VRSN » Topics » Eligibility Under Section 162(m)

This excerpt taken from the VRSN DEF 14A filed Apr 10, 2006.

Eligibility Under Section 162(m)


Section 162(m) of the U.S. Internal Revenue Code permits performance-based compensation meeting the requirements established by the U.S. Internal Revenue Service to be excluded from the limitation on deductibility



Table of Contents

of compensation in excess of $1 million paid to certain specified senior executives. In order to meet the requirements of Section 162(m), the 2006 Plan limits awards to individual participants as follows: No person may receive more than 1,500,000 shares issuable as awards in any fiscal year, other than new employees, who may receive up to a maximum of 3,000,000 shares issuable as awards granted in the fiscal year in which they first commence employment. The foregoing limits are greater than the number of shares subject to awards that VeriSign has granted to any individual in the past. We do not currently intend to significantly increase our equity awards to executive officers.


Awards may, but need not, include performance criteria that satisfy Section 162(m). To the extent that awards are intended to qualify as “performance-based compensation” under Section 162(m), the performance criteria will be one of the following criteria, either individually, alternatively or in any combination, applied to either the company as a whole or to a business unit or subsidiary, either individually, alternatively, or in any combination, and measured either annually or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specified by the compensation committee in the award:


    Net revenue and/or net revenue growth;


    Earnings per share and/or earnings per share growth;


    Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;


    Operating income and/or operating income growth;


    Net income and/or net income growth;


    Total stockholder return and/or total stockholder return growth;


    Return on equity;


    Operating cash flow return on income;


    Adjusted operating cash flow return on income;


    Economic value added;


    Individual business objectives; and


    Company specific operational metrics.


To the extent that an award under the 2006 Plan is designated as a “performance award,” but is not intended to qualify as performance-based compensation under Section 162(m), the performance criteria can include the achievement of strategic objectives as determined by the compensation committee.


Notwithstanding satisfaction of any performance criteria described above, to the extent specified at the time of grant of an award, the number of shares of common stock, stock options or other benefits granted, issued, retainable and/or vested under an award on account of satisfaction of performance criteria may be reduced by the compensation committee on the basis of such further considerations as the compensation committee in its sole discretion determines.


"Eligibility Under Section 162(m)" elsewhere:

Intuit (INTU)
Citrix Systems (CTXS)
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