DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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þ Filed by
the registrant |
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¨ Filed by a party other
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Check the appropriate box: |
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Preliminary Proxy Statement |
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14A-6(E)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
JACK IN THE BOX INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
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Payment of filing fee (check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11 |
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(1) Title of each class of securities to
which transaction applies: |
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(2) Aggregate number of securities to
which transaction applies: |
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(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):
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(4) Proposed maximum aggregate value of
transaction: |
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(5) Total fee paid:
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Fee paid previously with preliminary materials. |
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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. |
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration
Statement No.: |
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JACK IN THE BOX INC. |
January 9, 2015
Dear Fellow
Stockholder:
We invite you to attend the Jack in the Box Inc. 2015 Annual Meeting of Stockholders. The meeting will be held on Friday,
February 13, 2015, at 8:30 a.m. Pacific Standard Time at the offices of Jack in the Box Inc., 9330 Balboa Avenue, San Diego, CA 92123. In the following pages, you will find the Notice of Annual Meeting of Stockholders as well as a Proxy
Statement describing the business to be conducted at the meeting. We have also enclosed a copy of our Annual Report on Form 10-K for the fiscal year ended September 28, 2014, for your information.
To assure that your shares are represented at the meeting, please mark your choices on the enclosed proxy card, sign and date the card, and return
it promptly in the postage-paid envelope provided. We also offer stockholders the opportunity to vote their shares over the Internet or by telephone. Please see the Proxy Statement and the enclosed proxy card for details about voting. If you
hold your shares through an account with a broker, bank, or other financial institution, please follow the instructions you receive from them to vote your shares. If you are able to attend the meeting and wish to vote your shares in person, you may
do so at any time before the proxy is voted at the meeting.
Sincerely,
Leonard A. Comma
Chairman of the Board and Chief Executive Officer
Important notice regarding the availability of proxy materials
for the Annual Meeting of Stockholders to be held on February 13, 2015
The Jack in the Box Inc. Proxy Statement and Annual Report on Form 10-K for the
fiscal year ended September 28, 2014, are available electronically at
www.jackinthebox.com/proxy
TABLE OF CONTENTS
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held February 13, 2015
The 2015
Annual Meeting of Stockholders of Jack in the Box Inc. will be held on Friday, February 13, 2015, at 8:30 a.m. Pacific Standard Time, at the offices of Jack in the Box Inc., 9330 Balboa Avenue, San Diego, CA 92123 for the following
purposes:
1. |
To elect the eight directors specified in this Proxy Statement to serve until the next Annual Meeting of Stockholders and until their respective successors are elected and qualified; |
2. |
To ratify the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending September 27, 2015; |
3. |
To provide an advisory vote regarding the compensation of our named executive officers for the fiscal year ended September 28, 2014, as set forth in the Proxy Statement; and |
4. |
To consider such other business as may properly come before the meeting and any adjournments or postponements thereof. |
These matters are more fully described in the attached Proxy Statement, which is made a part of this notice.
Our Board of Directors recommends a vote FOR proposals 1 through 3. You are entitled to vote at the 2015 Annual Meeting of Stockholders (the
Annual Meeting) only if you were a Jack in the Box stockholder as of the close of business on December 16, 2014, the record date for the Annual Meeting. A complete list of stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder, for any purpose relating to the Annual Meeting, at the Annual Meeting, and for a period of ten days prior to the Annual Meeting, during regular business hours at our principal offices located at 9330
Balboa Avenue, San Diego, CA 92123.
Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares via the toll-free telephone number,
over the Internet, or by signing, dating, and returning the enclosed proxy card as promptly as possible in the envelope provided.
San Diego, California
January 9, 2015
By order of the Board of
Directors,
Phillip H. Rudolph
Executive Vice President, Chief Legal & Risk Officer and Corporate Secretary
INFORMATION REGARDING ADMISSION TO THE ANNUAL MEETING
Everyone attending the 2015 Annual Meeting of Stockholders will be required to present both proof of ownership of Jack in the Box Inc.
Common Stock and a valid picture identification, such as a drivers license or passport. If your shares are held in the name of a bank, broker or other financial institution, you will need a recent brokerage statement or letter from such entity
reflecting your stock ownership as of the record date. If you do not have both proof of ownership of Jack in the Box Inc. stock and a valid picture identification, you may be denied admission to the Annual Meeting.
Cameras and electronic recording devices are not permitted at the Annual Meeting.
JACK IN THE BOX INC.
9330 Balboa Avenue
San Diego, California 92123
PROXY
STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
February
13, 2015
GENERAL INFORMATION
1. |
Why am I receiving these materials? |
We sent you these proxy materials because the Board of Directors (sometimes referred to as the Board) of Jack
in the Box Inc. (sometimes referred to as the Company, Jack in the Box, we, us, or our) is soliciting your proxy to vote at the 2015 Annual Meeting of Stockholders (the Annual
Meeting) and at any postponements or adjournments of the Annual Meeting. The Annual Meeting will be held on February 13, 2015, at 8:30 a.m. Pacific Standard Time at our corporate headquarters located at 9330 Balboa Avenue, San
Diego, CA 92123. If you held shares of our Common Stock on December 16, 2014 (the Record Date), you are invited to attend the Annual Meeting and vote on the proposals
described below under the heading What am I voting on? However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may complete, sign, date, and return the
enclosed proxy card. You may also vote over the Internet or by telephone.
The Notice of Annual Meeting of Stockholders (the Notice), Proxy Statement,
the enclosed proxy card, and our Annual Report on Form 10-K for the fiscal year ended September 28, 2014, will be mailed to stockholders on or about January 9, 2015.
There are three proposals scheduled to be voted on at the Annual Meeting:
1. |
Election of the eight directors specified in this Proxy Statement to serve until the next Annual Meeting of Stockholders and until their respective successors are elected and qualified. |
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Ratification of the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending September 27, 2015.
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Advisory vote on the compensation awarded to our named executive officers for the fiscal year ended September 28, 2014, as set forth in this Proxy Statement.
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3. |
How does the Board recommend that I vote? |
Our Board recommends that you vote your shares:
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FOR the election of each of the eight directors named in this Proxy Statement to hold office until the next Annual Meeting of Stockholders and until their respective successors are elected and
qualified; |
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FOR the ratification of the appointment of KPMG LLP as our independent registered public accountants for the fiscal year ending September 27, 2015; and
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FOR, on an advisory basis, the approval of the compensation awarded to our named executive officers for the fiscal year ended September 28, 2014, as set forth in this Proxy Statement.
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2 JACK IN THE BOX INC. ï
2015 Proxy Statement
4. |
Who can vote at the Annual Meeting? |
If you were a holder of Jack in the Box Common Stock (the Common Stock) either as a stockholder of
record or as the beneficial owner of shares held in Street name as of the close of business on December 16, 2014, the Record Date for the Annual Meeting, you may vote your shares at the Annual Meeting. As of the Record Date, there
were 38,792,973
shares of Jack in the Box Inc. Common Stock outstanding, excluding treasury shares. Company treasury shares will not be voted. Each stockholder has one vote for each share of Common Stock held as
of the Record Date. As summarized below, there are some distinctions between shares held of record and those owned beneficially in Street name.
5. |
What does it mean to be a stockholder of record? |
If, on the Record Date, your shares were registered directly in your name with the Companys transfer agent,
Computershare, then you are a stockholder of record. As a stockholder of record, you may vote in person at the Annual
Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card, or vote by telephone or Internet, to ensure your vote
is counted.
6. |
What does it mean to beneficially own shares in Street name? |
If, on the Record Date, your shares were held in an account at a broker, bank, or other financial institution (we will
refer to those organizations collectively as broker), then you are the beneficial owner of shares held in Street name and these proxy materials are being forwarded to you by that broker. The broker holding your account is
considered the stockholder of record for purposes of voting at the Annual Meeting. As the beneficial owner, you have the right to direct your broker on how to vote the shares in your account. As a beneficial owner, you are invited to attend the
Annual Meeting. However, since you are not a stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your broker giving you the legal
right to vote the shares at the Annual Meeting, as well as satisfy the Annual Meeting admission criteria set out in the Notice.
Under the rules that govern brokers, your broker is not permitted to vote on your behalf on any matter to be considered at the Annual Meeting (other than the
ratification of the appointment of KPMG LLP as our independent registered public accountants for the 2015 fiscal year) unless you provide specific instructions to the broker as to how to vote. As a result, we encourage you to communicate your voting
decisions to your broker before the date of the Annual Meeting to ensure that your vote will be counted.
7. |
What if I return the proxy card to the Company but do not make specific choices? |
If you return a signed, dated, proxy card to the Company without making any voting selections, the Company will vote your shares as follows:
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FOR the election of all director nominees; |
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FOR the ratification of KPMG LLP as our independent registered public accountants for the fiscal year ending September 27, 2015; and |
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FOR, on an advisory basis, approval of the compensation awarded to our named executive officers for the fiscal year ended September 28, 2014, as set forth in this Proxy Statement.
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The Company does not expect that any matters other than the election of directors and the other proposals described in
this Proxy Statement will be brought before the Annual Meeting. The persons appointed as proxies will vote in their discretion on any other matters that may properly come before the Annual Meeting or any postponements or adjournments thereof,
including any vote to postpone or adjourn the Annual Meeting.
8. |
What does it mean if I received more than one proxy card? |
If you receive more than one proxy card, your shares are registered in more than one name or are registered in different
accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 3
9. |
How are votes counted? |
Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count
FOR, AGAINST, abstentions and broker non-votes. A broker non-vote occurs when your broker submits a proxy card for your shares of Common Stock held in Street name, but does not vote on a particular proposal
because the broker has not received voting instructions from you and does not have the authority to vote on that matter without instructions. Under the rules that govern brokers who are voting shares held in Street name, brokers have the discretion
to vote those shares on routine matters but not on non-routine matters. For purposes of these rules, the only routine matter in this Proxy Statement
is the ratification of the appointment of our independent registered public accountants. Non-routine matters in this Proxy Statement are the election of directors and the advisory vote on the
compensation of our named executive officers. Therefore, if you hold your shares in Street name and do not provide voting instructions to your broker, your broker does not have discretion to vote your shares on any of the proposals at the Annual
Meeting other than the ratification of the independent registered public accountants. However, your shares will be considered present at the Annual Meeting for purposes of determining the existence of a quorum, as provided below.
10. |
What is the voting requirement to approve each of the proposals? |
Proposal One Election of Directors
In the election of directors, you may vote FOR, AGAINST or ABSTAIN. The Companys Bylaws require that in an election such as this where the number of director
nominees does not exceed the number of directors to be elected, each director will be elected by the vote of the majority of the votes cast (in person or by proxy) with respect to the director. A majority of votes cast means that the
number of shares cast FOR a directors election exceeds the number of votes cast AGAINST that director. For purposes of determining the votes cast, only those votes cast FOR or AGAINST are
included. Neither a vote to ABSTAIN nor a broker non-vote will count as a vote cast FOR or AGAINST a director nominee and, as a result, will have no direct effect on the outcome of the election of directors.
Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present.
In an uncontested election, a nominee who does not
receive a majority of the votes cast will not be elected. An incumbent director who is not elected because he or she does not receive a majority of the votes cast will continue to serve, but will tender his or her resignation to the Board. The
Nominating and Governance Committee will take action to determine whether to accept or reject the directors resignation, or whether other action is appropriate, and will make a recommendation to the Board. Within ninety (90) days
following the date of the certification of the election results, the Board will act on the Committees recommendation and publicly disclose its decision and the rationale for such decision.
Proposal Two Ratification of the Appointment of Independent Registered Public
Accountants
The proposal to ratify the appointment of KPMG LLP requires the affirmative vote of a majority of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions will be included in the number of shares present and entitled to vote, and will have the same effect as a vote AGAINST this proposal. Brokers
have discretionary authority to vote uninstructed shares on this proposal. Abstentions will be counted for the purpose of determining whether a quorum is present.
Proposal Three Advisory Vote on Executive Compensation
The proposal to approve, on an advisory basis, the
compensation awarded to the named executive officers for the fiscal year ended September 28, 2014, requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote on
such proposal. Abstentions will be included in the number of shares present and entitled to vote, and will have the same effect as a vote AGAINST the proposal. Broker non-votes will not count as a vote cast FOR or
AGAINST the proposal, and will not be included in calculating the number of votes necessary for approval of this proposal. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present.
4 JACK IN THE BOX INC. ï
2015 Proxy Statement
11. |
How many shares must be present or represented to conduct business at the Annual Meeting? |
A quorum of stockholders is necessary to hold a valid annual meeting. A quorum will be present if the holders of at least
a majority of the total number of shares of Common Stock entitled to vote are present, in person or by proxy, at the Annual Meeting. Abstentions and shares represented by
broker non-votes are counted for the purpose of determining whether a quorum is present. If there are insufficient votes to constitute a quorum at the time of the Annual Meeting, we may adjourn
the Annual Meeting to solicit additional proxies.
12. |
How do I vote my shares of Jack in the Box Common Stock? |
If you are a stockholder of record, you can vote in the following ways:
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By Internet: by following the Internet voting instructions included in the proxy card at any time up until 11:59 p.m., Eastern Time, on
February 12, 2015. |
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By Telephone: by following the telephone voting instructions included in the proxy card at any time up until 11:59 p.m., Eastern Time, on
February 12, 2015. |
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By Mail: if you have received a printed copy of the proxy materials from us by mail, you may vote by mail by marking, dating, and signing your proxy card in
accordance with the instructions on it and returning it by mail in the pre-addressed reply envelope provided with the proxy materials. The proxy card must be received prior to the Annual Meeting. |
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In Person: if you satisfy the admission requirements to the Annual Meeting, as described in the Notice, you may vote your shares in person at the
meeting. Even if you plan to attend the Annual Meeting, we encourage you to vote in advance by Internet, telephone or mail so that your vote will be counted in the event you later decide not to attend the Annual Meeting.
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If you are a beneficial owner, you can vote in the following way:
If your shares are held in Street name or through a benefit or compensation plan, your broker or your plan trustee should give you instructions for voting your shares.
In these cases, you may vote by Internet, telephone or mail, as instructed by your broker, trustee, or other agent. Shares beneficially held through a benefit or compensation plan cannot be voted in person at the Annual Meeting. You may vote your
shares beneficially held through your broker in person if you satisfy the admission requirements to the Annual Meeting, as described in the Notice, and you obtain a valid proxy from your broker giving you the legal right to vote the shares at the
Annual Meeting.
13. |
May I change my vote or revoke my proxy? |
Yes.
If you are a stockholder of record, you may change your vote or revoke your proxy by:
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filing a written statement to that effect with our Corporate Secretary before the taking of the vote at the Annual Meeting; |
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voting again via the Internet or telephone but before the closing of those voting facilities at 11:59 p.m. Eastern Time on February 12, 2015; |
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attending the Annual Meeting, revoking your proxy and voting in person (attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy); or |
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timely submitting a properly signed proxy card with a later date that is received at or prior to the Annual Meeting.
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The written statement or subsequent proxy should be delivered to Jack in the Box Inc., 9330 Balboa Avenue,
San Diego, CA 92123, Attention: Corporate Secretary, or hand delivered to the Corporate Secretary before the taking of the vote at the Annual Meeting.
If
you are a beneficial owner and hold shares through a broker, bank, or other financial institution, you may submit new voting instructions by contacting your broker, bank, or other nominee. You may also change your vote or revoke your voting
instructions in person at the Annual Meeting if you obtain a signed proxy from the broker, bank, or other nominee giving you the right to vote the shares.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 5
14. |
Who will pay for the cost of soliciting proxies? |
The Company will pay the cost of preparing, printing, and mailing the Notice and the proxy materials. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries, and custodians holding shares of Common Stock beneficially owned by others, to forward to such beneficial owners. The Company may reimburse persons representing
beneficial owners of Common Stock for their costs of forwarding solicitation materials to the beneficial owners. If you choose to access proxy materials or vote over the Internet or by telephone, you are responsible for Internet or
telephone charges. We have engaged Innisfree M&A Incorporated (Innisfree), a proxy-solicitation firm, to provide advice to the Company with respect to the 2015 Annual Meeting of
Stockholders and to assist us in the solicitation of proxies, for which the Company will pay a fee of $15,000 plus reimbursement of certain out-of-pocket expenses. In addition to solicitation by mail, proxies may be solicited personally, by
telephone, or by Innisfree. They may also be solicited by directors, officers, or employees of the Company, who will receive no additional compensation for such activities.
15. |
How can I find out the results of the Annual Meeting? |
Preliminary voting results will be announced at the Annual Meeting. We will publish final results in a Current Report on
Form 8-K that we expect to file with the Securities and Exchange Commission (SEC) within four business days of the Annual Meeting. After the Form 8-K is filed, you may obtain
a copy by visiting the SECs website at www.sec.gov, visiting our website or contacting our Investor Relations Department by writing to Investor Relations Department, Jack in the Box
Inc., 9330 Balboa Avenue, San Diego, CA 92123, or by sending an email to Investor.relations@jackinthebox.com.
6 JACK IN THE BOX INC. ï
2015 Proxy Statement
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PROPOSAL ONE ELECTION OF DIRECTORS |
PROPOSAL ONE ELECTION OF DIRECTORS
All of the directors of the Company are elected annually and serve until the next Annual Meeting and until their
respective successors are elected and qualified. The current nominees for election as directors (each of whom is currently serving as a director of the Company) are set forth below. All of the nominees have indicated their willingness to serve, and
have
consented to be named in the Proxy Statement. If any should be unable or unwilling to stand for election, the shares represented by proxies may be voted for a substitute designated by the Board,
unless a contrary instruction is indicated in the proxy.
Nominees for Director
The following table provides certain information about each
nominee for director as of January 1, 2015.
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Director
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Leonard A. Comma (1) |
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44 |
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Chairman of the Board & Chief Executive Officer |
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2014 |
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David L. Goebel (1)(2)(3)(4) |
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64 |
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Independent Director |
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2008 |
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Sharon P. John (3)(4) |
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50 |
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Independent Director |
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2014 |
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Madeleine A. Kleiner (3)(4) |
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63 |
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Independent Director |
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2011 |
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Michael W. Murphy (1)(4)(5) |
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57 |
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Independent Director |
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2002 |
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James M. Myers (5)(6) |
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57 |
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Independent Director |
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2010 |
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David M. Tehle (5)(6) |
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58 |
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Independent Director |
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2004 |
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John T. Wyatt (3)(6) |
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59 |
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Independent Director |
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2010 |
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Member of the Executive Committee |
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Member of the Compensation Committee |
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Member of the Nominating and Governance Committee |
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Member of the Audit Committee |
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Member of the Finance Committee |
Vote Required for Approval
In the election of directors, you may vote FOR, AGAINST, or ABSTAIN. The Companys Bylaws require that, in an election such as this, where the number of director
nominees does not exceed the number of directors to be elected, each director will be elected by the vote of the majority of the votes cast (in person or by proxy) with respect to the director. A majority of votes cast means that the
number of shares cast FOR a directors election exceeds the number of votes cast AGAINST that director. For purposes of determining the votes cast, only those votes cast FOR or AGAINST are
included. Neither a vote to ABSTAIN nor a broker non-vote will count as a vote cast FOR or AGAINST a director nominee and, as a result, will have no direct effect on the outcome of the election of directors. Abstentions and broker non-votes will be
counted for the purpose of determining whether a quorum is present.
In an uncontested election, a nominee who does not receive a majority of the votes cast will
not be elected. An incumbent director who is not elected because he or she does not receive a majority of the votes cast will continue to serve, but shall tender his or her resignation to the Board. The Nominating and Governance Committee will take
action to determine whether to accept or reject the directors resignation, or whether other action is appropriate, and will make a recommendation to the Board. Within ninety (90) days following the date of the certification of the
election results, the Board will act on the Committees recommendation and publicly disclose its decision and the rationale for such decision.
ON PROPOSAL ONE, ELECTION OF DIRECTORS, THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 7
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PROPOSAL ONE ELECTION OF DIRECTORS |
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Director Qualifications and
Biographical Information
Biographical information for
each of the director nominees, including the key qualifications, experience, attributes, and skills that led our Board to the conclusion that each of the director nominees should serve as a director, is set forth on the pages below.
Our Board includes individuals with expertise in executive leadership and management, accounting and finance, marketing and branding, and across restaurant, franchise,
hospitality, retail, manufacturing, and healthcare industries. Our directors have a diversity of backgrounds and experiences. We believe that, as a group, they work effectively together in overseeing our business, hold themselves to the highest
standards of integrity, and are committed to representing the long-term best interests of our stockholders.
Director Nominees
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Leonard A. Comma
Director Since January 2014
Mr. Comma was appointed a Director, Chairman of the Board and Chief Executive Officer, effective January 1, 2014, and since that date has served as a
member of the Executive Committee. He succeeded former Chairman and CEO Linda A. Lang, who retired |
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Qualifications:
Mr. Comma has 24 years of experience at two major public companies
with extensive retail and franchise operations, including for the past year as our Chairman and CEO. In his prior executive-level role as President and Chief Operating Officer for Jack in the Box Inc., Mr. Comma was responsible for the operations of
all Company and franchised Jack in the Box restaurants more than 2,200 locations as well as: Menu Innovation, including Menu Strategy, Operations Support, and Research & Development; Marketing Communications, including
Merchandising; Consumer Intelligence & Analytics; and Internal Brand Communications. He also gained extensive experience in restaurant and retail operations and franchising in his previous roles with the Company as well as with ExxonMobil. His
professional expertise and knowledge of our business, our competition and our competitive positioning, along with his deep understanding of our values and culture, bring an important Company perspective to the Board. |
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from those positions effective the same date. From May 2012 until October 2014, Mr. Comma also served as President, and from November 2010 to January 1, 2014, as Chief Operating
Officer. Mr. Comma joined the Company in 2001 as Director of Convenience Store & Fuel Operations for the Companys proprietary chain of Quick Stuff convenience stores, which included more than 60 locations at the time it was sold
in 2009. In 2004, he was promoted to Division Vice President of Quick Stuff Operations, and in 2006 he was promoted to Regional Vice President of Quick Stuff and the Companys Southern California region, which included more than 150 Jack in the
Box restaurants. In 2007, Mr. Comma was promoted to Vice President of Operations, Division II, and had oversight of nearly 1,200 company and franchised Jack in the Box restaurants in the Western U.S. Prior to joining Jack in the Box Inc.,
Mr. Comma worked for Exxon Mobil Corporation since 1989, most recently as a Regional Manager with responsibility for supporting more than 300 franchisees in California, Nevada and Arizona. |
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8 JACK IN THE BOX INC. ï
2015 Proxy Statement
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PROPOSAL ONE ELECTION OF DIRECTORS |
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David L. Goebel
Lead Director; Director Since December 2008
Mr. Goebel has been a director of the Company since December 2008, and currently serves
as Lead Director. He is a partner and Faculty Member for Merryck & Co. Ltd, a worldwide business mentoring |
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Qualifications:
Mr. Goebels qualifications to serve on our Board include his
business, operational, management, and leadership development experience in the retail, food service, and hospitality industries, and as an executive consultant, including experience in restaurant operations, restaurant and concept development,
supply chain management, franchising, executive development, risk assessment, risk management, succession planning, executive compensation and strategic planning. |
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firm that offers services for chief executive officers by chief executive officers. He has held that position since May 2008. In 2008, Mr. Goebel became the founding principal and
President of Santoku, Inc., a private company that operates sandwich shops under the name Goodcents® Deli Fresh Subs (Goodcents), catering and cafeteria operations under the name
Y-Leave Cafe, catering services under the name Prime Catered Events, and a fast-casual pizza concept under the name Pie Five® Pizza Company. Mr. Goebel is also a consultant to
Mr. Goodcents Franchise Systems, Inc., the franchisor of Goodcents, and served as its acting President and CEO from 2010 until December 2014. Since September 2014, he has also served on the board of directors of QuickCheck, a privately held
company in the gas/convenience food category. Mr. Goebel has more than 40 years of experience in the retail, food service, and hospitality industries. From 2001 until 2007, he served in various executive positions at Applebees
International, Inc., including as President and Chief Executive Officer in 2006-2007, during which time the company operated nearly 2,000 restaurants in the United States and internationally. Previous to that, Mr. Goebel was President of
Summit Management, Inc., a consulting group specializing in executive development and strategic planning. Prior to that, Mr. Goebel was the Chief Operating Officer of Finest Foodservice, LLC, a Boston Chicken/Boston Market franchise that he
founded and co-owned, which was responsible for developing 80 restaurants within a seven-state area from 1994 until 1998. |
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Sharon P. John
Director Since September 2014
Ms. John has been a director of the Company since September 2014. Ms. John has been the Chief Executive Officer and a member of the Board of Directors
of Build-A-Bear Workshop, Inc. since June 2013. From January 2010 through May 2013, |
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Qualifications:
Ms. Johns qualifications to serve on our Board include her current
role as CEO and director of a publicly traded global retail company and her broad merchandising, marketing, branding, sales and executive management experience, including key roles at well-known consumer brands. |
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Ms. John served as President of Stride Rite Childrens Group LLC, a division of Wolverine World Wide, Inc., which designs and markets footwear for children. From 2002 through 2009,
she held positions of broadened portfolio and increased responsibility at Hasbro, Inc., a multinational toy and board game company, including as General Manager & Senior Vice President of its U.S. Toy Division from 2006 to 2008 and General
Manager & Senior Vice President of its Global Preschool unit from June 2008 through 2009. Ms. John also founded and served as Chief Executive Officer of Checkerboard Toys; served as Vice President, U.S. Toy Division with VTech
Industries, Inc.; and served in a range of roles at Mattel, Inc. She started her career in advertising. |
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JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 9
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PROPOSAL ONE ELECTION OF DIRECTORS |
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Madeleine A. Kleiner
Director Since September 2011
Ms. Kleiner has been a director of the Company since September 2011 and is currently Chair of the Nominating and Governance Committee. From 2001 to 2008,
Ms. Kleiner was Executive Vice President, General Counsel and Corporate Secretary for Hilton |
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Qualifications:
Ms. Kleiners qualifications to serve on our Board include her
experience as general counsel for two public companies, as outside counsel to numerous public companies and her past and current experience on public company boards. She brings to our Board experience as an executive for a major franchisor in the
hospitality industry, as well as expertise in corporate governance, risk management, securities laws disclosure, securities transactions, mergers and acquisitions, Sarbanes-Oxley compliance, human resources and executive compensation, government
relations and crisis management. |
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Hotels Corporation, a hotel and resort company. At Hilton, Ms. Kleiner oversaw the companys legal affairs and the ethics, privacy and government affairs functions. She was also a
member of the executive committee with significant responsibility for board of directors matters. From 1999 through 2001, Ms. Kleiner served as a director of a number of Merrill Lynch mutual funds operating under the Hotchkiss and Wiley name.
From 1995 to 1998, Ms. Kleiner served as Senior Executive Vice President, Chief Administrative Officer and General Counsel of H. F. Ahmanson & Company and its subsidiary, Home Savings of America, where she was responsible for oversight
of legal, human resources, legislative and government affairs and corporate communications. Previous to that, from 1977 to 1995, Ms. Kleiner was with the law firm of Gibson, Dunn & Crutcher, including as partner from 1983 to 1995,
where she advised corporations and their boards primarily in the areas of mergers and acquisitions, corporate governance, securities transactions and compliance. Ms. Kleiner has served on the board of directors of Northrop Grumman Corporation
since 2008, where she is a member of the audit committee. |
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Michael W. Murphy
Director Since September 2002
Mr. Murphy has been a director of the Company since September 2002, and is currently Chair of the Audit Committee. Since April 1996, Mr. Murphy has
been President and Chief Executive Officer of Sharp HealthCare, a comprehensive healthcare delivery |
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Qualifications:
Mr. Murphys qualifications to serve on our Board include his business
and management experience leading Sharp HealthCare, a large integrated healthcare delivery system with multiple facilities and more than 16,000 employees, his experience as a senior financial officer of Sharp HealthCare, and his experience as a
Certified Public Accountant, and former partner at Deloitte. He also serves on the Board of Directors and executive committee of the California Chamber of Commerce. The Board benefits from Mr. Murphys extensive experience in accounting,
finance, financial reporting, auditing, governance, labor relations, human resources and compensation, marketing, risk assessment and risk management, strategic planning and quality initiatives. |
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system in San Diego which has been recognized with the Malcolm Baldrige National Quality Award, the nations highest Presidential honor for quality and organizational performance
excellence. Prior to his appointment to President and Chief Executive Officer, Mr. Murphy served as Senior Vice President of Business Development and Legal Affairs for Sharp HealthCare. He began his career at Sharp in 1991 as Chief Financial
Officer of Grossmont Hospital before moving to a system-wide role as Vice President of Financial Accounting and Reporting. Prior to this, Mr. Murphy provided certified public accounting services, including as a partner at Deloitte. |
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10 JACK IN THE BOX INC. ï
2015 Proxy Statement
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PROPOSAL ONE ELECTION OF DIRECTORS |
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James M. Myers
Director Since December 2010
Mr. Myers has been a director of the Company since December 2010. Mr. Myers has served as President and Chief Executive Officer of Petco, the national
pet supplies retailer, since 2004. Prior to his appointment to President and Chief Executive Officer, Mr. Myers |
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Qualifications:
Mr. Myers qualifications to serve on our Board include more than
27 years of financial and retail operations experience, including 10 years as a CPA and public company auditor with KPMG LLP and 19 years with Petco, a national specialty retail chain with more than 1,350 stores in all 50 states
and Mexico. Mr. Myers brings to the Board his prior experience of serving on a public company board and audit committee, as well as experience with marketing and consumer brands, human resources and compensation, mergers and acquisitions,
capital markets, financial reporting, financial oversight, and the financial and strategic issues facing public and private companies. |
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served as Chief Financial Officer for Petco from 1998 to 2004. He began his career at Petco as Vice President and Controller in 1990. Previously, Mr. Myers was a Certified Public
Accountant with KPMG LLP. Mr. Myers serves on the board of the Retail Industry Leaders Association, and previously served on the board of Provide Commerce, an e-commerce retailer and public company, from 2004-2006, when Provide Commerce was
acquired. Mr. Myers served on the audit committee at Provide Commerce. |
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David M. Tehle
Director Since December 2004
Mr. Tehle has been a director of the Company since December 2004, and is currently Chair of the Finance Committee. He has been Executive Vice President and
Chief Financial Officer of Dollar General Corporation, a publicly traded company, since June |
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Qualifications:
Mr. Tehles qualifications to serve on our Board include his
experience in senior financial management at public companies in the retail and manufacturing industries. As an active CFO, he is responsible for the overall financial management of a large retail organization. Mr. Tehle has experience in the
oversight of strategic planning, human resources and compensation, finance, accounting, information systems, investor relations, treasury and internal audit functions. He brings valuable financial expertise and retail and management experience to
the Board. |
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2004. Mr. Tehle served from 1997 to June 2004 as Executive Vice President and Chief Financial Officer of Haggar Corporation, a manufacturing, marketing, and retail corporation. From
1996 to 1997, he was Vice President of Finance for a division of The Stanley Works, one of the worlds largest manufacturer of tools, and from 1993 to 1996, he was Vice President and Chief Financial Officer of Hat Brands, Inc. |
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John T. Wyatt
Director Since May 2010
Mr. Wyatt has been a director of the Company since May 2010, and is currently Chair of the Compensation Committee. Mr. Wyatt has served as the Chief
Executive Officer of Knowledge Universe-United States, an early childhood education |
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Qualifications:
Mr. Wyatts qualifications to serve on our Board include his
experience in senior management for major consumer brands in large global retail companies, including strategy and business development, marketing and brand building, product development, supply chain, finance and capital markets, labor relations,
human resources and compensation, organizational development and succession planning, and his prior public company board experience. He brings extensive experience in growing consumer brands to the Board. |
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company, since February 2012. From 2008 through February 2012, Mr. Wyatt was president of the Old Navy division of Gap Inc. He joined Gap Inc. in 2006, and previously served as
President of the companys GapBody division, and President of the companys Outlet division. From 2004 to 2006, Mr. Wyatt was President and Chief Executive Officer at Cutter & Buck Inc., a designer and marketer of upscale
apparel, including serving on the publicly held companys board of directors. From 2002 to 2004, he served as President of Warnaco Intimate Apparel, a global designer and manufacturer, and from 1999 to 2002, he was Executive Vice President for
Strategic Planning and eBusiness Strategies in the Saks family of companies. Additionally, Mr. Wyatt spent more than 20 years with VF Corporation, serving ultimately as President of Vanity Fair Intimates and Vanity Fair Intimates
Coalition. |
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In addition to the business and professional experiences described above, our director nominees also serve on the boards of various
civic and charitable organizations.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 11
CORPORATE
GOVERNANCE
We operate within a comprehensive corporate governance structure that includes the highest standards of professional and
personal conduct. Our Corporate Governance Principles and Practices, our ethics Code of Conduct, the charters for our Audit, Compensation, Finance and Nominating and Governance Committees, and other corporate governance information, are available at
www.jackinthebox.com/investors/
corporategovernance. These materials are also available in print to any stockholder upon written request to the Companys Corporate Secretary, Jack in the Box Inc.,
9330 Balboa Avenue, San Diego, CA 92123. The information on our website is not a part of this Proxy Statement and is not incorporated into any of our filings made with the Securities and Exchange Commission.
Directors
Independence
The Jack in the Box Inc. Director Independence Guidelines provide that a director shall not be independent if he or she
is: (a) a director, executive officer, partner or owner of 5% or greater interest in a company that either purchases from or makes sales to our Company that total more than one percent of the consolidated gross revenues of such company for that
fiscal year; (b) a director, executive officer, partner or owner of 5% or greater interest in a company from which our Company borrows an amount equal to or greater than one percent of the consolidated assets of either our Company or such other
company; or (c) a trustee, director or executive officer of a charitable organization that has received in that fiscal year discretionary donations from our Company that total more than one percent of the organizations latest publicly
available national annual charitable receipts.
The Board has analyzed the independence of each director. It has determined that all but Mr. Comma are independent
directors under the NASDAQ Listing Rules, as well as the additional Director Independence Guidelines adopted by the Board. As part of its analysis, the Board determined that none of these directors have a material relationship with the Company. The
Board also found that Winifred M. Webb, who served as a director until our 2014 annual meeting, was independent. Mr. Comma, our current Chief Executive Officer, and Ms. Lang, who held that role until her retirement on January 1, 2014,
were determined not to be independent due to their roles as Chief Executive Officer and employees of Jack in the Box Inc.
Board Meetings, Annual
Meeting of Stockholders, and Attendance
During the time each director served on the Board in fiscal 2014, each director attended more than 75% of the meetings of
the Board and of the committees on which he or she served. The Board held six meetings in fiscal 2014.
All of the directors standing for election in 2014 attended the 2014 Annual Meeting and we currently expect all of our
directors standing for election to be present at the 2015 Annual Meeting.
Determination of
Current Board Leadership Structure
The Nominating and Governance Committees Charter provides that the Committee will annually assess the leadership
structure of the Board and recommend a structure to the Board for approval. In November 2014, the Board of Directors, with the counsel of the Nominating and Governance Committee, conducted this assessment, including assessing whether (i) the
roles of Chief Executive Officer (CEO) and Chairman of the Board should continue to be combined, and (ii) the Board should continue to have an independent Lead Director. Based on the recommendation of the Nominating and Governance
Committee, the Board determined that combining the positions of Chairman and CEO continues to be in the best interests of the Company.
The Board determined that having one individual serve in both roles provides for clear leadership, accountability, and
alignment on corporate strategy. The Board believes that combining the roles of Chairman and CEO puts Mr. Comma in the best position to use his in-depth knowledge of our industry, our business and its challenges, and our stakeholders, including
our stockholders, employees, franchisees and guests, to provide the Board with the information and leadership needed to set agendas and direction for the Company. The Board does not believe that having an independent Chairman would make the
Boards risk oversight processes more effective. The Board noted that, during Mr. Commas tenure as Chairman and CEO, and Mr. Goebels service as Lead Director, the Board has received timely and relevant information
regarding the Companys business.
12 JACK IN THE BOX INC. ï
2015 Proxy Statement
In reaching its conclusion, the Board also considered the longstanding policies and practices at Jack in the Box for
strong, independent oversight, including:
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a Board with a high degree of independence, including only one non-independent member; |
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Board Committees (other than the Executive Committee) that are composed entirely of independent directors; |
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Board Committee Chairs who review and approve agendas before Committee meetings; |
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an annual evaluation of the performance of the Chairman and Chief Executive Officer by the Compensation Committee, which evaluation is then discussed with the independent directors of the Board in executive session;
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regular executive sessions held by the Board and key Board Committees, attended only by independent directors; |
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the ability of the independent directors to call meetings of the Board and recommend agenda topics to be considered by the Board; |
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a strong, independent Lead Director who has oversight responsibility for executive sessions and information flow to the Board, and who has served in that role since 2011. |
Based on these factors, the Board concluded that retaining the current Board leadership structure provides valuable stability and effective leadership.
Lead Director
The independent directors have appointed Mr. Goebel to serve as Lead Director. Our Corporate Governance Principles
and Practices provide for the Lead Director to fulfill the following functions:
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set agendas for the executive sessions of the Board; |
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preside at the executive sessions of the independent directors;
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act as a key communication channel between the Board and the CEO; |
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determine the format and adequacy of information flow to the Board; and |
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call meetings of independent directors. |
The Lead Director may perform other functions as the Board may direct,
including advising Management on the agenda for Board meetings.
The Boards Role
in Succession Planning
The Board expects Management to have an ongoing program for effective senior leadership development and succession. As
reflected in our Corporate Governance Principles and Practices, the Boards practice is to have the CEO review annually with the full Board the abilities of the key senior managers, and their likely successors. The Board also considers
management succession issues when meeting in executive session. Additionally, the Board oversees long-range plans for management development and retention, as well as executive succession, including CEO succession.
During 2013, Chairman and CEO Lang announced her retirement from both positions, effective January 1, 2014. The
Boards executive succession process led to the selection of Mr. Comma, then President and COO and longtime key member of Management, to succeed her as Chairman and CEO. The Board also
provided advice and input to Management in the hiring of Frances Allen in October 2014 as Jack in the Box Brand President.
At times, the Board will delegate to the
Compensation Committee responsibility to review and advise on succession planning, in which case the Board expects the Committee to review such plans with Management and the Board and to make recommendations to the Board with respect thereto.
The Boards Role
in Risk Oversight
Management is responsible for the Companys day-to-day risk management. The Boards role is to provide
oversight of the processes designed to identify, assess and monitor key risks and risk mitigation activities. The Board fulfills its risk oversight responsibilities through (i) quarterly reports from the Vice President of Internal Audit (VP,
Internal Audit) to the Audit Committee relating to risk management and oversight; (ii) annual enterprise risk management reports to the full Board by the VP, Internal Audit; (iii) reports directly from managers
responsible for the management of particular business risks; and (iv) reports by each Committee Chair regarding the Committees oversight of specific risk topics.
The Board has delegated oversight of specific risk areas to Committees of the Board. For example, the Audit Committee discusses with Management the Companys major
risk exposures and the steps Management has taken to monitor and mitigate those exposures, including the processes for
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 13
enterprise risk assessment and risk management. As another example, the Compensation Committee discusses with Management and its independent consultant the risks arising in connection with the
design of the Companys compensation programs and succession planning. The risk oversight responsibility of each Board Committee is described
in its committee charter available at www.jackinthebox.com/investors/corporategovernance. A more detailed discussion of the Compensation Committees oversight of compensation risk is
found in the section Risk Analysis of Compensation Programs contained in this proxy.
Executive Sessions
Our independent, non-employee directors meet in executive session without Management present at each regularly scheduled
meeting of the Board. Mr. Goebel is currently designated by the Board to act as the Lead Director for such
executive sessions. The Audit Committee also holds executive sessions at each regularly scheduled meeting, and the other committees of the Board meet in executive session as they deem
appropriate.
Committees of the
Board
The Board of Directors has five standing committees: Audit, Compensation, Nominating and Governance, Finance, and
Executive. The authority and responsibility of each Committee is summarized below. A more detailed description of the functions of the Audit, Compensation, Nominating and Governance, and Finance Committees is included in each Committee charter
available at www.jackinthebox.com/investors/corporategovernance.
Committee Member Independence. The Board has determined that each member
of the Audit, Compensation, Nominating and Governance, and Finance Committees is an independent director for purposes of the NASDAQ Listing Rules as well as under the additional Director Independence Guidelines adopted by the Board. In addition, the
members of the Audit Committee are all independent as required under Rule 10A-3(b)(1)(ii) under the Securities Exchange Act of 1934, and the members of the Compensation Committee meet the definitions of (i) a non-employee
director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, (ii) an outside director within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended
(IRC), and (iii) the requirements of Rule 10C-1 under the Securities Exchange Act of 1934.
Audit Committee. As more fully
described in its charter, the Audit Committee assists the Board of Directors with overseeing:
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the integrity of the Companys financial reports; |
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the Companys compliance with legal and regulatory requirements; |
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the independent registered public accountants performance, qualifications and independence; |
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the performance of the Companys internal auditors; and |
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the Companys processes for identifying, evaluating, and addressing major financial, legal, regulatory compliance, and enterprise risks.
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The Audit Committee has sole authority to select, evaluate, and when appropriate, replace the Companys independent
registered public accountants. The Audit Committee has appointed KPMG LLP (KPMG) as its independent registered public accountants for fiscal 2015 and is asking the stockholders to ratify this appointment in Proposal 2. In the event the
stockholders fail to ratify the appointment, the Audit Committee will reconsider the selection to determine, in its discretion, whether to retain KPMG or to select a different registered public accountant. Even if the selection is ratified, the
Audit Committee in its discretion may direct the appointment of a different independent auditing firm at any time during the year.
The Audit Committee meets at
least each quarter with KPMG, the Companys VP, Internal Audit, and Management to review the Companys annual and interim consolidated financial results before the publication of quarterly earnings press releases and the filing of
quarterly and annual reports with the Securities and Exchange Commission. The Audit Committee also meets at least each quarter in private sessions with KPMG, Management, and the VP, Internal Audit. The Audit Committee also oversees the
Companys Business Ethics Program, which includes receiving a quarterly report from the Ethics Officer. The Board of Directors has determined that each member of the Audit Committee qualifies as an audit committee financial expert
as defined by SEC rules. Additional information regarding the Audit Committee is set forth in the Report of the Audit Committee on page 22.
The Audit
Committee held four meetings in fiscal 2014.
Compensation Committee. As more fully described in its charter, the Compensation Committee assists
the Board in discharging the Boards responsibilities relating to director and executive officer compensation, and it oversees the performance evaluation of Management. The Compensation Committee reviews and approves the Companys
compensation philosophy, and the compensation of executive officers, including short- and long-term goals, metric and
14 JACK IN THE BOX INC. ï
2015 Proxy Statement
compensation components (e.g., cash, equity and other forms of compensation). The Compensation Committee discusses with Management and reports to the Board any significant risks associated with
the design and administration of the Companys compensation programs and succession planning, and actions taken by Management to mitigate such risks. The Committee has approved the disclosures in the Companys Compensation Discussion
and Analysis that begins on page 27 of this Proxy Statement. The Compensation Committee held seven meetings in fiscal 2014.
Executive
Committee. The Executive Committee is authorized to exercise all powers of the Board in the management of the business and affairs of the Company while the Board is not in session. The Executive Committee did not meet in fiscal 2014.
Finance Committee. As more fully described in its charter, the Finance Committee assists the Board in advising and consulting with Management
concerning financial matters of importance to the Company. Topics considered by the Committee include the Companys capital structure, financing arrangements, stock repurchase programs, capital investment policies, investment performance
oversight for the Companys retirement plans, the budget process, and the financial implications of major acquisitions and divestitures. The Finance Committee discusses with Management and reports to the Board major risk exposures and the
monitoring and mitigation activities undertaken by Management in connection with the matters overseen by the Committee, including proposed major transactions, capital structure, investment portfolio including employee benefit plan investments,
financing arrangements, and share repurchase programs. The Finance Committee held five meetings in fiscal 2014.
Nominating and Governance
Committee. As more fully described in its charter, the Nominating and Governance Committee duties include assessing the makeup and diversity of the Board, identifying and recommending qualified candidates to be nominated for election as
directors at the annual meeting or to be appointed by the Board to fill an existing or newly created vacancy on the Board; recommending members of the Board to serve on each Board committee; and annually reviewing and recommending the leadership
structure of the Board. The Nominating and Governance Committee discusses with Management and reports to the Board major risk exposures in connection with matters overseen by the Committee. Its activities include:
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evaluating director candidates for nomination; |
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evaluating the appropriate Board size; |
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reviewing and recommending corporate governance guidelines to the Board; |
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providing oversight with respect to the annual evaluation of Board, Committee and individual director performance;
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overseeing the Companys political and charitable contributions; |
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assisting the Board in its oversight of the Companys insider trading compliance program; and |
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recommending director education. |
All nominees for election as directors currently serve on the Board of Directors and
are known to the Nominating and Governance Committee in that capacity. The Nominating and Governance Committee held four meetings in fiscal 2014.
Policy
Regarding Consideration of Director Candidates and the Makeup and Diversity of the Board of Directors. The Nominating and Governance Committee has the responsibility to identify, screen, and recommend qualified candidates to the Board
for nomination as directors. In evaluating director candidates, the Nominating and Governance Committee considers the qualifications listed in the Jack in the Box Inc. Corporate Governance Principles and Practices, which are available at
www.jackinthebox.com/investors/corporategovernance. The following are some of the factors considered by the Nominating and Governance Committee in evaluating director candidates:
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the appropriate size of the Board; |
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the needs of the Company with respect to particular skills, background, and experience; |
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the skills, background and experience of the nominee in light of the skills, background and experience already possessed by members of the Board, including whether those qualities add to a diversity of experiences,
backgrounds, individuals, viewpoints and perspectives on the Board; |
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character and integrity; |
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independence from Management and potential conflicts of interest; |
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experience as a leader of an organization; |
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experience with accounting rules and practice; |
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experience with executive compensation; |
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applicable regulatory and listing requirements; |
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effective interpersonal and communications skills; and |
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the desire to balance the considerable benefits of continuity with the periodic injection of the fresh perspective provided by new members. |
The Nominating and Governance Committee may also consider such other factors as it may deem are in the best interests of the Company and its stockholders.
In order to be evaluated pursuant to the Nominating and Governance Committees established procedures, stockholder recommendations for candidates for the Board
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 15
must be sent in writing to the following address at least 120 days prior to the first anniversary of the date of the previous years Annual Meeting of Stockholders:
Nominating and Governance Committee of the Board of Directors
c/o Office of the Corporate Secretary
Jack in the Box Inc.
9330 Balboa Avenue
San Diego, CA 92123
Any recommendation submitted by a
stockholder to the Nominating and Governance Committee must include the same information concerning the potential candidate and the recommending stockholder as would be required under Article III, Section 3.16 of the Jack in the Box Inc.
Bylaws if the stockholder wished to nominate the candidate directly.
The Committee considers all candidates regardless of the source of the recommendation. In
addition to stockholder recommendations, the Committee considers recommendations from current directors, Company personnel and others. The Company generally retains a search firm to assist it in identifying and screening candidates, and conducting
reference checks. The Committee applies the same standards in evaluating candidates submitted by stockholders as it does in evaluating candidates submitted by other sources.
A candidate nominated by a stockholder for election at an Annual Meeting of Stockholders will not be eligible for
election unless the stockholder proposing the nominee has provided timely notice of the nomination in accordance with the deadlines (at least 120 days and no more than 150 days prior to the first anniversary of the date of the previous
years Annual Meeting of Stockholders) and other requirements set forth in the Companys Bylaws.
Article III, Section 3.16 of the
Companys Bylaws provides that, in order to be eligible for election as a director, a candidate must deliver to the Corporate Secretary statements indicating whether the candidate:
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is a party to any voting commitment that has not been disclosed to the Company; |
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is a party to any voting commitment that could limit the nominees ability to carry out a directors fiduciary duties; |
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is a party to any arrangements for compensation, reimbursement, or indemnification in connection with service as a director and has committed not to become a party to any such arrangement; |
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will comply with the Companys publicly disclosed policies and guidelines. |
The foregoing is a summary of
provisions of the Companys Bylaws, and is qualified by reference to the actual provisions of Article III, Section 3.16.
Committee Assignments
The Board of Directors considers new committee and chair
assignments, and the designation of a Lead Director, effective each February. Effective February 2014, the Board of Directors approved the following Board Committee assignments and re-designated David Goebel as the Lead Director. The only changes to
assignments made during fiscal 2014 or later are noted below:
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Compensation Committee |
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Executive Committee |
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Chair |
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David L. Goebel |
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Sharon P. John** |
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Madeleine A. Kleiner |
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Chair |
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Michael W. Murphy |
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ü |
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James M. Myers |
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ü |
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ü |
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David M. Tehle |
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ü |
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Chair |
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John T. Wyatt |
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Chair |
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ü |
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* |
Mr. Comma replaced Ms. Lang as Chairman of the Executive Committee, effective January 1, 2014, concurrent with Mr. Comma succeeding the retiring Ms. Lang as Chairman and CEO.
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** |
Ms. John was appointed to the Compensation and Nominating and Governance Committees upon joining the Board, effective September 18, 2014. |
16 JACK IN THE BOX INC. ï
2015 Proxy Statement
Code of Conduct
Jack in the Box is committed to establishing and maintaining an effective ethics and compliance program that is intended
to increase the likelihood of preventing, detecting, and correcting ethical lapses and violations of law or Company policy. In 1998, the Company adopted a Code of Conduct (the Code) which applies to all officers, and employees, as well
as to our Board of Directors. The Company also provides our franchisees and significant vendors with our Code and with procedures for communicating any ethics or compliance concerns to the Company. The Code is revised from time to time, most
recently with non-substantive updates in May 2014.
The Code is available on the Companys website at www.jackinthebox.com/investors/corporategovernance. We will
disclose amendments to, or waivers of our Code that are required to be disclosed under the securities rules, by posting such information on the Companys website, www.jackinthebox.com. Any waiver of our Code for directors or executive
officers must be approved by the Board of Directors. The Company did not grant any such waivers in fiscal 2014 and does not anticipate granting any such waiver in 2015.
Corporate Governance
Principles and Practices
The Company has adopted
Corporate Governance Principles and Practices (the Principles and Practices) which contain general principles and practices regarding the functioning of the Board of Directors and the Board Committees. The Nominating and Governance
Committee regularly reviews the Principles and Practices and recommends revisions if and as appropriate. The full text of the Principles and Practices may be found at www.jackinthebox.com/investors/corporategovernance. The Principles and
Practices address many of the items discussed above, and also include, among other things, the following items concerning the Board:
1. |
Limitation on Other Board Service. The Principles and Practices set forth the Boards policy limiting non-employee directors to simultaneous service on the boards of no more than three other public
companies. The Board has an approval process that generally limits each of our officers to serving on no more than one outside public company board. The approval process considers both the time commitment and potential business conflicts inherent in
such service, and is administered by the Nominating and Governance Committee. |
2. |
Retirement Policy. The Board has adopted a retirement policy under which directors may not stand for election or be appointed after age 73. |
3. |
Board, Committee, and Individual Director Evaluations. The directors annually complete an evaluation process focusing on an assessment of Board operations as a whole and the
|
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service of each director. Additionally, each of the Audit, Compensation, Finance, and Nominating and Governance Committees conducts a separate evaluation of its own performance and the adequacy
of its charter. The Nominating and Governance Committee coordinates the evaluation of individual directors and of the Board operations, and reviews and reports to the Board on the outcome of these self-evaluations. |
4. |
New-Director Orientation and Continuing Education. The Board works with Management to schedule new-director orientation programs and continuing education programs for directors. Orientation is designed to
familiarize new directors with the Company and the franchise restaurant industry as well as Company personnel, facilities, strategies and challenges, and corporate governance practices. Continuing education programs may include in-house and
third-party presentations and programs. |
Compensation Committee
Interlocks and Insider Participation
No member of our Compensation Committee is an officer, former officer, or employee of the Company. During fiscal 2014, no
member of the Compensation Committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. During fiscal 2014, no
interlocking relationship existed between any of our executive officers or Compensation Committee members, on the one hand, and the executive officers or Compensation Committee members of any
other entity, on the other hand.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 17
Communications with the Board of
Directors
Stockholders or others who wish to communicate any concern of any nature to the Board of Directors, any Committee of the
Board, or any individual director or group of directors, may write to a director or directors in care of the Office of the Corporate Secretary, Jack in the Box Inc. 9330 Balboa Avenue, San Diego, CA 92123, or telephone 1-888-613-5225. Your letter should indicate whether or not you are a stockholder of the Company.
Comments or questions regarding
our accounting, internal controls or auditing matters will be referred to members of our Audit Committee. Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to members of the
Nominating and
Governance Committee. For all other matters, our Corporate Secretary will, depending on the subject matter:
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forward the communication to the director or directors to whom it is addressed; |
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forward the communication to the appropriate management personnel; |
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attempt to handle the inquiry directly, for example where it is a request for information about our Company, or it is a stock-related matter; or |
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not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
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18 JACK IN THE BOX INC. ï
2015 Proxy Statement
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DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES |
DIRECTOR COMPENSATION AND STOCK OWNERSHIP
GUIDELINES
The Compensation Committee of the Board of Directors (the Committee) has responsibility for recommending to the Board the form
and amount of compensation for our non-employee directors. The following discussion of compensation and stock ownership guidelines applies only to our non-employee directors and does not apply to Mr. Comma who became CEO on January 1,
2014, and is an employee of the Company, or Ms. Lang who was CEO until her retirement on January 1, 2014. During 2014, each was compensated as an executive officer and did not receive additional compensation for service as a director.
The Board believes that total compensation for directors should be reflective of the work required in both (i) their ongoing oversight and governance role and
(ii) their continuous focus on driving long-term performance and stockholder value. The compensation program is designed to provide pay that is competitive with directors in the Companys Peer Group, which is described in the Compensation
Discussion & Analysis (CD&A) in this Proxy Statement. It consists of a combination of cash retainers and equity awards in the form of time-vested restricted stock units (RSUs). Competitive is defined
as approximating the 50th percentile of pay of Peer Group directors.
Director Compensation Program Review
and Changes
Director compensation is reviewed by an independent compensation consultant every two to three years. During fiscal 2014,
the Committee engaged the services of an independent compensation consulting firm (other than its regular independent executive compensation consultant) to evaluate director compensation. Based on the results of the
evaluation, the Board approved increasing each directors annual cash retainer from $50,000 to $65,000 beginning in February 2015, and revising the stock holding requirement from stock
valued at $150,000 to stock valued at three times the Board service annual cash retainer. No other changes were made to the director compensation program.
Annual Compensation Program
a. Cash Retainers
Each director receives an annual cash retainer for his or her service on the Board, service on Board committees, service
as chair of Board committees, and service as Lead Director, as applicable. There are no meeting fees. Retainers are paid in a single installment on the first business day of the month following the Annual Stockholder Meeting each year. Directors
with less than one full year of service receive a prorated retainer that is paid on the first business day of the month following his or her appointment to the Board.
2014 RETAINERS
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Annual Board Service: |
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$50,000 |
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Lead Director: |
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$17,500 |
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Committee |
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Committee Chair (1) |
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Committee Membership |
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Audit |
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$ |
25,000 |
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$ |
10,000 |
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Compensation |
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$ |
25,000 |
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$ |
7,500 |
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Finance |
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$ |
12,500 |
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$ |
5,000 |
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Nominating & Governance |
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$ |
12,500 |
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$ |
5,000 |
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(1) |
Includes Committee membership retainer
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Deferred Compensation Plan Directors may elect to defer receipt of some or all of their cash retainers
in the form of Common Stock equivalents under the Jack in the Box Inc. Deferred Compensation Plan for Non-Management Directors (the Director Deferred Compensation Plan). The number of Common Stock equivalents credited to a
directors account is based on a per share price equal to the average of the closing price of Common Stock on the NASDAQ Stock Market for the ten (10) trading days immediately preceding the date the deferred compensation is credited to the
directors account. The Company initiated a quarterly dividend during fiscal 2014. Under the Director Deferred Compensation Plan, to the extent dividends are paid, dividend equivalents and fractions thereof are converted to additional Common
Stock equivalents and are credited to a directors deferred compensation account as of the dividend payment dates. Each directors account is settled in an equal number of shares of Common Stock upon a pre-specified distribution date or
the directors termination of service from the Board. The Director Deferred Compensation Plan is a non-qualified plan under the Internal Revenue Code.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 19
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DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES |
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b. Annual Equity
Grant Restricted Stock Units
Each director receives an annual grant of RSUs under the 2004 Stock Incentive Plan. We grant RSUs for the
following reasons:
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RSUs cause the value of directors share ownership to rise and fall with that of other stockholders, serving the objective of alignment with stockholder interests. |
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Restricted stock and RSUs are a prevalent form of director compensation among the Companys Peer Group. |
The
Company determines the number of RSUs to be granted by dividing the annual equity award value of $90,000 by the closing price of Common Stock on the date of the annual
grant. RSUs granted prior to 2015 vest on the earlier of the first business day 12 months from the date of grant or upon the directors termination of service with the Board, unless a
director elects to defer vesting of shares issuable under such RSU awards until the earlier of a specified distribution date or the termination of their Board service, in compliance with IRC 409A. Beginning with the February 2015 RSU awards,
directors may elect to defer receipt of shares issuable under RSU awards to termination of their board service; and, to the extent the Company pays a dividend, directors will earn a dividend equivalent on RSU shares that have vested, but not yet
been issued. Dividends were not paid on RSUs awarded prior to February 2015.
Director Stock Holding Requirement
The Board believes that all directors should maintain a
meaningful personal financial stake in the Company to align their long-term interests with those of our stockholders. Pursuant to our Principles and Practices, it is the Boards desire that each non-employee director will hold Jack in the Box
Inc. Common Stock with a value of at least three times the annual cash Board service retainer within a reasonable period after joining the Board. Effective beginning fiscal 2012, all grants of equity to directors require that each director hold at
least 50% of the shares resulting from each grant until his or her termination of service from the Board. Direct holdings, unvested and deferred RSUs, and Common Stock equivalents count toward ownership value. The table below shows each
directors ownership value as of fiscal year end 2014, based on a closing stock price of $65.73 on the last trading day of fiscal 2014, September 26, 2014. Each of our non-employee directors, except Ms. John who joined the Board
late in fiscal 2014, meet the director holding requirement.
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Name |
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Board Service Effective Date |
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Direct Holdings / RSUs |
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Deferred Units & Common Stock Equivalents |
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Total Value |
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Mr. Goebel |
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Dec. 2008 |
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$ |
1,179,788 |
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$ |
208,298 |
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$ |
1,388,086 |
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Ms. John |
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Sept. 2014 |
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$ |
6,573 |
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$ |
0 |
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$ |
6,573 |
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Ms. Kleiner |
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Sept. 2011 |
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$ |
600,641 |
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$ |
208,298 |
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$ |
808,939 |
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Mr. Murphy |
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Sept. 2002 |
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$ |
310,246 |
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$ |
3,307,731 |
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$ |
3,617,977 |
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Mr. Myers |
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Dec. 2010 |
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$ |
1,947,514 |
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$ |
214,806 |
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$ |
2,162,320 |
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Mr. Tehle |
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Dec. 2004 |
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$ |
878,284 |
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$ |
2,643,332 |
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$ |
3,521,616 |
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Mr. Wyatt |
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May 2010 |
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$ |
499,219 |
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$ |
309,720 |
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$ |
808,939 |
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Expenses
The Company reimburses directors for customary and usual travel and out-of-pocket expenses incurred in connection with attendance at Board and committee meetings.
20 JACK IN THE BOX INC. ï
2015 Proxy Statement
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DIRECTOR COMPENSATION AND STOCK OWNERSHIP GUIDELINES |
Fiscal 2014 Compensation
For fiscal 2014, the average annual compensation of directors
was $164,583 (excluding the dividend payments on deferred accounts), comprised of (i) $74,583 in cash and (ii) $90,000 in RSUs. This average excludes Ms. John, who joined the Board in the final month of fiscal 2014. The following
table provides the compensation amounts for each of the Companys directors in fiscal 2014.
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Name |
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Fees Earned or Paid in Cash (1) |
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Stock Awards (2) |
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All Other Compensation (3) |
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Total |
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Mr. Goebel |
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$ |
80,000 |
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$ |
90,000 |
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$ |
0 |
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$ |
170,000 |
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Ms. John |
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$ |
25,240 |
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$ |
0 |
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$ |
0 |
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$ |
25,240 |
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Ms. Kleiner |
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$ |
70,000 |
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$ |
90,000 |
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$ |
0 |
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$ |
160,000 |
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Mr. Murphy |
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$ |
80,000 |
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$ |
90,000 |
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$ |
17,009 |
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$ |
187,009 |
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Mr. Myers |
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$ |
65,000 |
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$ |
90,000 |
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$ |
1,301 |
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$ |
156,301 |
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Mr. Tehle |
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$ |
72,500 |
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$ |
90,000 |
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$ |
11,724 |
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$ |
174,224 |
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Mr. Wyatt |
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$ |
80,000 |
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$ |
90,000 |
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$ |
0 |
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$ |
170,000 |
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(1) |
The amount reported in the Fees Earned or Paid in Cash column reflects Board and Committee earned retainers paid to each director in 2014 either in cash or deferred at the directors election. For
Ms. John, who joined the Board in September 2014, the fees were pro-rated for board service and committee membership from September 2014 until the next annual stockholder meeting in February 2014. |
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(2) |
The amount in the Stock Awards column reflects the grant date fair value of RSUs granted under the 2004 Stock Incentive Plan, computed in accordance with ASC 718. Each director received an annual equity
award of 1,551 RSUs, valued at $90,000 on the date of grant, February 24, 2014. The restricted stock units vest 100% on the earlier of the first business day 12 months from the date of grant or upon termination of service with the Board.
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(3) |
The amount reported in the All Other Compensation column reflects two dividend payments made during FY 2014 that were credited to the applicable directors common stock equivalent accounts in
connection with their prior deferral of cash retainers under the Director Deferred Compensation Plan described in the above section entitled a. Cash Retainers. |
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Outstanding Equity at Fiscal Year End
The table below sets forth the aggregate number of unvested and
deferred RSUs and shares underlying outstanding stock options held by directors at the end of fiscal 2014. In fiscal 2009, directors began receiving annual equity grants in the form of RSUs rather than stock options.
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Name |
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Unvested
RSUs |
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Deferred
RSUs |
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Stock Options |
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Mr. Goebel |
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1,551 |
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3,169 |
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0 |
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Ms. John |
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0 |
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0 |
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0 |
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Ms. Kleiner |
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1,551 |
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3,169 |
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0 |
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Mr. Murphy |
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1,551 |
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7,587 |
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12,900 |
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Mr. Myers |
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1,551 |
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0 |
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0 |
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Mr. Tehle |
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1,551 |
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10,756 |
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0 |
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Mr. Wyatt |
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1,551 |
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4,712 |
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0 |
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JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 21
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REPORT OF THE AUDIT COMMITTEE |
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REPORT OF
THE AUDIT COMMITTEE
The following is the report of the Audit Committee with respect to Jack in the Box Inc.s audited consolidated
financial statements for the fiscal year ended September 28, 2014.
The Audit Committee has reviewed and discussed the annual consolidated financial statements
with Management and KPMG LLP, the Companys independent registered public accounting firm (the independent auditor). Management is responsible for the financial reporting process, the system of internal controls, including internal
control over financial reporting, risk management and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditor is responsible for performing an independent audit of the
consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States of America, as well as expressing an opinion on the effectiveness of
internal control over financial reporting.
The Audit Committee met on four occasions in the fiscal year ended September 28, 2014. The Audit Committee met with
the independent auditor, with and without Management present, to discuss the results of its audits and quarterly reviews of the Companys financial statements. The Audit Committee also discussed with the independent auditor the matters required
to be discussed by Public Company Accounting Oversight Board (PCAOB) Statement on Auditing Standards No. 16 Communications with Audit Committees. The Audit Committee also received from the Companys independent auditor the written
disclosures and the letter required by applicable requirements of PCAOB regarding their
communications with the Audit Committee concerning independence, and has discussed with the independent auditor its independence from the Company. The Audit Committee also has considered whether
the provision of non-audit services to the Company is compatible with the independence of the independent auditor.
In performing its functions, the Audit Committee
acts only in an oversight capacity and necessarily relies on the work and assurances of the Companys management and internal audit group as well as the Companys independent auditor whose reports express opinions on the conformity of the
Companys annual financial statements with U.S. generally accepted accounting principles.
Based on the reviews and discussions referred to above, and the
reports of KPMG LLP, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, the inclusion of the audited consolidated financial statements in the Companys Annual Report on Form 10-K for the fiscal
year ended September 28, 2014, for filing with the SEC.
THE AUDIT COMMITTEE
Michael W. Murphy, Chair
James M. Myers
David M. Tehle
This report is not 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.
22 JACK IN THE BOX INC. ï
2015 Proxy Statement
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INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FEES AND SERVICES |
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FEES AND SERVICES
The following table presents fees billed for professional services rendered by KPMG, the Companys independent
registered public accountants, for the fiscal years ended September 28, 2014, and September 29, 2013.
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2014 |
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|
2013 |
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Audit Fees (1) |
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$ |
897,515 |
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|
$ |
910,520 |
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Audit Related Fees |
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Tax Fees (2) |
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|
67,923 |
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|
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All Other Fees |
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|
|
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|
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KPMG Total Fees |
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$ |
965,438 |
|
|
$ |
910,520 |
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(1) |
Audit fees include fees for the audit of the Companys consolidated annual financial statements and the audit of the effectiveness of internal controls over financial reporting. Audit fees also include fees for
review of the interim financial statements included in our Form 10-Q quarterly reports and the issuance of consents and services that are normally provided by the independent registered public accounting firm in connection with statutory and
regulatory filings or engagements. |
(2) |
Tax fees include fees for services rendered for tax compliance, tax advice or tax planning in connection with the Companys debt refinancings, interest rate swaps, and sales tax consulting.
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Registered Public Accountants Independence. The Audit Committee has considered whether the provision of
the above-noted services, other than audit services, is compatible with maintaining KPMGs independence, and has determined that the provision of such services has not adversely affected KPMGs independence.
Policy on Audit Committee Pre-Approval of Services. The Company and its Audit Committee are committed to ensuring the independence of the independent
registered public accountants, both in fact and in appearance. In this regard, the Audit Committee has established a pre-approval policy in accordance with applicable securities rules. The Audit Committees pre-approval policy is set forth in
the Audit Committee Pre-Approval Policy, included as Exhibit A to this Proxy Statement.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 23
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PROPOSAL TWO RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS |
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PROPOSAL
TWO RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee has appointed the firm of KPMG LLP as the
Companys independent registered public accountants for fiscal year 2015. Although action by stockholders in this matter is not required, the Audit Committee believes it is appropriate to seek stockholder ratification of this appointment.
KPMG LLP has served as the Companys independent auditor since 1986. One or more representatives of KPMG LLP will be present at the Annual Meeting and will have
the opportunity to make a statement and to respond to appropriate questions from stockholders. The following proposal will be presented at the Annual Meeting:
Action by the Audit Committee appointing KPMG LLP as the Companys independent registered public accountants to conduct the annual audit of the consolidated
financial statements of the Company and its subsidiaries for the fiscal year ending September 27, 2015, is hereby ratified, confirmed and approved.
Vote Required for Ratification
Ratification requires the affirmative vote of a majority of the votes present in person or
represented by proxy at the Annual Meeting and entitled to vote on such proposal. Abstentions will be included in the number of shares present and entitled to vote, and will have the same effect as a vote AGAINST this proposal. Brokers
have discretionary authority to vote uninstructed shares on this matter.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANYS INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.
24 JACK IN THE BOX INC. ï
2015 Proxy Statement
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PROPOSAL THREE ADVISORY VOTE ON EXECUTIVE COMPENSATION |
PROPOSAL THREE ADVISORY VOTE ON
EXECUTIVE COMPENSATION
As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), the
Company is providing stockholders with the opportunity to cast an advisory vote on the compensation of our named executive officers (NEOs) as disclosed in the CD&A, the compensation tables, narrative disclosures, and related
footnotes included in this Proxy Statement. This proposal is commonly known as a Say on Pay proposal.
The Say on Pay vote is advisory, and therefore
nonbinding on the Company; however, the Compensation Committee of the Board of Directors, which is comprised entirely of independent directors, values the opinions of our stockholders and will take into account the outcome of the vote when
considering future executive compensation decisions. We received a 97.8% favorable vote on Say on Pay at our February 2014 Annual Meeting of Stockholders.
The
Compensation Committee engages the services of an independent compensation consultant to advise on executive compensation matters, including competitive compensation targets within the marketplace, and Company performance targets and analysis. This
consultant works exclusively for the Compensation Committee and performs no other work for the Company.
As discussed in more detail in the CD&A, our executive
compensation program is designed to attract and retain a talented team of executives who can deliver on our commitment to build long-term stockholder value. The Compensation Committee believes our program is competitive in the marketplace, links pay
to performance by rewarding our NEOs for achievement of short-term and long-term financial goals (and, in some years, strategic goals), and aligns our NEOs interests with the long-term interests of our stockholders by providing a mix of
performance and service-based equity awards. Specifically, a significant portion of compensation paid to our NEOs is based on the Companys business performance.
Our fiscal 2014 NEOs consist of Brand Services executives supporting both brands, namely our Chief Executive Officer (CEO) (including our current CEO Leonard Comma, and
our Former CEO Linda Lang who retired in January 2014), Chief Financial Officer (CFO), Chief Legal and Risk Officer (CLO) and Chief People Officer (CPO), as well as our Qdoba Brand President.
The Compensation Committee believes stockholders should consider the following key components of our compensation programs and governance practices when voting on this
proposal:
Pay for Performance Orientation
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Targeted Pay. We target executive base salary, total cash compensation, and total direct compensation to approximate a reasonable range of the Market median for performance that meets expectations, with the
opportunity for above-market median compensation only if performance exceeds expectations. (Market compensation is defined in Section III. Competitive Analysis of the CD&A.) |
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Pay Mix. Our executive compensation program includes a mix of fixed and variable compensation, including annual and long-term incentives that create a balance between short-term and long-term focus.
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Annual Incentives. Each of the Brand Services NEOs (except Ms. Lang who announced her retirement prior to fiscal 2014) earned an annual incentive payment in fiscal 2014. The Company exceeded its
financial performance target for Operating Earnings Per Share (EPS), exceeded its consolidated Restaurant Operating Margin (ROM) target, and achieved its fiscal 2014 strategic goals at an overall level above target. The Qdoba Brand President earned
an annual incentive based on the same EPS and strategic goals, and on the above threshold level achievement on Qdoba brand Defined Operating Earnings Before Interest
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and Taxes (Operating EBIT) and ROM goals. The annual incentive plan for fiscal 2014 for all NEOs included a strategic goal component in order to motivate and reward Management for
achievements that positioned the Company for the future but were not necessarily directly reflected in our annual financial results. In fiscal 2014, these strategic goals included (a) implementing a brand services structure to more efficiently
and cost effectively support both brands and (b) undertaking a review of both brands strategy and positioning to identify initiatives to support our long-term goals. |
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Long-Term Incentives (LTI). Equity awards for our NEOs included a mix of stock options, performance share units (PSUs), and
time-vested restricted stock units (RSUs) with holding requirements. The PSUs vest three years after the grant, depending on the Companys achievement of goals set for each year over a three-fiscal year period. The November 2011 PSU
award for our NEOs, which was based on performance targets for the three-fiscal year period 2012-2014, vested in November 2014. The PSU goals for the November 2011 PSU award for the Brand Services executives were: (a) a specified guest
satisfaction goal (weighted one-third) and (b) Return on Invested Capital (ROIC) goal (weighted two-thirds). During the fiscal 2012-2014 three-year period, the Company
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ï 2015 Proxy Statement 25
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PROPOSAL THREE ADVISORY VOTE ON EXECUTIVE COMPENSATION |
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achieved the guest satisfaction goals at a level above target for each of the three years in the performance period, and achieved the ROIC goals at a level above target for all three years,
including achieving above maximum for the final performance year of FY 2014. Accordingly, in November 2014, our four Brand Services NEOs (the current CEO, CFO, CLO and CPO) each received a weighted payout on the FY 2012-14 PSU
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award, above target, but below maximum, of 141.7% of the target units awarded. (The Qdoba Brand President joined the company in March 2013 and did not participate in the 2011 LTI grant).
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The grant guidelines, goals, and performance metrics for the LTI awards granted in November 2014 for the performance period FY
2014-16 are further described in the CD&A.
Alignment with Long-Term
Stockholder Interests
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Stock Ownership Requirement. Our NEOs and other senior executives are required to own a significant amount of the Companys stock, based on a multiple of salary. |
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Equity Awards. Option awards and time-vested RSUs have multi-year vesting; performance awards are based on achievement of financial and operational goals over a three-year period. RSUs are subject to a
holding requirement of 50% or 100% until termination or retirement, based on whether the executive has met his or her stock ownership requirement on the date of the equity grants. The value of these awards, which have holding requirements or vest
over the course of several years, is directly linked to our
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stock price, aligning the financial interests of our NEOs with the interests of our stockholders. A large proportion of our NEOs total pay is delivered in equity awards (including options,
PSUs and RSUs). Such equity awards accounted for over 60% of the CEOs total direct compensation in 2014. |
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No Evergreen No Repricing No Pledging or Hedging. We do not have an evergreen plan, and we prohibit repricing equity awards without stockholder approval. We prohibit pledging of
Company stock as collateral for any obligation and we prohibit hedging transactions involving our stock. |
Recommendation
With the assistance of its independent compensation consultant, the Compensation Committee has thoughtfully developed our executive compensation
programs, setting NEO compensation that links pay to performance and provides an appropriate balance of short-term and long-term incentives that are aligned with long-term stockholder interests. Accordingly, the Board of Directors recommends that
you vote in favor of the following resolution:
RESOLVED, that Jack in the Box Inc. stockholders approve, on an advisory basis, the compensation of the
Companys named executive officers as described in the Companys Compensation Discussion and Analysis, tabular disclosures, and other narrative disclosures in this Proxy Statement for the 2015 Annual Meeting of Stockholders.
Approval of the Say on Pay proposal requires the affirmative vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and
entitled to vote on such proposal. Abstentions will be included in the number of shares present and entitled to vote, and will have the same effect as a vote AGAINST the proposal. Broker non-votes will not count as votes cast
FOR or AGAINST the proposal, and will not be included in calculating the number of votes necessary for approval for this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.
26 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A I. EXECUTIVE SUMMARY |
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (CD&A) explains the key elements of our executive compensation program and compensation
decisions for our named executive officers (NEOs) in fiscal 2014. The Compensation Committee of our Board of Directors (the Committee), with input from its independent compensation consultant, oversees these programs and
determines compensation for our NEOs. Compensation for fiscal 2013 and 2012 is shown for the NEOs who were also NEOs in either of those years.
Our fiscal year 2014
NEOs are:
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Leonard A. Comma (1) |
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Chairman and Chief Executive Officer (CEO), our principal executive officer |
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Linda A. Lang (1) |
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Retired Chairman and Chief Executive Officer (Former CEO), our former principal executive officer |
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Jerry P. Rebel |
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Executive Vice President, Chief Financial Officer (CFO), our principal financial officer |
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Phillip H. Rudolph |
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Executive Vice President, Chief Legal and Risk Officer (CLO) and Corporate Secretary |
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Timothy P. Casey |
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Qdoba Brand President |
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Mark H. Blankenship |
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Executive Vice President, Chief People, Culture & Corporate Strategy Officer (CPO) |
(1) |
In August 2013, Ms. Lang announced her retirement as Chairman and CEO, effective January 1, 2014, on which date Mr. Comma, previously President and Chief Operating Officer, assumed both positions.
Ms. Lang is referred to in this CD&A as either Ms. Lang or as Former CEO. |
Quick Reference Guide
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Executive Summary |
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Section I |
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Compensation Philosophy and Objectives |
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Section II |
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Compensation Competitive Analysis |
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Section III |
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Elements of Compensation |
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Section IV |
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Compensation Decision-Making Process |
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Section V |
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Fiscal 2014 Compensation |
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Section VI |
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Other Benefit Programs and Policies |
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Section VII |
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Fiscal 2015 Program Changes |
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Section VIII |
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I. EXECUTIVE SUMMARY
Jack in the Box is committed to building long-term stockholder
value. Our executive compensation program is designed to deliver on this commitment by using a balanced performance measurement framework that is aligned with the key drivers of Company performance and stockholder value creation. This executive
summary provides an overview of our fiscal 2014 Company performance, compensation framework and pay actions, targeted total direct compensation, CEO pay for performance alignment, and governance practices.
a. Fiscal 2014 Key Business Results
The Company returned significant value to its stockholders by delivering another year of strong financial and operational
performance in fiscal 2014. We believe that the pay-for-performance philosophy of our executive compensation program was an important driver of our success. Our performance reflects the strength of our leadership team and employees, the success of
our franchise business model, the growth of our brands, the restructuring activities we have undertaken to drive organizational efficiency, and our continued focus on enhancing our guests experience in our restaurants.
Fiscal 2014 highlights include:
Returns to Stockholders
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The Companys stock price increased 63.9% to $65.73 per share at fiscal year-end (FYE) 2014, versus $40.10 at FYE 2013. This increase is on top of a 42.7% increase during the prior year, fiscal 2013.
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We returned more than $335 million in cash to stockholders through initiation of a quarterly cash dividend and the repurchase of nearly $320 million in Company stock during fiscal 2014.
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ï 2015 Proxy Statement 27
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CD&A I. EXECUTIVE SUMMARY |
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Financial and Strategic Achievements
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Operating Earnings Per Share (Operating EPS)1 increased 35% to $2.45 per share for fiscal 2014 (versus $1.82 for fiscal 2013), on top of last years
39% increase over fiscal 2012. This represents the third consecutive year of growth in excess of 30 percent. |
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Systemwide same-store sales at Jack in the Box restaurants improved 2.0% for the year, and at Qdoba increased 6.0% for the year. We continue to execute on strategies that we believe will drive sustainable sales and
market-share growth over the long-term. |
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Consolidated restaurant operating margin improved 140 basis points to 18.5% in fiscal 2014, largely driven by same-store sales growth at both brands and the benefit of our Jack in the Box refranchising strategy.
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We have essentially completed the business model transformation of our Jack in the Box brand from primarily company-owned restaurants to franchise-owned restaurants. We refranchised 37 restaurants during the year, and
at year end approximately 81% of our system was franchised. This transformation has resulted in a less capital intensive business model with more annuity-like cash flows, as well as higher average unit volumes (AUV) and margins for the
remaining company restaurants that we operate. |
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Our Qdoba brand opened 38 new restaurants, and systemwide sales increased 13% for the year.
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During the year, we completed a review of the Qdoba brand strategy and positioning, and began implementation of several initiatives to differentiate us from the competition. We also undertook a review of the Jack in the
Box brand strategy and positioning and identified initiatives to support our long-term goals. |
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The organization also completed its transformation to a shared-services model that supports both our Jack in the Box and Qdoba brands with the integration of additional key functions under our Brand Services
framework. We believe this structure allows us to capitalize on operational and cost efficiencies, as well as shared expertise, experience, and capabilities. In fiscal 2014, we reduced G&A by 50 basis points from the prior year to 3.8% of
systemwide sales, reaching our targeted range of 3.5% to 4%. |
These accomplishments helped us (1) substantially exceed our annual incentive
plan performance target for Operating EPS; (2) exceed our Restaurant Operating Margin (ROM) target on a consolidated basis; (3) substantially exceed both our ROM and Operating EBIT targets for the Jack in the Box brand;
(4) achieve above threshold (but below target) level on Qdoba brand ROM and Operating EBIT; and (5) achieve our fiscal 2014 strategic goals at an overall level above target, as described in Fiscal 2014 Compensation Section VI below.
Accordingly, our Brand Services NEOs (CEO, CFO, CLO and CPO) received annual incentive payouts for fiscal 2014 of 200% of target payout, while the Qdoba Brand President received 116% of target payout. These payouts ranged from 87% to 200% of the
base salaries of our NEOs.
1 |
Operating EPS refers to diluted EPS from continuing operations on a GAAP basis excluding restructuring charges and gains/losses from refranchising. For a reconciliation, please see the Companys current report
on Form 8-K and accompanying press release filed November 18, 2014. |
b. Fiscal 2014 Compensation Framework
Our executive compensation program is designed to motivate, engage, and retain a talented leadership team and to appropriately reward them for their
contributions to our business. Our performance measurement framework consists of a combination of financial, operational, and strategic performance metrics, varying time horizons, and multiple equity vehicles. The largest portion of target executive
compensation is variable and is directly tied to the achievement of annual and longer-term financial and operating goals. In combination, these metrics and variables provide a balanced and comprehensive view of performance, and drive the
Committees executive compensation decisions. The framework and key fiscal 2014 performance measures and pay actions are shown opposite.
28 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A I. EXECUTIVE SUMMARY |
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ï 2015 Proxy Statement 29
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CD&A I. EXECUTIVE SUMMARY |
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c. Fiscal 2014 Targeted Total Direct
Compensation Mix
The chart below shows the percentage breakdown of targeted total direct compensation (TDC) (consisting of base salary,
target annual incentive, and target long-term incentive) for each NEO in fiscal 2014 (other than Ms. Lang). Consistent with our pay for performance philosophy (as described more fully in Section II of this CD&A), the largest portion of
compensation is variable, at-risk pay in the form of annual and long-term incentives, specifically 69% for our CEO, and 57%-61% for our other NEOs (includes annual incentive, stock options, and PSUs).
The Committee determined, based on market data and advice provided by its independent consultant, that the target TDC for our CEO in
fiscal 2014 was $4.4 million (consisting of base salary of $800,000, target annual incentive of $800,000, and target long-term incentive guideline of $2.8 million). Consistent with our compensation philosophy, TDC is generally +/-15% of the market
median, based on the Committees discretion and consideration of performance, retention, and other factors. Mr. Commas actual TDC in fiscal 2014 was $5.5 million.
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CEO Total Direct Compensation |
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Target (000s) |
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Actual (000s) |
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Salary |
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$ |
800.0 |
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765.8 |
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Annual Incentive |
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$ |
800.0 |
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$ |
1,600.0 |
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Long-Term Incentive (LTI) |
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2,800.0 |
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$ |
3,095.0 |
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Total |
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4,400.0 |
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$ |
5,460.8 |
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The increase in actual TDC over target TDC was primarily reflective of: (a) an additional $800,000 due to an annual incentive
payout at the maximum 200% of target based on the Companys substantially above target performance on the annual goals; and (b) an increase in the value of equity awards due to appreciation in our stock price from the date of grant
determination to the actual grant date. The LTI component values for each NEO are provided in Section VI.c. Fiscal 2014 Compensation Long-Term Incentive Compensation.
30 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A I. EXECUTIVE SUMMARY |
d. CEO Compensation and Pay for Performance Alignment
Each year, the Committee assesses our CEOs actual compensation relative to the Companys performance. The following graph shows the relationship of our
CEOs actual TDC (base salary, actual annual incentive earned, and long term incentive value based on the estimated value of each award using the stock price at the time of grant and, for PSUs, the entire three-year potential share payout at
target), compared to our cumulative shareholder return performance in each of the last five fiscal years. Pay for performance alignment is shown relative to the TDC of our current CEO, Mr. Comma, for FY 2014, and relative to our Former CEO,
Ms. Lang, for prior years. As illustrated, CEO compensation was generally aligned with Company performance.
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(1) |
The Cumulative Total Return numbers assume that the value of the investment in the Companys Common Stock was $100 on September 27, 2009 and track such investment through September 28, 2014, and
assumes reinvestment of dividends. |
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e. Governance Practices
The Company has several governance practices that it believes reinforce the soundness of our compensation programs.
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Director Independence. The Compensation Committee is made up entirely of independent directors. |
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Independent Compensation Consultant. The Committee retains an independent compensation consultant to advise on the executive compensation program and practices. The consultant works exclusively for the Committee
and does not perform any other work for the Company. |
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Tax Gross-Ups. The Company ceased providing tax gross-up provisions in compensation arrangements entered into in 2009 and later, except for relocation costs which would require Board approval. No such relocation
gross-up payments have been made to any NEO since 2008.
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Stock Ownership and Holding Requirements. Directors, NEOs and other executives have stock ownership and holding requirements until termination of service. |
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No Hedging or Pledging of Company Stock. The Company prohibits any hedging transactions involving our stock, pledges of Company stock, and the holding of Company stock in margin accounts. |
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Clawback Policy. A clawback policy was adopted in 2008 and applies to incentive cash compensation and performance-based equity awards.
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ï 2015 Proxy Statement 31
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CD&A I. EXECUTIVE SUMMARY |
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f. Say-on-Pay Feedback from
Stockholders
In 2014, we sought an advisory vote from our stockholders regarding our executive compensation program and received a
97.8% favorable vote supporting the program. Each year, the Committee considers the results of the advisory vote as it completes its annual review of each pay element and the compensation packages provided to our NEOs and other executives. Given the
significant level of stockholder support and our stockholder outreach throughout the year, the Committee concluded that our executive compensation
program continues to align executive pay with stockholder interests and provides competitive pay that encourages retention and effectively incentivizes performance of talented NEOs and
executives. Accordingly, the Committee determined not to make any significant changes to our programs as a result of the vote. The Committee will continue to consider the outcome of our say-on-pay votes and our stockholder views when making future
compensation decisions for the NEOs and executives.
32 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A II. COMPENSATION PHILOSOPHY AND OBJECTIVES |
II. COMPENSATION PHILOSOPHY AND OBJECTIVES
a. Compensation Philosophy
Our executive compensation program and pay decisions are based on the philosophy established by the Committee:
Competitive Pay for Expected Performance
Exemplary Pay for Exemplary Performance
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Competitive Pay means base salary and incentive opportunities that approximate the median of the Market (within a reasonable range of the 50th percentile, generally +/- 10% for base salary and annual
incentive, and +/- 15% for total direct compensation (TDC), which includes base salary, annual incentive, and long-term incentive). (Market compensation is defined in Section III Competitive Analysis of this proxy.)
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Expected Performance means the performance targets approved by the Board of Directors. |
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Exemplary Pay means annual and long-term incentive awards that are generally above the median of the Market. |
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Exemplary Performance means performance that exceeds the performance targets approved by the Committee, consistent with the operational plan and budget approved by the Board of Directors.
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b. Compensation Objectives
The Committee has set the following objectives for compensating our NEOs and other executives and considers these objectives in making compensation decisions:
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Objective |
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Description |
Competitive Pay |
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We provide competitive pay that is commensurate with job scope, responsibilities, and individual performance, and that is intended to attract and retain talent. Competitive pay is intended to approximate a reasonable range of pay
relative to the Market (described in Section III. below), and includes base salary, target level of annual incentive, and target award value of long-term incentives. |
Pay Mix |
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We use a mix of fixed-pay (base salary) and incentive compensation to incentivize and reward annual and long-term performance. Our incentives use different time horizons (annual, 3-year, 5-year, and until termination or retirement)
and different forms of payout (cash and stock). |
Pay-for- Performance |
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A large portion of executive compensation is variable, at-risk pay tied directly to achievement of annual and long-term incentive goals. Variable reward payouts are designed to provide competitive pay for achieving expected
performance, and above competitive pay for performance that exceeds expectations. The Committee exercises judgment and discretion in program design and pay decisions, taking into consideration both what and how goals were accomplished. |
Stockholder Alignment |
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We require NEOs and other executives to have a meaningful financial stake in the Company by delivering a significant proportion of their compensation in Company stock, and requiring them to hold a portion of those shares until
termination of service. |
Balanced Performance
Measurement |
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We use a combination of financial, operational, and strategic performance metrics, varying time horizons, and multiple equity vehicles to provide a balanced and comprehensive measurement of performance. |
Managing
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We set incentive goals in such a way as to discourage excessive risk taking, and avoid placing too much emphasis on any one metric or performance time horizon. A risk assessment of our
compensation program is performed on an annual basis. |
c. Internal Pay Equity
Our compensation programs are designed so that potential compensation opportunities are appropriate relative to each
executives level of responsibility and impact. While program design is similar for executives at the same level, actual pay
may vary based on an executives base pay and individual performance over time. In fiscal 2014, our CEOs targeted TDC was approximately 2.5 times higher than the next highest paid
executive.
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ï 2015 Proxy Statement 33
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CD&A III. COMPENSATION COMPETITIVE ANALYSIS |
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III. COMPENSATION
COMPETITIVE ANALYSIS
a. Competitive Analysis
Each year the Committee relies on a variety of data points to assess the competitiveness of our executive compensation
program and the individual compensation of our executives. Information the Committee uses to perform this analysis includes:
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The Companys performance against its internal financial, operational and strategic targets; |
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The mix of short-term and long-term compensation in the form of cash and equity-based compensation; and |
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A review of Market compensation, provided by the Committees independent consultant, that includes
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compensation data from (a) proxy statement disclosures of our Peer Group (defined below), (b) a restaurant industry compensation survey, and (c) general industry data from national
compensation surveys. |
The Committee also considers the Companys financial performance relative to our Peer Group. Although we target
compensation to approximate a reasonable range of the Market median, as described in our compensation philosophy, the Committee has discretion to determine if it is in the Companys best interest to provide any executives with compensation that
varies from this general approach.
b. Fiscal 2014 Peer
Group
We use a Compensation Peer Group to assess the competitive pay levels of our NEOs and other executives, and to evaluate
program design elements. The Committee believes the Peer Group should consist of a combination of restaurant and retail companies because these are the primary companies with which we compete for executive talent.
Our practice in selecting Peer Group companies is to look for companies in the restaurant industry that are comparable in size (GAAP revenue and market capitalization,
generally between 0.5x and 2.0x Jack in the Box). The Committee also considers systemwide sales, number of locations, business models and consumer focus. In reviewing systemwide sales comparisons, the Committee focuses on the eleven restaurant
companies in the Peer Group (for which comparative data is applicable). Given the small number of public restaurant companies that meet the above criteria, our peer group also includes retail companies of similar size.
For 2014, the Committees compensation consultant recommended, and the Committee approved, the following changes to
the Peer Group:
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Removing Darden Restaurants, Inc. because its revenue, market capitalization, and systemwide sales were substantially larger than that of the Peer Group; and |
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Adding Buffalo Wild Wings, because it more closely meets the established criteria described above for our Peer Group. |
The Committee approved the revised fiscal 2014 Peer Group in August 2013, based on the parameters described above, and on the peer group trailing four-quarter revenue
and market cap data at the time. At such time, the Peer Group members revenue and market cap medians were $2.2 billion and $2.2 billion, respectively, compared with trailing four quarter Jack in the Box revenue of $1.5 billion and market cap
of $1.7 billion (which rose to $2.5 billion as of FYE 2014). The Committee believes that the fiscal 2014 Peer Group provided sound representation of competitive pay levels and practices.
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2014 Peer Group |
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Restaurant |
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Retail |
Brinker International, Inc. |
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Aeropostale Inc. |
Buffalo Wild Wings, Inc. |
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Chicos FAS Inc. |
The Cheesecake Factory Incorporated |
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Childrens Place Retail Stores Inc. |
Chipotle Mexican Grill Inc. |
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DSW Inc. |
Cracker Barrel Old Country Store, Inc. |
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Finish Line, Inc. |
DineEquity, Inc |
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Genesco Inc. |
Dominos Pizza, Inc. |
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Urban Outfitters, Inc. |
Panera Bread Company |
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Ruby Tuesday, Inc. |
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Sonic Corporation |
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The Wendys Company |
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34 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A IV. ELEMENTS OF COMPENSATION |
IV. ELEMENTS OF COMPENSATION
Our executive compensation programs consist of the elements
summarized below, and are designed to (a) achieve our compensation objectives, (b) enable the Company to retain, motivate, engage, and reward our NEOs and other executives, and (c) encourage an appropriate level of risk taking, as
discussed later in this CD&A.
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Link to Compensation Objectives |
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Key Features |
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Current Year Performance |
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Base Salary
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Fixed amount of compensation for performing day-to-day responsibilities. Provides financial stability and security, and represents the smallest portion of TDC. |
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Competitive pay that is targeted to approximate a reasonable range of the median of the Market, taking into account job scope and complexity, criticality of position, knowledge, skills and
experience. Generally, executives are eligible for an annual salary increase, depending on individual performance, market pay changes, and internal equity. |
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Annual
Incentive
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Variable compensation component. Motivates and rewards for achievement of annual Company financial and operational goals and, in some years, other annual strategic objectives. |
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Incentives are targeted to approximate a reasonable range of the Market median. Total potential payouts range from 0% - 200% of target payout. Goals and weighting are set annually for specific
financial and/or strategic performance. Fiscal 2014 goals are described in Section VI.b. |
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Multi-Year Performance |
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Long-Term
Incentive (LTI)
(Equity) |
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Variable compensation component. Motivates and rewards for sustained long-term financial and operational
performance that increases stockholder value. Encourages continued employment through required
vesting periods in order to obtain shares. Stock ownership and holding requirements align the
financial interests of our executives with the financial interests of our stockholders. |
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Grant guidelines are reviewed annually and set to result in total pay that is within a reasonable range of the
Market median. Actual grants may vary from the LTI guideline based on individual performance.
Stock Options: In fiscal 2014, option awards represented 50% of an executives LTI guideline; they vest ratably over 3 years and expire 7 years from
the grant date. The exercise price is equal to the closing price of Jack in the Box Common Stock on the date of grant.
Performance Awards: In fiscal 2014, Performance Share Units (PSUs)
represented 30% of LTI guideline, are payable in stock, and vest upon the achievement, if any, of performance goals over a 3-fiscal year performance period. 2014-2016 goals are described in Section
VI.c. Restricted Stock Units (RSUs): In fiscal 2014, RSUs represented 20% of
LTI guideline, vest 20% per year over 5 years, and are payable in stock, with shares subject to a holding requirement until termination of service (100% of after-tax net shares for executives that have not met their stock ownership guideline, or 50%
of after-tax net shares for executives who have met the guideline). |
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Attraction & Retention |
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Perquisites
(Cash) |
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Provides a limited cash value for certain other benefits that are typically offered to executives in the Market. |
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A taxable benefit is provided to executives and paid bi-weekly. This benefit is intended to defray expenses for financial planning, and the executives use of their personal automobile
and cell phone for business purposes. |
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Retirement
Benefits
(Pension, SERP, Deferred Compensation) |
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Provides for retirement income to reward service and commitment to the Company and to encourage retention. |
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Pension All NEOs, except Mr. Casey who was hired in 2013, are participants in the same pension
plan as other employees, based on years of service and earnings up to IRC limitations. The plan was closed to new participants beginning January 1, 2011 and will sunset on December 31, 2015.
Supplemental Executive Retirement Plan (SERP) The SERP was closed to new participants in 2007. Our retired Former CEO Ms. Lang, and two fiscal
2014 NEOs, are participants in the plan as they were hired or promoted to an Officer position prior to 2007. The plan provides retirement income, on a non-qualified basis, without regard to IRC limitations.
Executive Deferred Compensation Plan (EDCP) The EDCP is a non-qualified deferred compensation plan that is offered to highly-compensated
employees. Executives hired or promoted to an Officer position after 2007 (and not eligible for the SERP), including three FY 2014 NEOs, receive an additional Company contribution to the EDCP for 10 years. |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 35
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CD&A V. COMPENSATION DECISION-MAKING PROCESS
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V. COMPENSATION DECISION-MAKING
PROCESS
Role of the Compensation Committee
The Committee works closely with its independent consultant and meets regularly, including in executive session without Management present, to make decisions on our
executive compensation program and on the compensation of our CEO and other executives. The Committee reviews a variety of market data and information, including Company, Peer Group, restaurant/retail industry, and general industry compensation
information, and considers the recommendations of its independent consultant when making compensation decisions. The Committee Chair reports the actions of the Committee to the Board at each regular meeting. The Committees responsibilities
include reviewing and approving:
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The compensation Peer Group; |
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Our compensation philosophy; |
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Amount and form of executive compensation (pay increases, equity grants); |
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CEO performance and compensation; |
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Annual and long-term incentive plans and benefit plans; |
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Performance metrics and goals, and achievement of goals in annual and long-term incentive plans; |
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Board compensation; and |
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Annual proxy statement/CD&A disclosure. |
Role of the Independent Compensation Consultant
The Committee has retained Semler Brossy Consulting Group, LLC (Semler Brossy or Consultant) as its independent compensation
consultant since January 2010. The Consultant reports directly to the Committee and performs no other work for the Company. The Committee has analyzed whether the work of Semler Brossy as a compensation consultant has raised any conflict of
interest, taking into consideration the following factors: (i) the provision of other services to the Company by Semler Brossy; (ii) the amount of fees from the Company paid to Semler Brossy as a percentage of Semler Brossys total
revenue; (iii) Semler Brossys policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship of Semler Brossy or the individual compensation advisors employed by the firm with
an executive officer of the Company; (v) any business or personal relationship of the individual compensation advisors with any member of the Committee; and (vi) any stock of the Company owned by Semler Brossy or the individual
compensation advisors whom it employs. The Committee has determined, based on its analysis of the above factors, that the work of Semler Brossy and the individual compensation advisors employed by
Semler Brossy as compensation consultants to the Committee has not created any conflict of interest.
The
Consultant performs the following responsibilities:
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Attends Committee meetings; |
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Provides independent advice to the Committee on current trends and best practices in compensation design and program alternatives, and advises on plans or practices that may improve effectiveness of our compensation
program; |
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Provides and discusses peer group and survey data for competitive comparisons; and, based on this information, offers independent recommendations on CEO and NEO compensation; |
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Reviews the CD&A, compensation tables, and other compensation-related disclosures in our proxy statements; |
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Offers recommendations, insights and perspectives on compensation related matters; |
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Evaluates and advises the Committee regarding enterprise and related risks associated with executive compensation components, plans and structures; and |
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Supports the Committee to ensure executive compensation programs are competitive and align the interests of our executives with those of our stockholders. |
In fiscal 2014, Semler Brossy attended all Committee meetings in person or by telephone, including executive sessions as requested, and consulted frequently with the
Committee Chair between meetings. Semler Brossy reviewed this CD&A and the tables contained in this Proxy Statement.
Role of the CEO
in Compensation Decisions
When making decisions on executive compensation, the Committee considers input from the Companys CEO, who reviews the
performance of the NEOs and executives (other than himself) and provides his recommendations to the Committee on NEO and other executives compensation, in consultation with the Companys CPO and the compensation and benefits department.
The CFO and finance department also provide information and answer the Committees questions regarding Company financial targets and projections. The CEO meets privately with the Committee and its consultant to discuss his executive pay
recommendations, and provides his insight and perspectives to the Committee on the reports and recommendations of the Committees Consultant relating to plan design and strategies, goal setting, payout structure, stock grants and holding
requirements, and other related topics.
The Committee reviews and discusses pay decisions related to the CEO in executive session without the CEO or any other
members of Management present.
36 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A VI. FISCAL 2014 COMPENSATION |
VI. FISCAL 2014 COMPENSATION
a. Base Salary
In fiscal 2014, the Committee approved the following NEO salary increases, effective November 2013, to recognize individual performance, skills, experience, criticality
of position, and to maintain market competitiveness.
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2014 Base Salary Increases |
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Name |
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FY 2013 Salary (000s) |
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FY 2014 Salary (000s) |
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% Increase |
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Mr. Comma (CEO) (1) |
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$ |
578 |
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$ |
800 |
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38.4% |
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Mr. Rebel (CFO) |
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$ |
524 |
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$ |
540 |
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3.1% |
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Mr. Rudolph (CLO) |
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$ |
471 |
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$ |
485 |
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3.0% |
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Mr. Casey (Qdoba President) |
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$ |
400 |
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$ |
412 |
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3.0% |
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Dr. Blankenship (CPO) |
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$ |
333 |
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$ |
350 |
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5.1% |
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(1) |
Mr. Comma received a 38.4% increase in salary due to his being appointed to succeed Ms. Lang, the Former CEO. Due to her retirement in January 2014, Ms. Lang is not included in the table above.
Ms. Langs base salary from November 2013 until her retirement remained at $995,000, which was the level set for fiscal 2013. |
b. Performance-Based Annual Incentive Compensation (Cash)
In November 2013, the Committee approved the annual incentive goals for fiscal 2014 consistent with the Companys
fiscal 2014 operational plan and budget approved by the Board. For the Brand Services executives (Mr. Comma, Mr. Rebel, Mr. Rudolph, and Dr. Blankenship), the annual goals included: (1) Operating EPS1, using the same calculation that Management and the investment community commonly uses to assess the Companys performance; (2) Consolidated ROM; and (3) specified strategic goals,
subject to a minimum financial performance threshold, as described below. For Mr. Casey, the Qdoba Brand President, the goals included a combination of corporate consolidated goals (the same Operating EPS and Strategic Goals as for the Brand
Services executives) and specific goals for Qdoba (Operating EBIT and ROM). Jack in the Box (JIB) Brand executives had a similar structure, although none were NEOs in FY 2014. The plan structure and relative weights of each goal are
shown in the table below.
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Brand Services Executives |
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JIB/Qdoba Brand Executives |
60% |
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Jack in the Box Inc. Operating EPS |
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30% |
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Jack in the Box Inc. Operating EPS |
20% |
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Consolidated ROM |
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30% |
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JIB/Qdoba Operating EBIT |
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20% |
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JIB/Qdoba ROM |
20% |
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Consolidated Strategic Goals |
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20% |
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Consolidated Strategic Goals |
When setting fiscal 2014 annual incentive goals, the Committee and our CEO considered: the Companys fiscal 2014
operational plan and budget, then-current economic conditions, and potential events that could impact future sales and earnings levels; the results of a sensitivity analysis of Company performance results relative to the incentive targets; and the
advice of the Committees Consultant.
Based on this review, at the beginning of the performance period, the Committee approved annual incentive goals based on
key financial metrics that it believed would increase stockholder value if achieved, with target and higher goals set at challenging, yet reasonable levels. Consolidated goals were established for the enterprise, and additional brand specific goals
were set for each of the JIB and Qdoba brands. The following table describes each goal and the reason for its inclusion in the annual incentive plan.
1 |
Operating EPS refers to diluted EPS from continuing operations on a GAAP basis excluding restructuring charges and gains/losses from refranchising. For a reconciliation, please see the Companys current report
on Form 8-K and accompanying press release filed November 18, 2014. |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 37
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CD&A VI. FISCAL 2014 COMPENSATION |
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2014 Performance Metrics |
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Why Goal Is Used |
Operating EPS (diluted) |
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This is a primary measure of how well the Company is performing overall, and is a key driver of stockholder return over the long-term. This metric excludes restructuring charges and gains and losses from refranchising. |
Consolidated Restaurant Operating Margin (ROM) |
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Consolidated ROM measures how effectively the Company manages its business operations and costs, and is a key performance metric for alignment with our franchise operators, our franchising strategy, and our stockholders and
potential investors. |
Strategic Goals
- Complete transition to Brand Services structure
- Identify and develop brand positioning strategies and initiatives to support growth |
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These strategic goals reward for (a) completing the transition to a Brand Services structure to contribute to operational and G&A efficiencies and support future growth, and (b) identifying and developing initiatives to support
brand positioning and future growth strategies for both our brands. Any payout for achievement of these strategic goals is conditioned upon the Company achieving a minimum Operating EPS threshold. |
JIB/Qdoba Defined Operating EBIT (Operating EBIT) |
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Brand Operating EBIT is a key performance metric for measuring operational performance relative to profitability. For the fiscal 2014 annual incentive, Brand Operating EBIT was defined as earnings (all revenue less costs) before
interest and taxes, where costs include regional administrative costs, but exclude unallocated costs including corporate G&A. (Beginning in 2015, the annual incentive metric is based on segment operating income, which is a measure reported in
our financial statements beginning with the 10-K for FY 2014.) |
JIB/Qdoba Restaurant Operating Margin (ROM) |
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Brand ROM measures how effectively JIB and Qdoba manage their respective business operations and costs, and is a key performance metric for alignment with each brands franchise
operators, as well as our stockholders and potential investors. |
Fiscal 2014 Performance Results
The
enterprise outperformed its fiscal 2014 financial targets, exceeding the highest goal set for Operating EPS, and performing slightly below the maximum goal for ROM. Qdoba achieved ROM and Operating EBIT (as defined in the table above) above the
thresholds but below the targets set for the year, partially due to costs associated with making investments in the short-term that we believe will benefit the brand over the longer-term. The charts below show actual financial performance relative
to target performance for the two enterprise goals and the two Qdoba brand-specific goals, respectively.
38 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A VI. FISCAL 2014 COMPENSATION |
The strategic goals (accounting for 20% of the target annual incentive for all our NEOs) were subject to a minimum
Operating EPS of $1.82 which, if met, funded the strategic portion of the award, but still permitted the Committee to exercise discretion to reduce the payout based on the Committees determination of the level of achievement attained. As the
Company exceeded the minimum Operating EPS threshold, the Committee assessed Managements achievement on its two strategic goals for the year relating to (1) completing the transition to a Brand Services structure, and (2) identifying
and developing initiatives to support future growth strategies for both brands. The Committees assessment on the first strategic goal was based on considerations that included (a) development of service level agreements for various Brand
Services functions, and (b) the integration of the information technology and People functions across the brands to leverage people and
infrastructure capabilities and create synergies in programs and processes. Achievements in information technology included the identification of key single technology platforms to support both
brands, such as point of sale systems, business intelligence and restaurant communication technology. Achievements in the People organization included integration of talent acquisition, training and development, performance management, salary and
incentive plans and HRIS systems and reporting. For the second strategic goal, the Committee assessed the review and implementation of Qdobas brand strategy and positioning, and progress on brand initiatives to strengthen and differentiate the
JIB brand and support our long-term goals.
Overall, the Committee determined that Management achieved an overall performance level above target level on these
strategic goals.
Fiscal 2014 Payouts
The 2014 target and maximum annual incentive payout percentages for the NEOs, expressed as a percentage of annual base salary, are shown in the table below. The payout
percentages are set by position level relative to Market data and each executives role in the Company. There is no minimum amount of incentive payout guaranteed for the NEOs, but the maximum amount is capped at 2x target payout (200% of salary
for the CEO, and 150% of salary for the other NEOs). In 2014, (1) the Company significantly exceeded each of the consolidated financial goals, and (2) in the Committees determination, Management performed well, but below the maximum
level for strategic goals. The annual incentive payouts to our four Brand Services NEOs reached their maximum payout caps. The Qdoba Brand President earned 116% of his target payout (87% of his base salary) based on the achievement on the
consolidated goals and the above threshold (but below target) achievement on the Qdoba brand goals.
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Payout (As Percent of Salary) |
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Target
Incentive (000s) |
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Actual Payout
(As Percent of Salary) |
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Actual Incentive
Earned (000s) |
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Target |
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Max |
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Mr. Comma (CEO) |
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100 |
% |
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200 |
% |
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$ |
800.0 |
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200 |
% |
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$ |
1,600.0 |
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Mr. Rebel (CFO) |
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75 |
% |
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150 |
% |
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$ |
405.0 |
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150 |
% |
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$ |
810.0 |
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Mr. Rudolph (CLO) |
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75 |
% |
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150 |
% |
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$ |
363.8 |
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150 |
% |
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$ |
727.5 |
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Mr. Casey (Qdoba President) |
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75 |
% |
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150 |
% |
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$ |
309.0 |
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87 |
% |
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$ |
357.5 |
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Dr. Blankenship (CPO) |
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75 |
% |
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150 |
% |
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$ |
262.5 |
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150 |
% |
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$ |
525.0 |
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c. Long-Term Incentive Compensation
In fiscal 2014, the long-term incentive program for all our Company NEOs was comprised of 50% stock options, 30%
performance share units (PSUs), and 20% restricted stock units (RSUs). The Committee chose these forms of equity awards and weightings to (a) give the greatest weighting to stock options which directly align executive pay with the creation of
value to our stockholders through stock price appreciation, (b) provide PSUs that directly link executive pay to achievement of longer-term Company financial and operational goals, and (c) provide time-vested RSUs to help facilitate stock
ownership and retention value. In fiscal 2014, all executives (Brand Services, JIB Brand, and Qdoba
Brand) shared the same consolidated goals and same metrics on brand specific goals.
Each year, the
Committees Consultant provides long-term incentive (LTI) grant guidelines that reflect approximately the median of Market TDC when combined with base salary and the target annual incentive. For the fiscal 2014 grant, the Committee considered
the equity grant guidelines, the Companys overall performance, each brands performance for the prior fiscal year, recommendations from the CEO (except with regard to his own compensation), and input from the Committees Consultant
to determine the actual grant value for each NEO and executive.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 39
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CD&A VI. FISCAL 2014 COMPENSATION |
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The chart below illustrates our LTI structure and the key
elements of each type of award for our NEOs and other executives.
Performance Share Units
PSUs vest after three years based upon performance metrics established at the beginning of the three fiscal-year
performance period, with specific performance targets for each metric reviewed and established at the beginning of each fiscal year of the performance period.
The
threshold performance targets set for the second and third years of the performance period may not be lower than the threshold set for the first year. The Committee believes that setting the specific performance targets annually helps the Committee
better understand the relative attainability and difficulty in the performance targets and, as a result, better align performance and payouts.
PSUs awarded in
November 2011 to Jack in the Box executives (based on the fiscal 2012-14 performance period) vested and were payable in November 2014. Consistent with our pay for performance philosophy, the payout level was determined based on the average of the
performance level attained in each fiscal year for two metrics: a guest satisfaction measure and ROIC from Operations. The three year average achievement level on the guest satisfaction goal
(weighted one-third) was above target at 132.2%; and achievement on the ROIC from Operations goal (weighted two-thirds) was above target at 146.4%, together resulting in a weighted payout of
141.7% of the target number of PSUs awarded.
In November 2013, the Committee granted PSU awards to our NEOs and executives (except the retiring CEO) for the
fiscal 2014-2016 performance period, based upon these metrics: (a) ROIC from Operations (ROIC), (b) Jack in the Box Systemwide Average Unit Sales Growth, and (c) Qdoba Systemwide Average Unit Sales Growth. Performance
targets were established relative to these metrics for fiscal 2014, the first year of the 3-year performance period. ROIC is a key indicator of our ability to increase long-term stockholder value, and Systemwide Average Unit Sales Growth is central
to the Companys investment thesis and long-term growth. With these three metrics, PSUs support the critical drivers of our success: to grow top-line sales profitably at both brands, and to ensure prudent deployment of capital to drive the
business. In each case, the Committee believes the goals set are appropriately challenging, but reasonably attainable.
40 JACK IN THE BOX INC. ï
2015 Proxy Statement
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CD&A VI. FISCAL 2014 COMPENSATION |
The table below shows the LTI awards to our NEOs in fiscal 2014.
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Fiscal 2014 Long-Term Incentive Awards to NEOs |
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Stock Options |
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PSUs (At Target) |
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Time-Vested RSUs |
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Name |
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# Shares Underlying Options |
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Grant Date Fair Value (000s) |
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# Units |
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Full Three Year Value (000s) |
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# Units |
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Grant Date Fair Value (000s) |
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Total (000s) |
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Mr. Comma (CEO) (1) |
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76,586 |
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$ |
1,534.0 |
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19,805 |
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$ |
936.6 |
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13,203 |
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$ |
624.4 |
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$ |
3,095.0 |
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Mr. Rebel (CFO) |
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25,263 |
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$ |
506.0 |
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6,533 |
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$ |
308.9 |
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4,355 |
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$ |
205.0 |
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$ |
1,020.0 |
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Mr. Rudolph (CLO) (1) |
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20,722 |
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$ |
415.1 |
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5,359 |
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$ |
253.4 |
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3,572 |
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$ |
168.9 |
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$ |
837.4 |
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Mr. Casey (Qdoba President) |
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14,436 |
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$ |
289.5 |
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3,733 |
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$ |
176.5 |
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2,489 |
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$ |
117.7 |
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$ |
583.7 |
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Dr. Blankenship (CPO) |
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12,993 |
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$ |
260.3 |
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3,360 |
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$ |
158.9 |
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2,240 |
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$ |
105.9 |
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$ |
525.1 |
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(1) |
In order to facilitate stock ownership, under the Companys prior executive stock ownership program in place through 2010, executive officers at the SVP level and higher were given grants of full value stock
awards to meet and maintain their stock ownership guideline. Prior to fiscal 2009, these awards consisted of restricted stock awards (RSAs), and in fiscal 2009 and 2010, consisted of restricted stock units (RSUs). Both forms of awards vest
over ten years: RSAs are held in an escrow account until the executives separation of service; RSUs are not converted to shares and distributed until the executives separation. In fiscal 2011, the Company transitioned to time-vested
RSUs with after-tax net share holding requirements until separation. The value of the RSAs or RSUs granted earlier under the prior stock ownership program is applied to offset, or reduce, future equity awards that may be granted to such executives
over a five year period. Mr. Comma and Mr. Rudolphs fiscal 2014 equity grants reflect such offsets. |
Grant Detail
The number of options and full-value units awarded during fiscal 2014 to each NEO was determined by dividing the LTI grant value approved by the Committee
at its November 2013 meeting for each NEO relative to each form of equity (50% options, 30% PSUs, 20% RSUs), by the 60-day average closing price of Jack in the Box Common Stock two weeks prior to the Committee meeting (for options, using a
Black-Scholes value). In accordance with our standard practice, the grant date of the fiscal 2014 awards was the second business day of the window period that opened in accordance with the Companys Employee/Insider Trading Policy,
after the release of the prior fiscal year-end earnings. The grant values in the table above reflect the Committees methodology in valuing these awards on the grant date, and are based on the closing price of the stock on the date of grant and
the number of options or full-value shares or units subject to the award. For the PSU award, the values above reflect the target number of shares for the entire three-year performance period of the award, as the award is intended
to measure and reward for such prospective three-year period (FY 2014-16); in contrast, the Grants of Plan-Based Awards table on page 51 sets forth on individual rows the grant date fair value of the current performance
year (FY 2014) of three successive PSU awards (made in FY 2012, FY 2013 and FY 2014).
d. Cash Perquisite Allowance
Executives receive an annual cash perquisite allowance. The allowance is taxable to each executive, and the Company does
not provide a related tax gross-up.
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Name |
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Allowance |
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Mr. Comma (CEO) |
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$ |
66,500 |
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Mr. Rebel (CFO) |
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$ |
52,000 |
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Mr. Rudolph (CLO) |
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$ |
52,000 |
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Mr. Casey (Qdoba President) |
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$ |
45,700 |
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Dr. Blankenship (CPO) |
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$ |
52,000 |
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JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 41
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CD&A VII. OTHER BENEFIT PROGRAMS AND POLICIES |
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VII. OTHER BENEFIT PROGRAMS
AND POLICIES
a. Executive
Benefits
Our NEOs and other executives receive the same benefits as those generally available to other employees in the Company.
Both Company-subsidized and voluntary benefit programs are provided and include medical, dental, vision, life insurance,
and disability coverage. Additionally, the Company provides each NEO with an enhanced level of employer-paid term life insurance with a value for each NEO of $770,000.
b. Retirement Plans
The Companys retirement plans are designed to provide our employees, including our NEOs and other executives, with some retirement income
security. These plans reward for service and provide an additional incentive for our employees to build long-term careers at Jack in the Box.
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Defined Benefit Pension Plan (Retirement Plan). All our NEOs except Mr. Casey, along with our employees generally, are participants in a tax-qualified defined benefit pension plan. This plan was
closed to new employees hired on or after January 1, 2011 and will sunset on December 31, 2015. This means that our participating NEOs and employees will no longer accrue additional benefits based on additional pay and service
as of that date. Participants in the pension plan may begin receiving their accrued benefit on or after retirement. |
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Supplemental Executive Retirement Plan (SERP). Three of our NEOs (including the Former CEO) and two other executives are participants in the SERP. Effective January 1, 2007, the SERP was closed
to new participants. The SERP is unfunded and not qualified for tax purposes. The SERP was established in 1990 to address IRC limitations on pension benefits that could be accrued under our tax-qualified pension plan.
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Non-Qualified Deferred Compensation Plan (EDCP). Our NEOs and other highly-compensated employees who are excluded from participating in our qualified 401(k) Plan are eligible to participate in our
EDCP. Participants may defer up to 50% of base salary, and up to 85% of their annual cash incentive. The Company matches 100% of the first 3% of deferred base salary and annual incentive. These obligations represent an unsecured claim against the
Company. |
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Enhanced EDCP. Due to the closure of the SERP in 2007, employees hired or promoted into a Corporate Vice President or above position on or after January 1, 2007 receive an additional contribution to
their EDCP account of 4% of base salary and annual incentive each year for up to 10 years. Three of our NEOs receive the enhanced EDCP.
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c. Executive Stock
Ownership and Holding Requirements
Our NEOs and senior vice presidents and higher are subject to stock ownership guidelines that require them to maintain a
minimum equity stake in Jack in the Box. The guidelines are based on a multiple of salary and are intended to assure that these executives maintain a meaningful financial stake in the Company to promote a long-term perspective in managing the
business, and to align the long-term financial interests of these executives with those of our stockholders.
Prior to 2011, the executive stock ownership program
included one-time grants of restricted stock that were required to be held until the executives termination of service with the Company. Since fiscal 2011, executives have been granted time-vested RSUs that include a share holding requirement
until termination of service.
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Position |
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Minimum Ownership (multiple of base salary) |
|
Chairman and CEO |
|
|
5.0x |
|
Executive Vice President |
|
|
3.0x |
|
JIB and Qdoba Brand Presidents* |
|
|
3.0x |
|
Senior Vice President |
|
|
1.5x |
|
* |
Increased from 1.0x, effective November 2014. |
Holding Requirement
Executives subject to stock ownership guidelines are required
to hold 100% of the shares issued from each RSU grant after it vests until their stock ownership guideline is met, and if met, required to hold 50% of the shares issued from each RSU grant after it vests. Holding requirements are applied on an
after-tax net share basis.
42 JACK IN THE BOX INC. ï
2015 Proxy Statement
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|
CD&A VII. OTHER BENEFIT PROGRAMS AND POLICIES |
Named Executive Officer Stock Ownership
Our NEOs stock ownership is reviewed annually by the Committee at the time equity grants are approved. As of the end of
fiscal 2014, all of our NEOs have met their stock ownership requirement, with the exception of Mr. Casey and Dr. Blankenship. Mr. Casey was hired in March 2013 and his 2013 and 2014 RSU grants and all future RSU grants are subject to
a holding requirement of 100% of net shares until his stock ownership requirement is met. Dr. Blankenship was promoted to Executive Vice President in November 2013 (thereby increasing his ownership requirement); his
2010-
2014 RSU grants, and all future RSU grants, are subject to a holding requirement of 100% of net shares until his stock ownership requirement is met. Ms. Lang, not shown in the table due to
her retirement prior to fiscal year end, met her stock ownership requirement.
Neither PSUs nor options (regardless of when they are exercisable) are counted toward
meeting stock ownership guidelines unless and until shares are issued upon vesting or option exercise, as applicable.
|
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|
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|
|
|
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|
|
|
|
|
|
|
|
Name |
|
Shares Directly Held |
|
|
Restricted Stock/ Unvested Shares (1) |
|
|
Total Shares |
|
|
Value at 9/28/14 @ $65.73
(000s) |
|
|
Value of Stock Ownership
Requirement (000s) |
|
|
Meets Requirement |
|
Mr. Comma (CEO) |
|
|
5,218 |
|
|
|
64,434 |
|
|
|
69,652 |
|
|
$ |
4,578 |
|
|
$ |
4,000 |
|
|
|
Yes |
|
Mr. Rebel (CFO) |
|
|
8,733 |
|
|
|
80,698 |
|
|
|
89,431 |
|
|
$ |
5,878 |
|
|
$ |
1,620 |
|
|
|
Yes |
|
Mr. Rudolph (CLO) |
|
|
4,277 |
|
|
|
70,842 |
|
|
|
75,119 |
|
|
$ |
4,938 |
|
|
$ |
3,483 |
|
|
|
Yes |
|
Mr. Casey (Qdoba President) |
|
|
0 |
|
|
|
2,489 |
|
|
|
2,489 |
|
|
$ |
163 |
|
|
$ |
412 |
|
|
|
No |
|
Dr. Blankenship (CPO) |
|
|
3,464 |
|
|
|
7,587 |
|
|
|
11,051 |
|
|
$ |
726 |
|
|
$ |
1,050 |
|
|
|
No |
|
(1) |
This column includes restricted shares and unvested RSUs; and for Mr. Comma, also includes deferred performance vested restricted stock. |
d. Prohibition of Pledging and Hedging Transactions
The Company prohibits certain derivative transactions in Company stock. Officers, including NEOs, and their families, may
not:
|
|
Trade in puts, calls, or other derivative vehicles involving the Companys securities (often referred to as hedging transactions);
|
|
|
Engage in zero-cost collars, forward sales contracts or other hedging transactions in Company securities; |
|
|
Hold Company securities in margin accounts; or |
|
|
Pledge Company securities. |
e. Executive
Compensation Recovery (Clawback) Policy
The Companys compensation recovery policy provides that in the event Jack in the Box Inc. materially restates all
or a portion of its financial statements due to fraud or intentional misconduct, either committed by a Corporate Officer or knowingly permitted by a Corporate Officer, the Committee may take action to recover incentive cash compensation and
performance-based equity awards that were based on the achievement of financial results that were subsequently restated. For purposes of this policy, a Corporate Officer is defined as an employee with the title of Corporate Vice President or above,
and includes the Jack in the Box Brand President and Qdoba Brand President, as well as former Corporate Officers who were employed by the Company at the time of any fraud or intentional misconduct.
Executive compensation subject to recovery and/or cancellation may include:
i) |
Annual incentive or incentive cash compensation paid to the Corporate Officer, plus a reasonable rate of interest, |
ii) |
Economic gains realized from the sale of shares awarded under a performance-based equity plan, and |
iii) |
Restricted stock or units, deferred stock awards or units, and outstanding stock options to the extent vesting of such awards is performance-based. |
The Committee has the sole discretion to determine what action to take in the event of a restatement, including soliciting recommendations from the Audit Committee and
the full Board and retaining outside advisors to assist in making its determinations. Any actions taken by the Committee would be independent of consequences imposed by law enforcement agencies, regulators or other authorities. The Committee will
continue to review potential changes to the Clawback Policy in light of the Dodd-Frank Act and any regulations or listing requirements based thereon.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 43
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|
CD&A VII. OTHER BENEFIT PROGRAMS AND POLICIES |
|
|
|
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|
|
f. Termination of Service
None of the 2014 NEOs have employment or severance agreements that provide for benefits upon a termination of service,
except in the event of a change in control as described in the Compensation and Benefits Assurance Agreements discussion in the next section. When an NEO terminates employment with the Company, the NEO will receive amounts according to the
specific terms and provisions of each compensation plan or benefit plan. Such amounts may include:
|
|
Amounts contributed and distributions under the Companys qualified and non-qualified deferred compensation plans (subject to the specific terms and requirements of IRC Section 409A). |
|
|
Vesting acceleration, upon a qualified change in control, under the Companys equity incentive plan and standard equity agreement for unvested equity awards. |
|
|
Amounts accrued and vested in the Companys pension plans (Retirement Plan and SERP). |
|
|
If termination is after the end of the fiscal year but before payment, annual cash incentive award subject to the Companys achievement of performance goals.
|
If eligible to retire under a Company-sponsored retirement plan, In addition to the above, and consistent with the terms
of our standard equity agreement, the executive is entitled to the following:
|
|
Accelerated vesting of options equal to 5% additional vesting for each full year of service with the Company. |
|
|
Prorated vesting of performance share units and full vesting of time-vested RSUs in accordance with the vesting schedule of each award. |
|
|
A prorated annual cash incentive award based on the number of full reporting periods worked in the fiscal year before retirement, subject to the Companys eligibility requirements and achievement of performance
goals. |
If an NEO dies while employed by the Company, under the terms of the respective stock award agreements, all outstanding options and stock
awards will become 100% vested on the date of his or her death.
The values of additional potential payments to the NEOs are provided in the section entitled
Potential Payments Upon Termination or Change in Control of this Proxy Statement.
g. Compensation & Benefits Assurance (Change in Control) Agreements
The Committee believes that Compensation & Benefits Assurance Agreements (otherwise known as a Change in Control
or CIC Agreements) benefit stockholders by providing an important incentive to senior executives to remain focused on running the business in the case of a pending or actual change in control event.
Accordingly, each of the NEOs (including Ms. Lang prior to her retirement) and three other officers have a CIC Agreement providing for compensation in the form of
a lump sum payment and other benefits in the event of a qualifying termination within 24 months of the effective date of the change in control of the Company (a double-trigger agreement). Each agreement has a term of two years, and
is subject to automatic extension for additional two-year terms unless either party to the agreement gives notice of intent not to renew. Further details are set forth in the section entitled Potential Payments Upon Termination of Employment
or Change in Control.
In 2009, in line with market practices, the Committee determined not to enter into any future compensatory agreements that obligate the
Company to provide tax gross-up payments intended to offset the cost of excise taxes imposed on excess parachute payments. Accordingly, no CIC agreements entered into since 2009 include a gross-up
provision. Since 2012, the Companys current form CIC agreement includes a best after-tax provision where benefits would be reduced only if doing so would result in a better
after-tax economic position for the affected executive. Under this provision, there are no gross-ups payable; the executive is solely responsible for payment of excise taxes and other applicable federal, state, and local income and
employment taxes. One grandfathered CIC Agreement, entered into with our CFO prior to 2009, was still in effect at fiscal year-end, and includes a gross-up provision.
During FY 2014, the Committee reviewed the CIC agreement structure with its independent consultant, and approved a change to the CIC agreement to provide the same
multiple of cash severance benefits (2.5x base salary and annual incentive) to the Brand Presidents as it provides to Executive Vice Presidents. The Committee plans to continue to monitor the costs and appropriate terms and conditions of CIC
Agreements in the future.
A detailed discussion of the provisions of the CIC Agreements and associated monetary values is provided in the section following
the compensation tables entitled Compensation & Benefits Assurance Agreements.
44 JACK IN THE BOX INC. ï
2015 Proxy Statement
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|
|
CD&A VII. OTHER BENEFIT PROGRAMS AND POLICIES |
h. Tax and Accounting Information
Internal Revenue Code Section 162(m)
The Committee and its Consultant consider the IRC Section 162(m) implications of all compensation decisions for our NEOs and other executives. Section 162(m)
places a one million dollar limit on the amount of compensation that the Company can deduct in any one year for certain NEOs. Certain performance-based pay is excluded from this limit. For the reasons discussed earlier, our compensation programs are
designed to provide the largest portion of an executives compensation through programs intended to qualify as performance-based compensation under Section 162(m), including our annual performance incentive plan and long-term incentive
plan in the form of stock options and performance share units. However, corporate objectives may not necessarily align with the requirements of Section 162(m). Accordingly, the Committee may grant awards or enter into compensation arrangements
under which payments are not deductible under Section 162(m). Restricted stock awards are not considered performance-based under Section 162(m) and, accordingly, are subject to the one million dollar deductibility limit.
Internal Revenue Code Section 409A
Under IRC Section 409A, amounts deferred by an employee under a non-qualified deferred compensation plan (such as the SERP and EDCP) may be included in gross
income when deferred and be subject to a 20% additional federal tax, unless the plan complies with certain requirements related to the timing of deferral election and distribution decisions.
The Company administers the SERP and EDCP intending to comply with Section 409A. The Company intends that its stock options are exempt from Section 409A.
Expensing of Stock Options
The Company accounts for compensation
expense associated with options in accordance with the Financial Accounting Standards Board (FASB) authoritative guidance on stock compensation, and it uses a Black Scholes valuation model to determine the fair value of our
stock options at grant.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 45
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|
|
CD&A VIII. FISCAL 2015 PROGRAM CHANGES |
|
|
|
|
|
|
|
|
VIII. FISCAL 2015 PROGRAM
CHANGES
The Committee approved the following changes
to the executive compensation program for Jack in the Box and Qdoba effective in fiscal 2015 to continue to align our business objectives with our pay for performance philosophy:
Annual Incentive Plans Our objective is to provide annual incentive plans that are aligned with
overall enterprise performance and the performance of each of our brands (Jack in the Box and Qdoba). Consistent with this objective, the Committee approved certain changes to our fiscal 2015 incentive plans. For fiscal 2015, the performance metrics
are all financial (with no strategic goal component) and differ for Brand Services Executives and JIB and Qdoba brand executives:
|
|
|
|
|
|
|
Brand Services Executives |
|
JIB/Qdoba Brand Executives |
70% |
|
Jack in the Box Inc. Operating EPS |
|
30% |
|
Jack in the Box Inc. Operating EPS |
30% |
|
Consolidated ROM |
|
40% |
|
JIB/Qdoba Segment Operating Income |
|
|
|
|
30% |
|
JIB/Qdoba ROM |
Beginning with the Annual Report for fiscal 2014, each brands Segment Operating Income will be disclosed in the Companys
financial statements.
Long-Term Incentive After a thorough review and discussion of our long-term incentive (LTI) program, the Committee, in
consultation with its independent consultant and Management, approved a change to the weighting of each equity component included in our LTI program. In fiscal
2015, to provide a more balanced approach in the form of equity awards, grants will consist of 34% stock options, 33% PSUs, and 33% RSUs. The PSU payout will continue to be based 50% on ROIC from
Operations and the other 50% will focus on growth, using Consolidated Systemwide Sales (Jack in the Box and Qdoba).
The Committee also revised the change in
control provisions in its form grant agreements for options, PSUs and RSUs. Beginning with November 2014 grants, in the event of a change in control: options and RSUs that are not assumed by the acquiring company would vest only upon a
double-trigger, specifically both a change in control and employment termination (as defined and specified in the agreement); and PSUs would vest based upon the actual performance level attained for completed performance periods and the
target performance for incomplete periods, as of the date of the change in control.
Stock Ownership Guideline To provide for better alignment
with shareholder interests, and to align internally with position scope and with peer companies, beginning in fiscal 2015, the stock ownership requirement for the Jack in the Box and Qdoba Brand President positions was increased from 1.0x salary to
3.0x salary, the same level as that of our Executive Vice Presidents.
46 JACK IN THE BOX INC. ï
2015 Proxy Statement
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|
|
COMPENSATION COMMITTEE REPORT |
COMPENSATION COMMITTEE REPORT
The Jack in the Box Compensation Committee is comprised solely of independent members of the Companys Board of Directors. The Committee assists the Board in
fulfilling its responsibilities regarding compensation matters, and is responsible under its charter to determine the compensation of the Executive Officers. This includes reviewing all components of pay for our CEO and the other NEOs. The Committee
reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with its Consultant, with Management and with the Board. Based on this review and discussion, the Committee, on behalf of the Board, has authorized
that this Compensation Discussion and Analysis be included in this Proxy Statement for fiscal 2014, ended September 28, 2014.
THE COMPENSATION COMMITTEE
John T. Wyatt, Chair
David L. Goebel
Sharon P. John
Madeleine A. Kleiner
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 47
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|
|
COMPENSATION RISK ANALYSIS |
|
|
|
|
|
|
|
|
COMPENSATION RISK ANALYSIS
The Committee has engaged in a thorough risk analysis of our compensation plans, programs, policies, and practices for all employees. This includes advice from the
Committees independent consultant regarding executive programs, and a detailed report, prepared by a Company Internal Compensation Risk Committee, describing the risk mitigation characteristics of the Companys annual and long-term
incentive programs for non-executive officer positions. For the following reasons, the Committee believes that the design of our compensation programs, the governance of our programs, and our risk oversight process guard against imprudent risk
taking that could have a material adverse effect on the Company.
Compensation Program Design Protections
|
|
Our base pay programs consist of competitive salaries that provide a fixed level of income on a regular basis. This mitigates any incentive on the part of our executives and employees to take unnecessary or imprudent
risks. |
|
|
The Board approves the Companys strategic plan, capital budget, and long-term financial and operational plans that serve as the basis for setting short and long-term incentive goals. Goals are intended to drive
stockholder value with targets set relative to the approved budget, historical and future expected performance, and a reasonable amount of stretch so that they do not encourage imprudent risk taking. |
|
|
Our annual incentive programs provide variable pay opportunity for certain position levels based on achievement of multiple annual performance goals including both financial and, for some years, strategic goals. Goals
are set at reasonable levels and payouts are managed as a percentage of pay, with maximum caps.
|
|
|
The largest amount of executive incentive compensation opportunity is tied to long-term incentive compensation that emphasizes sustained Company performance over time. This reduces incentive for executives and other
employees to take risks that might increase short-term compensation at the expense of longer term Company results. |
|
|
Equity awards have multi-year vesting, and RSU awards for executives have holding requirements until termination of service. This aligns the long-term interests of our NEOs and executives with those of our stockholders,
and discourages taking short-term risks at the expense of longer-term performance. |
|
|
The maximum awards that may be paid out under the annual and long-term incentive programs are capped at appropriate competitive levels, and the Committee retains the discretion to reduce payouts under the plan.
|
Structural Governance Protections
|
|
The Committee has adopted a clawback/compensation recovery policy that allows the Committee to take action to recover both cash compensation and performance-based equity awards for all NEOs and executives in the event
of a material restatement based on fraud or intentional misconduct. Additionally, the Company has strong internal controls over the measurement and calculation of performance goals designed to keep them from being susceptible to manipulation.
|
|
|
|
Prohibits hedging transactions involving our stock, which prevents executives from insulating themselves from poor stock performance by betting against our success;
|
|
|
|
Prohibits pledges of Company stock and the holding of Company stock in margin accounts. This reduces the risk that executives might create incentives to focus on short-term performance at the expense of long-term
performance; and |
|
|
|
Has a formal ethics code of conduct and an ethics helpline, and provides ethics training and communications to employees. The ethics program is intended to reinforce a culture of integrity at the Company, including
reducing the likelihood of manipulation of financial results for personal gain. |
48 JACK IN THE BOX INC. ï
2015 Proxy Statement
EXECUTIVE COMPENSATION
The Summary Compensation Table (SCT) summarizes the total compensation of our NEOs for the fiscal year ended September 28, 2014, and the prior two
fiscal years to the extent required under the Securities and Exchange Commission rules.
Summary Compensation Table
|
|
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|
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|
|
|
|
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|
|
Summary Compensation Table |
|
|
|
|
|
|
|
|
|
|
|
Name &
Principal Position |
|
Fiscal Year |
|
|
Salary (1) |
|
|
Bonus |
|
|
Stock Awards (2) |
|
|
Option Awards (3) |
|
|
Non-Equity Incentive Plan Compensation (4) |
|
|
Change in Pension Value & NQDC Earnings (5) |
|
|
All
Other Compensation (6) |
|
|
Total |
|
Mr. Comma |
|
|
2014 |
|
|
$ |
765,846 |
|
|
$ |
0 |
|
|
$ |
1,298,804 |
|
|
$ |
1,534,018 |
|
|
$ |
1,600,000 |
|
|
$ |
72,276 |
|
|
$ |
229,922 |
|
|
$ |
5,500,866 |
|
Chairman and CEO* |
|
|
2013 |
|
|
$ |
574,769 |
|
|
$ |
0 |
|
|
$ |
457,094 |
|
|
$ |
586,613 |
|
|
$ |
862,723 |
|
|
$ |
0 |
|
|
$ |
152,818 |
|
|
$ |
2,634,017 |
|
|
|
|
2012 |
|
|
$ |
517,615 |
|
|
$ |
0 |
|
|
$ |
231,302 |
|
|
$ |
414,754 |
|
|
$ |
754,041 |
|
|
$ |
81,437 |
|
|
$ |
120,816 |
|
|
$ |
2,119,965 |
|
Ms. Lang |
|
|
2014 |
|
|
$ |
260,231 |
|
|
$ |
0 |
|
|
$ |
281,947 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
1,861,690 |
|
|
$ |
514,126 |
|
|
$ |
2.917,994 |
|
(Former) Chairman and CEO* |
|
|
2013 |
|
|
$ |
991,654 |
|
|
$ |
0 |
|
|
$ |
1,481,127 |
|
|
$ |
1,783,803 |
|
|
$ |
1,748,713 |
|
|
$ |
567,234 |
|
|
$ |
148,711 |
|
|
$ |
6,721,242 |
|
|
|
|
2012 |
|
|
$ |
962,192 |
|
|
$ |
0 |
|
|
$ |
860,545 |
|
|
$ |
1,542,305 |
|
|
$ |
1,922,630 |
|
|
$ |
3,668,930 |
|
|
$ |
153,045 |
|
|
$ |
9,109,647 |
|
Mr. Rebel |
|
|
2014 |
|
|
$ |
537,539 |
|
|
$ |
0 |
|
|
$ |
679,038 |
|
|
$ |
506,018 |
|
|
$ |
810,000 |
|
|
$ |
1,074,699 |
|
|
$ |
117,801 |
|
|
$ |
3,725,095 |
|
Executive Vice President, |
|
|
2013 |
|
|
$ |
521,923 |
|
|
$ |
0 |
|
|
$ |
433,532 |
|
|
$ |
501,566 |
|
|
$ |
690,475 |
|
|
$ |
400,541 |
|
|
$ |
88,618 |
|
|
$ |
2,636,655 |
|
Chief Financial Officer |
|
|
2012 |
|
|
$ |
503,808 |
|
|
$ |
0 |
|
|
$ |
274,472 |
|
|
$ |
495,986 |
|
|
$ |
754,041 |
|
|
$ |
796,133 |
|
|
$ |
90,020 |
|
|
$ |
2,914,460 |
|
Mr. Rudolph |
|
|
2014 |
|
|
$ |
482,846 |
|
|
$ |
0 |
|
|
$ |
476,164 |
|
|
$ |
415,062 |
|
|
$ |
727,500 |
|
|
$ |
63,438 |
|
|
$ |
150,448 |
|
|
$ |
2,315,458 |
|
Executive Vice President, |
|
|
2013 |
|
|
$ |
469,385 |
|
|
$ |
0 |
|
|
$ |
262,826 |
|
|
$ |
301,884 |
|
|
$ |
620,637 |
|
|
$ |
11,016 |
|
|
$ |
128,599 |
|
|
$ |
1,794,347 |
|
Chief Legal and Risk Officer & Secretary |
|
|
2012 |
|
|
$ |
454,000 |
|
|
$ |
0 |
|
|
$ |
166,476 |
|
|
$ |
298,529 |
|
|
$ |
681,021 |
|
|
$ |
52,826 |
|
|
$ |
131,790 |
|
|
$ |
1,784,642 |
|
Mr. Casey |
|
|
2014 |
|
|
$ |
410,154 |
|
|
$ |
0 |
|
|
$ |
176,534 |
|
|
$ |
289,153 |
|
|
$ |
357,513 |
|
|
$ |
0 |
|
|
$ |
99,972 |
|
|
$ |
1,333,326 |
|
Qdoba Brand President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Blankenship |
|
|
2014 |
|
|
$ |
347,385 |
|
|
$ |
0 |
|
|
$ |
292,553 |
|
|
$ |
260,250 |
|
|
$ |
525,000 |
|
|
$ |
915,022 |
|
|
$ |
77,832 |
|
|
$ |
2,418,042 |
|
Executive Vice President, |
|
|
2013 |
|
|
$ |
331,154 |
|
|
$ |
0 |
|
|
$ |
160,815 |
|
|
$ |
181,116 |
|
|
$ |
321,745 |
|
|
$ |
67,766 |
|
|
$ |
65,722 |
|
|
$ |
1,128,318 |
|
Chief People, Culture, & Strategy Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
As announced during FY 2013, Mr. Comma succeeded the retiring Ms. Lang, as Chairman and CEO, effective January 1, 2014. |
(1) |
The amounts in this column are the base salary earned during the fiscal year, including any amounts deferred by the NEOs in the Executive Deferred Compensation Plan (EDCP). |
(2) |
The amounts in this column represent the aggregate grant date fair value of the PSUs and RSUs granted during the applicable fiscal year, in accordance with FASB ASC Topic 718 (ASC 718) based on the
assumptions and methodologies set forth in the Companys 2014 Annual Report on Form 10-K (Note 12 Share-Based Employee Compensation). PSU awards, which cliff vest after three years, are made annually in November and vest based on our
performance during the succeeding three fiscal-year period. The performance metrics are established at the beginning of the three year period when the grant is made; the specific performance targets for all or a portion of the award are reviewed and
set by the Committee at the beginning of each fiscal year of the performance period (subject to the thresholds for years 2 and 3 being no lower than the threshold established for year 1). The target values of the Fiscal 2014 grant date PSU awards
are included in the table amounts; the values assuming the highest level of performance achievement (150% of target) are, respectively: Mr. Comma, $1,011,651; Mr. Rebel, $709,610; Mr. Rudolph, $460,841; Mr. Casey, $88,243; and
Dr. Blankenship, $279,933. In our 2012 Proxy, we reported higher amounts in this column, reporting the target value of the full three-year PSU award. This was in accordance with the Committees methodology in setting the award values, as
described on page 41 of the CD&A. Specifically, the total stock value reported for 2012 was: Ms. Lang, $1,301,691 (of which $781,022 was PSU value); Mr. Comma, $349,876 (including $209,925 PSU value); Mr. Rebel, $418,395
(including $251,037 PSU value); and Mr. Rudolph, $251,821 (including $151,096 PSU value). |
|
Unlike the other NEOs, Ms. Lang did not receive an FY 2014 award of RSUs and PSUs in November 2013 due to her retirement. The values shown for her in this column represent the aggregate grant date fair value for
the FY 2014 performance period of the PSU awards she received in November 2011 and November 2012. Ms. Lang will receive a payout of each respective award based on the average of the performance level attained in each fiscal year of the 3-fiscal
year period and pro-rated based on her period of service; the value of the Fiscal 2014 grant date portion of Ms. Langs November 2011 and November 2012 PSU awards, assuming the highest level of performance achievement (150% of target) and
without taking into account service pro-ration, is $422,920. |
(3) |
The amounts in this column are the grant date fair values of stock option grants in accordance with ASC 718. The grant date fair values have been determined based on the assumptions and methodologies set forth in the
Companys 2014 Annual Report on Form 10-K (Note 12 Share-Based Employee Compensation). |
(4) |
The amounts in this column are the annual incentive awards earned under the annual incentive plan for executives. Performance achievement is approved by the Committee at the November meeting following the end of the
fiscal year. Annual incentive payments are made in December following Committee approval and reported in the SCT in the fiscal year for which the incentive is earned. |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 49
(5) |
The amounts in this column are the change in the estimated present value of each NEOs accumulated benefit under (1) the qualified pension plan (the Retirement Plan) for all NEOs except
Mr. Casey, and (2) the Supplemental Executive Retirement Plan (SERP) for Lang, Rebel and Blankenship. The estimates are determined using interest rate and mortality rate assumptions consistent with those used in the
Companys financial statements for fiscal years ending September 28, 2014, September 29, 2013, and September 30, 2012. The present value of Ms. Langs accumulated benefit under the SERP as of September 28,
2014 is based on her actual retirement date (January 1, 2014) and is reduced pursuant to her election to begin receiving her benefit after retirement, but before normal retirement age. The RP-2000 Mortality Table is used for the Retirement Plan and
SERP estimates, projected to 2019, combined for employees and annuitants, separate for males and females, with white collar adjustment. The amounts reported in this column may fluctuate significantly in a given year based on a number of factors that
affect the formula to determine pension benefits, including changes in: (i) salary and annual incentive; (ii) years of service; and, predominantly: (iii) the discount rates used in estimating present values, which were 4.36% for the
SERP and 4.60% for the Retirement Plan for 2014, 4.88% for the SERP and 5.37% for the Retirement Plan for 2013, and 4.34% for both plans in 2012. The actual change in pension value for Mr. Comma for 2013 was a negative $24,365, and therefore is
shown as $0 and does not affect the sum of total compensation in this table. Our eligible NEOs become vested in the Retirement Plan after five years, and in the SERP after attaining age 55 and completing 10 years of service. Both plans
have been closed to new participants. For a detailed discussion of the Companys pension benefits, see the sections of this Proxy Statement titled Retirement Plan, Supplemental Executive Retirement Plan and Pension
Benefits Table and accompanying footnotes. The Company does not provide above-market or preferential earnings on non-qualified deferred compensation. |
(6) |
Amounts in this column for fiscal 2014 are detailed in the table below: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Compensation Table |
|
|
|
|
|
|
|
|
|
Perquisite Allowance |
|
|
Deferred Compensation Matching Contribution (1) |
|
|
Company- Paid Life Insurance Premiums |
|
|
Other |
|
|
Total
All Other Compensation |
|
Mr. Comma (CEO) |
|
$ |
64,269 |
|
|
$ |
165,609 |
|
|
$ |
44 |
|
|
$ |
0 |
|
|
$ |
229,922 |
|
Ms. Lang (Former CEO) |
|
$ |
17,392 |
|
|
$ |
7,807 |
|
|
$ |
0 |
|
|
$ |
488,927 |
(2) |
|
$ |
514,126 |
|
Mr. Rebel (CFO) |
|
$ |
52,000 |
|
|
$ |
40,426 |
|
|
$ |
3,466 |
|
|
$ |
25,029 |
(3) |
|
$ |
117,801 |
|
Mr. Rudolph (CLO) |
|
$ |
52,000 |
|
|
$ |
84,724 |
|
|
$ |
4,277 |
|
|
$ |
13,297 |
(3) |
|
$ |
150,448 |
|
Mr. Casey (Qdoba President) |
|
$ |
45,700 |
|
|
$ |
53,737 |
|
|
$ |
535 |
|
|
$ |
0 |
|
|
$ |
99,972 |
|
Dr. Blankenship (CPO) |
|
$ |
51,031 |
|
|
$ |
26,172 |
|
|
$ |
629 |
|
|
$ |
0 |
|
|
$ |
77,832 |
|
|
(1) |
For Messrs. Comma, Rudolph and Casey, this amount includes enhanced EDCP Company contribution in place of SERP, as discussed in the Non-qualified Deferred Compensation section below. |
|
|
(2) |
This amount represents a payment to the retired CEO for tax reimbursement, including a tax gross-up, with respect to the Medicare portion of the FICA tax applicable to the lifetime value of her SERP benefit that was
due in full at the time of her retirement. The Board approved this grossed-up FICA reimbursement for SERP participants in 1995. The SERP has been closed to new participants since 2007. |
|
|
(3) |
The Company initiated paying quarterly cash dividends during fiscal 2014. These amounts represent cash dividends paid on June 9, 2014 and September 2,
2014 for Mr. Rebel and Mr. Rudolphs restricted stock shares being held in an escrow account until each executives termination or retirement. |
|
50 JACK IN THE BOX INC. ï
2015 Proxy Statement
Grants of Plan-Based Awards
The following table provides information on fiscal 2014 cash
and equity incentive awards granted to our NEOs. Cash incentive awards are based on fiscal year performance under our annual incentive plan. Long-term equity incentive compensation includes stock options, time-based restricted stock units, and
performance share unit awards that vest, if at all, upon achievement of performance goals over a three-year period. The 2014 incentive award terms are further described in CD&A Sections IV (Elements of Compensation)
and VI (Fiscal 2014 Compensation).
|
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grants of Plan Based Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date (1)
|
|
|
Approval
Date |
|
|
Award
Type (2)
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (3) |
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards (4) |
|
|
All Other Stock Awards: Number of Shares of
Stock or Units (5) |
|
|
All Other Option Awards: Number of
Securities Underlying
Options (6)
|
|
|
Exercise
or Base Price of Option
Awards ($/Share)
|
|
|
Grant
Date Fair Value of Stock and
Option Awards (7) |
|
Name |
|
|
|
|
Threshold |
|
|
Target |
|
|
Maximum |
|
|
Threshold (#) |
|
|
Target (#) |
|
|
Maximum (#) |
|
|
|
|
|
Mr. Comma (CEO) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 12-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,874 |
|
|
|
3,748 |
|
|
|
5,622 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
177,243 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 13-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,956 |
|
|
|
3,912 |
|
|
|
5,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
184,998 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 14-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,301 |
|
|
|
6,602 |
|
|
|
9,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
312,193 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,203 |
|
|
|
|
|
|
|
|
|
|
$ |
624,370 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,586 |
|
|
$ |
47.29 |
|
|
$ |
1,534,018 |
|
|
|
|
|
|
|
|
11/14/2013 |
|
|
|
AIP |
|
|
$ |
|
|
|
$ |
800,000 |
|
|
$ |
1,600,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Lang (Former CEO) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 12-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,609 |
|
|
|
3,218 |
|
|
|
4,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
152,176 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 13-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,372 |
|
|
|
2,744 |
|
|
|
4,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
129,771 |
|
Mr. Rebel (CFO) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 12-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,241 |
|
|
|
4,482 |
|
|
|
6,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
211,954 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 13-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,672 |
|
|
|
3,344 |
|
|
|
5,016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
158,154 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 14-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,089 |
|
|
|
2,178 |
|
|
|
3,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
102,982 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,355 |
|
|
|
|
|
|
|
|
|
|
$ |
205,948 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,263 |
|
|
$ |
47.29 |
|
|
$ |
506,018 |
|
|
|
|
|
|
|
|
11/14/2013 |
|
|
|
AIP |
|
|
$ |
|
|
|
$ |
405,000 |
|
|
$ |
810,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Rudolph (CLO) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 12-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,349 |
|
|
|
2,698 |
|
|
|
4,047 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
127,573 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 13-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,007 |
|
|
|
2,013 |
|
|
|
3,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
95,195 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 14-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
893 |
|
|
|
1,786 |
|
|
|
2,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
84,476 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,572 |
|
|
|
|
|
|
|
|
|
|
$ |
168,920 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,722 |
|
|
$ |
47.29 |
|
|
$ |
415,062 |
|
|
|
|
|
|
|
|
11/14/2013 |
|
|
|
AIP |
|
|
$ |
|
|
|
$ |
363,750 |
|
|
$ |
727,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Casey (Qdoba President) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 14-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
622 |
|
|
|
1,244 |
|
|
|
1,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
58,829 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2103 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,489 |
|
|
|
|
|
|
|
|
|
|
$ |
117,705 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,436 |
|
|
$ |
47.29 |
|
|
$ |
289,153 |
|
|
|
|
|
|
|
|
11/14/2013 |
|
|
|
AIP |
|
|
$ |
|
|
|
$ |
309,000 |
|
|
$ |
618,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Blankenship (CPO) |
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 12-14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
809 |
|
|
|
1,619 |
|
|
|
2,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
76,547 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 13-15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
604 |
|
|
|
1,208 |
|
|
|
1,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
57,111 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
PSU 14-16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
560 |
|
|
|
1,120 |
|
|
|
1,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
52,965 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
RSU |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,240 |
|
|
|
|
|
|
|
|
|
|
$ |
105,930 |
|
|
|
|
11/26/2013 |
|
|
|
11/14/2013 |
|
|
|
Option |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,993 |
|
|
$ |
47.29 |
|
|
$ |
260,250 |
|
|
|
|
|
|
|
|
11/14/2013 |
|
|
|
AIP |
|
|
$ |
|
|
|
$ |
262,500 |
|
|
$ |
525,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Grants were approved at the November 2013 Committee meeting, with a grant date of November 26, 2013, the second business day of the Companys next open trading window, in accordance with the Companys
consistent practice. In accordance with ASC 718, this is the grant date for the portion of the PSUs awarded in fiscal 2014 that relate to the fiscal 2014 performance period, as well as the portion of the PSUs awarded in fiscal 2013 and
2012 that relate to the fiscal 2014 performance period because the Committee sets the specific fiscal 2014 performance targets in fiscal 2014, as further described under PSU and RSU Awards in footnote 7 to this table. Ms. Lang
received no new PSU awards in FY 2014; the PSUs in the table above for Ms. Lang represent the portion of her 2013 and 2012 PSU awards that relate to fiscal 2014 performance. |
(2) |
For PSU awards, this column shows the three fiscal years of the PSU performance period. |
(3) |
The amounts in these columns represent the potential payouts under the fiscal 2014 annual incentive plan, which were earned based on performance in fiscal 2014. The threshold payout is zero, target payout represents
the amount payable for achieving the target level of performance, and maximum payout is capped at two times target payout. Incentive payouts are prorated between performance levels, and the payout values are calculated using the executives
annual salary rate as specified at the time performance goals are approved by the Committee (no later than 90 days from the start of the fiscal year). The Summary Compensation Table for fiscal 2014 shows the actual incentive compensation earned by
our NEOs for fiscal 2014 performance. Ms. Lang did not participate in the annual incentive plan in fiscal 2014. |
(4) |
The amounts in these columns are the threshold, target, and maximum share payout levels for the PSUs under the Companys long-term incentive plan for the fiscal 2014 performance period. Threshold payout is 50%
of target and is based on achieving an established minimum performance requirement; there will be no payout if performance is below the minimum performance requirement. Maximum payout is 150% of target. Due to Ms. Langs retirement in
January 2014, she did not receive a new PSU award in November 2013 (fiscal 2014), but was eligible to receive a prorated payout for the fiscal 2014 performance period portion of PSU awards made to her in previous years, fiscal 2012 and 2013.
|
(5) |
The amounts in this column are the number of RSUs granted in November 2013 that vest 20% per year over five years, and are subject to a holding requirement until termination of service. |
(6) |
The amounts in this column represent the number of stock options granted in November 2013 that vest 33% per year over three years on the anniversary of the grant date. These stock options expire seven years from
the grant date. The exercise price is the closing price of Common Stock on the grant date of November 26, 2013 ($47.29). |
(7) |
Stock Options The value of stock options represents the grant date fair value, computed in accordance with ASC 718, which is a theoretical value at grant using a valuation model that requires the
input of assumptions, including the expected volatility of our stock price. As such, the values may not reflect the actual amounts that our NEOs will realize; rather the actual amount realized will depend on the Companys stock price relative
to the exercise price. The assumptions used in the valuation are reported in the Form 10-K for fiscal 2014. |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 51
|
PSU and RSU Awards The values of PSUs and RSUs are the grant date fair values, as computed in accordance with ASC 718, and based on the closing price of the Companys Common Stock on the grant
date ($47.29 on November 26, 2013). The grant date fair values have been determined based on the assumptions and methodologies set forth in the Companys 2014 Annual Report on Form 10-K (Note 12 Share-Based Employee
Compensation). PSU awards, which cliff vest after three years, are made annually in November and vest based on our performance during the succeeding three fiscal-year period. The performance metrics are established at the beginning of the three year
period when the grant is made; while the specific performance targets are set by the Committee at the beginning of each fiscal year of the performance period (subject to the thresholds for years 2 and 3 being no lower than the threshold established
for year 1); therefore, in accordance with SEC rules and ASC 718, the values shown on each of the three rows for the PSUs reflect the grant date fair value of the fiscal 2014 performance period portion of the award based on probable outcome (target
level performance) of each of the PSU awards. |
Outstanding Equity Awards at Fiscal Year End 2014
The following table provides information on all outstanding
option awards and unvested stock awards held by each of the NEOs at the end of fiscal 2014. Each option grant is shown separately and the vesting schedule is shown as Footnote 1 to the table. The market value of the stock awards is based on the
closing price of Jack in the Box Inc. Common Stock as of the last trading day of the fiscal year, September 26, 2014, which was $65.73.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Equity Awards at Fiscal Year End 2014 |
|
|
|
|
|
|
Option Awards (1) |
|
|
Stock Awards |
|
Name |
|
Option
Grant Date |
|
|
Number of
Securities Underlying
Unexercised Options
Exercisable |
|
|
Number of
Securities Underlying
Unexercised Options
Unexercisable |
|
|
Option
Exercise Price |
|
|
Option
Expiration Date |
|
|
Number
Of Shares or Units of
Stock That Have Not Vested (2) |
|
|
Market Value of Shares or Units of
Stock That Have Not
Vested (3) |
|
|
Equity
Incentive Plan Awards:
Number of Unearned
Shares, Units or Other Rights That Have Not Vested
(4) |
|
|
Equity
Incentive Plan Awards:
Market or
Payout Value of Unearned
Shares, Units or
Other Rights
That Have Not Vested (3) |
|
Mr. Comma (CEO) |
|
|
11/25/2011 |
|
|
|
|
|
|
|
18,759 |
|
|
$ |
18.67 |
|
|
|
11/25/2018 |
|
|
|
94,503 |
|
|
$ |
6,211,671 |
|
|
|
22,432 |
|
|
$ |
1,474,425 |
|
|
|
|
11/26/2012 |
|
|
|
|
|
|
|
33,030 |
|
|
$ |
27.49 |
|
|
|
11/26/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2013 |
|
|
|
|
|
|
|
76,586 |
|
|
$ |
47.29 |
|
|
|
11/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Lang |
|
|
11/25/2011 |
|
|
|
209,268 |
|
|
|
|
|
|
$ |
18.67 |
|
|
|
11/25/2018 |
|
|
|
49,000 |
|
|
$ |
3,220,799 |
|
|
|
9,845 |
|
|
$ |
647,099 |
|
(Former CEO) |
|
|
11/26/2012 |
|
|
|
150,659 |
|
|
|
|
|
|
$ |
27.49 |
|
|
|
11/26/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Rebel (CFO) |
|
|
09/15/2006 |
|
|
|
3,732 |
|
|
|
|
|
|
$ |
26.28 |
|
|
|
09/15/2016 |
|
|
|
109,549 |
|
|
$ |
7,200,628 |
|
|
|
9,472 |
|
|
$ |
622,588 |
|
|
|
|
11/26/2010 |
|
|
|
57,054 |
|
|
|
|
|
|
$ |
20.05 |
|
|
|
11/26/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/25/2011 |
|
|
|
44,865 |
|
|
|
22,433 |
|
|
$ |
18.67 |
|
|
|
11/25/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2012 |
|
|
|
14,120 |
|
|
|
28,242 |
|
|
$ |
27.49 |
|
|
|
11/26/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2013 |
|
|
|
|
|
|
|
25,263 |
|
|
$ |
47.29 |
|
|
|
11/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Rudolph (CLO) |
|
|
11/25/2011 |
|
|
|
1,504 |
|
|
|
13,502 |
|
|
$ |
18.67 |
|
|
|
11/25/2018 |
|
|
|
88,873 |
|
|
$ |
5,841,615 |
|
|
|
7,033 |
|
|
$ |
462,269 |
|
|
|
|
11/26/2012 |
|
|
|
8,499 |
|
|
|
16,998 |
|
|
$ |
27.49 |
|
|
|
11/26/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2013 |
|
|
|
|
|
|
|
20,722 |
|
|
$ |
47.29 |
|
|
|
11/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Casey (Qdoba President) |
|
|
11/26/2013 |
|
|
|
|
|
|
|
14,436 |
|
|
$ |
47.29 |
|
|
|
11/26/2020 |
|
|
|
4,231 |
|
|
$ |
278,108 |
|
|
|
3,484 |
|
|
$ |
229,012 |
|
Dr. Blankenship (CPO) |
|
|
11/26/2010 |
|
|
|
27,663 |
|
|
|
|
|
|
$ |
20.05 |
|
|
|
11/26/2017 |
|
|
|
18,473 |
|
|
$ |
1,214,232 |
|
|
|
4,355 |
|
|
$ |
286,224 |
|
|
|
|
11/25/2011 |
|
|
|
16,201 |
|
|
|
8,101 |
|
|
$ |
18.67 |
|
|
|
11/25/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2012 |
|
|
|
5,099 |
|
|
|
10,198 |
|
|
$ |
27.49 |
|
|
|
11/26/2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11/26/2013 |
|
|
|
|
|
|
|
12,993 |
|
|
$ |
47.29 |
|
|
|
11/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
All option awards vest 33% each year for three years from date of grant, except the 9/15/2006 award, which vested 25% over four years. |
(2) |
The amounts in this column are: (i) unvested restricted stock awards or RSUs granted under the stock ownership program for all NEOs, with vesting subject to the executives continued employment with the
Company, and full vesting 10 years from the grant date and issued only upon termination (Mr. Comma, 34,700; Mr. Rebel, 62,572; and Mr. Rudolph, 58,815), (ii) unvested RSUs that vest 20% each year for five years and are subject to
a holding requirement until termination of service (Mr. Comma, 26,734; Mr. Rebel, 18,126; Mr. Rudolph, 12,027; Mr. Casey, 2,489; and Dr. Blankenship, 7,587); and (iii) unvested PSUs for which the performance goals have
been met for a completed performance period and that vest upon the third anniversary of the November 2011, November 2012 and November 2013 grant dates, subject to the executives continued employment with the Company (Mr. Comma,
33,069; Mr. Rebel, 28,851; Mr. Rudolph, 18,031, Mr. Casey, 1,742; and Dr. Blankenship, 10,886). Ms. Lang has 49,000 unvested PSUs which represent the prorated amount for which performance goals have been met for the
completed fiscal years of Ms. Langs November 2011 and 2012 PSU awards, and will vest upon the third anniversary of each date of grant. In accordance with the retirement provisions of the stock option and RSU agreements, upon
Ms. Langs retirement, she received additional vesting of stock options equal to 10% for each year of service, and 100% vesting of unvested RSUs. |
(3) |
The market value was determined by multiplying the applicable number of stock awards by the closing market price on September 26, 2014 ($65.73, the last trading day of fiscal 2014). |
(4) |
The amounts in this column represent unvested PSUs granted in November 2011, November 2012 and November 2013 for which the performance achievement was not yet known at FYE, that vest upon the third anniversary
of each grant date. The share amount is reported at target payout level. |
JACK IN THE BOX INC. ï
2015 Proxy Statement 52
Option Exercises and Stock Vested in Fiscal 2014
The following table provides information on stock option
exercises and shares acquired on the vesting of stock awards by the NEOs during fiscal 2014. Option award value realized is calculated by subtracting the aggregate exercise price of the options exercised from the aggregate fair market value of the
shares of Jack in the Box stock acquired on the date of exercise. Stock award value realized is calculated by multiplying the number of shares shown in the table by the closing price of Jack in the Box stock on the date the stock awards vested.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Exercises and Stock Vested |
|
|
|
|
|
|
Option Awards |
|
|
Stock Awards (1) |
|
|
|
Number of Shares Acquired on Exercise |
|
|
Value Realized on Exercise |
|
|
Number of Shares Acquired on Vesting |
|
|
Value Realized on Vesting |
|
Mr. Comma (CEO) |
|
|
78,739 |
|
|
$ |
2,420,759 |
|
|
|
7,481 |
|
|
$ |
354,076 |
|
Ms. Lang (Former CEO) (1) |
|
|
560,638 |
|
|
$ |
17,844,142 |
|
|
|
272,852 |
|
|
$ |
15,662,246 |
|
Mr. Rebel (CFO) |
|
|
182,268 |
|
|
$ |
5,271,758 |
|
|
|
7,972 |
|
|
$ |
377,354 |
|
Mr. Rudolph (CLO) |
|
|
62,962 |
|
|
$ |
2,103,127 |
|
|
|
5,064 |
|
|
$ |
239,692 |
|
Mr. Casey (Qdoba President) |
|
|
0 |
|
|
$ |
0 |
|
|
|
0 |
|
|
$ |
0 |
|
Dr. Blankenship (CPO) |
|
|
15,750 |
|
|
$ |
641,655 |
|
|
|
3,479 |
|
|
$ |
164,652 |
|
(1) |
The reported number of shares and value realized on vesting includes the PSUs granted in November 2010 for the performance period FY2011-2013, which vested in
November 2013 and resulted in a payout of 29% of the PSU award. For Ms. Lang, this amount also includes 200,000 shares resulting from RSAs awarded in 2002-2005, which under the Companys prior executive stock ownership program were held in
an escrow account until her retirement. |
Retirement Plan Benefits
The following table provides information on the pension
benefits for the NEOs under each of the following pension plans:
Retirement Plan
The Retirement Plan is a Company-funded and tax-qualified retirement plan that was offered to eligible employees hired in
2010 or earlier that have reached age 21 and completed one year of service (at least 1,000 hours/year). All NEOs except Mr. Casey (who was hired in 2013) are participants. Participants are 100% vested after completing five years
(1,000 hours per year) of service. Employees hired on or after January 1, 2011 are not eligible to participate in the plan. As of December 31, 2015, employees will no longer accrue additional benefits based on additional pay and service.
The plan provides that a participant retiring at the normal retirement age of 65 will receive benefits based primarily on the formula described below:
|
(1) |
One-percent (1%) of the average of the five highest consecutive calendar years of pay (Final Average Pay, includes base salary and annual incentive) out of the last ten years of eligible service,
multiplied by the number of full calendar years and months while an eligible employee.
|
PLUS
|
(2) |
0.4% of Final Average Pay in excess of Covered Compensation (average of the Social Security taxable wage bases) multiplied by the number of full calendar years and months while an eligible employee (up to a maximum of
35 years). |
A participant in the Retirement Plan who has at least ten years of vesting service may elect to begin receiving reduced payments as early
as age 55.
Note: Prior to 1989, benefits are subject to grandfathered minimum benefit accruals under the previous plan. Retirement plan benefits are (i) not
permitted to be paid to participants while actively employed with Jack in the Box Inc. and (ii) typically paid in the form of a monthly annuity unless the present value of the accrued benefit is equal to or less than $7,500 at termination and
in such event, may be paid in the form of a lump sum payment.
Supplemental Executive Retirement Plan
(SERP)
Effective January 1, 2007, the SERP was closed to new participants. Executives and certain highly compensated
employees who were hired or promoted into such position prior to January 1, 2007 (including three 2014 NEOs) are eligible to participate in the SERP. The SERP, established in
1990, provides for retirement benefits above amounts available under the Companys Retirement Plan due to IRC limits that restrict benefits available under the Companys tax-qualified
plan. The SERP is unfunded and not qualified for tax purposes.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 53
The SERP provides that a participant retiring at the normal retirement age of 62 will receive a benefit equal to a target
replacement income, based on final average pay and service. When combined with other amounts payable under the Companys tax-qualified pension benefit, and other qualified and non-qualified deferred compensation programs, the target replacement
income is up to 60% of Final Average Pay and subject to the following conditions:
|
|
Final Average Pay is defined as the average of the five highest calendar years of pay (base salary and annual incentive) out of the last ten years of employment with the Company. |
|
|
Service is defined as the entire period of employment in calendar years and months while an eligible employee. |
|
|
There is no reduction in the target replacement income (60%) if a participant has 20 or more years of service. For participants with less than 20 years of service, the target replacement income percentage is
determined by multiplying the number of years of service times 3%, up to a maximum of 20 years. |
|
|
To receive a retirement benefit under the SERP, a participant must attain the earlier of (i) age 62 or (ii) age 55
|
|
|
with ten years of service while employed at Jack in the Box or while disabled. A participant may begin receiving payments as early as age 55 with a reduction in benefits equal to 5/12 of 1% for
each month commencement of benefit payments precedes the participants attainment of age 62. |
|
|
Benefits under the SERP are only available to retirees as monthly payments and cannot be received in a lump sum. |
|
|
Death benefits are payable if a participant dies while employed. |
|
|
The SERP provides for spousal joint and survivor annuities. |
The following table provides information on the actuarial
present value of the accumulated pension and SERP benefits as of the end of fiscal 2014 (September 28, 2014), using fiscal 2014 earnings (base salary and annual incentive). The maximum amounts used for the Retirement Plan do not exceed the
IRS-prescribed limit applicable to tax-qualified plans ($260,000 for 2014). Present values were calculated using the interest rate and mortality assumptions used in the Companys financial statements for fiscal year 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits Table |
|
|
|
|
|
|
|
|
Plan Name |
|
Number of Years Credited Service |
|
|
Present Value of Accumulated Benefit at Normal Retirement Age
(3) |
|
|
Payments During Last Year |
|
Mr. Comma (CEO) (1) |
|
Retirement Plan |
|
|
13 |
|
|
$ |
250,570 |
|
|
|
|
|
Ms. Lang (Former CEO) (2) |
|
Retirement Plan |
|
|
26 |
|
|
$ |
857,558 |
|
|
|
|
|
|
|
SERP |
|
|
26 |
|
|
$ |
12,926,186 |
|
|
$ |
511,418 (4) |
|
Mr. Rebel (CFO) |
|
Retirement Plan |
|
|
11 |
|
|
$ |
369,456 |
|
|
$ |
|
|
|
|
SERP |
|
|
11 |
|
|
$ |
3,267,770 |
|
|
|
|
|
Mr. Rudolph (CLO) (1) |
|
Retirement Plan |
|
|
7 |
|
|
$ |
220,568 |
|
|
$ |
|
|
Mr. Casey (Qdoba President) (1) |
|
None |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Dr. Blankenship (CPO) |
|
Retirement Plan |
|
|
17 |
|
|
$ |
495,731 |
|
|
$ |
|
|
|
|
SERP |
|
|
17 |
|
|
$ |
2,090,901 |
|
|
|
|
|
|
(1) |
Mr. Comma and Mr. Rudolph are not participants in the SERP. Mr. Casey is not a participant in the Retirement Plan or the SERP. |
|
|
(2) |
The present value of Ms. Langs accumulated benefit under the Retirement Plan as of September 28, 2014 is based on her accrued benefit on her actual retirement date (January 1, 2014); Ms. Lang
elected not to begin receiving her benefit under the Plan on her retirement, but rather on a future date. Effective February 1, 2014, Ms. Lang is receiving monthly benefits from the SERP. The present value of Ms. Langs
accumulated benefit under the SERP as of September 28, 2014 is based on her actual retirement date (January 1, 2014) and her election to begin receiving her benefit before normal retirement age. |
|
|
(3) |
As of the end of fiscal 2014, all NEOs are vested in the Retirement Plan, except Mr. Casey who is not a participant in the plan because he was hired after the plan was closed to new participants in January 2011.
For the SERP, as of the end of the measurement period (September 28, 2014), all NEOs have met the service requirement for vesting; only Ms. Lang and Mr. Rebel have met the minimum age requirement for vesting; Dr. Blankenship has not
met the minimum age requirement for the SERP and has no benefits payable under the SERP. The actuarial present value of accumulated benefits under the Retirement Plan and the SERP is based on discount rates of 4.60% and 4.36% respectively, as of
September 28, 2014. The RP-2000 Mortality Table is used for both the Retirement Plan and the SERP calculations, projected to 2019, combined for employees and annuitants, separate for males and females, with white collar adjustment. Except for
Ms. Lang who is currently receiving SERP benefits, participants are assumed to retire at the latest of current age and the plans earliest retirement date with unreduced benefits. No pre-retirement mortality, retirement, or termination has
been assumed for the present value factors. |
|
|
(4) |
Represents SERP payments made to Ms. Lang after her retirement date. |
|
54 JACK IN THE BOX INC. ï
2015 Proxy Statement
Non-Qualified Deferred Compensation
Executive Deferred Compensation Plan (EDCP)
The NEOs and other highly compensated employees are eligible to defer up to 50% of base salary and up to 85% of annual incentive pay to the EDCP (prior to fiscal 2013,
it was up to 100% of annual incentive), an unfunded, non-qualified deferred compensation plan, the benefits of which are paid by the Company out of its general assets. The plan is subject to IRC Section 409A for all deferred compensation earned
on or after January 1, 2005; deferred compensation earned prior to 2005 is not subject to Section 409A requirements and continues to be governed under the terms of the plan and tax laws in effect on or before December 31, 2004, as
applicable. The Company matches 100% of the first 3% of the participants compensation that is deferred into the EDCP. Participants may make an election to invest their deferrals among an array of investment options, and their accounts are
credited based upon the performance of the investment
options. Participants are 100% vested in their own contributions, and any gains or losses on the Company matching contributions, and become vested in the Company match at the rate of 25% per
year (such that they are fully vested after completing four full years of service with the Company).
Enhanced EDCP
Beginning January 1, 2007, new Corporate Vice Presidents and above who otherwise would have been eligible for the SERP receive an additional annual Company
contribution of 4% of base salary and annual incentive to their EDCP account for up to ten years. Participants become vested in the supplemental match at the same rate as the Company match, 25% per year as above (such that they are fully vested
after completing four full years of service with the Company).
2014 Non-Qualified Deferred Compensation
The following table provides information on the contributions, earnings, withdrawals and distributions in the Executive Deferred Compensation Plan during fiscal 2014
and the account balances as of the end of fiscal 2014. As of September 28, 2014, all NEOs except Mr. Casey are 100% vested in Company contributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Deferred Compensation Plan Table |
|
|
|
|
|
|
|
|
|
Executive Contributions in Fiscal 2014 (1) |
|
|
Registrant Contributions In Fiscal 2014 (2) |
|
|
Aggregate Earnings/ (Losses) in Fiscal 2014 |
|
|
Aggregate Withdrawals/ Distributions |
|
|
Aggregate Balance at FYE14 (3) |
|
Mr. Comma (CEO) |
|
$ |
243,151 |
|
|
$ |
165,609 |
|
|
$ |
124,794 |
|
|
$ |
|
|
|
$ |
1,344,731 |
|
Ms. Lang (Former CEO) |
|
$ |
10,409 |
|
|
$ |
7,807 |
|
|
$ |
84,947 |
|
|
$ |
(3,456,672 |
) (4) |
|
$ |
0 |
|
Mr. Rebel (CFO) |
|
$ |
62,002 |
|
|
$ |
40,426 |
|
|
$ |
60,731 |
|
|
$ |
|
|
|
$ |
838,521 |
|
Mr. Rudolph (CLO) |
|
$ |
113,351 |
|
|
$ |
84,724 |
|
|
$ |
53,868 |
|
|
$ |
|
|
|
$ |
669,259 |
|
Mr. Casey (Qdoba President) |
|
$ |
149,474 |
|
|
$ |
53,737 |
|
|
$ |
6,077 |
|
|
$ |
|
|
|
$ |
193,299 |
|
Dr. Blankenship (CLO) |
|
$ |
94,186 |
|
|
$ |
26,172 |
|
|
$ |
179,037 |
|
|
$ |
|
|
|
$ |
1,594,836 |
|
|
(1) |
These amounts are also included in the salary and non-equity incentive plan compensation columns in the 2014 row of the SCT. |
|
|
(2) |
These amounts are reported as All Other Compensation in the SCT. |
|
|
(3) |
Amounts reported in this column are included in the Companys SCT in prior years if the named executive officer was an NEO in previous years. The balance reflects the cumulative value of each NEOs deferrals,
match, and investment gains or losses. These amounts do not include any contributions or earnings related to the fiscal 2014 annual incentive payment, which was paid after the end of fiscal 2014. |
|
|
(4) |
Per Ms. Langs prior distribution elections made under the EDCP, she received a lump-sum distribution of her EDCP balance on the seventh month following
her retirement date of January 1, 2014, in compliance with IRC Section 409A. |
|
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 55
Compensation & Benefits
Assurance Agreements
The Company provides CIC Agreements because it considers it in the best interest of its stockholders to encourage
continued employment of key management in the event of a change in control transaction. These agreements help facilitate successful performance by key executives during an impending change in control, by protecting them against the loss of their
positions following a change in the ownership or control of the Company, and ensuring that his or her expectations for long-term incentive compensation arrangements will be fulfilled. Generally, under the agreements, a change in control is defined
to include:
(i) |
the acquisition by any person or group of 50% or more of the outstanding stock or combined voting power of the Company (excluding acquisitions by the fiduciary of the Company benefit plans or certain affiliates);
|
(ii) |
circumstances in which individuals constituting our board of directors generally cease to constitute a majority of the board; and |
(iii) |
certain stockholder-approved mergers, consolidations, sales of assets or liquidation of the Company. |
These CIC
Agreements provide certain specified benefits to the executive if, within twenty-four (24) full calendar months following the effective date of a change in control event, his or her employment is terminated (Qualifying Termination):
(i) |
involuntarily other than for cause, death, or disability, or |
(ii) |
voluntarily for good reason. Voluntary termination for good reason is generally defined as the executives resignation due to: |
|
(a) |
the assignment of the executive to duties or responsibilities inconsistent with his or her status, or a reduction or alteration in the nature or status of his or her duties or responsibilities in effect as of ninety
(90) days prior to the change in control event; |
|
(b) |
the acquiring companys requirement that the executive be based at a location in excess of fifty (50) miles from his or her location immediately prior to a change in control; |
|
(c) |
a material reduction in base salary; |
|
(d) |
a material reduction in the Companys compensation, health and welfare, retirement benefit plans, or any perquisites, unless an alternative plan is provided of a comparable value; or |
|
(e) |
the Companys failure to require any successor to assume the CIC agreement benefits. |
CIC benefits are not provided
in the event of terminations by reason of death, disability, voluntary termination without good reason, or the Companys involuntary termination of the executives employment for cause.
In the event of a change in control of the Company and Qualifying Termination of an executive covered under a CIC
Agreement as described above, the executive is entitled to the following severance benefits:
1. |
A lump sum cash payment equal to his or her accrued but unpaid annual salary and unreimbursed business expenses. |
2. |
A lump sum cash amount equal to a multiple of the executives then-current annual salary, as follows: |
|
|
|
|
|
|
|
Multiple of Salary* |
|
Mr. Comma |
|
|
3.0x |
|
Mr. Rebel |
|
|
2.5x |
|
Mr. Rudolph |
|
|
2.5x |
|
Mr. Casey |
|
|
2.5x |
|
Dr. Blankenship |
|
|
2.5x |
|
|
* |
Based on the listed NEOs position as of September 28, 2014. Due to her retirement in January 2014, Ms. Lang does not have a CIC agreement. |
|
3. |
A lump sum cash incentive award equal to the multiple above times the greater of: (a) the average annual incentive percentage for the last three fiscal years prior to the change in control times annual salary; or
(b) the average dollar amount of the annual incentive paid for the last three fiscal years prior to the change in control. If an executive does not have three full years of incentive awards, the Company will apply the target incentive award
percentage for each missed year. |
4. |
Continuation of health insurance coverage at Company expense at the same cost and same coverage level as in effect as of the executives Qualifying Termination date (subject to changes in coverage levels applicable
to all employees generally) for a specified coverage period as provided below, to run concurrently with any coverage provided under COBRA. If an executive receives health insurance coverage with a subsequent employer prior to the end of 18 months,
the continuation of health insurance coverage under the agreement is discontinued. |
|
|
|
|
|
|
|
Coverage Period* |
|
Mr. Comma |
|
|
36 months |
|
Mr. Rebel |
|
|
30 months |
|
Mr. Rudolph |
|
|
30 months |
|
Mr. Casey |
|
|
30 months |
|
Dr. Blankenship |
|
|
30 months |
|
|
* |
Based on the listed NEOs position as of September 28, 2014. |
|
5. |
Standard outplacement services at Company expense, from a nationally recognized outplacement firm selected by the executive, for a period of up to one year from the date of Qualifying Termination.
|
56 JACK IN THE BOX INC. ï
2015 Proxy Statement
6. |
The full vesting of unvested restricted stock, performance share units, and in-the-money stock options, subject to the terms of the applicable award agreement and stock incentive plan. Beginning November 2014, all
future time-based restricted stock units and stock option awards that continue after a change in control will be double-trigger, requiring both a CIC and Qualifying Termination, for vesting acceleration. |
7. |
For the one pre-2009 agreement in effect as of Fiscal 2014 year end, in the event that any portion of the payments and benefits provided for under the agreement are considered excess parachute payments under IRC
Section 280G and are thus subject to the 20% excise tax imposed by IRC Section 4999, the agreement provides for a conditional gross-up payment to reimburse the executive for the excise tax and additional taxes resulting from the imposition
of the excise tax. The gross-up payment will be made, however, only if the amounts treated as parachute payments under Section 280G exceed the Section 280G threshold by more than 10%. If the parachute payments exceed the
Section 280G threshold by 10% or less, then the payments to the executive will be reduced to an amount that is one dollar less the Section 280G threshold. At the time these agreements were entered into, the potential tax gross
up payment, in the Committees view, was an appropriate method for the Company to insulate the executives from excise tax imposed under Section 4999 and was a more common practice in the market.
|
8. |
For agreements in 2009 and later, there is no excise tax gross up. The four remaining NEOs are parties to this form of agreement, which provides for payment of the greater of: (i) the aggregate parachute payments
reduced to the maximum amount that would not subject the executive to relevant excise taxes; or (ii) the aggregate parachute payments, with the executive paying the relevant excise taxes and such other applicable federal, state and local income
and employment taxes. Under this agreement, the executive is solely responsible for payment of excise taxes and other applicable federal, state, and local income and employment taxes. |
Supplemental Executive Retirement Plan. In the event of an involuntary termination (or material diminution in duties or responsibilities or material
downward change of title) within 24 months following a change in control, in accordance with the SERP, a participating NEO will receive, in the form of three annual installments commencing on termination, the actuarial equivalent of his/her
accrued early retirement benefit unreduced for early commencement.
Non-Qualified Deferred Compensation. In the event of a change in control, in
accordance with the EDCP, a participant shall become 100% vested in any Company contributions without regard to service requirements. Accounts shall be distributed in accordance with the participants existing distribution election (on
termination of employment or under a scheduled in-service withdrawal).
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 57
Potential Payments on
Termination of Employment or Change in Control
In the event of a termination not related to a change in control, NEOs will receive amounts under the terms and
provisions of the specific plans in which they are a participant. During fiscal 2014, Ms. Lang and Mr. Rebel were eligible to retire under the Retirement and SERP Plans; and Ms. Lang retired on January 1, 2014.
The following table helps illustrate the potential payments and benefits to which our NEOs (other than Ms. Lang) would be entitled as of fiscal 2014 year-end in
the event of: (1) a termination of employment not related to a change in control; or (2) under our CIC Agreement (described above), upon both (a) a change in control, and a Qualifying Termination, and (b) a change in control
without a Qualifying Termination.
Under our stock incentive plan and award agreements used for RSUs and stock options through fiscal year 2014,
acceleration of equity awards occurs upon the consummation of a change in control (no Qualifying Termination requirement), and equity is accelerated as explained in Footnote 4 to the table. (For
new grants beginning in November 2014, the form of RSU and option agreements require a Qualifying Termination as described in Section VIII Fiscal 2015 Program Changes.) The potential payments assume that the termination and/or termination
resulting from a change in control occurred on the last day of fiscal 2014, September 28, 2014 and, where applicable, use the closing price of our Common Stock of $65.73 on September 26, 2014 (the last market trading day in the fiscal
year). The actual amounts can only be determined at the time of such termination or change in control, and therefore, the actual amounts will vary from the estimated amounts in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Payments on Termination of Employment or Change in Control |
|
|
|
|
|
|
|
|
|
|
|
Cash Severance (1) |
|
|
Annual Incentive (2) |
|
|
Continuation
of Benefits (3) |
|
|
Equity Incentive and Stock Awards (4) |
|
|
Pension and SERP Benefits (5) |
|
|
Gross-Up for Excise Tax (6) |
|
|
Total |
|
Mr. Comma (CEO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary /Involuntary Term Without Cause (Non-Retirement Eligible) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
250,570 |
|
|
|
|
|
|
$ |
250,570 |
|
Death |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,088,157 |
|
|
$ |
250,570 |
|
|
|
|
|
|
$ |
8,338,727 |
|
Disability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,530,046 |
|
|
$ |
276,269 |
|
|
|
|
|
|
$ |
4,806,315 |
|
CIC/ Qualifying Termination |
|
$ |
2,400,000 |
|
|
$ |
3,584,000 |
|
|
$ |
58,690 |
|
|
$ |
9,213,126 |
|
|
$ |
250,570 |
|
|
|
|
|
|
$ |
15,506,386 |
|
CIC/No Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,213,126 |
|
|
|
|
|
|
|
|
|
|
$ |
9,213,126 |
|
Mr. Rebel (CFO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary /Involuntary Term Without Cause (Retirement Eligible) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,637,693 |
|
|
$ |
3,764,582 |
|
|
|
|
|
|
$ |
10,402,275 |
|
Death |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,637,693 |
|
|
$ |
3,764,582 |
|
|
|
|
|
|
$ |
10,402,275 |
|
Disability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,036,173 |
|
|
$ |
3,3,809,74 |
|
|
|
|
|
|
$ |
7,845,877 |
|
CIC/ Qualifying Termination |
|
$ |
1,350,000 |
|
|
$ |
1,939,500 |
|
|
$ |
40,011 |
|
|
$ |
7,143,792 |
|
|
$ |
4,193,812 |
|
|
$ |
3,750,622 |
|
|
$ |
18,417,737 |
|
CIC/No Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,143,792 |
|
|
|
|
|
|
|
|
|
|
$ |
7,143,792 |
|
Mr. Rudolph (CLO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary /Involuntary Term Without Cause (Non-Retirement Eligible) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
220,568 |
|
|
|
|
|
|
$ |
220,568 |
|
Death |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,714,211 |
|
|
$ |
220,568 |
|
|
|
|
|
|
$ |
5,934,779 |
|
Disability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,046,689 |
|
|
$ |
263,605 |
|
|
|
|
|
|
$ |
4,310,294 |
|
CIC / Qualifying Termination |
|
$ |
1,212,500 |
|
|
$ |
1,741,958 |
|
|
$ |
40,011 |
|
|
$ |
6,081,357 |
|
|
$ |
220,568 |
|
|
|
|
|
|
$ |
9,296,394 |
|
CIC/No Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,081,357 |
|
|
|
|
|
|
|
|
|
|
$ |
6,081,357 |
|
Mr. Casey (Qdoba President) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary /Involuntary Term Without Cause (Non-Retirement Eligible) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0 |
|
Death |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
511,592 |
|
|
|
|
|
|
|
|
|
|
$ |
511,592 |
|
Disability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
245,392 |
|
|
|
|
|
|
|
|
|
|
$ |
245,392 |
|
CIC / Qualifying Termination |
|
$ |
1,030,000 |
|
|
$ |
447,020 |
|
|
$ |
40,011 |
|
|
$ |
675,172 |
|
|
|
|
|
|
|
|
|
|
$ |
2,192,203 |
|
CIC/No Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
675,172 |
|
|
|
|
|
|
|
|
|
|
$ |
675,172 |
|
58 JACK IN THE BOX INC. ï
2015 Proxy Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potential Payments on Termination of Employment or Change in Control |
|
|
|
|
|
|
|
|
|
|
|
Cash Severance (1) |
|
|
Annual Incentive (2) |
|
|
Continuation
of Benefits (3) |
|
|
Equity Incentive and Stock Awards (4) |
|
|
Pension and SERP Benefits (5) |
|
|
Gross-Up for Excise Tax(6) |
|
|
TOTAL |
|
Dr. Blankenship (CPO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Reason |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary /Involuntary Term Without Cause (Non-Retirement Eligible) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
495,731 |
|
|
|
|
|
|
$ |
495,731 |
|
Death |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,741,866 |
|
|
$ |
1,243,875 |
|
|
|
|
|
|
$ |
2,985,741 |
|
Disability |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
731,071 |
|
|
$ |
2,625,704 |
|
|
|
|
|
|
$ |
3,356,775 |
|
CIC / Qualifying Termination |
|
$ |
875,000 |
|
|
$ |
1,041,250 |
|
|
$ |
40,011 |
|
|
$ |
1,968,482 |
|
|
$ |
3,071,699 |
|
|
|
|
|
|
$ |
6,996,442 |
|
CIC/No Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,968,482 |
|
|
|
|
|
|
|
|
|
|
$ |
1,968,482 |
|
Ms. Lang (Former CEO Who Retired in 2014)
Upon
Ms. Langs retirement on January 1, 2014, the vesting of her outstanding equity accelerated, based upon her years of service and under the terms of the applicable equity award agreements, as further described in footnote 4 below. The
value of such acceleration was: $9,280,896 (based upon $50.02, the closing price of our Common Stock on 12/31/2013, the last trading day before her 01/01/2014 retirement date; and consisting of: $4,449,764 for the difference between her accelerated
options strike price and the 12/31/2013 closing price of our Common Stock; $2,526,010 for restricted stock released from escrow; and $2,305,122 for accelerated RSUs). The values of Ms. Langs accumulated benefits under the Pension
Plan and SERP as of her retirement date are shown in the Pension Benefits Table. As included in the SCT, Ms. Lang also received a payment of $488,927 for tax reimbursement, including a tax gross-up, with respect to the Medicare portion of the
FICA tax applicable to the lifetime value of her SERP benefit that was due in full at the time of her retirement. The Board approved this grossed-up FICA reimbursement for SERP participants in 1995.
(1) |
Cash Severance: Reflects multiple of annual base salary as described in the Compensation and Benefits Assurance Agreement section (CIC Section), above. |
(2) |
Annual incentive: Reflects multiple of annual incentive as described in the CIC Section. |
(3) |
Continuation of Benefits: Reflects benefits continuation as described in the CIC section and an outplacement fee estimate of $10,000. |
(4) |
Equity Incentive and Stock Awards: The amounts shown in the table reflect only the value of unvested awards and options that would be accelerated upon termination; they do not include the vested portion as of
the end of fiscal 2014. For a change in control, the amounts shown reflect only the amount of acceleration of unvested restricted stock, unvested performance share units, and in-the-money unvested stock options. All references to termination below
include only terminations not for cause. |
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a) |
Stock Awards (RSA/RSU under the stock ownership program in place prior to fiscal 2011): |
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(i) |
Upon termination not related to a change in control, if eligible to retire under a company sponsored retirement plan, determination of shares vested is based on a schedule of the greater of: a) 30% of the award
vesting three years from the date of grant, and 10% vesting for each year of service thereafter as of the date of retirement; b) such vesting as would have occurred had 10% of the Award vested for each year of service with the Company, or
c) in such greater amount as may be determined by the Board in its sole discretion. |
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(ii) |
Upon termination not related to a change in control, and not eligible to retire under a company sponsored retirement plan, determination of shares vested is based on a schedule of 15% vesting on or after 3 years from
the grant date, and 5% vesting for each year of service thereafter as of the termination date. |
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(iii) |
Upon death, disability, or a change in control, stock awards vest 100%. |
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b) |
Performance Share Units (PSUs): |
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(i) |
Upon termination not related to a change in control, if eligible to retire under a company sponsored retirement plan or due to death or disability, and the awardee had been continuously employed by the Company as of
the last date of the first fiscal year of the performance period, the performance share units will vest on a prorated basis, based on the number of full accounting periods the awardee was continuously employed by the Company during the performance
period and to the extent to which performance goals are achieved. |
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(ii) |
Upon termination not related to a change in control or due to death or disability, the award will be cancelled. |
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(iii) |
Upon a change in control, PSUs awarded through FYE 2014 would vest at the greater of the performance level attained as of the date of the change in control or 100% of target. |
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(i) |
Upon termination not related to a change in control, death, disability, or retirement, the award will be cancelled. |
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(ii) |
Upon death, disability or retirement, the RSUs will vest 100%. |
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(iii) |
Upon a change in control, RSUs awarded through FYE 2014 will vest 100%. |
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(i) |
Upon termination not related to a change in control, and eligible to retire under a company sponsored retirement plan, determination of shares vested is based on a formula of 5% additional vesting for each year of
service with the Company. |
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(ii) |
Upon termination not related to a change in control, and not eligible to retire under a company sponsored retirement plan, there is no acceleration of option awards. |
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(iii) |
Upon death or a change in control (for options awarded through FYE 2014, where options are not assumed by the acquiring company), option awards will vest 100%. |
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(iv) |
Vesting upon disability is based on the number of shares which would have been vested as of twelve months following the Optionees first day of absence from work with the Company, and therefore, for purposes of
this table, no additional vesting is applied in the event of a disability. |
(5) |
Pension and SERP: Annual benefit amounts listed for each NEO are subject to the eligibility and vesting provisions of the Retirement Plan and the SERP, which are described above in the sections of this
Proxy Statement titled Retirement Plan, Supplemental Executive Retirement Plan and Pension Benefits Table and accompanying footnotes. All values shown represent present values and are based on the following: |
|
a) |
In the event of a voluntary/involuntary termination or death, benefit values are based on accrued benefits as of fiscal year end payable at normal
retirement. Benefit values were calculated as of September 28, 2014, based on a discount rate of 4.60% for the qualified pension plan and 4.36% for the SERP. The RP-2000 Mortality Table is used for both the qualified pension plan and the SERP,
projected to 2019 combined for employees and annuitants, separate for males and females with white collar adjustment. In the event of death while actively employed, the amount of the survivor benefit under the SERP shall be one times the
participants compensation and shall be defined as annualized current base salary |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 59
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plus the average of the annual incentives paid for the three most recent completed fiscal years. If, however, the date of death is at age 55 plus 10 years of service or later, the amount of
the survivor benefit shall be the greater of one times the participants compensation or the actuarial equivalent lump sum present value of the participants supplemental retirement benefit. In the event of death while actively employed,
the amount of the pension benefit shall be the accrued actuarial equivalent pension benefit as determined on the date of death. Such benefit shall not be subject to any reduction of benefits. |
|
b) |
Disability benefits shown assume an NEO terminates employment with the Company due to disability and remains continuously disabled until reaching normal retirement age. Benefit values are based on accrued benefits as
of the NEOs normal retirement age and were calculated as of September 28, 2014 based on a discount rate of 4.598% for the qualified pension plan and 4.363% for the SERP and the RP-2000 Mortality Table as described above. |
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c) |
In the event of an involuntary termination (or material diminution in duties or responsibilities or material downward change of title) within 24 months following a change in control, participants become 100%
vested in the SERP. Benefit values are based on accrued benefits as of fiscal year end and were calculated as of September 28, 2014. The SERP values are based on an interest rate of 6.0% and the RP-2000 Mortality Table, projected 10 years.
|
|
d) |
As described in the Non-Qualified Deferred Compensation Section above, all of the NEOs receive a 3% Company match on their contributions to the non-qualified deferred compensation (EDCP) account, and
Mr. Comma, Mr. Rudolph, and Mr. Casey, who are not eligible to participate in the SERP, receive an additional 4% Company contribution to their EDCP accounts for up to ten years. As of the end of Fiscal 2014, all the NEOs, except
Mr. Casey, are 100% vested in the Company matching contributions. Accordingly, these amounts are not included here, but are described in the Non-Qualified Deferred Compensation Section above. |
|
e) |
Mr. Rebel, the only SERP participant who was retirement eligible at FYE 2014, would receive tax reimbursement, including a tax gross-up, with respect to the Medicare portion of the FICA tax applicable to the
lifetime value of his SERP benefit that would be due in full at the time of his retirement. The Board approved this grossed-up FICA reimbursement for SERP participants in 1995. |
(6) |
Gross-Up for Excise Tax: For Mr. Rebel, the only executive with a pre-2009 CIC agreement, if any portion of the payments and benefits provided for in a CIC agreement would be considered
excess parachute payments under IRC Section 280G(b)(1) and subject to excise tax, then the agreement provides for a conditional gross up whereby excise taxes are grossed up. However, in the event that the parachute
payment exceeds the excise tax threshold by 10% or less, the executive is not grossed up and the executives severance is reduced to $1.00 below the threshold so that the executive is not subject to excise tax. The amount of the gross-up
payment is calculated based on the value of all benefits that could have been received and characterized as contingent upon a CIC under IRC Section 280G and related regulations as of September 28, 2014, except for equity award acceleration
which is calculated based on the assumption that the change in control occurred on December 31, 2014. For purposes of this calculation, the value of the acceleration of vesting of all outstanding equity awards is calculated according to
Section 280G and the related regulations. For 2009 and later agreements (in place for all other NEOs), no gross-up is provided. |
60 JACK IN THE BOX INC. ï
2015 Proxy Statement
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tables set forth, as of December 16, 2014 (the Record Date), information with respect to
beneficial ownership of our Common Stock by (i) each person who we know to beneficially own more than 5% of our Common Stock, (ii) each director and nominee for director of the Company, (iii) each NEO listed in the Summary
Compensation Table herein (except the retired CEO) and (iv) all of our directors and executive officers of the Company as a group. The address of each director and executive officer shown in the table below is c/o Jack in the Box Inc.,
9330 Balboa Avenue, San Diego, CA 92123.
We determined the number of shares of Common Stock beneficially owned by each person under rules promulgated
by the SEC, based on information obtained from questionnaires, Company records and filings with the SEC. The information is not necessarily indicative of beneficial ownership for any other
purpose. Under these rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power and also any shares which the individual or entity had the right to acquire within sixty
days of December 16, 2014. All percentages are based on the shares of Common Stock outstanding as of December 16, 2014. Except as noted below, each holder has sole voting and investment power with respect to all shares of Common Stock
listed as beneficially owned by that holder.
Security Ownership of Certain Beneficial Owners
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Name |
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Number of Shares of Common Stock Beneficially Owned as of December 16, 2014 |
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Percent of Class |
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BlackRock, Inc. (1) |
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3,086,965 |
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8.0% |
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Vanguard Group, Inc. (2) |
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3,080,474 |
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7.9% |
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(1) |
According to its Form 13F filings as of September 30, 2014, BlackRock Inc., on behalf of its direct subsidiaries, BlackRock Fund Advisors and
BlackRock Institutional Trust Company N.A., had investment discretion with respect to accounts holding 3,086,965 shares. BlackRock Fund Advisors was the beneficial owner of 1,990,221 shares, of which it had sole voting power.
BlackRock Institutional Trust Company, N.A., was the beneficial owner of 1,096,744 shares, of which it had sole voting power with respect to 1,002,569 shares and no voting power with respect to 94,175 shares. The address of BlackRock
Fund Advisors is 400 Howard Street, San Francisco, CA 94105. |
(2) |
According to its Form 13F filings as of September 30, 2014, Vanguard Group Inc., on behalf of its direct subsidiary, Vanguard Fiduciary Trust Company,
had investment discretion with respect to accounts holding 3,080,474 shares. Vanguard Group, Inc.was the beneficial owner of 3,030,870 shares, of which it had sole voting power with respect to 3,400 shares and no voting power
with respect to 3,027,470 shares. Vanguard Fiduciary Trust Company was the beneficial owner of 49,604 shares, of which it had sole voting power. The address of Vanguard Group, Inc. is P.O. Box 2600 Valley Forge, PA 19482.
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JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 61
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
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Security Ownership Of Directors and Management
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Name |
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Number of Shares of Common Stock Beneficially Owned as of December 16, 2014 (1) |
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Number Attributable to Options Exercisable Within 60 Days of December 16, 2014 |
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Percent of Class |
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Mr. Comma |
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53,225 |
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25,528 |
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* |
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Mr. Rebel |
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203,624 |
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103,960 |
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* |
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Mr. Rudolph |
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73,606 |
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23,911 |
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* |
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Mr. Casey |
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337 |
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0 |
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* |
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Dr. Blankenship |
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23,031 |
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14,529 |
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* |
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Mr. Goebel |
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21,118 |
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0 |
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* |
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Ms. John |
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100 |
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0 |
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* |
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Ms. Kleiner |
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12,307 |
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0 |
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* |
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Mr. Murphy |
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55,156 |
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0 |
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* |
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Mr. Myers |
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32,905 |
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0 |
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* |
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Mr. Tehle |
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53,655 |
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0 |
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* |
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Mr. Wyatt |
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12,307 |
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0 |
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* |
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All directors and executive officers as a group (16 persons) |
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582,166 |
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186,254 |
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1.5% |
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* |
Asterisk in the percent of class column indicates beneficial ownership of less than 1% |
(1) |
For purposes of computing the percentage of outstanding shares held by each person or group of persons named in the Beneficial Ownership table 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. The securities totaled in this column include stock options, direct
holdings, stock equivalents under the Director Deferred Compensation Plan, restricted stock and restricted stock units as described below. |
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Stock Options. As a group, within 60 days of December 16, 2014, our directors, NEOs and other executive officers have the right to acquire through the exercise of stock options, 186,254 of the shares
of Common Stock reflected in the Beneficial Ownership table. |
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Direct Holdings and Restricted Stock. |
As a group, within 60 days of
December 16, 2014, our directors, NEOs and other executive officers shares include (a) 150,067 shares directly held by directors and officers and (b) 95,815 restricted stock awards held by NEOs, which shares may be voted, but
are not available for sale or other disposition until the expiration of vesting restrictions, which occurs upon each individuals termination of service.
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Name |
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Direct Holdings |
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Restricted Stock |
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Mr. Comma |
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16,022 |
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Mr. Rebel |
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20,252 |
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62,572 |
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Mr. Rudolph |
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11,338 |
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33,243 |
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Mr. Casey |
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337 |
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Dr. Blankenship |
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8,502 |
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Mr. Goebel |
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16,398 |
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Ms. John |
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100 |
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Ms. Kleiner |
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7,587 |
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Mr. Murphy |
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3,169 |
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Mr. Myers |
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28,078 |
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Mr. Tehle |
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11,811 |
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Mr. Wyatt |
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6,044 |
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All other executive officers |
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20,429 |
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Common Stock Equivalents. |
The shares of our directors reflected as beneficially
owned include an aggregate of 75,662 Common Stock equivalents attributed to cash compensation deferred under the Director Deferred Compensation Plan and resulting dividends, as described in the Director Compensation section of this proxy statement.
These Common Stock equivalents are convertible on a one-for-one basis into shares of Common Stock upon the earlier of a pre-specified distribution date or termination of service as elected by the director.
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Name |
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Stock Equivalents
for Directors |
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Mr. Goebel |
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0 |
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Ms. John |
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0 |
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Ms. Kleiner |
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0 |
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Mr. Murphy |
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42,849 |
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Mr. Myers |
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3,276 |
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Mr. Tehle |
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29,537 |
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Mr. Wyatt |
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0 |
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62 JACK IN THE BOX INC. ï
2015 Proxy Statement
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
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Restricted Stock Units. As a group, within 60 days of December 16, 2014, our directors, NEOs and other executive officers may convert an aggregate of 74,368 RSUs on a one-for-one basis into
shares of Common Stock upon vesting. RSUs may not be voted. The breakdown between directors and NEOs is provided below. |
These RSUs fully vest upon the earlier of 12 months from the
date of grant or upon termination of service with the Board.
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Name |
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Unvested RSUs |
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Deferred RSUs |
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Mr. Goebel |
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1,551 |
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3,169 |
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Ms. John |
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0 |
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0 |
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Ms. Kleiner |
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1,551 |
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3,169 |
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Mr. Murphy |
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1,551 |
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7,587 |
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Mr. Myers |
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1,551 |
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0 |
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Mr. Tehle |
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1,551 |
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10,756 |
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Mr. Wyatt |
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1,551 |
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4,712 |
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RSUs of NEOs and other executive officers. |
These RSUs fully vest upon termination
of service and are convertible on a one-for-one basis into shares of Common Stock upon vesting. Also included are deferred performance vested restricted stock units in the amount of 3,000 for Mr. Comma and 2,040 for all other executive
officers.
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Name |
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RSUs |
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Mr. Comma |
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11,675 |
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Mr. Rebel |
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16,840 |
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Mr. Rudolph |
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5,114 |
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Mr. Casey |
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0 |
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Dr. Blankenship |
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0 |
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All other executive officers |
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2,040 |
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JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 63
OTHER
INFORMATION
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16(a) of the Securities Exchange Act of 1934, each executive officer, each director, and each
beneficial owner of more than 10% of the Companys Common Stock is required to file certain forms with the Securities and Exchange Commission. A report of beneficial ownership of the Companys 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 2014 were filed on a timely basis, except as noted below.
On
September 29, 2014, Michael W. Murphy, James M. Myers, and David M. Tehle each filed a Form 5 to report their beneficial ownership of derivative securities consisting of 55,043, 32,897, and 53,577 shares of Common Stock equivalents,
respectively. In each case, these individuals elected to participate in the Companys Deferred Compensation Plan for Non-Management Directors, which was initially approved by the Companys stockholders in February 1995. Under
this Plan, a non-management director
can elect to defer receipt of some or all of the annual cash retainers he or she is entitled to receive for their service as a director. Upon deferral, the Company credits the non-management
director with Common Stock equivalents (and fractions thereof) determined by dividing the amount deferred by the average of the closing price of the Companys Common Stock for the ten (10) trading days immediately preceding the date the
deferred compensation is credited to the directors account. At the end of the non-management directors service, the Company is required to issue the non-management director that number of shares of Common Stock equal to that number
of Common Stock equivalents credited to the non-management directors account at the time of distribution. Due to an administrative error, the beneficial ownership of these Common Stock equivalents previously credited to the accounts of
these non-management directors were not previously reported on Form 4, though they have consistently been disclosed in the Companys annual proxy statements. On October 14, 2014, John T. Wyatt filed a Form 5 to report his sale of 3,811
shares of Common Stock on December 10, 2013. The sale during Fiscal Year 2014 was previously not reported due to an administrative error.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
It is the Companys policy that the Audit Committee approve or ratify transactions involving the Company and its
directors, executive officers or principal stockholders or members of their immediate families or entities controlled by any of them or in which they have a substantial ownership interest in which the amount involved exceeds $120,000 and that are
otherwise reportable under SEC disclosure rules.
During fiscal year 2014, the Company was not a party to a transaction or series of transactions in which the
amount
involved did or may exceed $120,000 in which any of its directors, named executive officers or other executive officers, any holder of more than 5% of its Common Stock or any member of the
immediate family of any of these persons had or will have a direct or indirect material interest, other than the compensation arrangements (including with respect to equity compensation) described in Executive Compensation above.
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 and in accordance with their best judgment.
64 JACK IN THE BOX INC. ï
2015 Proxy Statement
STOCKHOLDER PROPOSALS FOR THE 2016 ANNUAL MEETING
Proposals to be included in the Proxy Statement
Under the rules of the SEC, if a stockholder wishes to submit a proposal for possible inclusion in the proxy materials for our 2016 Annual Meeting, we must receive it
no later than 120 calendar days prior to the anniversary of this years mailing date. Accordingly, in order for a stockholder proposal to be considered timely for inclusion in our proxy materials for the 2016 Annual Meeting, any such
stockholder proposal must be received by our Corporate Secretary no later than 5:00 p.m. Pacific Time, on September 11, 2015. The stockholder must also comply with the procedures and requirements set forth in Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, as well as the applicable requirements of our Bylaws.
Proposals not included in the Proxy Statement
If a stockholder wishes to present a proposal at our 2016 Annual Meeting or to nominate one or more directors, the stockholder must provide the proposal to us on a
timely basis and satisfy the other conditions set forth in our Bylaws and in applicable SEC rules. The Companys Bylaws provide that in order for a stockholder to present business or to make nominations for the election of a director, written
notice containing the information required by the Bylaws must be delivered to the Corporate Secretary at the principal executive offices of the Company not less than 120 days and not more than 150 days prior to the first anniversary of the
date of the previous years Annual Meeting. Accordingly, in order for a stockholder proposal intended to be proposed at the 2016 Annual Meeting to be considered timely, it must be received by the Corporate Secretary not later than
October 16, 2015, and not earlier than September 16, 2015.
General
All proposals must be in writing and should be mailed to Jack in the Box Inc., to the attention of Phillip H. Rudolph, Corporate Secretary, at 9330 Balboa Avenue,
San Diego, CA 92123. A copy of the Bylaws may be obtained by written request to the Corporate Secretary at the same address. The Bylaws are also available at www.jackinthebox.com/investors/corporategovernance.
JACK IN THE BOX INC. ANNUAL REPORT ON FORM 10-K
A copy of the Companys Annual Report on Form 10-K for the fiscal year ended September 28, 2014, excluding
exhibits, may be obtained by stockholders without charge by written request sent to the above address. We make available free of charge on
our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. These materials can be found at www.jackinthebox.com/investors.
DELIVERY OF PROXY
MATERIALS AND ANNUAL REPORTS
We may satisfy SEC rules regarding delivery of Proxy Statements and Annual Reports by delivering a single copy of these
documents to an address shared by two or more stockholders. This process is known as householding. This delivery method can result in meaningful cost savings for us. In order to take advantage of this opportunity, we have delivered only
one Proxy Statement and Annual Report to stockholders who share an address with another stockholder, unless contrary instructions were received prior to the mailing date.
We undertake to deliver promptly upon written or oral request a separate copy of the Proxy Statement and/or Annual Report, as requested, to a stockholder at a shared
address to which a single copy of these documents was delivered. If you
hold stock as a record stockholder and prefer to receive separate copies of a Proxy Statement and/or Annual Report either now or in the future, please contact our Corporate Secretary at 9330
Balboa Avenue, San Diego, CA 92123. If your stock is held by a brokerage firm or bank and you prefer to receive separate copies of a Proxy Statement and/or Annual Report either now or in the future, please contact your brokerage or bank. The
voting instruction sent to a Street-name stockholder should provide information on how to request (i) householding of future Company materials or (ii) separate materials if only one set of documents is being sent to a household. If it does
not, a stockholder who would like to make one of these requests should contact us as indicated above.
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement 65
EXHIBIT A
Jack in the Box Inc. Audit Committee Pre-Approval Policy
The Audit Committee of Jack in the Box Inc. (JACK) is responsible for the appointment, retention and
termination, compensation and oversight of the work of the registered public accountant providing audit or attest services (an independent auditor) to JACK, all JACK subsidiaries and any other entity whose financial results are included
in JACKs consolidated financial statements for which an audit of the financial statements is conducted (collectively, the Company).
In
accordance with the Sarbanes-Oxley Act of 2002 (SOX) and implementing rules and regulations of the Securities and Exchange Commission (SEC) and the auditing standards and rules of the Public Company Accounting Oversight Board
(PCAOB), the Audit Committee has established as its policy that it will review in advance, and either approve or disapprove, any audit, audit-related, internal control-related, tax or other non-audit service to be provided to the Company
by the independent auditor. Definitions of key terms are provided following this policy.
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Engagement of Independent Auditor. Annually, in the early part of each fiscal year, the Audit Committee will approve the engagement of the registered public accounting firm (a) to perform the annual audit of
the Companys consolidated financial statements, (b) to provide an attestation report on the effectiveness of the Companys internal controls over financial reporting, (c) to review the Companys interim financial
statements, and (d) to provide such other audit-related, tax and non-audit services as are then anticipated to be required for the proper conduct of the Companys affairs and consistent with maintaining the independence of the firm
selected to audit the Companys annual financial statements. The Audit Committee will approve the provision by the Companys independent auditor of only those non-audit, tax and internal control-related services deemed permissible under
the federal securities laws and any applicable rule or regulation of the SEC and/or the PCAOB. |
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Non-Audit Services. The Audit Committee may delegate to its Chair the authority to pre-approve otherwise permissible non-audit services, provided that any decision made pursuant to such delegation must be
presented to the full Audit Committee for informational purposes at its next regularly held meeting. |
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Permissible Tax and Internal Control-Related Services. With respect to the proposed provision of permissible tax services and services related to internal control over financial reporting, the independent auditor
shall |
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provide sufficient information to the Audit Committee regarding the proposed tax service or non-audit service related to internal control over financial reporting to permit it to make a judgment about the impact of the
audit firms provision of such services on the audit firms independence, including, but not limited to, a written description regarding: |
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the nature and scope of the service, fee structure and any side letter or other amendment to the engagement letter, or any other agreement (written or oral) between the independent auditor and the Company relating to
that service; and |
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any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement between the independent auditor or its affiliate and any person regarding the promoting, marketing
or recommending of a transaction covered by the service; |
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discuss with the Audit Committee the potential effects of the services on the outside auditors independence; |
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disclose to the Audit Committee any amendments to tax services or internal control-related engagements whether or not written; and |
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document the substance of the discussion with the Audit Committee. |
With respect to each proposed service, or proposed
modification of service, related to internal control over financial reporting or tax, each request must comply with the procedural and information requirements set forth above.
4. |
Delegation to Audit Committee Chair. To ensure prompt handling of unforeseeable or unexpected matters that arise between Audit Committee meetings, the
Audit Committee hereby delegates authority to its Chair, and/or to such other members of the Audit Committee as the Chair shall from time to time designate, to review and, if appropriate, approve in advance, any request for the independent auditor
to provide non-audit (including tax and internal control-related) services. Any such approval must be reported to the Audit Committee at its next scheduled meeting, and any necessary corresponding change made to the authorized list of services and
budget previously approved by the Audit Committee. With respect to tax and internal control-related services, however, the independent auditor must discuss the service, and its potential effects
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A-1 JACK IN THE BOX INC. ï
2015 Proxy Statement
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on its independence, with the full Audit Committee at the next regularly held meeting. |
Neither
the Audit Committee, the Chair nor any other member of the Audit Committee shall delegate to Management, or to
any other person, its obligation under applicable law and this policy to approve in advance any service to be provided to the Company by its independent auditor.
Definitions
a. |
The term audit services shall mean services that are necessary to perform an audit and/or review in accordance with the standards of PCAOB and/or requirements of the SEC and the PCAOB, as well as
those services that generally only the Companys independent auditor reasonably can provide, including but not limited to comfort letters, consents and assistance with and/or review of documents filed with the SEC. |
b. |
The term audit-related services shall mean assurance and related services that traditionally are performed by the independent auditor including, among other services, attestations, statutory audits,
financial audits for subsidiaries or affiliates of the Company, employee benefit plan financial statement audits, agreed-upon or expanded audit procedures related to accounting and/or billing records required to respond to or comply with financial,
accounting or regulatory reporting requirements, due diligence related to mergers and acquisitions, accounting consultations and audits in connection with acquisitions, consultations on other accounting and/or reporting standards or interpretations
of the SEC, the Financial Accounting Standards Board (FASB) or other regulatory or standard-setting bodies such as the PCAOB. |
c. |
The term internal control-related services shall mean any service that directly or indirectly relates to the Companys internal control over financial reporting (as defined by the rules and
regulations of the SEC and PCAOB). The Audit Committees annual decision to retain an independent auditor to perform an audit of the Companys consolidated financial statements and internal
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control over financial reporting shall not be included within the scope of this term. |
d. |
The term tax services shall mean tax compliance, tax planning and tax advisory services that are permitted by the SEC and/or the PCAOB, and are consistent with applicable federal, state, local and
foreign tax laws, including but not limited to the Internal Revenue Code (IRC) and implementing rules and regulations of the Internal Revenue Service (IRS). This term does not include any non-audit service, including those
related to the marketing, planning or opining in favor of the tax treatment of a transaction, that is, or that is otherwise related to: (1) a confidential transaction (as defined under PCAOB rules); (2) an aggressive tax position
transaction (including, but not limited to, those deemed by the IRS to be listed transactions) (as defined under PCAOB rules), and (3) any tax service to a person (other than a non-management director of the Company) in a financial
reporting oversight role (as defined under PCAOB rules) at the audit client, or to an immediate family member of such person. |
e. |
The term all other non-audit services shall mean any services to be provided to the Company by the independent auditor other than audit services, audit-related services, internal control-related
services and tax services. This term shall not include any service that is prohibited by Title II of SOX, any other provision of the federal securities laws or other applicable federal law, and/or any applicable rule, regulation or interpretation of
the SEC, the PCAOB or any other governmental or regulatory organization. |
JACK IN THE
BOX
INC.
ï 2015 Proxy Statement A-2
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9330 BALBOA AVE.
SAN DIEGO, CA 92123-1516 |
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VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off
date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form. |
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ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards
and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials
electronically in future years. |
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VOTE BY PHONE - 1-800-690-6903 Use any
touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.
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VOTE BY MAIL Mark, sign and date your
proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
M79961-P57333 KEEP THIS PORTION FOR YOUR RECORDS |
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DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED. |
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JACK IN THE BOX
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The Board of Directors recommends you vote FOR all 8 nominees listed and FOR proposals 2 and
3. |
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Election of Directors |
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Abstain |
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Nominees: |
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1a. Leonard A. Comma
1b. David L. Goebel
1c. Sharon P. John |
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Ratification of the appointment of KPMG LLP as independent registered public accountants.
Advisory approval of executive compensation. |
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1d. Madeleine A. Kleiner
1e. Michael W. Murphy |
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NOTE: In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof. |
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1f. James M. Myers
1g. David M. Tehle
1h. John T. Wyatt
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For address changes and/or comments, please check this box and write them on the back where indicated. |
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Please indicate if you plan to attend this meeting. |
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign
personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
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Signature [PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Proxy Statement and the 2014 Annual Report on Form 10-K are available at www.proxyvote.com.
M79962-P57333
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JACK IN THE BOX INC.
Annual Meeting of Stockholders
February 13, 2015, 8:30 a.m., Pacific Time
This proxy is solicited by the Board of Directors |
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The undersigned hereby appoints Leonard A. Comma and Phillip H. Rudolph, and each of them, with power to act without the other
and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Jack in the Box Inc. Common Stock which the undersigned is entitled to vote, and, in
their discretion, to vote upon such other business as may properly come before the 2015 Annual Meeting of Stockholders of the company to be held February 13, 2015, or at any adjournment or postponement thereof, with all powers which the
undersigned would possess if present at the Annual Meeting. THIS PROXY WILL BE
VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR THE ELECTION OF ALL DIRECTORS AND FOR PROPOSALS 2 AND 3.
In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournment thereof.
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Address Changes/Comments:
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(If you
noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side
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