Nutrisystem 2011 Annual Report Download - page 68

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The Company has issued restricted stock to employees generally with vesting terms ranging from three to five
years. The fair value is equal to the market price of the Company’s common stock on the date of grant. Expense
for restricted stock is amortized ratably over the vesting period. The following table summarizes the restricted
stock activity for 2009, 2010 and 2011:
Number of
Shares
Weighted-
Average
Grant-Date
Fair Value
Aggregate
Intrinsic
Value
Nonvested, January 1, 2009 ............................ 1,400,347 $23.19
Granted ............................................ 515,653 $14.96
Vested ............................................. (334,350) $23.32
Forfeited ........................................... (264,627) $22.15
Nonvested, December 31, 2009 ......................... 1,317,023 $20.12
Granted ............................................ 569,705 $18.13
Vested ............................................. (499,287) $19.59
Forfeited ........................................... (76,623) $19.00
Nonvested, December 31, 2010 ......................... 1,310,818 $19.52
Granted ............................................ 337,256 $13.70
Vested ............................................. (496,864) $22.68
Forfeited ........................................... (288,352) $16.53
Nonvested, December 31, 2011 ......................... 862,858 $16.43 $11,157
Additionally, the Company grants restricted stock units. The restricted stock units granted during 2010 and 2011
were primarily performance-based units. The performance-based units have performance conditions and graded-
vesting. Each vesting tranche is treated as an individual award and the compensation expense is recognized on a
straight-line basis over the requisite service period for each tranche. The requisite service period is a combination
of the performance period and the subsequent vesting period based on continued service. The level of
achievement of such goals may cause the actual amount of units that ultimately vest to range from 0% to 200%
of the original units granted which is reflected as performance factor adjustment in the table below. The
Company recognizes expense for performance-based restricted stock units when it is probable that the
performance criteria specified will be achieved. The fair value is equal to the market price of the Company’s
common stock on the date of grant. Expense is amortized ratably over the vesting period. The following table
summarizes the restricted stock unit activity:
Number of
Restricted
Stock Units
Weighted-
Average
Grant-Date
Fair Value
Aggregate
Intrinsic
Value
Nonvested, January 1, 2009 ............................. 0 $ 0
Granted ............................................ 5,500 $14.84
Vested ............................................. 0 $ 0
Forfeited ............................................ 0 $ 0
Nonvested, December 31, 2009 .......................... 5,500 $14.84
Granted ............................................ 67,496 $17.53
Performance factor adjustment .......................... (14,999) $17.53
Vested ............................................. (1,833) $14.84
Forfeited ............................................ 0 $ 0
Nonvested, December 31, 2010 .......................... 56,164 $17.35
Granted ............................................ 54,999 $14.49
Performance factor adjustment .......................... (54,999) $14.49
Vested ............................................. 0 $ 0
Forfeited ............................................ (19,848) $17.03
Nonvested, December 31, 2011 .......................... 36,316 $17.53 $470
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