Jack In The Box 2007 Annual Report Download - page 76

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In February 2006, the stockholders of the Company approved an employee stock purchase plan (“ESPP”) for
all eligible employees to purchase shares of common stock at 95% of the fair market value on the date of purchase.
Employees may authorize us to withhold up to 15% of their base compensation during any offering period, subject
to certain limitations. A maximum of 200,000 shares of common stock may be issued under the plan. As of
September 30, 2007, 188,752 shares of common stock were available for future issuance under this Plan.
Compensation expense — The components of share-based compensation expense recognized in each year are
as follows (in thousands):
2007 2006 2005
Stock options ......................................... $ 8,602 $ 7,270 $ —
Performance-vested stock awards ........................... 2,416 1,210 838
Nonvested stock awards .................................. 1,246 805 558
Deferred compensation for directors — liability classified ......... 324 2,885 280
Deferred compensation for directors — equity classified .......... 376 — —
Total share-based compensation expense ..................... $12,964 $12,170 $1,676
Stock options — Prior to fiscal 2007, options granted had contractual terms of 10 or 11 years and employee
options generally vested over a four-year period. Beginning fiscal 2007, option grants have contractual terms of
7 years and employee options vest over a three-year period. Options may vest sooner for employees meeting certain
age and years of service thresholds. Options granted to non-management directors vest at six months. All option
grants provide for an option exercise price equal to the closing market value of the common stock on the date of
grant.
The following is a summary of stock option activity for fiscal year 2007:
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
(In thousands)
Options outstanding at October 1, 2006 ............ 6,235,034 $13.78
Granted.................................. 1,008,800 30.28
Exercised ................................ (2,362,436) 11.77
Forfeited ................................. (13,111) 20.71
Expired .................................. (19,930) 10.91
Options outstanding at September 30, 2007 ......... 4,848,357 $18.19 6.32 $68,990
Options exercisable at September 30, 2007 ......... 2,926,501 $14.57 5.59 $52,234
Options exercisable and expected to vest at
September 30, 2007......................... 4,753,657 $18.11 6.29 $68,008
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 prior 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,
F-26
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)