SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JACK IN THE BOX INC.
(Name of Registrant as Specified in Its Charter)
JACK IN THE BOX INC.
(Name of Person(s) Filing Proxy Statement)
Paying of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[LOGO} JACK IN THE BOX INC.
January 18, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Jack in the Box Inc. to be held at 2:00 p.m. on Friday, February 22, 2002, at
the Marriott Mission Valley, 8757 Rio San Diego Drive, San Diego, California.
We hope you will attend in person. If you plan to do so, please indicate in
the space provided on the enclosed proxy. Whether you plan to attend the meeting
or not, we encourage you to read this proxy statement and vote your shares.
Please sign, date and return the enclosed proxy as soon as possible in the
postage-paid envelope provided, or if indicated on your proxy card, vote by
telephone. This will ensure representation of your shares in the event that you
are unable to attend the meeting.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Meeting and Proxy Statement.
The Directors and Officers of the Company look forward to meeting with you.
Sincerely,
ROBERT J. NUGENT
Robert J. Nugent
Chairman of the Board
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 22, 2002
The 2002 Annual Meeting of Stockholders of Jack in the Box Inc. will be
held at 2:00 p.m. on Friday, February 22, 2002, at the Marriott Mission Valley,
8757 Rio San Diego Drive, San Diego, California.
The meeting will be held to vote upon the following proposals:
1. To elect nine directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To approve the 2002 Stock Incentive Plan;
3. To ratify the appointment of KPMG LLP as independent accountants; and
4. To act upon such other matters as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on December 26, 2001,
will be entitled to vote at the meeting.
By Order of the Board of Directors
LAWRENCE E. SCHAUF
Lawrence E. Schauf
Secretary
San Diego, California
January 18, 2002
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
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PROXY STATEMENT
------------------
ANNUAL MEETING OF STOCKHOLDERS
February 22, 2002
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies. The Board of Directors of Jack in the Box Inc., a Delaware corporation
(the "Company"), is soliciting proxies for use at the 2002 Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held at 2:00 p.m. on
Friday, February 22, 2002, at the Marriott Mission Valley, 8757 Rio San Diego
Drive, San Diego, California, or any postponements or adjournments thereof. This
Proxy Statement and form of proxy were mailed to stockholders on or about
January 18, 2002.
The Company will pay for the cost of preparing, assembling and mailing the
Notice of Annual Meeting of Stockholders, Proxy Statement and form of proxy. We
have engaged D.F. King & Co., Inc. ("D.F. King") to assist us in the
solicitation of proxies, for which they will be paid a fee not to exceed $5,000
plus out-of-pocket expenses. In addition to solicitation by mail, proxies may be
solicited personally or by telephone or other means by D.F. King, as well as by
directors, officers or employees of the Company, who will receive no additional
compensation for such services.
VOTING
We have fixed the close of business on December 26, 2001 as the record date
for the determination of stockholders entitled to notice of and to vote at the
Annual Meeting. On that date, there were 39,288,116 shares of
Jack in the Box Inc. Common Stock, $.01 par value (the "Common Stock"),
outstanding, excluding treasury shares. Company treasury shares will not be
voted. You are entitled to one vote for each share you own on any matter that
may be presented for consideration and action by stockholders at the meeting.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote is necessary for
us to have a quorum at the Annual Meeting. Abstentions and broker non-votes
(i.e., shares held by brokers or nominees that the broker or nominee does not
have discretionary power to vote on a particular matter and as to which
instructions have not been received from the beneficial owners or persons
entitled to vote) are counted for the purpose of determining whether a quorum is
present at the meeting. If there are insufficient votes to constitute a quorum
at the time of the Annual Meeting, we may adjourn the Annual Meeting to solicit
additional proxies.
A director will be elected by a plurality of the votes present or
represented by proxy. A majority of the votes present or represented by proxy
will be required to approve the 2002 Stock Incentive Plan and to ratify the
appointment of KPMG LLP as independent accountants of the Company for the 2002
fiscal year.
With regard to the election of directors, your vote may be cast in favor of
the proposed directors or withheld. Votes that are withheld will be excluded
entirely from the vote and will have no effect. Abstentions may be specified on
all proposals other than the election of directors and will be counted as
present for purposes of the item on which the abstention is voted. Therefore,
such abstentions will have the effect of a negative vote. Broker non-votes are
not counted for purposes of determining whether a proposal has been approved
and, therefore, have the effect of reducing the number of votes required to
achieve a majority of the votes cast for such proposal.
Your proxy will be voted as you direct either in writing or by telephone.
If you give no direction, your proxy will be voted FOR management's nominees for
election as directors and FOR Proposals 2 and 3. The enclosed proxy gives
discretionary authority as to any matters not specifically referred to therein.
See "Other Business". The telephone voting procedures, available only if you are
a stockholder of record, are designed to authenticate your identity, to allow
you to vote your shares and to confirm that your instructions have been properly
recorded. The enclosed proxy card sets forth specific instructions that you must
follow if you qualify to vote via telephone and wish to do so. You may revoke
your proxy at any time before it is voted at the Annual Meeting by giving
written notice of revocation to the Secretary of the Company, by filing a duly
executed written proxy bearing a later date or, if you qualify, by a later proxy
delivered using the telephone voting procedures. Your proxy will not be voted if
you are present at the Annual Meeting and elect to vote in person.
PROPOSAL ONE
ELECTION OF DIRECTORS
The nine directors of the Company are elected annually and serve until the
next Annual Meeting and until their successors are elected and qualified. The
current nominees for election as directors are set forth below. Should any
nominee become unavailable to serve as a director, your proxy will be voted for
such other person as the Board of Directors of the Company (the "Board")
designates. To the best of our knowledge, all nominees are and will be available
to serve. Stockholders' nominations for election of a director may be made only
pursuant to the provisions of the Company's Bylaws, described below under "Other
Business".
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
---
The following table provides certain information about each of management's
nominees for director as of January 1, 2002:
Position(s) Director
Name Age with the Company Since
--------------------------------- --- ------------------------- -----
Michael E. Alpert (4)(5)......... 59 Director 1992
Jay W. Brown (3)(5).............. 56 Director 1997
Paul T. Carter (1)(2)............ 79 Director 1991
Edward W. Gibbons (3)(4)(5)...... 65 Director 1985
Alice B. Hayes, Ph.D. (2)(5)..... 64 Director 1999
Murray H. Hutchison (1)(2)....... 63 Director 1998
Robert J. Nugent (3)............. 60 Chairman of the Board, 1988
Chief Executive Officer
L. Robert Payne (1)(4)........... 68 Director 1986
Kenneth R. Williams.............. 59 President, Chief Operating 2001
Officer and Director
--------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
(4) Member of the Finance Committee.
(5) Member of the Nominating and Governance Committee.
2
The business experience, principal occupations and employment of the
nominees follows:
Mr. Alpert was a partner in the San Diego office of the law firm of Gibson,
Dunn & Crutcher LLP for more than five years prior to his retirement in August
1992. He is currently Advisory Counsel to Gibson, Dunn & Crutcher LLP. Gibson,
Dunn & Crutcher LLP provides legal services to the Company from time to time.
Mr. Brown is currently a principal with Westgate Group, LLC. From April
1995 to September 1998, Mr. Brown was President and Chief Executive Officer of
Protein Technologies International, Inc., the world's leading supplier of
soy-based proteins to the food and paper processing industries. He was Chairman
and Chief Executive Officer of Continental Baking Company from October 1984 to
July 1995 and President of Van Camp Seafood Company from August 1983 to October
1984. From July 1981 through July 1983, he served as Vice President of Marketing
for the Company. Mr. Brown is a director of Agribrands International, Inc. and
Cardinal Brands, Inc.
Mr. Carter has been an insurance consultant for the Government Division of
Corroon & Black Corporation since February 1987. He retired in February 1987 as
Chairman and Chief Executive Officer of Corroon & Black Corporation,
Southwestern Region and as Director and Senior Vice President of Corroon & Black
Corporation. Mr. Carter is a director of Borrego Springs National Bank.
Mr. Gibbons has been a general partner of Gibbons, Goodwin, van Amerongen,
an investment banking firm, for more than five years. Mr. Gibbons is also a
director of Robert Half International, Inc. and Summer Winds Garden Centers,
Inc.
Dr. Hayes has been the President of the University of San Diego since 1995.
From 1989 to 1995, Dr. Hayes served as Executive Vice President and Provost of
Saint Louis University. Previously, she spent 27 years at Loyola University of
Chicago, where she served in various executive positions. Dr. Hayes is also a
director of the Pulitzer Publishing Company, the Old Globe Theatre, Independent
Colleges of Southern California, The San Diego Foundation, Loyola University of
Chicago, and Catholic Charities, Diocese of San Diego.
Mr. Hutchison served 18 years as Chief Executive Officer and Chairman of
International Technology Corp., a large publicly traded environmental
engineering firm, until his retirement in 1996. Mr. Hutchison is the Chairman of
the Board of Sunrise Medical, Inc. and the Huntington Hotel Corp. and serves as
a director of Cadiz Inc., Senior Resource Corp. and the Olson Company.
Mr. Nugent has served as Chairman of the Board since February 2001 and
Chief Executive Officer since April 1996. He served as President from April 1996
to February 2001 and Executive Vice President from February 1985 to April 1996.
Mr. Nugent has 22 years of experience with the Company in various executive and
operations positions.
Mr. Payne has served as President and Chief Executive Officer of
Multi-Ventures, Inc. since February 1976. Multi-Ventures, Inc. is a real estate
development and investment company that is also the managing partner of the
San Diego Mission Valley Hilton and the Red Lion Hanalei Hotel. He was a
principal in the Company prior to its acquisition by its former parent, Ralston
Purina Company, in 1968.
Mr. Williams has served as President and Chief Operating Officer since
February 2001. He was Executive Vice President, Marketing and Operations from
May 1996 to February 2001 and Senior Vice President from January 1993 to May
1996. Mr. Williams has 36 years of experience with the Company in various
operations positions.
3
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES OF THE BOARD
The following information is provided about the Board of Directors and
certain of its committees.
The Audit Committee directs the internal and external audit activities of
the Company as deemed appropriate. All members of the Audit Committee are
independent directors. In June 2000, the Board of Directors adopted an Audit
Committee Charter. The full text of the Audit Committee Charter was set forth in
Exhibit A of our Proxy Statement for last year. No substantive changes have been
made to the charter. The Audit Committee held four meetings, including one
telephonic meeting, in fiscal 2001 and on one occasion acted by unanimous
written consent.
The Compensation Committee reviews compensation policies and recommends
changes when appropriate. The Compensation Committee held four meetings in
fiscal 2001 and on one occasion acted by unanimous written consent.
The Nominating and Governance Committee recommends to the Board nominees
for election as directors and will consider nominees properly submitted by
stockholders (see "Other Business"). The committee also administers the
Company's Corporate Governance Principles and Practices. In fiscal 2001, the
Nominating and Governance Committee held four meetings, including two telephonic
meetings.
In fiscal 2001, the Board of Directors held six meetings, including one
telephonic meeting, and on one occasion acted by unanimous written consent. Each
current director attended more than 75% of the aggregate number of the general
meetings held and the meetings of committees on which such director served.
Directors who are also officers of the Company or its subsidiaries receive
no additional compensation for their services as directors. The independent
directors of the Company receive compensation consisting of an $18,000 annual
retainer, $2,000 for each Board meeting attended in person and $1,000 for each
committee meeting attended in excess of five. All directors are reimbursed for
out-of-pocket and travel expenses. No additional compensation is paid for
actions taken by the Board or committees by written consent. Under the Company's
Deferred Compensation Plan for Non-Management Directors, each independent
director may defer any portion or all of such compensation. Amounts deferred
under the plan's equity option are immediately converted to stock equivalents at
the then-current market price of the Company's Common Stock and matched at a 25%
rate by the Company. A director's stock equivalent account is distributed in
cash, based upon the ending number of stock equivalents and the market value of
the Company's Common Stock, at the conclusion of the director's service as a
member of the Board. All of the independent directors have elected to defer
their compensation pursuant to this plan.
Pursuant to the Company's Non-Employee Director Stock Option Plan, as
amended (the "Director Plan"), each year each independent director also receives
a stock option to purchase a certain number of shares of the Company's Common
Stock based on the relationship of each director's compensation to the fair
market value of the stock, but limited to fewer than 10,000 shares in any fiscal
year. During fiscal 2001, under the Director Plan, each independent director
received a stock option to purchase 7,000 shares of the Company's Common Stock
at the fair market value on the date of grant.
4
PROPOSAL TWO
APPROVAL OF THE 2002 STOCK INCENTIVE PLAN
At the Annual Meeting, stockholders will be asked to approve the Company's
2002 Stock Incentive Plan (the "2002 Plan"), which was adopted by the Board of
Directors in November 2001, subject to approval by the Company's stockholders.
The Company's Board of Directors considers the 2002 Plan to be important to the
Company's ability to appropriately compensate its officers and employees as the
Company's operations continue to grow. In this respect, the 2002 Plan will serve
the objectives previously implemented under the Company's 1992 Employee Stock
Incentive Plan, as amended (the "1992 Plan"). Substantially all of the shares
authorized under the 1992 Plan have either been issued or are subject to
currently outstanding options or other awards under that plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
Summary of the New Plan
The 2002 Plan is designed to enable the Company to attract, retain and
motivate its officers and other key employees, and to further align their
interests with those of the stockholders of the Company, by providing for or
increasing the proprietary interest of such persons in the Company.
The following summary of the main features of the 2002 Plan is qualified in
its entirety by reference to the complete text of the 2002 Plan, which is set
forth as Exhibit A to this Proxy Statement.
The 2002 Plan authorizes the grant and issuance of two different types of
Awards:
o Stock Options, which can qualify as "incentive stock options" under the
Internal Revenue Code of 1986, as amended (the "Tax Code") or as
"non-qualified stock options;"
o Incentive Stock, which is stock that vests based on continued
employment, passage of time or satisfaction of performance criteria.
The 2002 Plan has a number of special terms and limitations, including:
o The exercise price for stock options granted under the plan must equal
the Company's stock price on the date the option is granted;
o Stock options granted under the 2002 Plan cannot be "repriced," as
defined in the 2002 Plan;
o Only 1,900,000 shares are proposed to be available for issuance under
the 2002 Plan;
o No more than 15% of the shares available under the 2002 Plan may be
issued in the form of awards other than stock options;
o Awards under the 2002 Plan typically are subject to one-year minimum
vesting requirements, subject to exceptions for retirement, death or
disability of an employee or upon a change of control;
o Stockholder approval is required for certain types of amendments to the
2002 Plan.
The 2002 Plan provides that Awards may, but need not, qualify for an
exemption from the "short swing liability" provisions of Section 16(b) of the
Exchange Act pursuant to Rule 16b-3 and/or qualify as "performance-based
compensation" that is exempt from the $1 million limitation on the deductibility
of compensation under Tax Code Section 162(m). In order for Awards under the
2002 Plan to qualify as "performance-based compensation" under Tax Code Section
162(m), the 2002 Plan is required to provide (i) stockholder approval of the
class of eligible participants, (ii) per person annual award limitations and
(iii) the "Qualifying Performance Criteria."
5
Administration
The 2002 Plan will be administered by the Compensation Committee of the
Board of Directors, although the Board of Directors may exercise any authority
of the Committee under the 2002 Plan in lieu of the Committee's exercise
thereof. The Committee may designate subcommittees and may delegate certain
administrative functions to others.
Subject to the express provisions of the 2002 Plan, the Committee has broad
authority to administer and interpret the 2002 Plan, including, without
limitation, authority to determine who is eligible to participate in the 2002
Plan and to which of such persons, and when, Awards are granted, to determine
the number of shares of Common Stock subject to Awards and the exercise or
purchase price of such shares under an Award, to establish and verify the extent
of satisfaction of any performance goals applicable to Awards, to prescribe and
amend the terms of the agreements evidencing Awards made under the 2002 Plan,
and to make all other determinations deemed necessary or advisable for the
administration of the 2002 Plan.
Stock Subject to the New Plan
The aggregate number of shares of the Company's Common Stock ("Shares")
that can be issued under the 2002 Plan may not exceed 1,900,000, provided that
no more than 15% of these Shares may be issued under Awards other than Stock
Options. The number of Shares subject to the 2002 Plan and to outstanding Awards
under the 2002 Plan may be appropriately adjusted by the Board of Directors if
the Common Stock is affected through a reorganization, merger, consolidation,
recapitalization, restructuring, reclassification, dividend (other than
quarterly cash dividends) or other distribution, stock split, spin-off or sale
of substantially all of the Company's assets. For purposes of calculating the
aggregate number of Shares issued under the 2002 Plan, only the number of Shares
actually issued upon exercise or settlement of an Award and not delivered to or
retained by the Company upon cancellation, expiration or forfeiture of an Award
or in payment or satisfaction of the purchase price, exercise price or tax
withholding obligation of an Award shall be counted. As of December 26, 2001,
the closing price of the Common Stock on the New York Stock Exchange was $27.35.
Eligibility
Any person who is an employee (as that term is defined under SEC Form S-8,
which is used for registering compensatory stock arrangements under the
Securities Act) of the Company or any of its affiliates is eligible to be
selected as a recipient of an Award under the 2002 Plan. The Compensation
Committee of the Board of Directors has not yet determined how many individuals
will ultimately participate in the 2002 Plan, but currently there are 69
individuals holding awards granted under the 1992 Plan. While it is generally
expected that the same categories of executives and management who participate
under the 1992 Plan will be eligible to participate under the 2002 Plan, Awards
may from time to time be granted to employees who are not in these groups but
who have otherwise distinguished themselves for their contributions to the
Company.
Awards
The 2002 Plan authorizes the grant and issuance of the following types of
Awards: Stock Options and Incentive Stock.
Stock Options. Subject to the provisions of the 2002 Plan, the Committee
has discretion to determine the vesting schedule of options, the events causing
an option to expire, the number of shares subject to any option, the
restrictions on transferability of an option, and such further terms and
conditions, in each case not inconsistent with the 2002 Plan, as may be
determined from time to time by the Committee except that no option granted to
an employee may become exercisable within one (1) year of the grant date other
than upon a change of control or upon the employee's retirement, death or
disability. The 2002 Plan expressly provides that options cannot be "repriced,"
as defined in the 2002 Plan. The exercise price for options may not be less than
6
100% of the fair market value of the Common Stock on the date the option is
granted. The total number of shares subject to options granted to any one
employee during any calendar year cannot exceed 400,000. The exercise price of
an option may be paid through various means specified by the Committee,
including in cash or check, by delivering to the Company shares of Common Stock,
by a reduction in the number of Shares issuable pursuant to such option, or by a
promissory note or other commitment to pay (including such a commitment by a
stock broker to pay over proceeds from the sale of Shares issuable under a Stock
Option). Options granted under the 2002 Plan may be either incentive stock
options ("ISOs") qualifying under Tax Code Section 422 or non-qualified stock
options ("NQSOs"), which are not intended to qualify as ISOs.
Incentive Stock. Incentive Stock is an award or issuance of Shares the
grant, issuance, retention, vesting and/or transferability of which is subject
during specified periods of time to such conditions (including performance
conditions) and terms as the Committee deems appropriate. Subject to the
provisions of the 2002 Plan, the Committee has discretion to determine the terms
of any Incentive Stock Award, including the number of Shares subject to an
Incentive Stock Award or a formula for determining such, the purchase price, if
any, for the Shares (which may be below fair market value), the conditions that
determine the number of Shares granted, issued, retainable and/or vested,
forfeiture provisions, the effect of termination of employment for various
reasons, and such further terms and conditions, in each case not inconsistent
with the 2002 Plan, as may be established by the Committee. Incentive Stock
Awards may be granted, issued, retainable and/or vested based upon continued
employment, the passage of time or the satisfaction of performance criteria, as
specified by the Committee, except that any condition that is based upon
continued employment or the passage of time shall not provide for vesting of any
portion of an Incentive Stock Award in less than one (1) year from the date the
award is made, other than upon the retirement, death or disability of the
employee or upon a change of control. The total number of shares of Incentive
Stock issued or issuable to any employee during any calendar year may not exceed
100,000. The performance criteria upon which Incentive Stock Awards are granted,
issued, retained and/or vested may be based on financial performance and/or
personal performance evaluations. However, any Incentive Stock that is intended
by the Committee to satisfy the requirements for "performance-based
compensation" under Tax Code Section 162(m), the performance criteria shall be a
measure based on one or more Qualifying Performance Criteria. Notwithstanding
satisfaction of any performance goals, if specified in the terms of an Award at
the time of its grant, the number of Shares granted, issued, retainable and/or
vested under an Incentive Stock Award may be reduced by the Committee on the
basis of such further considerations as the Committee in its sole discretion
shall determine.
Transferability of Awards
Generally, Awards granted under the 2002 Plan may not be sold, assigned,
conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner
prior to the vesting or lapse of any and all restrictions applicable thereto,
other than by will or the laws of descent and distribution, except that the
Committee may permit an Award to be transferable to a member or members of the
Participant's family or to entities owned or established for the benefit of a
Participant's family.
Qualifying Performance Criteria and Tax Code Section 162(m) Limits
Subject to stockholder approval of the 2002 Plan, the performance criteria
for any Incentive Stock that is intended to satisfy the requirements for
"performance-based compensation" under Tax Code Section 162(m) shall be any one
or more of the following performance criteria, either individually,
alternatively or in any combination, applied to either the Company as a whole or
to a business unit or subsidiary, either individually, alternatively or in any
combination, and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established target, to previous
years' results or to a designated comparison group, in each case as specified by
the Committee in the Award: (a) cash flow, (b) earnings per share, (c) earnings
before taxes, (d) earnings before interest, taxes, depreciation and
amortization, (e) return on equity, (f) total stockholder return, (g) share
7
price performance, (h) return on capital, (i) return on assets or net assets,
(j) revenue, (k) income or net income, (l) operating income or net operating
income, (m) operating profit or net operating profit, (n) operating margin or
profit margin, (o) return on operating revenue, (p) market share, (q) overhead
or other expense reduction and (r) any other similar performance criteria
contemplated by the regulations under Tax Code Section 162(m). The Committee may
appropriately adjust any evaluation of performance under a Qualifying
Performance Criteria to exclude any of the following events that occurs during a
performance period: (i) asset write-downs, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs, and (v) any extraordinary
non-recurring items.
The aggregate number of Shares subject to options granted under the 2002
Plan during any calendar year to any one Participant may not exceed 400,000,
unless such limitation is not required under Tax Code Section 162(m). The
aggregate number of Shares issued or issuable under all Awards granted under the
2002 Plan (other than options) during any calendar year to any one Participant
shall not exceed 100,000.
Other Provisions Applicable to Awards
The 2002 Plan has provisions designed so that it qualifies as an "eligible
plan" under the margin provisions of Regulation U, by expressly providing that
the Committee may, but is not required to, loan the amount necessary to purchase
Shares and/or pay taxes under any award. The 2002 Plan also provides that the
Committee may, but need not, provide that the holder of an Award has a right
(such as a stock appreciation right) to receive a number of Shares or cash, or a
combination thereof, the amount of which is determined by reference to the value
of the Award. Finally, the 2002 Plan does not limit the Company's right to make
other arrangements to provide stock options and other forms of compensation
arrangements as it determines appropriate.
Change of Control
The Committee may provide that in connection with a change of control (as
defined in the 2002 Plan), Awards will become exercisable, payable, vested,
paid, or canceled, and may provide for an absolute or conditional exercise,
payment or lapse of conditions or restrictions on an Award that would be
effective only if, upon the announcement of a transaction intended or reasonably
expected to result in a change of control, no provision is made under the terms
of such transaction for the holder of an Award to realize the full benefit of
the Award. A change of control is defined to include (i) any merger or
consolidation in which the Company is not the surviving entity (or survives only
as a subsidiary of another entity whose shareholders did not own all or
substantially all of the Company's Common Stock immediately prior to such
transaction), (ii) the sale of all or substantially all of the Company's assets
to any other person or entity (other than a wholly-owned subsidiary), (iii) the
acquisition of beneficial ownership or control of more than 50% of the
outstanding shares of Common Stock by any person or entity, including a group of
persons who agree to act together, (iv) the dissolution or liquidation of the
Company, (v) a contested election of directors, as a result of which or in
connection with which the persons who were directors of the Company before such
election or their nominees cease to constitute a majority of the Board, or (vi)
any other event specified by the Committee.
Amendments and Termination
The Board of Directors may amend, alter or discontinue the 2002 Plan or any
agreement evidencing an Award made under the 2002 Plan, but no such amendment
shall, without the approval of the stockholders of the Company: (a) materially
increase the maximum number of shares of Common Stock for which Awards may be
granted under the 2002 Plan; (b) reduce the price at which Stock Options may be
granted; (c) reduce the exercise price of outstanding Options; (d) extend the
term of the 2002 Plan; (e) change the class of persons eligible to participate
under the 2002 Plan; (f) increase the number of shares that are eligible for
issuance under Incentive Stock Awards; or (g) after any change of control,
impair the rights of any Award holder without such holder's consent. No Award
shall be granted under the 2002 Plan more than 10 years after the date of the
stockholders' adoption of the 2002 Plan.
8
Federal Income Tax Consequences
The following discussion of the federal income tax consequences of the 2002
Plan is intended to be a summary of applicable federal law as currently in
effect. State and local tax consequences may differ, and tax laws may be amended
or interpreted differently during the term of the 2002 Plan or of Awards
thereunder. Because the federal income tax rules governing Awards and related
payments are complex and subject to frequent change, and they depend on the
Participant's individual circumstances, Participants are advised to consult
their tax advisors prior to exercise of options or other Awards or dispositions
of stock acquired pursuant to Awards.
ISOs and NQSOs are treated differently for federal income tax purposes.
ISOs are intended to comply with the requirements of Tax Code Section 422. NQSOs
need not comply with such requirements.
An optionee is not taxed on the grant or, except as described below,
exercise of an ISO. The difference between the exercise price and the fair
market value of the Shares on the exercise date will, however, be an adjustment
item for purposes of the alternative minimum tax, and thus an optionee could be
subject to the alternative minimum tax as a result of the exercise of an ISO. If
an optionee holds the Shares acquired upon exercise of an ISO for at least two
years following the option grant date and at least one year following exercise,
the optionee's gain, if any, upon a subsequent disposition of such Shares is
long-term capital gain. The measure of the gain is the difference between the
proceeds received on disposition and the optionee's basis in the Shares (which
generally equals the exercise price). If an optionee disposes of Shares acquired
pursuant to exercise of an ISO before satisfying the one and two-year holding
periods described above, the optionee may recognize both ordinary income and
capital gain in the year of disposition. The amount of the ordinary income will
be the lesser of (i) the amount realized on disposition less the optionee's
adjusted basis in the Shares (usually the exercise price) or (ii) the difference
between the fair market value of the Shares on the exercise date and the
exercise price. The balance of the consideration received on such a disposition
will be long-term capital gain if the stock had been held for at least one year
following exercise of the ISO. The Company is not entitled to an income tax
deduction on the grant or exercise of an ISO or on the optionee's disposition of
the Shares after satisfying the holding period requirements described above. If
the holding periods are not satisfied, the Company will be entitled to a
deduction in the year the optionee disposes of the Shares in an amount equal to
the ordinary income recognized by the optionee.
An optionee is not taxed on the grant of an NQSO. On exercise, however, the
optionee recognizes ordinary income equal to the difference between the option
price and the fair market value of the shares acquired on the date of exercise.
The Company is entitled to an income tax deduction in the year of exercise in
the amount recognized by the optionee as ordinary income. Any gain on subsequent
disposition of the shares is long term capital gain if the shares are held for
at least one year following exercise. The Company does not receive a deduction
for this gain.
Participants generally are required to recognize ordinary income with
respect to Incentive Stock equal to the fair market value of the Shares (less
any amount paid to acquire the Shares) when the Shares are both received and no
longer subject to vesting restrictions, except that a Participant who receives
Incentive Stock that is subject to vesting restrictions and who properly makes
an election under Tax Code Section 83(b) (an "83(b) election") within 30 days of
receipt will recognize ordinary income based on the value of the underlying
Shares (determined without regard to the vesting restrictions) on the date of
initial receipt (as opposed to the date of vesting) and may treat appreciation
subsequent to the date of receipt as capital gain (depending on the holding
period for the Shares). Participants receiving Incentive Stock should consult
their tax advisors regarding the ability and advisability of making the 83(b)
election, including the limitations on claiming a loss if the Shares decline in
value or are forfeited after receipt. The Company generally receives a deduction
equal to the ordinary income recognized by the recipient of Incentive Stock.
9
Certain officers, directors and significant stockholders of the Company who
are subject to Section 16(b) of the Exchange Act should consult their tax
advisors regarding the effect of Section 16(b) on the amount and timing of
income to be recognized in connection with an Award, including the ability and
advisability of making an 83(b) election in connection with an Award.
Special rules will apply in cases where a recipient of an Award pays the
exercise or purchase price of the Award or applicable withholding tax
obligations under the 2002 Plan by delivering previously owned Shares or by
reducing the number of Shares otherwise issuable pursuant to the Award. The
surrender or withholding of such Shares will in certain circumstances result in
the recognition of income with respect to such Shares or a carryover basis in
the Shares acquired, and may constitute a disposition for purposes of applying
the ISO holding periods discussed above. The Company generally will be entitled
to withhold any required taxes in connection with the exercise or payment of an
Award, and may require the Participant to pay such taxes as a condition to
exercise of an Award.
The terms of the agreements or other documents pursuant to which specific
Awards are made under the 2002 Plan may provide for accelerated vesting or
payment of an Award in connection with a change in ownership or control of the
Company. In that event and depending upon the individual circumstances of the
Participant, certain amounts with respect to such Awards may constitute "excess
parachute payments" under the "golden parachute" provisions of the Tax Code.
Pursuant to these provisions, a Participant will be subject to a 20% excise tax
on any "excess parachute payments" and the Company will be denied any deduction
with respect to such payments. Participants should consult their tax advisors as
to whether accelerated vesting of an Award in connection with a change of
ownership or control of the Company would give rise to an excess parachute
payment.
As described above, Awards under the 2002 Plan may qualify as
"performance-based compensation" under Tax Code Section 162(m) in order to
preserve federal income tax deductions by the Company with respect to any
compensation required to be taken into account under Tax Code Section 162 that
is in excess of $1,000,000 and paid to a Covered Employee (as defined in Tax
Code Section 162). Compensation for any year that is attributable to an Award
granted to a Covered Employee and that does not so qualify may not be deductible
by the Company to the extent such compensation, when combined with other
compensation paid to such employee for the year, exceeds $1,000,000.
Interests of Directors and Officers
The Committee has full discretion to determine the timing and recipients of
any stock option grants under the 2002 Plan and the number of shares subject to
any such options that may be granted under the 2002 Plan, subject to an annual
limitation on the total number of options that may be granted to any optionee.
Therefore, the benefits and amounts that will be received by each of the Named
Executive Officers, the executive officers as a group, and all other key
employees under the 2002 Plan are not presently determinable.
10
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Jack in the Box Inc. Board of Directors (the
"Committee") is composed of three independent directors. The Audit Committee
reviews our financial reporting process on behalf of the Board of Directors. In
fulfilling its responsibilities, the Audit Committee has reviewed and discussed
the audited financial statements contained in the 2001 Annual Report on Form
10-K with management and the independent accountants. Management is responsible
for the financial statements and the reporting process, including the system of
internal controls. The independent accountants are responsible for performing an
independent audit of the Company's financial statements and expressing an
opinion on the conformity of those audited financial statements with accounting
principles generally accepted in the United States of America.
The Committee discussed with the independent accountants, the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended. In addition, the Committee has
discussed with the independent accountants, their independence from the Company
and its management, including the matters in the written disclosures required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board approved
including the audited financial statements in the Company's Annual Report on
Form 10-K for the fiscal year ended September 30, 2001, filed with the
Securities and Exchange Commission.
Paul T. Carter, Chair
L. Robert Payne
Murray H. Hutchison
PROPOSAL THREE
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board has appointed KPMG LLP as independent accountants to audit the
consolidated financial statements of the Company for the fiscal year ending
September 29, 2002, subject to ratification by stockholders. KPMG LLP has acted
as independent accountants for the Company since 1986. A representative of the
firm will be present at the Annual Meeting and will have the opportunity to make
a statement and respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
---
Audit Fees
The aggregate fees billed by KPMG LLP for professional services rendered
for the audit of the Company's annual financial statements for the fiscal year
ended September 30, 2001 and for the reviews of the financial statements
included in the Company's Forms 10-Q for that fiscal year were $196,000.
Financial Information Systems Design and Implementation Fees
KPMG LLP did not perform services relating to financial information systems
design and implementation.
All Other Fees
The aggregate fees billed by KPMG LLP for professional services rendered,
other than those covered in the preceding two sections, for the fiscal year
ended September 30, 2001 were $50,900.
Auditor Independence
Other fees include fees for the audits of the Company's benefit plans,
accounting pronouncement implementation and tax-related services. The Audit
Committee has considered whether the provision of these services is compatible
with maintaining the principal accountant's independence and has determined that
the provision of such services have not adversely affected the accountant's
independence.
11
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation of
the Company's chief executive officer and the other four most highly compensated
executive officers of the Company for services in all capacities to the Company
and its subsidiaries during the fiscal years indicated. Bonus amounts were
accrued during the year and paid shortly thereafter.
Long-Term Compensation
----------------------- All Other
Annual Compensation Restricted Securities Compen-
Name and --------------------------------- Stock Underlying sation
Principal Position(s) Year Salary($) Bonus($) Other($) Awards($)(1) Options(#) ($)(2)
------------------------------- ------ ---------- --------- --------- ------------ ---------- ---------
Robert J. Nugent............... 2001 677,539 174,225 22,850 0 59,600 27,342
Chairman of the Board and 2000 627,692 615,648 19,810 0 48,100 26,307
Chief Executive Officer 1999 588,462 600,000 21,747 300,000 43,200 24,185
Kenneth R. Williams............ 2001 484,308 101,250 12,451 0 36,500 26,044
President, Chief Operating 2000 424,616 334,541 16,755 0 28,900 24,215
Officer and Director 1999 397,539 320,000 12,791 160,000 26,700 22,414
Charles W. Duddles (3)......... 2001 364,573 74,585 10,615 0 31,000 20,819
Executive Vice President, 2000 363,077 284,205 12,000 0 25,300 20,858
Chief Financial Officer, 1999 348,885 280,000 12,231 140,000 23,600 19,875
Chief Administrative
Officer and Director
Lawrence E. Schauf............. 2001 297,231 60,600 30,464 0 24,300 17,086
Executive Vice President, 2000 286,154 223,027 32,328 0 20,200 16,715
Secretary 1999 278,462 224,000 31,813 112,000 18,800 16,130
Paul L. Schultz................ 2001 354,692 72,540 12,216 0 22,900 18,970
Senior Vice President, 2000 332,615 228,351 35,739 0 18,400 18,269
Operations and Franchising 1999 300,346 222,600 15,397 111,300 13,600 15,886
Linda A. Lang.................. 2001 253,308 66,269 12,153 0 13,000 14,565
Senior Vice President, 2000 227,308 134,165 12,231 0 10,300 10,955
Marketing 1999 200,442 129,000 12,000 64,500 8,400 10,126
-------------------------
(1) Restricted stock awards represent the value as of their grant date on
October 4, 1999 of restricted stock units granted under the 1992 Employee
Stock Incentive Plan to the named executive officer with respect to
services rendered in fiscal 1999. The restricted stock units will vest
100% on October 4, 2002 and are subject to forfeiture under certain
circumstances. The actual number of restricted stock units awarded was
determined by dividing the indicated award value by the closing stock
price on October 4, 1999 ($23.875). When vested, Messrs. Nugent, Williams,
Duddles, Schauf and Schultz and Ms. Lang will receive, respectively,
12,566, 6,702, 5,864, 4,692, 4,662 and 2,702 shares of the Company's
Common Stock.
(2) All other compensation represents the Company's matching contributions to
the Deferred Compensation Plan and approximately $1,400-$1,500 annually
for each person, except Ms. Lang, for premiums on term life insurance paid
by the Company for the benefit of the named executive officer. The Company
has no interest in such insurance policies.
(3) Mr. Duddles retired from the Company and the Board effective
August 31, 2001. He had served as Executive Vice President and Chief
Administrative Officer since May 1988 and Chief Financial Officer since
October 1985. Mr. John F. Hoffner joined the Company on August 27, 2001 to
replace Mr. Duddles as Executive Vice President and Chief Financial
Officer at an annual salary of $375,000. He received stock options
overing a total of 40,000 shares valued at fair market value on the date
of grant and the Company has entered into a compensation and benefits
assurance agreement with Mr. Hoffner similar to those executed with
Messrs. Nugent, Williams, Schauf and Schultz.
12
Stock Option Grants in Fiscal 2001
Set forth below is information with respect to options granted to the
named executive officers in the Summary Compensation Table during the 2001
fiscal year.
% of Total Potential Realizable Value
Number of Options/SARs at Assumed Annual Rates of
Securities Granted to Exercise Stock Price Appreciation
Underlying Employees or Base for Option Term
Options/SARs in Fiscal Price Expiration --------------------------
Name Granted (#) Year ($/Share) Date 5% 10%
--------------------------- ------------ ------------ --------- ---------- ---------- -------------
Robert J. Nugent........... 59,600 6.3% 26.00 12/10/2010 $984,678 $2,501,273
Kenneth R. Williams........ 36,500 3.9% 26.00 12/10/2010 603,032 1,531,820
Charles W. Duddles......... 31,000 3.3% 26.00 12/10/2010 512,165 1,300,998
Lawrence E. Schauf......... 24,300 2.6% 26.00 12/10/2010 401,471 1,019,814
Paul L. Schultz............ 22,900 2.4% 26.00 12/10/2010 378,341 961,059
Linda A. Lang.............. 13,000 1.4% 26.00 12/10/2010 214,779 545,580
Option Exercises in Fiscal 2001 and Fiscal Year-End Values
Set forth below is information with respect to options exercised by the
named executive officers in the Summary Compensation Table during the 2001
fiscal year, and the number and value of unexercised stock options held by the
named executive officers at the end of the fiscal year.
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs Held In-the-Money Options/SARs
Shares at Fiscal Year-End at Fiscal Year-End(1)
Acquired on Value --------------------------- --------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------------- ----------- ---------- ----------- ------------- ----------- -------------
Robert J. Nugent........... 93,205 $2,321,249 200,100 144,800 $2,973,055 $523,520
Kenneth R. Williams........ 85,000 1,871,569 124,260 88,840 1,971,103 322,823
Charles W. Duddles......... 78,660 1,761,015 164,900 0 1,530,875 0
Lawrence E. Schauf......... 12,500 239,738 25,780 61,220 156,621 225,598
Paul L. Schultz............ 44,795 987,489 80,820 52,580 1,345,248 187,715
Linda A. Lang.............. 0 0 38,838 30,160 588,247 106,748
-------------------------
(1) Based on the difference between the exercise price of the options and the
closing price of the Company's Common Stock on the last trading day prior
to the end of the Company's fiscal year ended September 30, 2001 ($28.00).
Pension Plan Table
Retirement Plan. The Company maintains a retirement plan (the "Retirement
Plan"), which was adopted effective October 21, 1985 and restated effective
January 1, 1989. The Retirement Plan is a defined benefit plan covering eligible
employees employed in an administrative, clerical, or restaurant hourly capacity
who have completed one year of service with at least 1,000 hours of service and
reached age 21. The Retirement Plan provides that a participant retiring at age
65 will receive an annual retirement benefit equal in amount to one percent of
Final Average Pay multiplied by Benefit Service plus .4% of Final Average Pay in
excess of Covered Compensation multiplied by Benefit Service, subject to
grandfathered minimum benefit accruals under the previous plan as of December
31, 1998. The .4% portion of the calculation is limited to a maximum of 35 years
of service. The Employee Retirement Income Security Act of 1974 ("ERISA") and
various tax laws may cause a reduction in the annual retirement benefit payable
under the Retirement Plan. (The preceding capitalized terms are defined in the
Retirement Plan.)
Although normal retirement age is 65, benefits may begin as early as age 55
if participants meet the service requirements defined in the Retirement Plan.
Benefits payable are reduced for early commencement.
13
Supplemental Retirement Plan. In 1990, the Company established a
non-qualified supplemental retirement plan for selected executives, known as the
Supplemental Executive Retirement Plan. The plan provides for a percentage of
replacement income based on Service and Final Average Compensation (each as
defined in the plan). The target replacement income from all Company funded
sources based upon a maximum of 20 full years of service is 60% of Final Average
Compensation. For those executives who have served fewer than 20 years, the
target percentage of 60% is reduced by applying a factor determined by dividing
the number of years of actual service by 20. The plan is unfunded and represents
an unsecured claim against the Company.
Easy$aver Plus Plan. In 1985, the Company adopted the Jack in the Box Inc.
Savings Investment Plan, currently named the Jack in the Box Inc. Easy$aver Plus
Plan (the "E$P"), which includes a cash-or-deferred arrangement under Section
401(k) of the Internal Revenue Code. Eligible employees who have completed at
least one year of service with a minimum of 1,000 hours of work and reached age
21 qualify for the E$P. Participants in the E$P may defer up to 12% of their pay
on a pre-tax basis. In addition, the Company contributes on a participant's
behalf an amount equal to 50% of the first 4% of compensation that is deferred
by the participant.
Deferred Compensation Plan. Since 1989, all executive officers and certain
other members of management of the Company have been excluded from participation
in the E$P. In 1990, the Company created for these individuals a non-qualified
deferred compensation plan known as the Capital Accumulation Plan for
Executives. Participants of the plan may defer up to 15% of base and up to 100%
(less applicable taxes) of bonus pay. The Company contributes on a participant's
behalf 100% of the first 3% of compensation that is deferred by the participant.
Benefits paid under this plan also include an interest component based on
Moody's Average Corporate Bond Yield Index. The plan is unfunded and
participants' accounts represent unsecured claims against the Company.
Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company contributions to the E$P, Company
contributions to the Deferred Compensation Plan and Supplemental Retirement
Plan.
Estimated Annual Benefits Based on Years of Service
---------------------------------------------------
Average Annual Earnings 10 15 20
--------------------------- ------------ ----------- -----------
$ 100,000................ $ 30,000 $ 45,000 $ 60,000
200,000................ 60,000 90,000 120,000
300,000................ 90,000 135,000 180,000
400,000................ 120,000 180,000 240,000
500,000................ 150,000 225,000 300,000
600,000................ 180,000 270,000 360,000
800,000................ 240,000 360,000 480,000
1,000,000................ 300,000 450,000 600,000
1,200,000................ 360,000 540,000 720,000
1,300,000................ 390,000 585,000 780,000
At September 30, 2001, the number of years of service under the retirement
plans for Messrs. Nugent, Williams, Schauf and Schultz, and Ms. Lang was 22, 31,
5, 26 and 13, respectively; and the amount of eligible compensation for each of
these individuals approximates the amounts reflected as salary and bonus in the
Summary Compensation Table.
Severance Arrangements
We have entered into compensation and benefits assurance agreements with
certain of our senior executives, including Messrs. Nugent, Williams, Schauf and
Schultz, for the payment of certain compensation and the provision for certain
benefits in the event of termination of employment following a change in control
14
of the Company. The agreements had an initial term expiring on
September 29, 1998 but are automatically extended for additional two-year terms
thereafter unless at least six-months written notice is given to the contrary.
If there is a change of control (as defined in the agreements) during the term
of any such agreement, the executive will be entitled to receive the payments
and benefits specified in the event that his employment is terminated within 24
months thereafter: (i) involuntarily, without cause or (ii) voluntarily for
"good reason" (as defined in the agreements). Amounts payable under each
agreement include all amounts earned by the employee prior to the date of
termination and a multiple of the employee's annual base salary, bonus and the
Company's matching contributions to the Deferred Compensation Plan. In the case
of Messrs. Nugent, Williams, Schauf and Schultz, the applicable multiples are
2.5, 2.5, 2.5 and 1.5, respectively. In addition, the agreements provide for the
continuation of health insurance benefits for a period of up to 18 months
following termination and certain incidental benefits.
Report of the Board of Directors and Compensation Committee on Executive
Compensation
The Board of Directors has the primary responsibility for determining
executive compensation. In addition, there is also a Compensation Committee
composed of not fewer than two non-employee directors. Executive compensation is
designed to (a) provide compensation opportunities that will attract, motivate
and retain highly qualified managers and executives, and (b) provide salary and
other rewards that are closely linked to Company, team, and individual
performance goals focused on achievement of annual business plans and longer
term incentives linked to increases in stockholder value. The Chief Executive
Officer recommends the compensation to be paid to executive officers of the
Company other than himself; final determination of the amount of compensation
rests with the non-employee members of the Board of Directors. Board members who
are also executive officers do not participate in discussions about, nor do they
vote on, recommendations concerning their respective compensation.
The Company's executive officer compensation program is comprised of base
salary, bonus opportunity, long-term incentive compensation in the form of stock
options, and other benefits such as health insurance. It is our objective to
maintain base salaries that are at approximately the mid-range of compensation
paid to senior executives with comparable qualifications, experience and
responsibilities at other companies engaged in the same or similar businesses.
The Performance Bonus Plan provides for a bonus as a percent of base salary
which is dependent upon the Company's performance level achieved and the job
classification of the individual. The purpose of the Performance Bonus Plan is
to encourage the loyalty of certain key employees, executives and officers of
the Company and its affiliates, by providing incentives which are aligned with
Company performance. The performance bonuses for the named executives for fiscal
2001 were paid in accordance with the established plan and are reflected in the
Summary Compensation Table.
The 1992 Employee Stock Incentive Plan has formed the basis for the
Company's long-term incentive plan for officers and key managers. The proposed
2002 Stock Incentive Plan is intended to replace the 1992 plan. The purpose of
these plans is to furnish an incentive to key employees, executives and officers
of the Company, its subsidiaries and affiliates to increase profits and provide
an opportunity to earn a bonus based on the financial performance of the
Company. During fiscal 2001, options to purchase the following amounts of the
Company's Common Stock were granted to Messrs. Nugent, Williams, Duddles, Schauf
and Schultz, and Ms. Lang: 59,600, 36,500, 31,000, 24,300, 22,900 and 13,000
shares, respectively. All options were granted at 100% of the market price of
the Company's Common Stock on the date of grant ($26.00). Beginning on November
10, 2001, 20% of the total number of shares subject to the option will become
exercisable annually. Options serve to directly align the interests of
executives, including the Chief Executive Officer, with your interests since
such executives will not realize a benefit unless and until the market price of
the Company's Common Stock increases.
15
Mr. Nugent became Chairman of the Board on February 23, 2001 and has been
Chief Executive Officer of the Company since April 1, 1996. His base salary as
of December 25, 2000, was increased approximately 8.5% over his previous base
salary in order to maintain his salary at approximately the mid-range of
competitive industry practice. An annual cash incentive award is payable to
Mr. Nugent if the Company achieves or exceeds specified earnings goals.
Mr. Nugent's bonus for fiscal 2001 represents approximately 25% of the potential
cash bonus payable under the Company's Performance Bonus Plan. In fiscal 2001,
approximately 20% of Mr. Nugent's compensation was incentive pay.
This report is submitted by the Board of Directors and the Compensation
Committee.
Board of Directors Compensation Committee
------------------------------------------------ -------------------------
Michael E. Alpert Murray H. Hutchison Murray H. Hutchison, Chair
Jay W. Brown Robert J. Nugent Paul T. Carter
Paul T. Carter L. Robert Payne Alice B. Hayes
Edward W. Gibbons Kenneth R. Williams
Alice B. Hayes
This report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee, Paul T. Carter, Alice B. Hayes
and Murray H. Hutchison, are outside directors and do not have compensation
committee interlocks.
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock at September 30th of each year to the yearly weighted
cumulative return of a Restaurant Peer Group Index and to the Standard & Poor's
("S&P") 500 Index for the same period. The comparison assumes $100 was invested
on September 30, 1996 in the Company's Common Stock and in each of the
comparison groups, and assumes reinvestment of dividends. The Company paid no
dividends during the periods.
[A LINE GRAPH CHART WAS INCLUDED HEREIN WHICH
GRAPHICALLY REFLECTED THE FOLLOWING DATA]
1996 1997 1998 1999 2000 2001
------ ------ ------ ------ ------ ------
Jack in the Box Inc........... $100 $188 $157 $249 $214 $280
S&P 500 Index ................ 100 140 153 196 222 163
Restaurant Peer Group (1)..... 100 101 126 181 127 118
-------------------------
(1) The Restaurant Peer Group Index is comprised of the following companies:
Applebee's International, Inc.; Bob Evans Farms, Inc.; Brinker
International, Inc.; CBRL Group, Inc.; CKE Restaurants, Inc.; Luby's, Inc.;
Papa John's International, Inc.; Ruby Tuesday, Inc.; Ryan's Family
Steakhouse, Inc.; Shoney's, Inc. and Sonic Corp.
16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 14, 2001, information with
respect to beneficial ownership of voting securities of the Company by (i) each
person who is known to us to be the beneficial owner of more than 5% of any
class of the Company's voting securities, (ii) each director and nominee for
director of the Company, (iii) each executive officer listed in the Summary
Compensation Table herein and (iv) all directors and executive officers of the
Company as a group. Each of the following stockholders has sole voting and
investment power with respect to shares beneficially owned by such stockholder,
except to the extent that authority is shared with spouses under applicable law
or as otherwise noted.
Number of Shares
of Common Stock Percent of
Name Beneficially Owned(1) Class(1)
------------------------------------------ --------------------- -----------
Fidelity Investments (2).................. 5,890,823 15.0%
Franklin Resources, Inc. (3).............. 2,459,250 6.3%
Robert J. Nugent.......................... 726,411 1.8%
Edward W. Gibbons (4)..................... 427,336 1.1%
Kenneth R. Williams....................... 226,606 *
Paul L. Schultz........................... 129,425 *
L. Robert Payne........................... 106,740 *
Paul T. Carter............................ 80,050 *
Michael E. Alpert......................... 65,100 *
Jay W. Brown.............................. 52,600 *
Lawrence E. Schauf........................ 38,180 *
Murray H. Hutchison....................... 22,600 *
Linda A. Lang............................. 43,498 *
Alice B. Hayes............................ 14,600 *
All directors and executive
officers as a group (25 persons).......... 2,203,302 5.5%
-------------------------
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of a given date which such person
has the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above on a given date, any security which such person or
persons has the right to acquire within 60 days after such date is deemed
to be outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. Messrs. Nugent,
Gibbons, Williams, Schultz, Payne, Carter, Alpert, Brown, Schauf and
Hutchison and, Ms. Lang and Dr. Hayes have the right to acquire through the
exercise of stock options within 60 days of the above date, 221,640,
62,600, 117,340, 89,080, 62,600, 62,600, 62,600, 42,600, 34,680, 22,600,
43,498 and 12,600, respectively, of the shares reflected above as
beneficially owned.
(2) FMR Corp., on behalf of certain of its direct and indirect subsidiaries,
Fidelity Management & Research Company and Fidelity Management Trust
Company, and Fidelity International Limited, on behalf of certain of its
direct and indirect subsidiaries, (collectively "Fidelity Investments"),
indirectly held and had investment discretion with respect to 5,890,823
shares as of December 14, 2001. Fidelity Investments had sole voting
discretion with respect to 906,923 of such shares. The address of Fidelity
Management & Research Company and Fidelity Management Trust Company is 82
Devonshire Street, Boston, Massachusetts 02109. The address of Fidelity
International Limited is Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda.
(3) According to its Schedule 13F filing as of September 30, 2001, Franklin
Advisors, Inc., a subsidiary of Franklin Resources, Inc., exercised shared
investment discretion and sole voting power with respect to 2,459,250
shares. The address of Franklin Resources, Inc. is 777 Mariners Island
Boulevard, 6th Floor, San Mateo, California 94404.
(4) Includes 50,000 shares owned by Mr. Gibbons' wife.
17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each
executive officer, director and beneficial owner of more than 10% of the
Company's Common Stock is required to file certain forms with the Securities and
Exchange Commission ("SEC"). A report of beneficial ownership of the Company's
Common Stock on Form 3 is due at the time such person becomes subject to the
reporting requirements and a report on Form 4 or Form 5 must be filed to reflect
changes thereafter. Based on written statements and copies of forms provided to
us by persons subject to the reporting requirements, we believe that all such
reports required to be filed by such persons during fiscal 2001 were filed on a
timely basis, except for late Forms 3 filed for each of Gladys DeClouet, John
Hoffner and David Kaufhold upon becoming executive officers of the Company, and
late Forms 4 filed for each of Stephanie Cline, William Motts and Paul Schultz
with respect to the exercise and sale of shares under stock options.
OTHER BUSINESS
We are not aware of any other matters to come before the Annual Meeting. If
any matter not mentioned herein is properly brought before the Annual Meeting,
the persons named in the enclosed proxy will have discretionary authority to
vote all proxies with respect thereto in accordance with their best judgment.
Pursuant to the Company's Bylaws, in order for a stockholder to present
business at the Annual Meeting or to make nominations for election of a
director, such matters must be filed in writing with the Secretary of the
Company in a timely manner. To be timely, a stockholder's notice must be
delivered to the principal executive offices of the Company not less than ninety
(90) nor more than one hundred and twenty (120) days prior to the meeting as
originally scheduled; provided, however, that in the event that less than 100
days' notice or prior public disclosure of the date of the meeting is made to
stockholders, notice by the stockholder must be received not later than the
close of business on the 10th day following the day on which notice of the date
of the Annual Meeting was mailed or public disclosure was made. Such notice
shall set forth, as to the stockholder giving notice, the stockholder's name and
address as they appear on the Company's books, and the class and number of
shares of the Company which are beneficially owned by such stockholder.
Additionally, (i) with respect to a stockholder's notice regarding a nominee for
director, such notice shall set forth, as to each person whom the stockholder
proposes to nominate for election or re-election as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors pursuant to the Securities Exchange Act of
1934, as amended (including such person's written consent to being named in the
Proxy Statement as a nominee and to serving as a director if elected); and (ii)
with respect to a notice relating to a matter the stockholder proposes to bring
before the Annual Meeting, a brief description of the business desired to be
brought before the meeting and any material interest of the stockholder in such
business.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's proxy solicitation materials to be distributed in
connection with the Company's Annual Meeting of Stockholders to be held in the
year 2003 must set forth such proposal in writing and file it with the Secretary
of the Company on or before September 20, 2002. Any such proposals must comply
in all respects with the rules and regulations of the Securities and Exchange
Commission.
2001 ANNUAL REPORT AND FORM 10-K
A copy of the 2001 Annual Report to Stockholders accompanies this Proxy
Statement. The Company's Annual Report on Form 10-K for the year ended September
30, 2001, as filed with the Securities and Exchange Commission, contains
detailed information concerning the Company and its operations which is not
included in the 2001 Annual Report. A COPY OF THE 2001 FORM 10-K WILL BE
FURNISHED TO YOU WITHOUT CHARGE UPON REQUEST IN WRITING TO: Jack in the Box
Inc., Treasury Department, 9330 Balboa Avenue, San Diego, California 92123-1516.
By Order of the Board of Directors,
LAWRENCE E. SCHAUF
Lawrence E. Schauf
Secretary
18
Exhibit A
JACK IN THE BOX
2002 STOCK INCENTIVE PLAN
Section 1. Purpose of Plan
The purpose of this 2002 Stock Incentive Plan (this "Plan") of
Jack in the Box Inc., a Delaware corporation (the "Company") is to enable the
Company and its subsidiaries and affiliates to attract, retain and motivate
their employees, and to further align the interests of such persons with those
of the stockholders of the Company by providing for or increasing the
proprietary interest of such persons in the Company.
Section 2. Administration of Plan
2.1 Composition of Committee. This Plan shall be administered by the
Compensation Committee of the Board of Directors (the "Committee"), as appointed
from time to time by the Board of Directors. The Board of Directors shall fill
vacancies on, and from time to time may remove or add members to, the Committee.
The Committee shall act pursuant to a majority vote or unanimous written
consent. The Board of Directors, in its sole discretion, may exercise any
authority of the Committee under this Plan in lieu of the Committee's exercise
thereof. Notwithstanding the foregoing, with respect to any Award that is not
intended to satisfy the conditions of Rule 16b-3 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or Section 162(m)(4)(C) of the
Internal Revenue Code of 1986, as amended (the "Code"), the Committee may
appoint one or more separate committees (any such committee, a "Subcommittee")
composed of one or more directors of the Company (who may but need not be
members of the Committee) and may delegate to any such Subcommittee(s) the
authority to grant Awards, as defined in Section 5.1 hereof, under the Plan to
Eligible Persons, to determine all terms of such Awards, and/or to administer
the Plan or any aspect of it. Any action by any such Subcommittee within the
scope of such delegation shall be deemed for all purposes to have been taken by
the Committee. The Committee may designate the Secretary of the Company or other
Company employees to assist the Committee in the administration of the Plan, and
may grant authority to such persons to execute agreements or other documents
evidencing Awards made under this Plan or other documents entered into under
this Plan on behalf of the Committee or the Company.
2.2 Powers of the Committee. Subject to the provisions of this Plan, the
Committee shall be authorized and empowered to do all things necessary or
desirable, in its sole discretion, in connection with the administration of this
Plan, including, without limitation, the following:
(a) to prescribe, amend and rescind rules and regulations relating
to this Plan and to define terms not otherwise defined herein;
(b) to determine which persons are Eligible Persons (as defined in
Section 4), to which of such Eligible Persons, if any, Awards shall be
granted hereunder and the timing of any such Awards;
(c) to grant Awards to Eligible Persons and determine the terms and
conditions thereof, including the number of Shares subject to Awards and
the exercise or purchase price of such Shares and the circumstances under
which Awards become exercisable or vested or are forfeited or expire, which
terms may but need not be conditioned upon the passage of time, continued
employment, the satisfaction of performance criteria, the occurrence of
certain events (including events which the Board or the Committee determine
constitute a change of control), or other factors;
(d) to establish, verify the extent of satisfaction of, adjust,
reduce or waive any performance goals or other conditions applicable to the
grant, issuance, exercisability, vesting and/or ability to retain any
Award;
(e) to prescribe and amend the terms of the agreements or other
documents evidencing Awards made under this Plan (which need not be
identical);
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(f) to determine whether, and the extent to which, adjustments are
required pursuant to Section 10, "Changes in Capital Structure";
(g) to interpret and construe this Plan, any rules and regulations
under this Plan and the terms and conditions of any Award granted
hereunder, and to make exceptions to any such provisions in good faith and
for the benefit of the Company; and
(h) to make all other determinations deemed necessary or advisable
for the administration of this Plan.
2.3 Determinations of the Committee. All decisions, determinations and
interpretations by the Committee regarding this Plan shall be final and binding
on all Eligible Persons and Participants. The Committee shall consider such
factors as it deems relevant to making such decisions, determinations and
interpretations including, without limitation, the recommendations or advice of
any director, officer or employee of the Company and such attorneys, consultants
and accountants as it may select.
Section 3. Stock Subject to Plan
3.1 Aggregate Limits. The aggregate number of shares of the Company's
Common Stock, $.01 par value ("Shares"), issued pursuant to all Awards granted
under this Plan shall not exceed 1,900,000 provided that no more than 15% of
such Shares available for grant under this Plan may be issued pursuant to all
Incentive Stock Awards granted under this Plan. The aggregate number of Shares
available for issuance under this Plan and the number of Shares subject to
outstanding Options or other Awards shall be subject to adjustment as provided
in Section 9. The Shares issued pursuant to this Plan may be Shares that either
were reacquired by the Company, including Shares purchased in the open market,
or authorized but unissued Shares.
3.2 Code Section 162(m) Limits. No Eligible Person shall receive Option
Awards with respect to more than 400,000 shares during any one calendar year. No
Eligible Person shall receive Incentive Stock Awards with respect to more than
100,000 shares during any one calendar year. Notwithstanding anything to the
contrary in this Plan, the foregoing limitations shall be subject to adjustment
under Section 9 only to the extent that such adjustment will not affect the
status of any Award intended to qualify as "performance-based compensation"
under Code Section 162(m). The foregoing limitations shall not apply to the
extent that they are no longer required in order for compensation in connection
with grants under this Plan to be treated as "performance-based compensation"
under Code Section 162(m). The aggregate number of Shares that may be issued
pursuant to the exercise of Incentive Stock Options ("ISOs") granted under this
Plan shall not exceed 1,900,000, which number shall be calculated and adjusted
pursuant to Section 3.3 and Section 9 only to the extent that such calculation
or adjustment will not affect the status of any Option intended to qualify as an
ISO under Code Section 422.
3.3 Issuance of Shares. For purposes of Section 3.1, the aggregate number
of Shares issued under this Plan at any time shall equal only the number of
Shares actually issued upon exercise or settlement of an Award and shall not
include Shares subject to Awards that have been canceled, expired or forfeited
or Shares subject to Awards that have been delivered (either actually or
constructively by attestation) to or retained by the Company in payment or
satisfaction of the purchase price, exercise price or tax withholding obligation
of an Award.
Section 4. Persons Eligible Under Plan
Any person who is an employee of the Company or any of its affiliates shall
be eligible to be considered for the grant of Awards hereunder (an "Eligible
Person"). Unless provided otherwise by the Committee, the term "employee" shall
mean an "employee," as such term is defined in General Instruction A to Form S-8
under the Securities Act of 1933, as amended, and a "Participant" is any current
or former Eligible Person to whom an Award has been made and any person
(including any estate) to whom an Award has been assigned or transferred
pursuant to Section 8.1.
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Section 5. Plan Awards
5.1 Award Types. The Committee, on behalf of the Company, is authorized
under this Plan to enter into certain types of arrangements with Eligible
Persons and to confer certain benefits on them. The following arrangements or
benefits are authorized under this Plan if their terms and conditions are not
inconsistent with the provisions of this Plan: Options and Incentive Stock. Such
arrangements and benefits are sometimes referred to herein as "Awards." The
authorized types of arrangements and benefits for which Awards may be granted
are defined as follows:
(a) Options: An Option is a right granted under Section 6 to
purchase a number of Shares at such exercise price, at such times, and on
such other terms and conditions as are specified in the agreement, Stock
Option Certificate, terms and conditions or other document evidencing the
Award (the "Option Document"). Options intended to qualify as Incentive
Stock Options ("ISOs") pursuant to Code Section 422 and Options not
intended to qualify as ISOs ("Nonqualified Options") may be granted under
Section 6.
(b) Incentive Stock: Incentive Stock is an award or issuance of
Shares made under Section 7, the grant, issuance, retention, vesting and/or
transferability of which is subject during specified periods of time to
such conditions (including continued employment or performance conditions)
and terms as are expressed in the agreement or other document evidencing
the Award (the "Incentive Stock Document").
5.2 Grants of Awards. An Award may consist of one such arrangement or
benefit or two or more of them in tandem or in the alternative.
Section 6. Options
The Committee may grant an Option or provide for the grant of an Option,
either from time to time in the discretion of the Committee or automatically
upon the occurrence of specified events, including, without limitation, the
achievement of performance goals, the satisfaction of an event or condition
within the control of the recipient of the Award or within the control of
others.
6.1 Option Document. Each Option Document shall contain provisions
regarding (a) the number of Shares that may be issued upon exercise of the
Option, (b) the purchase price of the Shares and the means of payment for the
Shares, (c) the term of the Option, (d) such terms and conditions on the vesting
and/or exercisability of an Option as may be determined from time to time by the
Committee, (e) restrictions on the transfer of the Option and forfeiture
provisions and (f) such further terms and conditions, in each case not
inconsistent with this Plan as may be determined from time to time by the
Committee. Option Documents evidencing ISOs shall contain such terms and
conditions as may be necessary to qualify, to the extent determined desirable by
the Committee, with the applicable provisions of Section 422 of the Code.
6.2 Option Price. The purchase price per share of the Shares subject to
each Option granted under this Plan shall equal or exceed 100% of the fair
market value of a Share on the date the Option is granted. Unless the Committee
shall specify otherwise, for purposes of this Plan the term "fair market value"
shall mean, as of any date, the closing price for a Share (as defined in Section
3.1) reported for such date by the New York Stock Exchange (or such other stock
exchange or quotation system on which Shares are then listed or quoted) or, if
no Shares are traded on the New York Stock Exchange (or such other stock
exchange or quotation system) on the date in question, then for the next
preceding date for which Shares traded on the New York Stock Exchange (or such
other stock exchange or quotation system).
6.3 Option Term. The "Term" of each Option granted under this Plan,
including any ISOs, shall be 10 years from the date of its grant, unless the
Committee provides for a lesser term.
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6.4 Option Vesting. Options granted under this Plan shall be exercisable at
such time and in such installments during the period prior to the expiration of
the Option's Term as determined by the Committee. The Committee shall have the
right to make the timing of the ability to exercise any Option granted under
this Plan subject to continued employment, the passage of time and/or such
performance requirements as deemed appropriate by the Committee. At any time
after the grant of an Option the Committee may reduce or eliminate any
restrictions surrounding any Participant's right to exercise all or part of the
Option, except that no Option shall first become exercisable within one (1) year
from its date of grant, other than upon death or disability of the Eligible
Person or termination (other than a termination for cause) after becoming
eligible for retirement, or upon a Corporate Change (as defined in Section 10.1
hereof).
6.5 Termination of Employment. Subject to Section 10, upon a termination of
employment by an Eligible Person prior to the full exercise of an Option, the
unexercised portion of the Option shall be subject to such procedures as the
Committee may establish.
6.6 Payment of Exercise Price. The exercise price of an Option shall be
paid in the form of one or more of the following, as the Committee shall
specify, either through the terms of the Option Document or at the time of
exercise of an Option: (a) cash or certified or cashiers' check, (b) shares of
capital stock of the Company that have been held by the Participant for such
period of time as the Committee may specify, (c) other property deemed
acceptable by the Committee, (d) a reduction in the number of Shares or other
property otherwise issuable pursuant to such Option, (e) payment under an
arrangement with a broker selected or approved by the Company where payment is
made pursuant to an irrevocable commitment by the broker to deliver to the
Company proceeds from the sale of the Shares issuable upon exercise of the
Option, or (f) any combination of (a) through (d).
6.7 No Option Repricing. Without the approval of stockholders, the Company
shall not reprice any Options. For purposes of this Plan, the term "reprice"
shall mean lowering the exercise price of previously awarded Options within the
meaning of Item 402(i) under Securities and Exchange Commission Regulation S-K.
Section 7. Incentive Stock
Incentive Stock is an award or issuance of Shares the grant, issuance,
retention, vesting and/or transferability of which is subject during specified
periods of time to conditions (such as continued employment or performance
conditions) and terms as the Committee deems appropriate.
7.1 Incentive Stock Document. Each Incentive Stock Document shall contain
provisions regarding (a) the number of Shares subject to such Award or a formula
for determining such, (b) the purchase price of the Shares, if any, and the
means of payment for the Shares, (c) the performance criteria, if any, and level
of achievement versus these criteria that shall determine the number of Shares
granted, issued, retainable and/or vested, (d) such terms and conditions on the
grant, issuance, vesting and/or forfeiture of the Shares as may be determined
from time to time by the Committee, (e) restrictions on the transferability of
the Shares and (f) such further terms and conditions in each case not
inconsistent with this Plan as may be determined from time to time by the
Committee.
7.2 Sale Price. Subject to the requirements of applicable law, the
Committee shall determine the price, if any, at which Shares of Incentive Stock
shall be sold or awarded to an Eligible Person, which may vary from time to time
and among Eligible Persons and which may be below the fair market value of such
Shares at the date of grant or issuance.
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7.3 Share Vesting. The grant, issuance, retention and/or vesting of Shares
of Incentive Stock shall be at such time and in such installments as determined
by the Committee or under criteria established by the Committee. At its
discretion, the Committee may make the timing of the grant and/or the issuance,
ability to retain and/or vesting of Shares of Incentive Stock subject to
continued employment, passage of time and/or such performance criteria and level
of achievement versus these criteria as deemed appropriate by the Committee,
which criteria may be based on financial performance and/or personal performance
evaluations, except that no such condition that is based upon continued
employment or the passage of time shall provide for vesting of any portion of an
Award in less than one (1) year from the date the Award is made, other than upon
the death or disability of the Eligible Person or termination (other than
termination for cause) after becoming eligible for retirement, or upon a
Corporate Change (as defined in Section 10.1 hereof). Notwithstanding anything
to the contrary herein, the performance criteria for any Incentive Stock that is
intended to satisfy the requirements for "performance-based compensation" under
Code Section 162(m) shall be a measure based on one or more Qualifying
Performance Criteria (as defined in Section 8.2) selected by the Committee and
specified at the time the Incentive Stock Award is authorized.
7.4 Discretionary Adjustments. Notwithstanding satisfaction of any
performance goals, if specified as part of the terms of an Incentive Stock Award
at the time of its grant, the number of Shares granted, issued, retainable
and/or vested under an Incentive Stock Award on account of either financial
performance or personal performance evaluations may be reduced by the Committee
on the basis of such further considerations as the Committee shall determine.
7.5 Termination of Employment. Subject to Section 10, upon a termination of
employment by an Eligible Person prior to the vesting of or the lapsing of
restrictions on Incentive Stock, the Incentive Stock Awards granted to such
Eligible Person shall be subject to such procedures as determined by the
Committee.
Section 8. Other Provisions Applicable to Awards
8.1 Transferability. Unless the agreement or other document evidencing an
Award (or an amendment thereto authorized by the Committee) expressly states
that the Award is transferable as provided hereunder, no Award granted under
this Plan, nor any interest in such Award, may be sold, assigned, conveyed,
gifted, pledged, hypothecated or otherwise transferred in any manner prior to
the vesting or lapse of any and all restrictions applicable thereto, other than
by will or the laws of descent and distribution. The Committee may grant an
Award or amend an outstanding Award to provide that the Award is transferable or
assignable (a) in the case of a transfer without the payment of any
consideration, to any "family member" as such term is defined in Section 1(a)(5)
of the General Instructions to Form S-8 under the 1933 Act, as such may be
amended from time to time, and (b) in any transfer described in clause (ii) of
Section 1(a)(5) of the General Instructions to Form S-8 under the 1933 Act as
amended from time to time, provided that following any such transfer or
assignment the Award will remain subject to substantially the same terms
applicable to the Award while held by the Participant, as modified as the
Committee shall determine appropriate, and as a condition to such transfer the
transferee shall execute an agreement agreeing to be bound by such terms.
8.2 Qualifying Performance Criteria. For purposes of this Plan, the term
"Qualifying Performance Criteria" shall mean any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit or subsidiary,
either individually, alternatively or in any combination, and measured either
annually or cumulatively over a period of years, on an absolute basis or
relative to a pre-established target, to previous years' results or to a
designated comparison group, in each case as specified by the Committee in the
Award: (a) cash flow, (b) earnings per share, (c) earnings before taxes, (d)
earnings before interest, taxes, depreciation and amortization, (e) return on
equity, (f) total stockholder return, (g) share price performance, (h) return on
capital, (i) return on assets or net assets, (j) revenue, (k) income or net
income, (l) operating income or net operating income, (m) operating profit or
net operating profit, (n) operating margin or profit margin, (o) return on
operating revenue, (p) market share, (q) overhead or other expense reduction and
(r) any other similar performance criteria contemplated by the regulations under
Code Section 162(m). The Committee may appropriately adjust any evaluation of
performance under a Qualifying Performance Criteria to exclude any of the
following events that occurs during a performance period: (i) asset write-downs,
(ii) litigation or claim judgments or settlements, (iii) the effect of changes
in tax law, accounting principles or other such laws or provisions affecting
reported results, (iv) accruals for reorganization and restructuring programs
and (v) any extraordinary non-recurring items.
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8.3 Dividends. Unless otherwise provided by the Committee, no adjustment
shall be made in Shares issuable under Awards on account of cash dividends that
may be paid or other rights that may be issued to the holders of Shares prior to
their issuance under any Award. The Committee shall specify whether dividends or
dividend equivalent amounts shall be paid to any Participant with respect to the
Shares subject to any Award that have not vested or been issued or that are
subject to any restrictions or conditions on the record date for dividends.
8.4 Documents Evidencing Awards. The Committee shall, subject to applicable
law, determine the date an Award is deemed to be granted, which for purposes of
this Plan shall not be affected by the fact that an Award is contingent on
subsequent stockholder approval of this Plan. The Committee or, except to the
extent prohibited under applicable law, its delegate(s) may establish the terms
of agreements or other documents evidencing Awards under this Plan and may, but
need not, require as a condition to any such agreement's or document's
effectiveness that such agreement or document be executed by the Participant and
that such Participant agree to such further terms and conditions as specified in
such agreement or document. The grant of an Award under this Plan shall not
confer any rights upon the Participant holding such Award other than such terms,
and subject to such conditions, as are specified in this Plan as being
applicable to such type of Award (or to all Awards) or as are expressly set
forth in the agreement or other document evidencing such Award.
8.5 Tandem Stock or Cash Rights. Either at the time an Award is granted or
by subsequent action, the Committee may, but need not, provide that an Award
shall contain as a term thereof, a right, either in tandem with the other rights
under the Award or as an alternative thereto, of the Participant to receive,
without payment to the Company, a number of Shares, cash or a combination
thereof, the amount of which is determined by reference to the value of the
Award.
8.6 Financing. The Committee may in its discretion provide financing to a
Participant in a principal amount sufficient to pay the purchase price of any
Award and/or to pay the amount of taxes required by law to be withheld with
respect to any Award. Any such loan shall be subject to all applicable legal
requirements and restrictions pertinent thereto, including Regulation G
promulgated by the Federal Reserve Board. The grant of an Award shall in no way
obligate the Company or the Committee to provide any financing whatsoever in
connection therewith.
8.7 Additional Restrictions on Awards. Either at the time an Award is
granted or by subsequent action, the Committee may, but need not, impose such
restrictions, conditions or limitations as it determines appropriate as to the
timing and manner of any resales by a Participant or other subsequent transfers
by a Participant of any Shares issued under an Award, including without
limitation (a) restrictions under an insider trading policy, (b) restrictions
designed to delay and/or coordinate the timing and manner of sales by
Participants, and (c) restrictions as to the use of a specified brokerage firm
for such resales or other transfers.
Section 9. Changes in Capital Structure
9.1 Corporate Actions Unimpaired. The existence of outstanding Awards
(including any Options) shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issuance of Shares or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference
stock ahead of or affecting the Shares or other securities of the Company or the
rights thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise. Further, except
as expressly provided herein or by the Committee, (a) the issuance by the
Company of shares of stock of any class of securities convertible into shares of
stock of any class, for cash, property, labor or services, upon direct sale,
upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, (b) the payment of a dividend in property other than
Shares, or (c) the occurrence of any similar transaction, and in any case
whether or not for fair value, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number of Shares subject to Options
or other Awards theretofore granted or the purchase price per Share, unless the
Committee shall determine in its sole discretion that an adjustment is necessary
to provide equitable treatment to a Participant.
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9.2 Adjustments Upon Certain Events. If the outstanding Shares or other
securities of the Company, or both, for which the Award is then exercisable or
as to which the Award is to be settled shall at any time be changed or exchanged
by declaration of a stock dividend, stock split, combination of shares,
recapitalization, or reorganization, the Committee may, and if such event occurs
after a Corporate Change the Committee shall, appropriately and equitably adjust
the number and kind of Shares or other securities which are subject to the Plan
or subject to any Awards theretofore granted, and the exercise or settlement
prices of such Awards, so as to maintain the proportionate number of Shares or
other securities without changing the aggregate exercise or settlement price,
provided, however, that such adjustment shall be made so as to not affect the
status of any Award intended to qualify as an ISO or as "performance-based
compensation" under Section 162(m) of the Code. If the Company recapitalizes or
otherwise changes its capital structure, or merges, consolidates, sells all of
its assets or dissolves (each of the foregoing a "Fundamental Change"), then
thereafter upon any exercise of an Option or settlement of an Award theretofore
granted, the Participant shall be entitled to purchase under such Option or
receive under such Award, in lieu of the number of Shares as to which such
Option shall then be exercisable or such Award shall then be subject, the number
and class of shares of stock and securities to which the Participant would have
been entitled pursuant to the terms of the Fundamental Change if, immediately
prior to such Fundamental Change, the Participant had been the holder of record
of the number of Shares as to which such Option or Award is then subject.
Section 10. Change of Control
10.1 Definitions. Unless the Committee provides otherwise,
For purposes of the Plan and Awards granted under the Plan, the term
"Corporate Change" shall mean:
(i) any merger or consolidation in which the Company shall not be
the surviving entity (or survives only as a subsidiary of another entity
whose shareholders did not own all or substantially all of the Company's
Common Stock immediately prior to such transaction),
(ii) the sale of all or substantially all of the Company's assets to
any other person or entity (other than a wholly-owned subsidiary),
(iii) the acquisition of beneficial ownership or control of
(including, without limitation, power to vote) more than 50% of the
outstanding shares of Common Stock by any person or entity (including a
"group" as defined by or under Section 13(d)(3) of the Exchange Act),
(iv) the dissolution or liquidation of the Company,
(v) a contested election of directors, as a result of which or in
connection with which the persons who were directors of the Company before
such election or their nominees cease to constitute a majority of the
Board, or
(vi) any other event specified by the Committee, regardless of
whether at the time an Option is granted or thereafter.
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10.2 Effect of Change of Control. The Committee may provide, either at the
time an Option is granted or thereafter, that a Corporate Change shall have such
effect as specified by the Committee, or no effect, as the Committee in its sole
discretion may provide. Without limiting the foregoing, the Committee may but
need not provide, either at the time an Option is granted or thereafter, that if
a Corporate Change occurs, then effective as of a date selected by the
Committee, the Committee (which for purposes of the Corporate Changes described
in (iii) and (v) above shall be the Committee as constituted prior to the
occurrence of such Corporate Change) acting in its sole discretion without the
consent or approval of any Participant, will effect one or more of the following
alternatives or combination of alternatives with respect to all outstanding
Options (which alternatives may be conditional on the occurrence of such of the
Corporate Change specified in clause (i) through (v) above which gives rise to
the Corporate Change and which may vary among individual Participants): (1) in
the case of a Corporate Change specified in clauses (i), (ii) or (iv),
accelerate the time at which Options then outstanding may be exercised in full
for a limited period of time on or before a specified date (which will permit
the Participant to participate with the Common Stock received upon exercise of
such Option in the event of a Corporate Change specified in clauses (i), (ii) or
(iv), as the case may be) fixed by the Committee, after which specified date all
unexercised Options and all rights of Participants thereunder shall terminate,
(2) accelerate the time at which Options then outstanding may be exercised so
that such Options may be exercised in full for their then remaining term, or (3)
require the mandatory surrender to the Company of outstanding Options held by
such Participant (irrespective of whether such Options are then exercisable
under the provisions of the Plan) as of a date, before or not later than sixty
days after such Corporate Change, specified by the Committee, and in such event
the Committee shall thereupon cancel such Options and the Company shall pay to
each Participant an amount of cash equal to the excess of the fair market value
of the aggregate shares subject to such Option over the aggregate Option price
of such shares; provided, however, the Committee shall not select an alternative
(unless consented to by the Participant) that, if the Participant exercised his
accelerated Options pursuant to alternative 1 or 2 and participated in the
transaction specified in clause (i), (ii) or (iv) or received cash pursuant to
alternative 3, would result in the Participant's owing any money by virtue of
operation of Section 16(b) of the Exchange Act. If all such alternatives have
such a result, the Committee shall take such action, which is hereby authorized,
to put such Participant in as close to the same position as such Participant
would have been in had alternative 1, 2 or 3 been selected but without resulting
in any payment by such Participant pursuant to Section 16(b) of the Exchange
Act. Notwithstanding the foregoing, with the consent of the Participant, the
Committee may in lieu of the foregoing make such provision with respect of any
Corporate Change as it deems appropriate.
Section 11. Taxes
11.1 Withholding Requirements. The Committee may make such provisions or
impose such conditions as it may deem appropriate for the withholding or payment
by a Participant of any taxes that the Committee determines are required in
connection with any Award granted under this Plan, and a Participant's rights in
any Award are subject to satisfaction of such conditions.
11.2 Payment of Withholding Taxes. Notwithstanding the terms of Section
11.1, the Committee may provide in the agreement or other document evidencing an
Award or otherwise that all or any portion of the taxes required to be withheld
by the Company or, if permitted by the Committee, desired to be paid by the
Participant, in connection with the exercise, vesting, settlement or transfer of
any other Award shall be paid or, at the election of the Participant, may be
paid by the Company by withholding shares of the Company's capital stock
otherwise issuable or subject to such Award, or by the Participant delivering
previously owned shares of the Company's capital stock, in each case having a
fair market value equal to the amount required or elected to be withheld or
paid, or by a broker selected or approved by the Company paying such amount
pursuant to an irrevocable commitment by the broker to deliver to the Company
proceeds from the sale of the Shares issuable under the Award. Any such election
is subject to such conditions or procedures as may be established by the
Committee and may be subject to approval by the Committee.
A-8
Section 12. Amendments or Termination
The Board may amend, alter or discontinue this Plan or any agreement or
other document evidencing an Award made under this Plan but, except as provided
pursuant to the anti-dilution adjustment provisions of Section 9.2, no such
amendment shall, without the approval of the stockholders of the Company:
(a) materially increase the maximum number of shares of Common Stock
for which Awards may be granted under this Plan;
(b) reduce the price at which Options may be granted below the price
provided for in Section 6.2;
(c) reduce the exercise price of outstanding Options;
(d) extend the term of this Plan;
(e) materially change the class of persons eligible to be Eligible
Persons or Participants;
(f) increase the number of shares that are eligible for non-Option
Awards; or
(g) after any Corporate Change, impair the rights of any Award
holder without such holder's consent.
The Board may amend, alter or discontinue the Plan or any agreement
evidencing an Award made under the Plan, but no amendment or alteration shall be
made which would impair the rights of any Award holder, without such holder's
consent, under any Award theretofore granted, provided that no such consent
shall be required if the Committee determines in its sole discretion and prior
to the date of any Corporate Change or change of control (as defined, if
applicable, in the agreement evidencing such Award) that such amendment or
alteration either is required or advisable in order for the Company, the Plan or
the Award to satisfy any law or regulation or to meet the requirements of any
accounting standard.
Section 13. Compliance with Other Laws and Regulations
This Plan, the grant and exercise of Awards thereunder, and the obligation
of the Company to sell, issue or deliver Shares under such Awards, shall be
subject to all applicable federal, state and foreign laws, rules and regulations
and to such approvals by any governmental or regulatory agency as may be
required. The Company shall not be required to register in a Participant's name
or deliver any Shares prior to the completion of any registration or
qualification of such Shares under any federal, state or foreign law or any
ruling or regulation of any government body which the Committee shall determine
to be necessary or advisable.
No Option shall be exercisable unless a registration statement with respect
to the Option is effective or the Company has determined that such registration
is unnecessary. Unless the Awards and Shares covered by this Plan have been
registered under the Securities Act of 1933, as amended, or the Company has
determined that such registration is unnecessary, each person receiving an Award
and/or Shares pursuant to any Award may be required by the Company to give a
representation in writing that such person is acquiring such Shares for his or
her own account for investment and not with a view to, or for sale in connection
with, the distribution of any part thereof.
Section 14. Option Grants by Subsidiaries
In the case of a grant of an Option to any eligible Employee employed by a
Subsidiary, such grant may, if the Committee so directs, be implemented by the
Company issuing any subject shares to the Subsidiary, for such lawful
consideration as the Committee may determine, upon the condition or
understanding that the Subsidiary will transfer the shares to the option holder
in accordance with the terms of the Option specified by the Committee pursuant
to the provisions of the Plan. Notwithstanding any other provision hereof, such
Option may be issued by and in the name of the Subsidiary and shall be deemed
granted on such date as the Committee shall determine.
A-9
Section 15. No Right to Company Employment
Nothing in this Plan or as a result of any Award granted pursuant to this
Plan shall confer on any individual any right to continue in the employ of the
Company or interfere in any way with the right of the Company to terminate an
individual's employment at any time. The agreements or other documents
evidencing Awards may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence.
Section 16. Liability of Company
The Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant, an Eligible Person or other
persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of shares
as to which the Company has been unable to obtain from any regulatory body
having jurisdiction the authority deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not
realized, by any Participant, Eligible Person or other person due to the
receipt, exercise or settlement of any Option or other Award granted
hereunder.
Section 17. Effectiveness and Expiration of Plan
This Plan shall be effective on the date the Company's stockholders adopt
this Plan. All Awards granted under this Plan are subject to, and may not be
exercised before, the approval of this Plan by the stockholders. Stockholder
approval of the Plan must occur prior to the first anniversary date of the
effective date of this Plan. Stockholder approval shall be by the affirmative
vote of the holders of a majority of the outstanding shares of the Company
present, or represented by proxy, and entitled to vote, at a meeting of the
Company's stockholders or by written consent in accordance with the laws of the
State of Delaware; provided that if such approval by the stockholders of the
Company is not forthcoming, all Awards previously granted under this Plan shall
be void. No Awards shall be granted pursuant to this Plan more than 10 years
after the effective date of this Plan.
Section 18. Non-Exclusivity of Plan
Neither the adoption of this Plan by the Board nor the submission of this
Plan to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board or the Committee to adopt
such other incentive arrangements as either may deem desirable, including
without limitation, the granting of restricted stock or stock options otherwise
than under this Plan, and such arrangements may be either generally applicable
or applicable only in specific cases.
Section 19. Governing Law
This Plan and any agreements or other documents hereunder shall be
interpreted and construed in accordance with the laws of the State of Delaware
and applicable federal law. The Committee may provide that any dispute as to any
Award shall be presented and determined in such forum as the Committee may
specify, including through binding arbitration. Any reference in this Plan or in
the agreement or other document evidencing any Award to a provision of law or to
a rule or regulation shall be deemed to include any successor law, rule or
regulation of similar effect or applicability.
A-10
Proxy with telephone voting instructions - side one
-----------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
JACK IN THE BOX INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 22, 2002 AT 2:00 P.M.
MARRIOTT MISSION VALLEY, 8757 RIO SAN DIEGO DRIVE, SAN DIEGO, CALIFORNIA.
The undersigned hereby appoints Robert J. Nugent, John F. Hoffner and
Lawrence E. Schauf and each of them, acting by a majority or by one of them
if only one is acting, as lawful proxies, with full power of substitution,
for and in the name of the undersigned, to vote on behalf of the undersigned,
with all the powers the undersigned would possess if personally present at
the Annual Meeting of Stockholders of Jack in the Box Inc., a Delaware
corporation, on February 22, 2002, or any postponements or adjournments
thereof. The above named proxies are instructed to vote all the undersigned's
shares of stock on the proposals set forth in the Notice of Annual Meeting
and Proxy Statement as specified on the other side hereof and are authorized
in their discretion to vote upon such other business as may properly come
before the meeting or any postponements or adjournments thereof. This proxy
when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted
"FOR" all nominees listed and "FOR" Proposals 2 and 3. The Board of Directors
recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
JACK IN THE BOX INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 22, 2002 AT 2:00 P.M.
MARRIOTT MISSION VALLEY
8757 RIO SAN DIEGO DRIVE
SAN DIEGO, CALIFORNIA
Proxy with telephone voting instructions - side two
--------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Please mark your [X]
all nominees listed and Proposals 2 and 3. votes as indicated
in this example.
------------------------------------------------------------------------------
WITHHOLD
FOR ALL ALL
1. Election of Directors |_| |_|
Nominees:
01 Michael E. Alpert 06 Murray H. Hutchison
02 Jay W. Brown 07 Robert J. Nugent
03 Paul T. Carter 08 L. Robert Payne
04 Edward W. Gibbons 09 Kenneth R. Williams
05 Alice B. Hayes
(Instruction: To withhold authority to vote
for any individual nominee write that
nominee's name below.)
----------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the 2002 Stock |_| |_| |_|
Incentive Plan.
FOR AGAINST ABSTAIN
3. Ratification of appointment |_| |_| |_|
of KPMG LLP as independent
accountants.
4. In their discretion, the
Proxies are authorized to vote upon
such other business as may properly
come before the meeting.
YES NO
I plan to attend the meeting. |_| |_|
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW ***
[NAME, ADDRESS & SHARE INFORMATION]
Signature(s)X_______________________________ Dated: ___________________, 2002
Stockholder(s), please sign above exactly as name appears hereon; in the case of
joint holders, all should sign. Fiduciaries should add their full title to their
signature. Corporations should sign in full corporate name by an authorized
officer. Partnerships should sign in partnership name by an authorized person.
--------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
You will be asked to enter the Control Number located in the box in the lower
right hand corner of this form.
--------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
--------------------------------------------------------------------------------
Your vote will be confirmed and cast as you directed. END OF CALL.
--------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
--------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9; To WITHHOLD FOR AN INDIVIDUAL nominee,
press 0 and listen to the instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN; press 0.
Proposal 3: To vote FOR, press 1; AGAINST, press 9; ABSTAIN; press 0.
Your vote will be confirmed and cast as you directed. END OF CALL.
--------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail back your proxy.
--------------------------------------------------------------------------------
THANK YOU FOR VOTING
Call *** Toll Free *** On a Touch Tone Telephone
1-800-840-1208 - ANYTIME [Reserved for Control
There is NO CHARGE to you for this call Number Box]
Proxy without telephone voting instructions - side one
-----------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
JACK IN THE BOX INC.
FOR ANNUAL MEETING OF STOCKHOLDERS
ON FEBRUARY 22, 2002 AT 2:00 P.M.
MARRIOTT MISSION VALLEY,
8757 RIO SAN DIEGO DRIVE,
SAN DIEGO, CALIFORNIA
The undersigned hereby appoints Robert J. Nugent, John F. Hoffner and
Lawrence E. Schauf and each of them, acting by a majority or by one of them
if only one is acting, as lawful proxies, with full power of substitution,
for and in the name of the undersigned, to vote on behalf of the undersigned,
with all the powers the undersigned would possess if personally present at
the Annual Meeting of Stockholders of Jack in the Box Inc., a Delaware
corporation, on February 22, 2002, or any postponements or adjournments
thereof. The above named proxies are instructed to vote all the undersigned's
shares of stock on the proposals set forth in the Notice of Annual Meeting
and Proxy Statement as specified on the other side hereof and are authorized
in their discretion to vote upon such other business as may properly come
before the meeting or any postponements or adjournments thereof. This proxy
when properly executed will be voted in the manner directed herein by the
undersigned stockholder. If no direction is made, this proxy will be voted
"FOR" all nominees listed and "FOR" Proposals 2 and 3. The Board of Directors
recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
JACK IN THE BOX INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 22, 2002 AT 2:00 P.M.
MARRIOTT MISSION VALLEY
8757 RIO SAN DIEGO DRIVE
SAN DIEGO, CALIFORNIA
Proxy without telephone voting instructions - side two
--------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Please mark your |X|
all nominees listed and Proposals 2 and 3. indicated votes as
in this example.
--------------------------------------------------------------------------------
FOR ALL
EXCEPT
WITHHOLD (note
FOR ALL ALL below)
1. Election of Directors |_| |_| |_|
Nominees:
01 Michael E. Alpert 06 Murray H. Hutchison
02 Jay W. Brown 07 Robert J. Nugent
03 Paul T. Carter 08 L. Robert Payne
04 Edward W. Gibbons 09 Kenneth R. Williams
05 Alice B. Hayes
(Instruction: To withhold authority to vote
for any individual nominee mark the "FOR ALL
EXCEPT" box above and write that nominee's
name below.)
----------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the 2002 |_| |_| |_|
Stock Incentive Plan.
FOR AGAINST ABSTAIN
3. Ratification of |_| |_| |_|
appointment of KPMG LLP as
independent accountants.
4. In their discretion,
the Proxies are authorized
to vote upon such other
business as may properly
come before the meeting.
YES NO
I plan to attend the meeting. |_| |_|
[NAME, ADDRESS & SHARE INFORMATION]
Signature(s)X____________________________ Dated: ______________________, 2002
Stockholder(s), please sign above exactly as name appears hereon; in the case of
joint holders, all should sign. Fiduciaries should add their full title to their
signature. Corporations should sign in full corporate name by an authorized
officer. Partnerships should sign in partnership name by an authorized person.
--------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
Proxy Easy $aver Plus Plan - side one
--------------------------------------------------------------------------------
Please fold and detach at perforation before mailing
--------------------------------------------------------------------------------
Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]
PLEASE DO NOT USE FINE POINT PENS.
--------------------------------------------------------------------------------
The Board of Directors of Jack in the Box Inc. recommends
a vote FOR all nominees listed and Proposals 2 and 3.
FOR ALL
EXCEPT
WITHHOLD (noted
FOR ALL ALL at left)
1. Election of Directors |_| |_| |_|
Nominees:
01 Michael E. Alpert 06 Murray H. Hutchison
02 Jay W. Brown 07 Robert J. Nugent
03 Paul T. Carter 08 L. Robert Payne
04 Edward W. Gibbons 09 Kenneth R. Williams
05 Alice B. Hayes
---------------------------------------------------
(Instruction: To withhold authority to vote for
any individual nominee mark the "FOR ALL EXCEPT"
box above and write that nominee's name above.)
FOR AGAINST ABSTAIN
2. Approve the 2002 Stock Incentive Plan. |_| |_| |_|
FOR AGAINST ABSTAIN
3. Ratification of appointment of |_| |_| |_|
KPMG LLP as independent
accountants.
4. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before
the meeting.
Please note: If this Voting Instruction Form is signed, but no direction is
given on Proposal #1, Mellon Bank, N.A. will vote "FOR" all nominees listed, or
if no direction is given on Proposals #2 or #3, Mellon Bank, N.A. will vote
"FOR" those Proposals.
(Continued and to be dated and signed on the other side)
Proxy Easy $aver Plus Plan - side two
--------------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE This voting instruction is requested by Mellon Bank, N.A.
in conjunction with a proxy solicitation by the Board of Directors of
Jack in the Box Inc.
Please read the enclosed Proxy Statement and the Annual Report to
Stockholders for more information.
CONFIDENTIAL VOTING INSTRUCTION FORM
To: Mellon Bank, N.A.
as Trustee of the Jack in the Box Inc. Easy$aver Plus Plan
Please fold and detach at perforation before mailing
--------------------------------------------------------------------------------
The undersigned hereby instructs Mellon Bank, N.A., as Trustee of the
Jack in the Box Inc. Easy$aver Plus Plan, to vote in person or by proxy at the
Annual Meeting of the Stockholders of Jack in the Box Inc., to be held on
February 22, 2002, and at any postponements or adjournments thereof, all shares
of Common Stock of Jack in the Box Inc., for which the undersigned shall be
entitled to instruct, in the manner specified on the other side hereof.
Mellon Bank, N.A. will vote the shares represented by this Voting Instruction
Form if it is properly completed, signed, and received by Mellon Bank, N.A.
before 5:00 p.m. EST on February 19, 2002 at P.O. Box 9116, Hingham, MA 02043.
Please note that if this Voting Instruction Form is not properly completed and
signed, or it is not received by Mellon Bank, N.A., as indicated above,
Mellon Bank, N.A. will not vote any shares represented by such Voting
Instruction Form.
Mellon Bank, N.A. makes no recommendation regarding any voting instruction. Any
Voting Instruction Form, if properly completed, signed, and received by
Mellon Bank, N.A. in a timely manner will supersede any previously received
Voting Instruction Form. All voting instructions received by Mellon Bank, N.A.
will be kept confidential.
Dated:_____________________, 2002
_________________________________
Signature
--------------------------------------------------------------------------------
BALLOT JACK IN THE BOX INC. BALLOT
Annual Meeting of Stockholders, February 22, 2002
The undersigned votes________________________________(______________) shares of
stock, with respect to the following:
1. Election of Directors: Michael E. Alpert, Jay W. Brown, Paul T. Carter,
Edward W. Gibbons, Alice B. Hayes, Murray H. Hutchison, Robert J. Nugent,
L. Robert Payne and Kenneth R. Williams.
|_| FOR all nominees listed.
|_| WITHHOLD AUTHORITY to vote for all nominees listed.
|_| FOR all nominees listed except______________________________________
2. Approve the 2002 Stock Incentive Plan. |_| FOR |_| AGAINST |_| ABSTAIN
3. Ratification of appointment of KPMG LLP |_| FOR |_| AGAINST |_| ABSTAIN
as independent accountants.
_____________________________________________________
Stockholder's signature (|_| check box if you are voting shares held in
Easy$aver Plus Plan)
INSTRUCTION: If ballot is cast by proxy, print stockholder name above or, if
multiple stockholders, print "Proxies Filed" above.
_____________________________________________________
Proxy signature (if ballot is cast by proxy)