Sunbeam 2006 Annual Report Download - page 71

The Company’s federal income tax returns for its fiscal year ended December 31,2003 and 2004 are under examination
by the Internal Revenue Service (“IRS”). In addition, one of the Company’s acquired subsidiaries is under examination by the
IRS for its fiscal year ending September 30,2004, a tax year prior to the Company’s acquisition of that subsidiary. In 2006,
the Company concluded an examination with the Internal Revenue Service of one of its acquired subsidiaries for tax years
prior to the Company’s acquisition of that subsidiary. The Company and/or its subsidiaries are also subject to state and for-
eign income tax audits. The Company believes that adequate amounts have been reserved for any adjustments that may ulti-
mately result from these examinations.
On October 22,2004,the American Jobs Creation Act of 2004 (“Act”) was signed into law. The Act created a special
one-time dividends received deduction on the repatriation of certain foreign earnings to a United States taxpayer, provided
certain criteria are met. The Act provides for a special 85%dividends received deduction of certain foreign earnings that are
repatriated (as defined in the Act) prior to December 31,2005.In December of 2005,the Company distributed cash from its
foreign subsidiaries and will report an extraordinary dividend of approximately $114 million and a related tax liability of
approximately $6.6million in its calendar year 2005 tax returns. The total effect on income tax expense in 2005 for amounts
repatriated under the Act is approximately $1million. In addition, the tax effect of such repatriation increased goodwill by
approximately $5.6million.
The Company’s intends to indefinitely reinvest undistributed earnings of certain of its foreign subsidiaries outside the
United States. As a result the Company has not provided for U.S. income taxes on undistributed foreign earnings of approxi-
mately $241 million at December 31,2006.The Company intends to permanently reinvest these earnings in the future
growth of its foreign businesses under the guidance provided in APB Opinion No. 23,“Accounting for Income Taxes—Special
Areas”. Determination of the amount of unrecognized deferred U.S. income liability is not practicable because of the com-
plexities associated with its hypothetical calculation.
13.EQUITY AND STOCK OPTION PLANS
2003 Stock Incentive Plan
The Company maintains the 2003 Stock Incentive Plan, as amended and restated (the “2003 Plan”), which allows for
grants of stock options, restricted stock and short-term cash awards. There were approximately 1,768,938 shares available for
grant under this long-term equity incentive plan at December 31,2006.
Prior to 2003,the Company granted stock options to key employees and non-employee directors under the 2001 Stock
Option Plan, the 1998 Long-Term Equity Incentive Plan, the 1993 Stock Option Plan and the 1993 and 1996 Stock Option
Plans for Non-employee Directors. There are no remaining shares available for grant under any of these plans as of December
31,2005.
Asummary of the Company’s stock option activity for the years ended December 31,2006, and 2005 is as follows:
Weighted Avg.
Option
Shares Price
Outstanding as of December 31,2004 4,101,335 $11.52
Granted 1,241,780 30.88
Exercised (434,716)33.03
Cancelled (212,863)14.52
Outstanding as of December 31,2005 4,695,536 16.92
Granted 100,000 33.37
Exercised (447,129)9.94
Cancelled (247,159)28.54
Outstanding as of December 31,2006 4,101,248 $17.38
Notes to Consolidated Financial Statements
Jarden Corporation 2006 Annual Report
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