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This excerpt taken from the LTS DEF 14A filed Jul 20, 2009. Tax
Considerations
Section 162(m) of the Internal Revenue Code generally
disallows a public companys tax deduction for compensation
in excess of $1 million in any taxable year paid to the
chief executive officer and the four other most highly
compensated officers. The effect of Section 162(m) is
substantially mitigated by our net operating losses, although
the amount of any deduction disallowed under Section 162(m)
could increase our alternative minimum tax by up to 2% of such
disallowed amount. Qualifying performance-based compensation is
not subject to the deduction limit if certain requirements are
satisfied. Because our shareholders approved our 1999 Equity
Plan, awards under the 1999 Equity Plan generally qualify as
performance-based compensation that is fully
deductible and not subject to the Section 162(m) deduction
limit. In determining executive compensation, our compensation
committee considers, among other factors, the possible tax
consequences. Tax consequences, including tax deductibility, are
subject to many factors (such as changes in the tax laws) that
are beyond our control. Also, the compensation committee
believes that it is important for it to retain maximum
flexibility in designing compensation programs that meet its
stated objectives. For these reasons, the committee, while
considering tax deductibility as one of the factors in
determining compensation, does not limit compensation to those
levels or types of compensation that will be deductible by us.
This excerpt taken from the LTS DEF 14A filed Apr 29, 2008. Tax
Considerations
Section 162(m) of the Internal Revenue Code generally
disallows a public companys tax deduction for compensation
in excess of $1 million in any taxable year paid to the
chief executive officer and the four other most highly
compensated officers. The effect of Section 162(m) is
substantially mitigated by our net operating losses, although
the amount of any deduction disallowed under Section 162(m)
could increase our alternative minimum tax by up to 2% of such
disallowed amount. Qualifying performance-based compensation is
not subject to the deduction limit if certain requirements are
satisfied. Because our shareholders approved our Equity Plan,
awards under the Equity Plan generally qualify as
performance-based compensation that is fully
deductible and not subject to the Section 162(m) deduction
limit. In determining executive compensation, our compensation
committee considers, among other factors, the possible tax
consequences. Tax consequences, including tax deductibility, are
subject to many factors (such as changes in the tax laws) that
are beyond our control. In addition, the compensation committee
believes that it is important for it to retain maximum
flexibility in designing compensation programs that meet its
stated objectives. For these reasons, the committee, while
considering tax deductibility as one of the factors in
determining compensation, does not limit compensation to those
levels or types of compensation that will be deductible by us.
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