Nutrisystem 2008 Annual Report Download - page 58

10. STOCKHOLDERS’ EQUITY
Common Stock
In 2006, the Company issued 1,324,174 shares of common stock upon the exercise of common stock options and
received proceeds of $3,632 and 8,523 shares of restricted stock vested. Also, in 2006, the Company issued
10,804 shares of common stock as compensation to board members, certain consultants and spokespersons per
their contracts. Costs recognized for these stock grants were $537.
In 2007, the Company issued 412,076 shares of common stock upon the exercise of common stock options and
received proceeds of $1,931 and 15,860 shares of restricted stock vested. Also, in 2007, the Company issued
4,910 shares of common stock as compensation to board members, certain consultants and spokespersons per
their contracts. Costs recognized for these stock grants were $283.
In 2008, the Company issued 659,518 shares of common stock upon the exercise of common stock options and
received proceeds of $1,022 and 94,865 shares of restricted stock vested. Included in the number of shares vested
for 2008 were 24,422 shares that employees surrendered to the Company for payment of the minimum tax
withholding obligations. Also, in 2008, the Company issued 49,264 shares of common stock as compensation to
board members, certain consultants and spokespersons per their contracts. Costs recognized for these stock grants
were $735. During the quarters ended June 30, September 30 and December 31, 2008, the Company paid a
dividend of $0.175 per share to all shareholders of record.
In August 2006, the Company announced that its Board of Directors authorized the repurchase of up to $50,000
of its outstanding shares of common stock. In February 2007, a repurchase program of up to $200,000 of
outstanding shares of common stock was authorized and in October 2007, an additional $100,000 was
authorized. The stock repurchase programs from 2007 have an expiration date of March 31, 2009, and also may
be limited or terminated at any time without prior notice. The timing and actual number of shares repurchased
depends on a variety of factors including price, corporate and regulatory requirements, alternative investment
opportunities and other market conditions. In 2008, the Company purchased and retired 4,907,323 shares of
common stock for an aggregate cost of $67,085. In 2007, the Company purchased and retired 2,799,031 shares of
common stock for an aggregate cost of $121,777. In 2006, the Company purchased and retired 896,700 shares of
common stock for an aggregate cost of $45,368. The cost of the purchased shares was reflected in the
accompanying statement of stockholders’ equity as a reduction of common stock (equal to par value of purchased
shares), additional paid-in capital (“APIC”) (equal to balance in APIC) with the excess recorded as a reduction in
retained earnings. As of December 31, 2008, the Company was authorized to purchase an additional $115,770
under the existing repurchase programs. During January 2009, the Company purchased an additional 132,200
shares of common stock for an aggregate cost of $1,939.
Preferred Stock
The Company has authorized 5,000,000 shares of preferred stock issuable in series upon resolution of the Board
of Directors. Unless otherwise required by law, the Board of Directors can, without stockholder approval, issue
preferred stock in the future with voting and conversion rights that could adversely affect the voting power of the
common stock. The issuance of preferred stock may have the effect of delaying, averting or preventing a change
in control of the Company.
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