LPAD - SEC Filings

LAPOLLA INDUSTRIES INC filed this 10-K on 04/15/2009.
« Prev Page	Outline	Printer Friendly	Entire Filing	Next Page »

Index

Policy on Deductibility of Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”), limits the tax deductibility by a company of annual compensation in excess of $1,000,000 paid to our CEO and any of our four other most highly compensated executive officers. However, performance-based compensation that has been approved by stockholders is excluded from the $1,000,000 limit if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals and our board of directors committee that establishes such goals consists only of “outside directors.” Additionally, stock options will qualify for the performance-based exception where, among other requirements, the exercise price of the option is not less than the fair market value of the stock on grant date, and the plan includes a per-executive limitation on the number of shares for which options may be granted during a specified period. Our stock option grants under our Equity Plan are intended to meet the criteria of Section 162(m) of the Code. We believe all of the members of our Compensation Committee qualify as outside directors pursuant to Section 162(m) of the Code. The Compensation Committee considers the anticipated tax treatment to our Company and our executive officers when reviewing executive compensation and our compensation programs. The deductibility of some types of compensation payments can depend upon the timing of an executive’s vesting or exercise of previously granted rights. Sections 280G and 4999 of the Code impose certain adverse tax consequences on compensation treated as excess parachute payments. An executive is treated as having received excess parachute payments for purposes of Sections 280G and 4999 of the Code if he or she receives compensatory payments or benefits that are contingent on a change in the ownership or control of a corporation, and the aggregate amount of such contingent compensatory payments and benefits equal or exceeds three times the executive’s base amount. If the executive’s aggregate contingent compensatory payments and benefits equal or exceed three times the executive’s base amount, the portion of the payments and benefits in excess of one times the base amount are treated as excess parachute payments. An executive’s base amount generally is determined by averaging the executive’s Form W-2 taxable compensation from the corporation for the five calendar years preceding the calendar year in which the change in ownership or control occurs. An executive’s excess parachute payments are subject to a 20% excise tax under Section 4999 of the Code, in addition to any applicable federal income and employment taxes. Also, the corporation’s compensation deduction in respect of the executive’s excess parachute payments is disallowed under Section 280G of the Code. If we were to be subject to a change of control, certain amounts received by our executives (e.g. amounts attributable to accelerated vesting of options) could be excess parachute payments under Sections 280G and 4999 of the Code.

Executive Compensation

The following table shows the compensation earned by, or awarded or paid to, each of our named executive officers for services rendered in all capacities to us for the year ended December 31, 2008.

SUMMARY COMPENSATION TABLE

						Stock		Options		All Other
Name and	Year	Salary		Bonus		Awards		Awards		Compensation		Total
Principal Position	($)	($)		($)		($)		($) (1)		($) (2)		($)
(a)	(b)	(c)		(d)		(e)		(f)		(i)		(j)
Douglas J. Kramer	2008		350,000		—		—		662,816		19,545		1,032,361
CEO and President	2007		350,000		—		—		342,617		19,361		711,978
	2006		350,000		—		—		93,738		17,134		460,872

Michael T. Adams	2008		158,750		—		—		—		24,064		182,814
CGO, EVP and Secretary	2007		158,611		—		—		68,977		18,691		246,279
	2006		121,792		—		—		15,623		13,208		150,623

Paul Smiertka	2008		155,962		—		—		36,782		5,581		198,325
CFO and Treasurer (3)	2007		—		—		—		—		—		—
	2006		—		—		—		—		—		—

Timothy J. Novak	2008		30,145		—		—		—		2,313		32,458
Former CFO and Treasurer (4)	2007		92,361		—		—		14,449		3,855		110,665
	2006		—		—		—		—		—		—

Notes:

(1) The amounts shown in this column represent the amounts of compensation cost recognized by us in each fiscal year related to grants of stock options, as prescribed under SFAS 123R. For a discussion of valuation assumptions, see Note 17 – Share-Based Payment Arrangements, Equity Incentive Plan, of our Notes to Financial Statements included in our annual report on Form 10-K for the year ended December 31, 2008. The information provided hereinbelow shows how much of the overall amount of the compensation cost recognized by us in 2008 is attributable to each award:

				Number of Shares of Stock		2008 Fiscal Year
Name of Executive Officer	Grant Date	Exercise Price ($)		Underlying Options Granted		Compensation Cost ($)
Douglas J. Kramer	7/12/2005		.67		2,000,000		367,926
Douglas J. Kramer	5/5/2008		.74		2,000,000		294,890
Paul Smiertka	3/3/2008		.68		200,000		36,782

(2) For 2008, the amounts disclosed in this column consist of perquisites valued at an aggregate of $51,503, of which approximately $2,963 was attributed to personal use of a Company provided leased vehicle to Mr. Kramer; $9,000 was for a car allowance for Mr. Adams; $15,642, $15,642, $5,581, and $2,313 was for health and dental insurance for Mr. Kramer, Mr. Adams, Mr. Smiertka, and Mr. Novak, respectively; and $940 was for life insurance coverage for Mr. Kramer.

(3) Mr. Smiertka joined the Company as CFO and Treasurer on March 3, 2008.

(4) Mr. Novak joined the Company as CFO and Treasurer on June 11, 2007 and resigned on February 16, 2008.

Copyright © 2007 LaPolla Industries, Inc. All rights reserved. Home. Contact. Privacy Statement. Internet Disclaimer.

Copyright © 2007 LaPolla Industries, Inc. All rights reserved.
Home. Contact. Privacy Statement. Internet Disclaimer.