##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
  þ


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    January 1, 2006oro


TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF
    THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          
    to          .    Commission File Number: 0-25123
      P.F. Changs China Bistro,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other
    jurisdiction of
    incorporation or organization)

86-0815086(I.R.S. Employer
    Identification No.)7676 East Pinnacle Peak Road
    Scottsdale, AZ(Address of principal
    executive offices)

85255(Zip
    Code)    Registrants
    telephone number, including area code:(480) 888-3000
  Securities registered pursuant to Section 12(b) of the
    Act:
    NONE
  Securities registered pursuant to Section 12(g) of the
    Act:
    Common Stock, $.001 par value
  o
  o
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  þ o o
  Rule 12b-2 o
      DOCUMENTS
    INCORPORATED BY REFERENCE
    (to the extent indicated herein)




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##### 



TABLE OF
    CONTENTS
  
  Item



PagePART I1.

Business


32.

Properties


113.

Legal
    Proceedings


134.

Submission of
    Matters to a Vote of Security Holders


13PART II5.

Market for the
    Registrants Common Stock and Related Stockholder
    Matters


146.

Selected Financial
    Data


157.

Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


167A.

Quantitative and
    Qualitative Disclosures About Market Risks


308.

Financial
    Statements and Supplementary Data


319.

Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


569A.

Controls and
    Procedures


56PART III10.

Directors and
    Executive Officers of the Registrant


5811.

Executive
    Compensation


5812.

Security Ownership
    of Certain Beneficial Owners and Management and Related
    Stockholder Matters


5813.

Certain
    Relationships and Related Transactions


5814.

Principal
    Accountant Fees and Services


59PART IV15.

Exhibits, Financial
    Statement Schedules


59Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2   2




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##### Table of Contents



PART I  Item 1.
    Business  General
        Concept
    and Strategy
    Menu
  fan tsai. Fan tsai
   3




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##### Table of Contents



made-to-order
    Operations
    day-to-day
      day-to-day
   4




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##### Table of Contents



Marketing
  word-of-mouth word-of-mouth
    Competition
    Management
    Information Systems
  point-of-sales point-of-sales
  Purchasing
   5




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Employees
    Unit
    Economics
    Access to
    Information
  www.pfchangs.com. Form 10-K, Form 10-Q, Form 8-K
  Risk
    Factors
  Failure
    of our existing or new restaurants to achieve predicted results
    could have a negative impact on our revenues and performance
    results.
    The
    inability to develop and construct our restaurants within
    projected budgets and time periods will adversely affect our
    business and financial condition.
    
    landlord delays;
    labor disputes;
    shortages of materials and skilled labor;
    weather interference;
    unforeseen engineering problems;
    environmental problems;
    construction or zoning problems;
    local government regulations;
    modifications in design to the size and scope of the
    projects; and
    other unanticipated increases in costs, any of which could give
    rise to delays or cost overruns. 6




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Development
    is critical to our success.
    
    identification and availability of suitable locations;
    competition for restaurant sites;
    negotiation of favorable lease arrangements;
    timely development of commercial, residential, street or highway
    construction near our restaurants;
    management of the costs of construction and development of new
    restaurants;
    securing required governmental approvals and permits;
    recruitment of qualified operating personnel, particularly
    managers and chefs;
    weather conditions;
    competition in new markets; and
    general economic conditions.    Increases
    in the minimum wage may have a material adverse effect on our
    business and financial results.
    Intense
    competition in the restaurant industry could prevent us from
    increasing or sustaining our revenues and
    profitability.
     7




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Changes
    in general economic and political conditions affect consumer
    spending and may harm our revenues and operating
    results.
    Fluctuations
    in operating results may cause profitability to
    decline.
    
    general economic conditions;
    consumer confidence in the economy;
    changes in consumer preferences;
    competitive factors, including the performance of restaurant
    stocks;
    weather conditions;
    timing of new restaurant openings and related expenses;
    revenues contributed by new restaurants; and
    increases or decreases in comparable restaurant revenues.    Our
    inability to retain key personnel could negatively impact our
    business.
    Failure
    to comply with governmental regulations could harm our business
    and our reputation.
    
    the environment;
    building construction;
    zoning requirements;
    the preparation and sale of food and alcoholic
    beverages; and
    employment. 8




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Future
    changes in financial accounting standards may cause adverse
    unexpected operating results and affect our reported results of
    operations.
      Our
    financial results may also fluctuate significantly as a result
    of our accounting for certain aspects of our partnership
    program.
     9




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Implementing
    our growth strategy may strain our management resources and
    negatively impact our competitive position.
    Potential
    labor shortages may delay planned openings or damage customer
    relations.
    Changes
    in food costs could negatively impact our revenues and results
    of operations.
    Rising
    insurance costs could negatively impact
    profitability.
    Litigation
    could have a material adverse effect on our
    business.
     10




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##### Table of Contents



Compliance
    with changing regulation of corporate governance and public
    disclosure may result in additional expenses.
    Special
    Note Regarding Forward-Looking Statements
  Form 10-K Form 10-K,
  Item 2.
    Properties  10-K.
  Number of


Average SquareState

Locations


FootageAlabama


1



6,650Arizona


7



6,650Arkansas


1



7,250California


25



6,700Colorado


7



6,750Florida


9



6,600Georgia


3



5,950Idaho


1



6,400Illinois


4



7,550Indiana


2



7,050Iowa


1



7,100Kansas


1



6,500Kentucky


1



7,500Louisiana


1



6,200Massachusetts


1



5,750Maryland


2



6,750Michigan


3



6,750Minnesota


2



7,150Missouri


3



7,000 11




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##### Table of Contents



Number of


Average SquareState

Locations


FootageNorth Carolina


3



6,850Nebraska


1



7,100New Jersey


3



7,750New Mexico


1



7,450Nevada


5



8,600New York


3



7,000Ohio


6



6,800Oklahoma


2



7,500Oregon


3



6,600Pennsylvania


2



7,200Tennessee


4



6,750Texas


13



6,800Utah


2



5,300Virginia


4



6,750Washington


3



6,750Wisconsin


2



6,450132



6,850   10-K.
  Number of


Average SquareState

Locations


FootageArizona


16



3,000California


9



3,250Colorado


4



3,100Florida


3



3,100Maryland


2



3,150Minnesota


3



3,200Nevada


3



3,050New Mexico


1



3,350North Carolina


2



2,950Oklahoma


3



3,200Tennessee


1



3,300Texas


31



3,250Utah


2



3,25080



3,200   10-K,
  Expansion
    Strategy and Site Selection
   12




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##### Table of Contents



Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   13




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##### Table of Contents



PART II  Item 5.
    Market
    for the Registrants Common Stock and Related Stockholder
    Matters      Quarter Ended

High


LowMarch 28, 2004


52.24



46.27June 27, 2004


51.93



41.87September 26, 2004


46.07



39.50January 2, 2005


57.87



44.80April 3, 2005


60.34



52.25July 3, 2005


62.30



52.90October 2, 2005


65.12



43.25January 1, 2006


53.90



42.92      14




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##### Table of Contents



Item 6.
    Selected
    Financial Data    Selected
    Consolidated Financial Data
  Fiscal Year


Fiscal Year


Fiscal Year


Fiscal Year


Fiscal Year2001


2002


2003


2004(1)


2005(In thousands, except per share
    data)Statement of Income
    Data:Revenues

$
306,441


$
406,609


$
539,917


$
706,941


$
809,153Costs and expenses:Restaurant operating costs:Cost of sales


86,368



112,571



152,788



200,736



224,634Labor


98,086



134,728



176,428



233,325



267,681Operating


41,597



55,293



73,660



99,528



122,742Occupancy


18,716



24,129



28,914



37,693



42,793Total restaurant operating costs


244,767



326,721



431,790



571,282



657,850General and administrative


16,316



20,513



28,692



34,662



39,181Depreciation and amortization


12,476



15,847



21,817



29,155



36,950Preopening expense


5,180



6,428



8,790



7,995



9,248Partner investment expense(2)


2,744



5,798



4,196



17,671



4,800Income from operations


24,958



31,302



44,632



46,176



61,124Interest income and other income,
    net


900



41



466



612



1,841Income before minority interest
    and provision for income taxes


25,858



31,343



45,098



46,788



62,965Minority interest


(4,558
)


(5,243
)


(7,887
)


(10,078
)


(8,227
)Income before provision for income
    taxes


21,300



26,100



37,211



36,710



54,738Provision for income taxes


(7,530
)


(8,875
)


(12,424
)


(10,656
)


(16,942
)Net income

$
13,770


$
17,225


$
24,787


$
26,054


$
37,796Basic net income per share

$
0.58


$
0.70


$
0.98


$
1.01


$
1.44Diluted net income per share

$
0.54


$
0.66


$
0.94


$
0.98


$
1.40Shares used in calculation of
    basic net income per share


23,728



24,688



25,345



25,727



26,271Shares used in calculation of
    diluted net income per share


25,470



25,924



26,250



26,575



27,000   15




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##### Table of Contents



As of


As of


As of


As of


As ofDecember 30,


December 29,


December 28,


January 2,


January 1,2001


2002


2003


2005


2006(In thousands)Balance Sheet Data:Cash and cash equivalents

$
20,799


$
39,089


$
45,478


$
66,409


$
31,948Short-term investments (including
    restricted short-term investments)


13,300



3,800



5,000



5,000



42,410Total assets


191,338



238,850



303,821



383,515



466,662Long-term debt


1,644



1,441



136



545



5,360Common stockholders equity


133,296



168,019



204,332



244,957



293,898     (1)
    
    P.F. Changs operates on a
    52/53-week
    year, with the fiscal year ending on the Sunday closest to
    December 31. Fiscal years 2001, 2002, 2003 and 2005 each
    were comprised of 52 weeks. Fiscal year 2004 was comprised
    of 53 weeks.(2)
    
    Partner investment expense increased during 2004 as a result of
    a $12.5 million modification of certain partnership
    agreements as discussed in Note 1 to our consolidated
    financial statements.    Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
         16




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##### Table of Contents



Results
    of Operations
    Fiscal Year 2004


Fiscal Year 2005(1)Consolidated


Bistro


Pei Wei


Consolidated


Bistro


Pei WeiStatements of Income
    Data:Revenues


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%Costs and expenses:Restaurant operating costs:Cost of sales


28.4



28.3



28.9



27.8



27.7



28.0Labor


33.0



32.9



33.5



33.1



32.9



34.0Operating


14.1



13.9



15.1



15.2



14.9



16.5Occupancy


5.3



5.2



6.1



5.3



5.1



6.0Total restaurant operating costs


80.8



80.4



83.6



81.3



80.7



84.5General and administrative


4.9



4.7



6.4



4.8



2.1



4.8Depreciation and amortization


4.1



4.1



4.6



4.6



4.5



4.5Preopening expense


1.1



1.0



2.2



1.1



0.9



2.4Partner investment expense


2.5



2.5



2.7



0.6



0.5



1.0Income from operations


6.5



7.5



0.4



7.6



11.4



2.8Interest and other income
    (expense), net


0.1



0.1



0.0



0.2



0.0



0.0Minority interest


(1.4
)


(1.5
)


(0.9
)


(1.0
)


(1.1
)


(0.8
)Income (loss) before provision for
    income taxes


5.2



6.1
%


(0.5
)%


6.8



10.4
%


2.0
%Provision for income taxes


(1.5
)










(2.1
)Net income


3.7
%










4.7
%       (1)
    
    Shared Services and Other expenses are included in the
    Consolidated percentage of revenues calculation for 2005 only.
    Prior to 2005, similar expenses were generally presented within
    Bistro.  52/53-week
  Year
    Ended January 1, 2006 Compared to Year Ended
    January 2, 2005
  Revenues
    Bistro:
  Pei Wei:
 17




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##### Table of Contents



Costs and
    Expenses
  Cost of Sales.
  Bistro:
  Pei Wei:
  Labor.
  Bistro:
  Pei Wei:
  Operating.
  Bistro:
  Pei Wei:
  Occupancy.
 18




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Bistro:
  Pei Wei:
  General and Administrative.
  Depreciation and Amortization.
  Bistro:
  Pei Wei:
  Preopening Expense.
 19




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##### Table of Contents



Bistro:
  Pei Wei:
  Partner Investment Expense.
  Bistro:
  Pei Wei:
  Interest
    and Other Income (Expense), Net
    Minority
    Interest
   20




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##### Table of Contents



Bistro:
  Pei Wei:
  Provision
    for Income Taxes
  Interim Financial Reporting
    Fiscal Year 2003


Fiscal Year 2004Consolidated


Bistro


Pei Wei


Consolidated


Bistro


Pei WeiStatements of Income
    Data:Revenues


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%Costs and expenses:Restaurant operating costs:Cost of sales


28.3



28.2



29.6



28.4



28.3



28.9Labor


32.7



32.6



33.6



33.0



32.9



33.5Operating


13.6



13.6



14.3



14.1



13.9



15.1Occupancy


5.4



5.2



6.3



5.3



5.2



6.1Total restaurant operating costs


80.0



79.5



83.9



80.8



80.4



83.6General and administrative


5.3



5.1



7.4



4.9



4.7



6.4Depreciation and amortization


4.0



4.0



4.5



4.1



4.1



4.6Preopening expense


1.6



1.4



3.3



1.1



1.0



2.2Partner investment expense


0.8



0.8



0.5



2.5



2.5



2.7Income (loss) from operations


8.3



9.1



0.4



6.5



7.5



0.4Interest and other income
    (expense), net


0.1



0.1



0.0



0.1



0.1



0.0Minority interest


(1.5
)


(1.5
)


(1.0
)


(1.4
)


(1.5
)


(0.9
)Income (loss) before provision for
    income taxes


6.9



7.7
%


(0.6
)%


5.2



6.1
%


(0.5
)%Provision for income taxes


(2.3
)










(1.5
)Net income


4.6
%










3.7
%      21




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##### Table of Contents



Year
    Ended January 2, 2005 Compared to Year Ended
    December 28, 2003
  Revenues
    Bistro:
  Pei Wei:
  Costs and
    Expenses
  Cost of Sales.
  Bistro:
  Pei Wei:
  Labor.
  Bistro:
  Pei Wei:
  Operating.
  Bistro:
 22




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##### Table of Contents



Pei Wei:
  Occupancy.
  Bistro:
  Pei Wei:
  General and Administrative.
  Bistro:
  Pei Wei:
  Depreciation and Amortization.
  Bistro:
  Pei Wei:
 23




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##### Table of Contents



Preopening Expense.
  Bistro:
  Pei Wei:
  Partner Investment Expense.
  Bistro:
  Pei Wei:
  Interest
    and Other Income (Expense), Net
    Minority
    Interest
    Bistro:
  Pei Wei:
 24




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##### Table of Contents



Provision
    for Income Taxes
    Quarterly
    Results
        Fiscal 2004


Fiscal 2005First


Second


Third


Fourth


First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter


QuarterRevenues, in thousands

$
164,056


$
169,602


$
174,013


$
199,270


$
194,214


$
198,056


$
203,049


$
213,834Costs and expenses:Restaurant operating costs:Cost of sales


28.6
%


28.2
%


28.1
%


28.7
%


27.8
%


27.5
%


27.6
%


28.1
%Labor


33.5



33.5



32.6



32.5



32.9



32.9



33.6



33.0Operating


13.8



14.0



14.2



14.3



14.6



15.0



15.6



15.5Occupancy


5.2



5.3



5.4



5.4



5.3



5.4



5.5



4.9Total restaurant operating costs


81.1



81.1



80.3



80.9



80.6



80.8



82.3



81.5General and administrative


5.3



4.9



5.1



4.4



5.2



5.1



4.6



4.6Depreciation and amortization


4.0



4.1



4.2



4.2



4.2



4.3



4.6



5.2Preopening expense


1.4



0.8



1.2



1.1



0.7



1.3



1.3



1.3Partner investment expense(1)


8.2



0.5



1.0



0.8



0.1



0.8



0.7



0.7Income from operations


(0.0
)


8.6



8.3



8.6



9.2



7.8



6.6



6.8Interest and other income
    (expense), net


0.1



0.0



0.1



0.2



0.2



0.2



0.3



0.2Income before minority interest and
    provision for income taxes


0.1



8.6



8.3



8.8



9.4



8.0



6.8



7.0Minority interest


(1.4
)


(1.4
)


(1.5
)


(1.4
)


(1.2
)


(1.1
)


(1.0
)


(0.8
)Income before provision for income
    taxes


(1.3
)


7.2



6.8



7.4



8.3



6.9



5.9



6.1Provision for income taxes


0.9



(2.3
)


(2.1
)


(2.3
)


(2.7
)


(2.2
)


(1.7
)


(1.8
)Net income


(0.4
)%


5.0
%


4.7
%


5.1
%


5.6
%


4.7
%


4.2
%


4.3
%       (1)
    
    Partner investment expense increased during first quarter of
    2004 as a result of a $12.5 million modification of certain
    partnership agreements as discussed in Note 1 to our
    consolidated financial statements. 25




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Liquidity
    and Capital Resources
           26




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##### Table of Contents



Critical
    Accounting Policies
    Lease
    Obligation
         27




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##### Table of Contents



Partnership
    Structure
      Impairment
    of Long-Lived Assets
    Self
    Insurance
   28




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##### Table of Contents



Income
    Taxes
        New
    Accounting Standards
  Share-Based Payment Accounting for
    Stock-Based Compensation. Statement of Cash Flows.
    No. 13-1 13-1), Accounting for Rental Costs Incurred During a Construction
    Period. 13-1, 13-1
  Accounting
    Changes and Error Corrections
 29




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##### Table of Contents



Exchanges of
    Nonmonetary Assets Accounting for Nonmonetary Transactions.
  Inflation
    Purchase
    Commitments
  Payments Due by PeriodLess








MoreThan


1-3


3-5


ThanContractual
    Obligations

Total


1 Year


Years


Years


5 Years(In thousands)Long-Term Debt

$
10,470


$
5,110


$
5,223


$
77


$
60Operating Leases


287,588



23,680



58,377



59,205



146,326Capital Leases


5,062



416



832



832



2,982Purchase Obligations


61,017



44,720



14,107



2,190



Total

$
364,137


$
73,926


$
78,539


$
62,304


$
149,368     Disclosure in Managements Discussion and Analysis
    about Off-Balance Sheet Arrangements and Aggregate Contractual
    Obligations
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risks  available-for-sale
 30




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  P.F.
    CHANGS CHINA BISTRO, INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  PageConsolidated Financial Statements:Report of
    Independent Registered Public Accounting Firm


33Consolidated
    Balance Sheets at January 2, 2005 and January 1,
    2006


34Consolidated
    Statements of Income for the Years Ended December 28, 2003,
    January 2, 2005 and January 1, 2006


35Consolidated
    Statements of Common Stockholders Equity for the Years
    Ended December 28, 2003, January 2, 2005 and
    January 1, 2006


36Consolidated
    Statements of Cash Flows for the Years Ended December 28,
    2003, January 2, 2005 and January 1, 2006


37Notes to
    Consolidated Financial Statements


38  31




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Report of
    Independent Registered Public Accounting Firm  
            
 32




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##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  CONSOLIDATED
    BALANCE SHEETS
  January 2,


January 1,2005


2006(In thousands)ASSETSCurrent assets:Cash and cash equivalents

$
66,409


$
31,948Short-term investments


5,000



34,150Restricted short-term investments






8,260Inventories


2,951



3,461Prepaids and other current assets


9,874



15,957Total current assets


84,234



93,776Property and equipment, net


280,641



345,864Deferred income tax assets


3,755



1,938Goodwill


6,819



6,819Other assets


8,066



18,265Total assets

$
383,515


$
466,662LIABILITIES AND COMMON
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
14,013


$
13,850Construction payable


3,899



6,463Accrued expenses


32,298



40,864Unearned revenue


12,459



15,281Current portion of long-term debt,
    including $198,000 and $3,503,000 due to related parties at
    January 2, 2005 and January 1, 2006, respectively


613



5,110Total current liabilities


63,282



81,568Long-term debt, including $62,000
    and $3,503,000 due to related parties at January 2, 2005
    and January 1, 2006, respectively


545



5,360Lease obligation


43,936



55,991Minority interests


30,795



29,845Commitments and contingenciesCommon stockholders equity:Common stock, $0.001 par
    value, 40,000,000 shares authorized: 26,067,507 shares
    issued and outstanding at January 2, 2005 and 26,397,366 at
    January 1, 2006


26



26Additional paid-in capital


154,210



165,355Retained earnings


90,721



128,517Total common stockholders
    equity


244,957



293,898Total liabilities and common
    stockholders equity

$
383,515


$
466,662    33




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  CONSOLIDATED
    STATEMENTS OF INCOME
  Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands, except per share
    amounts)Revenues

$
539,917


$
706,941


$
809,153Costs and expenses:Restaurant operating costs:Cost of sales


152,788



200,736



224,634Labor


176,428



233,325



267,681Operating


73,660



99,528



122,742Occupancy


28,914



37,693



42,793Total restaurant operating costs


431,790



571,282



657,850General and administrative


28,692



34,662



39,181Depreciation and amortization


21,817



29,155



36,950Preopening expense


8,790



7,995



9,248Partner investment expense


4,196



17,671



4,800Income from operations


44,632



46,176



61,124Interest and other income
    (expense):Interest expense


(11
)


(3
)


(10
)Interest and other income


477



615



1,851Income before minority interest
    and provision for income taxes


45,098



46,788



62,965Minority interest


(7,887
)


(10,078
)


(8,227
)Income before provision for income
    taxes


37,211



36,710



54,738Provision for income taxes


(12,424
)


(10,656
)


(16,942
)Net income

$
24,787


$
26,054


$
37,796Net income per share:Basic

$
0.98


$
1.01


$
1.44Diluted

$
0.94


$
0.98


$
1.40Weighted average shares used in
    computation:Basic


25,345



25,727



26,271Diluted


26,250



26,575



27,000    34




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  CONSOLIDATED
    STATEMENTS OF COMMON STOCKHOLDERS EQUITY
  Common Stockholders
    EquityAdditionalCommon Stock


Paid-In


RetainedShares


Amount


Capital


Earnings


Total(In thousands)Balances, December 29,
    2002


25,002



25



128,114



39,880



168,019Issuance of common stock under
    stock option plans


473



1



5,289







5,290Issuance of common stock under
    employee stock purchase plan


43







1,123







1,123Issuance of common stock of Pei
    Wei subsidiary under stock option plan










138







138Tax benefit from disqualifying
    stock option dispositions










4,975







4,975Net income














24,787



24,787Balances, December 28,
    2003


25,518



26



139,639



64,667



204,332Issuance of common stock under
    stock option plans


510







5,911







5,911Issuance of common stock under
    employee stock purchase plan


40







1,548







1,548Issuance of common stock of Pei
    Wei subsidiary under stock option plan










76







76Tax benefit from disqualifying
    stock option dispositions










7,036







7,036Net income














26,054



26,054Balances, January 2,
    2005


26,068


$
26


$
154,210


$
90,721


$
244,957Issuance of common stock under
    stock option plans


285







6,075







6,075Issuance of common stock under
    employee stock purchase plan


44







1,891







1,891Tax benefit from disqualifying
    stock option dispositions










3,179







3,179Net income














37,796



37,796Balances, January 1,
    2006


26,397


$
26


$
165,355


$
128,517


$
293,898    35




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands)Operating Activities:Net income

$
24,787


$
26,054


$
37,796Adjustments to reconcile net
    income to net cash provided by operating activities:Depreciation and amortization


21,817



29,155



36,950Partner investment expense


3,355



17,195



4,800Partner bonus expense, imputed


1,439



1,750



1,808Deferred income taxes


(3,308
)


(195
)


1,817Tax benefit from disqualifying
    stock option dispositions credited to equity


4,975



7,036



3,179Minority interest


7,887



10,078



8,227Changes in operating assets and
    liabilities:Inventories


(592
)


(40
)


(510
)Prepaids and other current assets


(137
)


(3,561
)


(6,186
)Other assets


(1,708
)


(1,110
)


(1,042
)Accounts payable


1,316



5,646



(163
)Accrued expenses


12,421



4,380



8,566Lease obligation


6,476



10,509



10,453Unearned revenue


2,957



2,608



2,822Net cash provided by operating
    activities


81,685



109,505



108,517Investing Activities:Capital expenditures


(70,726
)


(84,088
)


(93,792
)Purchases of short-term investments


(1,200
)






(48,180
)Capitalized interest


(106
)


(58
)


(3,396
)Purchase of minority interests


(22
)


(595
)


(6,085
)Proceeds from sale of short-term
    investments










10,770Net cash used in investing
    activities


(72,054
)


(84,741
)


(140,683
)Financing Activities:Repayments of long-term debt


(1,756
)


(1,382
)


(672
)Payments of capital lease
    obligation










(135
)Proceeds from sale of subsidiary
    common stock


138



76



Proceeds from stock options
    exercised and employee stock purchases


6,413



7,459



7,966Proceeds from minority
    investors contributions


1,074



1,175



1,320Distributions to minority members
    and partners


(9,111
)


(11,161
)


(10,774
)Net cash used in financing
    activities


(3,242
)


(3,833
)


(2,295
)Net increase (decrease) in cash
    and cash equivalents


6,389



20,931



(34,461
)Cash and cash equivalents at the
    beginning of the year


39,089



45,478



66,409Cash and cash equivalents at the
    end of the year

$
45,478


$
66,409


$
31,948Supplemental Disclosures of
    Cash Flow Information:Cash paid for interest

$
146


$
104


$
429Cash paid for income taxes, net of
    refunds


1,791



11,144



15,116Supplemental Disclosures of
    Non-Cash Items:Purchase of minority interests
    through issuance of long-term debt and conversion to
    members capital

$
370


$
355


$
3,756Change in construction payable


2,859



(2,560
)


2,564Capital lease adjustment









$
1,737    36




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
 January 1,
    2006
  1.
    Summary
    of Significant Accounting Policies  Organization
    and Nature of Operations
    Fiscal
    Year
    Use of
    Estimates
    Principles
    of Consolidation and Presentation
    Cash
    and Cash Equivalents
    Short-term
    and Restricted Short-term Investments
   37




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Receivables
    Inventories
  first-in,
  Property
    and Equipment
        Goodwill
    and Intangibles
       38




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Accrued
    Insurance
    Lease
    Obligation
        No. 13-1, Accounting for Rental Costs Incurred During a Construction
    Period
  Unearned
    Revenue
   39




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Revenue
    Recognition
    Advertising
    Partner
    Bonus Expense, Imputed
    Preopening
    Expense
  13-1, Accounting for Rental Costs Incurred During a Construction
    Period
  Partner
    Investment Expense
  ,
  5-year
   40




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Income
    Taxes
  Accounting for Income
    Taxes.
    Stock-Based
    Compensation
  Accounting for Stock Issued to Employees
  Accounting for Stock Based
    Compensation
  Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands, except per share
    amounts)Net income, as reported

$
24,787


$
26,054


$
37,796Deduct: Total stock-based employee
    compensation expense determined under fair value methods for all
    awards, net of related tax effects


3,569



5,074



6,160Pro forma net income

$
21,218


$
20,980


$
31,636Net income per share:Basic, as reported

$
0.98


$
1.01


$
1.44Basic, pro forma

$
0.84


$
0.82


$
1.20Diluted, as reported

$
0.94


$
0.98


$
1.40Diluted, pro forma

$
0.81


$
0.79


$
1.17Weighted average shares used in
    computation:Basic


25,345



25,727



26,271Diluted


26,250



26,575



27,000     2003


2004


2005Weighted average risk-free
    interest rate


3.3
%


3.6
%


4.1
%Expected life of options (years)


5.0



5.0



5.0Expected stock volatility


46.4
%


43.7
%


38.9
%Expected dividend yield


0.0
%


0.0
%


0.0
%  41




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Net
    Income Per Share
  Earnings per Share.
    Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands, except per share
    amounts)Numerator:Numerator for basic and diluted
    net income per share  net income available to
    common stockholders

$
24,787


$
26,054


$
37,796Denominator:Denominator for basic net income
    per share  weighted-average shares


25,345



25,727



26,271Effect of dilutive securities:Employee and director stock options


905



848



729Denominator for diluted net income
    per share  adjusted for weighted average shares
    and assumed conversions


26,250



26,575



27,000Net income per share:Basic

$
0.98


$
1.01


$
1.44Diluted

$
0.94


$
0.98


$
1.40   Fair
    Value of Financial Instruments
    Segment
    Reporting
  Disclosure about Segments of an
    Enterprise and Related Information.
 42




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##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Concentrations
    of Credit Risk
    Reclassifications
    Recent
    Accounting Pronouncements
  Share-Based Payment Accounting for
    Stock-Based Compensation. Statement of Cash Flows.
    No. 13-1 13-1), Accounting for Rental Costs Incurred During a Construction
    Period. 13-1, 13-1
  Accounting
    Changes and Error Corrections
 43




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Exchanges of
    Nonmonetary Assets Accounting for Nonmonetary Transactions.
  2.
    Property
    and Equipment    January 2,


January 1,2005


2006(In thousands)Land

$



$
3,681Building and improvements






15,188Leasehold improvements


268,548



330,500Furniture, fixtures and equipment


74,568



94,607China and smallwares


7,184



9,157350,300



453,133Less accumulated depreciation and
    amortization


89,104



119,979261,196



333,154Construction in progress


19,445



12,710$
280,641


$
345,864     3.
    Intangibles   44




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     2006

$
8502007


8502008


8502009


8502010


850Thereafter


6,293$
10,543   4.
    Accrued
    Expenses    January 2,


January 1,2005


2006(In thousands)Accrued payroll

$
11,064


$
12,354Sales and use tax payable


4,787



5,405Property tax payable


1,850



2,301Accrued insurance


8,536



11,708Accrued rent


2,475



3,427Other accrued expenses


3,586



5,669$
32,298


$
40,864   5.
    Credit
    Facility   45




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   6.
    Long-Term
    Debt    January 2,


January 1,2005


2006(In thousands)$7.0 million in unsecured
    promissory notes, payable to related parties from the sale of
    minority partner interests, with a rate of 200-225 basis
    points over LIBOR (4.84% at January 1, 2006), maturing
    January 2007 through December 2007

$
259


$
7,006$3.8 million in unsecured
    promissory notes, payable to non-related parties from the sale
    of minority partner interests, with a rate of 200 basis
    points over LIBOR (4.84% at January  1, 2006),
    maturing January 2006 through August 2009


827



3,392Other


72



721,158



10,470Less current portion


613



5,110$
545


$
5,360     2006

$
5,1102007


4,5622008


6612009


742010


3Thereafter


60$
10,470     7.
    Leases     46




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     December 28,


January 2,


January 1,2003


2005


2006(In thousands)Minimum rentals

$
14,657


$
19,227


$
20,819Contingent rentals


6,380



7,723



8,193$
21,037


$
26,950


$
29,012     Capital


OperatingLeases


Leases


Total2006

$
416


$
23,680


$
24,0962007


416



28,360



28,7762008


416



30,017



30,4332009


416



29,605



30,0212010


416



29,600



30,016Thereafter


2,982



146,326



149,308Total minimum lease payments


5,062


$
287,588


$
292,650Less: Amount representing interest


2,399Present value of net minimum lease
    payments

$
2,663     8.
    Preferred
    Stock and Common Stockholders Equity  Preferred
    Stock
    Stock
    Option Plans
   47




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         48




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Outstanding OptionsWeighted-Shares





AverageAvailable





Exercisefor Options


Shares


PriceOutstanding at December 29,
    2002


955,362



2,386,927


$
14.88Authorized










Granted


(602,000
)


602,000



43.34Exercised






(464,535
)


11.38Forfeited (canceled)


96,198



(96,198
)


18.92Outstanding at December 28,
    2003


449,560



2,428,194



22.46Authorized


1,000,000







Granted


(602,200
)


602,200



45.33Exercised






(509,833
)


11.59Forfeited (canceled)


49,331



(49,331
)


36.52Outstanding at January 2, 2005


896,691



2,471,230



29.92Authorized










Granted


(876,550
)


876,550



55.66Exercised






(285,269
)


21.30Forfeited (canceled)


94,394



(94,394
)


46.06Outstanding at January 1, 2006


114,535



2,968,117


$
37.84Options exercisable at
    January 1, 2006






1,481,893


$
27.34     Options OutstandingWeighted-





Options ExercisableAverage


Weighted-





Weighted-Remaining


Average





AverageNumber


Contractual


Exercise


Number


ExerciseRange of Exercise
    Prices

Outstanding


Life


Price


Exercisable


Price$ 1.20 - $10.00


185,014



2.1 years


$
4.79



185,014


$
4.79$10.01 - $15.00


256,655



4.0 years



13.07



256,655



13.07$15.01 - $20.00


360,831



5.2 years



18.65



310,952



18.58$20.01 - $25.00


8,961



6.0 years



24.39



5,709



24.39$25.01 - $30.00


23,075



6.6 years



29.17



6,938



29.05$30.01 - $35.00


335,369



6.5 years



31.45



219,000



31.63$35.01 - $40.00


87,970



7.2 years



38.56



72,759



39.00$40.01 - $45.00


414,245



8.4 years



43.91



109,633



43.91$45.01 - $50.00


412,529



7.6 years



46.55



137,995



46.29$50.01 - $59.11


883,468



9.3 years



55.59



177,238



51.81    49




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Key
    Employee Stock Purchase Plan
    Employee
    Stock Purchase Plan
    9.
    Benefit
    Plan    10.
    Employment
    Agreements   50




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       11.
    Partnership
    Structure     51




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   12.
    Income
    Taxes    Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands)Federal:Current

$
12,987


$
8,539


$
12,230Deferred


(2,800
)


(165
)


1,53810,187



8,374



13,768State:Current


2,745



2,312



2,895Deferred


(508
)


(30
)


2792,237



2,282



3,174$
12,424


$
10,656


$
16,942     Year Ended


Year Ended


Year EndedDecember 28,


January 2,


January 1,2003


2005


2006(In thousands)Income tax expense at federal
    statutory rate


35.0
%


35.0
%


35.0
%State taxes, net of federal expense


3.9
%


4.0
%


3.8
%FICA tip credit


(7.6
)%


(10.0
)%


(7.7
)%Other, net


2.1
%






(0.1
)%33.4
%


29.0
%


31.0
%     As of


As ofJanuary 2,


January 1,2005


2006(In thousands)Deferred tax assets:Preopening expenses

$
1,218


$
1,302FICA tip and AMT credit
    carryforward


8,503



6,199Buyout intangible


7,786



5,228Unearned compensation


2,367



3,962Other


2,324



3,992Straight line rent


405



32922,603



21,012Deferred tax liabilities:Depreciation on property and
    equipment


20,330



19,943Goodwill amortization


(1,482
)


(869
)18,848



19,074Net deferred tax assets

$
3,755


$
1,938  52




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
         13.
    Commitments
    and Contingencies  Purchase
    Obligations
  12-month
  Litigation
    14.
    Segment
    Reporting   53




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SharedServices andTotal


Other(1)


Bistro


Pei Wei(In thousands)Fiscal Year 2005:Revenues

$
809,153


$



$
675,204


$
133,949Income (loss) before income taxes


54,738



(18,003
)


70,080



2,661Capital expenditures


93,792



5,897



65,251



22,644Depreciation and amortization


36,950



880



30,093



5,977Total assets


466,662



18,384



385,716



62,562Goodwill


6,819







6,566



253Fiscal Year 2004:Revenues

$
706,941






$
611,468


$
95,473Income (loss) before income taxes


36,710







37,194



(484
)Capital expenditures


84,088







67,475



16,613Depreciation and amortization


29,155







24,778



4,377Total assets


383,515







341,374



42,141Goodwill


6,819







6,566



253Fiscal Year 2003:Revenues

$
539,917






$
486,609


$
53,308Income (loss) before income taxes


37,211







37,505



(294
)Capital expenditures


70,726







56,839



13,887Depreciation and amortization


21,817







19,414



2,403Total assets


303,821







275,021



28,800Goodwill


6,819







6,566



253     (1)
    
    The Company did not segregate Shared Services and
    Other during fiscal years 2003 and 2004. Prior to 2005,
    similar expenses were generally presented within Bistro. 54




---



##### Table of Contents



P.F.
    CHANGS CHINA BISTRO, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   15.
    Interim
    Financial Results (Unaudited)  quarter-to-quarter
  Year Ended January 2,
    2005


Year Ended January 1,
    2006First


Second


Third


Fourth


First


Second


Third


FourthQuarter(1)


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter


Quarter(In thousands, except per share
    data)Revenues

$
164,056


$
169,602


$
174,013


$
199,270


$
194,214


$
198,056


$
203,049


$
213,834Restaurant operating profit


31,062



32,133



34,340



38,124



37,724



38,056



36,028



39,495Income (loss) before provision for
    income taxes


(2,185
)


12,240



11,903



14,752



16,039



13,706



11,886



13,107Net income (loss)


(678
)


8,396



8,171



10,165



10,826



9,252



8,439



9,279Basic net income (loss) per share


(0.03
)


0.33



0.32



0.39



0.41



0.35



0.32



0.35Diluted net income (loss) per share


(0.03
)


0.32



0.31



0.38



0.40



0.34



0.31



0.34Basic weighted average shares
    outstanding


25,559



25,605



25,768



25,977



26,117



26,221



26,359



26,385Diluted weighted average shares
    outstanding


25,559



26,475



26,589



26,786



26,893



26,977



27,073



27,058     (1)
    
    Partner investment expense increased during first quarter of
    2004 as a result of a $12.5 million modification of certain
    partnership agreements as discussed in Note 1. 55




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##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Disclosure Controls and Procedures
  Form 10-K, Rule 13a-15(e)
  Managements Annual Report on Internal Control over
    Financial Reporting Rule 13a-15(f)
  Internal
    Control  Integrated Framework. Internal
    Control  Integrated Framework.
    Change in Internal Control Over Financial
    Reporting
 56




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                     57




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##### Table of Contents



PART III  Item 10.
    Directors
    and Executive Officers of the Registrant    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Securities Authorized for Issuance Under Equity Compensation
    Plans.
  Number of Shares


Weighted


Number of Sharesto Be Issued


Average Exercise


RemainingUpon Exercise of


Price of


Available forOutstanding


Outstanding


FuturePlan Category

Options


Options


IssuanceEquity compensation plans approved
    by shareholders(a)


2,591,450


$
39.18



615,314
(c)Equity compensation plans not
    approved by shareholders(b)


376,667


$
28.61



3,041Total


2,968,117







618,355     (a)
    
    Consists of four P.F. Changs stock plans: 1996 Stock
    Option Plan, 1997 Restaurant Management Stock Option Plan, 1998
    Stock Option Plan and 1998 Employee Stock Purchase Plan.(b)
    
    Consists of P.F. Changs China Bistro 1999 Nonstatutory
    Stock Option Plan. See Notes to Consolidated Financial
    Statements, Note 8  Stock Option
    Plans.(c)
    
    Includes 503,820 shares reserved for issuance under the
    1998 Employee Stock Purchase Plan.    2003


2004


2005Net grants during the period as %
    of outstanding shares


2.0%



2.1%



3.0%Grants to named executive
    officers* as % of total options granted


24.9%



23.2%



23.8%Grants to named executive
    officers* as % of outstanding shares


0.6%



0.5%



0.8%Cumulative options held by named
    executive officers* as % of total options outstanding


44.8%



37.9%



37.8%     *
    
    Named executive officers are defined by the SEC for inclusion in
    the Proxy Statement. Named executive officers include our Chief
    Executive Officer (CEO), each of the four other most highly
    compensated executive officers serving at the end of the fiscal
    year ended January 1, 2006 and one additional individual
    for whom disclosure would have been provided but for the fact
    that he was not serving as an executive officer at the end of
    fiscal 2005. Fiscal 2004 and fiscal 2003 include our CEO and
    each of the four other most highly compensated executive
    officers.  Regulation S-K
 58




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##### Table of Contents



Item 13.
    Certain
    Relationships and Related Transactions    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules    Form 10-K:
                Form 10-K.
    ExhibitNumber

Description Document3
.1(1)

Amended and Restated Certificate
    of Incorporation.3
.1(2)

Amended and Restated By-laws.4
.1(3)

Specimen Common Stock Certificate.4
.2(3)

Amended and Restated Registration
    Rights Agreement dated May 1, 1997.10
.1(3)

Form of Indemnification Agreement
    for directors and executive officers.10
.2(3)

1998 Stock Option Plan and forms
    of agreement thereunder.10
.3(3)

1997 Restaurant Manager Stock
    Option Plan and forms of Agreement thereunder.10
.4(3)

1996 Stock Option Plan and forms
    of Agreement thereunder.10
.5(3)

1998 Employee Stock Purchase Plan.10
.13(4)

1999 Nonstatutory Stock Option
    Plan.10
.16(5)

Common Stock Purchase Agreement
    dated January 11, 2001.10
.17(6)

Pei Wei Asian Diner, Inc. 2001
    Stock Option Plan.10
.18(7)

Employment Agreement between
    Richard L. Federico and the Company, as amended, dated
    June 30, 2005.10
.19(7)

Employment Agreement between
    Robert T. Vivian and the Company, as amended, dated
    June 30, 2005.10
.20(7)

Employment Agreement by and among
    Russell Owens, Pei Wei Asian Diner, Inc. and the Company, as
    amended, dated June 30, 2005.10
.21(7)

Employment Agreement between R.
    Michael Welborn and the Company dated June 30, 2005. 59




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##### Table of Contents



ExhibitNumber

Description Document10
.23(8)

Key Employee Stock Purchase Plan
    and forms of Agreement thereunder.21
.1

List of Subsidiaries.23
.1

Consent of Ernst & Young,
    LLP, Independent Registered Public Accounting Firm.31
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 for Richard
    L. Federico.31
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 for Kristina
    K. Cashman.32
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 for Richard
    L. Federico.32
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 for Kristina
    K. Cashman.     
    
    Management Contract or Compensatory Plan.  (1)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    dated April 25, 2002.(2)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    dated October 24, 2001.(3)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-1
    (File
    No. 333-59749).(4)
    
    Incorporated by reference to the Registrants Annual Report
    on Form 10-K
    dated March 6, 2001.(5)
    
    Incorporated by reference to the Registrants
    Form 10-Q,
    dated April  1, 2001.(6)
    
    Incorporated by reference to the Registrants Annual Report
    on Form 10-K
    dated February 19, 2002.(7)
    
    Incorporated by reference to the Registrants
    Form 8-K
    dated June 30, 2005.(8)
    
    Incorporated by reference to the Registrants
    Form S-8
    dated January  31, 2005 60




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##### Table of Contents



SIGNATURES
      By:
    /s/  RICHARD
    L. FEDERICO   Chairman and Chief Executive Officer
  POWER OF
    ATTORNEY
  attorneys-in-fact attorneys-in-fact attorneys-in-fact
    Signature

Title

DateBy:

/s/  RICHARD
    L. FEDERICORichard
    L. Federico

Chairman, Chief Executive Officer
    and Director (Principal Executive Officer)

February 15, 2006By:

/s/  KRISTINA
    CASHMANKristina
    Cashman

Chief Financial Officer and
    Secretary (Principal Accounting Officer)

February 15, 2006By:

/s/  KENNETH
    J. WESSELSKenneth
    J. Wessels

Director

February 15, 2006By:

/s/  R.
    MICHAEL WELBORNR.
    Michael Welborn

Executive Vice President, Chief
    Administrative Officer and Director

February 15, 2006By:

/s/  JAMES
    G. SHENNAN, JR.James
    G. Shennan, Jr.

Director

February 15, 2006By:

/s/  F.
    LANE CARDWELL, JR.F.
    Lane Cardwell, Jr.

Director

February 15, 2006By:

/s/  M.
    ANN RHOADESM.
    Ann Rhoades

Director

February 15, 2006By:

/s/  LESLEY H. HOWELesley
    H. Howe

Director

February 15, 2006  61




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##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description Document3
.1(1)

Amended and Restated Certificate
    of Incorporation.3
.1(2)

Amended and Restated By-laws.4
.1(3)

Specimen Common Stock Certificate.4
.2(3)

Amended and Restated Registration
    Rights Agreement dated May 1, 1997.10
.1(3)

Form of Indemnification Agreement
    for directors and executive officers.10
.2(3)

1998 Stock Option Plan and forms
    of agreement thereunder.10
.3(3)

1997 Restaurant Manager Stock
    Option Plan and forms of Agreement thereunder.10
.4(3)

1996 Stock Option Plan and forms
    of Agreement thereunder.10
.5(3)

1998 Employee Stock Purchase Plan.10
.13(4)

1999 Nonstatutory Stock Option
    Plan.10
.16(5)

Common Stock Purchase Agreement
    dated January 11, 2001.10
.17(6)

Pei Wei Asian Diner, Inc. 2001
    Stock Option Plan.10
.18(7)

Employment Agreement between
    Richard L. Federico and the Company, as amended, dated
    June 30, 2005.10
.19(7)

Employment Agreement between
    Robert T. Vivian and the Company, as amended, dated
    June 30, 2005.10
.20(7)

Employment Agreement by and among
    Russell Owens, Pei Wei Asian Diner, Inc. and the Company, as
    amended, dated June 30, 2005.10
.21(7)

Employment Agreement between R.
    Michael Welborn and the Company dated June 30, 2005.10
.23(8)

Key Employee Stock Purchase Plan
    and forms of Agreement thereunder.21
.1

List of Subsidiaries.23
.1

Consent of Ernst & Young,
    LLP, Independent Registered Public Accounting Firm.31
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 for Richard
    L. Federico.31
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002 for Kristina
    K. Cashman.32
.1

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 for Richard
    L. Federico.32
.2

Certification pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002 for Kristina
    K. Cashman.     
    
    Management Contract or Compensatory Plan.  (1)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    dated April 25, 2002.(2)
    
    Incorporated by reference to the Registrants Quarterly
    Report on
    Form 10-Q
    dated October 24, 2001.(3)
    
    Incorporated by reference to the Registrants Registration
    Statement on
    Form S-1
    (File
    No. 333-59749).(4)
    
    Incorporated by reference to the Registrants Annual Report
    on Form 10-K
    dated March 6, 2001.(5)
    
    Incorporated by reference to the Registrants
    Form 10-Q,
    dated April  1, 2001.(6)
    
    Incorporated by reference to the Registrants Annual Report
    on Form 10-K
    dated February 19, 2002.(7)
    
    Incorporated by reference to the Registrants
    Form 8-K
    dated June 30, 2005.(8)
    
    Incorporated by reference to the Registrants
    Form S-8
    dated January  31, 2005 62