Jamba Juice 2014 Annual Report Download - page 42

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The fair value of restricted stock units is determined based on our closing stock price on the date of grant. The restricted stock units granted to employees
typically vest and become unrestricted over the three year period following the date of grant. The restricted stock units granted to non-employee directors
typically vest and become unrestricted one year after the date of grant. Share-based compensation expense is recognized ratably over the vesting periods for
restricted stock units.
The fair value of performance stock units (“PSUs”), which are granted to Company Vice Presidents and above, is determined based on the fair value at
grant date. We record expenses related to PSUs with criteria based on market performance by recognizing grant date fair value over the vesting period.
Compensation expense for PSUs with criteria based on predetermined internal performance targets such as EBITDA and total shareholder returns, is recorded
when it is probable that the performance criteria will be met and expensed over the remaining vesting period. Considerable judgment is applied in
determining the assumptions for computing the fair value of share-based compensation. Changes in the assumptions could result in an adjustment to our
results of operations.
Self-Insurance Reserves
We are self-insured for healthcare benefits. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as
actual historical trends. For our workers’ compensation benefits, we were self-insured for existing and prior years’ exposures through September 30, 2008.
Liabilities associated with the risks that we retain for workers compensation benefits are estimated in part, by considering historical claims experience,
demographic factors, severity factors, and other actuarial assumptions. Our estimates use this actuarial data in conjunction with known industry trends and
Company experience. If actual claims experience differs from our assumptions, historical trends, and estimates, changes in our insurance reserves would
impact the expense recorded in our consolidated statements of operations.
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