Audiovox 2010 Annual Report Download - page 94

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Audiovox Corporation and Subsidiaries
Notes to Consolidated Financial Statements, continued
February 28, 2010
(Dollars in thousands, except share and per share data)
b) Employee Stock Purchase Plan
In April 2000, the stockholders approved the 2000 Employee Stock Purchase Plan of up to 1,000,000 shares. The stock
purchase plan provides eligible employees an opportunity to purchase shares of the Company's Class A common stock
through payroll deductions at a minimum of 2% and a maximum of 15% of base salary compensation. Amounts withheld
are used to purchase Class A common stock on the open market. The cost to the employee for the shares is equal to 85%
of the fair market value of the shares on or about the quarterly purchase date (December 31, March 31, June 30 or
September 30). The Company bears the cost of the remaining 15% of the fair market value of the shares as well as any
broker fees. Effective March 1, 2008, the Employee Stock Purchase Plan was terminated.
The Company's employee stock purchase plan is a non-compensatory plan, and the related expense is recorded in general
and administrative expenses in the consolidated statements of operations.
c) Profit Sharing Plans/ 401(k) Plan
The Company has established two non-contributory employee profit sharing plans for the benefit of its eligible
employees in the United States and Canada. The plans are administered by trustees appointed by the Company. No
contributions were made during the years ended February 28, 2010, February 28, 2009 and February 29, 2008.
Contributions required by law to be made for eligible employees in Canada were not material for all periods presented.
The Company also has a 401(k) plan for eligible employees. The Company matches a portion of the participant's
contributions after three months of service under a predetermined formula based on the participant's contribution level.
As of February 1, 2008, the Company has temporarily suspended all matching contributions to contain operating
expenses until economic conditions improve. The Company's contributions were $239, $848 and $749 for the years
ended February 28, 2010, February 28, 2009 and February 29, 2008, respectively. Shares of the Company's Common
Stock are not an investment option in the Savings Plan and the Company does not use such shares to match participants'
contributions.
d) Cash Bonus Profit Sharing Plan
During Fiscal 2009, the Board of Directors authorized a Cash Bonus Profit Sharing Plan that allows the Company to
make profit sharing contributions for the benefit of eligible employees, for any fiscal year based on a pre-determined
formula on the Company's pre-tax profits. The size of the contribution is dependent upon the performance of the
Company. A participant’s share of the contribution is determined pursuant to the participant’s eligible wages for the
fiscal year as a percentage of total eligible wages for all participants. The Company did not make a cash bonus profit
sharing contribution for the year ended February 28, 2009 due to the Company’s pre-tax loss for the year. For Fiscal
2010, the Company elected to pay back previous temporary salary reductions to all employees below the level of vice
president in lieu of a contribution to the Profit Sharing Plan.
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 $3,158 and $2,559 at February 28, 2010 and February 28, 2009, 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.
64
Source: AUDIOVOX CORP, 10-K, May 14, 2010 Powered by Morningstar® Document Research℠