WeightWatchers 2013 Annual Report Download - page 107

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
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, restricted stock 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 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 December 28, 2013, December 29, 2012 and
December 31, 2011, the Company granted 14, 13, and 13 fully-vested shares, respectively, and recognized
compensation expense of $524, $707 and $772, 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 $4,255, $8,845 and $9,067 for the
years ended December 28, 2013, December 29, 2012 and December 31, 2011, 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 $1,174, $2,742 and
$2,895 for the years ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively. The
tax benefits realized from options exercised and RSUs vested totaled $4,217, $5,847 and $11,309 for the years
ended December 28, 2013, December 29, 2012 and December 31, 2011, respectively. No compensation costs
were capitalized. As of December 28, 2013, there was $24,881 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 2.5 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. In fiscal 2013,
the Company also granted special performance-based stock option awards. The following describes some further
details of these awards.
Stock Option Awards
Option Awards with Time Vesting Criteria
Pursuant to the option components of the Stock Plans, the Company’s Board of Directors authorized the
Company to enter into agreements under which certain employees received stock options with time vesting
criteria (“Time Vesting Options”). The options are exercisable based on the terms outlined in the agreements.
Time Vesting Options outstanding at December 28, 2013 vest over a period of three to five years and the
expiration term is ten years. Time Vesting Options outstanding at December 28, 2013 have an exercise price
between $19.74 and $79.55 per share.
F-21