Employee Stock Purchase and Stock Option Plans

Broad-Based, Employee Stock Purchase Plans

Under the 1989 ESPP and the GESPP, eligible employees who elect to participate in these plans are granted the right to purchase shares of the common stock of Jacobs at a discount that is limited to 5% of the per-share market value on the day shares are sold to employees. The following table summarizes the stock issuance activity under the 1989 ESPP and the GESPP for the fiscal years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	For the Years Ended
	September 28, 2018		September 29, 2017		September 30, 2016
Aggregate Purchase Price Paid for Shares Sold:
Under the 1989 ESPP	$	21,590,858	$	21,084,657	$	23,631,241
Under the GESPP	2,240,609		2,105,834		2,660,067
Total	$	23,831,467	$	23,190,491	$	26,291,308
Aggregate Number of Shares Sold:
Under the 1989 ESPP	357,899		403,652		564,461
Under the GESPP	36,405		39,648		63,196
Total	394,304		443,300		627,657

On January 19, 2017, the Company’s stockholders approved an increase in the number of shares authorized by 4,350,000 shares for the 1989 ESPP and by 150,000 shares for the GESPP.

At September 28, 2018, there remains 4,187,955 shares reserved for issuance under the 1989 ESPP and 138,575 shares reserved for issuance under the GESPP.

Stock Incentive Plans

We also sponsor the 1999 Stock Incentive Plan, as amended and restated (the "SIP") and the 1999 Outside Director Stock Plan, as amended and restated (the "ODSP"). The 1999 SIP provides for the issuance of incentive stock options, non-qualified stock options, share appreciation rights ("SARs"), restricted stock and restricted stock units to employees. The 1999 ODSP provides for awards of shares of common stock, restricted stock, restricted stock units and grants of non-qualified stock options to our outside (i.e., nonemployee) directors. The following table sets forth certain information about the 1999 Plans:



	1999 SIP	1999 ODSP	Total
Number of shares authorized	29,850,000	1,100,000	30,950,000
Number of remaining shares reserved for issuance at September 28, 2018	6,911,375	486,755	7,398,130
Number of shares relating to outstanding stock options at September 28, 2018	1,575,634	191,125	1,766,759
Number of shares available for future awards:
At September 28, 2018	5,335,741	295,630	5,631,371
At September 29, 2017	7,351,946	312,412	7,664,358

Effective September 28, 2012, all grants of shares under the 1999 SIP are issued on a fungible basis. An award other than an option or SAR are granted on a 1.92-to-1.00 basis (“Fungible”). An award of an option or SAR are granted on a 1-to-1 basis (“Not Fungible”).

The following table presents the fair value of shares (of restricted stock and restricted stock units) vested for the years ended September 28, 2018, September 29, 2017 and September 30, 2016 (in thousands):



	For the Years Ended
	September 28, 2018		September 29, 2017		September 30, 2016
Restricted Stock and Restricted Stock Units (service condition)	$	64,121	$	34,466	$	17,481
Restricted Stock Units (service, market, and performance conditions at target)	2,626		4,183		4,336
Total	$	66,747	$	38,649	$	21,817

At September 28, 2018, the amount of compensation cost relating to non-vested awards not yet recognized in the financial statements is approximately $93.3 million. The majority of these unrecognized compensation costs will be recognized by the first quarter of fiscal 2020. The weighted average remaining contractual term of options currently exercisable is 4.3 years.

Stock Options

The following table summarizes the stock option activity for the years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	Number of Stock Options		Weighted Average Exercise Price
Outstanding at October 2, 2015	4,072,707		$	46.06
Granted	460,770		$	42.17
Exercised	(412,416	)	$	40.88
Cancelled or expired	(543,549	)	$	49.13
Outstanding at September 30, 2016	3,577,512		$	45.69
Granted	—		$	—
Exercised	(906,648	)	$	43.79
Cancelled or expired	(154,039	)	$	48.79
Outstanding at September 29, 2017	2,516,825		$	46.19
Granted	—		$	—
Exercised	(636,019	)	$	46.93
Cancelled or expired	(114,047	)	$	52.26
Outstanding at September 28, 2018	1,766,759		$	45.53

Cash received from the exercise of stock options, net of tax remitted, during the year ended September 28, 2018 was $29.8 million.

Stock options outstanding at September 28, 2018 consisted entirely of non-qualified stock options. The following table presents the total intrinsic value of stock options exercised for the fiscal years ended September 28, 2018, September 29, 2017 and September 30, 2016 (in thousands):



For the Years Ended
September 28, 2018	September 29, 2017	September 30, 2016
$13,931	$14,713	$4,149

The total intrinsic value of stock options exercisable at September 28, 2018 was approximately $47.6 million. The following table presents certain other information regarding our 1999 SIP and 1999 OSDP for the fiscal years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	September 28, 2018		September 29, 2017		September 30, 2016
At fiscal year end:
Range of exercise prices for options outstanding	$32.51–$60.43		$32.51–$80.63		$32.51–$80.63
Number of options exercisable	1,557,900		1,992,022		2,581,421
For the fiscal year:
Range of prices relating to options exercised	$35.93–$61.26		$37.03–$55.53		$36.88–$55.00
Estimated weighted average fair values of options granted	$	—	$	—	$	12.80

The following table presents certain information regarding stock options outstanding and stock options exercisable at September 28, 2018:



	September 28, 2018
	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number	Weighted Average Remaining Contractual Life (years)	Weighted Average Price		Number	Weighted Average Exercise Price
$32.51 - $37.03	153,000	3.49	$	37.01	153,000	$	37.01
$37.43 - $46.09	1,059,647	4.87	$	42.69	850,788	$	42.74
$47.11 - $55.13	513,237	4.48	$	52.74	513,237	$	52.74
$60.08 - $80.63	40,875	5.25	$	60.33	40,875	$	60.33
	1,766,759	4.65	$	45.53	1,557,900	$	45.93

The 1999 ODSP and the 1999 SIP allow participants to satisfy the exercise price of stock options by tendering shares of Jacobs common stock that have been owned by the participants for at least six months. Shares so tendered are retired and canceled, and are shown as repurchases of common stock in the accompanying Consolidated Statements of Stockholders’ Equity. The weighted average remaining contractual term of options currently exercisable is 4.30 years.

Restricted Stock

The following table presents the number of shares of restricted stock and restricted stock units issued as common stock under the 1999 SIP for the years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	For the Years Ended
	September 28, 2018	September 29, 2017	September 30, 2016
Restricted stock	—	—	597,091
Restricted stock units (service condition)	1,087,724	496,951	183,131
Restricted stock units (service, market and performance conditions)	254,784	237,058	372,794

The amount of restricted stock units issued for awards with performance and market conditions in the above table are issued based on performance against the target amount. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions related to the awards.

The share amounts in the above tables reflect the Fungible share on a 1.92-to-1.00 basis of restricted stock and restricted stock unit issued.

The following table presents the number and weighted average grant-date fair value of restricted stock and restricted stock units at September 28, 2018:



Number of unvested Restricted Stock and Restricted Stock Units:	Number of Shares		Weighted Average Grant-Date Fair Value
Outstanding at September 29, 2017	2,514,387		$	49.62
Granted	1,364,128		$	65.64
Vested	(1,209,322	)	$	55.19
Cancelled	(339,658	)	$	49.57
Outstanding at September 28, 2018	2,329,535		$	56.11

The following table presents the number of shares of restricted stock and restricted stock units canceled and withheld for taxes under the 1999 SIP for the years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	For the Years Ended
	September 28, 2018	September 29, 2017	September 30, 2016
Restricted stock	284,254	365,481	512,903
Restricted stock units (service condition)	336,516	128,536	177,640
Restricted stock units (service, market and performance conditions)	95,063	86,742	275,933

The amount of unvested restricted stock units canceled for awards with service and performance conditions in the above table is based on the service period achieved and performance against the target amount.

The share amounts in the above tables reflect the Fungible share on a 1.92-to-1.00 basis of restricted stock and restricted stock unit issued.

The restrictions attached to restricted stock and restricted stock units generally relate to the recipient’s ability to sell or otherwise transfer the stock or stock units. There are also restrictions that subject the stock and stock units to forfeiture back to the Company until earned by the recipient through continued employment or service.

The following table provides the number of shares of restricted stock and restricted stock units outstanding at September 28, 2018 under the 1999 SIP. Shares granted in the table below are granted on a 1.92-to-1.00 basis (fungible):



	September 28, 2018
	Total
Restricted stock	337,805
Restricted stock units (service condition)	1,131,200
Restricted stock units (service, market and performance conditions)	735,438

The following table presents the number of shares of restricted stock and restricted stock units issued under the 1999 ODSP for the years ended September 28, 2018, September 29, 2017 and September 30, 2016:



	For the Years Ended
	September 28, 2018	September 29, 2017	September 30, 2016
Restricted stock units (service condition)	21,620	21,123	23,090

The following table provides the number of shares of restricted stock and restricted stock units outstanding at September 28, 2018 under the 1999 ODSP:



	September 28, 2018
Restricted stock	34,000
Restricted stock units (service condition)	91,092

All shares granted under the 1999 ODSP are issued on a 1.92-to-1 basis.

Modification

On January 18, 2017, the Company modified time vested outstanding restricted stock units, paid out in stock and cash, specifically to allow participants to be entitled to dividend equivalents during the vesting period on the outstanding RSUs. Dividends will be paid out at the end of the vesting period and are forfeitable before the vesting period concludes. This modification affected 786 employees and resulted in $1.1 million of incremental compensation cost and will be recognized over the remaining vesting period for each grant, since dividends are forfeitable until vesting is achieved.