Nutrisystem 2011 Annual Report Download - page 67

authorize up to 1,000,000, 5,600,000 and 2,700,000 shares of common stock, respectively, for issuance. At
December 31, 2011, the 2008 Long-Term Incentive Plan had 500,039 shares available for grant.
Under each of the plans, the Board of Directors determines the term of each award, but no award can be
exercisable more than 10 years from the date the award is granted. To date, all of the awards issued under the
Equity Incentive Plans expire 10 years from the grant date. The Board also determines the vesting provisions and
the exercise price per share, which is the fair market value at date of grant. Awards issued to employees generally
vest over terms ranging from three to five years.
The following table summarizes the Company’s stock option activity for 2009, 2010 and 2011:
Number
of Shares
Weighted-
Average
Exercise
Price Per
Share
Weighted-
Average
Remaining
Contractual
Life (years)
Aggregate
Intrinsic Value
Outstanding, January 1, 2009 .......................... 253,066 $ 6.24
Exercised .......................................... (119,806) $ 4.70
Forfeited ........................................... (5,500) $23.79
Outstanding, December 31, 2009 ....................... 127,760 $ 6.92
Exercised .......................................... (54,927) $ 2.27
Forfeited ........................................... (20,000) $ 6.00
Outstanding, December 31, 2010 ....................... 52,833 $12.10
Granted ........................................... 327,280 $14.37
Exercised .......................................... (25,001) $ 5.17
Forfeited ........................................... (18,805) $19.22
Outstanding, December 31, 2011 ....................... 336,307 $14.43 9.25 $92
Exercisable at December 31, 2011 ...................... 15,635 $15.58 2.83 $92
Expected to vest at December 31, 2011................... 332,776 $14.43 9.24 $92
In 2011, the Company recorded pre-tax compensation charges of $150 for stock option awards. In 2010 and
2009, the Company did not record any compensation charges for stock option awards as all outstanding awards
were fully vested. There were no option grants in 2010 or 2009. The weighted-average grant date fair value of
stock options granted in 2011 was $4.50. The total intrinsic value of stock options exercised in 2011, 2010 and
2009 was $204, $1,001 and $1,352, respectively.
The fair value of each stock option was estimated on the date of grant using the Black-Scholes option pricing
model and the following weighted average assumptions:
2011
Expected dividend yield ........................................................ 4.76%
Expected volatility ............................................................ 53.15%
Risk-free interest rate .......................................................... 1.38%
Expected life (in years) ........................................................ 4.75
In 2011, 2010 and 2009, the Company authorized the issuance of 30,275, 19,124 and 30,618 shares of common stock,
respectively, as compensation to the Board of Directors resulting in compensation expense of $455 in each year. In
addition, in 2011, 2010 and 2009, the Company issued a total of 124,561, 11,576, and 8,421 shares of common stock,
respectively, to non-employees for services. Costs recognized for these shares were $841, $167 and $83 in 2011, 2010
and 2009, respectively, and approximated fair value. The stock-based compensation costs were recorded in marketing
and general and administrative expenses in 2011, 2010, and 2009 in the accompanying consolidated statements of
operations.
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