Radio Shack 2009 Annual Report Download - page 74

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In February 2007, the Board of Directors amended the Deferred Plan to provide that, in lieu of the original
amounts described above, each non-employee director now receives a one-time initial grant of units
equal to the number of shares of our common stock that represent a fair market value of $150,000 on the
grant date, and an annual grant of units equal to the number of shares of our common stock that
represent a fair market value of $105,000 on the annual grant date.
Under the Deferred Plan, one-third of the Units vest annually over three years from the date of grant.
Vesting of outstanding awards is accelerated under certain circumstances. At termination of service, death,
disability or change in control of RadioShack, Directors will receive shares of common stock equal to the
number of vested Units. Directors may receive these shares in a lump sum or they may defer receipt of
these shares in equal installments over a period of up to ten years. We granted 47,300, 62,600, and
30,300 Units in 2009, 2008 and 2007, respectively. There were 179,076 Units outstanding and 736,413
Units available for grant at December 31, 2009.
NOTE 8 – EMPLOYEE BENEFIT PLANS
The following benefit plans were in place during the periods covered by the financial statements
Deferred Compensation Plans: The Executive Deferred Compensation Plan (“EDCP”) and the
Executive Deferred Stock Plan (“EDSP”) became effective in April of 1998 and permitted employees to
defer portions of their base salary, bonuses, and delivery of any restricted stock or stock acquired under a
non-qualified stock option exercise that would otherwise vest.
Employee deferrals and employer contributions to the EDCP and EDSP were discontinued effective
January 1, 2007, and any unvested matching company contributions remaining as of December 31, 2006,
were immediately vested. All account balances, including matching company contributions, under these
plans were distributed in the first quarter of 2007. Accruals related to these plans were recorded as a current
liability in our Consolidated Balance Sheets, totaling $27.8 million at December 31, 2006, and were
eliminated upon distribution during the first half of 2007.
RadioShack 401(k) Plan: The RadioShack 401(k) Plan (“401(k) Plan”), a defined contribution plan, was
amended and restated effective July 1, 2008, and allows a participant to defer, by payroll deductions, from
1% to 75% of their annual compensation, limited to certain annual maximums set by the Internal Revenue
Code. The amended 401(k) Plan also presently provides that our contribution to each participant’s account
maintained under the 401(k) Plan be an amount equal to 100% of the participant’s contributions up to 4%
of their annual compensation. This percentage contribution made by us is discretionary and may change
in the future. Our contributions go directly to the 401(k) Plan and are made in cash and invested
according to the investment elections made by the participant for their own contributions. Company
contributions to the 401(k) Plan were $6.6 million, $7.2 million and $8.0 million for 2009, 2008 and 2007,
respectively.
Supplemental Executive Retirement Plan: Prior to January 1, 2006, certain officers of the Company
were participants in RadioShack’s Salary Continuation Plan (“SCP”) or its Deferred Compensation Plan
(“DCP” and, together with the SCP, the “Plans”), which provided a defined benefit to be paid out over a
ten-year period upon retirement between the ages of 55 and 70. Participation in the Plans and the benefit
payments were based solely on the discretion and approval of the Management Development and
Compensation Committee of the Board of Directors, and the benefit payments did not bear any
relationship to a participant’s present compensation, final compensation or years of service. We accrued
benefit payments earned based on the provisions set forth by the MD&C for each individual person.
Based on the method by which the Plans were administered and because there was not a specific plan
governing the benefit payment calculation, the accounting and disclosure provisions of the FASB’s
accounting guidance for pensions were not previously required.