11. SHARE-BASED COMPENSATION

Stock Options—The Company maintains three share-based compensation plans (collectively, the "Plans"). The Company's Amended and Restated 2006 Employee, Director and Consultant Stock Plan, as amended (the "2006 Plan") was approved by the Company's stockholders on November 28, 2006, and provides for the granting of up to eight million shares of common stock in the form of nonqualified and incentive stock options, stock grants or other share-based awards to employees, nonemployee directors and consultants. The amendment and restatement of the 2006 Plan was approved by stockholders on May 20, 2010. In connection with the merger of Jamba, Inc. with Jamba Juice Company on November 28, 2006, the Company assumed the outstanding options under the Jamba Juice Company 1994 Stock Incentive Plan (the "1994 Plan") and the Jamba Juice Company 2001 Equity Incentive Plan (the "2001 Plan"), both of which provided for the granting of nonqualified and incentive stock options to employees, nonemployee directors and consultants. No additional grants are available under the 2001 Plan and the 1994 Plan.

As of January 3, 2012, there remained 2,250,942 shares available for grant under the Company's 2006 Plan. Options granted under the 2006 Plan have an exercise price equal to the closing price of the Company's common stock on the grant date. Options granted in 2006 under the 2006 Plan have an exercise price equal to the average of the closing price of the Company's common stock for five trading days, consisting of the two days immediately following the date of grant, the day of the grant, and two days immediately before the date of grant. Options under the 2001 Plan and 1994 Plan were granted at an exercise price equal to or greater than the fair market value of the common stock at the date of the grant, are exercisable for up to 10 years, and vest annually on grant date over a four year period. Options outstanding under the 1994 Plan and the 2001 Plan became fully vested in 2010.

In December 2008, the Company granted an aggregate of 1,500,000 shares of stock options to its new President and Chief Executive Officer, resulting in an increase in the number of shares issued under stock option awards outstanding. This award was granted as an inducement grant outside of the Company's existing equity plans and has a three-year vesting period.

The fair value of options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected life of the award. The risk-free rate of interest is based on the zero coupon U.S. Treasury rates appropriate for the expected term of the award. For expected life we apply the guidance provided by the SEC Staff Accounting Bulletin No. 110. Expected dividends are zero based on history of not paying cash dividends on the Company's common stock. Expected volatility is based on a 75/25 blend of historic daily stock price observations of the Company's common stock since its inception and historic daily stock price observations of the Company's peers during the period immediately preceding the share-based award grant that is equal in length to the award's expected term. We make assumptions for the number of awards that will ultimately not vest ("forfeitures") in determining the share-based compensation expense for these awards. The Company uses historical data to estimate expected employee behaviors related to option exercises and forfeitures. There is currently no market-based mechanism or other practical application to verify the reliability and accuracy of the estimates stemming from these valuation models or assumptions, nor is there a means to compare and adjust the estimates to actual values, except for annual adjustments to reflect actual forfeitures.

The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:


	Fiscal Year Ended January 3, 2012			Fiscal Year Ended December 28, 2010			Fiscal Year Ended December 29, 2009
Weighted-average risk-free interest rate		1.15	%		1.59	%		2.03	%
Expected life of options (years)		6.25			6.24			5.0
Expected stock volatility		63.4	%		65.9	%		57.9	%
Expected dividend yield		0	%		0	%		0	%

A summary of the stock option activities for fiscal years 2010 and 2011 is presented below (shares and dollars in thousands):


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Contractual Term		Aggregate Intrinsic Value
Options outstanding at December 29, 2009		5,346		$	2.75
Options granted		1,083			2.27
Options exercised		(278	)		0.53
Options canceled		(333	)		5.63

Options outstanding at December 28, 2010		5,818		$	2.60
Options granted		1,356			1.80
Options exercised		(229	)		1.14
Options canceled		(767	)		4.41

Options outstanding at January 3, 2012		6,178		$	2.25		7.64	$	1,230

Options vested or expected to vest at January 3, 2012		5,470		$	2.31		7.42	$	1,209

Options exercisable at January 3, 2012		3,465		$	2.71		6.80	$	917

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price, which is equal to the market value at the time of the grant. Information regarding options outstanding and exercisable at January 3, 2012 is as follows:


Range of Exercise Prices	Number Outstanding		Weighted-Average Remaining Contractual Life		Weighted-Average Exercise Price		Number Exercisable		Weighted-Average Exercise Price
$0.36 – $0.58		125,000		7.12 years	$	0.42		87,500	$	0.43
$0.60 – $0.60		1,500,000		6.91 years		0.60		1,125,000		0.60
$1.03 – $1.08		115,000		7.44 years		1.07		87,500		1.07
$1.31 – $1.31		953,415		6.67 years		1.31		758,180		1.31
$1.61 – $1.61		765,250		9.86 years		1.61		—		—
$1.79 – $1.80		751,900		8.58 years		1.79		289,357		1.79
$2.19 – $2.21		135,000		9.33 years		2.21		16,250		2.21
$2.22 – $2.22		656,350		8.86 years		2.22		173,471		2.22
$2.27 – $4.48		629,633		7.82 years		2.84		381,508		3.19
$5.09 – $11.77		546,372		4.99 years		9.94		546,372		9.94

		6,177,920			$	2.25		3,465,138	$	2.71

The weighted-average fair value of options granted in fiscal 2011 and fiscal 2010 was $1.06 and $2.27, respectively. At January 3, 2012, stock options totaling 5,470 are expected to vest over the next three years. The remaining expense to amortize is approximately $1.1 million at January 3, 2012.

Share-based compensation expense was $1.3 million, $1.1 million, and $1.3 million for fiscal 2011, fiscal 2010, and fiscal 2009, respectively, and is included in general and administrative expenses in the consolidated statements of operations. No income tax benefit was recorded in fiscal 2011, 2010 and 2009.

Restricted Stock—During the fiscal year ended December 29, 2009, the Company issued restricted stock units ("RSUs") as permitted under the 2006 Plan. RSUs are charged against the 2006 Plan share reserve on the basis of one share for each unit granted. The fair value of RSUs is determined based on the Company's closing stock price on the date of grant. These RSUs vest and become unrestricted 33.3% on the first anniversary of the grant date and 33.3% per year thereafter. Share-based compensation expense is recognized ratably over the three-year service period for RSUs. The remaining expense to amortize is approximately $48 thousand at January 3, 2012.

Information regarding activity for RSUs outstanding under the 2006 Plan is as follows (shares in thousands):


	Number of shares of RSUs			Weighted- Average Grant Date Fair Value (per share)
RSUs outstanding as of December 29, 2009		180		$	1.79
RSUs granted		—			—
RSUs forfeited (canceled)		(12	)		1.79
RSUs vested		(58	)		1.79

RSUs outstanding as of December 28, 2010		110		$	1.79
RSUs granted		—			—
RSUs forfeited (canceled)		(14	)		1.79
RSUs vested		(48	)		1.79

RSUs outstanding as of January 3, 2012		48		$	1.79