Nutrisystem 2010 Annual Report Download - page 59

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10. STOCKHOLDERS’ EQUITY
Common Stock
In 2008, the Company issued 659,518 shares of common stock upon the exercise of 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 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 2010, the Company issued 54,927 shares of common stock upon the exercise of stock options and received
proceeds of $124. Additionally, 501,120 shares of restricted stock and restricted stock units vested. Included in
the number of shares vested for 2010 were 154,585 shares that employees surrendered to the Company for
payment of the minimum tax withholding obligations. Also, in 2010, the Company issued 30,700 shares of
common stock as compensation to board members and spokespersons per their contracts. Costs recognized for
these stock grants were $622. The fair value of the common stock issued in 2010 to board members and
spokespersons was $705. During each of the four quarters of 2010, the Company paid a dividend of $0.175 per
share to all shareholders of record. Subsequent to December 31, 2010, the Board of Directors declared a quarterly
dividend of $0.175 per share payable on March 17, 2011 to shareholders of record as of March 7, 2011.
The Company and its Board of Directors have authorized stock repurchase programs of which an additional
$38,833 is available as of December 31, 2010 to purchase outstanding shares of common stock through
March 31, 2011. The repurchase programs 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 2010, the Company
purchased and retired 3,270,429 shares of common stock for an aggregate cost of $74,997. 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. 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.
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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