Memorex 2009 Annual Report Download - page 78

Note 11 — Employee Savings and Stock Ownership Plans
We sponsor a 401(k) retirement savings plan under which eligible United States employees may choose to save up
to 20 percent of eligible compensation on a pre-tax basis, subject to certain IRS limitations. From January 1 to March 31,
2009, we matched 100 percent of employee contributions up to the first three percent of eligible compensation plus
50 percent on the next two percent of eligible compensation. Beginning in April 2009 and as of December 31, 2009, we
matched 50 percent of employee contributions on the first three percent of eligible compensation and 25 percent on the
next two percent of eligible compensation in our stock. We also sponsor a variable compensation program in which we
may, at our discretion, contribute up to three percent of eligible employee compensation to employees’ 401(k) retirement
accounts, depending upon our performance. No contributions have been made under the variable compensation program
for the years ended 2009, 2008 or 2007.
We used shares of treasury stock to match employee 401(k) contributions for 2009, 2008 and 2007. Total expense
related to the use of shares of treasury stock to match employee 401(k) contributions was $1.3 million, $2.6 million and
$3.4 million in 2009, 2008 and 2007, respectively.
In November 2009, we determined it was appropriate to reinstate our 401(k) Plan matching contribution to the rate
applied prior to April 2009. The matching contribution effective January 1, 2010 will be 100 percent of employee
contributions up to the first three percent of eligible compensation plus 50 percent on the next two percent of eligible
compensation.
Note 12 — Stock-Based Compensation
We have stock-based compensation awards outstanding under five plans (collectively, the Stock Plans). We have
stock options outstanding under our 1996 Employee Stock Incentive Program (Employee Plan) and our 1996 Directors
Stock Compensation Program. We have stock options and restricted stock outstanding under our 2000 Stock Incentive
Plan (2000 Incentive Plan), our 2005 Stock Incentive Plan (2005 Incentive Plan) and our 2008 Stock Incentive Plan (2008
Incentive Plan). We also have restricted stock units outstanding under our 2005 Incentive Plan and our 2008 Incentive
Plan. No further shares are available for grant under the Employee Plan, Directors Plan, 2000 Incentive Plan or the 2005
Incentive Plan. Restricted stock granted and stock option awards exercised are issued from our treasury stock. The
purchase of treasury stock is discretionary and will be subject to determination by our Board of Directors each quarter
following its review of our financial performance and other factors.
The Employee Plan was approved and adopted by 3M Company on June 18, 1996, as our sole shareholder, and
became effective on July 1, 1996. The total number of shares of common stock that could have been issued or awarded
under the Employee Plan was not to exceed 6.0 million. The outstanding options are non-qualified, normally have a term
of ten years and generally became exercisable from one to five years after grant date. Exercise prices are equal to the fair
market value of our common stock on the date of grant. As a result of the approval and adoption of the 2000 Incentive
Plan in May 2000, no further shares are available for grant under the Employee Plan.
The Directors Plan was also approved and adopted by 3M Company, as our sole shareholder, and became effective
on July 1, 1996. The total number of shares of common stock that could have been issued or awarded under the Directors
Plan was not to exceed 0.8 million. The outstanding options are non-qualified, normally have a term of ten years and
generally became exercisable one year after grant date. Exercise prices are equal to the fair market value of our common
stock on the date of grant. As a result of the approval and adoption of the 2005 Incentive Plan in May 2005, no further
shares are available for grant under the Directors Plan.
The 2000 Incentive Plan was approved and adopted by our shareholders on May 16, 2000, and became effective
immediately. The total number of shares of common stock that could have been issued or awarded under the 2000
Incentive Plan was not to exceed 4.0 million. The outstanding options are non-qualified, normally have a term of seven to
ten years and generally became exercisable 25 percent per year beginning on the first anniversary of the grant date.
Exercise prices are equal to the fair market value of our common stock on the date of grant. As a result of the approval
and adoption of the 2005 Incentive Plan in May 2005, no further shares are available for grant under the 2000 Incentive
Plan.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)