeting, there were 24,543,375 shares of Common Stock outstanding.
Each share of Common Stock is entitled to one vote on all matters
presented for Stockholder action at the meeting. The holders of
record of a majority of the number of shares of Common Stock
issued, outstanding and entitled to vote on any matter shall
constitute a quorum at the Annual Meeting. Shares of Common Stock
present in person or represented by proxy (including shares which
abstain or withhold a vote with respect to one or more of the
matters presented for stockholder approval) will be counted for
purposes of determining whether a quorum is present. All shares of
Common 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 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 at the meeting
and can cast them all for one nominee or can divide them among as
many nominees as he or she chooses. A holder of Common Stock may
divide his or her cumulative votes among the nominees by marking
the proxy card according to the instructions on the card. If a
Stockholder does not allocate his or her votes, then such
Stockholder's cumulative votes will be allocated equally among the
nominees for whom authority to vote is granted. An affirmative
vote of the majority of the outstanding shares of Common Stock
present at the meeting in person or by proxy is required for the
approval of any other matter properly brought before this meeting.
All shares of Common Stock represented by properly executed
proxies received prior to the Annual Meeting will be voted in
accordance with the instructions contained therein. In the absence
of voting instructions, the shares will be voted FOR the election
of the directors named as nominees in this Proxy Statement. A
holder of Common Stock 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. Votes submitted
as abstentions on any proposal will be counted as present for
purposes of establishing a quorum, but unvoted for purposes of
determining the approval of any matter submitted to the
Stockholders for a vote. Broker "non-votes" will count as present
for quorum purposes but will not count for or against any
proposal. 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 Board of Directors does not know of any other business to
be presented for consideration at the Annual Meeting. If any other
business properly comes before the Annual Meeting or any
adjournment thereof, the proxies will be voted on such matters in
the discretion of the proxy holders insofar as the proxies are not
limited to the contrary.
AS OF THE ANNUAL MEETING RECORD DATE, MR. O. GENE BICKNELL,
THE CHIEF EXECUTIVE OFFICER AND THE CHAIRMAN OF THE BOARD OF
DIRECTORS OF THE COMPANY, BENEFICIALLY HELD 14,649,366 SHARES
CONSTITUTING APPROXIMATELY 60% OF THE COMMON STOCK. MR. BICKNELL
HAS INFORMED THE COMPANY THAT HE INTENDS TO VOTE ALL SUCH SHARES
FOR THE ELECTION OF DIRECTORS NAMED AS NOMINEES IN THIS PROXY
STATEMENT.
This Proxy Statement and the form of proxy are first being
mailed to Stockholders on or around June 15, 1999.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, DATE, EXECUTE AND
RETURN THE FORM OF PROXY SENT TO THEM WITH THIS PROXY STATEMENT.
PROPOSAL NUMBER ONE
ELECTION OF THREE DIRECTORS
The Board of Directors of the Company is currently comprised
of six directors 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 Board of
Directors has approved an increase in the number of directors from
six to seven effective at the Annual Meeting of Stockholders. As
a result, three directors will be elected by Stockholders at this
Annual Meeting. The three persons designated by the Board of
Directors as nominees for election at this meeting to serve a
three-year term expiring in 2002 and until their successors are
elected and qualified are James K. Schwartz, William A. Freeman
and Michael W. Gullion. Each of the nominees has indicated a
willingness and ability 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 Common 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 any nominee is
unable or unwilling to serve) for the election of the nominees
named above. Each director requires an affirmative vote of a
plurality of the votes cast by the stockholders present at the
meeting in 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 Common Stock FOR the election of the
nominees named above. The names of the directors and nominees,
their ages, the years in which their terms of office will expire,
their principal occupations during at least the past five years,
other directorships held and certain other biographical
information are set forth below.
The Board of Directors recommends that you vote FOR the
election of James K. Schwartz, William A. Freeman and Michael W.
Gullion.
Nominees for Directors to Serve a Three-Year Term to Expire in
2002:
JAMES K. SCHWARTZ, Age 37, President and Chief Operating
Officer.
Mr. Schwartz joined the company in December 1991 as Vice
President of Accounting and Administration. He was promoted
to Vice President of Finance, Treasurer and Chief Financial
Officer in 1993. In January 1995 he was promoted to President
and Chief Operating Officer. Mr. Schwartz is a board member
of the International Pizza Hut Franchisee Association and the
Unified Foodservice Purchasing Cooperative. Mr. Schwartz has
served as a director of the Company since 1996.
WILLIAM A. FREEMAN, Age 55, Senior Vice President and Chief
Financial Officer of Semitool, Inc.
Mr. Freeman has been Senior Vice President and Chief
Financial Officer of Semitool, Inc., a semiconductor
equipment manufacturer, since March 1998. Previously, Mr.
Freemen was self-employed as a management consultant after
retiring from Zurn Industries, Inc. in 1995. Mr. Freeman's
former consulting clients included, among others, entities
privately held by Mr. Bicknell. Mr. Freeman was President of
Zurn Industries, Inc., a manufacturing and construction
company, from May 1991 through September 1995. During his
tenure at Zurn Industries, Inc., Mr. Freeman also held the
positions of Senior Vice President and Chief Financial
Officer from May 1986 through May 1991 and divisional
management positions from January 1973 through April 1986.
MICHAEL W. GULLION, Age 45, Chairman of the Board of
Directors and Chief Executive Officer of Gold Banc,
Corporation, Inc. ("Gold Banc").
Mr. Gullion has served as Chairman of the Board of Directors
and Chief Executive Officer of Gold Bank in Leawood, Kansas,
the leading bank for Gold Banc Corporation, Inc. since 1978.
He was President of Gold Banc from its inception in December
1985 through February 1999 and is currently Chairman of the
Board of Directors and Chief Executive Officer of Gold Banc.
Continuing Directors - Not Standing for Election This Year
Directors with Terms Expiring in 2000:
FRAN D. JABARA, Age 74, 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
Commerce Bank, Wichita, Kansas and Midwest Grain Products,
Inc.
ROBERT E. CRESSLER, Age 60, Partner in Diverse Direction,
Inc. ("DDI").
Mr. Cressler was first elected a director of the Company in
April 1985. He has been a partner in DDI for more than 10
years. DDI previously operated Pizza Hut restaurants and
continues to operate other businesses, including Nutri/System
and New Horizons franchises.
Directors with Terms Expiring in 2001:
O. GENE BICKNELL, Age 66, 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. Mr. Bicknell re-
assumed the position of Chief Executive Officer, a position
he held from 1962 to 1992, on January 31, 1995.
MICHAEL BRAUDE, Age 63, President and Chief Executive Officer
of the Kansas City Board of Trade.
Mr. Braude has been President and Chief Executive Officer of
the Kansas City Board of Trade since 1984. He also serves as
a director of Country Club Bank and Midwest Grain Products,
Inc. Mr. Braude has served as a director of the Company since
1998.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met four times during the fiscal year
ended March 30, 1999. The Company's standing Stock Option and
Compensation Committee and the Company's standing Audit Committee
each met four times 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.
Jabara, Cressler and Freeman. 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. In May 1999, the Board of Directors adopted a formal
written charter of the Audit Committee which specifies the scope
of the Audit Committee's responsibilities, and how it carries out
those responsibilities, including the structure, processes and
membership requirements of the Committee. The Board undertook this
action in response to recent recommendations of the Blue Ribbon
Committee on Improving the Effectiveness of Corporate Audit
Committees, which were presented to the Securities and Exchange
Commission, the New York Stock Exchange and the National
Association of Securities Dealers.
STOCK OPTION AND COMPENSATION COMMITTEE. The Stock Option
and Compensation Committee is comprised of Messrs. Jabara,
Cressler and Braude. The Committee reviews and recommends to the
Board of Directors the levels, amounts, and types of compensation
to be 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.
DIRECTOR COMPENSATION
Non-employee directors are paid a fee of $1,000 for each
Board meeting attended, $750 for each committee meeting attended
and $1,000 per month as additional director's compensation.
Directors who are also employees of the Company do not receive any
additional compensation solely for serving as directors of the
Company. Messrs. Jabara, Cressler, Freeman, Gullion and Braude
have never been employed by the Company.
STOCK OPTION AND COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Stock Option and Compensation Committee is currently
comprised of three non-employee directors, Messrs. Jabara,
Cressler and Braude. Mr. Jabara chairs the Committee.
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDER
AND OF DIRECTORS AND MANAGEMENT
The following table sets forth, as of April 30, 1999, certain
information as to the number of shares of common stock
beneficially owned by each person who is known by the Company to
own beneficially more than 5% of its outstanding shares, by all
directors and nominees, by the Named Executive Officers (as
defined under the caption "Executive Compensation") and by the
directors and executive officers as a group.
Amount and Nature of
Name and Title Beneficial Ownership (1) Percent of Class
of Beneficial Owner
O. Gene Bicknell (2) (3)
Chairman, Chief Executive
Officer and Director 14,649,366 59.7%
James K. Schwartz (3)
President, Chief
Operating Officer
and Director 168,750 *
Troy D. Cook (3)
Senior Vice President,
Chief Financial
Officer, Treasurer
and Secretary 80,000 *
Marty D. Couk (3)
Senior Vice President-
Pizza Hut Operations 72,500 *
D. Blayne Vaughn (3)
Vice President-
Pizza Hut Operations 22,500 *
L. Bruce Sharp (3)
Vice President-
Pizza Hut Operations 1,250 *
Robert E. Cressler, Director ---- *
Fran D. Jabara, Director 3,998 *
William A. Freeman, Director 400 *
Michael Braude, Director ---- *
Michael W. Gullion,
Director-Nominee ---- *
All executive officers and
directors as a group
(12 persons) 15,009,264 61.2%
(1) Includes options for 995,000 shares of Common Stock which may
be acquired upon the exercise of stock options exercisable on
or within 60 days after April 30, 1999. Does not include
options held which are not exercisable within 60 days.
(2) Includes 671,816 shares of Common Stock of which 9,600 shares
are owned by Mr. Bicknell's spouse, 83,000 shares are owned by
Pitt Plastics, Inc. and controlled by Mr. Bicknell, and
579,216 shares are owned by O. Gene Bicknell Charitable
Remainder Unit Trust. The address for Mr. Bicknell is 720 W.
20th Street, Pittsburg, Kansas 66762.
(3) Includes shares which may be acquired upon the exercise of
stock options exercisable on or within 60 days after April 30,
1999, under the Company's stock option plans as follows:
650,000, 168,750, 80,000, 72,500, 22,500, and 1,250 shares for
Messrs. Bicknell, Schwartz, Cook, Couk, Vaughn and Sharp,
respectively.
*Less than 1% ownership.
SECTION 16(a) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires the Company's directors,
executive officers, and persons owning more that ten percent of a
registered class of the Company's securities to file with the
United States Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of equity
securities of the Company. Officers, directors, and greater-than-
ten-percent Stockholders are required by the Securities and
Exchange Commission's regulations to furnish the Company with
copies of all Section 16(a) forms that they file. To the Company's
knowledge, based solely on review of copies of such reports
furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 30,
1999, all Section 16(a) filing requirements applicable to
directors, executive officers and greater-than ten percent
Stockholders were met.
EXECUTIVE COMPENSATION
The following table summarizes, for each of the three fiscal
years ended March 30, 1999, March 31, 1998 and March 25, 1997, the
compensation awarded to, earned by, or paid to (i) the Chief
Executive Officer (the "CEO") of the Company as of March 30, 1999,
and (ii) each of the five most highly compensated executive
officers (other than the CEO) who served as executive officers of
the Company or its subsidiaries as of March 30, 1999, whose annual
compensation exceeded $100,000 for the fiscal year ended March 30,
1999, and (iii) up to two additional individuals for whom
disclosure would have been provided but for the fact that the
individual was not serving as an executive officer at the end of
the fiscal year (i), (ii) and (iii) collectively, the "Named
Executive Officers"). The Company does not currently award stock
appreciation rights or restricted stock. Long-term incentives
offered by the Company under its executive compensation program
are stock options, the Deferred Compensation and Retirement Plan
and the Non-Qualified Executive Deferred Compensation Plan
described below.
Summary Compensation Table
All Other
Name and Annual Stock Compen-
Principal Fiscal Compensation Option sation
Position Year(1) Salary Bonus Awards (2)
O. Gene Bicknell 1999 $370,000 $200,000 ---- $69,767
Chairman of the 1998 350,000 95,000 ---- 57,108
Board and Chief 1997 350,000 100,000 ---- 12,778
Executive
Officer (3) (5)
James K. Schwartz 1999 250,000 325,000 ---- 13,442
(4)(5) 1998 225,000 95,000 ---- 9,760
President and 1997 200,000 85,000 50,000 10,240
Chief Operating
Officer
Troy D. Cook (5) 1999 165,000 263,750 ---- 11,926
Senior Vice 1998 150,000 38,750 ---- 9,760
President and 1997 130,000 40,000 30,000 5,567
Chief Financial
Officer,
Secretary
and Treasurer
Marty D. Couk 1999 130,000 10,471 ---- 5,663
Senior Vice 1998 126,000 12,228 ---- 4,416
President 1997 126,000 20,604 ---- 4,812
Pizza Hut
Operations
D. Blayne Vaughn 1999 116,500 14,223 ---- 67,708
Vice President 1998 109,000 12,612 10,000 3,483
Pizza Hut 1997 92,400 22,856 ---- 3,649
Operations
L. Bruce Sharp 1999 100,500 11,088 ---- 49,132
Vice President 1998 92,267 9,554 10,000 2,598
Pizza Hut 1997 70,805 5,280 ---- 2,018
Operations
(1) For the fiscal year ended on the last Tuesday in March for
the year noted.
(2) Fiscal 1999 figures consist of the Company's calendar 1998
profit sharing plan contributions, deferred compensation plan
matching contributions, the cost of group term life insurance and
accidental death benefits, car allowance, stock option gains and,
in the case of Mr. Bicknell, the economic benefit derived from
split-dollar life insurance policies paid for by the Company (see
footnote 3), in the following amounts: Mr. Bicknell, $5,032 profit
sharing, $1,260 group insurance, $4,602 car allowance, $58,873
split-dollar insurance; Mr. Schwartz, $5,032 profit sharing,
$3,742 deferred compensation plan matching contributions, $66
group insurance, $4,602 car allowance; Mr. Cook, $5,032 profit
sharing, $2,226 deferred compensation plan matching contributions,
$66 group insurance, $4,602 car allowance, Mr. Couk, $4,161 profit
sharing, $1,400 deferred compensation plan matching contributions,
$102 group insurance; Mr. Vaughn, $3,759 profit sharing, $1,370
deferred compensation plan matching contributions, $62,477 stock
option gains, $102 group insurance; Mr. Sharp, $2,992 profit
sharing, $1,210 deferred compensation plan matching contributions,
$44,828 stock option gains, $102 group insurance.
(3) The Company pays 100% of the premiums on split-dollar
policies insuring the life of Mr. Bicknell. The policies state
that 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. The benefit derived for each year is as
follows: fiscal 1999, $58,873; fiscal 1998, $46,154; fiscal 1997,
$7,330.
(4) Mr. Schwartz has a five-year employment contract with the
Company dated January 27, 1995. If Mr. Schwartz is
terminated by the Company for any reason (other than for
cause) the Company is required to pay Mr. Schwartz any
accrued bonus and an amount equal to his then current base
salary for one year and continuation for six months of any
benefit plan available to him immediately prior to the
termination of the contract. His base salary for the 1999
fiscal year was $250,000. If there is a change in control in
the Company and his employment with the Company is
terminated, Mr. Schwartz will continue to receive from the
Company or a successor entity, as the case may be, his base
salary as of the date of the contract for a period of one
year.
(5) The Company awarded special executive bonuses this year
relating to the recapitalization of Romacorp, Inc. as
follows: Mr. Bicknell, $100,000, Mr. Schwartz, $225,000 and
Mr. Cook, $225,000.
STOCK OPTIONS
The following table sets forth information for the last
completed fiscal year relating to (i) exercises by the Named
Executive Officers of stock options pursuant to the Company's 1994
Non-Qualified Stock Option Plan (the "1994 Plan") and the Amended
and Restated 1984 Non-Qualified Stock Option Plan (the "1984 Plan"
or collectively the Company's "Stock Option Plans"), and (ii)
holdings at March 30, 1999, by the Named Executive Officers of
unexercised options granted pursuant to the Stock Option Plans.
The Company currently does not award stock appreciation rights
under its executive compensation program. The Company did not make
any option grants during fiscal 1999.
Aggregated Option Exercises in Fiscal 1999 and Option Value at
March 30, 1999
Value of
Unex-
Number of ercised
Unexer- In-the-
cised Money
Options at Options at
Shares March 30, March 30,
Ac- 1999 1999
quired Exercis- Exercis
on able/ -able/
Exer-ValueUnexer- Unexer-
Name cise Realized cisable cisable (1)
O. Gene
Bicknell $---- $---- 650,000 / ---- $5,440,000 /$ ----
James K.
Schwartz ---- ----168,750 / 31,250 1,855,000 / 278,125
Troy D.
Cook ---- ---- 80,000 / 20,000 848,125 / 179,375
Marty D.
Couk ---- ---- 72,500 / 5,000 800,313 / 50,000
D. Blayne
Vaughn 20,000 62,477 22,500 / 12,500 227,188 / 108,438
L. Bruce
Sharp 12,500 44,828 1,250 / 8,125 12,500 / 63,438
Robert B.
Page(2) 115,500 422,781 ---- / ---- ---- / ----
(1) The closing price of the Common Stock on the Nasdaq National
Market on March 30, 1999 was $16 7/8 per share. Value is
calculated by determining the difference between the option
exercise price and $16 7/8 multiplied by the number of shares
of Common Stock underlying the options.
(2) Mr. Page is no longer an officer of the Company due to the
recapitalization of Romacorp, Inc. By March 30, 1999, Mr. Page
exercised all of his vested options, including the options
vested in accordance with the terms of the recapitalization.
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective December 1, 1998, the Company established the Non-
Qualified Executive Deferred Compensation Plan which is
administered by the Compensation Committee. James K. Schwartz and
Troy D. Cook are currently the only eligible participants to the
Non-Qualified Executive Deferred Compensation Plan. The full
benefit amounts available to Messrs. Schwartz and Cook are up to
$10 million and $7 million, respectively (the "Full Benefit
Amounts"), which benefit amounts vest at specified intervals over
a 19 1/2 year period from the effective date of the agreement.
In the event a change of control occurs, as defined in the
agreement, the vesting schedule will be modified to provide for
accelerated vesting, in whole or in part, depending upon the
amount of time lapsed from the effective date of the agreement,
and the nature of the participant's continued employment, if any.
The Non-Qualified Executive Deferred Compensation Plan
provides that the Company will acquire life insurance policies on
the lives of Messrs. Schwartz and Cook with death benefits of $5
million each. The Company is the sole owner and beneficiary of
such policies. Upon death of a participant, the Non-Qualified
Executive Deferred Compensation Plan provides that the
participant's beneficiaries will receive the Full Benefit Amount
earned on the date of death, plus the proceeds of the life
insurance policy on such participant.
DEFERRED COMPENSATION AND RETIREMENT PLAN
Effective January 1, 1999, as approved by the Compensation
Committee of the Board of Directors, the Company established the
Deferred Compensation and Retirement Plan (the "Plan").
Participation in the Plan is based on meeting certain compensation
levels or approval of the Stock Option and Compensation Committee.
The provisions of the plan allow a participant to make separate
elections for the deferral of a portion of their salary and a
portion of their bonuses, if any. The Company will match
participant contributions 100% on the first 4% of the compensation
that is deferred. Additionally, the Company can make discretionary
contributions to the plan for any individual participant.
Contributions to the plan are made to a rabbi trust. With respect
to Company matching contributions, participants vest 25% for each
year of service through the fourth year of service. Distributions
from the plan are made in either lump sum payments or equal
payments over five or ten year terms.
REPORT OF THE STOCK OPTION AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The compensation for the Company's Chief Executive Officer
and its other executives is administered by the Stock Option and
Compensation Committee with oversight by the Board of Directors.
Executive compensation is comprised of four primary components: a
base salary, a non-guaranteed performance bonus, deferred
compensation and stock option grants. The first two are based
generally upon short-term performance, with the latter two offered
as long-term incentives to the executive.
In fiscal 1999, the Committee reviewed surveys published by
the National Restaurant Association to obtain competitive
compensation levels for companies similar in size and nature. The
Committee seeks to establish base 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 relative
performance of the individual and Company during the previous
fiscal year. Compensation surveys reviewed by the Committee
include many of the peer companies reflected in the Performance
Graph included herein; 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 primarily upon the
individual executive's contribution to the Company. Bonuses are
determined by the Stock Option and Compensation Committee and then
proposed to the full Board of Directors for ratification and
approval, with tentative installments paid quarterly. Because the
relative performance and contribution of an executive may not
perfectly coincide with earnings reported in the respective fiscal
year, bonuses may not correlate directly with a particular
division's or company-wide earnings results. During fiscal 1999,
the Stock Option and Compensation Committee proposed to the Board
of Directors, and the Board of Directors approved, special
discretionary bonuses to Messrs. Bicknell, Schwartz and Cook in
the amounts of $100,000, $225,000 and $225,000, respectively,
which were awarded in recognition of their respective efforts in
connection with the recapitalization of Romacorp, Inc.
Executives participate in the NPC International, Inc. Profit
Sharing Plan (the "Profit Sharing Plan") along with store
management and certain corporate staff, to the extent they meet
the requirements for the Profit Sharing Plan. To qualify for the
Profit Sharing Plan, an employee generally must have two years of
service, be 21 years of age or older and be employed on the last
day of the plan year. The Board of Directors determines the
overall contribution to the Profit Sharing Plan, and executives
who participate in the Profit Sharing Plan receive a pro-rata
share of that contribution. A participant's share of the annual
Profit Sharing Plan contribution generally is computed to be the
proportion of his/her salary (as adjusted to meet ERISA
requirements) relative to the combined salaries of all
participants in the Profit Sharing Plan. The six executives named
in the Summary Compensation Table participated in the Profit
Sharing Plan. Calendar year 1998 was the last year for this plan
due to the implementation of alternative benefit plans.
The Company utilizes long-term awards in the form of stock
options to strengthen the link between executive pay and overall
Stockholder return. Stock options have been periodically issued
pursuant to the Stock Option Plans and have been an integral part
of executive officer compensation. The Stock Option and
Compensation Committee believes such options will align the
interests of the Company's executives with those of its
Stockholders. The Committee believes that Company performance is
reflected over time in the price of the Company's stock and that
improving the stock price benefits the Stockholders collectively
in addition to the individual executive.
The Stock Option and Compensation Committee does not impose
strict formulas or compare results to specific pre-set performance
targets in determining overall compensation for executive
officers. Factors considered by the Stock Option and Compensation
Committee in determining current performance and the related
compensation for the Company's executive officers for the 1999
fiscal year include (i) the achievement of minimum performance
standards (generally prior year operating performance, adjusted
for those factors in the current or prior year which are outside
the control of the individual being considered), (ii) current year
earnings 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.
While some or all of these factors are considered in judging
the performance of each executive, certain of the factors may have
more or less relevance in determining a specific individual's
performance and resulting pay. Particular factors may be
considered more relevant to, and weigh more heavily in
determination of compensation for, the executive who exercises
operating control over a division or subsidiary than for an
executive who performs a general function.
Chief Executive Officer Compensation
The Stock Option and Compensation 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 the discussion or vote when deliberations
regarding his salary are before the Board of Directors, of which
he is a member.
In determining Mr. Bicknell's bonus in the current and prior
year, the Committee considered the amount of time he spent on
activities which were unrelated to the Company over the course of
each fiscal year.
Compensation Committee Members
Fran D. Jabara
Robert E. Cressler
Michael Braude
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. 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.
Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99
NPC
International,
Inc. 100.0 81.2 159.1 184.6 234.3 298.4
Peer Group 100.0 81.3 99.8 80.8 89.0 68.3
Nasdaq Stock
Market 100.0 110.8 146.8 168.6 250.5 340.4
TRANSACTIONS WITH MANAGEMENT
During the fiscal year ended March 30, 1999, the Company sold
real estate to Mr. Bicknell for $511,000. The value of the real
estate was determined by a certified general real property
appraiser and the transaction was approved by the Board of
Directors. Additionally, the Company utilized a corporate
aircraft from a company owned by Mr. Bicknell and incurred expense
of approximately $100,000 during the fiscal year ended March 30,
1999. Management believes amounts paid were at least as favorable
as could be obtained from unrelated parties.
INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee recommended and the Board of Directors
approved the selection of PricewaterhouseCoopers LLP as
independent public accountants of the Company for the fiscal year
ended March 30, 1999. PricewaterhouseCoopers LLP audited the
financial statements of the Company for the most recent completed
fiscal year. A representative of Pricewaterhouse-Coopers LLP 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. The Audit Committee has not made a
recommendation with respect to PricewaterhouseCoopers LLP for
fiscal 2000 because meetings regarding such services have not yet
occurred.
Effective July 27, 1998, as discussed in the Company's filing
on Form 8-K dated July 30, 1998, the Company's Audit Committee
recommended and the Board of Directors approved a change in
independent accountants from Ernst & Young LLP to
PricewaterhouseCoopers LLP.
Ernst & Young LLP's report on the Company's financial
statements for the fiscal years ended March 25, 1997, and March
31, 1998, contained no adverse opinion or disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope
or accounting principles.
During the fiscal years ended March 25, 1997, and March 31,
1998, and during subsequent interim periods though June 30, 1998,
there were no disagreements with Ernst & Young LLP on any matter
of accounting principles or practices, financial statement
disclosures, or auditing scope or procedures, which disagreements,
if not resolved to the satisfaction of Ernst & Young LLP, would
have caused it to make a reference to the subject matter of the
disagreements in connection with its audit reports.
During the fiscal years ended March 25, 1997, and March 31,
1998, and during subsequent interim period through June 30, 1998,
there were no reportable events (as defined in Securities and
Exchange Commission Regulations S-K Item 304(a)(1)(v).
During the fiscal year ended March 30, 1999, there were no
disagreements with PricewaterhouseCoopers LLP on any matter of
accounting principle or practice, financial statement disclosure,
or auditing scope or procedure, which disagreement, if not
resolved to the satisfaction of PricewaterhouseCoopers LLP, would
have caused it to make a reference to the subject matter of the
disagreement in connection with their audit report.
PROPOSALS OF STOCKHOLDERS
Proposals of Stockholders of the Company intended to be
presented at the Annual Meeting of Stockholders to be held in 2000
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 5,
2000. Such proposals must also comply with the other requirements
of the proxy solicitation rules of the Securities and Exchange
Commission. Stockholder proposals should be addressed to the
attention of the Secretary of the Company.
MISCELLANEOUS
No business other than that described herein 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.
AVAILABLE INFORMATION
A copy of the Company's 1999 Annual Report to Stockholders
accompanies this proxy. Additional copies of the Company's Annual
Report to Stockholders and copies of the Company's Annual Report
on Form 10-K for the year ended March 30, 1999 are available
without charge upon request. Requests should be addressed to the
Chief Financial Officer, NPC International, Inc., 720 W. 20th
Street, Pittsburg, KS 66762.
By Order of the Board
of Directors
Troy D. Cook
Secretary
Pittsburg, Kansas
May 27, 1999
