NPC International
720 West 20th Street
Pittsburg, KS 66762
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
July 11, 2000
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 11, 2000 at 10:00 a.m. Central Time, to consider
and take action with respect to the following:
1. To elect one director to serve a three-year
term and until his successor is elected and
qualified,
2. To approve the amendment of the Company's
National Pizza Company 1994 Stock Option Plan
(currently the NPC International, Inc. 1994
Stock Option Plan) (the "1994 Plan") increasing
the total number of shares of Common Stock
available for issuance upon the exercise of
options granted under the 1994 Plan by
1,000,000 shares to an aggregate of 3,791,450
shares of Common Stock, and eliminating the
requirement that all future increases receive
the approval of the Stockholders of the
Company, and
3. 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
23, 2000 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 28, 2000 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 26, 2000
NPC INTERNATIONAL, INC.
720 W. 20TH STREET
PITTSBURG, KANSAS 66762
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JULY 11, 2000
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 11, 2000. 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 23, 2000 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 23, 2000 the record date for the
determination of Stockholders entitled to vote at the Annual
Meeting, there were 22,270,555 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 and for
the approval of the amendment to the 1994 Plan. 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 14,674,366 SHARES
CONSTITUTING APPROXIMATELY 66% OF THE COMMON STOCK. MR. BICKNELL
HAS INFORMED THE COMPANY THAT HE INTENDS TO VOTE ALL SUCH SHARES
FOR THE ELECTION OF THE DIRECTOR NAMED AS NOMINEE IN THIS PROXY
STATEMENT AND FOR THE APPROVAL OF THE AMENDMENT TO THE 1994 PLAN.
This Proxy Statement and the form of proxy are first being
mailed to Stockholders on or before June 13, 2000.
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 ONE DIRECTOR
The Board of Directors of the Company is currently comprised
of seven 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 a decrease in the number of directors from
seven to six effective at the Annual Meeting of Stockholders. As a
result, only one director will be elected by Stockholders at this
Annual Meeting. The person designated by the Board of Directors as
nominee for election at this meeting to serve a three-year term
expiring in 2003 and until his successor is elected and qualified
is Martin C. Bicknell. The nominee 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 the individual director will be voted
(unless the nominee is unable or unwilling to serve) for the
election of the nominee 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. O. Gene Bicknell has
informed the Company that he intends to vote his shares of Common
Stock FOR the election of the nominee named above. The names of
the directors and nominee, 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 Martin C. Bicknell.
Nominee for Director to Serve a Three-Year Term to Expire in 2003:
MARTIN C. BICKNELL, Age 32, Senior Vice President
of Investments of A.G. Edwards & Sons, Inc.
Mr. Martin C. Bicknell has been Senior Vice President of
Investments of A.G. Edwards & Sons, Inc. in Overland Park,
Kansas, since March 1997. Mr. Martin C. Bicknell joined the
A.G. Edwards & Sons, Inc. as a Financial Consultant in 1991.
Mr. Martin C. Bicknell is the son of Mr. O. Gene Bicknell,
Chairman of the Board of the Company and holds the position
of Trustee or Successor Trustee in certain trusts controlled
by Mr. O.Gene Bicknell which trusts are beneficial owners of
Common Stock in the Company.
Continuing Directors - Not Standing for Election This Year
Directors with Terms Expiring in 2001:
O. GENE BICKNELL, Age 67, 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 64, 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.
Directors with Terms to Expire in 2002:
JAMES K. SCHWARTZ, Age 38, President and Chief Operating
Officer of the Company.
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 Franchise Holders Association
and the Unified Foodservice Purchasing Cooperative. Mr.
Schwartz has served as a director of the Company since 1996.
WILLIAM A. FREEMAN, Age 56, 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. O. Gene 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 46, Chairman of the Board of
Directors and Chief Executive Officer of Gold Banc
Corporation, Inc. ("Gold Banc").
Mr. Gullion has served as Chairman 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.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met four times during the fiscal year
ended March 28, 2000. The Company's standing Stock Option and
Compensation Committee met three times and the Company's standing
Audit Committee met six 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. At the annual meeting on July 11,
2000 the term as director expires for Messrs. 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. In May 1999, the Board of
Directors adopted a formal written charter of the Audit Committee,
which was amended in April 2000, 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 and rule changes of the Nasdaq Stock Market and the
Securities and Exchange Commission.
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. The
Audit Committee chairman received $1,250 for each committee
meeting. Directors who are also employees of the Company do not
receive any additional compensation solely for serving as
directors of the Company. Messrs. Braude, Cressler, Freeman,
Gullion and Jabara 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. None of the
members of the Stock Option and Compensation Committee were,
during the Company's last fiscal year, an officer or employee of
the Company or any of its subsidiaries, or otherwise were formally
an officer of the company or any of its subsidiaries.
BENEFICIAL OWNERSHIP OF PRINCIPAL STOCKHOLDER
AND OF DIRECTORS AND MANAGEMENT
The following table sets forth, as of April 21, 2000, 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.
Name and Title Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership (1) of Class
O. Gene Bicknell (2) (3)
Chairman, Chief Executive
Officer and Director 14,674,366 65.9%
James K. Schwartz (3)
President, Chief
Operating Officer
and Director 187,500 *
Troy D. Cook (3)
Senior Vice President,
Chief Financial
Officer, Treasurer
and Secretary 92,500 *
D. Blayne Vaughn (3)
Vice President-
Pizza Hut Operations 32,500 *
L. Bruce Sharp (3)
Vice President-
Pizza Hut Operations 6,875 *
Michael Braude, Director ---- *
Robert E. Cressler, Director ---- *
William A. Freeman, Director 400 *
Michael W. Gullion, Director ---- *
Fran D. Jabara, Director 3,998 *
Martin C. Bicknell,
Director-Nominee (4) 183,808 *
All executive officers,
directors and
nominees as a
group (11 persons) 15,181,947 68.2%
(1) Includes options for 969,375 shares of Common Stock which may
be acquired upon the exercise of stock options exercis-able
on or within 60 days after April 21, 2000. Does not include
options held which are not exercisable within 60 days.
(2) Includes 696,816 shares of Common Stock of which 9,600 shares
are owned by Mr. Bicknell's spouse, 134,000 shares are owned
by Pitt Plastics, Inc. and controlled by Mr. Bicknell and
553,216 shares are owned by the 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 21,
2000, under the Company's stock option plans as follows: 650,000,
187,500, 92,500, 32,500 and 6,875 shares for Messrs. Bicknell,
Schwartz, Cook, Vaughn and Sharp, respectively.
(4) Includes 183,808 shares of Common Stock of which 6,700 shares
are jointly owned by Mr. Bicknell's children, and controlled by
Mr. Bicknell and 177,108 shares owned by Bicknell Family
Foundation.
*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 28,
2000, all Section 16(a) filing requirements applicable to
directors, executive officers and greater-than 10% Stockholders
were met, except that one statement of changes in beneficial
ownership on Form 4 was filed late by Mr. O. Gene Bicknell.
EXECUTIVE COMPENSATION
The following table summarizes, for each of the three fiscal
years ended March 28, 2000, March 30, 1999 and March 31, 1998 the
compensation awarded to, earned by, or paid to (i) the Chief
Executive Officer (the "CEO") of the Company as of March 28, 2000,
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 28, 2000, whose annual
compensation exceeded $100,000 for the fiscal year ended March 28,
2000, 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 Non-Qualified Deferred Compensation and
Retirement Plan and the Non-Qualified Executive Deferred
Compensation Plan described below.
Summary Compensation Table
All
Name Other
And Annual Stock Compen-
Principal Fiscal Compensation Option sation
Position Year (1) Salary Bonus Awards (2)
O. Gene Bicknell 2000 $450,000 $150,000 ---- $79,804
Chairman of the 1999 370,000 200,000 ---- 69,767
Board and Chief 1998 350,000 95,000 ---- 57,108
Executive
Officer (3)
James K. Schwartz 2000 350,000 150,000 ---- 24,779
President and 1999 250,000 325,000 ---- 13,442
Chief Operating 1998 225,000 95,000 ---- 9,760
Officer
Troy D. Cook 2000 225,000 80,000 ---- 17,010
Senior Vice 1999 165,000 263,750 ---- 11,926
President and 1998 150,000 38,750 ---- 9,760
Chief Financial
Officer,
Secretary and
Treasurer
D. Blayne Vaughn 2000 125,000 29,836 ---- 6,291
Vice President 1999 116,500 14,223 ---- 67,708
Pizza Hut 1998 109,000 12,612 10,000 3,483
Operations
L. Bruce Sharp 2000 110,000 30,652 ---- 5,723
Vice President 1999 100,500 11,088 ---- 49,132
Pizza Hut 1998 92,267 9,554 10,000 2,598
Operations
(1) For the fiscal year ended on the last Tuesday in March for
the year noted.
(2) Fiscal 2000 figures consist of the Company's calendar 1999
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, below), in the
following amounts: Mr. Bicknell, $757 group insurance, $4,602 car
allowance, $74,445 split-dollar insurance; Mr. Schwartz, $20,111
deferred compensation plan matching contributions, $66 group
insurance, $4,602 car allowance; Mr. Cook, $12,342 deferred
compensation plan matching contributions, $66 group insurance,
$4,602 car allowance, Mr. Vaughn, $6,189 deferred compensation
plan matching contributions, $102 group insurance; Mr. Sharp,
$5,621 deferred compensation plan matching contributions, $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 2000 $74,445, fiscal 1999 $58,873 and fiscal 1998
$46,154.
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
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 28, 2000, 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 to these executives during
fiscal 2000.
Aggregated Option Exercises in Fiscal 2000 and Option Value at
March 28, 2000
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares March 28, 2000 March 28, 2000
Acquired Exercisable/ Exercisable/
Name on Value Unexer- Unexer-
Exercise Realized cisable cisable (1)
O. Gene
Bicknell $ ---- $ ---- 650,000 / ---- $285,250 / ----
James K.
Schwartz ---- ---- 187,500 / 12,500 319,025 / ----
Troy D.
Cook ---- ---- 92,500 / 7,500 123,420 / ----
D. Blayne
Vaughn ---- ---- 32,500 / 2,500 28,900 / ----
L. Bruce
Sharp ---- ---- 6,875 / 2,500 1,464 / ----
(1) The closing price of the Common Stock on the Nasdaq Stock
Market on March 28, 2000 was $7.67 per share. Value is calculated
by determining the difference between the option exercise price
and $7.67 multiplied by the number of shares of Common Stock
underlying the options.
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 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 the death of a participant, the Non-Qualified
Executive Deferred Compensation Plan provides that the
participant's beneficiary will receive the Full Benefit Amount
earned on the date of death, if any, 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
Non-Qualified 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. No discretionary contributions were made
during fiscal 2000. 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 2000, 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.
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 2000
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
PROPOSAL NUMBER TWO
AMENDMENT OF THE COMPANY'S NATIONAL PIZZA COMPANY 1994 STOCK
OPTION PLAN
General
In May 1994, the 1994 Plan was adopted by the Board of
Directors and subsequently approved by the Company's stockholders.
Under the 1994 Plan, the Stock Option and Compensation Committee
may grant non-qualified stock options and incentive options
(within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code")). At this Annual Meeting,
stockholders are being asked to consider and act upon a proposal
which would increase the total number of shares of Common Stock of
the Company that may be issued pursuant to awards granted under
the 1994 Plan by 1,000,000 shares, for a total of 3,791,450 and
would change the plan to permit the Board to increase, without
stockholder approval, the number of shares of Common Stock
available under the 1994 Plan for issuance upon exercise of non-
qualified stock options. A summary of the material features of the
1994 Plan is set forth below.
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 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 1994 Plan is administered by the Stock Option and
Compensation Committee, a committee of at least three directors
appointed by the Board of Directors. Subject to the express
provisions of the plan, the committee selects eligible persons to
receive options and determines all of the terms and conditions of
each option. The committee also establishes rules and regulations
for administering the plan and decides questions of interpretation
or application of any such rules or any provision of the 1994
Plan.
Shares Available for Awards
The 1994 Plan originally authorized up to 2,791,450 shares of
our common stock to be available to become subject to outstanding
options. The Company is requesting stockholder approval for the
increase of 1,000,000 additional shares at the Annual Meeting of
Stockholders, which will cause the total number of shares
available to be subject to options to be 3,791,450. To the extent
that shares of common stock subject to issuance upon the exercise
of options are not issued because of a surrender, lapse,
expiration or termination of any such option prior to issuance,
such shares shall again be available to be made subject to options
under the 1994 Plan.
In the event of a stock split, stock dividend,
recapitalization, reorganization, merger, consolidation,
liquidation, combination or other similar change or event, the
number of shares of Common Stock available under the 1994 Plan and
the number of shares of Common Stock subject to each outstanding
option may be appropriately adjusted by the compensation committee
in its discretion to prevent the dilution or diminution of such
options.
Amendments to the Plan
The Board of Directors may suspend or terminate the 1994 Plan
at any time. Under the plan currently in effect, the Board may not
make an amendment without stockholder approval which would
increase the aggregate number of shares of Common Stock available
under the 1994 Plan,
The Board has approved an amendment to the 1994 Plan which
would permit it to increase, without stockholder approval, the
number of shares of Common Stock available under the 1994 Plan for
issuance upon exercise of non-qualified stock options. Any
increase in the number of shares available for issuance upon
exercise of incentive stock options would continue to require
stockholder approval. To date, all grants awarded under the 1994
Plan have been grants of non-qualified stock options.
The Board of Directors recommends a vote FOR approval of the
amendments to the 1994 Plan which would (a) increase the number of
shares of the Company Common Stock that may be issued under the
1994 Plan and (b) permit the Board of Directors to amend the 1994
Plan in the future, without stockholder approval, to increase the
number of shares of Company Common Stock that may be issued
pursuant to non-qualified stock options.
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 Stock Market
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-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00
NPC
International,
Inc. 100.0 195.9 227.2 288.4 367.3 176.9
Peer Group 100.0 122.8 99.4 109.4 84.0 79.4
Nasdaq
Stock
Market 100.0 132.5 152.3 226.4 308.3 598.8
CERTAIN RELATIONSHIPS
During the fiscal year ended March 28, 2000 the Company
utilized a corporate aircraft from a company owned by Mr. O. Gene
Bicknell and incurred expense of approximately $100,000 during the
fiscal year ended March 28, 2000. Management believes amounts paid
were at least as favorable as could be obtained from unrelated
parties.
Mr. Martin C. Bicknell is Senior Vice President of
Investments of A.G. Edwards & Sons, Inc. A.G. Edwards Trust, a
subsidiary of A.G. Edwards, Inc. and an affiliate of A.G. Edwards
& Sons, Inc., is Trustee for the Company's Non-Qualified Deferred
Compensation and Retirement Plan and provides other services
related to the Company's Non-Qualified Executive Deferred
Compensation Plan.
INDEPENDENT PUBLIC ACCOUNTANTS
Effective August 16, 1999 as discussed in the Company's
filing on From 8-K/A dated August 16, 1999, the Audit Committee
recommended and the Board of Directors approved the selection of
KPMG LLP as independent public accountants of the Company for the
fiscal year ended March 28, 2000. KPMG LLP audited the financial
statements of the Company for fiscal years ended March 30, 1999
and March 28, 2000. A representative of KPMG 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.
KPMG LLP's reports on the Company's financial statements for
the fiscal years ended March 28, 2000 and March 30, 1999 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 28, 2000 and March 30,
1999 there were no disagreements with KPMG 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 KPMG LLP, would have caused it to
make a reference to the subject matter of the disagreement in
connection with their audit report.
During the fiscal years ended March 28, 2000 and March 30,
1999 there were no reportable events (as defined in Securities and
Exchange Commission Regulations S-K Item 304(a)(1)(v)).
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.
PricewaterhouseCoopers LLP's report on the Company's
financial statements for the fiscal year ended March 30, 1999
contained no adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or accounting
principles.
During the fiscal year ended March 30, 1999 there were no
disagreements with PricewaterhouseCoopers 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 PricewaterhouseCoopers LLP,
would have caused it to make a reference to the subject matter of
the disagreements in connection with its audit report.
During the fiscal year ended March 30, 1999 there were no
reportable events (as defined in Securities and Exchange
Commission Regulations S-K Item 304(a)(1)(v)).
Ernst & Young LLP's report on the Company's financial
statements for the fiscal year ended March 31, 1998 contained no
adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
During the fiscal year ended 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 year ended March 31, 1998 and during
subsequent interim periods through June 30, 1998 there were no
reportable events (as defined in Securities and Exchange
Commission Regulations S-K Item 304(a)(1)(v)).
PROPOSALS OF STOCKHOLDERS
Proposals of Stockholders of the Company intended to be
presented at the Annual Meeting of Stockholders to be held in 2001
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 13,
2001. 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 2000 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 28, 2000 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 26, 2000
