American Home Shield 2010 Annual Report Download - page 93

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 10. Related Party Transactions (Continued)
beginning in the fourth quarter of 2010, the consulting fee otherwise payable to Citigroup became payable to StepStone.
Between the Merger and December 31, 2010, Holdings completed open market purchases totaling $65.0 million in face value of the Permanent Notes for
a cost of $21.4 million. The debt acquired by Holdings has not been retired, and the Company has continued to pay interest in accordance with the terms of
the debt. During the years ended December 31, 2010, 2009 and 2008, the Company recorded interest expense of $7.0 million, $6.9 million and $0.4 million,
respectively, related to Permanent Notes held by Holdings. During the years ended December 31, 2010 and 2009, the Company made cash payments to
Holdings in the amount of $7.0 million and $6.5 million, respectively. There were no cash payments made by the Company to Holdings in 2008. Interest
accrued by the Company and payable to Holdings as of December 31, 2010 and 2009 amounted to $3.2 million.
Note 11. Employee Benefit Plans
Effective January 2, 2007, the Company approved a long-term incentive plan (the "LTIP") designed to reward certain employees based on the
accumulated three-year Company financial performance against pre-tax income and revenue goals. Pursuant to the LTIP, the awards would be paid out in
cash at the end of a three-year performance period, if certain performance measures were achieved. The costs of the awards were recognized over the
performance period and were included in selling and administrative expenses in the Consolidated Statements of Operations. Compensation expense related to
the LTIP was $1.7 million for the year ended December 31, 2008. During 2009, the Company determined that the three year financial performance measures
had not been achieved and reversed reserves related to the Plan in the amount of $4.4 million. The LTIP was terminated as of December 31, 2009.
Discretionary contributions to qualified profit sharing and non-qualified deferred compensation plans were made in the amount of $15.2 million,
$13.1 million and $14.0 million for the years ended December 31, 2010, 2009 and 2008, respectively.
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