Nutrisystem 2009 Annual Report Download - page 63

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A reconciliation of the beginning and ending amounts of the total unrecognized tax benefit is as follows:
Year Ended December 31,
2009 2008
Balance at beginning of year ................. $1,193 $ 929
Increase related to current year tax positions .... 182 287
Decrease due to lapse of statute of limitations . . . — (23)
Balance at end of year ...................... $1,375 $1,193
11. DISCONTINUED OPERATION
In the fourth quarter of 2007, the Company committed to a plan to sell its subsidiary, Slim and Tone and this
subsidiary has been treated as a discontinued operation. Accordingly, the operating results of this discontinued
operation have been presented separately from continuing operations for all periods presented. The plan to sell
was not completed and operations have ceased as of December 31, 2009. Slim and Tone had revenues of $65,
$277 and $723 and pre-tax losses of $390, $276 and $100 for the years ended December 31, 2009, 2008 and
2007, respectively. Additionally, in 2007, an impairment of $1,156 pre-tax was included in the loss from
discontinued operations.
12. EQUITY INSTRUMENTS
Equity Incentive Plans
The Company has three equity incentive plans: the 1999 Equity Incentive Plan, the 2000 Equity Incentive Plan
and the 2008 Long-Term Incentive Plan (collectively, the “Equity Incentive Plans”). Under these plans, a variety
of equity instruments can be granted to key employees including incentive and nonqualified stock options to
purchase shares of the Company’s common stock, restricted stock or shares of common stock. The 1999 Equity
Incentive Plan, the 2000 Equity Incentive Plan and the 2008 Long-Term Incentive Plan authorize up to
1,000,000, 5,600,000 and 2,700,000 shares of common stock, respectively, for issuance. At December 31, 2009,
options to purchase 1,648,093 shares were available for grant under these plans.
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.
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