WeightWatchers 2006 Annual Report Download - page 86

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Restricted Stock Units
Pursuant to the restricted stock components of the Stock Plans, the Company has granted RSUs to certain
employees. The RSUs vest over a period of three to five years. The fair value of RSUs is determined using the
market price of the Company’s common stock on the date of grant. A summary of RSU activity under the plans
for the year ended December 30, 2006 is presented below:
Shares
Weighted-
Average
Grant-Date
Fair Value
Outstanding at January 1, 2006 ....................................... 181 $48.77
Granted ...................................................... 187 $48.84
Vested ....................................................... (63) $50.29
Forfeited ..................................................... (23) $49.58
Outstanding at December 30, 2006 .................................... 282 $48.40
The weighted-average grant date fair value of RSUs granted was $48.84, $50.26 and $39.01 for the years
ended December 30, 2006, December 31, 2005 and January 1, 2005, respectively. The total fair value of RSUs
vested during the years ended December 30, 2006 and December 31, 2005 was $2,922 and $2,263, respectively.
No RSUs vested during the year ended January 1, 2005.
WeightWatchers.com Stock Incentive Plan of Weight Watchers International, Inc. and Subsidiaries:
In April 2000, the Board of Directors of WWI adopted the WeightWatchers.com Stock Incentive Plan of
Weight Watchers International, Inc. and Subsidiaries, pursuant to which selected employees were granted options
to purchase shares of common stock of WeightWatchers.com that are owned by WWI. The number of shares
available for grant under this plan was 400 shares of authorized common stock of WeightWatchers.com. In
connection with the acquisition of WW.com (See Note 3), the Company purchased and canceled all 103
outstanding WW.com options granted under the plan in the second quarter of 2005. Effective July 2, 2005, the
Board of Directors of the Company terminated the plan.
WeightWatchers.com Stock Option Plan
Prior to WWI’s acquisition of WW.com (See Note 3), WeightWatchers.com granted incentive stock options
and/or nonqualified stock options on its common stock to its employees, consultants and/or certain
non-employees under the terms of its stock option plans. In connection with the acquisition, WWI acquired 2,759
shares of WW.com stock which represented vested and unvested options under the plan. The 2,293 shares of
vested options were acquired based upon the difference between the purchase price per share and the exercise
price per share. The 466 shares of unvested options were exchanged for 134 restricted stock units of WWI.
Due to the adoption of FIN 46R (see Note 2), the fair value of stock options granted by
WeightWatchers.com are included in the pro forma footnote disclosures showing the impact to the Company’s
results had it adopted the fair value provisions of SFAS No. 123 (see Note 2). The fair value of options granted
by WeightWatchers.com during fiscal 2004 were estimated on their date of grant using the Black-Scholes option
pricing model with the following weighted average assumptions: (a) dividend yield of 0%, (b) volatility of 64%,
(c) risk-free interest rate of 3.0%—3.9% and (d) expected term of 5 years.
F-23