Jamba Juice 2007 Annual Report Download - page 79

Table of Contents


The weighted-average grant-date fair value of options granted and options assumed from Jamba Juice Company during fiscal 2006 was $4.66 and
$6.19, respectively. There were no options exercised during fiscal 2006. At January 9, 2007, 2.1 million stock options are expected to vest over the next four
years.
The fair value of restricted common stock is determined based on the closing price of the Company’s common stock on the date of grant. Restricted
common stock vests and becomes unrestricted 25% on the first anniversary of the grant date and 25% per year thereafter. Stock-based compensation expense
is recognized ratably over the four-year service period. The Company issued 137,500 shares of restricted common stock with a weighted-average fair value of
$11.50 per share during fiscal 2006, all of which remain unvested as of January 9, 2007.
Stock-based compensation expense was $0.4 million and is included in labor costs in the consolidated statement of operations for fiscal 2006. The total
income tax benefit recognized in the consolidated statement of operations for stock-based compensation arrangements was $143,000 for fiscal 2006.
As of January 9, 2007, there was $9.9 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements
granted under the Plans that is expected to be recognized over a weighted-average period of 3.5 years. The total fair value of shares vested during fiscal 2006
was $0.

As discussed in Note 1, the Company issued warrants to purchase 17,250,000 shares of common stock at an exercise price of $6.00 and an option to
purchase up to a total of 750,000 units at an exercise price of $10.00 in connection with its initial public offering in July 2005. Each unit includes one share of
common stock and a warrant to purchase one share of common stock at an exercise price of $7.50. In November 2006, the Company assumed 304,581
outstanding warrants in connection with the Merger (see Note 2). All warrants and the option are fully vested as of January 9, 2007. A summary of the
warrant activity as of January 9, 2007, and changes during the year then ended is presented below (shares in thousands):





Warrants outstanding as of January 11, 2006 18,000 $6.06
Warrants assumed from Jamba Juice Company 305 5.15
Warrants exercised (2) 4.26
Warrants outstanding as of January 9, 2007 18,303 $6.05
The weighted-average remaining contractual life of the warrants and the option outstanding as of January 9, 2007 is 3.46 years and 2.56 years,
respectively. The aggregate intrinsic value of the warrants and the option are $67.6 million and $2.1 million, respectively, as of January 9, 2007 and the
intrinsic value of warrants exercised during fiscal 2006 was $10,203. There were no warrants exercised or granted during the period from January 1, 2006 to
January 10, 2006, and there were no warrants exercised during fiscal 2005.

The Company maintains a voluntary defined contribution plan covering all eligible employees that it acquired from the Jamba Juice Company. Eligible
employees may elect to defer and contribute a percentage of their compensation to the plan, not to exceed the dollar amount set by law. The Company also
provides for a
79