WeightWatchers 2006 Annual Report Download - page 84

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The number of anti-dilutive common stock equivalents excluded from the calculation of weighted average
shares for diluted EPS was 1,208, 281 and 410 for the years ended December 30, 2006, December 31, 2005 and
January 1, 2005, respectively.
9. Stock Plans
WWI Incentive Compensation Plans:
On May 12, 2004 and December 16, 1999, respectively, the WWI shareholders approved the 2004 Stock
Incentive Plan (the “2004 Plan”) and the 1999 Stock Purchase and Option Plan (the “1999 Plan”, and together
with the 2004 Plan, the “Stock Plans”). These plans are designed to promote the long-term financial interests and
growth of WWI by attracting and retaining management with the ability to contribute to the success of the
business. The Board of Directors or a committee thereof administers the plans.
Under the 2004 Plan, grants may take the following forms at the Board or its committee’s sole discretion:
non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock units (“RSUs”)
and other share-based awards. The maximum number of shares available for grant under the 2004 Plan is 2,500
as of the plan’s effective date.
Under the 1999 Plan, grants may take the following forms at the Board or its committee’s sole discretion:
non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, purchase stock,
dividend equivalent rights, performance units, performance shares and other share-based grants. The maximum
number of shares available for grant under this plan is 7,058 shares of authorized common stock.
Under the Stock Plans, the Company also grants fully vested shares of its common stock to certain members
of its Board of Directors. While these shares are fully vested, beginning with stock grants made in the fourth
quarter of 2006, the directors are restricted from selling these shares while they are still serving on the Board.
During the fiscal years ended December 30, 2006, December 31, 2005 and January 1, 2005, the Company
granted 12, 1 and 1 fully vested shares, respectively and recognized compensation expense of $550, $43, and
$45, respectively.
The Company issues common stock for share-based compensation awards from treasury stock. The total
compensation cost that has been charged against income for these plans was $12,339 for the year ended
December 30, 2006. Such amount has been included as a component of selling, general and administrative
expenses. The total income tax benefit recognized in the income statement for all share-based compensation
arrangements was $4,812 for the year ended December 30, 2006. No compensation costs were capitalized. As of
December 30, 2006, there was $23,079 of total unrecognized compensation cost related to stock options and
restricted stock units (“RSUs”) granted under the plans. That cost is expected to be recognized over a weighted-
average period of 2.7 years.
While the plans permit various types of awards, other than the aforementioned shares issued to directors,
grants under the plans have historically been either stock options or RSUs. The following describes some further
details of these awards.
Stock Option Awards
Pursuant to the option components of the Stock Plans, the Board of Directors authorized the Company to
enter into agreements under which certain members of management received stock options. The options are
F-21