Jack In The Box 2009 Annual Report Download - page 66

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Table of Contents


to certain limitations. A maximum of 200,000 shares of common stock may be issued under the plan. As of September 27, 2009,
157,637 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):
  
Stock options $ 8,952 $ 7,880 $ 8,602
Performance-vested stock awards (1,429) 1,381 2,416
Nonvested stock awards 704 1,034 1,246
Nonvested stock units 830 — —
Deferred compensation for directors — equity classified 284 271 376
Deferred compensation for directors — liability classified — — 324
Total share-based compensation expense $ 9,341 $10,566 $12,964
In November 2008, we modified the performance periods and goals of our outstanding performance-vested stock awards to address
challenges associated with establishing long-term performance measures. The modifications and changes to expectations regarding
achievement levels resulted in a $2.2 million reduction in our expense.
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 2009:

 
  
  
   

Options outstanding at September 28, 2008 5,149,296 $ 20.62
Granted 24,000 23.27
Exercised (375,698) 12.17
Expired (9,272) 10.43
Options outstanding at September 27, 2009 4,788,326 $ 21.31 5.03 $ 12,977
Options exercisable at September 27, 2009 3,717,779 $ 19.89 4.80 $ 12,977
Options exercisable and expected to vest at September 27, 2009 4,772,320 $ 21.30 5.03 $ 12,977
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