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67
year of plan participation or three years of Company service. The Company’s matching contributions from the July 11, 2008,
acquisition date through December 31, 2008, totaled $889,000. The CSK 401(k) plan was merged with the Company’s profit sharing
and savings plan effective January 1, 2009.
The Company has in effect a performance incentive plan for the Company’s senior management under which the Company awards
shares of restricted stock that vest equally over a three-year period and are held in escrow until such vesting has occurred. Shares are
forfeited when an employee ceases employment. A total of 650,000 shares of common stock have been authorized for issuance under
this plan. Shares awarded under this plan are valued based on the market price of the Company’s common stock on the date of grant
and compensation cost is recorded over the vesting period. The Company recorded $544,000 of compensation cost for this plan for
the year ended December 31, 2009, and recognized a corresponding income tax benefit of $212,000. The Company recorded
$494,000 of compensation cost for this plan for the year ended December 31, 2008, and recognized a corresponding income tax
benefit of $190,000. The Company recorded $459,000 of compensation cost for this plan for the year ended December 31, 2007, and
recognized a corresponding income tax benefit of $169,000. The total fair value of shares vested (at vest date) for the years ended
December 31, 2009, 2008 and 2007, were $657,000, $497,000 and $478,000, respectively. The remaining unrecognized
compensation cost related to unvested awards at December 31, 2009, was $618,000. The Company awarded 21,773 shares under this
plan in 2009 with an average grant date fair value of $33.36. The Company awarded 16,830 shares under this plan in 2008 with an
average grant date fair value of $26.96. The Company awarded 16,189 shares under this plan in 2007 with an average grant date fair
value of $34.02. Compensation cost for shares awarded is recognized over the three-year vesting period. Changes in the Company’s
restricted stock for the year ended December 31, 2009, were as follows:
Shares
Weighted-
Average
Grant Date
Fair Value
Non-vested at December 31, 2008 15,381 $ 29.13
Granted during the period 21,773 33.36
Vested during the period 17,244 31.57
Forfeited during the period (378) 31.34
Non-vested at December 31, 2009 19,532 31.65
At December 31, 2009, approximately 458,000 shares were reserved for future issuance under this plan.
Supplemental Retirement Plan Agreement
In conjunction with the CSK acquisition on July 11, 2008, the Company assumed a supplemental executive retirement plan agreement
with CSK’s former Chairman and Chief Executive Officer, Maynard Jenkins, which provides supplemental retirement benefits for a
period of 10 years beginning on the first anniversary of the effective date of termination of his employment. Mr. Jenkins retired on
August 15, 2007. The benefit amount in this agreement is fully vested and payable to Mr. Jenkins at a rate of $600,000 per annum.
The Company has accrued the entire present value of this obligation of approximately $4,000,000 as of the July 11, 2008 acquisition
date. Payments of $600,000 were made to Mr. Jenkins in 2009 and payments of $600,000 were made to Mr. Jenkins between July 11,
2008, the acquisition date, and December 31, 2008.