Jamba Juice 2009 Annual Report Download - page 100

Table of Contents
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The weighted-average fair value of options granted in fiscal 2008 and fiscal 2007 was $0.47 and $2.94, respectively. No stock options were exercised in
fiscal 2008 and the intrinsic value of the options exercised during fiscal 2007 was $0.1 million. 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 December 30, 2008, 2,964,540 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. Share-based compensation expense
is recognized ratably over the four-year service period.
Share-based compensation expense was $4.2 million, $4.2 million, and $0.4 million for fiscal 2008, fiscal 2007, and fiscal 2006, respectively, and is
included in labor costs in the consolidated statements of operations. The total income tax benefit recognized in the consolidated statements of operations for
share-based compensation arrangements was $1.2 million and $0.1 million for fiscal 2007 and fiscal 2006, respectively. No benefit was recorded in fiscal
2008.
Restricted Stock—The Company did not issue shares of restricted common stock in fiscal 2008 or fiscal 2007 and issued 137,500 shares of restricted
common stock with a weighted-average fair value of $11.50 per share during fiscal 2006, of which all shares had been canceled or exercised prior to
December 30, 2008. The total fair value of restricted common stock vested during fiscal 2008, fiscal 2007, and fiscal 2006 was $56,175, $395,000, and
$0, respectively.
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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 per share and an
option to purchase up to a total of 750,000 units at an exercise price of $10.00 per share 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 per share. In November 2006, the
Company assumed 304,581 outstanding warrants in connection with the Merger (see Note 2). All warrants and the options to purchase the units were fully
vested as of December 30, 2008. No warrants were exercised in fiscal 2008. During fiscal 2007, the Company received $4.0 million of proceeds for the exercise
of 669,500 of the $6.00 warrants. The fair value of warrants exercised of $2.5 million was reclassified from derivative liability to additional paid-in capital
on the date of exercise. A summary of the warrant activity and changes during fiscal 2008 is presented below (shares in thousands):
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Warrants outstanding as of January 1, 2008 17,633 $6.05
Warrants expired (19) 4.74
Warrants exercised — —
Warrants outstanding as of December 30, 2008 17,614 $6.05
The weighted-average remaining contractual life of the warrants and the option outstanding as of December 30, 2008 is 0.5 years and 1.5 years,
respectively. The aggregate intrinsic value of the warrants and the option to purchase the units are $0 and $0.1 million, respectively, as of December 30, 2008.
The intrinsic value of warrants exercised during fiscal 2008, fiscal 2007 and fiscal 2006 was $0, $2.1 million and $10,203, respectively.
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