Jack In The Box 2005 Annual Report Download - page 66

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(continued)
10. STOCK-BASED EMPLOYEE COMPENSATION (continued)
The following is a summary of stock option activity for the three fiscal years ended October 2, 2005:
Option exercise price per share
Shares Range
Weighted-
average
Balance at September 29, 2002 ................................................ 4,180,932 4.19 - 32.77 $21.12
Granted ................................................................................. 879,196 15.37 - 22.98 20.71
Exercised............................................................................... (42,002) 15.94 - 23.29 20.41
Canceled ............................................................................... (126,233) 5.75 - 26.63 23.14
Balance at September 28, 2003 ................................................ 4,891,893 4.19 - 32.77 21.10
Granted ................................................................................. 1,406,307 18.90 - 31.15 21.64
Exercised............................................................................... (580,244) 5.00 - 26.63 15.42
Canceled ............................................................................... (127,909) 5.75 - 26.63 21.92
Balance at October 3, 2004....................................................... 5,590,047 4.19 - 32.77 21.80
Granted ................................................................................. 414,400 33.16 - 35.25 35.16
Exercised............................................................................... (1,487,469) 4.19 - 32.77 20.20
Canceled ............................................................................... (43,278) 5.75 - 26.63 22.75
Balance at October 2, 2005....................................................... 4,473,700 5.75 - 35.25 23.56
The following is a summary of stock options outstanding at October 2, 2005:
Options outstanding Options exercisable
Range of
exercise prices
Number
outstanding
Weighted-average
remaining contractual
life in years
Weighted-
average
exercise price
Number
exercisable
Weighted-
average
exercise price
$ 5.75 - 7.50 71,265 0.85 $ 6.92 71,265 $ 6.92
12.13 - 18.90 1,056,481 7.05 17.97 494,778 17.00
19.06 - 23.25 1,152,903 5.67 21.19 894,872 21.25
23.88 - 26.00 1,125,003 5.96 25.40 852,614 25.41
26.02 - 35.11 755,548 7.30 29.02 527,028 28.99
35.25 - 35.25 312,500 9.96 35.25 – –
5.75 - 35.25 4,473,700 6.57 23.56 2,840,557 22.83
At October 2, 2005, October 3, 2004 and September 28, 2003, the numbers of options exercisable were 2,840,557,
2,976,113 and 2,874,900, respectively, and the weighted-average exercise prices of those options were $22.83, $21.15 and
$19.39, respectively.
The weighted-average fair value of options granted in 2005, 2004 and 2003 were $13.71, $9.66 and $9.18, respectively.
Effective in the fourth quarter of fiscal 2005, we began utilizing a binomial-based model to determine the fair value of
options granted. The fair value of all other options granted has been estimated on the date of grant using the Black-Scholes
option-pricing model. Valuation models require the input of highly subjective assumptions, including the expected
volatility of the stock price. The following weighted-average assumptions were used for stock option grants in each fiscal
year:
2005 2004 2003
Risk-free interest rate.......................................................................... 4.1% 3.7% 3.6%
Volatility............................................................................................. 35.5% 40.4% 40.0%
Dividends yield................................................................................... 0.0% 0.0% 0.0%
Expected life....................................................................................... 6 years 6 years 6 years
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