Audiovox 2009 Annual Report Download - page 104

Download and view the complete annual report

Please find page 104 of the 2009 Audiovox annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 139

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139

Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements
February 28, 2009
(Dollars in thousands, except share and per share data)
e) Deferred Compensation Plan
Effective December 1, 1999, the Company adopted a Deferred Compensation Plan (the Plan) for a select group of
management. The Plan is intended to provide certain executives with supplemental retirement benefits as well as to
permit the deferral of more of their compensation than they are permitted to defer under the Profit Sharing and 401(k)
Plan. The Plan provides for a matching contribution equal to 25% of the employee deferrals up to $20. As of February 1,
2008, the Company has temporarily suspended all matching contributions to contain operating expenses until economic
conditions improve. The Plan is not intended to be a qualified plan under the provisions of the Internal Revenue Code.
All compensation deferred under the Plan is held by the Company in an investment trust which is considered an asset of
the Company. The Company has the option of amending or terminating the Plan at any time.
The investments, which amounted to $2,559 and $4,406 at February 28, 2009 and February 29, 2008, respectively, have
been classified as long-term marketable securities and are included in investment securities on the accompanying
consolidated balance sheets and a corresponding deferred compensation liability is reflected as a long-term liability.
Unrealized gains and losses on the marketable securities and corresponding deferred compensation liability net to zero in
the accompanying consolidated statements of operations.
11) Lease Obligations
During 1998, the Company entered into a 30-year capital lease for a building with its principal stockholder and current
chairman, which was the headquarters of the discontinued Cellular operation. Payments on the capital lease were based upon
the construction costs of the building and the then-current interest rates. The effective interest rate on the capital lease
obligation is 8%. This lease was refinanced in December 2006, which resulted in a $161 reduction to the capital lease
obligation and corresponding asset, and expires on November 30, 2026. On November 1, 2004, in connection with the sale
of the Cellular business, the Company entered into an agreement to sub-lease the building to UTStarcom ("UTSI") for
monthly payments of $46 through October 31, 2009.
At February 28, 2009, the Company was obligated under non-cancelable capital and operating leases for equipment and
warehouse facilities for minimum annual rental payments as follows:
Capital Operating
Lease Leases
2010 $ 521 $ 4,757
2011 521 3,649
2012 535 3,299
2013 574 2,609
2014 574 2,292
Thereafter 8,203 15,827
Total minimum lease payments 10,928 $ 32,433
Less: minimum sublease income 368
Net 10,560
Less: amount representing interest 4,953
Present value of net minimum lease payments 5,607
Less: current installments included in accrued expenses and other current liabilities 76
Long-term capital obligation $ 5,531
Rental expense for the above-mentioned operating lease agreements and other leases on a month-to-month basis
approximated $2,412, $3,138 and $2,319 for the years ended February 28, 2009, February 29, 2008 and February 28, 2007,
respectively.
72
Source: AUDIOVOX CORP, 10-K, May 14, 2009 Powered by Morningstar® Document Research℠