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This excerpt taken from the LLTC DEF 14A filed Sep 23, 2009. Tax and Accounting Implications Deductibility of Executive Officer Compensation As part of its role, the Compensation Committee reviews and considers the deductibility of executive officer compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals, subject to certain 27 exemptions. The Company’s goal is for the compensation paid under its management incentive plans to be generally fully deductible for federal income tax purposes, except for restricted stock awards which do not qualify as performance-based compensation under Section 162(m) because they only contain time-based vesting provisions. In certain situations, however, the Compensation Committee may approve compensation that does not meet these requirements in order to ensure competitive levels of total compensation for its executive officers. Accounting for Stock-Based Compensation Commencing on July 4, 2005, the beginning of fiscal 2006, the Company became subject to the requirements set forth in SFAS 123(R) Share-Based Payment, and, accordingly, records a charge to its income statement for the estimated value of stock-based awards. 28 This excerpt taken from the LLTC DEF 14A filed Sep 23, 2008. Tax and Accounting Implications Deductibility of Executive Officer Compensation As part of its role, the Compensation Committee reviews and considers the deductibility of executive officer compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals, subject to certain exemptions. The Company believes that compensation paid under the management incentive plans is generally fully deductible for federal income tax purposes, except for restricted stock awards which do not qualify as performance-based compensation under Section 162(m) because they only contain time-based vesting provisions. In certain situations, the Compensation Committee may approve compensation that does not meet these requirements in order to ensure competitive levels of total compensation for its executive officers. Accounting for Stock-Based Compensation Commencing on July 4, 2005, the beginning of fiscal 2006, the Company became subject to the requirements set forth in FASB 123R Share-Based Payment and, accordingly, records a charge to its income statement for the estimated value of stock-based awards. 18 This excerpt taken from the LLTC DEF 14A filed Sep 26, 2007. Tax and Accounting Implications Deductibility of Executive Officer Compensation As part of its role, the Compensation Committee reviews and considers the deductibility of executive officer compensation under Section 162(m) of the Internal Revenue Code, which provides that the Company may not deduct compensation of more than $1,000,000 that is paid to certain individuals, subject to certain exemptions. The Company believes that compensation paid under the management incentive plans is generally fully deductible for federal income tax purposes. However, in certain situations, the Compensation Committee may approve compensation that does not meet these requirements in order to ensure competitive levels of total compensation for its executive officers. Accounting for Stock-Based Compensation Commencing on July 4, 2005, the beginning of fiscal 2006, the Company became subject to the requirements set forth in FASB 123R Share-Based Payment and, accordingly, records a charge to its income statement for the estimated value of stock-based awards. 16 | EXCERPTS ON THIS PAGE:
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