Nutrisystem 2006 Annual Report Download - page 57

A
s of December 31, 2006, the Company recorded an income tax receivable of
$
3,522 included in other current
a
ssets in the accompanying consolidated balance sheet. The Company recognized a tax benefit of
$
17,939 and
$
16,105 in 2006 and 2005, respectivel
y
, from the exercise of certain stock options and recorded these amounts a
s
increases to additional paid-in capital in the accompanying consolidated statements of stockholders’ equity.
Th
es
i
gn
ifi
cant
i
tems compr
i
s
i
ng t
h
e Company’s
d
e
f
erre
di
ncome tax assets an
dli
a
bili
t
i
es are as
f
o
ll
ows:
December
31,
2
006
200
5
D
e
f
erre
d
tax asset
—
R
eserves and accrual
s
............................................
$1,283 $ 92
7
G
oodwill ...................................................... 369 43
3
Net operat
i
ng
l
oss carry
f
orwar
d
....................................
1
,
133 5
,
97
4
O
the
r
.........................................................
1,141 17
6
3,
926 7
,
51
0
V
aluation allowance
................................................. —
(
12
5
)
3
,926 7,38
5
D
eferred tax liabilit
y
—
P
roperty an
d
equ
i
pment
.
........................................
.
(
50
)(
21
)
$
3,876
$
7,36
4
A
t December 31, 2006, the Compan
y
had net operatin
g
loss carr
y
forwards of approximatel
y
$17,500 for
state tax purposes. For state tax purposes, t
h
ere
i
sa
li
m
i
tat
i
on on t
h
e amount o
f
net operat
i
ng
l
oss carry
f
orwar
ds
t
h
at can
b
eut
ili
ze
di
nag
i
ven year to o
ff
set state taxa
bl
e
i
ncome. Net operat
i
ng
l
osses w
ill b
eg
i
n to exp
i
re
in
2020
.
B
ase
d
on t
h
e pro
j
ecte
dl
eve
l
o
ff
uture taxa
bl
e
i
ncome over t
h
e per
i
o
d
s
i
nw
hi
c
h
t
h
e
d
e
f
erre
d
tax assets are
d
e
d
uct
ibl
e, management
b
e
li
eves
i
t
i
s more
lik
e
l
yt
h
an not t
h
at t
h
e Company w
ill
rea
li
ze t
h
e
d
e
f
erre
d
tax assets.
1
1. Equity Instruments
E
q
u
i
t
y
Incent
i
ve Plans
Th
e Company
h
as two equ
i
ty
i
ncent
i
ve p
l
ans, t
h
e 1999 Equ
i
ty Incent
i
ve P
l
an an
d
2000 Equ
i
ty Incent
i
v
e
Plan. Under these plans, a variet
y
of equit
y
instruments can be
g
ranted to ke
y
emplo
y
ees includin
g
incentive an
d
nonqua
lifi
e
d
stoc
k
opt
i
ons to purc
h
ase s
h
ares o
f
t
h
e Company’s common stoc
k
an
d
s
h
ares o
f
common stoc
k
.T
he
1999 Equity Incentive Plan and the 2000 Equity Incentive Plan authorize up to 1,000,000 and 5,600,000 shares o
f
common stock, respectivel
y
, for issuance. At December 31, 2006, options to purchase 667,4
5
9 shares wer
e
a
va
il
a
bl
e
f
or grant un
d
er t
h
ese p
l
ans.
I
n June 2000, t
h
e Company a
l
so a
d
opte
d
t
h
e 2000 Equ
i
ty Incent
i
ve P
l
an
f
or Outs
id
eD
i
rectors an
d
C
onsultants (the “Director Plan”) under which a variet
y
of equit
y
instruments can be
g
ranted to non-emplo
y
ee
di
rectors an
d
consu
l
tants to t
h
e Company
i
nc
l
u
di
ng nonqua
lifi
e
d
stoc
k
opt
i
ons to purc
h
ase s
h
ares o
f
t
h
e
C
ompany’s common stock or shares of common stock. The Director Plan authorizes up to 1,500,000 shares of
common stock for issuance. At December 31, 2006, 704,039 shares were available for
g
rant under this plan.
Un
d
er eac
h
o
f
t
h
ep
l
ans, t
h
e Boar
d
o
f
D
i
rectors
d
eterm
i
nes t
h
e term o
f
eac
h
awar
d
,
b
ut no awar
d
can
b
e
exerc
i
sa
bl
e more t
h
an 10 years
f
rom t
h
e
d
ate t
h
e awar
di
s grante
d
.To
d
ate, a
ll
o
f
t
h
e awar
d
s
i
ssue
d
un
d
er t
h
e
Equit
y
Incentive Plans expire 10
y
ears from the
g
rant date and all of the awards issued under the Director Pla
n
exp
i
re
b
etween t
h
ree mont
h
san
d
10 years
f
rom t
h
e grant
d
ate. T
h
e Boar
d
a
l
so
d
eterm
i
nes t
h
e vest
i
ng prov
i
s
i
on
s
a
n
d
t
h
e exerc
i
se pr
i
ce per s
h
are, w
hi
c
hi
st
h
e
f
a
i
r mar
k
et va
l
ue at
d
ate o
f
grant. Awar
d
s
i
ssue
d
to emp
l
oyee
s
g
enerall
y
vest over a three
y
ear period.
5
1