Nautilus 2012 Annual Report Download - page 51

Table of Contents
Under accounting guidance, an uncertain tax position represents the Company's expected treatment of a tax position taken in a filed tax return, or
planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes.
Following is a reconciliation of gross unrecognized tax benefits from uncertain tax positions (excluding the impact of penalties and interest) for
the years ended December 31, 2012 , 2011 and 2010 (in thousands):
Of the $2.5 million of gross unrecognized tax benefits from uncertain tax positions outstanding as of December 31, 2012 , $1.2 million would, if
recognized, affect the Company's effective tax rate.
The Company recognizes tax-related interest and penalties as a component of income tax expense. The Company had a cumulative liability for
interest and penalties related to uncertain tax positions as of December 31, 2012 and 2011 of $1.6 million and $1.6 million , respectively.
The Company's U.S. federal income tax returns for 2009 through 2012 are open to review by the U.S. Internal Revenue Service. The Company's
state income tax returns for 2006 through 2012 are open to review, depending on the respective statute of limitation in each state. In addition, the
Company files income tax returns in several non-U.S. jurisdictions with varying statutes of limitation.
As of December 31, 2012 , the Company believes it is reasonably likely that, within the next 12 months, $0.3 million
of previously unrecognized
tax benefits related to certain U.S. and non-U.S. filing positions will be recognized as statutes of limitation expire.
(12) STOCKHOLDERS' EQUITY
Common Stock
As of December 31, 2012 , the Company had 75.0 million authorized shares of common stock, no par value, of which 30.9 million shares were
issued and outstanding and 1.7 million shares were reserved for future issuance under its equity compensation plans.
2005 Long-Term Incentive Plan
In 2005 Nautilus shareholders approved the 2005 Long-Term Incentive Plan (the “2005 Plan”) to enhance the Company's ability to attract and
retain highly qualified personnel and align the long-term interests of participants with those of the shareholders. The 2005 Plan, which is
administered by the Company's Compensation Committee of the Board of Directors, authorizes the Company to grant various types of stock-
based awards including: stock options, stock appreciation rights, restricted stock, stock units and performance stock grants. Stock options
granted under the 2005 Plan shall not have an exercise price less than the fair market value of the Company's common shares on the date of the
grant. The exercise price of an option or stock appreciation right may not be reduced without shareholder approval. Stock options generally vest
over periods of three or four years of continuous service, commencing on the date of grant. Stock options granted after the adoption of the 2005
Plan have a seven -year contractual term. Stock options granted under the preceding plan expire after ten years.
Upon its adoption, there were approximately 4.0 million shares available for issuance under the 2005 Plan. The number of shares available for
issuance is increased by any shares of common stock which were previously reserved for issuance under the Company's preceding stock option
plan, and were not subject to grant on June 6, 2005, or as to which the stock based compensation award is forfeited on or after June 6, 2005. The
number of shares available for issuance is reduced by (i) two shares for each share delivered in settlement of any stock appreciation rights, for
each share of restricted stock, and for each stock unit or performance unit award, and (ii) one share for each share delivered in settlement of a
stock option award. In no event shall more than 1.0 million
aggregate shares of common stock subject to stock options, stock appreciation rights,
45
2012 2011 2010
Unrecognized tax benefits, beginning of year
$
4,376
$
3,342
$
3,249
Additions for tax positions taken in prior years
—
1,017
52
Reductions for tax positions taken in prior years
(972
)
—
(
75
)
Additions for tax positions related to the current year
—
73
125
Lapses of statutes of limitations
(874
)
(56
)
(9
)
Unrecognized tax benefits, end of year
$
2,530
$
4,376
$
3,342