WeightWatchers 2008 Annual Report Download - page 82

WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
10. Stock Plans
Incentive Compensation Plans:
On May 12, 2004 and December 16, 1999, respectively, the Company’s shareholders approved the 2004
Stock Incentive Plan (the “2004 Plan”) and the 1999 Stock Purchase and Option Plan (the “1999 Plan”). On
May 6, 2008, the Company’s shareholders approved the 2008 Stock Incentive Plan (the “2008 Plan” and together
with the 2004 Plan and the 1999 Plan, the “Stock Plans”). These plans are designed to promote the long-term
financial interests and growth of the Company by attracting, motivating and retaining employees with the ability
to contribute to the success of the business and aligning compensation for our employees over a multi-year
period directly with the interests of the shareholders of the Company. The Company’s Board of Directors or a
committee thereof administers the Stock Plans.
Under the 2008 Plan, grants may take the following forms at the Compensation and Benefit Committee’s
discretion: non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock units
(“RSUs”), restricted stock and other equity-based awards. As of its effective date, the maximum number of
shares of common stock available for grant under the 2008 Plan is 3,000, subject to increase and adjustment as
set forth in the 2008 Plan.
Under the 2004 Plan, grants may take the following forms at the Company’s Board of Directors or its
committee’s sole discretion: non-qualified stock options, incentive stock options, stock appreciation rights, RSUs
and other share-based awards. As of its effective date, the maximum number of shares of common stock
available for grant under the 2004 Plan was 2,500.
Under the 1999 Plan, grants may take the following forms at the Company’s Board of Directors or its
committee’s sole discretion: non-qualified stock options, incentive stock options, stock appreciation rights,
restricted stock, RSUs, purchase stock, dividend equivalent rights, performance units, performance shares and
other share-based grants. The maximum number of shares of common stock available for grant under the 1999
Plan was 7,058.
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
Company’s Board of Directors. During the fiscal years ended January 3, 2009, December 29, 2007 and
December 30, 2006, the Company granted 15, 15 and 12 fully-vested shares, respectively, and recognized
compensation expense of $513, $727 and $550, 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 $11,302, $11,763 and $12,339 for
the years ended January 3, 2009, December 29, 2007 and December 30, 2006, respectively. Such amounts have
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 $4,029, $4,588 and
$4,812 for the years ended January 3, 2009, December 29, 2007 and December 30, 2006, respectively. No
compensation costs were capitalized. As of January 3, 2009, there was $24,597 of total unrecognized
compensation cost related to stock options and RSUs granted under the Stock Plans. That cost is expected to be
recognized over a weighted-average period of approximately 2.4 years.
While the Stock Plans permit various types of awards, other than the aforementioned shares issued to
directors, grants under the plans have historically been either non-qualified stock options or RSUs. The following
describes some further details of these awards.
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