Jack In The Box 2008 Annual Report Download - page 73

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to 350,000 shares of common stock in connection with the crediting of stock equivalents. As of September 28, 2008,
323,373 shares of common stock were available for future issuance under this plan.
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 28, 2008, 173,185 shares of common stock were available for future issuance under this plan.
Compensation expense — We offer share-based compensation plans to attract, retain, and motivate key
officers, non-employee directors, and employees to work toward the financial success of the Company. The
components of share-based compensation expense recognized in each year are as follows (in thousands):
2008 2007 2006
Stock options . ....................................... $ 7,880 $ 8,602 $ 7,270
Performance-vested stock awards .......................... 1,381 2,416 1,210
Nonvested stock awards ................................. 1,034 1,246 805
Deferred compensation for directors — equity classified ......... 271 376 —
Deferred compensation for directors — liability classified ........ — 324 2,885
Total share-based compensation expense ................... $10,566 $12,964 $12,170
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 2008:
Shares
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
(In thousands)
Options outstanding at September 30, 2007 . . . 4,848,357 $18.19
Granted ........................... 1,140,500 24.76
Exercised .......................... (753,266) 11.47
Forfeited........................... (75,595) 19.88
Expired ........................... (10,700) 11.04
Options outstanding at September 28, 2008 . . . 5,149,296 $20.62 5.75 $20,983
Options exercisable at September 28, 2008 . . . 3,079,941 $16.97 5.04 $20,373
Options exercisable and expected to vest at
September 28, 2008 .................. 5,090,884 $20.56 5.74 $ 7,647
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-27
JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)