LTEC » Topics » 2007 Executive Compensation Components

This excerpt taken from the LTEC DEF 14A filed Jun 4, 2008.
2007 Executive Compensation Components
 
Executive compensation consists of the following components:
 
  •  Base salary;
 
  •  Incentive payments pursuant to the Management Incentive Plan;
 
  •  Stock option plan; and
 
  •  Perquisites and personal benefits.
 
As discussed above, we use this mix of compensation to motivate our executive officers to achieve the business and other goals set by the Company and to reward our executives for achieving those goals.
 
Base Salary.  Base salaries for our executives are determined at the discretion of our Compensation and Options Committee and intended to reflect the scope of each executive officer’s responsibilities, our success, and contributions of each executive to that success. Executive salaries are generally adjusted gradually over time and as necessary to meet this objective. During its review of suitable base salary levels, the Compensation and Options Committee undertakes an internal review of each named executive officer’s compensation, both individually and relative to other executive officers, relative to the Compensation and Options Committee’s perception of compensation levels in the marketplace, and the individual performance of the executive. The Compensation and Options Committee reviews executive compensation on an annual basis, or more often if necessary and determines base salary and cash bonuses for executive officers. In 2007, the annual review was performed in March. Increases


15


 

in base salary may be moderated by other considerations, such as geographic or market data, industry trends or the Compensation and Options Committee’s perception of the fairness of the compensation relative to other executive officers.
 
Incentive payments pursuant to the Management Incentive Plan.  All of our named executive officers are eligible for annual incentive payments pursuant to the Management Incentive Plan. The Compensation and Options Committee approved the payment of incentive payments to all of our named executive officers in 2007 pursuant to the Management Incentive Plan reflected in the Grants of Plan Based Awards table. The Management and Incentive Plan was adopted in 2003 and is an incentive payment program based on the Company’s achievement of certain earnings criteria. The Management Incentive Plan is available to executive officers and key employees as designated by the Company from time to time.
 
For each fiscal year, the Compensation and Options Committee determines a target level of Company performance and the percentage and payout each executive officer is entitled to receive if the target level is achieved. The Compensation and Options Committee sets the target performance level based on past Company performance, market pricing and prior practices. The Compensation and Options Committee considers each named executive officer’s responsibilities, contributions to the success of the Company and salary level in setting their respective incentive payment. For 2007, the following incentive payment levels were approved by the Compensation and Options Committee, with “X Variable” representing the set incentive payment amount for each named executive officer:
 
      Adjusted EBITDA @ $18,000,000 =  0% X Variable
Adjusted EBITDA @ $21,000,000 = 100% X Variable
Adjusted EBITDA @ $24,000,000 = 200% X Variable
Adjusted EBITDA @ $27,000,000 = 300% X Variable
 
In 2007, the total amount paid to the named executive officers was $133,284 for incentives earned in 2006. There were no incentives earned in 2007. Incentive payments are generally paid on an annual basis.
 
Stock Option Plan.  In 1995 and 2003, we adopted stock option plans to enhance profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer stock-based incentives and other equity interest to employees, managers and directors of the Company, thereby attracting, retaining and rewarding these individuals and strengthening the mutuality of interests between these individuals and the Company’s stockholders. The Company currently issues stock options only under the 2003 Stock Option Plan.
 
The stock option plans are administered by the Compensation and Options Committee, which has full authority to grant stock based awards according to the terms of the Stock Option Plan.
 
1995 Stock Option Plan
 
Our 1995 Stock Option Plan was adopted with the objective of attracting, motivating and retaining key personnel and promoting our success by linking the interests of our employees, managers and directors with our success. There are 1.3 million shares of common stock authorized for option grants under the plan. With the adoption of the 2003 Stock Option Plan on July 15, 2003, the Company no longer grants additional stock options under the 1995 Stock Option Plan. The term of each option is 10 years from the grant of the option. Options granted under our 1995 Stock Option Plan, unless waived or modified in a particular option agreement or by action of the Compensation and Options Committee, vest according to the following schedule:
 
      Year 1: 25%
Year 2: 50%
Year 3: 75%
Year 4: 100%
 
As of December 31, 2007, all options granted under the 1995 Stock Option Plan have fully vested. The exercise price of nonqualified stock options granted under the plan may be greater or less than the fair value of the common stock on the date of grant, as determined by the Compensation and Options Committee at its discretion. At December 31, 2007, 902,000 shares of common stock were available for future grants under the 1995 Plan.


16


 

2003 Stock Option Plan
 
The 2003 Stock Option Plan calls for options to be non-qualified stock options with exercise prices equal to the fair value of the stock on the date granted. The stock options under the Stock Option Plan have a term of 10 years and, unless waived or modified in a particular option agreement or by action of the Compensation and Options Committee, vest according to the following schedule:
 
      Year 1: 20%
Year 2: 40%
Year 3: 60%
Year 4: 80%
Year 5: 100%
 
At December 31, 2007, 178,000 shares of common stock were available for future grants under the 2003 Plan.
 
Provisions related to the termination of the stock option award are generally determined by the Compensation and Options Committee at the time of grant. Currently outstanding options under the Stock Option Plans provided that in the event of termination of a grantee due to death or disability, the options may be exercised, to the extent exercisable on the date of their death, by their Legal Representative at any time within one year after death. In the event a grantee voluntarily terminates or is terminated without cause, the grantee may exercise their options, to the extent exercisable on the date of such termination, at any time within three months after the date of termination. In the event that a grantee is terminated for cause, the options shall terminate on the day immediately before the date of the termination. The 2003 Stock Option Plan prohibits each of the named executive officers from competing with us for a period of two years after termination of their employment relationship with the Company, which includes a prohibition against accepting a position with a direct competitor of the Company.
 
The total number of shares of common stock, which may be issued under the 2003 Stock Option Plan, is 345,600 shares. In 2007, the Company issued 30,000 shares under its 2003 Stock Option Plan.
 
Perquisites and Other Personal Benefits.  The Company provides named executive officers with perquisites and other personal benefits that the Company and the Compensation and Options Committee believe are reasonable and consistent with its overall compensation program and which it perceives will better enable the Company to attract and retain superior employees for key positions. In addition to customary health insurance, disability insurance and vacation benefits, the Company provides one times the annual base earnings, with a maximum of $300,000 for term life insurance. In addition, the Company matches 401(k) contributions made by the named executive officers at 50 cents on the dollar up to 6% of their annual salary.
 
This excerpt taken from the LTEC DEF 14A filed Apr 30, 2007.
2006 Executive Compensation Components
 
Executive compensation consists of the following components:
 
  •  Base salary;
 
  •  Incentive payments pursuant to the Management Incentive Plan;
 
  •  Stock option plan; and
 
  •  Perquisites and personal benefits.
 
As discussed above, we use this mix of compensation to motivate our executive officers to achieve the business and other goals set by the Company and to reward our executives for achieving those goals.
 
Base Salary.  Base salaries for our executives are determined at the discretion of our Compensation and Options Committee and intended to reflect the scope of each executive officer’s responsibilities, our success, and contributions of each executive to that success. Executive salaries are generally adjusted gradually over time and as necessary to meet this objective. During its review of suitable base salary levels, the Compensation and Options Committee undertakes an internal review of each named executive officer’s compensation, both individually and relative to other executive officers, relative to the Compensation and Options Committee’s perception of compensation levels in the marketplace, and the individual performance of the executive. The Compensation and Options Committee reviews executive compensation on an annual basis, or more often if necessary and determines base salary and cash bonuses for executive officers. In 2006, the annual review was performed in March. Increases in base salary may be moderated by other considerations, such as geographic or market data, industry trends or the Compensation and Options Committee’s perception of the fairness of the compensation relative to other executive officers.
 
Incentive payments pursuant to the Management Incentive Plan.  All of our named executive officers are eligible for annual incentive payments pursuant to the Management Incentive Plan. The Compensation and Options Committee approved the payment of incentive payments to all of our named executive officers in 2006 pursuant to the Management Incentive Plan reflected in the Grants of Plan Based Awards table on page 14. The Management and Incentive Plan was adopted in 2003 and is an incentive payment program based on the Company’s achievement of certain earnings criteria. The Management Incentive Plan is available to executive officers and key employees as designated by the Company from time to time.
 
For each fiscal year, the Compensation and Options Committee determines a target level of Company performance and the percentage and payout each executive officer is entitled to receive if the target level is achieved. The Compensation and Options Committee sets the target performance level based on past Company


8


Table of Contents

performance, market pricing and prior practices. The Compensation and Options Committee considers each named executive officer’s responsibilities, contributions to the success of the Company and salary level in setting their respective incentive payment. For 2006, the following incentive payment levels were approved by the Compensation and Options Committee, with “X Variable” representing the set incentive payment amount for each named executive officer:
 
Adjusted EBITDA @ $17,500,000 = 0% X Variable
Adjusted EBITDA @ $21,500,000 = 100% X Variable
Adjusted EBITDA @ $25,000,000 = 200% X Variable
Adjusted EBITDA @ $28,000,000 = 300% X Variable
 
In 2006, the total amount paid to the named executive officers was $165,750. Incentive payments are generally paid on an annual basis.
 
Stock Option Plan.  In 1995 and 2003, we adopted stock option plans to enhance profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer stock-based incentives and other equity interest to employees, managers and directors of the Company, thereby attracting, retaining and rewarding these individuals and strengthening the mutuality of interests between these individuals and the Company’s stockholders. The Company currently issues stock options only under the 2003 Stock Option Plan.
 
The stock option plans are administered by the Compensation and Options Committee, which has full authority to grant stock based awards according to the terms of the Stock Option Plan.
 
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki