Glossary

Accrual Method Accounting

An accounting method under which you report your income when you earn it, whether or not you have received it. You generally deduct your expenses when you incur a liability for them, rather than when you pay them.

An accounting method under which you report your income when you earn it, whether or not you have received it. You generally deduct your expenses when you incur a liability for them, rather than when you pay them.

Adjusted Basis

Before you can figure any gain or loss on a sale, exchange, or other disposition of property or figure allowable depreciation, depletion, or amortization, you usually must make certain adjustments (increases and decreases) to the basis of the property. The result of these adjustments to the basis is the adjusted basis

Adjusted Gross Income

26 U.S.C. Section 62. Adjusted gross income defined

    (a) General rule
      For purposes of this subtitle, the term ''adjusted gross income''
    means, in the case of an individual, gross income minus the
    following deductions:
      (1) Trade and business deductions
        The deductions allowed by this chapter (other than by part VII
      of this subchapter) which are attributable to a trade or business
      carried on by the taxpayer, if such trade or business does not
      consist of the performance of services by the taxpayer as an
      employee.
      (2) Certain trade and business deductions of employees
        (A) Reimbursed expenses of employees
          The deductions allowed by part VI (section 161 and following)
        which consist of expenses paid or incurred by the taxpayer, in
        connection with the performance by him of services as an
        employee, under a reimbursement or other expense allowance
        arrangement with his employer.  The fact that the reimbursement
        may be provided by a third party shall not be determinative of
        whether or not the preceding sentence applies.
        (B) Certain expenses of performing artists
          The deductions allowed by section 162 which consist of
        expenses paid or incurred by a qualified performing artist in
        connection with the performances by him of services in the
        performing arts as an employee.
        (C) Certain expenses of officials
          The deductions allowed by section 162 which consist of
        expenses paid or incurred with respect to services performed by
        an official as an employee of a State or a political
        subdivision thereof in a position compensated in whole or in
        part on a fee basis.
      (3) Losses from sale or exchange of property
        The deductions allowed by part VI (sec. 161 and following) as
      losses from the sale or exchange of property.
      (4) Deductions attributable to rents and royalties
        The deductions allowed by part VI (sec. 161 and following), by
      section 212 (relating to expenses for production of income), and
      by section 611 (relating to depletion) which are attributable to
      property held for the production of rents or royalties.
      (5) Certain deductions of life tenants and income beneficiaries
          of property
        In the case of a life tenant of property, or an income
      beneficiary of property held in trust, or an heir, legatee, or
      devisee of an estate, the deduction for depreciation allowed by
      section 167 and the deduction allowed by section 611.
      (6) Pension, profit-sharing, and annuity plans of self-employed
          individuals
        In the case of an individual who is an employee within the
      meaning of section 401(c)(1), the deduction allowed by section
      404.
      (7) Retirement savings
        The deduction allowed by section 219 (relating to deduction of
      certain retirement savings).
      ((8) Repealed. Pub. L. 104-188, title I, Sec. 1401(b)(4), Aug.
          20, 1996, 110 Stat. 1788)
      (9) Penalties forfeited because of premature withdrawal of funds
          from time savings accounts or deposits
        The deductions allowed by section 165 for losses incurred in
      any transaction entered into for profit, though not connected
      with a trade or business, to the extent that such losses include
      amounts forfeited to a bank, mutual savings bank, savings and
      loan association, building and loan association, cooperative bank
      or homestead association as a penalty for premature withdrawal of
      funds from a time savings account, certificate of deposit, or
      similar class of deposit.
      (10) Alimony
        The deduction allowed by section 215.
      (11) Reforestation expenses
        The deduction allowed by section 194.
      (12) Certain required repayments of supplemental unemployment
          compensation benefits
        The deduction allowed by section 165 for the repayment to a
      trust described in paragraph (9) or (17) of section 501(c) of
      supplemental unemployment compensation benefits received from
      such trust if such repayment is required because of the receipt
      of trade readjustment allowances under section 231 or 232 of the
      Trade Act of 1974 (19 U.S.C. 2291 and 2292).
      (13) Jury duty pay remitted to employer
        Any deduction allowable under this chapter by reason of an
      individual remitting any portion of any jury pay to such
      individual's employer in exchange for payment by the employer of
      compensation for the period such individual was performing jury
      duty.  For purposes of the preceding sentence, the term ''jury
      pay'' means any payment received by the individual for the
      discharge of jury duty.
      (14) Deduction for clean-fuel vehicles and certain refueling
          property
        The deduction allowed by section 179A.
      (15) Moving expenses
        The deduction allowed by section 217.
      (16) Archer MSAs
        The deduction allowed by section 220.
      (17) Interest on education loans
        The deduction allowed by section 221.
      (18) Higher education expenses
        The deduction allowed by section 222.
    Nothing in this section shall permit the same item to be deducted
    more than once.
    (b) Qualified performing artist
      (1) In general
        For purposes of subsection (a)(2)(B), the term ''qualified
      performing artist'' means, with respect to any taxable year, any
      individual if -
          (A) such individual performed services in the performing arts
        as an employee during the taxable year for at least 2
        employers,
          (B) the aggregate amount allowable as a deduction under
        section 162 in connection with the performance of such services
        exceeds 10 percent of such individual's gross income
        attributable to the performance of such services, and
          (C) the adjusted gross income of such individual for the
        taxable year (determined without regard to subsection
        (a)(2)(B)) does not exceed $16,000.
      (2) Nominal employer not taken into account
        An individual shall not be treated as performing services in
      the performing arts as an employee for any employer during any
      taxable year unless the amount received by such individual from
      such employer for the performance of such services during the
      taxable year equals or exceeds $200.
      (3) Special rules for married couples
        (A) In general
          Except in the case of a husband and wife who lived apart at
        all times during the taxable year, if the taxpayer is married
        at the close of the taxable year, subsection (a)(2)(B) shall
        apply only if the taxpayer and his spouse file a joint return
        for the taxable year.
        (B) Application of paragraph (1)
          In the case of a joint return -
            (i) paragraph (1) (other than subparagraph (C) thereof)
          shall be applied separately with respect to each spouse, but
            (ii) paragraph (1)(C) shall be applied with respect to
          their combined adjusted gross income.
        (C) Determination of marital status
          For purposes of this subsection, marital status shall be
        determined under section 7703(a).
        (D) Joint return
          For purposes of this subsection, the term ''joint return''
        means the joint return of a husband and wife made under section
        6013.
    (c) Certain arrangements not treated as reimbursement arrangements
      For purposes of subsection (a)(2)(A), an arrangement shall in no
    event be treated as a reimbursement or other expense allowance
    arrangement if -
        (1) such arrangement does not require the employee to
      substantiate the expenses covered by the arrangement to the
      person providing the reimbursement, or
        (2) such arrangement provides the employee the right to retain
      any amount in excess of the substantiated expenses covered under
      the arrangement.
    The substantiation requirements of the preceding sentence shall not
    apply to any expense to the extent that substantiation is not
    required under section 274(d) for such expense by reason of the
    regulations prescribed under the 2nd sentence thereof.

Alternative Minimum Tax

26 U.S.C. Section 55. Alternative minimum tax imposed

    (a) General rule
      There is hereby imposed (in addition to any other tax imposed by
    this subtitle) a tax equal to the excess (if any) of -
        (1) the tentative minimum tax for the taxable year, over
        (2) the regular tax for the taxable year.
    (b) Tentative minimum tax
      For purposes of this part -
      (1) Amount of tentative tax
        (A) Noncorporate taxpayers
          (i) In general
            In the case of a taxpayer other than a corporation, the
          tentative minimum tax for the taxable year is the sum of -
              (I) 26 percent of so much of the taxable excess as does
            not exceed $175,000, plus
              (II) 28 percent of so much of the taxable excess as
            exceeds $175,000.
         The amount determined under the preceding sentence shall be
          reduced by the alternative minimum tax foreign tax credit for
          the taxable year.
          (ii) Taxable excess
            For purposes of this subsection, the term ''taxable
          excess'' means so much of the alternative minimum taxable
          income for the taxable year as exceeds the exemption amount.
          (iii) Married individual filing separate return
            In the case of a married individual filing a separate
          return, clause (i) shall be applied by substituting
          ''$87,500'' for ''$175,000'' each place it appears.  For
          purposes of the preceding sentence, marital status shall be
          determined under section 7703.
        (B) Corporations
          In the case of a corporation, the tentative minimum tax for
        the taxable year is -
            (i) 20 percent of so much of the alternative minimum
          taxable income for the taxable year as exceeds the exemption
          amount, reduced by
            (ii) the alternative minimum tax foreign tax credit for the
          taxable year.
      (2) Alternative minimum taxable income
        The term ''alternative minimum taxable income'' means the
      taxable income of the taxpayer for the taxable year -
          (A) determined with the adjustments provided in section 56
        and section 58, and
          (B) increased by the amount of the items of tax preference
        described in section 57.
      If a taxpayer is subject to the regular tax, such taxpayer shall
      be subject to the tax imposed by this section (and, if the
      regular tax is determined by reference to an amount other than
      taxable income, such amount shall be treated as the taxable
      income of such taxpayer for purposes of the preceding sentence).
      (3) Maximum rate of tax on net capital gain of noncorporate
          taxpayers
        The amount determined under the first sentence of paragraph
      (1)(A)(i) shall not exceed the sum of -
          (A) the amount determined under such first sentence computed
        at the rates and in the same manner as if this paragraph had
        not been enacted on the taxable excess reduced by the lesser of
        -
            (i) the net capital gain; or
            (ii) the sum of -
              (I) the adjusted net capital gain, plus
              (II) the unrecaptured section 1250 gain, plus
          (B) 10 percent of so much of the adjusted net capital gain
        (or, if less, taxable excess) as does not exceed the amount on
        which a tax is determined under section 1(h)(1)(B), plus
          (C) 20 percent of the adjusted net capital gain (or, if less,
        taxable excess) in excess of the amount on which tax is
        determined under subparagraph (B), plus
          (D) 25 percent of the amount of taxable excess in excess of
        the sum of the amounts on which tax is determined under the
        preceding subparagraphs of this paragraph.
      In the case of taxable years beginning after December 31, 2000,
      rules similar to the rules of section 1(h)(2) shall apply for
      purposes of subparagraphs (B) and (C). Terms used in this
      paragraph which are also used in section 1(h) shall have the
      respective meanings given such terms by section 1(h) but computed
      with the adjustments under this part.
    (c) Regular tax
      (1) In general
        For purposes of this section, the term ''regular tax'' means
      the regular tax liability for the taxable year (as defined in
      section 26(b)) reduced by the foreign tax credit allowable under
      section 27(a), the section 936 credit allowable under section
      27(b), and the Puerto Rico economic activity credit under section
      30A. Such term shall not include any increase in tax under
      section 49(b) or 50(a) or subsection (j) or (k) of section 42.
      (2) Cross references
          For provisions providing that certain credits are not
        allowable against the tax imposed by this section, see sections
        26(a), 29(b)(6), 30(b)(3), and 38(c).
    (d) Exemption amount
      For purposes of this section -
      (1) Exemption amount for taxpayers other than corporations
        In the case of a taxpayer other than a corporation, the term
      ''exemption amount'' means -
          (A) $45,000 ($49,000 in the case of taxable years beginning
        in 2001, 2002, 2003, and 2004) in the case of -
            (i) a joint return, or
            (ii) a surviving spouse,
          (B) $33,750 ($35,750 in the case of taxable years beginning
        in 2001, 2002, 2003, and 2004) in the case of an individual who
        -
            (i) is not a married individual, and
            (ii) is not a surviving spouse,
          (C) 50 percent of the dollar amount applicable under
        paragraph (1)(A) in the case of a married individual who files
        a separate return, and
          (D) $22,500 in the case of an estate or trust.
      For purposes of this paragraph, the term ''surviving spouse'' has
      the meaning given to such term by section 2(a), and marital
      status shall be determined under section 7703.
      (2) Corporations
        In the case of a corporation, the term ''exemption amount''
      means $40,000.
      (3) Phase-out of exemption amount
        The exemption amount of any taxpayer shall be reduced (but not
      below zero) by an amount equal to 25 percent of the amount by
      which the alternative minimum taxable income of the taxpayer
      exceeds -
          (A) $150,000 in the case of a taxpayer described in paragraph
        (1)(A) or (2),
          (B) $112,500 in the case of a taxpayer described in paragraph
        (1)(B), and
          (C) $75,000 in the case of a taxpayer described in
        subparagraph (C) or (D) of paragraph (1).
      In the case of a taxpayer described in paragraph (1)(C),
      alternative minimum taxable income shall be increased by the
      lesser of (i) 25 percent of the excess of alternative minimum
      taxable income (determined without regard to this sentence) over
      the minimum amount of such income (as so determined) for which
      the exemption amount under paragraph (1)(C) is zero, or (ii) such
      exemption amount (determined without regard to this paragraph).
    (e) Exemption for small corporations
      (1) In general
        (A) $7,500,000 gross receipts test
          The tentative minimum tax of a corporation shall be zero for
        any taxable year if the corporation's average annual gross
        receipts for all 3-taxable-year periods ending before such
        taxable year does not exceed $7,500,000. For purposes of the
        preceding sentence, only taxable years beginning after December
        31, 1993, shall be taken into account.
        (B) $5,000,000 gross receipts test for first 3-year period
          Subparagraph (A) shall be applied by substituting
        ''$5,000,000'' for ''$7,500,000'' for the first 3-taxable-year
        period (or portion thereof) of the corporation which is taken
        into account under subparagraph (A).
        (C) First taxable year corporation in existence
          If such taxable year is the first taxable year that such
        corporation is in existence, the tentative minimum tax of such
        corporation for such year shall be zero.
        (D) Special rules
          For purposes of this paragraph, the rules of paragraphs (2)
        and (3) of section 448(c) shall apply.
      (2) Prospective application of minimum tax if small corporation
          ceases to be small
        In the case of a corporation whose tentative minimum tax is
      zero for any prior taxable year by reason of paragraph (1), the
      application of this part for taxable years beginning with the
      first taxable year such corporation ceases to be described in
      paragraph (1) shall be determined with the following
      modifications:
          (A) Section 56(a)(1) (relating to depreciation) and section
        56(a)(5) (relating to pollution control facilities) shall apply
        only to property placed in service on or after the change date.
          (B) Section 56(a)(2) (relating to mining exploration and
        development costs) shall apply only to costs paid or incurred
        on or after the change date.
          (C) Section 56(a)(3) (relating to treatment of long-term
        contracts) shall apply only to contracts entered into on or
        after the change date.
          (D) Section 56(a)(4) (relating to alternative net operating
        loss deduction) shall apply in the same manner as if, in
        section 56(d)(2), the change date were substituted for
        ''January 1, 1987'' and the day before the change date were
        substituted for ''December 31, 1986'' each place it appears.
          (E) Section 56(g)(2)(B) (relating to limitation on allowance
        of negative adjustments based on adjusted current earnings)
        shall apply only to prior taxable years beginning on or after
        the change date.
          (F) Section 56(g)(4)(A) (relating to adjustment for
        depreciation to adjusted current earnings) shall not apply.
          (G) Subparagraphs (D) and (F) of section 56(g)(4) (relating
        to other earnings and profits adjustments and depletion) shall
        apply in the same manner as if the day before the change date
        were substituted for ''December 31, 1989'' each place it
        appears therein.
      (3) Exception
        The modifications in paragraph (2) shall not apply to -
          (A) any item acquired by the corporation in a transaction to
        which section 381 applies, and
          (B) any property the basis of which in the hands of the
        corporation is determined by reference to the basis of the
        property in the hands of the transferor,
      if such item or property was subject to any provision referred to
      in paragraph (2) while held by the transferor.
      (4) Change date
        For purposes of paragraph (2), the change date is the first day
      of the first taxable year for which the taxpayer ceases to be
      described in paragraph (1).
      (5) Limitation on use of credit for prior year minimum tax
          liability
        In the case of a taxpayer whose tentative minimum tax for any
      taxable year is zero by reason of paragraph (1), section 53(c)
      shall be applied for such year by reducing the amount otherwise
      taken into account under section 53(c)(1) by 25 percent of so
      much of such amount as exceeds $25,000. Rules similar to the
      rules of section 38(c)(3)(B) shall apply for purposes of the
      preceding sentence.

Alternative Minimum Tax (AMT)

The tax law gives preferential treatment to some kinds of income and allows special deductions and credits for some kinds of expenses. Taxpayers who benefit from these provisions of the law may have to pay an additional tax called the alternative minimum tax. It is a separate tax computation that, in effect, eliminates many deductions and credits and creates a tax liability for an individual who would otherwise pay little or no tax.

The adjustments and tax preference items include such things as: standard or certain itemized deductions, taxable state and local tax refunds, accelerated depreciation of certain property, intangible drilling costs, certain tax exempt interest and the difference between AMT and regular tax gain or loss on the sale of property, treatment of incentive stock options and depletion allowances.

Annuities For A Single Life

You receive definite amounts at regular intervals for life. The payments end at death.

Annuity

An annuity is a series of payments under a contract made at regular intervals over a period of more than one full year. They can be either fixed (under which you receive a definite amount) or variable (not fixed). You can buy the contract alone or with the help of your employer.

Basis

Basis is the amount of your investment in property for tax purposes. The basis of property you buy is usually the cost. Basis is used to figure gain or loss on the sale or disposition of investment property.

Basis is the amount of your investment in property for tax purposes. The basis of property you buy is usually the cost. Basis is used to figure gain or loss on the sale or disposition of investment property.

Below-Market Loan

A demand loan (defined later) on which interest is payable at a rate below the applicable federal rate, or a term loan where the amount loaned is more than the present value of all payments due under the loan.

A demand loan (defined later) on which interest is payable at a rate below the applicable federal rate, or a term loan where the amount loaned is more than the present value of all payments due under the loan.

Blackout Period

This is the period immediately prior to the release of financial information, annual or quarterly reports, filed by public companies with the SEC. During this period, company insiders are prohibited from buying and selling company securities, pursuant to the company's insider-trading policy.

Call

An option that entitles the purchaser to buy, at any time before a specified future date, property such as a stated number of shares of stock at a specified price.

An option that entitles the purchaser to buy, at any time before a specified future date, property such as a stated number of shares of stock at a specified price.

Cash Method Accounting

An accounting method under which you report your income in the year in which you actually or constructively receive it. You generally deduct your expenses in the year you pay them.

An accounting method under which you report your income in the year in which you actually or constructively receive it. You generally deduct your expenses in the year you pay them.

Compensation

Wages, salaries, commissions, tips, bonuses, professional fees, earnings from self-employment, and alimony.

Constructive Receipt Of Income

When an amount is credited to the taxpayer's account or made available to the taxpayer (or taxpayer's agent) without restriction.

Coupled Stock Appreciation Right (CSAR)

(a) A Coupled Stock Appreciation Right ("CSAR") shall be related to a particular Option and shall be exercisable only when and to the extent the related Option is exercisable.

(b) A CSAR may be granted to the Holder for no more than the number of shares subject to the simultaneously or previously granted Option to which it is coupled.

(c) A CSAR shall entitle the Holder (or other person entitled to exercise the Option pursuant to the Plan) to surrender to the Company unexercised a portion of the Option to which the CSAR relates (to the extent then exercisable pursuant to its terms) and to receive from the Company in exchange therefor an amount determined by multiplying the difference obtained by subtracting the Option exercise price from the Fair Market Value of a share of Common Stock on the date of exercise of the CSAR by the number of shares of Common Stock with respect to which the CSAR shall have been exercised, subject to any limitations the Committee may impose.

Demand Loan

A loan payable in full at any time upon demand by the lender.

Disability Income

This income comes from an employer's disability insurance, health plan, or pension plan. The payments replace wages for the time the taxpayer missed work because of the disability. The plan must provide for disability retirement for the payments to be considered disability income.

Disability Pension

Generally paid to a taxpayer who retires because of a disability before the minimum retirement age (set by the employer). The disability pension is considered regular pension income when the taxpayer reaches the minimum retirement age.

Dividend

A distribution of money or other property made by a corporation to its shareholders out of its earnings and profits.

Domestic Relations Order (DRO)

Domestic Relations Order (DRO)

THE 2003 INCENTIVE AWARD PLAN OF INFONET SERVICES CORPORATION

1.16. "DRO" shall mean a domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder.

Employee Stock Purchase Plan(ESPP)

This is broad based employee stock purchase plan that allows employees to use payroll deductions to purchase company stock over the purchase period (3 month, 6 month, 12 month). Employees typically purchase company stock through this method at a 15% reduction in price.

Equity Awards

This is the common name given to stock grants given by a company, usually stock options, restricted stock, restricted stock units, performance share awards. Deferred compensation does not fall into this category.

Equity Option

Any option:

Fair Market Value

The price at which property would change hands between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts.

The price at which property would change hands between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts.

Fixed Period Annuities

You receive definite amounts at regular intervals for a specified length of time.

Form 4

Form 4 provides information about the disposition of stock either by sale or
transfer. This information may indicate whether the shares have been transferred to a family partnership or other entity controlled by the shareholders, officers, and/or Directors.

Gross Income

26 U.S.C. § 61

Section 61. Gross income defined

    (a) General definition
      Except as otherwise provided in this subtitle, gross income means
    all income from whatever source derived, including (but not limited
    to) the following items:
        (1) Compensation for services, including fees, commissions,
      fringe benefits, and similar items;
        (2) Gross income derived from business;
        (3) Gains derived from dealings in property;
        (4) Interest;
        (5) Rents;
        (6) Royalties;
        (7) Dividends;
        (8) Alimony and separate maintenance payments;
        (9) Annuities;
        (10) Income from life insurance and endowment contracts;
        (11) Pensions;
        (12) Income from discharge of indebtedness;
        (13) Distributive share of partnership gross income;
        (14) Income in respect of a decedent; and
        (15) Income from an interest in an estate or trust.
    (b) Cross references
          For items specifically included in gross income, see part II
        (sec. 71 and following).  For items specifically excluded from
        gross income, see part III (sec. 101 and following).

Independent Stock Appreciation Right

Independent Stock Appreciation Rights.

THE 2003 INCENTIVE AWARD PLAN OF INFONET SERVICES CORPORATION

(a) An Independent Stock Appreciation Right ("ISAR") shall be unrelated to any Option and shall have a term set by the Committee. An ISAR shall be exercisable in such installments as the Committee may determine. An ISAR shall cover such number of shares of Common Stock as the Committee may determine. The exercise price per share of Common Stock subject to each ISAR shall be set by the Committee. An ISAR is exercisable only while the Holder is an Employee or Consultant; provided, that the Committee may determine that the ISAR may be exercised subsequent to Termination of Employment or Termination of Consultancy without cause, or following a change in control Change in Control of the Company, or because of the Holder?s retirement, death or disability, or otherwise.

(b) An ISAR shall entitle the Holder (or other person entitled to exercise the ISAR pursuant to the Plan) to exercise all or a specified portion of the ISAR (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the ISAR from the Fair Market Value of a share of Common Stock on the date of exercise of the ISAR by the number of shares of Common Stock with respect to which the ISAR shall have been exercised, subject to any limitations the Committee may impose.

Individual Retirement Arrangement (IRA)

A tax-sheltered savings plan set up by the taxpayer, generally for retirement income.

Interest

Compensation for the use or forbearance of money.

Investment Interest

The interest you paid or accrued on money you borrowed that is allocable to property held for investment.

Joint And Survivor Annuities

The first annuitant receives a definite amount at regular intervals for life. After he or she dies, a second annuitant receives a definite amount at regular intervals for life. The amount paid to the second annuitant may or may not differ from the amount paid to the first annuitant.

Nominee

A person who receives, in his or her name, income that actually belongs to someone else.

Nonqualified Deferred Compensation Plan

A nonqualified deferred compensation (NQDC) plan is any elective or nonelective
plan, agreement, method, or arrangement between an employer and an
employee (or service recipient and service provider) to pay the employee
compensation some time in the future. NQDC plans do not afford employers and
employees with the tax benefits associated with qualified plans because, unlike
qualified plans, NQDC plans do not satisfy all of the requirements of § 401(a).

Option Price/Exercise Price

The term option price, price paid under the option, or exercise price means the consideration in cash or property which, pursuant to the terms of the option, is the price at which the stock subject to the option is purchased. The term option price does not include any amounts paid as interest under a deferred payment arrangement or treated as interest. (Source: IRS)

Ordinary Income

26 U.S.C. Section 64. Ordinary income defined

For purposes of this subtitle, the term ''ordinary income''
includes any gain from the sale or exchange of property which is
neither a capital asset nor property described in section 1231(b).
Any gain from the sale or exchange of property which is treated or
considered, under other provisions of this subtitle, as ''ordinary
income'' shall be treated as gain from the sale or exchange of
property which is neither a capital asset nor property described in
section 1231(b).

Ordinary Loss

26 U.S.C. Section 65. Ordinary loss defined

For purposes of this subtitle, the term ''ordinary loss''includes any loss from the sale or exchange of property which is
not a capital asset.  Any loss from the sale or exchange of property which is treated or considered, under other provisions of
this subtitle, as ''ordinary loss'' shall be treated as loss from the sale or exchange of property which is not a capital asset.

Performance Stock Appreciation Right (PSAR)

Performance Stock Appreciation Right (PSAR)

Proxy Statement

The 14A, Proxy Statement Pursuant to Section 14A of the SEC, better known as the Definitive Proxy Statement, is sent to the shareholders of record prior to the Annual Meeting and contains information about specific stock options and
compensation plans for the executives. It also contains information about shareholder proposals and other business related information. It is more detailed than the 10-K and provides specific detail as to the number of options granted and the total exercise price.

Put

An option that entitles the purchaser to sell, at any time before a specified future date, property such as a stated number of shares of stock at a specified price. 

An option that entitles the purchaser to sell, at any time before a specified future date, property such as a stated number of shares of stock at a specified price.

Qualified Employee Annuity

A qualified employee annuity is a retirement annuity purchased by an employer for an employee under a plan that meets Internal Revenue Code requirements.

Stock Option Grant Agreement

The Stock Option Grant Agreement is the very agreement entered into between the company and the employee/executive. Typically, the agreement disclaims any contract of employment relationship. The agreement is entered into at the start of employment, and when additional grants are awarded to the employee/executive. The agreement outlines the terms and conditions of the right granted, such as the type of option (Statutory Option/Incentive Stock Option), the number of shares, vesting schedule, grant price and the expiration date.

Stock Option Plan

A Stock Option Plan is a legal document setting forth the controlling guidelines about the administration of the Stock Option Plan for employees. Companies may use different types of Stock Option Plans for executives and all other employees. Each employee is considered a plan participant. The plan document specifies the number of shares that are allocated to the plan, the types of options that can be granted, eligibility of participants, vesting schedules, and the terms by which the plan can be amended or terminated.

Stripped Preferred Stock

Stock that meets the following tests.

Taxable Income

26 U.S.C. Section 63. Taxable income defined

    (a) In general
      Except as provided in subsection (b), for purposes of this
    subtitle, the term ''taxable income'' means gross income minus the
    deductions allowed by this chapter (other than the standard
    deduction).
    (b) Individuals who do not itemize their deductions
      In the case of an individual who does not elect to itemize his
    deductions for the taxable year, for purposes of this subtitle, the
    term ''taxable income'' means adjusted gross income, minus -
        (1) the standard deduction, and
        (2) the deduction for personal exemptions provided in section
      151.
    (c) Standard deduction
      For purposes of this subtitle -
      (1) In general
        Except as otherwise provided in this subsection, the term
      ''standard deduction'' means the sum of -
          (A) the basic standard deduction, and
          (B) the additional standard deduction.
      (2) Basic standard deduction
        For purposes of paragraph (1), the basic standard deduction is
      -
          (A) $5,000 in the case of -
            (i) a joint return, or
            (ii) a surviving spouse (as defined in section 2(a)),
          (B) $4,400 in the case of a head of household (as defined in
        section 2(b)),
          (C) $3,000 in the case of an individual who is not married
        and who is not a surviving spouse or head of household, or
          (D) $2,500 in the case of a married individual filing a
        separate return.
      (3) Additional standard deduction for aged and blind
        For purposes of paragraph (1), the additional standard
      deduction is the sum of each additional amount to which the
      taxpayer is entitled under subsection (f).
      (4) Adjustments for inflation
        In the case of any taxable year beginning in a calendar year
      after 1988, each dollar amount contained in paragraph (2) or (5)
      or subsection (f) shall be increased by an amount equal to -
          (A) such dollar amount, multiplied by
          (B) the cost-of-living adjustment determined under section
        1(f)(3) for the calendar year in which the taxable year begins,
        by substituting for ''calendar year 1992'' in subparagraph (B)
        thereof -
            (i) ''calendar year 1987'' in the case of the dollar
          amounts contained in paragraph (2) or (5)(A) or subsection
          (f), and
            (ii) ''calendar year 1997'' in the case of the dollar
          amount contained in paragraph (5)(B).
      (5) Limitation on basic standard deduction in the case of certain
          dependents
        In the case of an individual with respect to whom a deduction
      under section 151 is allowable to another taxpayer for a taxable
      year beginning in the calendar year in which the individual's
      taxable year begins, the basic standard deduction applicable to
      such individual for such individual's taxable year shall not
      exceed the greater of -
          (A) $500, or
          (B) the sum of $250 and such individual's earned income.
      (6) Certain individuals, etc., not eligible for standard
          deduction
        In the case of -
          (A) a married individual filing a separate return where
        either spouse itemizes deductions,
          (B) a nonresident alien individual,
          (C) an individual making a return under section 443(a)(1) for
        a period of less than 12 months on account of a change in his
        annual accounting period, or
          (D) an estate or trust, common trust fund, or partnership,
      the standard deduction shall be zero.
    (d) Itemized deductions
      For purposes of this subtitle, the term ''itemized deductions''
    means the deductions allowable under this chapter other than -
        (1) the deductions allowable in arriving at adjusted gross
      income, and
        (2) the deduction for personal exemptions provided by section
      151.
    (e) Election to itemize
      (1) In general
        Unless an individual makes an election under this subsection
      for the taxable year, no itemized deduction shall be allowed for
      the taxable year.  For purposes of this subtitle, the
      determination of whether a deduction is allowable under this
      chapter shall be made without regard to the preceding sentence.
      (2) Time and manner of election
        Any election under this subsection shall be made on the
      taxpayer's return, and the Secretary shall prescribe the manner
      of signifying such election on the return.
      (3) Change of election
        Under regulations prescribed by the Secretary, a change of
      election with respect to itemized deductions for any taxable year
      may be made after the filing of the return for such year.  If the
      spouse of the taxpayer filed a separate return for any taxable
      year corresponding to the taxable year of the taxpayer, the
      change shall not be allowed unless, in accordance with such
      regulations -
          (A) the spouse makes a change of election with respect to
        itemized deductions, for the taxable year covered in such
        separate return, consistent with the change of treatment sought
        by the taxpayer, and
          (B) the taxpayer and his spouse consent in writing to the
        assessment (within such period as may be agreed on with the
        Secretary) of any deficiency, to the extent attributable to
        such change of election, even though at the time of the filing
        of such consent the assessment of such deficiency would
        otherwise be prevented by the operation of any law or rule of
        law.
      This paragraph shall not apply if the tax liability of the
      taxpayer's spouse for the taxable year corresponding to the
      taxable year of the taxpayer has been compromised under section
      7122.
    (f) Aged or blind additional amounts
      (1) Additional amounts for the aged
        The taxpayer shall be entitled to an additional amount of $600
      -
          (A) for himself if he has attained age 65 before the close of
        his taxable year, and
          (B) for the spouse of the taxpayer if the spouse has attained
        age 65 before the close of the taxable year and an additional
        exemption is allowable to the taxpayer for such spouse under
        section 151(b).
      (2) Additional amount for blind
        The taxpayer shall be entitled to an additional amount of $600
      -
          (A) for himself if he is blind at the close of the taxable
        year, and
          (B) for the spouse of the taxpayer if the spouse is blind as
        of the close of the taxable year and an additional exemption is
        allowable to the taxpayer for such spouse under section 151(b).
      For purposes of subparagraph (B), if the spouse dies during the
      taxable year the determination of whether such spouse is blind
      shall be made as of the time of such death.
      (3) Higher amount for certain unmarried individuals
        In the case of an individual who is not married and is not a
      surviving spouse, paragraphs (1) and (2) shall be applied by
      substituting ''$750'' for ''$600''.
      (4) Blindness defined
        For purposes of this subsection, an individual is blind only if
      his central visual acuity does not exceed 20/200 in the better
      eye with correcting lenses, or if his visual acuity is greater
      than 20/200 but is accompanied by a limitation in the fields of
      vision such that the widest diameter of the visual field subtends
      an angle no greater than 20 degrees.
    (g) Marital status
      For purposes of this section, marital status shall be determined
    under section 7703.

Term Loan

Any loan that is not a demand loan.

Variable Annuities

You receive payments that may vary in amount for a specified length of time or for life. The amounts you receive may depend upon such variables as profits earned by the pension or annuity funds, cost-of-living indexes, or earnings from a mutual fund.