Base Period Compensation

Base Period Compensation. (i) the average annual "Compensation" (as defined below) which was includible in his gross income for his base period (i.e., his most recent five taxable years or such lesser number of taxable years or portions thereof during which the Executive performed services for the Company ending before the date of the Change in Control); and (ii) if Executive's base period includes a short taxable year or less than all of a taxable year, compensation for such short or incomplete taxable year shall be... annualized for the base period. (In annualizing compensation, the frequency with which payments are expected to be made over an annual period shall be taken into account. Thus, any amount of compensation for such a short or incomplete taxable year that represents a payment that would not be made more than once per year shall not be annualized). For purposes of this definition, Executive's "Compensation" shall mean the sum of the Executive's base salary plus any cash bonuses included in Executive's taxable compensation for federal income tax purposes and reported to Executive and Internal Revenue Service ("IRS"). Compensation shall not include any amount, other than base salary and cash bonuses, such as the reporting of previously deferred compensation or gain realized upon exercise of any non qualified stock options. View More