Supercuts 2008 Annual Report Download - page 107

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. BENEFIT PLANS (Continued)
remains unchanged from the prior agreement in place with the Vice Chairman). The Vice Chairman has agreed that during the period in which
payments are made, as provided in the agreement, he will not engage in any business competitive with the business conducted by the Company.
Additionally, the Company has a survivor benefit plan for the Vice Chairman's spouse, payable upon his death, at a rate of one half of his
deferred compensation benefit, adjusted for inflation, for the remaining life of his spouse. Estimated associated costs included in general and
administrative expenses on the Consolidated Statement of Operations totaled $0.7, $2.1 and $0.3 million for each of fiscal years 2008, 2007 and
2006, respectively. Related obligations totaled $6.5 and $6.6 million at June 30, 2008 and 2007, respectively, and are included in other
noncurrent liabilities in the Consolidated Balance Sheet. The Company intends to fund all future obligations under this agreement through
company-owned life insurance policies on the Vice Chairman. Cash values of these policies totaled $3.4 and $3.1 million at June 30, 2008 and
2007, respectively, and are included in other assets in the Consolidated Balance Sheet. The policy death benefits exceed the obligations under
this agreement.
In September 2006, the FASB issued SFAS No. 158. SFAS No. 158 amends SFAS No. 87, Employers' Accounting for Pensions (SFAS
No. 87), SFAS No. 88,
Employers' Accounting for Settlements and Curtailments of Defined Benefit Plans and for Termination Benefits (SFAS
No. 88), SFAS No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions (SFAS No. 106) and SFAS No. 132(R),
Employers' Disclosures about Pensions and Other Postretirement Benefits
(SFAS No. 132(R)). SFAS No. 158 requires balance sheet
recognition of the funded status for all pension and postretirement benefit plans as of the Company's fiscal year ended June 30, 2007. SFAS
No. 158 requires the impact of the initial adjustment be recorded as an adjustment of the ending balance of accumulated other comprehensive
income. Subsequent changes in funded status will be recognized as a component of other comprehensive income to the extent they have not yet
been recognized as a component of net periodic benefit cost pursuant to SFAS No. 87, SFAS No. 88 or SFAS No. 106. The Company has
unfunded deferred compensation contracts covering key executives based on their accomplishments within the Company which are subject to the
provisions of SFAS No. 158. The Company adopted the provisions of SFAS No. 158 as of June 30, 2007. The adoption of SFAS No. 158
increased long-term liabilities by $0.9 million, increased deferred tax assets by $0.3 million and decreased accumulated other comprehensive
income by $0.6 million on the Consolidated Balance Sheet. For the year ended June 30, 2008, an adjustment to the impact of the adoption of
SFAS No. 158 decreased long-term liabilities by $1.3 million, increased deferred tax liabilities by $0.5 million and increased accumulated other
comprehensive income by $0.8 million.
Compensation expense included in income before income taxes related to the aforementioned plans, excluding amounts paid for expenses
and administration of the plans, for the three years ended June 30, 2008, 2007 and 2006, included the following:
105
2008
2007
2006
(Dollars in thousands)
Profit sharing plan
$
3,373
$
3,305
$
2,650
Executive Profit Sharing Plan
497
491
389
ESPP
711
714
689
FSPP
18
11
16
Deferred compensation contracts
3,122
6,107
2,755