Nutrisystem 2009 Annual Report Download - page 60

brief in this matter. On January 21, 2010, the U.S. Department of Labor filed an amicus curiae brief in this
matter. The Company believes that the claims are without merit and intends to defend the litigation vigorously.
The Company is also involved in other various claims and routine litigation matters. In the opinion of
management, after consultation with legal counsel, the outcome of such matters is not anticipated to have a
material adverse effect on the Company’s consolidated financial position, results of operations or cash flows in
future years.
Contractual Commitments
The Company has entered into supply agreements with various food vendors. The majority of these agreements
provide for annual pricing, annual purchase obligations, as well as exclusivity in the production of certain
products, with terms of five years or less. One agreement also provides rebates if certain volume thresholds are
exceeded. The Company anticipates it will meet all annual purchase obligations.
9. STOCKHOLDERS’ EQUITY
Common Stock
In 2007, the Company issued 412,076 shares of common stock upon the exercise of common stock options and
received proceeds of $1,931. Additionally, 15,860 shares of restricted stock vested. Also, in 2007, the Company
issued 4,910 shares of common stock as compensation to board members 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. Additionally, 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 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 2009, the Company issued 119,806 shares of common stock upon the exercise of common stock options and
received proceeds of $563. Additionally, 334,350 shares of restricted stock vested. Included in the number of
shares vested for 2009 were 118,307 shares that employees surrendered to the Company for payment of the
minimum tax withholding obligations. Also, in 2009, the Company issued 39,039 shares of common stock as
compensation to board members and spokespersons per their contracts. Costs recognized for these stock grants
were $538. The fair value of the common stock issued in 2009 to board members and spokespersons was $580.
During each of the four quarters of 2009, the Company paid a dividend of $0.175 per share to all shareholders of
record. Subsequent to December 31, 2009, the Board of Directors declared a quarterly dividend of $0.175 per
share payable on March 22, 2010 to shareholders of record as of March 11, 2010.
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 had an expiration date of March 31, 2009 but were
extended by the Board of Directors until March 31, 2011. The programs 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 2009, the Company purchased and retired 132,200 shares of common stock for an aggregate cost
of $1,939. 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
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