Enom 2012 Annual Report Download - page 109

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F-26
U.S. subsidiaries for an indefinite period of time. It is not practicable to compute the amount of incremental taxes that would
result from the repatriation of those earnings.
The Company is subject to the accounting guidance for uncertain income tax positions. The Company believes that its
income tax positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a
material adverse effect on the Company's financial condition, results of operations, or cash flow. The Company acquired an $85
uncertain tax position as a result of a business acquisition during 2011.
The Company's policy for recording interest and penalties associated with audits and uncertain tax positions is to
record such items as a component of income tax expense, and amounts recognized to date are insignificant. No uncertain
income tax positions were recorded during 2011 or 2012 other than one related to a business acquisition during the year, and
the Company does not expect its uncertain tax position to change during the next twelve months.
During 2011 and 2012, the aggregate changes in our total gross amount of unrecognized tax benefits are summarized
as follows:
Year ended
December 31,
2011
Year ended
December 31,
2012
Beginning balance $ — $ 85
Gross increase in unrecognized tax benefits - prior year tax position 85 —
Ending balance $ 85 $ 85
The Company files a U.S. federal and many state tax returns. The tax years 2007 to 2011 remain subject to
examination by the IRS and most tax years since the Company's incorporation are subject to examination by various state
authorities.
9. Related Party Transactions
The Company’s Chairman and Chief Executive Officer and certain members of the board of directors of the Company
also sit on the board of directors of The FRS Company (“FRS”). The Company recognized approximately $378, $513 and $30
in revenue from FRS for advertising and creative services during the years ended December 31, 2010, 2011 and 2012,
respectively. As of December 31, 2011 and December 31, 2012, the Company’s receivable balance due from FRS was $45 and
$0, respectively. The creative services agreement was terminated by the parties effective May 31, 2011.
10. Employee Benefit Plan
The Company has a defined contribution plan under Section 401(k) of the Internal Revenue Code ("401(k) Plan")
covering all full-time employees who meet certain eligibility requirements. Eligible employees may defer up to 90% of their
pre-tax eligible compensation, up to the annual maximum allowed by the Internal Revenue Service. Under the 401(k) Plan, the
Company may, but is not obligated to, match a portion of the employee contributions up to a defined maximum. The Company
did not make any matching contributions for the years ended December 31, 2010, 2011 and 2012 but has commenced making
matching contributions in January 2013.
11. Share-based Compensation Plans and Awards
Stock Incentive Plans
Under the Company's 2010 Incentive Award Plan (the "2010 Plan"), the Administrator of the 2010 Plan, which is the
compensation committee of the Company's board of directors, may grant up to 15,500 stock option, restricted stock, restricted
stock unit and other incentive awards to employees, officers, non-employee directors, and consultants, and such options or
awards may be designated as incentive or non-qualified stock options at the discretion of the Administrator. In connection with
the adoption of the 2010 Plan on August 5, 2010, 334 stock-based awards then available for grant under the 2006 Plan were
canceled. Any stock-based awards outstanding under the 2006 Plan when the 2010 Plan was adopted that subsequently are
forfeited, expire or lapse are available for future grants under the 2010 Plan. In addition, awards available for grant under the
2010 Plan shall be increased on an annual basis as of January 1st of each fiscal year by an amount equal to the lesser of (i)
6,000 (ii) 5% of the total shares outstanding as of the end of the prior fiscal year and (iii) such lesser amount as determined by
the Administrator of the 2010 Plan. As of December 31, 2012, 13,792 stock-based awards were available for future grant under
the 2010 Plan. Generally, stock option grants have 10-year terms and employee stock options vest 1/4th on the anniversary of
the vesting commencement date and 1/48th monthly thereafter, over a 4-year period. Restricted stock unit awards generally