American Home Shield 2011 Annual Report Download - page 102

Table of Contents
Notes to the Consolidated Financial Statements (Continued)
Note 10. Related Party Transactions (Continued)
fees related to these agreements in each of the years ended December 31, 2011, 2010 and 2009 of $1.25 million, which is included in Selling and
administrative expenses in the Consolidated Statements of Operations. As of December 22, 2011, Holdings purchased from BAS 7.5 million shares of capital
stock of Holdings. Effective January 1, 2012, the annual management fee payable to BAS was reduced to $0.25 million.
In 2008 and 2009, Holdings completed open market purchases totaling $65.0 million in face value of the 2015 Notes for a cost of $21.4 million. On
December 21, 2011, the Company purchased from Holdings and retired $65.0 million in face value of the 2015 Notes for an aggregate purchase price of
$68.0 million, which included payment of accrued interest of $3.0 million. During the years ended December 31, 2011, 2010 and 2009, the Company
recorded interest expense of $6.8 million, $7.0 million and $6.9 million, respectively, related to 2015 Notes held by Holdings. During the years ended
December 31, 2011, 2010 and 2009, the Company paid interest to Holdings in the amount of $10.0 million, $7.0 million and $6.5 million, respectively.
Interest accrued by the Company and payable to Holdings as of December 31, 2010 amounted to $3.2 million. As a result of the purchase of the 2015 Notes
from Holdings, the Company did not have interest payable to Holdings as of December 31, 2011.
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. 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 $15.7 million,
$13.9 million and $12.0 million for the years ended December 31, 2011, 2010 and 2009, respectively.
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