SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
JACK IN THE BOX INC.
(Name of Registrant as Specified in Its Charter)
JACK IN THE BOX INC.
(Name of Person(s) Filing Proxy Statement)
Paying of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
[LOGO] JACK IN THE BOX INC.
January 19, 2001
Dear Stockholder:
This year we are celebrating the 50th anniversary of the first
Jack in the Box restaurant. As we look back, we are proud of our innovations and
accomplishments over the years, but we know it is what we achieve in the future
that will justify your loyalty. You are cordially invited to attend the Annual
Meeting of Stockholders of Jack in the Box Inc. to be held at 2:00 p.m. on
Friday, February 23, 2001, at Copley Symphony Hall, 750 B Street, San Diego,
California.
We hope you will attend in person. If you plan to do so, please indicate in
the space provided on the enclosed proxy. Whether you plan to attend the meeting
or not, we encourage you to read this proxy statement and vote your shares.
Please sign, date and return the enclosed proxy as soon as possible in the
postage-paid envelope provided, or if indicated on your proxy card, vote by
telephone. This will ensure representation of your shares in the event that you
are unable to attend the meeting.
The matters expected to be acted upon at the meeting are described in
detail in the attached Notice of Meeting and Proxy Statement.
The Directors and Officers of the Company look forward to meeting with you.
Sincerely,
JACK W. GOODALL
Jack W. Goodall
Chairman of the Board
<PAGE>
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
--------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on February 23, 2001
The 2001 Annual Meeting of Stockholders of Jack in the Box Inc. will be
held at 2:00 p.m. on Friday, February 23, 2001, at Copley Symphony Hall, 750 B
Street, San Diego, California.
The meeting will be held to vote upon the following proposals:
1. To elect ten directors to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To approve the Performance Bonus Plan;
3. To ratify the appointment of KPMG LLP as independent accountants; and
4. To act upon such other matters as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on December 27, 2000,
will be entitled to vote at the meeting.
By Order of the Board of Directors
LAWRENCE E. SCHAUF
Lawrence E. Schauf
Secretary
San Diego, California
January 19, 2001
<PAGE>
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
------------------
PROXY STATEMENT
------------------
ANNUAL MEETING OF STOCKHOLDERS
February 23, 2001
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies. The Board of Directors of Jack in the Box Inc., a Delaware corporation
(the "Company"), formerly Foodmaker, Inc., is soliciting proxies for use at the
2001 Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be
held at 2:00 p.m. on Friday, February 23, 2001, at Copley Symphony Hall, 750 B
Street, San Diego, California, or any postponements or adjournments thereof.
This Proxy Statement and form of proxy were mailed to stockholders on or about
January 19, 2001.
The Company will pay for the cost of preparing, assembling and mailing the
Notice of Annual Meeting of Stockholders, Proxy Statement and form of proxy and
the solicitation of proxies. D.F. King & Co., Inc. ("D.F. King") has been
engaged to assist in the solicitation of proxies, for which they will be paid a
fee not to exceed $4,500 plus out-of-pocket expenses. In addition to
solicitation by mail, proxies may be solicited personally or by telephone or
other means by D.F. King, as well as by directors, officers or employees of the
Company, who will receive no additional compensation for such services.
VOTING
The close of business on December 27, 2000 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. On that date, there were 38,507,905 shares of Jack in the
Box Inc. common stock, $.01 par value (the "Common Stock"), outstanding,
excluding treasury shares. Company treasury shares will not be voted. You are
entitled to one vote for each share you own on any matter that may be presented
for consideration and action by stockholders.
The presence, in person or by proxy, of the holders of at least a majority
of the total number of shares of Common Stock entitled to vote is necessary for
us to have a quorum at the Annual Meeting. Abstentions and broker non-votes
(i.e., shares held by brokers or nominees that the broker or nominee does not
have discretionary power to vote on a particular matter and as to which
instructions have not been received from the beneficial owners or persons
entitled to vote) are counted for the purpose of determining whether a quorum is
present at the meeting. If there are insufficient votes to constitute a quorum
at the time of the Annual Meeting, the Annual Meeting may be adjourned in order
to solicit additional proxies.
A director will be elected by a plurality of the votes present or
represented by proxy. A majority of the votes present or represented by proxy
will be required to approve the Performance Bonus Plan and to ratify the
appointment of KPMG LLP as independent accountants of the Company for the 2001
fiscal year.
With regard to the election of directors, your vote may be cast in favor or
withheld. Votes that are withheld will be excluded entirely from the vote and
will have no effect. Abstentions may be specified on all proposals other than
the election of directors and will be counted as present for purposes of the
item on which the abstention is voted. Therefore, such abstentions will have the
effect of a negative vote. Broker non-votes are not counted for purposes of
determining whether a proposal has been approved and, therefore, have the effect
of reducing the number of votes required to achieve a majority of the votes cast
for such proposal.
<PAGE>
Your proxy will be voted as you direct in writing or by telephone. If you
give no direction, your proxy will be voted FOR management's nominees for
election as directors and FOR Proposals 2 and 3, unless you otherwise direct in
the proxy. The enclosed proxy gives discretionary authority as to any matters
not specifically referred to therein. See "Other Business". The telephone voting
procedures, available only if you are a stockholder of record, are designed to
authenticate your identity, to allow you to vote your shares and to confirm that
your instructions have been properly recorded. Specific instructions to be
followed if you qualify to vote via telephone are set forth on the enclosed
proxy card. You may revoke your proxy at any time before it is voted at the
Annual Meeting by giving written notice of revocation to the Secretary of the
Company, by filing a duly executed written proxy bearing a later date or, if you
qualify, by a later proxy delivered using the telephone voting procedures. Your
proxy will not be voted if you are present at the Annual Meeting and elect to
vote in person.
PROPOSAL ONE
ELECTION OF DIRECTORS
The ten directors of the Company are elected annually and serve until the
next Annual Meeting and until their successors are elected and qualified.
Mr. Goodall, our Chairman of the Board since 1985, is retiring after having
served the Company in various capacities for almost 38 years. Upon re-election
to the Board, Mr. Nugent will serve as the new Chairman of the Board.
Mr. Williams has been nominated to fill a position on the Board as well. The
nominees for election as directors are set forth below. Should any nominee
become unavailable to serve as a director, your proxy will be voted for such
other person as the Board of Directors of the Company (the "Board") designates.
To the best of our knowledge, all nominees are and will be available to serve.
The Board recommends a vote FOR all nominees. Stockholders' nominations for
election of a director may be made only pursuant to the provisions of the
Company's Bylaws, described below under "Other Business".
The following table provides certain information about each of management's
nominees for director as of January 1, 2001:
Position(s) Director
Name Age with the Company Since
---- ----- ---------------- -----
Michael E. Alpert (4)(5)...... 58 Director 1992
Jay W. Brown (3)(5)........... 55 Director 1997
Paul T. Carter (1)(2)(5)...... 78 Director 1991
Charles W. Duddles............ 60 Executive Vice President, 1988
Chief Financial Officer,
Chief Administrative Officer
and Director
Edward W. Gibbons (4)(5)...... 64 Director 1985
Alice B. Hayes, Ph.D. (2)(5).. 63 Director 1999
Murray H. Hutchison (1)(2).... 62 Director 1998
Robert J. Nugent (3).......... 59 President, Chief Executive 1988
Officer and Director
L. Robert Payne (1)(4)........ 67 Director 1986
Kenneth R. Williams........... 58 Executive Vice President, -
Marketing and Operations
--------------------------
(1) Member of the Audit Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
(4) Member of the Finance Committee.
(5) Member of the Nominating and Governance Committee.
2
<PAGE>
The business experience, principal occupations and employment of the
nominees follows:
Mr. Alpert was a partner in the San Diego office of the law firm of Gibson,
Dunn & Crutcher LLP for more than five years prior to his retirement in August
1992. He is currently Advisory Counsel to Gibson, Dunn & Crutcher LLP. Gibson,
Dunn & Crutcher LLP provides legal services to the Company from time to time.
Mr. Brown is currently a principal with Westgate Group, LLC. From April
1995 to September 1998, Mr. Brown was President and Chief Executive Officer of
Protein Technologies International, Inc., the world's leading supplier of
soy-based proteins to the food and paper processing industries. He was Chairman
and Chief Executive Officer of Continental Baking Company from October 1984 to
July 1995 and President of Van Camp Seafood Company from August 1983 to October
1984. From July 1981 through July 1983, he served as Vice President of Marketing
for the Company. Mr. Brown is a director of Agribrands International, Inc. and
Cardinal Brands, Inc.
Mr. Carter has been an insurance consultant for the Government Division of
Corroon & Black Corporation since February 1987. He retired in February 1987 as
Chairman and Chief Executive Officer of Corroon & Black Corporation,
Southwestern Region and as Director and Senior Vice President of Corroon & Black
Corporation. Mr. Carter is a director of Borrego Springs National Bank.
Mr. Duddles has been Executive Vice President and Chief Administrative
Officer since May 1988. He has been Chief Financial Officer since October 1985.
Mr. Duddles has 21 years of experience with the Company in various finance
positions.
Mr. Gibbons has been a general partner of Gibbons, Goodwin, van Amerongen,
an investment banking firm, for more than five years. Mr. Gibbons is also a
director of Robert Half International, Inc. and Summer Winds Garden Centers,
Inc.
Dr. Hayes has been the President of the University of San Diego since 1995.
From 1989 to 1995, Dr. Hayes served as Executive Vice President and Provost of
Saint Louis University. Previously, she spent 27 years at Loyola University of
Chicago, where she served in various executive positions. Dr. Hayes is also a
director of the Pulitzer Publishing Company, the Old Globe Theatre, Independent
Colleges of Southern California, The San Diego Foundation, Loyola University of
Chicago, and Catholic Charities, Diocese of San Diego.
Mr. Hutchison served 18 years as Chief Executive Officer and Chairman of
International Technology Corp., one of the largest publicly traded environmental
engineering firms in the U.S., until his retirement in 1996. Mr. Hutchison is
the Chairman of the Board of Sunrise Medical, Inc. and of Huntington Hotel Corp.
and serves as a director of Cadiz Inc., Senior Resource Corp. and the Olson
Company.
Mr. Nugent has been President and Chief Executive Officer since April 1996.
The Company has announced that Mr. Nugent will become Chairman of the Board and
Chief Executive Officer effective February 23, 2001, upon his re-election to the
Board of Directors. He was Executive Vice President from February 1985 to April
1996. Mr. Nugent has 21 years of experience with the Company in various
executive and operations positions.
Mr. Payne has been President and Chief Executive Officer of Multi-Ventures,
Inc. since February 1976 and was Chairman of the Board of Grossmont Bank, a
wholly-owned subsidiary of Bancomer, S.A., from February 1974 until October
1995. Multi-Ventures, Inc. is a real estate development and investment company
that is also the managing partner of the San Diego Mission Valley Hilton and the
Red Lion Hanalei Hotel. He was a principal in the Company prior to its
acquisition by its former parent, Ralston Purina Company, in 1968.
Mr. Williams has been Executive Vice President, Marketing and Operations
since May 1996. The Company has announced that Mr. Williams will become
President and Chief Operating Officer effective February 23, 2001, upon
Mr. Nugent's promotion to Chairman of the Board and concurrent with his vacating
the office of the President. He was Senior Vice President from January 1993 to
May 1996. Mr. Williams has 35 years of experience with the Company in various
operations positions.
3
<PAGE>
INFORMATION ABOUT THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES OF THE BOARD
The following information is provided about the Board of Directors and
certain of its committees.
The Audit Committee directs the internal and external audit activities of
the Company as deemed appropriate. All members of the Audit Committee are
independent directors. In June 2000, the Board of Directors adopted an Audit
Committee Charter. The full text of the Audit Committee Charter is set forth in
Exhibit A. The Audit Committee held two meetings in fiscal 2000 and on one
occasion acted by unanimous written consent.
The Compensation Committee reviews compensation policies and recommends
changes when appropriate. The Compensation Committee held one meeting in fiscal
2000.
The Nominating and Governance Committee recommends to the Board nominees
for election as directors and will consider nominees properly submitted by
stockholders (see "Other Business"). The committee also administers the
Company's Corporate Governance Principles and Practices. The Nominating and
Governance Committee held no meetings in fiscal 2000.
In fiscal 2000, the Board of Directors held five meetings and on one
occasion acted by unanimous written consent. Each current director attended more
than 75% of the aggregate number of the general meetings held and the meetings
of committees on which such director served.
Directors who are also officers of the Company or its subsidiaries receive
no additional compensation for their services as directors. As Chairman of the
Board, Mr. Goodall received compensation consisting of a $36,000 annual retainer
and $3,000 for each Board meeting attended in person. Upon Mr. Goodall's
retirement, in recognition of his extensive service and dedication to the
Company, the Board elected to enhance his retirement benefits in the amount of
approximately $80,000 per year. The other independent directors of the Company
receive compensation consisting of an $18,000 annual retainer and $2,000 for
each Board meeting attended in person. All directors are reimbursed for
out-of-pocket and travel expenses. No additional compensation is paid for
actions taken by the Board by written consent or participating in telephonic
meetings. Under the Company's Deferred Compensation Plan for Non-Management
Directors, each independent director may defer any portion or all of such
compensation. Amounts deferred under the plan's equity option are immediately
converted to stock equivalents at the then current market price of the Company's
Common Stock and matched at a 25% rate by the Company. A director's stock
equivalent account is distributed in cash, based upon the ending number of stock
equivalents and the market value of the Company's Common Stock, at the
conclusion of the director's service as a member of the Board. All of the
independent directors have elected to defer their compensation pursuant to this
plan.
Pursuant to the Company's Non-Employee Director Stock Option Plan, as
amended (the "Director Plan"), upon election to the Board, each independent
director also receives a stock option to purchase a certain number of shares of
the Company's Common Stock based on the relationship of each director's
compensation to the fair market value of the stock, but limited to fewer than
10,000 shares. During fiscal 2000, under the Director Plan, each independent
director received a stock option to purchase 5,600 shares of the Company's
Common Stock at the fair market value on the date of grant.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 15, 2000, information with
respect to beneficial ownership of voting securities of the Company by (i) each
person who is known to us to be the beneficial owner of more than 5% of any
class of the Company's voting securities, (ii) each director and nominee for
director of the Company, (iii) each executive officer listed in the Summary
Compensation Table herein and (iv) all directors and executive officers of the
Company as a group. Each of the following stockholders has sole voting and
investment power with respect to shares beneficially owned by such stockholder,
except to the extent that authority is shared with spouses under applicable law
or as otherwise noted.
Number of Shares
of Common Stock Percent of
Name Beneficially Owned(1) Class(1)
--------------------------------------------- ---------------------- -----------
FMR Corp. (2)............................. 4,998,985 13.0%
Franklin Resources, Inc. (3).............. 2,119,873 5.5%
Robert J. Nugent.......................... 818,831 2.1%
Jack W. Goodall........................... 555,563 1.4%
Edward W. Gibbons (4)..................... 420,336 1.1%
Charles W. Duddles........................ 378,133 *
Kenneth R. Williams....................... 376,976 *
Paul L. Schultz........................... 159,840 *
L. Robert Payne........................... 116,740 *
Paul T. Carter............................ 73,050 *
Michael E. Alpert......................... 58,100 *
Jay W. Brown.............................. 45,600 *
Lawrence E. Schauf........................ 33,280 *
Murray H. Hutchison....................... 15,600 *
Alice B. Hayes............................ 7,600 *
All directors and executive
officers as a group (23 persons).......... 3,362,693 8.4%
-------------------------
* Less than one percent
(1) For purposes of this table, a person or group of persons is deemed to have
"beneficial ownership" of any shares as of a given date which such person
has the right to acquire within 60 days after such date. For purposes of
computing the percentage of outstanding shares held by each person or group
of persons named above on a given date, any security which such person or
persons has the right to acquire within 60 days after such date is deemed
to be outstanding, but is not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person. Messrs. Nugent,
Goodall, Gibbons, Duddles, Williams, Schultz, Payne, Carter, Alpert, Brown,
Schauf, Hutchison and Dr. Hayes have the right to acquire through the
exercise of stock options within 60 days of the above date, 274,265,
295,170, 55,600, 145,440, 187,320, 119,495, 69,100, 62,350, 55,600, 35,600,
29,780, 15,600 and 5,600, respectively, of the shares reflected above as
beneficially owned.
(2) Fidelity Management & Research Company, Fidelity Management Trust Company
and Fidelity International Limited, subsidiaries of FMR Corp., exercised,
as of December 15, 2000, investment discretion with respect to 3,841,805,
951,760 and 205,420 shares, respectively, and sole voting power with
respect to the 951,760 and 205,420 shares. The address of Fidelity
Management & Research Company and Fidelity Management Trust Company is 82
Devonshire Street, Boston, Massachusetts 02109. The address of Fidelity
International Limited is Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda.
(3) According to its Schedule 13F filing, Franklin Advisors, Inc. and Franklin
Management, Inc., subsidiaries of Franklin Resources, Inc., exercised, as
of September 30, 2000, shared investment discretion with respect to
1,859,800 and 260,073 shares, respectively, and sole voting power with
respect to the 1,859,800 shares. The address of Franklin Resources, Inc. is
777 Mariners Island Boulevard, 6th Floor, San Mateo, California 94404.
(4) Includes 50,000 shares owned by Mr. Gibbons' wife.
5
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the annual and
long-term compensation of the Company's chief executive officer and the other
four most highly compensated executive officers of the Company for services in
all capacities to the Company and its subsidiaries during the fiscal years
indicated. Bonus amounts were accrued during the year and paid shortly
thereafter.
<TABLE>
<CAPTION>
Long-Term Compensation
----------------------- All Other
Annual Compensation Restricted Securities Compen-
Name and -------------------------------- Stock Underlying sation
Principal Position(s) Year Salary($) Bonus($) Other($) Awards($)(1) Options(#) ($)(2)
---------------------------------- -------- --------- -------- -------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert J. Nugent............... 2000 627,692 615,648 19,810 0 48,100 26,307
President, Chief Executive 1999 588,462 600,000 21,747 300,000 43,200 24,185
Officer and Director 1998 525,000 550,000 12,000 0 52,000 22,685
Kenneth R. Williams............ 2000 424,616 334,541 16,755 0 28,900 24,215
Executive Vice President, 1999 397,539 320,000 12,791 160,000 26,700 22,414
Marketing and Operations 1998 364,000 302,400 12,000 0 33,000 20,671
Charles W. Duddles............. 2000 363,077 284,205 12,000 0 25,300 20,858
Executive Vice President, 1999 348,885 280,000 12,231 140,000 23,600 19,875
Chief Financial Officer, 1998 321,500 266,400 12,000 0 30,000 18,501
Chief Administrative
Officer and Director
Lawrence E. Schauf............. 2000 286,154 223,027 32,328 0 20,200 16,715
Executive Vice President, 1999 278,462 224,000 31,813 112,000 18,800 16,130
Secretary 1998 257,500 212,000 19,034 0 23,700 15,429
Paul L. Schultz................ 2000 332,615 228,351 35,739 0 18,400 18,269
Senior Vice President, 1999 300,346 222,600 15,397 111,300 13,600 15,886
Operations and Franchising 1998 270,000 182,000 12,000 0 17,000 14,886
<FN>
-------------------------
(1) Restricted stock awards represent the value as of their grant date on
October 4, 1999 of restricted stock units granted under the 1992 Employee
Stock Incentive Plan to the named executive officer with respect to
services rendered in fiscal 1999. The restricted stock units will vest 100%
on October 4, 2002 and are subject to forfeiture under certain
circumstances. The actual number of restricted stock units awarded was
determined by dividing the indicated award value by the closing stock price
on October 4, 1999 ($23.875). When vested, Messrs. Nugent, Williams,
Duddles, Schauf and Schultz will receive, respectively, 12,566, 6,702,
5,864, 4,692 and 4,662 shares of the Company's Common Stock.
(2) All other compensation represents the Company's matching contributions to
the Deferred Compensation Plan and approximately $1,400 annually for each
person for premiums on term life insurance paid by the Company for the
benefit of the named executive officer. The Company has no interest in such
insurance policies.
</FN>
</TABLE>
Stock Option Grants in Fiscal 2000
Set forth below is information with respect to options granted to the named
executive officers in the Summary Compensation Table during the 2000 fiscal
year.
<TABLE>
<CAPTION>
% of Total Potential Realizable Value
Number of Options/SARs at Assumed Annual Rates of
Securities Granted to Exercise Stock Price Appreciation
Underlying Employees or Base for Option Term
Options/SARs in Fiscal Price Expiration --------------------------
Name Granted (#) Year ($/Share) Date 5% 10%
--------------------------- ------------- ------------ ------------ ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Nugent........ 48,100 7.3% 23.25 12/14/2009 $711,117 $1,806,661
Kenneth R. Williams..... 28,900 4.4% 23.25 12/14/2009 427,262 1,085,499
Charles W. Duddles...... 25,300 3.8% 23.25 12/14/2009 374,039 950,281
Lawrence E. Schauf...... 20,200 3.1% 23.25 12/14/2009 298,640 758,723
Paul L. Schultz......... 18,400 2.8% 23.25 12/14/2009 272,028 691,114
</TABLE>
6
<PAGE>
Option Exercises in Fiscal 2000 and Fiscal Year-End Values
Set forth below is information with respect to options exercised by the
named executive officers in the Summary Compensation Table during the 2000
fiscal year, and the number and value of unexercised stock options held by the
named executive officers at the end of the fiscal year.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs Held In-the-Money Options/SARs
Shares at Fiscal Year-End at Fiscal Year-End(1)
Acquired on Value ----------------------------- --------------------------
Name Exercise(#) Realized Exercisable Unexercisable Exercisable Unexercisable
--------------------------- ------------- ------------ --------------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Robert J. Nugent........ 39,795 $707,953 264,645 113,860 $3,247,335 $74,116
Kenneth R. Williams..... 15,000 353,100 191,540 70,060 2,470,731 47,035
Charles W. Duddles...... 31,340 686,362 150,380 62,180 1,925,767 42,759
Lawrence E. Schauf...... 0 0 25,740 49,460 138,932 33,780
Paul L. Schultz......... 5,205 118,223 115,815 39,480 1,453,831 24,230
<FN>
-------------------------
(1) Based on the difference between the exercise price of the options and the
closing price of the Company's Common Stock on the last trading day prior
to the Company's fiscal year ended October 1, 2000 ($21.438). At such date,
Messrs. Nugent, Williams, Duddles, Schauf and Schultz had unexercisable
options which were not in-the-money for 82,660, 50,260, 44,180, 35,240 and
29,280 shares, respectively.
</FN>
</TABLE>
Report of the Board of Directors and Compensation Committee on Executive
Compensation
The Board of Directors has the primary responsibility for determining
executive compensation. In addition, there is also a Compensation Committee
composed of not fewer than two non-employee directors. Executive compensation is
designed to (a) provide compensation opportunities that will attract, motivate
and retain highly qualified managers and executives, and (b) provide salary and
other rewards that are closely linked to Company, team, and individual
performance goals focused on achievement of annual business plans and longer
term incentives linked to increases in stockholder value. The Chief Executive
Officer recommends the compensation to be paid to executive officers of the
Company other than himself; final determination of the amount of compensation
rests with the non-employee members of the Board of Directors. Board members who
are also executive officers do not participate in discussions about, nor do they
vote on, recommendations concerning their respective compensation.
The Company's executive officer compensation program is comprised of base
salary, bonus opportunity, long-term incentive compensation in the form of stock
options, and other benefits such as health insurance. It is our objective to
maintain base salaries that are at approximately the mid-range of compensation
paid to senior executives with comparable qualifications, experience and
responsibilities at other companies engaged in the same or similar businesses.
The Performance Bonus Plan provides for a bonus as a percent of base salary
which is dependent upon the Company's performance level achieved and the job
classification of the individual. The purpose of the Performance Bonus Plan is
to encourage the loyalty of certain key employees, executives and officers of
the Company and its affiliates, by providing incentives which are aligned with
Company performance. The performance bonuses for the named executives for fiscal
2000 were paid in accordance with the established plan and are reflected in the
Summary Compensation Table.
The 1992 Employee Stock Incentive Plan forms the basis for the Company's
long-term incentive plan for officers and key managers. The purpose of the Plan
is to furnish an incentive to key employees, executives and officers of the
Company, its subsidiaries and affiliates to increase profits and provide an
opportunity to earn a bonus based on the financial performance of the Company.
During fiscal 2000, options to purchase the following amounts of the Company's
Common Stock were granted to Messrs. Nugent, Williams, Duddles, Schauf and
Schultz: 48,100, 28,900, 25,300, 20,200 and 18,400 shares, respectively. All
options were granted at 100% of the market price of the Company's Common Stock
on the date of grant ($23.25) and become exercisable 20% annually beginning on
November 12, 2001. Options serve to directly align the interests of executives,
including the Chief Executive Officer, with your interests since such executives
will not realize a benefit unless and until the market price of the Company's
Common Stock increases.
7
<PAGE>
Mr. Nugent became the Chief Executive Officer of the Company on April 1,
1996. His base salary as of December 27, 1999, was increased approximately 6%
over his previous base salary in order to maintain his salary at approximately
the mid-range of competitive industry practice. An annual cash incentive award
is payable to Mr. Nugent if the Company achieves or exceeds specified earnings
goals. Mr. Nugent's bonus for fiscal 2000 represents approximately 97% of the
potential cash bonus payable under the Company's Performance Bonus Plan. In
fiscal 2000, approximately 50% of Mr. Nugent's compensation was incentive pay.
This report is submitted by the Board of Directors and the Compensation
Committee.
Board of Directors Compensation Committee
------------------------------------------------ -----------------------
Michael E. Alpert Jack W. Goodall Paul T. Carter
Jay W. Brown Alice B. Hayes Alice B. Hayes
Paul T. Carter Murray H. Hutchison Murray H. Hutchison
Charles W. Duddles Robert J. Nugent
Edward W. Gibbons L. Robert Payne
This report will not be deemed to be incorporated by reference in any
filing by the Company under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this report by reference.
Compensation Committee Interlocks and Insider Participation
The members of the Compensation Committee are currently Paul T. Carter,
Alice B. Hayes and Murray H. Hutchison. Jay W. Brown, who was Vice President of
the Company from July 1981 to July 1983, was a committee member until February
18, 2000 and participated in the deliberations of the committee prior to that
time.
Pension Plan Table
Retirement Plan. The Company maintains a retirement plan (the "Retirement
Plan"), which was adopted effective October 21, 1985 and restated effective
January 1, 1989. The Retirement Plan is a defined benefit plan covering eligible
regular employees employed in an administrative, clerical, or restaurant hourly
capacity who have completed 1,000 hours of service and reached age 21. The
Retirement Plan provides that a participant retiring at age 65 will receive an
annual retirement benefit equal in amount to one percent of Final Average Pay
multiplied by Benefit Service plus .4% of Final Average Pay in excess of Covered
Compensation multiplied by Benefit Service, subject to grandfathered minimum
benefit accruals under the previous plan as of December 31, 1988. The .4%
portion of the calculation is limited to a maximum of 35 years of service. The
Employee Retirement Income Security Act of 1974 ("ERISA") and various tax laws
may cause a reduction in the annual retirement benefit payable under the
Retirement Plan. (The preceding capitalized terms are defined in the Retirement
Plan, a copy of which is filed as an exhibit to the Company's Annual Report on
Form 10-K.)
Although normal retirement is age 65, benefits may begin as early as age 55
if service requirements defined in the Retirement Plan are met. Benefits payable
are reduced for early commencement.
Supplemental Retirement Plan. The Company established a non-qualified
supplemental retirement plan for selected executives effective April 2, 1990,
known as the Supplemental Executive Retirement Plan. The plan provides for a
percentage of replacement income based on Service and Final Average Compensation
(each as defined in the plan). The target replacement income from all Company
funded sources based upon a maximum of 20 full years of service is 60% of Final
Average Compensation. For those executives whose service lengths are less than
20 years, the target percentage of 60% is reduced by applying a factor
determined by dividing the number of full years of actual service by 20. The
plan is unfunded and represents an unsecured claim against the Company.
8
<PAGE>
Easy$aver Plus Plan. Effective October 21, 1985, we adopted the Jack in the
Box Inc. Savings Investment Plan, currently named the Jack in the Box Inc.
Easy$aver Plus Plan (the "E$P"), which includes a cash-or-deferred arrangement
under Section 401(k) of the Internal Revenue Code. Eligible employees who have
completed at least one year of service with a minimum of 1,000 hours of work and
reached age 21 qualify for the E$P. Participants in the E$P may defer up to 12%
of their pay on a pre-tax basis. In addition, we contribute on a participant's
behalf an amount equal to 50% of the first 4% of compensation that is deferred
by the participant.
Deferred Compensation Plan. Since January 1, 1989, all executive officers
and certain other members of management of the Company have been excluded from
participation in the E$P. Effective April 2, 1990, we created for these
individuals a non-qualified deferred compensation plan known as the Capital
Accumulation Plan for Executives. Participants of the plan may defer up to 15%
of base and/or bonus pay. We contribute on a participant's behalf 100% of the
first 3% of compensation that is deferred by the participant. Benefits paid
under this plan also include an interest component based on Moody's Average
Corporate Bond Yield Index. The plan is unfunded and participants' accounts
represent unsecured claims against the Company.
Summary of Retirement and Other Deferred Benefits. The following table
shows estimated annual benefits payable to participants as a straight life
annuity. The benefits are derived from some or all of the following Company
funded sources: Retirement Plan, Company contributions to the E$P, Company
contributions to the Deferred Compensation Plan, Supplemental Retirement Plan
and Social Security (50% of primary insurance amount).
Estimated Annual Benefits Based on
Years of Service
------------------------------------------------
Average Annual Earnings 10 15 20
-------------------------- --------- --------- ---------
$ 100,000............... $ 30,000 $ 45,000 $ 60,000
200,000............... 60,000 90,000 120,000
300,000............... 90,000 135,000 180,000
400,000............... 120,000 180,000 240,000
500,000............... 150,000 225,000 300,000
600,000............... 180,000 270,000 360,000
800,000............... 240,000 360,000 480,000
1,000,000............... 300,000 450,000 600,000
1,200,000............... 360,000 540,000 720,000
1,300,000............... 390,000 585,000 780,000
At October 1, 2000, the number of years of service under the retirement
plans for Messrs. Nugent, Williams, Duddles, Schauf and Schultz was 21, 30, 27,
4 and 25, respectively; and the amount of eligible compensation for each of
these individuals approximates the amounts reflected as salary and bonus in the
Summary Compensation Table.
Severance Arrangements
We have entered into compensation and benefits assurance agreements with
certain of our senior executives, including Messrs. Nugent, Williams, Duddles,
Schauf and Schultz, for the payment of certain compensation and the provision
for certain benefits in the event of termination of employment following a
change in control of the Company. The agreements had an initial term expiring on
September 29, 1998 but are automatically extended for additional two-year terms
thereafter unless at least six-months written notice is given to the contrary.
If there is a change of control (as defined in the agreements) during the term
of any such agreement, the executive will be entitled to receive the payments
and benefits specified in the event that his employment is terminated within 24
months thereafter: (i) involuntarily, without cause or (ii) voluntarily for
"good reason" (as defined in the agreements). Amounts payable under each
agreement include all amounts earned by the employee prior to the date of
termination and a multiple of the employee's annual base salary, bonus and the
Company's matching contributions to the Deferred Compensation Plan. In the case
of Messrs. Nugent, Williams, Duddles, Schauf and Schultz, the applicable
multiples are 2.5, 2.5, 2.5, 2.5 and 1.5, respectively. In addition, the
agreements provide for the continuation of health insurance benefits for a
period of up to 18 months following termination and certain incidental benefits.
9
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each
executive officer, director and beneficial owner of more than 10% of the
Company's Common Stock is required to file certain forms with the Securities and
Exchange Commission. A report of beneficial ownership of the Company's Common
Stock on Form 3 is due at the time such person becomes subject to the reporting
requirements and a report on Form 4 or Form 5 must be filed to reflect changes
thereafter. Based on written statements and copies of forms provided to us by
persons subject to the reporting requirements, we believe that all such reports
required to be filed by such persons during fiscal 2000 were filed on a timely
basis.
PERFORMANCE GRAPH
The following graph compares the cumulative return to holders of the
Company's Common Stock at September 30th of each year to the yearly weighted
cumulative return of a Restaurant Peer Group Index and to the Standard & Poor's
("S&P") 500 Index for the same period. The comparison assumes $100 was invested
on September 30, 1995 in the Company's Common Stock and in each of the
comparison groups, and assumes reinvestment of dividends. The Company paid no
dividends during the periods.
[A LINE GRAPH CHART WAS INCLUDED HEREIN WHICH
GRAPHICALLY REFLECTED THE FOLLOWING DATA]
1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ----
Jack in the Box Inc.......... $100 $174 $327 $273 $434 $373
Restaurant Peer Group (1).... 100 107 126 112 111 97
S&P 500 Index................ 100 120 169 184 236 267
-------------------------
(1) The Restaurant Peer Group Index is comprised of the following companies:
Applebee's International, Inc.; Bob Evans Farms, Inc.; Brinker
International, Inc.; CBRL Group, Inc.; CKE Restaurants, Inc.; Luby's, Inc.;
Papa John's International, Inc.; Ruby Tuesday, Inc.; Ryan's Family
Steakhouse, Inc.; Shoney's, Inc.; Sonic Corp. and Vicorp Restaurants, Inc.
10
<PAGE>
Report of the Audit Committee
The Audit Committee of the Jack in the Box Inc. Board of Directors (the
"Committee") is composed of three independent directors. The Audit Committee
reviews our financial reporting process on behalf of the Board of Directors. In
fulfilling its responsibilities, the Audit Committee has reviewed and discussed
the audited financial statements contained in the 2000 Annual Report on Form
10-K with management and the independent auditors. Management is responsible for
the financial statements and the reporting process, including the system of
internal controls. The independent auditors are responsible for performing an
independent audit of the Company's financial statements and expressing an
opinion on the conformity of those audited financial statements with accounting
principles generally accepted in the United States.
The Committee discussed with the independent auditors, the matters required
to be discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as amended. In addition, the Committee has discussed with the
independent auditors, the auditors' independence from the Company and its
management, including the matters in the written disclosures required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees. The Audit Committee has considered whether the independent auditors
provision of information technology services to the Company is compatible with
the auditor's independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the Board approved
including the audited financial statements in the Company's Annual Report on
Form 10-K for the year ended October 1, 2000, filed with the Securities and
Exchange Commission.
Paul T. Carter, Chair
L. Robert Payne
Murray H. Hutchison
PROPOSAL TWO
APPROVAL OF THE
PERFORMANCE BONUS PLAN
The Compensation Committee of the Board of Directors has adopted, subject
to approval by the stockholders, the Jack in the Box Performance Bonus Plan (the
"Plan").
The Plan is intended to qualify as a performance-based compensation plan
for purposes of Section 162(m) of the Internal Revenue Code (the "Code").
Section 162(m) of the Code places a limit on the amount of compensation that may
be deducted by the Company in any tax year with respect to the Company's five
most highly paid executives. However, certain performance-based compensation
that has been approved by stockholders is not subject to this deduction limit.
The Plan is designed to permit the Company to take appropriate tax deductions
for performance-based compensation.
The following description summarizes the principle features of the Plan but
is qualified in its entirety by reference to the full text of the Plan set forth
as Exhibit B to this Proxy Statement.
Purpose And Eligibility
The purpose of the Plan is to encourage the loyalty of certain key
employees, executives and officers of the Company and its affiliates, by
providing incentives which are aligned with Company performance and qualify as
performance-based compensation within the meaning of Section 162(m) of the
Internal Revenue Code. The Plan is an unfunded, performance-based plan designed
to tie compensation directly to the Company's objectives. Participants in the
Plan are officers, executives and other key employees of the Company and its
subsidiaries and affiliates. As of December 15, 2000, 79 employees, including
all executive officers, were eligible to participate in the Plan during fiscal
2001.
11
<PAGE>
Administration
The Plan will be administered by the Compensation Committee of the Board of
Directors. The Compensation Committee consists solely of non-employee directors
who are outside directors within the meaning of Section 162(m) of the Code. The
Board of Directors may modify, amend, suspend or terminate the Plan under the
terms of its provisions.
Performance Goals
At the beginning of each fiscal year, the Compensation Committee will
establish (i) specific performance goals for participants in the Plan for a
performance period of one fiscal year and (ii) the objective formula or standard
to be followed in calculating any bonus payable under the Plan. The performance
goals may be based on one or more of the following business criteria: earnings
before income taxes; earnings before interest, income taxes, depreciation and
amortization; net earnings; earnings per share; return on equity, or any
combination thereof. The performance goals must be established while the
performance relative to the goal remains substantially uncertain within the
meaning of Section 162(m). The Compensation Committee established the
performance goals for fiscal 2001 based on earnings before income taxes. The
Committee believes that the specific target constitutes confidential business
information, the disclosure of which could adversely effect the Company. Because
of (i) the similarities between the bonus plan in effect for fiscal 2000 and the
Plan, and (ii) the choice of earnings before income taxes as the applicable
business criterion for both years, the Company believes that if the Plan had
been in effect for fiscal 2000 the participants would have received the same
bonuses they received under the bonus plan actually in effect for fiscal 2000.
Awards
Awards may be paid in cash or Restricted Stock Units ("RSUs") which are
issued under the terms of the 1992 Employee Stock Incentive Plan, or by both
means. When all or any portion of an award is issued in RSUs, it will be
converted to a number of units equivalent to the number of shares of the
Company's Common Stock which could have been purchased at fair market value on
the distribution date. There is a $3 million dollar individual award limit in
any fiscal year.
Since awards under the Plan will be based on performance objectives
established with respect to each fiscal year, the amount of awards to be paid in
the future to any of the executive officers cannot be determined at this time
since the performance period has not yet been completed. Actual awards will
depend upon actual performance measured against the pre-established performance
objectives.
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to enable the Plan to comply with the requirements
of Section 162(m). If the stockholders fail to approve the Plan at the Annual
Meeting, the Plan will not qualify as performance-based for purposes of Section
162(m) of the Code. In the event that the Plan is not approved by the Company's
stockholders, any bonuses in amounts which when combined with other non-exempt
compensation exceed the limit set forth in Section 162(m) of the Code, for
fiscal year 2001, for the five most highly paid executives, would be
discretionary, and such amounts would not be deductible under Section 162(m),
but bonuses, otherwise earned and payable to participants in the Plan, would be
paid under the terms and provisions of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
PROPOSAL THREE
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT ACCOUNTANTS
The Board has appointed KPMG LLP as independent accountants to audit the
consolidated financial statements of the Company for the fiscal year ending
September 30, 2001, subject to ratification by stockholders. KPMG LLP has acted
as independent accountants for the Company since 1986. A representative of the
firm will be present at the Annual Meeting and will have the opportunity to make
a statement and respond to appropriate questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
12
<PAGE>
OTHER BUSINESS
We are not aware of any other matters to come before the Annual Meeting. If
any matter not mentioned herein is properly brought before the Annual Meeting,
the persons named in the enclosed proxy will have discretionary authority to
vote all proxies with respect thereto in accordance with their best judgment.
Pursuant to the Company's Bylaws, in order for a stockholder to present
business at the Annual Meeting or to make nominations for election of a
director, such matters must be filed in writing with the Secretary of the
Company in a timely manner. To be timely, a stockholder's notice must be
delivered to the principal executive offices of the Company not less than ninety
(90) nor more than one hundred and twenty (120) days prior to the meeting as
originally scheduled; provided, however, that in the event that less than 100
days' notice or prior public disclosure of the date of the meeting is made to
stockholders, notice by the stockholder must be received not later than the
close of business on the 10th day following the day on which notice of the date
of the Annual Meeting was mailed or public disclosure was made. Such notice
shall set forth, as to the stockholder giving notice, the stockholder's name and
address as they appear on the Company's books, and the class and number of
shares of the Company which are beneficially owned by such stockholder.
Additionally, (i) with respect to a stockholder's notice regarding a nominee for
director, such notice shall set forth, as to each person whom the stockholder
proposes to nominate for election or re-election as a director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors pursuant to the Securities Exchange Act of
1934, as amended (including such person's written consent to being named in the
Proxy Statement as a nominee and to serving as a director if elected); and (ii)
with respect to a notice relating to a matter the stockholder proposes to bring
before the Annual Meeting, a brief description of the business desired to be
brought before the meeting and any material interest of the stockholder in such
business.
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Any stockholder of the Company wishing to have a proposal considered for
inclusion in the Company's proxy solicitation materials to be distributed in
connection with the Company's Annual Meeting of Stockholders to be held in the
year 2002 must set forth such proposal in writing and file it with the Secretary
of the Company on or before September 21, 2001. Any such proposals must comply
in all respects with the rules and regulations of the Securities and Exchange
Commission.
2000 ANNUAL REPORT AND FORM 10-K
A copy of the 2000 Annual Report to Stockholders accompanies this Proxy
Statement. The Company's Annual Report on Form 10-K for the year ended October
1, 2000, as filed with the Securities and Exchange Commission, contains detailed
information concerning the Company and its operations which is not included in
the 2000 Annual Report. A COPY OF THE 2000 FORM 10-K WILL BE FURNISHED TO YOU
WITHOUT CHARGE UPON REQUEST IN WRITING TO: Jack in the Box Inc., Treasury
Department, 9330 Balboa Avenue, San Diego, California 92123-1516.
By Order of the Board of Directors,
LAWRENCE E. SCHAUF
Lawrence E. Schauf
Secretary
13
<PAGE>
Exhibit A
JACK IN THE BOX INC.
AUDIT COMMITTEE CHARTER
A. STATEMENT OF POLICY
There shall be a committee of the Board of Directors of Jack in the Box Inc.
("the Company") to be known as the Audit Committee. The Audit Committee is
designated by and reports to the Board of Directors. The Audit Committee's
purpose is to assist the Board of Directors in fulfilling its responsibility
to the shareholders, potential shareholders and investment community by
reviewing the financial information that will be published, the system of
internal controls established by management and the Board of Directors and
the internal and external audit processes. It is the Board of Director's
principal agent in assuring the independence and objectivity of the
Company's independent public accountants, the Internal Audit Department, the
integrity of management, the appropriateness of accounting policies and the
adequacy of the disclosure to shareholders.
B. ORGANIZATION
The Audit Committee shall consist of at least three members and be comprised
solely of directors, each of whom is independent of the management of the
Company and is free of any relationship that, in the opinion of the Board of
Directors, would interfere with his or her exercise of independent judgment
as a committee member. For purposes hereof, "independent" shall mean a
director who meets the New York Stock Exchange definition of "independence,"
as determined by the Board. One member of the Audit Committee shall be
designated as the Chairman and will be responsible for coordinating the
overall activities of the Audit Committee.
Each member of the Company's Audit Committee must be financially literate
and one member of the Audit Committee shall have accounting or related
financial management expertise, both as provided in the Board's judgment.
C. AUTHORITY
The Audit Committee is granted the authority to investigate any activity of
the Company and its subsidiaries, and all employees are directed to
cooperate as requested by members of the Audit Committee. The Audit
Committee is empowered to retain persons having special competence as
necessary to assist the Audit Committee in fulfilling its responsibility.
D. RESPONSIBILITIES
In carrying out its responsibilities, the Board of Directors believes the
policies and procedures of the Audit Committee shall remain flexible, in
order to best react to changing conditions and to ensure to the directors
and shareholders that the corporate accounting and reporting practices of
the Company are in accordance with all requirements and are of the highest
quality. The Audit Committee shall have general responsibility for
surveillance of internal controls and accounting and audit activities of the
Company.
In carrying out these responsibilities, the Audit Committee will:
o Review and recommend to the Board of Directors the selection and retention
of independent auditors to audit the financial statements of the Company
and its divisions and subsidiaries, or the termination of such independent
auditors.
o Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit for the current year and the
audit procedures to be utilized, and at the conclusion thereof, review
such audit including any comments or recommendations of the independent
auditors. The Audit Committee will also review the timing and approve the
estimated cost of the annual audit.
A-1
<PAGE>
o Review the written statement from the outside auditor of the Company
concerning any relationships between the auditor and the Company or any
other relationships that may adversely affect the independence of the
auditor and assess the independence of the outside auditor as required
under Independent Standard Boards Standard No. 1.
o Review with the independent auditors, the Company's internal auditors, and
financial and accounting personnel the adequacy and effectiveness of the
accounting and financial controls of the Company, and make or review any
recommendations for the improvement of such internal control procedures or
particular areas where new or more detailed controls or procedures are
desirable. Particular emphasis will be given to the adequacy of such
internal controls to expose payments, transactions or procedures that
might be deemed illegal or otherwise improper.
o Review the internal audit function of the Company including the
independence of the function, the ability of the function to raise issues
to the appropriate level of authority, the proposed audit plans for the
coming year, and the coordination of such plans with the independent
auditors.
o Review recommendations and findings of the internal auditors to assure
that appropriate actions are taken by management.
o Review the financial statements contained in the Company's annual and
quarterly financial statements with management and the independent
auditors, including an analysis of the Company's independent auditor's
judgment as to the accuracy of financial information, adequacy of
disclosures and quality of the Company's accounting principles.
o Review with management and the independent auditors the results of any
significant matters identified as a result of the independent auditors'
interim review procedures prior to the filing of each Form 10Q or as soon
thereafter as possible. Audit Committee Chair may perform this on behalf
of the Audit Committee.
o Review and approve significant changes in the accounting policies of the
Company and accounting and financial reporting rule changes that may have
a significant impact on the Company's financial reports.
o Review material pending legal proceedings involving the Company and other
contingent liabilities.
o Review the adequacy of the Audit Committee Charter on an annual basis.
o Conduct or authorize an appropriate review of any related party
transactions deemed significant by the Committee and review potential
conflict of interest situations where appropriate.
o Ensure that the Company has the appropriate systems and processes in place
to be sure that 1) the Company is in compliance with all applicable laws
and regulations and 2) to prevent and detect any potential violations.
o Submit the minutes of all meetings of the Audit Committee to, or review
the matters discussed at each committee meeting with, the Board of
Directors.
o Conduct or authorize an investigation of any matter brought to its
attention within the scope of its duties, with the power to retain outside
counsel for this purpose if, in its judgment, that is appropriate.
o Report to the Board of Directors the results of its review and make such
recommendations, as it may deem appropriate.
E. MEETINGS
The Audit Committee shall meet as often as may be deemed necessary or
appropriate in its judgment, generally two times each year, either in person
or telephonically. The Audit Committee shall meet in executive sessions with
the independent auditors and Internal Auditor at least annually. The Audit
Committee shall report to the full Board of Directors with respect to its
meetings. The majority of the members of the Audit Committee shall
constitute a quorum.
A-2
<PAGE>
Exhibit B
JACK IN THE BOX
PERFORMANCE BONUS PLAN
A. PURPOSE
The purpose of the Jack in the Box Performance Bonus Plan (The "Plan") is to
encourage the future loyalty of certain key employees, executives and
officers by providing annual bonus incentives which are aligned with Company
performance and qualify as performance-based compensation within the meaning
of Section 162(m) of the Internal Revenue Code.
B. EFFECTIVE DATE
This Plan shall be effective as of October 2, 2000. The Plan will be
effective for each subsequent fiscal year unless modified or terminated.
C. ELIGIBILITY
To become a Participant in the Plan, an employee must meet the
qualifications of sub-paragraphs 1, 2, 3 and 4 below, as well as any other
eligibility requirements set forth in the Plan.
1. The employee must be an active employee of the Company or its affiliates
for six (6) or more consecutive full accounting periods during the
fiscal year.
2. The employee must be in a Director position or above for at least four
(4) full accounting periods during the fiscal year.
3. The employee must not be eligible to participate in any other
incentive/bonus plan offered by the Company or its affiliates.
4. The employee must have a PPAT performance rating of "S" or better on
their most recent performance appraisal as of the time any distribution
is scheduled to be made under the Plan. However, if no PPAT performance
rating has been completed within one year of the time any distribution
is scheduled to be made under the Plan, the employee's immediate
supervisor has the discretion to determine whether the employee's
performance would be an "S" or better and merits a bonus award.
D. ADMINISTRATION
The Plan shall be administered by a Committee consisting of at least two
members of the Board of Directors of the Company who are "outside directors"
within the meaning of Section 162(m) (the "Committee"). The Committee shall
establish and administer performance goals and determine the time and the
form and manner in which awards may be made. The Committee shall have the
power and authority at any time to adopt, modify or eliminate eligibility
and other rules and regulations for the administration of the Plan.
E. BONUS DETERMINATION
Performance goals are established annually by the Committee consistent with
the requirements of Section 162(m). The Committee shall select one or more
criteria from among the following business criteria: earnings before income
taxes; earnings before interest, income taxes, depreciation and
amortization; net earnings; earnings per share or return on equity. The
Committee shall establish both (i) objective performance goals based on the
foregoing criteria and (ii) the formula to be followed in calculating any
bonus payable with respect thereto, within ninety (90) days of the beginning
of each fiscal year of the Company (or such shorter time period as may be
required under Section 162(m) and in any event while the achievement of
performance goals remains substantially uncertain within the meaning of
Section 162(m). At the end of the fiscal year and prior to any payment under
the Plan, the Committee must certify in writing that a specific performance
goal was attained. Each Participant may receive an award only for the
specific performance goal attained and approved by the Committee.
B-1
<PAGE>
Participants may be eligible to receive a lump sum cash award, and a
Restricted Stock Unit ("RSU") award as allowed by the 1992 Employee Stock
Incentive Plan (the "1992 Plan"), based on a specified percentage of salary
which is determined by the accomplishment of corporate goals, as established
annually by the Committee. The terms of the RSUs shall be subject to the
terms of the 1992 Plan and RSU Award Agreement.
F. MAXIMUM INDIVIDUAL BONUS
Notwithstanding any other provision of the Plan, no Participant shall
receive any award or combination of awards under the Plan for any fiscal
year in excess of $3 million.
G. AWARD DISTRIBUTION
It is anticipated that Participants may receive a lump sum cash
distribution, if any is to be made, no later than January 5th following the
end of the fiscal year for which the award is intended. No Participant has a
vested right to any lump sum cash distribution under this Plan and no cash
bonus award will be considered earned until it is actually distributed to
the Participant.
Subject to the provisions of the 1992 Plan, or except as otherwise
determined by the Committee or the Board, any RSU award will vest three
years from the last day of the fiscal year for which the RSU award is
granted. The RSU award will be converted to and distributed as shares of
Jack in the Box Common Stock as soon as practicable after the RSU award has
vested. Any compensation provided in the form of RSUs will not be included
in pension earnings for any Company retirement plan.
H. LESS THAN FULL YEAR PARTICIPATION
Subject to the provisions of Sections I., J., and K., an employee who
becomes a Participant in accordance with Section C. for a portion of the
fiscal year, will receive a pro-rata award based on a fraction, the
numerator of which is the number of full accounting periods during the
fiscal year the employee was a Participant, and the denominator of which is
thirteen (13).
I. PROMOTIONS
Subject to the eligibility requirements in Section C.:
1. If an employee is promoted into a position covered by this Plan during
the fiscal year and is eligible to become a Participant, the Participant
may receive a pro-rata award as provided in Section H., using the
Participant's annualized base salary on the last day of the fiscal year.
2. If a Participant is promoted to another position covered by this Plan
during the fiscal year, any bonus award will be computed using the
percentage applicable to the position level in which the Participant is
classified on the last day of the fiscal year, using the Participant's
annualized base salary on the last day of the fiscal year.
J. DEMOTIONS
Subject to the eligibility requirements in Section C.:
1. If a Participant is demoted during the fiscal year to a position not
covered by this Plan, the Participant may receive a pro-rata award as
provided in Section H., using the Participant's annualized base salary
immediately prior to the effective date of the demotion.
2. If a Participant is demoted to another position covered by this Plan
during the fiscal year, any bonus award will be pro-rated using the
percentage applicable to each position level of the Participant during
the fiscal year, using the Participant's annualized base salary in
effect for the last day worked in each position level.
B-2
<PAGE>
K. TERMINATION OF A PARTICIPANT
1. In the event of termination during the fiscal year and the Participant
is eligible to retire under a Company sponsored retirement plan, or due
to death or total and permanent disability (as defined in the Company's
Long Term Disability Plan), the Committee will, for an otherwise
qualified Participant who meets the requirements of Section C. 3. and
4., allot a pro-rata award as provided in Section H. Determination of
any award will be made at the conclusion of the fiscal year.
2. In all other cases, a Participant whose employment terminates
voluntarily or involuntarily prior to the end of the fiscal year, will
not be eligible to receive an award. If termination occurs after the end
of the fiscal year, but before distribution of the cash portion of the
award or the granting of the RSU award, the Committee reserves the right
in its absolute discretion to determine if any cash distribution or RSU
award will be made. With respect to RSU awards under the 1992 Plan,
additional termination provisions will be as set forth in the RSU Award
Agreement.
L. PLAN REVISION
The Board of Directors or the Committee thereof, upon determining that the
purpose and intent of the Plan is not being fulfilled, may terminate, alter,
suspend or amend the Plan at any time as deemed necessary to further the
best interests of the Company and such actions may be effective for any
fiscal year and with respect to any distributions which have not been made.
Amendments during the fiscal year will be effective immediately and
retroactively unless otherwise stated. Notwithstanding the above, no
amendment may be effective without Board of Directors and/or shareholder
approval if such approval is required in order to comply with Section
162(m).
M. EMPLOYMENT DURATION/EMPLOYMENT RELATIONSHIP
This Plan does not, and the policies and practices of Jack in the Box Inc.
or its affiliates in administering this Plan will not, constitute a contract
or other agreement concerning the duration of any Participant's employment
with Jack in the Box Inc. or its affiliates. The employment relationship of
each Participant is "at will" and may be terminated at any time by Jack in
the Box Inc. or its affiliates or by the Participant with or without cause.
A Participant who accepts any RSU award under the 1992 Plan or any cash
distribution is agreeing that the Participant's employment is "at will".
N. SECTION 162(m) CONDITIONS; BIFURCATION OF PLAN
It is the intent of the Company that the Plan and the awards paid under the
Plan to Participants who are or may become persons whose compensation is
subject to Section 162(m), satisfy any applicable requirements of Section
162(m). Any provision, application or interpretation of the Plan
inconsistent with this intent shall be disregarded. The provisions of the
Plan may be bifurcated by the Board or the Committee at any time so that
certain provisions of the Plan, or any award, required in order to satisfy
the requirements of Section 162(m) are only applicable to Participants whose
compensation is subject to Section 162(m).
B-3
<PAGE>
Proxy with telephone voting instructions - side one
----------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JACK IN THE BOX INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 23, 2001 AT 2:00 P.M.
COPLEY SYMPHONY HALL, 750 B STREET, SAN DIEGO, CALIFORNIA.
The undersigned hereby appoints Robert J. Nugent, Charles W. Duddles and
Lawrence E. Schauf and each of them, acting by a majority or by one of them
if only one is acting, as lawful proxies, with full power of substitution,
for and in the name of the undersigned, to vote on behalf of the
undersigned, with all the powers the undersigned would possess if
personally present at the Annual Meeting of Stockholders of Jack in the Box
Inc., a Delaware corporation, on February 23, 2001, or any postponements or
adjournments thereof. The above named proxies are instructed to vote all
the undersigned's shares of stock on the proposals set forth in the Notice
of Annual Meeting and Proxy Statement as specified on the other side hereof
and are authorized in their discretion to vote upon such other business as
may properly come before the meeting or any postponements or adjournments
thereof. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted "FOR" all nominees listed and "FOR" Proposals 2
and 3. The Board of Directors recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
JACK IN THE BOX INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 23, 2001 AT 2:00 P.M.
COPLEY SYMPHONY HALL
750 B STREET
SAN DIEGO, CALIFORNIA
<PAGE>
Proxy with telephone voting instructions - side two----------------------------
The Board of Directors recommends a vote FOR Please mark your |X|
all nominees listed and Proposals 2 and 3 votes as indicated
in this example.
-----------------------------------------------------------------------------
WITHHOLD
FOR ALL ALL
1. Election of Directors |_| |_|
Nominees:
01 Michael E. Alpert 06 Alice B. Hayes
02 Jay W. Brown 07 Murray H. Hutchison
03 Paul T. Carter 08 Robert J. Nugent
04 Charles W. Duddles 09 L. Robert Payne
05 Edward W. Gibbons 10 Kenneth R. Williams
(Instruction: To withhold authority to vote
for any individual nominee write that
nominee's name below.)
-------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the Performance |_| |_| |_|
Bonus Plan.
FOR AGAINST ABSTAIN
3. Ratification of appointment |_| |_| |_|
of KPMG LLP as independent
accountants.
4. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come
before the meeting.
YES NO
I plan to attend the meeting. |_| |_|
*** IF YOU WISH TO VOTE BY TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW ***
[NAME, ADDRESS & SHARE INFORMATION]
Signature(s)__________________________________ Dated: ________________, 2001
Stockholder(s), please sign above exactly as name appears hereon; in the case of
joint holders, all should sign. Fiduciaries should add their full title to their
signature. Corporations should sign in full corporate name by an authorized
officer. Partnerships should sign in partnership name by an authorized person.
-------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
VOTE BY TELEPHONE
QUICK *** EASY *** IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
You will be asked to enter the Control Number located in the box in the lower
right hand corner of this form.
-------------------------------------------------------------------------------
OPTION #1: To vote as the Board of Directors recommends on ALL proposals,
press 1.
-------------------------------------------------------------------------------
Your vote will be confirmed and cast as you directed. END OF CALL.
-------------------------------------------------------------------------------
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
-------------------------------------------------------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9; To WITHHOLD FOR AN INDIVIDUAL nominee, press 0 and listen
to the instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
Proposal 3: To vote FOR, press 1, AGAINST, press 9, ABSTAIN, press 0.
Your vote will be confirmed and cast as you directed. END OF CALL.
-------------------------------------------------------------------------------
If you vote by telephone, there is no need for you to mail back your proxy.
-------------------------------------------------------------------------------
THANK YOU FOR VOTING
Call *** Toll Free *** On a Touch Tone Telephone
1-800-840-1208 - ANYTIME [Reserved for Control
There is NO CHARGE to you for this call Number Box]
<PAGE>
Proxy without telephone voting instructions - side one
----------------------------------------------------------------------------
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
JACK IN THE BOX INC.
FOR ANNUAL MEETING OF STOCKHOLDERS ON FEBRUARY 23, 2001 AT 2:00 P.M.
COPLEY SYMPHONY HALL, 750 B STREET, SAN DIEGO, CALIFORNIA
The undersigned hereby appoints Robert J. Nugent, Charles W. Duddles and
Lawrence E. Schauf and each of them, acting by a majority or by one of them
if only one is acting, as lawful proxies, with full power of substitution,
for and in the name of the undersigned, to vote on behalf of the
undersigned, with all the powers the undersigned would possess if
personally present at the Annual Meeting of Stockholders of Jack in the Box
Inc., a Delaware corporation, on February 23, 2001, or any postponements or
adjournments thereof. The above named proxies are instructed to vote all
the undersigned's shares of stock on the proposals set forth in the Notice
of Annual Meeting and Proxy Statement as specified on the other side hereof
and are authorized in their discretion to vote upon such other business as
may properly come before the meeting or any postponements or adjournments
thereof. This proxy when properly executed will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made,
this proxy will be voted "FOR" all nominees listed and "FOR" Proposals 2
and 3. The Board of Directors recommends a vote FOR the above proposals.
(Continued, and to be marked, dated and signed, on the other side)
--------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
JACK IN THE BOX INC.
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 23, 2001 AT 2:00 P.M.
COPLEY SYMPHONY HALL
750 B STREET
SAN DIEGO, CALIFORNIA
<PAGE>
Proxy without telephone voting instructions - side two-------------------------
The Board of Directors recommends a vote FOR Please mark your |X|
all nominees listed and Proposals 2 and 3. votes as indicated
in this example.
--------------------------------------------------------------------------------
FOR ALL
EXCEPT
WITHHOLD (noted
FOR ALL ALL below)
1. Election of Directors |_| |_| |_|
Nominees:
01 Michael E. Alpert 06 Alice B. Hayes
02 Jay W. Brown 07 Murray H. Hutchison
03 Paul T. Carter 08 Robert J. Nugent
04 Charles W. Duddles 09 L. Robert Payne
05 Edward W. Gibbons 10 Kenneth R. Williams
(Instruction: To withhold authority to vote
for any individual nominee mark the "FOR ALL
EXCEPT" box above and write that nominee's
name below.)
--------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the |_| |_| |_|
Performance Bonus Plan.
FOR AGAINST ABSTAIN
3. Ratification of |_| |_| |_|
appointment of KPMG LLP as
independent accountants.
4. In their discretion,
the Proxies are authorized
to vote upon such other
business as may properly
come before the meeting.
YES NO
I plan to attend the meeting. |_| |_|
[NAME, ADDRESS & SHARE INFORMATION]
Signature(s)_____________________________ Dated: _______________________, 2001
Stockholder(s), please sign above exactly as name appears hereon; in the case of
joint holders, all should sign. Fiduciaries should add their full title to their
signature. Corporations should sign in full corporate name by an authorized
-------------------------------------------------------------------------------
/ FOLD AND DETACH HERE /
<PAGE>
Proxy Easy $aver Plus Plan - side one------------------------------------------
Please fold and detach at perforation before mailing
-----------------------------------------------------------------------------
The Board of Directors of Jack in the Box Inc. recommends
a vote FOR all nominees listed and Proposals 2 and 3.
-----------------------------------------------------------------------------
Please vote by filling the appropriate boxes below.
FOR ALL
EXCEPT
WITHHOLD (noted
FOR ALL ALL at left)
1. Election of Directors |_| |_| |_|
Nominees:
01 Michael E. Alpert 06 Alice B. Hayes
02 Jay W. Brown 07 Murray H. Hutchison
03 Paul T. Carter 08 Robert J. Nugent
04 Charles W. Duddles 09 L. Robert Payne
05 Edward W. Gibbons 10 Kenneth R. Williams
(Instruction: To withhold authority to vote for
any individual nominee mark the "FOR ALL EXCEPT"
box above and write that nominee's name below.
------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve the Performance Bonus Plan. |_| |_| |_|
FOR AGAINST ABSTAIN
3. Ratification of appointment of KPMG |_| |_| |_|
LLP as independent accountants.
4. In their discretion, the Proxies are
authorized to vote upon such other
business as may properly come before
the meeting.
Please note: If this Voting Instruction Form is signed, but no direction is
given on Proposal #1, Mellon Bank, N.A. will vote "FOR" all nominees listed, or
if no direction is given on Proposals #2 or #3, Mellon Bank, N.A. will vote
"FOR" those Proposals.
(Continued and to be dated and signed on the other side)
<PAGE>
Proxy Easy $aver Plus Plan - side two------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE This voting instruction is requested by Mellon Bank, N.A.
in conjunction with a proxy solicitation by the Board of Directors of
Jack in the Box Inc.
Please read the enclosed Proxy Statement and the Annual Report to
Stockholders for more information.
CONFIDENTIAL VOTING INSTRUCTION FORM
To: Mellon Bank, N.A.
as Trustee of the Jack in the Box Inc. Easy$aver Plus Plan
Please fold and detach at perforation before mailing
-------------------------------------------------------------------------------
The undersigned hereby instructs Mellon Bank, N.A., as Trustee of the Jack in
the Box Inc. Easy$aver Plus Plan, to vote in person or by proxy at the Annual
Meeting of the Stockholders of Jack in the Box Inc., to be held on February 23,
2001, and at any postponements or adjournments thereof, all shares of Common
Stock of Jack in the Box Inc., for which the undersigned shall be entitled to
instruct, in the manner specified on the other side hereof.
Mellon Bank, N.A. will vote the shares represented by this Voting Instruction
Form if it is properly completed, signed, and received by Mellon Bank, N.A.
before 5:00 p.m. EST on February 15, 2001 at P.O. Box 9116, Hingham, MA 02043.
Please note that if this Voting Instruction Form is not properly completed and
signed, or it is not received by Mellon Bank, N.A., as indicated above, Mellon
Bank, N.A. will not vote any shares represented by such Voting Instruction Form.
Mellon Bank, N.A. makes no recommendation regarding any voting instruction. Any
Voting Instruction Form, if properly completed, signed, and received by Mellon
Bank, N.A. in a timely manner will supersede any previously received Voting
Instruction Form. All voting instructions received by Mellon Bank, N.A. will be
kept confidential.
Dated:_____________________, 2001
__________________________________
Signature
<PAGE>
BALLOT JACK IN THE BOX INC. BALLOT
Annual Meeting of Stockholders, February 23, 2001
The undersigned votes________________________________(______________) shares of
stock, with respect to the following:
1. Election of Directors:
Michael E. Alpert, Jay W. Brown, Paul T. Carter, Charles W. Duddles,
Edward W. Gibbons, Alice B. Hayes, Murray H. Hutchison, Robert J. Nugent,
L. Robert Payne and Kenneth R. Williams.
|_| FOR all nominees listed.
|_| WITHHOLD AUTHORITY to vote for all nominees listed.
|_| FOR all nominees listed except______________________________________
2. Approve the Performance Bonus Plan. |_| FOR |_| AGAINST |_| ABSTAIN
3. Ratification of appointment of KPMG LLP |_| FOR |_| AGAINST |_| ABSTAIN
as independent accountants.
_______________________________________________________
Stockholder's signature (|_| check box if you are voting shares held in
Easy$aver Plus Plan)
INSTRUCTION: If ballot is cast by proxy, print stockholder name above or, if
multiple stockholders, print "Proxies Filed" above.
_______________________________________________________
Proxy signature (if ballot is cast by proxy)
