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<br />I <br />I <br />I <br />'I <br />). <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />Consul- Tech Enterprises, Inc. and Subsidiaries <br />Notes to Consolidated Financial Statements <br />December 31, 2006 and 2005 <br /> <br />J. Pension Plans (continued) <br /> <br />Defmed Contribution Pension Plan <br /> <br />The Company sponsors a defined contribution pension plan, which covers substantially all of its <br />eligible employees. The Company's contributions are based on 50% of the fIrst 5% of the covered <br />employee's salary, Contributions to the plan amounted to $144,581 and $109,846 during 2006 and <br />2005, respectively. <br /> <br />K. Employee Stock Award Plan <br /> <br />The Company has an employee stock award plan, Under the plan, on January 1,2003, Consul-Tech <br />Enterprises, Inc., the parent company, issued a total of 12,000 shares to certain employees as an <br />incentive to remain employed by the Company, and to increase their profItability, The Shareholder's <br />Agreement prohibits the sale, transfer, pledge, conveyance or other disposal without the consent of <br />the Company, which may be withheld for any reason. If consent to a sale is granted, the employee is <br />restricted further in that only the Company or an employee of the Company may purchase the shares. <br />If the Company elects to purchase the stock at the employee's request, the purchase price is <br />calculated by a formula based on net service revenue (as defmed) for the fIscal year preceding the <br />event triggering the sale, The sales price is further limited during the fIrst fIve years to 20% of the <br />share price in the fIrst year the agreement and increases by 20% a year until it reaches 100% of the <br />sales price. <br /> <br />No compensation cost has been recognized for the shares issued; had compensation cost been <br />determined on the basis of the contract formula, net income would have been reduced by <br />approximately $161,000, which represents 20% of the sales price. <br /> <br />L. Commitments and,Contingencies <br /> <br />Operating Leases <br /> <br />The Compapy leases its operating facilities under long-term non-cancelable leases expmng on <br />various dates through 2010, Minimum rental commitments as of December 31, 2006 for all non- <br />cancelable operating leases are as follows: <br /> <br />2007 $ 583,538 <br />2008 400,511 <br />2009 197,286 <br />2010 12,851 <br />Total $ 1,194,186 <br /> <br />15 <br />