Supercuts 2005 Annual Report Download - page 89

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
The provision for income taxes differs from the amount of income tax determined by applying the applicable United States (U.S.)
statutory rate to earnings before income taxes, as a result of the following:
As of June 30, 2005, undistributed earnings of international subsidiaries of approximately $15.3 million were considered to have been
reinvested indefinitely and, accordingly, the Company has not provided United States income taxes on such earnings.
9. BENEFIT PLANS:
Profit Sharing Plan:
Effective July 1, 2003, the Company’
s qualified employee stock ownership plan (ESOP) was converted to a profit sharing plan. The profit
sharing plan covers substantially all field supervisors, warehouse and corporate office employees. The profit sharing plan is a noncontributory
defined contribution plan and contributions to the plan are at the discretion of the Company. Prior to January 22, 2002, such contributions were
invested in common stock of the Company. Subsequent to that date, such contributions may be invested in a broad range of securities, at the
participant’s election.
Executive Profit Sharing Plan:
Effective July 1, 2003, the Company’s nonqualified executive stock award plan (ESAP) was converted to a nonqualified profit sharing
plan. The Executive Profit Sharing Plan covers those employees not eligible to participate under the qualified profit sharing plan. Contributions
to the Executive Profit Sharing Plan are at the discretion of the Company.
Stock Purchase Plan:
The Company has an employee stock purchase plan (SPP) available to substantially all employees. Under terms of the plan, eligible
employees may purchase the Company’s common stock through payroll deductions. The Company contributes an amount equal to 15 percent
of the purchase price of the stock to be purchased on the open market and pays all expenses of the SPP and its administration, not to exceed an
aggregate contribution of $5.0 million (o n August 19, 2003, the Board of Directors elected to increase the maximum aggregate contribution
from $4.0 to $5.0 million). At June 30, 2005, cumulative contributions to the SPP totaled $4.7 million.
88
2005
2004
2003
(Dollars in thousands)
U.S. statutory rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal income tax benefit
2.5
2.1
3.0
Tax effect of goodwill impairment
11.0
—
—
Work Opportunity Tax Credits
(1.5
)
—
—
Change in estimates
(1.0
)
—
—
Other, primarily U.S. to Foreign income mix and meals and
entertainment
(1.5
)
(1.1
)
(0.6
)
44.5
%
36.0
%
37.4
%