Harman Kardon 2010 Annual Report Download - page 112

Harman International Industries, Incorporated and Subsidiaries
(Dollars in thousands, except per-share data and unless otherwise indicated)
Note 16 – Retirement Benefits
Plan Descriptions
Retirement savings plan
We provide a Retirement Savings Plan for certain employees in the United States. Under the plan,
employees may contribute up to 50 percent of their pretax compensation subject to certain limitations. Each
business unit will make a safe harbor non-elective contribution in an amount equal to three percent of a
participant’s eligible contribution. Each business unit may make a matching contribution of up to three percent
(50 percent on the first six percent of an employee’s tax-deferred contribution) and, upon approval of our Board
of Directors, a profit sharing contribution. Matching and profit sharing contributions vest at a rate of 25 percent
for each year of service with the employer, beginning with the second year of service. Effective January 1, 2009,
we suspended the matching and safe harbor non-elective contributions for these plans. The employer matching
contribution has been reinstated as of January 1, 2010. Approval for the profit sharing contribution is requested
from our Board of Directors at the end of each fiscal year. Management did not request approval for the profit
sharing contribution for the fiscal year ended June 30, 2009, therefore no amount has been accrued for fiscal year
2010. Expenses related to the Retirement Savings Plan for the years ended June 30, 2010 and 2008 were $3.7
million and $13.4 million, respectively. For the fiscal year ended June 30, 2009 income of $1.7 million was
recorded representing the matching and safe harbor non-elective contributions for these plans through January 1,
2009 offset by the fiscal year 2008 reversal of profit sharing accrual in September 2008, as the contribution was
not approved by our Board of Directors.
Pension benefits
We provide defined pension benefits to certain eligible employees. The measurement date used for
determining pension benefits is the last day of our fiscal year, June 30. We have certain business units in Europe
that maintain defined benefit pension plans for many of our current and former employees. The coverage
provided and the extent to which the retirees’ share in the cost of the program vary by business unit. Generally,
plan benefits are based on age, years of service and average compensation during the final years of service. In the
United States, we have a SERP that provides retirement, death and termination benefits, as defined in the SERP,
to certain key executives designated by our Board. The majority of our defined benefit plans do not have
contractual or legal statutes which specify minimum funding requirements. We are in compliance with all
existing contractual obligations and legal statutes. Our expenses related to the SERP for the years ended June 30,
2010, 2009 and 2008 were $7.4 million, $6.2 million and $7.1 million, respectively.
During fiscal year 2011, we expect to contribute amounts to the defined benefit pension plans necessary to
cover required disbursements. The benefits that we expect to pay in each fiscal year from 2011 to 2015 are $7.0
million, $7.3 million, $8.2 million, $8.4 million and $8.7 million, respectively. The aggregate benefits we expect
to pay in the five fiscal years from 2016 to 2020 are $47.2 million.
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