Invacare 2008 Annual Report Download - page 89

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Leases and Commitments—Continued
Future minimum operating and capital lease commitments as of December 31, 2008, are as follows (in
thousands):
Year Capital Leases Operating Leases
2009 ............................................................. $ 1,818 $21,067
2010 ............................................................. 1,501 14,100
2011 ............................................................. 1,448 8,696
2012 ............................................................. 1,353 4,504
2013 ............................................................. 1,334 3,125
Thereafter ........................................................ 7,500 4,964
Total future minimum lease payments .................................. 14,954 $56,456
Amounts representing interest ......................................... (4,381)
Present value of minimum lease payments ............................... $10,573
Retirement and Benefit Plans
Substantially all full-time salaried and hourly domestic employees are included in the Invacare Retirement
Savings Plan sponsored by the company. The company makes matching cash contributions up to 66.7% of
employees’ contributions up to 3% of compensation, quarterly contributions based upon 4% of qualified wages
and may make discretionary contributions to the domestic plans based on an annual resolution of the Board of
Directors.
The company sponsors a Deferred Compensation Plus Plan covering certain employees, which provides for
elective deferrals and the company retirement deferrals so that the total retirement deferrals equal amounts that
would have contributed to the company’s principal retirement plans if it were not for limitation imposed by
income tax regulations. Contribution expense for the above plans in 2008, 2007 and 2006 was $6,140,000,
$5,455,000, and $5,514,000, respectively.
The company also sponsors a non-qualified defined benefit Supplemental Executive Retirement Plan
(SERP) for certain key executives. The projected benefit obligation related to this unfunded plan was
$24,717,000 and $33,920,000 at December 31, 2008 and 2007, respectively, and the accumulated benefit
obligation was $24,323,000 and $22,842,000 at December 31, 2008 and 2007, respectively. The projected benefit
obligations were calculated using a salary increase of 4% at both December 31, 2008 and 2007. The assumed
discount rate for both 2008 and 2007 was 6.0% based upon the discount rate on high-quality fixed-income
investments without adjustment. The retirement age was 65 for both 2008 and 2007. Expense for the plan in
2008, 2007 and 2006 was $2,391,000, $3,031,000, and $2,861,000, respectively of which $1,294,000,
$1,520,000, and $1,407,000 was related to interest cost with the remaining portion related to service costs, prior
service costs and other gains/losses. Benefit payments in 2008, 2007 and 2006 were $424,000, $424,000 and
$952,000, respectively.
Effective December 31, 2008, the SERP was amended, in part to comply with IRS Section 409A. As a result
of the amendment, the plan became a defined benefit cash balance plan for all non-retirees and thus future
payments by the company will be made based upon a cash balance formula with interest credited at 6%. The plan
continues to be unfunded with individual hypothetical accounts maintained for each participant. Future company
expense will be equal to the hypothetical contributions made for each participant plus the crediting of interest. As
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