-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L7hm6rmUFizhe6sIN6TnvOV94ye+K1LPHBS4YN3Pz+tJLHji48CqdATYWH0qclhp U2R2tOmuYSyVDBh4E3mQxQ== 0000807882-03-000008.txt : 20030304 0000807882-03-000008.hdr.sgml : 20030304 20030304163653 ACCESSION NUMBER: 0000807882-03-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20030119 FILED AS OF DATE: 20030304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACK IN THE BOX INC /NEW/ CENTRAL INDEX KEY: 0000807882 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 952698708 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09390 FILM NUMBER: 03591754 BUSINESS ADDRESS: STREET 1: 9330 BALBOA AVE CITY: SAN DIEGO STATE: CA ZIP: 92123-1516 BUSINESS PHONE: 6195712121 MAIL ADDRESS: STREET 1: 9330 BALBOA AVENUE CITY: SAN DIEGO STATE: CA ZIP: 92123-1516 FORMER COMPANY: FORMER CONFORMED NAME: FOODMAKER INC /DE/ DATE OF NAME CHANGE: 19920703 10-Q 1 q1200310q.txt QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 19, 2003 ---------------- Commission file no. 1-9390 JACK IN THE BOX INC. (Exact name of registrant as specified in its charter) DELAWARE 95-2698708 - ---------------------------------------- -------------------------------------- (State of Incorporation) (I.R.S. Employer Identification No.) 9330 BALBOA AVENUE, SAN DIEGO, CA 92123 - ---------------------------------------- --------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (858) 571-2121 -------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No ----- ----- Number of shares of common stock, $.01 par value, outstanding as of the close of business February 27, 2003 - 36,527,653. JACK IN THE BOX INC. AND SUBSIDIARIES INDEX Page Part I. Financial Information Item 1. Consolidated Financial Statements: Consolidated Balance Sheets............................... 3 Unaudited Consolidated Statements of Earnings............. 4 Unaudited Consolidated Statements of Cash Flows........... 5 Notes to Unaudited Consolidated Financial Statements....... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................... 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk. 14 Item 4. Controls and Procedures ................................... 14 Part II. Other Information Item 4. Submission of Matters to a Vote of Security Holders........ 15 Item 6. Exhibits and Reports on Form 8-K........................... 16 Signature........................................................... 18 Certifications...................................................... 19 2 PART I. FINANCIAL INFORMATION Item 1. Consolidated Financial Statements JACK IN THE BOX INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) January 19, September 29, 2003 2002 - -------------------------------------------- ------------------ --------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents.................. $ 16,884 $ 5,620 Accounts receivable, net................... 20,426 26,176 Inventories................................ 32,107 29,975 Prepaid expenses and other current assets.. 11,816 38,108 Assets held for sale and leaseback......... 17,302 12,626 ------------ ------------ Total current assets..................... 98,535 112,505 ------------ ------------ Property and equipment, at cost............... 1,221,487 1,219,487 Accumulated depreciation and amortization.. 391,566 372,556 ------------ ------------- Property and equipment, net.............. 829,921 846,931 ------------ ------------- Trading area rights, net...................... - 64,628 Goodwill...................................... 66,616 1,988 Other assets, net............................. 43,027 37,392 ------------ ------------- TOTAL.................................... $ 1,038,099 $ 1,063,444 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt....... $ 2,394 $ 106,265 Accounts payable........................... 42,638 59,212 Accrued expenses........................... 163,871 167,900 ------------ ------------ Total current liabilities................ 208,903 333,377 ------------ ------------ Deferred income taxes......................... 28,283 25,861 Long-term debt, net of current maturities..... 249,726 143,364 Other long-term liabilities................... 101,910 96,727 Stockholders' equity: Common stock............................... 432 429 Capital in excess of par value............. 324,476 319,810 Retained earnings.......................... 248,224 227,064 Accumulated other comprehensive loss, net.. (8,882) (8,882) Unearned compensation...................... (4,442) - Treasury stock............................. (110,531) (74,306) ------------ ------------ Total stockholders' equity............... 449,277 464,115 ------------ ------------ TOTAL.................................... $ 1,038,099 $ 1,063,444 ============ ============ See accompanying notes to consolidated financial statements. 3 JACK IN THE BOX INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share data) Sixteen Weeks Ended ----------------------------------- January 19, January 20, 2003 2002 - -------------------------------------------- ------------------- --------------- Revenues: Restaurant sales...................... $ 559,431 $ 552,548 Distribution and other sales.......... 28,142 21,152 Franchise rents and royalties......... 17,500 16,639 Other.................................. 8,261 3,841 ----------- ----------- 613,334 594,180 ----------- ----------- Costs of revenues: Restaurant costs of sales............. 171,270 170,118 Restaurant operating costs............ 294,028 281,549 Costs of distribution and other sales. 27,492 20,685 Franchised restaurant costs........... 7,440 6,641 ----------- ----------- 500,230 478,993 ----------- ----------- Gross profit............................ 113,104 115,187 Selling, general and administrative..... 70,717 65,876 ----------- ----------- Earnings from operations................ 42,387 49,311 Interest expense........................ 8,258 7,305 ----------- ----------- Earnings before income taxes............. 34,129 42,006 Income taxes............................. 12,969 15,332 ----------- ----------- Net earnings............................. $ 21,160 $ 26,674 =========== =========== Earnings per share: Basic................................. $ .57 $ .68 Diluted............................... $ .56 $ .67 Weighted-average shares outstanding: Basic................................. 37,216 39,271 Diluted............................... 37,651 39,995 See accompanying notes to consolidated financial statements. 4 JACK IN THE BOX INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Sixteen Weeks Ended ------------------------------------ January 19, January 20, 2003 2002 - ------------------------------------------- ----------------- ------------------ Cash flows from operating activities: Net earnings............................. $ 21,160 $ 26,674 Non-cash items included in operations: Depreciation and amortization......... 21,182 21,107 Amortization of unearned compensation. 117 - Deferred finance cost amortization.... 915 514 Deferred income taxes................. 2,422 3,040 Gains on the conversion of Company-operated restaurants........... (7,270) (3,029) Decrease in receivables.................. 4,488 7,504 Increase in inventories.................. (2,132) (1,563) Decrease in prepaid expenses and other current assets......................... 10,003 7,026 Decrease in accounts payable............. (15,671) (5,390) Increase (decrease) in other liabilities. 3,453 (20,222) -------- -------- Cash flows provided by operating activities................ 38,667 35,661 -------- -------- Cash flows from investing activities: Additions to property and equipment...... (22,371) (30,017) Dispositions of property and equipment... 15,300 1,414 Proceeds from the conversion of Company-operated restaurants........... 849 3,766 Decrease (increase) in assets held for sale and leaseback..................... (4,676) 1,220 Collections on notes receivable.......... 4,302 1,666 Other.................................... (1,584) (1,389) -------- -------- Cash flows used in investing activities.......................... (8,180) (23,340) -------- -------- Cash flows from financing activities: Borrowings under revolving bank loans.... 361,500 125,500 Principal repayments under revolving bank loans............................. (288,500) (138,500) Principal payments on long-term debt, including current maturities........... (54,905) (647) Debt issuance and debt repayment costs... (1,203) - Repurchase of common stock............... (36,225) - Proceeds from issuance of common stock... 110 514 -------- -------- Cash flows used in financing activities.......................... (19,223) (13,133) -------- -------- Net increase (decrease) in cash and cash equivalents........................... $ 11,264 $ (812) ======== ======== See accompanying notes to consolidated financial statements. 5 JACK IN THE BOX INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) 1. GENERAL The accompanying unaudited consolidated financial statements of Jack in the Box Inc. (the "Company") and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission ("SEC"). In our opinion, all adjustments considered necessary for a fair presentation of financial condition and results of operations for the interim periods have been included. Operating results for any interim period are not necessarily indicative of the results for any other interim period or for the full year. We report results quarterly with the first quarter having 16 weeks and each remaining quarter having 12 weeks. Certain financial statement reclassifications have been made in the prior year to conform to the current year presentation. These financial statements should be read in conjunction with the notes to the fiscal year 2002 consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC. 2. ACCOUNTING CHANGES In the first quarter of fiscal year 2003, we adopted Statement of Financial Accounting Standards ("SFAS") 142, Goodwill and Other Intangible Assets, which establishes accounting and reporting standards for goodwill and separable intangible assets. For more information regarding the adoption of this Statement, refer to Note 3, Intangible Assets. In the first quarter of fiscal year 2003, we adopted the provisions of SFAS 143, Accounting for Asset Retirement Obligations, which addresses accounting and reporting standards for legal obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The adoption did not have a material impact on our results of operations or financial position. In the first quarter of fiscal year 2003, we adopted the provisions of SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement retains the fundamental provisions of SFAS 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, but addresses its significant implementation issues. The adoption did not have a material impact on our results of operations or financial position. In the first quarter of fiscal year 2003, we adopted the provisions of SFAS 145, Rescission of FASB Statements 4, 44, and 64, Amendment of FASB Statement 13, and Technical Corrections. SFAS 145 addresses inconsistencies in accounting for sale-leaseback transactions and amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. The adoption did not have a material impact on our results of operations or financial position. In the first quarter of fiscal year 2003, we adopted the provisions of SFAS 146, Accounting for Costs Associated with Exit or Disposal Activities. This Statement requires that costs associated with exit or disposal activities be recognized when they are incurred rather than at the date of a commitment to an exit or disposal plan. The adoption impacts exit liabilities recorded by the Company subsequent to December 31, 2002. In the first quarter of fiscal year 2003, we adopted the interim disclosure requirements of Financial Accounting Standards Board ("FASB") Interpretation 45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, which provides guidance on the recognition and disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees. Effective December 31, 2002, we adopted the initial recognition and measurement provisions of this Interpretation. The adoption did not have a material impact on our results of operations or financial position. 6 JACK IN THE BOX INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) 3. INTANGIBLE ASSETS SFAS 141, Business Combinations, requires that all business combinations be accounted for using the purchase method of accounting and specifies the criteria to use in determining whether intangible assets identified in purchase accounting must be recorded separately from goodwill. We determined that our trading area rights, which represent the amounts allocated under purchase accounting to reflect the value of operating existing restaurants within each specific trading area, do not meet the separability criteria of SFAS 141. Therefore, effective September 30, 2002, our trading area rights have been reclassified to goodwill. Under SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are tested at least annually for impairment. Separable intangible assets with definite lives will continue to be amortized over their estimated useful lives. In accordance with the provisions of SFAS 142, we ceased amortizing goodwill effective September 30, 2002. We also performed the transitional impairment test for goodwill in the quarter, which indicated there was no impairment upon our adoption of SFAS 142. Amortized and unamortized intangible assets consist of the following as of January 19, 2003: Gross Carrying Accumulated Net Carrying Amount Amortization Amount ------------------------------ ------------- --------------- -------------- Amortized intangible assets.... $ 52,345 $ 39,228 $ 13,117 ======== Unamortized intangible assets: Goodwill................................................. $ 66,616 ======== The change in the carrying amount of goodwill during the quarter ended January 19, 2003 was as follows: Balance at September 29, 2002........................... $ 1,988 Reclassification of trading area rights ................ 64,628 -------- Balance at January 19, 2003............................. $ 66,616 ======== Had the provisions of SFAS 142 been adopted prior to September 30, 2002, the Company would have reported net earnings and basic and diluted per share amounts as follows: Sixteen Weeks Ended ----------------------------- January 19, January 20, 2003 2002 --------------------------------------------------------- ---------------- Net earnings, as reported........... $ 21,160 $ 26,674 Goodwill and trading area rights amortization, net of taxes........ - 845 --------- --------- Net earnings, adjusted ............. $ 21,160 $ 27,519 ========= ========= Net earnings per share - basic: Net earnings, as reported........... $ .57 $ .68 Goodwill and trading area rights amortization, net of taxes........ - .02 --------- --------- Net earnings, adjusted ............. $ .57 $ .70 ========= ========= Net earnings per share - diluted: Net earnings, as reported........... $ .56 $ .67 Goodwill and trading area rights amortization, net of taxes........ - .02 --------- --------- Net earnings, adjusted ............. $ .56 $ .69 ========= ========= 7 JACK IN THE BOX INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) 3. INTANGIBLE ASSSETS (continued) Total intangibles amortization expense was $.7 million for the quarter ended January 19, 2003 and the estimated intangibles amortization expense for each fiscal year through fiscal year 2007 is $2.2 million. The estimated intangibles amortization expense does not take into consideration any intangible assets that may result from the Company's acquisition of Qdoba Restaurant Corporation as described in Note 8, Subsequent Events. 4. DEBT EXTINGUISHMENT In January 1994, we entered into financing lease arrangements with two limited partnerships (the "Partnerships"), in which we sold interests in 76 restaurants for a specified period of time. The acquisition of the properties, including costs and expenses, was funded through the issuance of $70 million in 10.3% senior secured notes by a special purpose corporation acting as agent for the Partnerships. On August 29, 2002, we entered into an agreement to repurchase the interests in the restaurant properties that had been encumbered by the financing lease obligations for a consent fee of $1.3 million. On January 2, 2003 we used borrowings under our credit facility and previous sinking fund payments to reacquire the interests in the restaurant properties and retire the high interest rate bearing financing lease obligations. 5. INCOME TAXES The income tax provisions in the quarter reflect the projected annual tax rates for 2003 and 2002 of 38.0% and 36.5% of pretax earnings, respectively. The fiscal 2002 income tax provision was subsequently adjusted to the effective annual rate of 33.9% of pretax earnings. The favorable income tax rate in 2002 resulted from our ability to realize previously unrecognized tax benefits. The final 2003 annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual rate could differ from our current estimates. 6. STOCKHOLDERS' EQUITY As part of the Company's long term incentive program, the Company awarded 217,600 shares of restricted stock to certain executives during the quarter ended January 19, 2003. These restricted stock awards have been recognized as unearned compensation in Stockholders' Equity based upon the fair value of the Company's common stock on the award date. Unearned compensation is amortized to compensation expense over the estimated vesting period. Pursuant to our stock repurchase program, as authorized by our Board of Directors, the Company repurchased 1,700,400 shares of our common stock for approximately $36.2 million during the quarter ended January 19, 2003. At the end of the quarter we had approximately $13.9 million of repurchase availability remaining. 7. AVERAGE SHARES OUTSTANDING Net earnings per share for each quarter is based on the weighted-average number of shares outstanding during the quarter, determined as follows: Sixteen Weeks Ended -------------------------------- January 19, January 20, 2003 2002 ----------------------------------------- --------------- ---------------- Shares outstanding, beginning of period .. 38,558,036 39,248,168 Effect of common stock issued........ 4,289 23,254 Effect of common stock reacquired.... (1,346,647) - ----------- ----------- Weighted-average shares outstanding - basic.............................. 37,215,678 39,271,422 Assumed additional shares issued upon exercise of stock options, net of shares reacquired at the average market price....................... 294,991 723,704 Effect of restricted stock issued..... 139,886 - ----------- ----------- Weighted-average shares outstanding - diluted............................. 37,650,555 39,995,126 =========== =========== 8 JACK IN THE BOX INC. AND SUBSIDIARIES NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share data) 7. AVERAGE SHARES OUTSTANDING (continued) Diluted weighted-average shares outstanding exclude options to purchase 3,271,253 and 1,427,411 shares of common stock in 2003 and 2002, respectively, because their exercise prices exceeded the average market price of common stock for the period. 8. CONTINGENCIES AND LEGAL MATTERS On April 18, 2001, an action was filed by Robert Bellmore and Jeffrey Fairbairn, individually and on behalf of all others similarly situated, in the Superior Court of the State of California, San Diego County, seeking class action status in alleging violations of California wage and hour laws. The Company settled the action in fiscal year 2002 for approximately $9.3 million without admission of liability and the court approved the settlement on February 10, 2003. The Company is also subject to normal and routine litigation. In the opinion of management, based in part on the advice of legal counsel, the ultimate liability from all other pending legal proceedings, asserted legal claims and known potential legal claims should not materially affect our operating results and liquidity. 9. SUBSEQUENT EVENTS Acquisition. On January 21, 2003 we acquired Qdoba Restaurant Corporation ("Qdoba"), operator and franchiser of Qdoba Mexican Grill(R) for $45 million in cash. The purchase was financed by our revolving credit facility. Qdoba operates in the fast-casual segment of the restaurant industry and, as of the acquisition date, operated or franchised 85 restaurants in 16 states. This acquisition is consistent with the Company's long-term strategy to grow from a regional quick-service restaurant chain to a national restaurant company. New Financing. On January 22, 2003, we secured a new senior credit facility which provides borrowings in the aggregate amount of $350 million and is comprised of: (i) a $200 million revolving credit facility maturing on January 22, 2006 and (ii) a $150 million term loan maturing on July 22, 2007. This new credit facility replaces our prior $175 million credit facility, which was due to expire March 31, 2003. 9 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS JACK IN THE BOX INC. AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS - --------------------- All comparisons under this heading between 2003 and 2002 refer to the 16-week periods ended January 19, 2003 and January 20, 2002, respectively, unless otherwise indicated. Company-operated restaurant sales increased $6.9 million, or 1.2%, to $559.4 million in 2003 from $552.5 million in 2002, reflecting an increase in the number of Company-operated restaurants offset in part by a decline in per store average sales. The number of Company-operated restaurants increased 3.6% to 1,515 at the end of the quarter from 1,462 restaurants a year ago. Sales at Company-operated restaurants open more than one fiscal year declined 2.6% in 2003 compared with 2002 due primarily to continued economic weakness in certain key markets and aggressive price discounting by competitors, offset in part by modest price increases. Distribution and other sales, representing distribution sales to franchisees and sales from our fuel and convenience stores ("QUICK STUFF(R)"), increased $7.0 million to $28.1 million in 2003 from $21.2 million in 2002. Other sales from our QUICK STUFF locations increased $5.5 million primarily due to an increase in the number of QUICK STUFF locations to twelve at the end of the quarter from ten a year ago. Distribution sales grew $1.5 million in 2003 compared with 2002, due to an increase in the number of franchised restaurants using our distribution services. Franchise rents and royalties increased $.9 million to $17.5 million in 2003 from $16.6 million in 2002, primarily reflecting an increase in the number of franchised restaurants to 365 at the end of the quarter from 335 a year ago. As a percentage of franchise restaurant sales, franchise rents and royalties declined slightly to 13.0% in 2003 from 13.1% in 2002 primarily due to a decline in sales at franchise-operated restaurants. Other revenues, principally gains and fees from the conversion of Company-operated restaurants, as well as interest income from notes receivable and investments, increased to $8.3 million in 2003 from $3.8 million in 2002, primarily due to our continued strategy of selectively converting Company-operated restaurants to franchises. Franchise gains and fees increased $4.5 million to $7.7 million in 2003 from $3.2 million in 2002 due to an increase in the number of restaurants converted to nine in the quarter compared with three a year ago. Restaurant costs of sales and operating costs increased with sales growth and the addition of Company-operated restaurants. Restaurant costs of sales, which include food and packaging costs, increased to $171.3 million in 2003 from $170.1 million in 2002. Restaurant costs of sales improved to 30.6% of restaurant sales in 2003 from 30.8% in 2002, primarily due to the favorable impact of lower food ingredient costs, certain margin improvement initiatives and modest selling price increases in 2003. Restaurant operating costs grew to $294.0 million, or 52.6% of restaurant sales, in 2003 from $281.5 million, or 51.0% in 2002. The percentage increase in 2003 reflects higher occupancy costs on newer stores whose sales have not yet matured, increased costs related to our new point of sale system, higher insurance expenses and reduced leverage on fixed costs due to a decline in average sales at Company-operated restaurants. Costs of distribution and other sales increased to $27.5 million, or 97.7% of the related sales, in 2003 from $20.7 million, or 97.8% in 2002, primarily reflecting an increase in the related sales. 10 Franchise restaurant costs, which consist principally of rents and depreciation on properties leased to franchisees and other miscellaneous costs, increased to $7.4 million in 2003 from $6.6 million in 2002, primarily reflecting an increase in the number of franchised restaurants. As a percentage of franchise restaurant sales, franchise restaurant costs increased to 5.5% in 2003 from 5.2% in 2002, as increases in fixed costs, primarily rents, exceeded the overall sales growth at franchise-operated restaurants. Selling, general and administrative expenses increased to $70.7 million, or 11.5% of revenues, in 2003 from $65.9 million, or 11.1% of revenues, in 2002, primarily due to higher pension costs and the reduced leverage from softer sales, which were offset in part by higher other revenues. Pension costs have increased due to declines in interest rates and in the return on plan assets. Interest expense increased to $8.3 million in 2003 from $7.3 million in 2002, primarily due to costs associated with the early retirement of our high interest rate financing lease obligations. Increases in total average debt outstanding were offset by lower average interest rates during the quarter. The income tax provisions in the quarter reflect the projected annual tax rates for 2003 and 2002 of 38.0% and 36.5% of pretax earnings, respectively. The fiscal 2002 income tax provision was subsequently adjusted to the effective annual rate of 33.9% of pretax earnings. The favorable income tax rate in 2002 resulted from our ability to realize previously unrecognized tax benefits. The final 2003 annual tax rate cannot be determined until the end of the fiscal year; therefore, the actual rate could differ from our current estimates. Net earnings decreased to $21.2 million, or $.56 per diluted share, in 2003 from $26.7 million, or $.67 per diluted share, in 2002. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- General. Cash and cash equivalents increased $11.3 million to $16.9 million at January 19, 2003 from $5.6 million at the beginning of the fiscal year. The higher cash balance at January 19, 2003 resulted from the receipt of proceeds related to the closing of several sale and leaseback transactions at the end of the quarter. These proceeds were used to repay borrowings under our credit facility immediately following the end of the quarter. We expect to maintain low levels of cash and cash equivalents, reinvesting available cash flows from operations to develop new or enhance existing restaurants, and to reduce borrowings under the revolving credit facility. Our working capital deficit decreased $110.5 million to $110.4 million at January 19, 2003 from $220.9 million at September 29, 2002, primarily due to the reclassification of our revolving credit facility to long-term debt and the repayment of our financing lease obligations in January 2003. The Company and the restaurant industry in general maintain relatively low levels of accounts receivable and inventories and vendors grant trade credit for purchases such as food and supplies. We also continually invest in our business through the addition of new units and refurbishment of existing units, which are reflected as long-term assets and not as part of working capital. At the end of the quarter, our current ratio increased to .5 to 1 compared with .3 to 1 at the beginning of the year, primarily due to the revolving credit facility reclassification and financing lease obligations repayment discussed above. At January 19, 2003, we had borrowings of $107 million and letters of credit outstanding of $19.7 million under our revolving credit facility. On January 22, 2003, we replaced our existing credit facility, due to expire March 31, 2003, with borrowings under a new senior credit facility. Our new credit facility provides borrowings in the aggregate amount of $350 million and is comprised of: (i) a $200 million revolving credit facility maturing on January 22, 2006 with an initial rate of London Interbank Offered Rate ("LIBOR") plus 2.25% and (ii) a $150 million term loan maturing on July 22, 2007 with an initial rate of LIBOR plus 3.25%. This new credit facility requires the payment of an annual commitment fee based on the unused portion of the credit facility. The annual commitment rate and the credit facility's interest rates are based on a financial leverage ratio, as defined in the credit agreement. To secure our respective obligations under the new credit facility, the Company and certain of its subsidiaries granted liens in substantially all of their personal property assets. Under certain circumstances, the Company and each of its certain subsidiaries will be required to grant liens in certain real property assets to secure their respective obligations under the new credit facility. Additionally, certain of our real and personal property secure other indebtedness of the Company. 11 We are subject to a number of covenants under our various debt instruments, including limitations on additional borrowings, acquisitions, loans to franchisees, capital expenditures, lease commitments and dividend payments, as well as requirements to maintain certain financial ratios, cash flows and net worth. As of January 19, 2003, we were in compliance with the covenants in effect. Total debt outstanding increased to $252.1 million at January 19, 2003 from $249.6 million at the beginning of the fiscal year. Other Transactions. In January 1994, we entered into financing lease arrangements with two limited partnerships (the "Partnerships"), in which we sold interests in 76 restaurants for a specified period of time. The acquisition of the properties, including costs and expenses, was funded through the issuance of $70 million in 10.3% senior secured notes by a special purpose corporation acting as agent for the Partnerships. On August 29, 2002, we entered into an agreement to repurchase the interests in the restaurant properties that had been encumbered by the financing lease obligations for a consent fee of $1.3 million. On January 2, 2003 we used borrowings under our credit facility and previous sinking fund payments to reacquire the interests in the restaurant properties and retire the high interest rate bearing financing lease obligations. In December 1999 and fiscal 2002, our Board of Directors authorized the repurchase of our outstanding common stock in the open market for an aggregate amount not to exceed $90 million. Through January 19, 2003, we had acquired 3,250,200 shares in connection with this authorization at an aggregate cost of $76.1 million. At the end of the quarter we had approximately $13.9 million of repurchase availability remaining. The stock repurchase program is intended to increase shareholder value and offset the dilutive effect of stock option exercises. Capital Expenditures. Capital expenditures decreased $7.6 million to $22.4 million in 2003 from $30.0 million in 2002, primarily due to a $5.8 million decrease in new restaurant expenditures reflecting a reduction in the number of new restaurant openings to 22 in 2003 from 35 a year ago. Capital expenditures in 2003 included $15.1 million for new restaurant expenditures, $5.8 million for existing restaurant improvements and $1.5 million for other additions. We plan to spend approximately $155 million during fiscal year 2003 on capital expenditures compared with the $182 million originally disclosed in our 2002 Annual Report on Form 10-K filed with the SEC. The projected estimate decrease reflects our plan to lease a greater portion of our new stores rather than purchase them. Future Liquidity. We require capital principally to grow the business through new restaurant construction, as well as to maintain, improve and refurbish existing restaurants, and for general operating purposes. Our primary short-term and long-term sources of liquidity are expected to be cash flows from operations, the revolving bank credit facility, and the sale and leaseback of certain restaurant properties. Additional potential sources of liquidity include financing opportunities and the conversion of Company-operated restaurants to franchised restaurants. Based upon current levels of operations and anticipated growth, we expect that cash flows from operations, combined with other financing alternatives available, will be sufficient to meet debt service, capital expenditure and working capital requirements. We do not have material related party transactions or off-balance sheet arrangements, other than our operating leases. We do not enter into commodity contracts for which market price quotations are not available. Furthermore, we are not aware of any other factors, which are reasonably likely to affect our liquidity, other than those disclosed as risk factors in our Form 10-K filed with the SEC. While we have noted that certain operating expenses, including pension, insurance and occupancy costs, are rising and the economy has slowed down, we believe that there are sufficient funds available from operations, our existing credit facility and the sale and leaseback of restaurant properties to accommodate the Company's future growth. 12 DISCUSSION OF CRITICAL ACCOUNTING POLICIES - ------------------------------------------ The Company's critical accounting policies, which are those that are most important to the portrayal of the Company's financial condition and results and require management's most subjective and complex judgements, are detailed in our most recent Annual Report on Form 10-K filed with the SEC. FUTURE APPLICATION OF ACCOUNTING STANDARDS - ------------------------------------------ In November 2002, the FASB's Emerging Issues Task Force ("EITF") discussed Issue 02-16, Accounting by a Customer (including a Reseller) for Cash Consideration Received from a Vendor. Issue 02-16 provides guidance on how a customer should account for cash consideration received from a vendor. This Issue is effective for fiscal periods beginning after December 15, 2002. We will adopt the provisions of Issue 02-16 in the first quarter of fiscal year 2004 and expect that the adoption will not have a material impact on our results of operations or financial position. In December 2002, the FASB issued Statement of Financial Accounting Standards ("SFAS") 148, Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement No. 123. This Statement provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee consideration. Additionally, the Statement amends the disclosure requirements of SFAS 123, Accounting for Stock-Based Compensation, to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. The transition guidance and annual disclosure provisions are effective for financial statements issued for fiscal years ending after December 15, 2002. The interim disclosure provisions are effective for financial reports containing financial statements for interim periods beginning after December 15, 2002. We will adopt the interim disclosure provisions of SFAS 148 in the second quarter of fiscal year 2003. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS - ---------------------------------------------------------- This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities law. These forward-looking statements are principally contained in the sections captioned, Notes to Unaudited Consolidated Financial Statements and Liquidity and Capital Resources. Statements regarding our continuing investment in new restaurants and refurbishment of existing facilities, expectations regarding our effective tax rate, expectations regarding any liability that may result from claims and actions filed against us, our future financial performance, our sources of liquidity, uses of cash and sufficiency of our cash flows are forward-looking statements. Forward-looking statements are generally identifiable by the use of the words "anticipate," "assume," "believe," "estimate," "seek," "expect," "intend," "plan," "project," "may," "will" "would," and similar expressions. Forward-looking statements are based on management's current plans and assumptions and are subject to known and unknown risks and uncertainties which may cause actual results to differ materially from expectations. The following is a discussion of some of those factors. There is intense competition in the quick service restaurant industry with respect to market share, restaurant locations, labor, menu and product development. The Company competes primarily on the basis of quality, variety and innovation of menu items, service, brand, convenience and price against several larger national and international chains with potentially significantly greater financial resources. The Company's results depend upon the effectiveness of its strategies as compared to its competitors, and can be adversely affected by aggressive competition from numerous and varied competitors in all areas of business, including new product introductions, promotions and discounting. In addition, restaurant sales can be affected by factors, including but not limited to, demographic changes, consumer preferences, tastes and spending patterns, perceptions about the health and safety of food products and severe weather conditions. With approximately 40% of its restaurants in California, Jack in the Box restaurant sales can be significantly affected by demographic changes, adverse weather, economic and political conditions and other significant events in California. The national economy continues in a downturn and is a significant contributor to soft sales trends experienced by the Company and several of its competitors; there can be no assurance as to when the trends can be reversed or that earnings will not be materially affected. The quick service restaurant industry is mature, with significant chain penetration. There can be no assurances that the Company's growth objectives in the regional domestic markets in which it operates restaurants and convenience stores will be met or that the new facilities will be profitable. Anticipated and unanticipated delays in development, sales softness and restaurant closures may have a material adverse effect on the Company's results of operations. The development and profitability of restaurants can be adversely affected by many factors including the ability 13 of the Company and its franchisees to select and secure suitable sites on satisfactory terms, the availability of financing and general business and economic conditions. The realization of gains from our program of selective sales of Company-operated restaurants to existing and new franchisees depends upon various factors, including sales trends at Jack in the Box restaurants and the financing market and economic conditions referred to above. The ongoing success of our selective sale and leaseback of restaurant properties is subject to changes in the economy, credit market, real estate market and the ability of the Company to obtain acceptable prices and terms. Our results of operations can also be adversely affected by changes in commodity prices or supply, increasing utility, occupancy and insurance costs, interest rates, inflation, recession and other factors over which the Company has no control, including the possibility of increased pension expense and contributions resulting from continued declines in interest rates and stock market returns. In January 2003, the Company completed its acquisition of Qdoba Restaurant Corporation, a fast-casual restaurant chain. The Company may not successfully integrate or fully realize the potential benefits or synergies of this or other acquisition transactions. Other factors that can cause actual results to differ materially from expectations include the unpredictable nature of litigation, including strategies and settlement costs; changes in accounting standards, policies and practices; new legislation and governmental regulation; potential variances between estimated and actual liabilities; and the possibility of unforeseen events affecting the industry in general. Our income tax provision is sensitive to expected earnings and, as expectations change, our income tax provision may vary from quarter-to-quarter and year-to-year. In addition, from time-to-time, we may take positions for filing our tax returns which differ from the treatment for financial reporting purposes. Our effective tax rate for fiscal 2003 is expected to be higher than our fiscal 2002 rate. This discussion of uncertainties is not exhaustive. Additional risk factors associated with our business are detailed in our most recent Annual Report on Form 10-K filed with the SEC. Jack in the Box Inc. assumes no obligation and does not intend to update these forward-looking statements. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Our primary exposure relating to financial instruments is to changes in interest rates. Our credit facility bears interest at an annual rate equal to the prime rate or the LIBOR plus an applicable margin based on a financial leverage ratio. As of January 19, 2003, our applicable margin was set at .625%. A hypothetical 100 basis point increase in short-term interest rates, based on the outstanding balance of our revolving credit facility at January 19, 2003, would result in a reduction of $1.07 million in annual pretax earnings. Changes in interest rates also impact our pension expense. An assumed discount rate is used in determining the present value of future cash outflows currently expected to be required to satisfy the pension benefit obligations when due. A hypothetical 30 basis point reduction in the assumed discount rate would result in an estimated increase of $1.2 million in our fiscal 2003 pension expense. We are also exposed to the impact of commodity price fluctuations related to unpredictable factors such as weather and various other market conditions outside our control. From time-to-time we enter into commodity futures and option contracts to manage these fluctuations. Open commodity futures and option contracts were not significant at January 19, 2003. At January 19, 2003, we had no other material financial instruments subject to significant market exposure. ITEM 4. CONTROLS AND PROCEDURES (a) Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended, within the 90 days prior to the filing date of this report. Based on their evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of the date of the evaluation. 14 (b) There have been no significant changes, including corrective actions with regard to significant deficiencies or material weaknesses, in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in paragraph (a) above. PART II. OTHER INFORMATION There is no information required to be reported for any items under Part II, except as follows: Item 1. LEGAL PROCEEDINGS On April 18, 2001, an action was filed by Robert Bellmore and Jeffrey Fairbairn, individually and on behalf of all others similarly situated, in the Superior Court of the State of California, San Diego County, seeking class action status in alleging violations of California wage and hour laws. The Company settled the action in fiscal year 2002 for approximately $9.3 million without admission of liability and the court approved the settlement on February 10, 2003. The Company is also subject to normal and routine litigation. In the opinion of management, based in part on the advice of legal counsel, the ultimate liability from all other pending legal proceedings, asserted legal claims and known potential legal claims should not materially affect our operating results and liquidity. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of stockholders in the first quarter ended January 19, 2003. Our annual meeting of stockholders was held February 14, 2003, at which the following matters were voted as indicated: For Withheld Abstain ----- -------- -------- 1. Election of the following directors to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Michael E. Alpert.................32,914,847 1,161,649 - Jay W. Brown......................33,786,778 289,718 - Edward W. Gibbons.................33,799,881 276,615 - Anne B. Gust......................33,790,832 285,664 - Alice B. Hayes, Ph.D..............33,032,526 1,043,970 - Murray H. Hutchison...............33,676,688 399,808 - Michael W. Murphy.................33,565,975 510,521 - Robert J. Nugent..................33,847,523 228,973 - L. Robert Payne...................33,685,367 391,129 - For Against Abstain ----- -------- -------- 2. Ratification of the appointment of KPMG LLP as independent accountants.......................33,388,659 665,301 22,536 15 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ITEM 6 (a). Exhibits -------- Number Description - ------ ----------- 3.1 Restated Certificate of Incorporation, as amended(9) 3.2 Restated Bylaws 4.1 Indenture for the 8 3/8% Senior Subordinated Notes due 2008(6) (Instruments with respect to the registrant's long-term debt not in excess of 10% of the total assets of the registrant and its subsidiaries on a consolidated basis have been omitted. The registrant agrees to furnish supplementally a copy of any such instrument to the Commission upon request.) 4.2 Shareholder Rights Agreement(3) 4.3 Credit Agreement dated as of January 22, 2003 by and among Jack in the Box Inc. and the lenders named therein (17) 10.1.1 Revolving Credit Agreement dated as of April 1, 1998 by and between Foodmaker, Inc. and the Banks named therein(6) 10.1.2 First Amendment dated as of August 24, 1998 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Foodmaker, Inc. and the Banks named therein(7) 10.1.3 Second Amendment dated as of February 27, 1999 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Foodmaker, Inc. and the Banks named therein(8) 10.1.4 Third Amendment dated as of September 17, 1999 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Foodmaker, Inc. and the Banks named therein(9) 10.1.5 Fourth Amendment dated as of December 6, 1999 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Foodmaker, Inc. and the Banks named therein(10) 10.1.6 Fifth Amendment dated as of May 3, 2000 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Jack in the Box Inc. and the Banks named therein(11) 10.1.7 Sixth Amendment dated as of November 17, 2000 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Jack in the Box Inc. and the Banks named therein(12) 10.1.8 Seventh Amendment dated as of August 23, 2002 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Jack in the Box Inc. and the Banks named therein(16) 10.1.9 Eighth Amendment dated as of September 27, 2002 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Jack in the Box Inc. and the Banks named therein(16) 10.1.10 Waiver dated as of November 15, 2002 to the Revolving Credit Agreement dated as of April 1, 1998 by and between Jack in the Box Inc. and the Banks named therein(16) 10.2 Purchase Agreements dated as of January 22, 1987 between Foodmaker, Inc. and FFCA/IIP 1985 Property Company and FFCA/IIP 1986 Property Company(1) 10.3 Land Purchase Agreements dated as of February 18, 1987 by and between Foodmaker, Inc. and FFCA/IPI 1984 Property Company and FFCA/IPI 1985 Property Company and Letter Agreement relating thereto(1) 10.4.1 Amended and Restated 1992 Employee Stock Incentive Plan(4) 10.4.2 Jack in the Box Inc. 2002 Stock Incentive Plan(15) 10.5 Capital Accumulation Plan for Executives(14) 10.5.1 First Amendment dated as of August 2, 2002 to the Capital Accumulation Plan for Executives(16) 10.6 Supplemental Executive Retirement Plan(14) 10.6.1 First Amendment dated as of August 2, 2002 to the Supplemental Executive Retirement Plan(16) 10.7 Performance Bonus Plan(13) 10.8 Deferred Compensation Plan for Non-Management Directors(2) 10.9 Amended and Restated Non-Employee Director Stock Option Plan(9) 10.10 Form of Compensation and Benefits Assurance Agreement for Executives(5) 10.11 Form of Indemnification Agreement between Jack in the Box Inc. and certain officers and directors(16) 10.12 Consent Agreement(16) 10.14 Executive Deferred Compensation Plan 10.15 Form of Restricted Stock Award for certain executives 10.15(a) Schedule of Restricted Stock Awards 99.1 Certification of Chief Executive Officer 99.2 Certification of Chief Financial Officer 16 - ---------- (1) Previously filed and incorporated herein by reference from registrant's Registration Statement on Form S-1 (No. 33-10763) filed February 24, 1987. (2) Previously filed and incorporated herein by reference from registrant's Definitive Proxy Statement dated January 17, 1995 for the Annual Meeting of Stockholders on February 17, 1995. (3) Previously filed and incorporated by reference from registrant's current report on Form 8-K dated July 26, 1996. (4) Previously filed and incorporated herein by reference from registrant's Registration Statement on Form S-8 (No. 333-26781) filed May 9, 1997. (5) Previously filed and incorporated herein by reference from registrant's Annual Report on Form 10-K for the fiscal year ended September 28, 1997. (6) Previously filed and incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended April 12, 1998. (7) Previously filed and incorporated herein by reference from registrant's Annual Report on Form 10-K for the fiscal year ended September 27, 1998. (8) Previously filed and incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended April 11, 1999. (9) Previously filed and incorporated herein by reference from registrant's Annual Report on Form 10-K for the fiscal year ended October 3, 1999. (10) Previously filed and incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended January 23, 2000. (11) Previously filed and incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended July 9, 2000. (12) Previously filed and incorporated herein by reference from registrant's Quarterly Report on Form 10-Q for the quarter ended January 21, 2001. (13) Previously filed and incorporated herein by reference from registrant's Definitive Proxy Statement dated January 19, 2001 for the Annual Meeting of Stockholders on February 23, 2001. (14) Previously filed and incorporated herein by reference from registrant's Annual Report on Form 10-K for the fiscal year ended September 30, 2001. (15) Previously filed and incorporated herein by reference from the registrant's Definitive Proxy Statement dated January 18, 2002 for the Annual Meeting of Stockholders' on February 22, 2002. (16) Previously filed and incorporated herein by reference from registrant's Annual Report on Form 10-K for the fiscal year ended September 29, 2002. (17) Previously filed and incorporated by reference from registrant's current report on Form 8-K dated January 22, 2003. ITEM 6(b). Form 8-K. -------- We did not file any reports on Form 8-K with the Securities and Exchange Commission during the first quarter ended January 19, 2003. 17 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized and in the capacities indicated. JACK IN THE BOX INC. By: /S/ JOHN F. HOFFNER ----------------------------------- John F. Hoffner Executive Vice President, and Chief Financial Officer (Principal Financial Officer) (Duly Authorized Signatory) Date: March 4, 2003 18 CERTIFICATION I, Robert J. Nugent, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Jack in the Box Inc.; 2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and c. presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. By: /S/ ROBERT J. NUGENT -------------------- Robert J. Nugent Chief Executive Officer and Chairman of the Board Date: March 4, 2003 19 CERTIFICATION I, John F. Hoffner, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Jack in the Box Inc.; 2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Quarterly Report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Quarterly Report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's Board of Directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. By: /S/ JOHN F. HOFFNER ------------------- John F. Hoffner Executive Vice President and Chief Financial Officer Date: March 4, 2003 20 EX-3 3 exbylaws.txt AMENDED BY-LAWS Exhibit 3.2 JACK IN THE BOX INC. (a Delaware corporation) BY-LAWS AMENDED AND RESTATED EFFECTIVE NOVEMBER 8, 2002 ARTICLE I Offices SECTION 1.01 Registered Office. The registered office of Jack in the Box Inc. (hereinafter called the Corporation) in the State of Delaware shall be at 1209 Orange Street, City of Wilmington, County of New Castle, and the name of the registered agent in charge thereof shall be The Corporation Trust Company. SECTION 1.02 Other Offices. The Corporation may also have an office or offices at such other place or places, either within or without the State of Delaware, as the Board of Directors (hereinafter called the Board) may from time to time determine or as the business of the Corporation may require. ARTICLE II Meetings of Stockholders SECTION 2.01 Annual Meetings. Annual meetings of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other proper business as may come before such meetings may be held at such time, date and place as the Board shall determine by resolution. SECTION 2.02 Special Meetings. A special meeting of the stockholders for the transaction of any proper business may be called at any time by the Board or by the President. SECTION 2.03 Place of Meetings. All meetings of the stockholders shall be held at such places, within or without the State of Delaware, as may from time to time be designated by the person or persons calling the respective meeting and specified in the respective notices or waivers of notice thereof. SECTION 2.04 Notice of Meetings. Except as otherwise required by law, notice of each meeting of the stockholders, whether annual or special, shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder of record entitled to vote at such meeting by delivering a typewritten or printed notice thereof to him personally, or by depositing such notice in the United States mail, in a postage prepaid envelope, directed to him at his post office address furnished by him to the Secretary of the Corporation for such purpose or, if he shall not have furnished to the Secretary his address for such purpose, then at his post office address last known to the Secretary, or by transmitting a notice thereof to him at such address by telegraph, cable, or wireless. Except as otherwise expressly required by law, no publication of any notice of a meeting of the stockholders shall be required. Every notice of a meeting of the stockholders shall state the place, date and hour of the meeting, and, in the case of a special meeting, shall also state the purpose or purposes for which the meeting is called. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall have waived such notice and such notice shall be deemed waived by any stockholder who shall attend such meeting in person or by proxy, except as a stockholder who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Except as otherwise expressly required by law, notice of any adjourned meeting of the stockholders need not be given if the time and place thereof are announced at the meeting at which the adjournment is taken. SECTION 2.05 Quorum. Except in the case of any meeting for the election of directors summarily ordered as provided by law, the holders of record of a majority in voting interest of the shares of stock of the Corporation entitled to be voted thereat, present in person or by proxy, shall constitute a quorum for the transaction of business at any meeting of the stockholders of the Corporation or any adjournment thereof. In the absence of a quorum at any meeting or any adjournment thereof, a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat or, in the absence therefrom of all the stockholders, any officer entitled to preside at, or to act as secretary of, such meeting may adjourn such meeting from time to time. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called. 2 SECTION 2.06 Voting. (a) Each stockholder shall, at each meeting of the stockholders, be entitled to vote in person or by proxy each share or fractional share of the stock of the Corporation having voting rights on the matter in question and which shall have been held by him and registered in his name on the books of the Corporation: (i) on the date fixed pursuant to Section 6.05 of these By-laws as the record date for the determination of stockholders entitled to notice of and to vote at such meeting, or (ii) if no such record date shall have been so fixed, then (a) at the close of business on the day next preceding the day on which notice of the meeting shall be given or (b) if notice of the meeting shall be waived, at the close of business on the day next preceding the day on which the meeting shall be held. (b) Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors in such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes. Persons holding stock of the Corporation in a fiduciary capacity shall be entitled to vote such stock. Persons whose stock is pledged shall be entitled to vote, unless in the transfer by the pledgor on the books of the Corporation he shall have expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Stock having voting power standing of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants in common, tenants by entirety or otherwise, or with respect to which two or more persons have the same fiduciary relationship, shall be voted in accordance with the provisions of the General Corporation Law of the State of Delaware. 3 (c) Any such voting rights may be exercised by the stockholder entitled thereto in person or by his proxy appointed by an instrument in writing, subscribed by such stockholder or by his attorney thereunto authorized, or by any other means permitted by the Delaware General Corporation Law, and delivered to the secretary of the meeting; provided, however, that no proxy shall be voted or acted upon after three years from its date unless said proxy shall provide for a longer period. The attendance at any meeting of a stockholder who may theretofore have given a proxy shall not have the effect of revoking the same unless he shall in writing so notify the secretary of the meeting prior to the voting of the proxy. At any meeting of the stockholders all matters, except as otherwise provided in the Certificate of Incorporation, in these By-laws or by law, shall be decided by the vote of a majority in voting interest of the stockholders present in person or by proxy and entitled to vote thereat and thereon, a quorum being present. The vote at any meeting of the stockholders on any question need not be by ballot, unless so directed by the chairman of the meeting. On a vote by ballot each ballot shall be signed by the stockholder voting, or by his proxy, if there be such proxy, and it shall state the number of shares voted. SECTION 2.07 List of Stockholders. The Secretary of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. SECTION 2.08 Judges. If at any meeting of the stockholders a vote by written ballot shall be taken on any question, the chairman of such meeting may appoint a judge or judges to act with respect to such vote. Each judge so appointed shall first subscribe an oath faithfully to execute the duties of a judge at such meeting with strict impartiality and according to the best of his ability. Such judges shall decide upon the qualification of the voters and shall report the number of shares represented at the meeting and entitled to vote on such question, shall conduct and accept the votes, and, when the voting is completed, shall ascertain and report the number of shares voted respectively for and against the question. Reports of judges shall be in writing and subscribed and delivered by them to the Secretary of the Corporation. The judges need not be stockholders of the Corporation, and any officer of the Corporation may be a judge on any question other than a vote for or against a proposal in which he shall have a material interest. 4 SECTION 2.09 Action Without Meeting. Any action required to be taken at any annual or special meeting of stockholders of the Corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. SECTION 2.10 Stockholder Proposals at Annual Meetings (a) Business may be properly brought before an annual meeting by a stockholder only upon the stockholder's timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than one hundred twenty (120) days in advance of the first anniversary of the date that the Corporation's proxy statement was first released to stockholders in connection with the previous year's annual meeting of stockholders, except that if no annual meeting was held in the previous year or the date of the annual meeting is more than thirty (30) calendar days earlier than the date contemplated at the time of the previous year's proxy statement, notice by the stockholders to be timely must be received not later than the close of business on the tenth (10th) day following the day on which the date of the annual meeting is publicly announced. "Public announcement" for purposes hereof shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"). In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder's notice as described above. For purposes of this Section 2.10, any adjournment(s) or postponement(s) of the original meeting which do not require a new written notice shall be deemed for purposes of notice to be a continuance of the original meeting and no business may be brought before any reconvened meeting unless timely notice of such business was given to the Secretary of the Corporation for the meeting as originally scheduled. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the meeting, (ii) the name and address, as they appear on the Corporation's books, of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder, and (iv) any material interest of the stockholder in such business. Notwithstanding the foregoing, nothing in this Section 2.10 shall be interpreted or construed to require the inclusion of information about any such proposal in any proxy statement distributed by, at the direction of, or on behalf of the Board." 5 (b) The chairman of the annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 2.10, and in such case, any such business not properly brought before the meeting shall not be transacted. ARTICLE III Board of Directors SECTION 3.01 General Powers. The property, business and affairs of the Corporation shall be managed by the Board. SECTION 3.02 Number and Term of Office. The exact number of directors shall be fixed from time to time by resolution of the board of directors or the stockholders. Directors need not be stockholders. Each of the directors of the Corporation shall hold office until his successor shall have been duly elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided. SECTION 3.03 Election of Directors. The directors shall be elected annually by the stockholders of the Corporation and the persons receiving the greatest number of votes, up to the number of directors to be elected, shall be the directors. SECTION 3.04 Resignations. Any director of the Corporation may resign at any time by giving written notice to the Board or to the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, it shall take effect immediately upon its receipt; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. 6 SECTION 3.05 Vacancies. Except as otherwise provided in the Certificate of Incorporation, any vacancy in the Board, whether because of death, resignation, disqualification, an increase in the number of directors, or any other cause, may be filled by vote of the majority of the remaining directors, although less than a quorum. Each director so chosen to fill a vacancy shall hold office until his successor shall have been elected and shall qualify or until he shall resign or shall have been removed in the manner hereinafter provided. SECTION 3.06 Place of Meeting, Etc. The Board may hold any of its meetings at such place or places within or without the State of Delaware as the Board may from time to time by resolution designate or as shall be designated by the person or persons calling the meeting or in the notice or a waiver of notice of any such meeting. Directors may participate in any regular or special meeting of the Board by means of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can hear each other, and such participation shall constitute presence in person at such meeting. SECTION 3.07 First Meeting. The Board shall meet as soon as practicable after each annual election of directors and notice of such first meeting shall not be required. SECTION 3.08 Regular Meetings. Regular meetings of the Board may be held at such times as the Board shall from time to time by resolution determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting shall be held at the same hour and place on the next succeeding business day not a legal holiday. Except as provided by law, notice of regular meetings need not be given. SECTION 3.09 Special Meetings. Special meetings of the Board shall be held whenever called by the President or a majority of the authorized number of directors. Except as otherwise provided by law or by these By-laws, notice of the time and place of each such special meeting shall be mailed to each director, addressed to him at his residence or usual place of business, at least five (5) days before the day on which the meeting is to be held, or shall be sent to him at such place by telegraph or cable or be delivered personally not less than forty-eight (48) hours before the time at which the meeting is to be held. Except where otherwise required by law or by these By-laws, notice of the purpose of a special meeting need not be given. Notice of any meeting of the Board shall not be required to be given to any director who is present at such meeting, except a director who shall attend such meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. 7 SECTION 3.10 Quorum and Manner of Acting. Except as otherwise provided in these By-laws or by law, the presence of a majority of the authorized number of directors shall be required to constitute a quorum for the transaction of business at any meeting of the Board, and all matters shall be decided at any such meeting, a quorum being present, by the affirmative votes of a majority of the directors present. In the absence of a quorum, a majority of directors present at any meeting may adjourn the same from time to time until a quorum shall be present. Notice of any adjourned meeting need not be given. The directors shall act only as a Board, and the individual directors shall have no power as such. SECTION 3.11 Action by Consent. Any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if a written consent thereto is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. SECTION 3.12 Removal of Directors. Subject to the provisions of the Certificate of Incorporation, any director may be removed at any time, either with or without cause, by the affirmative vote of the stockholders having a majority of the voting power of the Corporation given at a special meeting of the stockholders called for the purpose. SECTION 3.13 Compensation. The directors shall receive only such compensation for their services as directors as may be allowed by resolution of the Board. The Board may also provide that the Corporation shall reimburse each such director for any expense incurred by him on account of his attendance at any meetings of the Board or Committees of the Board. Neither the payment of such compensation nor the reimbursement of such expenses shall be construed to preclude any director from serving the Corporation or its subsidiaries in any other capacity and receiving compensation therefor. SECTION 3.14 Committees. The Board may, by resolution passed by a majority of the whole Board, designate one or more committees, each committee to consist of one or more of the directors of the Corporation. Any such committee, to the extent provided in the resolution of the Board and except as otherwise limited by law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Any such committee shall keep written minutes of its meetings and report the same to the Board at the next regular meeting of the Board. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. 8 SECTION 3.15 Nominations for Election to the Board of Directors. (a) Nominations of persons for election to the Board of Directors shall be made only at a meeting of stockholders and only (1) by or at the direction of the Board of Directors or (2) by any stockholders of the Corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 3.15. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made only pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less that ninety (90) days nor more than one hundred and twenty (120) days prior to the meeting; provided, however, that in the event that less than one hundred (100) days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. For purposes of this Section 3.15, any adjournment(s) or postponement(s) of the original meeting which do not require a new written notice shall be deemed for purposes of notice to be a continuation of the original meeting and no nominations by a stockholder of persons to be elected directors of the Corporation may be made at any such reconvened meeting unless pursuant to a notice which was timely for the meeting on the date originally schedule. Such stockholder's notice shall set forth: (i) 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) as to the stockholder giving the notice (A) the name and address as they appear on the Corporation's books, of such stockholder, and (B) the class and number of shares of the Corporation which are beneficially owned by such stockholder. Notwithstanding the foregoing, nothing in this Section 3.15 shall be interpreted or construed to require the inclusion of information about any such nominee in any proxy statement distributed by, at the direction of, or on behalf of the Board. 9 (b) The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this Section 3.15, and in such case, the defective nomination shall be disregarded. ARTICLE IV Officers SECTION 4.01 Number. The officers of the Corporation shall be a President, one or more Vice Presidents (the number thereof and their respective titles to be determined by the Board), a Secretary and a Treasurer. SECTION 4.02 Election, Term of Office and Qualifications. The officers of the Corporation, except such officers as may be appointed in accordance with Section 4.03, shall be elected annually by the Board at the first meeting thereof held after the election thereof. Each officer shall hold office until his successor shall have been duly chosen and shall qualify or until his resignation or removal in the manner hereinafter provided. SECTION 4.03 Assistants, Agents and Employees, Etc. In addition to the officers specified in Section 4.01, the Board may appoint other assistants, agents and employees as it may deem necessary or advisable, including one or more Assistant Secretaries, and one or more Assistant Treasurers, each of whom shall hold office for such period, have such authority, and perform such duties as the Board may from time to time determine. The Board may delegate to any officer of the Corporation or any committee of the Board the power to appoint, remove and prescribe the duties of any such assistants, agents or employees. 10 SECTION 4.04 Removal. Any officer, assistant, agent or employee of the Corporation may be removed, with or without cause, at any time: (i) in the case of an officer, assistant, agent or employee appointed by the Board, only by resolution of the Board; and (ii) in the case of an officer, assistant, agent or employee, by any officer of the Corporation or committee of the Board upon whom or which such power of removal may be conferred by the Board. SECTION 4.05 Resignations. Any officer or assistant may resign at any time by giving written notice of his resignation to the Board or the Secretary of the Corporation. Any such resignation shall take effect at the time specified therein, or, if the time be not specified, upon receipt thereof by the Board or the Secretary, as the case may be; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 4.06 Vacancies. A vacancy in any office because of death, resignation, removal, disqualification, or other cause, may be filled for the unexpired portion of the term thereof in the manner prescribed in these By-laws for regular appointments or elections to such office. SECTION 4.07 The President. The President of the Corporation shall be the chief executive officer of the Corporation and shall have, subject to the control of the Board, general and active supervision and management over the business of the Corporation and over its several officers, assistants, agents and employees. SECTION 4.08 The Vice Presidents. Each Vice President shall have such powers and perform such duties as the Board may from time to time prescribe. At the request of the President, or in case of the President's absence or inability to act upon the request of the Board, a Vice President shall perform the duties of the President and when so acting, shall have all the powers of, and be subject to all the restrictions upon, the President. SECTION 4.09 The Secretary. The Secretary shall, if present, record the proceedings of all meetings of the Board, of the stockholders, and of all committees of which a secretary shall not have been appointed in one or more books provided for that purpose; he shall see that all notices are duly given in accordance with these By-laws and as required by law; he shall be custodian of the seal of the Corporation and shall affix and attest the seal to all documents to be executed on behalf of the Corporation under its seal; and, in general, he shall perform all the duties incident to the office of Secretary and such other duties as may from time to time be assigned to him by the Board. 11 SECTION 4.10 The Treasurer. The Treasurer shall have the general care and custody of the funds and securities of the Corporation, and shall deposit all such funds in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board. He shall receive, and give receipts for, moneys due and payable to the Corporation from any source whatsoever. He shall exercise general supervision over expenditures and disbursements made by officers, agents and employees of the Corporation and the preparation of such records and reports in connection therewith as may be necessary or desirable. He shall, in general, perform all other duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Board. SECTION 4.11 Compensation. The compensation of the officers of the Corporation shall be fixed from time to time by the Board. None of such officers shall be prevented from receiving such compensation by reason of the fact that he is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary corporation, in any other capacity and receiving such compensation by reason of the fact that he is also a director of the Corporation. Nothing contained herein shall preclude any officer from serving the Corporation, or any subsidiary corporation, in any other capacity and receiving proper compensation therefor. ARTICLE V Contracts, Checks, Drafts, Bank Accounts, Etc. SECTION 5.01 Execution of Contracts. The Board, except as in these By-laws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances; and unless so authorized by the Board or by these By-laws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. SECTION 5.02 Checks, Drafts, Etc. All checks, drafts or other orders for payment of money, notes or other evidence of indebtedness, issued in the name of or payable to the Corporation, shall be signed or endorsed by such person or persons and in such manner as, from time to time, shall be determined by resolution of the Board. Each such officer, assistant, agent or attorney shall give such bond, if any, as the Board may require. 12 SECTION 5.03 Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select, or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. For the purpose of deposit and for the purpose of collection for the account of the Corporation, the President, any Vice President or the Treasurer (or any other officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation who shall from time to time be determined by the Board) may endorse, assign and deliver checks, drafts and other orders for the payment of money which are payable to the order of the Corporation. SECTION 5.04 General and Special Bank Accounts. The Board may from time to time authorize the opening and keeping of general and special bank accounts with such banks, trust companies or other depositories as the Board may select or as may be selected by any officer or officers, assistant or assistants, agent or agents, or attorney or attorneys of the Corporation to whom such power shall have been delegated by the Board. The Board may make such special rules and regulations with respect to such bank accounts, not inconsistent with the provisions of these By-laws, as it may deem expedient. ARTICLE VI Shares and Their Transfer SECTION 6.01 Certificates for Stock. Every owner of stock of the Corporation shall be entitled to have a certificate or certificates, to be in such form as the Board shall prescribe, certifying the number and class of shares of the stock of the Corporation owned by him. The certificates representing shares of such stock shall be numbered in the order in which they shall be issued and shall be signed in the name of the Corporation by the President or a Vice President, and by the Secretary or an Assistant Secretary or by the Treasurer or an Assistant Treasurer. Any of or all of the signatures on the certificates may be a facsimile. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon, any such certificate, shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the Corporation with the same effect as though the person who signed such certificate, or whose facsimile signature shall have been placed thereupon, were such officer, transfer agent or registrar at the date of issue. A record shall be kept of the respective names of the persons, firms or corporations owning the stock represented by such certificates, the number and class of shares represented by such certificates, respectively, and the respective dates thereof, and in case of cancellation, the respective dates of cancellation. Every certificate surrendered to the Corporation for exchange or transfer shall be canceled, and no new certificate or certificates shall be issued in exchange for any existing certificate until such existing certificate shall have been so canceled, except in cases provided for in Section 6.04. 13 SECTION 6.02 Transfers of Stock. Transfers of shares of stock of the Corporation shall be made only on the books of the Corporation by the registered holder thereof, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary, or with a transfer clerk or a transfer agent appointed as provided in Section 6.03, and upon surrender of the certificate or certificates for such shares properly endorsed and the payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof for all purposes as regards the Corporation. Whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact shall be so expressed in the entry of transfer if, when the certificate or certificates shall be presented to the Corporation for transfer, both the transferor and the transferee request the Corporation to do so. SECTION 6.03 Regulations. The Board may make such rules and regulations as it may deem expedient, not inconsistent with these By-laws, concerning the issue, transfer and registration of certificates for shares of the stock of the Corporation. It may appoint, or authorize any officer or officers to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them. SECTION 6.04 Lost, Stolen, Destroyed, and Mutilated Certificates. In any case of loss, theft, destruction, or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, theft, destruction, or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided, however, that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do. SECTION 6.05 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any other change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. If in any case involving the determination of stockholders for any purpose other than notice of or voting at a meeting of stockholders or expressing consent to corporate action without a meeting the Board shall not fix such a record date, the record date for determining stockholders for such purpose shall be the close of business on the day which the Board shall adopt the resolution relating thereto. A determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of such meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. 14 ARTICLE VII Indemnification SECTION 7.01 Action, Etc. Other Than by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, that he had reasonable cause to believe that his conduct was unlawful. 15 SECTION 7.02 Actions, Etc., by or in the Right of the Corporation. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. SECTION 7.03 Determination of Right of Indemnification. Any indemnification under Section 7.01 or 7.02 (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 7.01 and 7.02. Such determination shall be made (i) by the Board by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by counsel in a written opinion, or (iii) by the stockholders. SECTION 7.04 Indemnification Against Expenses of Successful Party. Notwithstanding the other provisions of this Article, to the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 7.01 or 7.02, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. 16 SECTION 7.05 Prepaid Expenses. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board deems appropriate. SECTION 7.06 Other Rights and Remedies. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any By-laws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. SECTION 7.07 Insurance. Upon resolution passed by the Board, the Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article. SECTION 7.08 Constituent Corporations. For the purposes of this Article, references to "the Corporation" include all constituent corporations absorbed in a consolidation or merger as well as the resulting or surviving corporation, so that any person who is or was a director, officer, employee or agent of such a constituent corporation or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise shall stand in the same position under the provisions of this Article with respect to the resulting or surviving corporation as he would if he had served the resulting or surviving corporation in the same capacity. 17 SECTION 7.09 Other Enterprises, Fines, and Serving at Corporation's Request. For purposes of this Article, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to any employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article. ARTICLE VIII Miscellaneous SECTION 8.01 Seal. The Board shall provide a corporate seal, which shall be in the form of a circle and shall bear the name of the Corporation and words and figures showing that the Corporation was incorporated in the State of Delaware and the year of incorporation. SECTION 8.02 Waiver of Notices. Whenever notice is required to be given by these By-laws or the Certificate of Incorporation or by law, the person entitled to said notice may waive such notice in writing, either before or after the time stated therein, and such waiver shall be deemed equivalent to notice. SECTION 8.03 Amendments. These By-laws, or any of them, may be altered, amended or repealed, and new By-laws may be made, (i) by the Board, by vote of a majority of the number of directors then in office as directors, acting at any meeting of the Board, or (ii) by the stockholders, at any annual meeting of stockholders, without previous notice, or at any special meeting of stockholders, provided that notice of such proposed amendment, modification, repeal or adoption is given in the notice of special meeting. Any By-laws made or altered by the stockholders may be altered or repealed by either the Board or the stockholders. 18 EX-10 4 edcp.txt EXECUTIVE DEFERRED COMPENSATION PLAN Exhibit 10.14 JACK IN THE BOX INC. EXECUTIVE DEFERRED COMPENSATION PLAN Effective January 1, 2003 TABLE OF CONTENTS Page Article I-PURPOSE............................................................1 ARTICLE II-DEFINITIONS.......................................................1 2.1 Account...........................................................1 2.2 Administrative Committee..........................................1 2.3 Beneficiary.......................................................1 2.4 Board.............................................................1 2.5 Change in Control.................................................1 2.6 Code..............................................................2 2.7 Company...........................................................2 2.8 Compensation......................................................3 2.9 Deferral Election.................................................3 2.10 Disability........................................................3 2.11 Discretionary Contribution........................................3 2.12 Effective Date....................................................3 2.13 Elected Deferred Compensation.....................................3 2.14 Employer..........................................................3 2.15 Financial Hardship................................................3 2.16 Hardship Distribution.............................................4 2.17 Matching Contribution.............................................4 2.18 Participant.......................................................4 2.19 Participation Agreement...........................................4 2.20 Plan..............................................................4 2.21 Plan Year.........................................................4 2.22 Scheduled Withdrawal..............................................4 2.23 Small Benefit.....................................................4 2.24 Transfer Contribution.............................................5 2.25 Year of Service...................................................5 ARTICLE III-PARTICIPATION AND DEFERRAL ELECTIONS.............................5 3.1 Eligibility and Participation.....................................5 3.2 Deferral Elections................................................5 3.3 Commencement, Duration and Modification of Deferral Election......6 ARTICLE IV-DEFERRED COMPENSATION ACCOUNTS....................................6 4.1 Accounts..........................................................6 4.2 Crediting of Deferrals............................................6 4.3 Termination Account...............................................6 4.4 Scheduled Withdrawal Accounts.....................................6 4.5 Matching Contribution Account.....................................7 4.6 Discretionary Contribution Account................................7 4.7 Transfer Contribution.............................................7 4.8 Vesting of Accounts...............................................7 4.9 Statement of Accounts.............................................7 ARTICLE V-INVESTMENT AND EARNINGS............................................8 5.1 Plan Investments..................................................8 5.2 Crediting Investment Gains and Losses.............................8 ARTICLE VI-PLAN BENEFITS.....................................................8 6.1 Distribution Options..............................................8 6.2 Commencement of Benefits..........................................9 6.3 Termination Benefits..............................................9 6.4 Death Benefits....................................................9 6.5 Disability Benefits...............................................9 6.6 Change-in-Control Benefits .......................................9 6.7 Scheduled Withdrawal.............................................10 6.8 Hardship Distribution............................................10 6.9 Accelerated Distribution.........................................10 6.10 Small Benefit....................................................11 6.11 Withholding and Payroll Taxes....................................11 6.12 Payment to Guardian..............................................11 ARTICLE VII-BENEFICIARY DESIGNATION.........................................11 7.1 Beneficiary Designation..........................................11 7.2 Changing Beneficiary.............................................11 7.3 No Beneficiary Designation.......................................13 7.4 Effect of Payment................................................13 ARTICLE VIII-ADMINISTRATION.................................................13 8.1 Committee; Duties................................................13 8.2 Agents...........................................................13 8.3 Binding Effect of Decisions......................................14 8.4 Indemnity of Committee...........................................14 8.5 Election of Committee After Change in Control....................14 ARTICLE IX-CLAIMS PROCEDURE.................................................14 9.1 Claim............................................................14 9.2 Denial of Claim..................................................14 9.3 Review of Claim..................................................14 9.4 Final Decision...................................................15 ARTICLE X-AMENDMENT AND TERMINATION OF PLAN.................................15 10.1 Amendment........................................................15 10.2 Company's Right to Terminate.....................................16 ARTICLE XI-MISCELLANEOUS....................................................16 11.1 Unfunded Plan....................................................16 11.2 Unsecured General Creditor.......................................16 11.3 Trust Fund.......................................................16 11.4 Nonassignability.................................................17 11.5 Not a Contract of Employment.....................................17 11.6 Protective Provisions............................................17 11.7 Governing Law....................................................17 11.8 Validity.........................................................17 11.9 Gender...........................................................17 11.10 Notice...........................................................18 11.11 Successors.......................................................18 JACK IN THE BOX INC. EXECUTIVE DEFERRED COMPENSATION PLAN Article I-PURPOSE The purpose of this Executive Deferred Compensation Plan is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain key employees of Employer. It is intended that the Plan will aid in attracting and retaining key employees of exceptional ability by providing them with these benefits. ARTICLE II-DEFINITIONS For the purposes of this Plan, the following terms shall have the meanings indicated, unless the content clearly indicates otherwise: 2.1 Account "Account" means the interest of a Participant in the Plan as represented by the hypothetical bookkeeping entries kept by Employer. A separate Account shall be established for each Participant and as may otherwise be required. 2.2 Administrative Committee "Administrative Committee" means the committee appointed by the Board to administer the Plan pursuant to Article VIII. 2.3 Beneficiary "Beneficiary" means the person, persons or entity (including, without limitation, any trustee) last designated by a Participant to receive the benefits specified hereunder, in the event of the Participant's death. 2.4 Board "Board" means the Board of Directors of the Company. 2.5 Change in Control "Change in Control" of the Company means, and shall be deemed to have occurred upon, the first to occur of any of the following events: (a) Any "Person" (other than those Persons in control of the Company as of the Effective Date, or other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) becomes the "Beneficial Owner," directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the combined voting power of the Company's then outstanding securities; or 1 (b) During any period of two (2) consecutive years after an employee becomes a Plan Participant, individuals who at the beginning of such period constitute the Board (and any new Director, whose election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the Directors then still in office who either were Directors at the beginning of the period or whose election or nomination for election was so approved), cease for any reason to constitute a majority thereof; or (c) The stockholders of the Company approve: (i) A plan of complete liquidation of the Company; or (ii) An agreement for the sale or disposition of all or substantially all of the Company's assets; or (iii) A merger, consolidation, or reorganization of the Company with or involving any other corporation, other than a merger, consolidation, or reorganization that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger, consolidation, or reorganization. However, in no event shall a "Change in Control" be deemed to have occurred, with respect to the Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed "part of a purchasing group" for purposes of the preceding sentence if the Participant is an equity participant in the purchasing company or group except for: (i) Passive ownership of less than two percent (2%) of the stock of the purchasing company; or (ii)Ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the nonemployee continuing Directors. For purposes of this Section, the terms "Person" and "Beneficial Owner" shall have the meanings given those terms in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, and Rule 13d-3 under that Act. 2.6 Code "Code" means the Internal Revenue Code of 1986, as amended. 2.7 Company "Company" means Jack in the Box Inc., a Delaware corporation or any successor to the business thereof. 2 2.8 Compensation "Compensation" means the base salary payable to and bonus earned by a Participant for services performed for the Employer and considered to be wages for purposes of federal income tax withholding. Inclusion of any other forms of compensation is subject to Committee approval. Compensation shall be calculated before reduction for any amounts deferred by the Participant pursuant to the Employer's tax qualified plans which may be maintained under Code Section 401(a) or a plan maintained under Code Section 125, or under this Plan. 2.9 Deferral Election "Deferral Election" means a commitment by a participant to defer a portion of Compensation to this Plan and for which a Participation Agreement has been submitted by the Participant to the Administrative Committee. 2.10 Disability "Disability" means a physical or mental condition that prevents the Participant from satisfactorily performing the Participant's usual duties for Employer. The Administrative Committee shall determine the existence of Disability and may rely on advice from a medical examiner satisfactory to the Administrative Committee in making the determination. 2.11 Discretionary Contribution "Discretionary Contribution" means an Employer contribution credited to a Participant's Account pursuant to Section 4.6 of this Plan. 2.12 Effective Date This Plan shall be effective as of January 1, 2003. 2.12 Elected Deferred Compensation "Elected Deferred Compensation" means the amount of Compensation that a Participant elects to defer pursuant to a Deferral Election. 2.13 Employer "Employer" means the Company and any affiliate or subsidiary entities designated by the Board as participating in this Plan. 2.15 Financial Hardship "Financial Hardship" means an unforeseeable emergency due to an illness or accident of the Participant or Beneficiary, the Participant's or Beneficiary's spouse or the Participant's or Beneficiary's dependant (as defined in Section 152(a) of the Code); loss of the Participant's or Beneficiary's property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant or Beneficiary that would result in severe financial hardship if early withdrawal were not permitted. Financial Hardship will not exist if the financial need can be relieved through reimbursement or compensation from insurance or otherwise; by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship; or by cessation of deferrals under the Plan. 3 2.16 Hardship Distribution "Hardship Distribution" means a distribution pursuant to Section 6.8 of the Plan made on account of the Participant or Beneficiary's Financial Hardship. Such distribution must be limited to the amount reasonably necessary to satisfy the Financial Hardship (which may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the distribution). 2.17 Matching Contribution "Matching Contribution" means an Employer contribution credited to a Participant's Account pursuant to Section 4.5 of this Plan. 2.18 Participant "Participant" means any individual who is participating in this Plan as provided in Article III. 2.19 Participation Agreement "Participation Agreement" means the agreement, whether written or provided through electronic means, to defer Compensation submitted by a Participant to the Administrative Committee or its delegates prior to the commencement of the period in which the Elected Deferred Compensation is to be earned. 2.20 Plan "Plan" means this Jack in the Box Inc. Executive Deferred Compensation Plan as set forth in this document and as the same may be amended from time to time. 2.21 Plan Year "Plan Year" means each calendar year beginning on January 1 and ending on December 31. 2.22 Scheduled Withdrawal "Scheduled Withdrawal" means a distribution to a Participant prior to termination of employment pursuant to Sections 4.4 and 6.7 of this Plan. 2.23 Small Benefit "Small Benefit" means a lump-sum payment pursuant to Section 6.10 of the Plan. 4 2.24 Transfer Contribution "Transfer Contribution" means a Participant's contribution credited to a Participant's Account pursuant to Section 4.7 of the Plan. 2.25 Year of Service "Year of Service" shall have the same meaning as provided in the Company's 401(k) plan, whether or not the Participant is a participant in such plan. ARTICLE III-PARTICIPATION AND DEFERRAL ELECTIONS 3.1 Eligibility and Participation (a) Eligibility. Any select key employee designated by the Employer and approved by the Administrative Committee shall be eligible to participate in the Plan. (b) Participation. An eligible employee may elect to participate in the Plan by submitting a Participation Agreement to the Administrative Committee prior to the beginning of the Plan Year in which the employee is eligible to participate. (c) Part-Year Participation. In the event an employee first becomes eligible to participate in the Plan on other than the first day of a Plan Year, a Participation Agreement may be submitted to the Administrative Committee within 30 days after the Administrative Committee notifies such employee of eligibility to participate in the Plan. The Deferral Election shall be effective only with regard to Compensation earned following submission of the Participation Agreement to the Administrative Committee. 3.2 Deferral Elections A Participant may file with the Administrative Committee a Participation Agreement to defer any or all of the following: (a) Salary Deferrals. A Participant may elect to defer up to fifty percent (50%) of base salary. The amount to be deferred shall be stated as a whole percentage of base salary. (b) Bonus Deferrals. A Participant may elect to defer all (less applicable taxes) or any portion of each bonus to be paid by the Employer. The amount to be deferred shall be stated as a whole percentage of each bonus payment. (c) Changes to Deferral Elections. The Administrative Committee may change the maximum amount of salary and/or bonus that may be deferred by giving written notice to all Participants. No such change may affect a Deferral Election entered into prior to the Administrative Committee's action. 5 3.3 Commencement, Duration and Modification of Deferral Election (a) Commencement. A Deferral Election shall become effective on the first day of the Plan Year immediately following the date a Participation Agreement for such Deferral Election is filed with the Administrative Committee. In the case when an employee first becomes eligible to participate in the Plan on other than the first day of a Plan Year, the Deferral Election will be effective only with regard to compensation earned following a timely submitted Participation Agreement per Section 3.1(c). (b) Duration. A Deferral Election shall remain in effect for all future Plan Years unless revoked or amended in writing or through electronic means by the Participant. Any such revocation or amendment shall become effective as of the first day of the Plan Year immediately following the receipt of the revocation or amendment by the Administrative Committee. (c) Modification. A Deferral Election shall terminate on the date a Participant terminates employment, receives a Hardship Distribution pursuant to Section 6.8 or an Accelerated Distribution pursuant to Section 6.9 of the Plan. A Deferral Election shall also terminate as of December 31 following a demotion during the Plan Year. ARTICLE IV-DEFERRED COMPENSATION ACCOUNTS 4.1 Accounts For recordkeeping purposes only, Employer shall maintain up to five (5) separate Accounts for each Participant. The Accounts shall be known as the Termination Account, Scheduled Withdrawal Accounts, Matching Contribution Account, and Discretionary Contribution Account. 4.2 Crediting of Deferrals Beginning January 1 of each Plan Year, a Participant's Elected Deferred Compensation which consists of deferred base salary shall be credited to the Participant's Accounts as soon as administratively feasible following the date when the corresponding nondeferred portion of the Participant's base salary is paid or would have been paid but for the Deferral Election. Beginning January 1 of each Plan Year, a Participant's Elected Deferred Compensation, which consists of deferred bonus, shall be credited to the Participant's Accounts as of the date of each year on which the bonus is paid or would have been paid but for the Deferral Election. 4.3 Termination Account A Participant may establish a Termination Account by filing a Participation Agreement to defer Compensation into the Termination Account and to receive benefits from such Account following termination of employment. 4.4 Scheduled Withdrawal Accounts A Participant may establish a Scheduled Withdrawal Account by filing a Participation Agreement to defer part or all of Compensation, Matching Contribution, and Discretionary Contributions for a given Plan Year along with earnings on such amounts into the Scheduled Withdrawal Account and by designating a future date on which each such amounts are to be distributed. 4.5 Matching Contribution Account 6 4.5 Matching Contribution Account There shall be credited to each Participant's Matching Contribution Account an amount equal to one hundred percent (100%) of the first three percent (3%) of a Participant's Compensation that is deferred into this Plan for the Plan Year. The amount shall be credited as of the date employee deferrals are credited pursuant to Section 4.2 of the Plan. 4.6 Discretionary Contribution Account The Employer may make contributions in such amount and at such times as recommended by the Administrative Committee and approved by the Compensation Committee of the Board, or as the Board, in its sole discretion, shall determine. Such amount shall be credited to the Participant's Discretionary Contribution Account as of the date designated by the Administrative Committee. 4.7 Transfer Contribution A Participant may make an irrevocable election, in accordance with the procedures promulgated by the Administrative Committee, to transfer all of his accumulated account balance under the Capital Accumulation Plan for Executives (the "CAPE") into this Plan. Any transfer to this Plan from the CAPE shall include the vested and nonvested portions of the Participant's account under the CAPE and such amounts shall be allocated among the Participant's Termination Account, Matching Contribution Account and Discretionary Contribution Account respectively. A Participant who elected to withdraw amounts attributable to a specific deferral commitment prior to termination of employment under the CAPE shall have such sums credited in this Plan to one or more Scheduled Withdrawal Accounts. Amounts transferred from the CAPE to this Plan pursuant to this Section 4.7 may not be transferred from this Plan to the CAPE. 4.8 Vesting of Accounts Each Participant shall be vested in the amounts credited to such Participant's Account as follows: (a) Elected Deferred Compensation. A Participant shall be one hundred percent (100%) vested at all times in his Elected Deferred Compensation and any gains or losses thereon. (b) Matching Contributions. A Participant's Matching Contribution Account shall become vested at the rate of twenty-five percent (25%) for each completed Year of Service; except, a Participant shall become one hundred percent (100%) vested at death or upon a Change in Control. (c) Discretionary Contributions. A Participant's Discretionary Contribution Account shall become vested as determined by the Compensation Committee of the Board, or by the Board. The Participant shall become one hundred percent (100%) vested at death or upon a Change of Control. 4.9 Statement of Accounts From time to time, but not less frequently than annually, each Participant shall be provided with a benefit statement setting forth the balance of the Accounts maintained for the Participant. 7 ARTICLE V-INVESTMENT AND EARNINGS 5.1 Plan Investments A Participant shall complete a portfolio allocation form electing from among a series of hypothetical investment options designated by the Administrative Committee into which the Participant's Elected Deferred Compensation, and all Employer contributions shall be credited. The performance of the Participant's Accounts shall be measured based upon the investment options selected. The Participant's Accounts shall be credited with such hypothetical crediting rates calculated after the investment managers' expenses and any insurance-related or other expenses as designated by the Administrative Committee have been deducted. Investment options may be changed daily by following such procedures as may be determined by the Administrative Committee. A revised or changed investment allocation shall be effective on the first business day following the Participant's request for a change. 5.2 Crediting Investment Gains and Losses Participant Accounts shall be credited daily with investment gains and losses as if such Account(s) were invested in one (1) or more of the Plan's investment options, as selected by the Participant, less administrative charges applied against the particular investment options. ARTICLE VI-PLAN BENEFITS 6.1 Distribution Options (a) Form of Payment. Benefits payable due to termination of employment or the death of the Participant may be made in one of the following forms: (i) Lump Sum. One (1) lump-sum payment. (ii) Installment Payments. Annual installment payments amortized over a period of up to ten (10) years, as elected by the Participant. The first installment payment shall be paid as soon as is administratively feasible after the Participant's date of termination or death. Subsequent installments shall be paid at the beginning of each subsequent Plan Year based on the remaining vested Account balance as of the immediately preceding December 31, as adjusted for gains or losses, and the remaining number of installment payments. Adjustments for investment gains and losses shall continue on unpaid vested Account balances. (iii) If a Participant has made no election, benefit payments shall be paid in annual installments over ten (10) years. (b) Change in Form of Payment. A Participant's election as to the form of distribution upon termination of employment or death shall be irrevocable, except that a Participant may file a new form of payment election which shall supersede his most recent prior election provided the election is made at least six (6) months prior to the date of termination of employment or death. An election filed within the six (6) months preceding termination of employment or death shall be null and void and the next preceding timely election filed by the Participant shall be controlling. 8 6.2 Commencement of Benefits A benefit payment in a single lump sum and the first payment of a series of installment payments shall be paid to the Participant (or Beneficiary, if applicable) as soon as administratively feasible but in no event more than sixty (60) days after the event giving rise to the distribution. 6.3 Termination Benefits Upon termination of employment, Participant shall receive all vested Account balances in the form elected pursuant to Section 6.1 of the Plan, including any balance in one or more Scheduled Withdrawal accounts. 6.4 Death Benefits (a) Pretermination. A Beneficiary shall receive all of the Participant's Account balances in the form elected by the Participant pursuant to Section 6.1 of the Plan, including any balance in one or more Scheduled Withdrawal Accounts. (b) Posttermination. If a Participant dies following the commencement of benefit payments, the Employer shall pay to the Beneficiary any remaining installment payments that would have been paid to the Participant had the Participant survived. If a Participant dies after all vested Account balances have been completely distributed, no death benefit shall be payable to the Beneficiary under the Plan. (c) Investment Direction. The Beneficiary shall succeed to the Participant's right to direct investments pursuant to Section 5.1 of the Plan following the Participant's death. (d) Subsequent Beneficiaries. If a Beneficiary who is receiving payments dies before all payments have been paid, any subsequent Beneficiary (as determined and provided for in Article VII) shall be paid any remaining vested Account balances in a lump sum as soon as practical after the death of the first Beneficiary. 6.5 Disability Benefits Upon a finding that a Participant has suffered a Disability, the Administrative Committee may, in its sole discretion, modify the Participant's current Deferral election or make distributions from the Participant's Account in an amount reasonably necessary to meet the Participant's needs resulting from the Disability. Such distribution shall not exceed the Participant's vested Account balance and shall be paid in a single lump sum. 6.6 Change-in-Control Benefits Upon a Change in Control, a Participant's Account may be distributed according to the Participant's election. The Participant shall elect whether to receive a distribution upon a Change in control and in what form as described in Section 6.1 of the Plan. 9 6.7 Scheduled Withdrawal (a) Commencement and Form of Scheduled Withdrawal. The balance of a Scheduled Withdrawal Account shall be paid in a single lump sum on the date elected by the Participant in the Participation Agreement when the applicable Account was established. In no event shall the payment date be prior to the completion of two (2) Plan Years from the date the applicable Account is established. (b) Change of Payment Date. A Participant's election indicating the date of distribution of a Scheduled Withdrawal Account shall be irrevocable, except that Participant may file a one time new election which shall supersede his most recent prior election provided 1) the election is made no later than twelve (12) months prior to the date the Account would otherwise be payable and 2) the new date of distribution is at least two years after the originally scheduled date of distribution. If a Participant files an election within the twelve (12) months preceding the date of distribution, such election shall be null and void and the next preceding timely filed election by the Participant shall be controlling. (c) Termination of Employment Prior to Distribution of Scheduled Withdrawal Account. If a Participant terminates employment or dies prior to payment of such Participant's Scheduled Withdrawal Account(s), such Account shall be paid pursuant to Section 6.3 or 6.4, as applicable. 6.8 Hardship Distribution Upon finding that a Participant or Beneficiary has suffered a Financial Hardship, the Administrative Committee may, in its sole discretion, make distributions from the Participant's Account prior to the time specified for payment of benefits under the Plan. The Hardship Distribution shall be made ratably from all vested Accounts. The amount of such distribution shall be limited to the amount reasonably necessary to meet the Participant's or Beneficiary's requirements during the Financial Hardship. Applications for a Hardship Distribution and determinations thereon by the Administrative Committee shall be in writing, and a Participant or Beneficiary may be required to furnish written proof of the Financial Hardship, as determined by the Administrative Committee in its sole discretion. Upon receiving a Hardship Distribution, a Participant's Deferral Election shall cease and such Participant shall not participate in the Plan until the first day of the Plan Year following twelve (12) months from the date of the Hardship Distribution. 6.9 Accelerated Distribution Notwithstanding any other provision of the Plan, at any time a Participant shall be entitled to receive, upon written request to the Administrative Committee, a lump-sum distribution equal to ninety percent (90%) of his vested Account balance on the last day of the month immediately preceding the date on which the Administrative Committee receives the written request. The remaining balance of such Account plus any nonvested amounts shall be forfeited by the Participant. Notwithstanding any provision in the Plan to the contrary, a distribution pursuant to this Section 6.9 shall be made as soon as administratively feasible but in no event later than thirty (30) days after the request is received by the Administrative Committee. Such Participant's Deferral Election shall cease at the time the request is filed with the Administrative Committee and such Participant shall not be eligible to make a Deferral Election until the first day of the Plan Year following a period of twelve (12) months from the date of distribution. 10 6.10 Small Benefit Notwithstanding any election made by the Participant, if, on the Participant's date of termination or date of death, his vested Account balance is less than fifty thousand dollars ($50,000), such Account shall be paid to the Participant or Beneficiary in a single lump sum. 6.11 Withholding and Payroll Taxes The Employer shall withhold from Plan payments any taxes required to be withheld from such payments under federal, state or local law. Such taxes shall be withheld from the Participant's nondeferred base salary or bonus to the maximum extent possible with any excess being withheld from the Participant's Elected Deferred Compensation. Each Participant shall bear the ultimate responsibility for payment of all taxes owed under this Plan. 6.12 Payment to Guardian If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of his property, the Administrative Committee may direct payment to the guardian, conservator, legal representative, or person having the care and custody of such minor, incompetent or incapacitated person. The Administrative Committee may require proof of minority, incompetency, incapacity, conservatorship or guardianship as it may deem appropriate prior to distribution. Such distribution shall completely discharge the Administrative Committee from all liability with respect to such benefit. ARTICLE VII-BENEFICIARY DESIGNATION 7.1 Beneficiary Designation Each Participant shall have the right, at any time, to designate one (1) or more persons or entities as Beneficiary (both primary as well as secondary) to whom benefits under this Plan shall be paid in the event of Participant's death prior to complete distribution of the Participant's vested Account balance. Each Beneficiary designation shall be in a written or through electronic means form prescribed by the Administrative Committee and shall be effective only when filed with the Administrative Committee during the Participant's lifetime. A married Participant's spouse shall be entitled to fifty percent (50%) interest in any benefit due the Participant unless such spouse waives the right to receive such benefit by executing a written consent acknowledging the effect of the Beneficiary designation, or it is established that such consent cannot be obtained because the spouse cannot be located. 7.2 Changing Beneficiary Any Beneficiary designation may be changed by an unmarried Participant without the consent of the previously named Beneficiary by the filing of a new Beneficiary designation with the Administrative Committee. 11 A married Participant's Beneficiary designation may be changed by a Participant by the filing a new Beneficiary designation with the Administrative Committee with the consent of the Participant's spouse as provided for in Section 7.1 above. The filing of a new designation shall supersede all designations previously filed. 7.3 No Beneficiary Designation If any Participant fails to designate a Beneficiary in the manner provided above, if the designation is void, or if the Beneficiary dies before the Participant or before complete distribution of the Participant's benefits, the Participant's Beneficiary shall be the person in the first of the following classes in which there is a survivor: (a) The Participant's surviving spouse; (b) The Participant's children in equal shares, except that if any of the children predecease the Participant with surviving issue, then such issue shall take by right of representation; (c) The Participant's estate. 7.4 Effect of Payment Payment to the Beneficiary shall completely discharge the Employer's obligations under this Plan. ARTICLE VIII-ADMINISTRATION 8.1 Committee; Duties This Plan shall be administered by the Administrative Committee, consisting of three (3) members as may be appointed by the Board or, except after a Change in Control, as provided in Section 8.5 below. The Administrative Committee shall have the authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of the Plan and decide or resolve any and all questions, including interpretations of the Plan, as may arise in such administration. A majority vote of the Administrative Committee members in office at the time of the vote shall control any decision. Members of the Administrative Committee may be Participants under this Plan. 8.2 Agents The Administrative Committee may employ agents and delegate to them such administrative duties as it sees fit, and may consult with counsel who may be counsel to the Company. 13 8.3 Binding Effect of Decisions The decision or action of the Administrative Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan. 8.4 Indemnity of Committee The Company shall indemnify and hold harmless the members of the Administrative Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan on account of such person's service on the Administrative Committee, except in the case of gross negligence or willful misconduct. 8.5 Election of Committee After Change in Control After a Change in Control, vacancies on the Administrative Committee shall be filled by majority vote of the remaining Administrative Committee members and Administrative Committee members may be removed only by such a vote. If no Administrative Committee members remain, a new Administrative Committee shall be elected by majority vote of the Participants in the Plan immediately preceding such Change in Control. No amendment shall be made to Article VIII or other Plan provisions regarding Administrative Committee authority with respect to the Plan without prior approval by the Administrative Committee. ARTICLE IX-CLAIMS PROCEDURE 9.1 Claim Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information under the Plan shall present the request in writing to the Administrative Committee, which shall respond in writing within thirty (30) days. 9.2 Denial of Claim If the claim or request is denied, the written notice of denial shall state: (a) The reason for denial, with specific reference to the Plan provisions on which the denial is based. (b) A description of any additional material or information required and an explanation of why it is necessary. (c) An explanation of the Plan's claim review procedure. 9.3 Review of Claim Any person whose claim or request is denied may request review by notice given in writing to the Administrative Committee. Such notice must be received by the Administrative Committee within sixty (60) days following the end of the thirty (30) day review period. The claim or request shall be reviewed by the Administrative Committee who may, but shall not be required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing. 14 9.4 Final Decision The decision on review shall normally be made within sixty (60) days after the claim or request is received by the Administrative Committee. If an extension of time is required for a hearing or other special circumstances, the claimant shall be notified and the time limit shall be one hundred twenty (120) days. The decision shall be in writing and shall state the reasons and the relevant Plan provisions. All decisions on review shall be final and bind all parties concerned. ARTICLE X-AMENDMENT AND TERMINATION OF PLAN 10.1 Amendment (a) The Board may at any time amend the Plan by written instrument subject to subsection (e) below. (b) The Administrative Committee may adopt any technical, clerical, conforming or clarifying amendment or other change, provided: (i) The Administrative Committee deems it necessary or advisable to: (A) Correct any defect, supply any omission or reconcile any inconsistency in order to carry out the intent and purposes of the Plan; (B) Maintain the Plan's status as a "top-hat" plan for purposes of ERISA; or (C)Facilitate the administration of the Plan; (ii) The amendment or change does not, without the consent of the Board, materially increase the cost to the Employer of maintaining the Plan; and (iii) Any formal amendment adopted by the Administrative Committee shall be in writing, signed by a member of the Committee and promptly reported to the Board. (c) To the extent permitted under subsection (e) below, amendments may have an immediate, prospective or retroactive effective date. (d) Amendments do not require the consent of any Participant or Beneficiary. (e) Amendments are subject to the following limitations: (i) Preservation of Account Balance. No amendment shall reduce the amount credited or to be credited to any Account as of the date notice of the amendment is given to Participants. (ii)Changes in Earnings Rate. If the Plan is amended so that a series of investment options is not used to calculate the Participants' investment gains or losses under the Plan, the rate of earnings to be credited to the Participant's Account shall not be less than the monthly equivalent of the average nominal annual yield on three (3) month Treasury bills for the applicable period. 15 10.2 Company's Right to Terminate The Board may at any time partially or completely terminate the Plan if, in its judgment, the tax, accounting or other effects of the continuance of the Plan, or potential payments thereunder would not be in the best interests of Company. (a) Partial Termination. The Board may partially terminate the Plan by instructing the Administrative Committee not to credit any additional Elected Deferred Compensation to the Plan. If such a partial termination occurs, the Plan shall continue to operate and be effective with regard to amounts credited prior to the effective date of such partial termination. (b) Complete Termination. The Board may completely terminate the Plan by instructing the Administrative Committee not to accept any additional Elected Deferred Compensation, and by terminating all ongoing Deferral Elections. If such a complete termination occurs, the Plan shall cease to operate and Employer shall pay out each Account. Payment shall be made in the manner prescribed below, notwithstanding any election made by the Participant. Earnings shall continue to be credited on any unpaid Account balances. Account Balance Payout Period - -------------------------------------------------------------------------------- Less than $50,000 Lump Sum $50,000 but not more than $100,000 3 annual installments $100,000 or more 5 annual installments ================================================================================ ARTICLE XI-MISCELLANEOUS 11.1 Unfunded Plan This plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of "management or highly-compensated employees" within the meaning of Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. 11.2 Unsecured General Creditor Participants and Beneficiaries shall be unsecured general creditors, with no secured or preferential right to any assets of Employer or any other party for payment of benefits under this Plan. Any property held by Employer for the purpose of generating the cash flow for benefit payments shall remain its general, unpledged and unrestricted assets. Employer's obligation under the Plan shall be an unfunded and unsecured promise to pay money in the future. 11.3 Trust Fund At its discretion, the Company may establish one (1) or more trusts, with such trustees as the Board may approve, for the purpose of providing for the payment of benefits owned under the Plan. Although such a trust shall be irrevocable, its assets shall be held for payment to Employer's general creditors in the event of insolvency or bankruptcy. To the extent any benefits provided under the Plan with respect to an Employer's Participants are paid from any such trust, that Employer shall have no further obligation to pay them. If not paid from the trust, such benefits shall remain the obligation solely of that Employer. 16 11.4 Nonassignability Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency. 11.5 Not a Contract of Employment This Plan shall not constitute a contract of employment between Employer and the Participant. Nothing in this Plan shall give a Participant the right to be retained in the service of Employer or to interfere with the right of Employer to discipline or discharge a Participant at any time. 11.6 Protective Provisions A Participant shall cooperate with Employer by furnishing any and all information requested by Employer in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as Employer may deem necessary and taking such other action as may be requested by Employer. 11.7 Governing Law The provisions of this Plan shall be construed and interpreted according to the laws of the State of California, except as preempted by federal law. 11.8 Validity In case any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein. 11.9 Gender The masculine gender shall include the feminine and the singular shall include the plural, except where the context expressly dictates otherwise. 17 11.10 Notice Any notice required or permitted under the Plan shall be sufficient if in writing and sent by first-class mail. Such notice shall be deemed as given as of the date of delivery or, if delivery is made by mail, as of the date that is three (3) business days after the mailing date. Mailed notice to the Administrative Committee shall be directed to the Company's address. Mailed notice to a Participant or Beneficiary shall be directed to the individual's last known address in Employer's records. 11.11 Successors The provisions of this Plan shall bind and inure to the benefit of Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of Company, and successors of any such corporation or other business entity. Jack in the Box Inc. By:/S/LARRY SCHAUF -------------------------- Larry Schauf: Dated:December 6, 2002 -------------------------- EX-10 5 reststock.txt FORM OF RESTRICTED STOCK AWARD Exhibit 10.15 JACK IN THE BOX INC. RESTRICTED STOCK AWARD UNDER THE 2002 STOCK INCENTIVE PLAN THIS AGREEMENT is made as of _____________, 20__ between Jack in the Box Inc., a Delaware corporation (the "Company"), and <> (the "Awardee"). RECITALS The Compensation Committee (the "Committee") of the Board of Directors of the Company which administers the Company's 2002 Stock Incentive Plan (the "Plan"), has granted to the Awardee as of _______________, 20__, this award of Restricted Stock, on the terms and conditions set forth herein. AGREEMENT In consideration of the foregoing and of the mutual covenants set forth herein and other good and valuable consideration, the parties hereto agree as follows: 1. RESTRICTED STOCK AWARD. The Committee hereby grants <> (<>) shares of common stock of the Company, par value $0.01 per share (the "Award") to the Awardee. As of the date of this Award, the Awardee will acquire and the Company will issue, subject to the terms and conditions set forth herein, the number of shares of Common Stock of the Company, par value $0.01 per share ("Common Stock") provided under this Award. As a condition to the issuance of the Award, the Awardee shall execute and deliver to the Company along with this executed Agreement (a) the Joint Escrow Instructions in the form attached to this Agreement and (b) the Assignment Separate from Certificate duly endorsed (with date and number of shares blank) in the form attached to this Agreement. 2. VESTING. Notwithstanding any other provision of the Plan to the contrary, and except as may be provided in the sole and absolute discretion of the Company, or as provided in Section 13 (Terminating Transactions) of this Agreement, no shares of Common Stock issued under this Award shall become vested at any time prior to the Awardee's termination of employment with the Company. Upon the Awardee's termination of employment, that portion of the Award which shall be considered vested as of such termination date, shall be determined in accordance with Section 6 of this Agreement. 3. CONSIDERATION. The Company acknowledges that Awardee has earned the Award Shares in the form of services previously rendered to the Company or a subsidiary pursuant to Delaware Code Section 153. 4. AWARD AS COMPENSATION. No amount attributable to this Award shall be considered as compensation for the purposes of any other Company sponsored plans. 5. CERTIFICATE REGISTRATION. The certificate for the shares of Common Stock underlying this Award shall be registered in the name of the Awardee (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). 6. TERMINATION OF EMPLOYMENT. (a) Termination for Cause. If the Awardee is terminated for cause (as determined by the Company's Board of Directors (the "Board") in its sole discretion) prior to November 8, 2012, then all of the shares of Common Stock underlying this Award will be automatically forfeited by the Awardee concurrently with such termination of employment, unless otherwise determined by the Board in its sole discretion. If the Awardee is terminated for cause prior to November 8, 2012, and unless otherwise determined by the Board in its sole discretion, the Awardee shall not be deemed vested in any portion of this Award, regardless of any vesting percentage which might have applied to such Award on account of this Section 6 for any other reason. If the Awardee is terminated for cause on or after November 8, 2012, upon termination 100% of the award shall vest. (b) Involuntary Termination or Voluntary Termination. If the Awardee ceases to be employed by the Company, its parent or a subsidiary because of Awardee's involuntary termination (other than for cause as described above) or voluntary termination, before the Awardee is eligible to retire under a Company sponsored retirement plan, then that portion of the Award which shall be considered vested on such termination shall be, unless otherwise determined by the Board in its sole discretion, calculated in accordance with the following schedule. Date of Termination Vesting Percentage Prior to November 8, 2005 0% On or after November 8, 2005 15% On or after November 8, 2006 20% On or after November 8, 2007 25% On or after November 8, 2008 30% On or after November 8, 2009 35% On or after November 8, 2010 40% On or after November 8, 2011 45% On or after November 8, 2012 100% Any portion of the Award which is not vested on the date of termination of employment, or determined to be vested by the Board in its sole discretion, shall be forfeited as of the date of termination of employment. It shall be the responsibility of the Awardee to notify the Company of any changes in address. As used in this Agreement, the term "parent" means any present or future corporation which would be a "parent corporation" of the Company as defined in Section 424(e) of the Internal Revenue Code and, "subsidiary" means any present or future corporation which would be a "subsidiary corporation" of the Company as defined in Section 424(f) of the Internal Revenue Code. (c) Retirement. If Awardee is eligible to retire under a Company sponsored retirement plan and ceases to be employed by the Company, its parent or a subsidiary for any reason other than (a) termination for cause, as determined by the Company in its sole discretion, or, (b) the Awardees death or Total and Permanent Disability (as defined below), then this Award shall become vested on such termination date in an amount equal to the greater of (i) such vesting as would have been determined by assuming 30% of the Award vested on November 8, 2005, and thereafter an additional 10% of the shares subject to this Award shall have become vested on each anniversary date of the Award following November 8, 2005 until such time as the Award became 100% vested on the date 10 years after the anniversary of the original grant of this Award, or (ii) provided that as of November 8, 2005, the Awardee is still employed by the Company, and had been continuously employed by the Company since the date this Award was granted, such vesting as would have occurred had 10% of the Award been determined to be vested for each year of service the Awardee provided to the Company, or (iii) in such greater amount as may be determined by the Board in its sole discretion. In no event however shall any portion of this Award be considered vested prior to the Awardee's termination date. It shall be the responsibility of the Awardee to notify the Company of any changes in address. (d) Disability. If Awardee shall suffer Total and Permanent Disability while in the employment of the Company, its parent or a subsidiary, then this Award will become 100% vested on such date the Awardee terminates employment on account of such Total and Permanent Disability. As used in this Agreement "Total and Permanent Disability" is defined as the inability to perform the duties of your occupation, or any occupation for which you are qualified or may reasonably become qualified by education, training or experience, because of an illness or injury unavoidable cause for a period of at least six (6) months, provided the inability is determined or expected to be permanent by a physician selected by the Company. (e) Death. If Awardee dies while in the employment of the Company, its parent or a subsidiary, and the Awardee had not been determined to have suffered Total and Permanent Disability within ninety (90) days of such Awardee's death, then this Award will become 100% vested on the date the Awardee terminates employment on account of death. The Award shall be considered transferred to the person or persons (the "Heir") to whom Awardee's rights under the Award passed by will or by the applicable laws of descent and distribution, as to all shares of Common Stock granted under this Award. It shall be the responsibility of the Heir to notify the Company of any changes in address. 7. COMPANY REACQUISITION RIGHT. In the event that (a) the Awardee's employment terminates for any reason or no reason, with or without cause, or (b) the Awardee, the Awardee's legal representative, or other holder of the shares of Common Stock subject to this Award, attempts to sell, exchange, transfer, pledge, or otherwise dispose of any portion of this Award prior to its distribution from the escrow established in accordance with Section 8 of this Agreement, the Company shall automatically reacquire such shares underlying the applicable portion of this Award, and the Awardee shall not be entitled to any payment therefore (the "Company Reacquisition Right"). 8. ESCROW. To ensure that shares of Common Stock subject to the Company Reacquisition Right will be available for reacquisition, the Awardee agrees to deliver to and deposit with an escrow agent designated by the Company the certificate evidencing the shares of Common Stock subject to the Award, together with an Assignment Separate from Certificate with respect to such certificate duly endorsed in the form attached to this Agreement, to be held by the agent under the terms and conditions of the Joint Escrow Instructions in the form attached to this Agreement (the "Escrow"). The Company shall bear the expenses of the Escrow. As soon as practicable after the expiration of the Company's Reacquisition Right with respect to any shares underlying this Award, the Company shall give to the escrow agent a written notice directing the escrow agent to deliver such shares of Common Stock to the Awardee. As soon as practicable after receipt of such notice, the escrow agent shall deliver to the Awardee the shares of Common Stock specified in such notice, and the Escrow shall terminate with respect to such shares. 9. TAXES AND WITHHOLDING. At the time this Agreement is executed, or at any time as requested by the Company, the Awardee hereby authorizes withholding from any amounts payable to the Awardee, including specifically any payroll check, and otherwise agrees to make adequate provision for, any sums required to satisfy the income taxes, FICA, state disability insurance or other similar payroll and withholding taxes arising from the receipt of shares of Common Stock subject to this Award, including without limitation, obligations arising upon the (a) transfer of shares of Common Stock to the Awardee, (b) the vesting of any shares subject to this Award, or (c) the filing of an election to recognize tax liability. The Company shall have no obligation to deliver the shares or to release any shares from Escrow until the tax withholding obligations of the Company have been satisfied by the Awardee. If, the Company determines that it is required to withhold taxes on account of any present or future tax required as a result of this Award, the Company may also require the Awardee to pay the amount of such tax by a cashier's or certified bank check, or, at the sole discretion of the Company, by either (a) personal check, payable to the order of Jack in the Box Inc., in advance of and as a condition to the delivery of the shares of Common Stock out of the Escrow, or (b) to deduct from the shares of Common Stock to be distributed from the Escrow that number of whole shares of Common Stock having a fair market value equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Company with respect to such distribution. 10. LEGALITY. The Company is not required to issue any shares of Common Stock subject to this Award until all applicable requirements of the Securities and Exchange Commission (the "SEC"), the California Department of Corporations or other regulatory agencies having jurisdiction with respect to such issuance, and any exchanges upon which the Common Stock may be listed, shall have been fully complied with. If the shares of Common Stock subject to this Award are being distributed subject to restrictions or if the rules and interpretations of the SEC so require, such shares may be issued only if Awardee represents and warrants in writing to the Company that the shares are being acquired for investment and not with a view to the distribution thereof, and any certificates issued upon distribution of the shares shall bear appropriate legends setting forth the restrictions on transfer of such shares. Such legends may not be removed until the Company so requests, based on the opinion of the Company's Counsel that the restrictions are no longer applicable. 11. ADJUSTMENTS IN STOCK. Subject to the provisions of the Plan, if the outstanding shares of the Company of the class subject to this Award are increased or decreased, or are changed into or exchanged for a different number or kind of shares or securities as a result of one or more reorganizations, recapitalizations, stock splits, reverse stock splits, stock dividends and the like, appropriate adjustments, to be conclusively determined by the Committee, shall be made in the number and/or type of shares or securities subject to this Award consistent with any and all changes stipulated above, any fractional shares resulting from adjustments will be settled in cash. 12. NONTRANSFERABILITY OF AWARD. This Award is not transferable otherwise than by will or the laws of descent and distribution. This Award shall not be otherwise transferred, assigned, pledged, hypothecated or otherwise disposed of in any way, whether by operation of law or otherwise, and shall not be subject to execution, attachment or similar process. Upon any attempt to transfer this Award otherwise than by will or the laws of descent and distribution or to assign, pledge, hypothecate or otherwise dispose of this Award, or upon the levy of any execution, attachment or similar process upon this Award, this Award shall immediately terminate and become null and void. 13. TERMINATING TRANSACTIONS. Upon the dissolution or liquidation of the Company prior to the shares of Common Stock subject to this Award becoming 100% vested this Award shall terminate. Upon the occurrence of any (i) 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) sale of all or substantially all of the Company's assets to any other person or entity (other than a wholly-owned subsidiary), or (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 Securities Exchange Act of 1934, as amended (collectively a "Terminating Transaction"), this Award shall terminate unless provision be made in writing in connection with such transaction for the assumption of the Award or the substitution for the Award of a new Award covering the shares of Common Stock of a successor employer corporation, or a parent or subsidiary thereof or of the Company, with appropriate adjustments as to the number and kind of shares and prices, in which event this Award shall continue in the manner and under the terms so provided. If this Award shall terminate pursuant to the foregoing sentences, the shares subject to the Award shall be considered 100% vested at such time immediately prior to the consummation of the Terminating Transaction as the Company shall designate. 14. NOTICES. All notices or other communications under this Agreement shall be given in writing and shall be deemed duly given and received on the third full business day following the day of the mailing thereof by registered or certified mail, return receipt requested, or when delivered personally as follows: (a) If to the Company, at its principal executive offices at the time of the giving of such notice, or at such other place as the Company shall have designated by notice as herein provided to each of the Awardees; (b) If to Awardee, at the address as it appears below Awardee's signature to this Agreement, or at such other place as Awardee shall have designated by notice as herein provided to the Company; and (c) If to any other holder, at such holder's last address appearing in the Company's records. 15. PLAN CONTROLS. The Award and all terms and conditions set forth in this Agreement are subject in all respects to the terms and conditions of the Plan as may be amended from time to time, (but no amendment shall adversely affect the Awardee's rights under this Award) and any rules and regulations promulgated by the Committee, which shall be controlling. All constructions, interpretations, rule determinations or other actions taken by the Committee shall be final, binding and conclusive on all interested parties, including the Company and its subsidiaries and all former, present and future employees of the Company or its subsidiaries. 16. RIGHT TO CONTINUED EMPLOYMENT. Nothing in the Plan or in this Agreement shall confer upon the Awardee any right to continue in the employment of the Company or any of its subsidiaries or interfere in any way with any right of the Company to terminate the Awardee's employment at any time. 17. RIGHTS AS A SHAREHOLDER. The Awardee shall have no rights as a stockholder with respect to the shares of Common Stock subject to the Award until the date of the issuance of a certificate for such shares of Common Stock (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such certificate is issued, except as provided in Section 11. Subject to the provisions of this Agreement, the Awardee shall be entitled to all rights and privileges of a stockholder of the Company with respect to shares of Common Stock deposited in the Escrow pursuant to Section 8. 18. ARBITRATION. Any dispute or claim concerning any Award granted (or not granted) pursuant to the Plan and this Agreement and any other disputes or claims relating to or arising out of the Plan and this Agreement shall be fully, finally and exclusively resolved by binding arbitration conducted in San Diego, California, by either (i) the American Arbitration Association in accordance with its rules and procedures, or (ii) by any party mutually agreed upon by the Committee and the claimant. By accepting an Award, the Awardee and the Company waive their respective rights to have any disputes or claims tried by a judge or jury. 19. LAWS APPLICABLE TO CONSTRUCTION. This Agreement shall be deemed to be a contract under the laws of the State of Delaware and for all purposes shall be construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principles of conflicts of law. 20. RECEIPT OF PROSPECTUS. The Awardee hereby acknowledges that he or she has received a copy of the prospectus relating to the Award and the shares covered thereby and the Plan. 21. GENERAL. The Company shall at all times during the term of this Award reserve and keep available such numbers of shares of Common Stock as will be sufficient to satisfy the requirements of this Award, shall pay all fees and expenses necessarily incurred by the Company in connection therewith, and will from time to time use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto. 22. ANNUAL REPORTS. The Company shall during the term of this Award provide to Awardee an annual report regarding the Company. 23. MISCELLANEOUS. (a) This writing constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except by a written agreement signed by Awardee and the Company. Anything in this Agreement to the contrary notwithstanding, any modification or amendment of this Agreement by a written agreement signed by, or binding upon, Awardee shall be valid and binding upon any and all persons or entities who may, at any time, have or claim any rights under or pursuant to this Agreement (including all Awardees hereunder) in respect of the Award granted to the Awardee. (b) No waiver of any breach or default hereunder shall be considered valid unless in writing and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. Anything in this Agreement to the contrary notwithstanding, any waiver, consent or other instrument under or pursuant to this Agreement signed by, or binding upon, Awardee shall be valid and binding upon any and all persons or entities (other than the Company) who may, at any time, have or claim any rights under or pursuant to this Agreement (including all Awardees hereunder) in respect of the Award originally granted to Awardee. (c) Except as otherwise expressly provided herein, this Agreement shall be binding upon and inure to the benefit of the Company, its successors and assigns, and Awardee and his heirs, personal representatives, successors and assigns; provided, however, that nothing contained herein shall be construed as granting Awardee the right to transfer any of his Award except in accordance with this Agreement. (d) If any provision of this Agreement shall be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render invalid or unenforceable any other severable provision of this Agreement, and this Agreement shall be carried out as if any such invalid or unenforceable provision were not contained herein. (e) The section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections. (f) Each party hereto shall cooperate and shall take such further action and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. (g) Whenever the pronouns "he" or "his" are used herein they shall also be deemed to mean "she" or "hers" or "it" or "its" whenever applicable. Words in the singular shall be read and construed as though in the plural and words in the plural shall be read and construed as though in the singular in all cases where they would so apply. (h) This Agreement may be executed in counterparts, all of which taken together shall be deemed one original. IN WITNESS WHEREOF, the Company has caused this Award to be granted on its behalf by its President or one of its Vice Presidents and Awardee has hereunto set his hand on the day and year first above written. Jack in the Box Inc. Awardee By: ------------------- --------------------- Robert J. Nugent Signature --------------------- Name --------------------- Street Address --------------------- City and State --------------------- Social Security No. EX-10 6 reststocktable.txt RESTRICTED STOCK AWARD TABLE Exhibit 10.15a JACK IN THE BOX INC. RESTRICTED STOCK AWARD UNDER THE 2002 STOCK INCENTIVE PLAN SUMMARY AS OF JANUARY 19, 2003 - --------------------- -------------------------------- ------------------------ Awardee Number of Shares Awarded Award Date - --------------------- -------------------------------- ------------------------ - --------------------- -------------------------------- ------------------------ John Hoffner 56,000 November 8, 2002 - --------------------- -------------------------------- ------------------------ Linda Lang 55,000 November 8, 2002 - --------------------- -------------------------------- ------------------------ Larry Schauf 50,000 November 8, 2002 - --------------------- -------------------------------- ------------------------ Carlo Cetti 29,600 November 8, 2002 - --------------------- -------------------------------- ------------------------ David Theno 28,000 November 8, 2002 - --------------------- -------------------------------- ------------------------ EX-99 7 ceocertification.txt CEO CERTIFICATION Exhibit 99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER I, Robert J. Nugnet, Chief Executive Officer of JACK IN THE BOX INC. (the "Registrant"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge: (1) the Quarterly Report on Form 10-Q of the Registrant, to which this certification is attached as an exhibit (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: March 4, 2003 /S/ROBERT J. NUGENT -------------------- Robert J. Nugent Chief Executive Officer EX-99 8 cfocertification.txt CFO CERTIFICATION Exhibit 99.2 CERTIFICATION OF CHIEF FINANCIAL OFFICER I, John F. Hoffner, Chief Financial Officer of JACK IN THE BOX INC. (the "Registrant"), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, based on my knowledge: (1) the Quarterly Report on Form 10-Q of the Registrant, to which this certification is attached as an exhibit (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: March 4, 2003 /S/JOHN F. HOFFNER ------------------- John F. Hoffner Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----