F-16
L I L L I A N V E R N O N
9.
Employee Benefit Plans--(continued)
contributions at all times, and become fully vested in the employer matching contribution after
two years of service. The Company's matching contributions to the plan for fiscal 2002, 2001 and
2000 were $472,000, $529,000, and $479,000, respectively.
The Company has deferred compensation agreements to provide additional retirement benefits
for certain principal stockholders of the Company. The deferred compensation agreements also
provide for death benefits to be paid to each party's beneficiary. The Company has purchased
life insurance policies to fund, in part, the payment of these benefits. Amounts expensed in
connection with these agreements were $1,143,000 in fiscal 2002, $817,000 in fiscal 2001 and
$930,000 in fiscal 2000.
10.
Stock Compensation Plans
At February 23, 2002, the Company had three stock-based compensation plans, which are
described below. The Company applies APB Opinion 25 in accounting for its stock
compensation plans. Accordingly, no compensation cost has been recognized for its non-
qualified stock options granted and for shares issued through its Employee Stock Purchase Plan.
If compensation cost for the Company's non-qualified stock options issued and shares
purchased through its stock purchase plan had been determined based on the fair value at the
grant dates for awards under those plans consistent with the requirements of Statement of
Financial Accounting Standards No. 123, the Company's net income (loss) and earnings (loss)
per share would have been equal to the pro forma amounts indicated below (dollars in
thousands, except per share amounts):
Fiscal Years Ended
February 23,
2002
February 24,
2001
February 26,
2000
Net income (loss) . . . . . . . . . . . . . . .
As reported
$(9,089)
$(1,378)
$6,289
Pro forma
$(9,498)
$(1,780)
$5,892
Basic and Diluted earnings (loss) . .
As reported
$ (1.08)
$ (0.16)
$ 0.69
per share
Pro forma
$ (1.13)
$ (0.20)
$ 0.65
The Company has a 1997 Performance Unit, Restricted Stock, Non-Qualified Option and
Incentive Stock Option Plan, and a total of 2,275,000 shares of common stock have been
reserved for issuance thereunder. The Company has granted non-qualified stock options to
employees. Such options have been granted at market value, vest within three years from the
date of grant and expire within ten years from the date of grant.
The Company also has a 1997 Stock Option Plan for Non-Employee Directors, and has reserved
a total of 350,000 shares of common stock for issuance thereunder. The Company has granted
non-qualified stock options to its non-employee Directors both pursuant to the Plan and outside
the Plan. These options are granted at market value, vest one year from the date of grant and
expire within ten years from the date of grant.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
