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v2.3.0.11
Stock-Based Compensation
6 Months Ended
Jun. 30, 2011
Stock-Based Compensation [Abstract]  
Stock-Based Compensation
6. Stock-Based Compensation
     At our Annual Meeting held on May 25, 2011, our shareholders approved the Jones Soda Co. 2011 Incentive Plan (2011 Plan). As a result, the 2002 Stock Option and Restricted Stock Plan (2002 Plan) was terminated, and equity awards granted after the 2011 Annual Meeting will be made under the 2011 Plan. Awards outstanding under the 2002 Plan will remain outstanding in accordance with their existing terms.
     The 2011 Plan initially authorizes the issuance of 3,000,000 shares of the Company’s common stock. Starting in 2012, the number of shares authorized under the 2011 Plan also may be increased each January 1st by an amount equal to the least of (a) 1,300,000 shares, (b) 4.0% of our outstanding common stock as of the end of our immediately preceding fiscal year, and (c) a lesser amount determined by the Board of Directors (the Board), provided that the number of shares that may be granted pursuant to awards in a single year may not exceed 10% of the Company’s outstanding shares of common stock on a fully diluted basis as of the end of the immediately preceding fiscal year.
     Under the terms of the 2011 Plan, the Board may grant awards to employees, officers, directors, consultants, agents, advisors and independent contractors. Awards may consist of stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards or other stock or cash-based awards. As of June 30, 2011, there were 3,000,000 shares available for issuance under the 2011 Plan.
(a)   Stock options:
     A summary of our stock option activity is as follows:
                 
    Outstanding Options  
    Number of     Weighted Average  
    Shares     Exercise Price  
Balance at January 1, 2011
    1,789,784     $ 1.96  
Options granted
    480,000       1.35  
Options exercised
    (25,288 )     0.68  
Options cancelled/expired
    (176,243 )     1.20  
 
           
Balance at June 30, 2011
    2,068,253     $ 1.68  
Exercisable, June 30, 2011
    1,096,879     $ 2.17  
Vested and expected to vest
    2,024,156     $ 1.70  
(b)   Restricted stock awards:
     A summary of our restricted stock activity is as follows:
                 
    Weighted-Average  
    Restricted     Grant Date  
    Shares     Fair Value  
Non-vested restricted stock at January 1, 2011
    158,581     $ 1.52  
Granted
           
Vested
    (107,264 )     1.52  
Cancelled/expired
    (47,781 )     1.42  
 
           
Non-vested restricted stock at June 30, 2011
    3,536     $ 2.80  
     A total of 47,352 shares were withheld by the Company as payment for withholding taxes due in connection with the vesting of restricted stock awards issued under the 2002 Plan for the six months ended June 30, 2011, and the average price paid per share of $1.32, reflects the average market value per share of the shares withheld for tax purposes. There were no shares withheld by the Company for the three months ended June 30, 2011. A total of 808 and 1,715 shares were withheld by the Company as payment for withholding taxes due in connection with the vesting of restricted stock awards issued under the 2002 Plan for the three and six months ended June 30, 2010, respectively, and the average price paid per share of $2.03 and $1.82, respectively, reflects the average market value per share of the shares withheld for tax purposes.
(c)   Stock-based compensation expense:
     Stock-based compensation expense is recognized using the straight-line attribution method over the employees’ requisite service period. We recognize compensation expense for only the portion of stock options or restricted stock expected to vest. Therefore, we apply estimated forfeiture rates that are derived from historical employee termination behavior. If the actual number of forfeitures differs from those estimated by management, additional adjustments to stock-based compensation expense may be required in future periods.
     At June 30, 2011, the unrecognized compensation expense related to stock options and non-vested restricted stock awards was $683,000 and $4,300, respectively, which is to be recognized over weighted-average periods of 2.2 years and 0.4 years, respectively.
The following table summarizes the stock-based compensation expense (in thousands):
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2011     2010     2011     2010  
Type of awards:                                
Stock options
  $ 115     $ 213     $ 200     $ 348  
Restricted stock
    5       21       95       53  
 
                       
 
  $ 120     $ 234     $ 295     $ 401  
 
                       
 
                               
Income statement account:
                               
Promotion and selling
  $ 28     $ 25     $ 86     $ 58  
General and administrative
    92       209       209       343  
 
                       
 
  $ 120     $ 234     $ 295     $ 401  
 
                       
     We employ the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model:
                 
    Six Months Ended June 30  
    2011     2010  
Expected dividend yield
           
Expected stock price volatility
    99.4 %     91.9 %
Risk-free interest rate
    2.5 %     2.8 %
Expected term (in years)
  5.9 years   5.6 years
Weighted-average grant date fair-value
  $ 1.06     $ 0.60  
     The aggregate intrinsic value of stock options outstanding at June 30, 2011 and 2010 was $135,000 and $311,000 and for options exercisable was $257,000 and $188,000, respectively. The intrinsic value of outstanding and exercisable stock options is calculated as the quoted market price of the stock at the balance sheet date less the exercise price of the option. The total intrinsic value of options exercised during the three and six months ended June 30, 2011 and 2010 was $700 and $57,000 and $14,000 and $58,000, respectively.