WeightWatchers 2007 Annual Report Download - page 84

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—Continued
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
WeightWatchers.com Stock Incentive Plan of Weight Watchers International, Inc. and Subsidiaries:
In April 2000, the Board of Directors of WWI adopted the WeightWatchers.com Stock Incentive Plan of
Weight Watchers International, Inc. and Subsidiaries, pursuant to which selected employees were granted options
to purchase shares of common stock of WeightWatchers.com that are owned by WWI. The number of shares
available for grant under this plan was 400 shares of authorized common stock of WeightWatchers.com. In
connection with the acquisition of WW.com (see Note 3), the Company purchased and canceled all 103
outstanding WW.com options granted under the plan in the second quarter of 2005. Effective July 2, 2005, the
Board of Directors of the Company terminated the plan.
WeightWatchers.com Stock Option Plan
Prior to WWI’s acquisition of WW.com (see Note 3), WeightWatchers.com granted incentive stock options
and/or nonqualified stock options on its common stock to its employees, consultants and/or certain
non-employees under the terms of its stock option plans. In connection with the acquisition, WWI acquired 2,759
shares of WW.com stock which represented vested and unvested options under the plan. The 2,293 shares of
vested options were acquired based upon the difference between the purchase price per share and the exercise
price per share. The 466 shares of unvested options were exchanged for 134 RSUs of WWI.
Due to the adoption of FIN 46R (see Note 2), the fair value of stock options granted by
WeightWatchers.com are included in the pro forma footnote disclosures showing the impact to the Company’s
results had it adopted the fair value provisions of SFAS No. 123 (see Note 2).
10. Income Taxes
Prior to December 16, 2005 WWI and WeightWatchers.com were separate tax paying entities. Effective
with the completion of the Redemption (see Note 3) WW.com has been included in WWI’s consolidated federal
tax return. The following tables summarize the consolidated provision for U.S. federal, state and foreign taxes on
income:
December 29,
2007
December 30,
2006
December 31,
2005
Current:
U.S. federal ........................................... $ 77,195 $ 63,319 $ 61,871
State ................................................. 10,711 12,395 8,811
Foreign .............................................. 20,851 17,916 23,047
$108,757 $ 93,630 $ 93,729
Deferred:
U.S. federal ........................................... $ 17,466 $ 24,389 $ 10,380
State ................................................. 2,030 2,787 1,642
Foreign .............................................. (2,942) 11 (838)
$ 16,554 $ 27,187 $ 11,184
Total tax provision ..................................... $125,311 $120,817 $104,913
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