| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| Item 4: Plan Financial Statements prepared in accordance with the financial reporting requirements of ERISA | ||||||||
| EX-23.1 | ||||||||
| Item 4: | Plan Financial Statements prepared in accordance with the financial reporting requirements of ERISA. | |
| Weyerhaeuser Company Salaried 401(k) Plan (formerly the Weyerhaeuser Company Investment Growth Plan) statements of net assets available for benefits as of December 31, 2008 and 2007, and the related statement of changes in net assets available for benefits for the year ended December 31, 2008, together with report of Independent Registered Public Accounting Firm. | ||
| Exhibit: | Consent of Independent Registered Public Accounting Firm |
| WEYERHAEUSER COMPANY SALARIED 401(K) PLAN |
||||
| By: | /s/ John A. Hooper | |||
| John A. Hooper | ||||
| Chairman Administrative Committee | ||||
June 23, 2009 |
||
Date |
| 2008 | 2007 | |||||||
Assets: |
||||||||
Plan interest in the Weyerhaeuser Company 401(k) and
Performance Share Plan Trust: |
||||||||
Participant directed investments at fair value: |
||||||||
Weyerhaeuser Company Stock Fund |
$ | 165,555 | 347,258 | |||||
Shares of registered investment company funds: |
||||||||
Vanguard 500 Index Fund |
309,379 | 590,139 | ||||||
Vanguard Extended Market Index Fund |
113,999 | 233,568 | ||||||
Vanguard Prime Money Market Fund |
55,297 | 62,420 | ||||||
Vanguard Target Retirement 2005 Fund |
9,904 | 18,762 | ||||||
Vanguard Target Retirement 2015 Fund |
48,644 | 75,596 | ||||||
Vanguard Target Retirement 2025 Fund |
31,622 | 47,601 | ||||||
Vanguard Target Retirement 2035 Fund |
16,257 | 25,371 | ||||||
Vanguard Target Retirement 2045 Fund |
10,995 | 16,602 | ||||||
Vanguard Target Retirement Income Fund |
4,703 | 4,929 | ||||||
Vanguard Total Bond Market Index Fund |
74,924 | 66,349 | ||||||
Vanguard Total International Stock Index Fund |
87,272 | 216,392 | ||||||
Vanguard Wellesley Income Fund |
181,001 | 259,380 | ||||||
Weyerhaeuser Stable Value Fund |
325,641 | 353,133 | ||||||
Participant loans |
— | 34 | ||||||
Total investments |
1,435,193 | 2,317,534 | ||||||
Employer contributions receivable |
— | 1,350 | ||||||
Net assets reflecting all investments at fair value |
1,435,193 | 2,318,884 | ||||||
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts |
3,043 | (931 | ) | |||||
Net assets available for benefits |
$ | 1,438,236 | 2,317,953 | |||||
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Additions: |
||||
Contributions: |
||||
Employer matching |
$ | 34,035 | ||
Participant |
82,188 | |||
Total additions |
116,223 | |||
Deductions: |
||||
Net investment loss from the Weyerhaeuser Company
401(k) and
Performance Share Plan Trust |
617,223 | |||
Benefits paid to participants |
382,178 | |||
Total deductions |
999,401 | |||
Net decrease prior
to plan transfers |
(883,178 | ) | ||
Plan transfers, net |
3,461 | |||
Net decrease |
(879,717 | ) | ||
Net assets available for benefits: |
||||
Beginning of year |
2,317,953 | |||
End of year |
$ | 1,438,236 | ||
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| (1) | Description of the Plan | |
| The following description of the Weyerhaeuser Company Salaried 401(k) Plan (the Plan) provides only general information. Participants should refer to the summary plan description and plan document for a more complete description of the Plan’s provisions. Prior to January 1, 2008, the Plan’s legal name was the Weyerhaeuser Company Investment Growth Plan. |
| (a) | General | ||
| The Plan is a defined contribution plan and was established April 1, 1968. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended. | |||
| Any salaried employee of Weyerhaeuser Company (the Company) or of a participating subsidiary and certain hourly employees who are eligible for salaried benefits are eligible to participate in the Plan. The president of the Company designates participating subsidiaries from among the eligible domestic corporations of which the voting stock is owned by the Company and/or one of its other subsidiaries. No person covered by a collective bargaining agreement may participate unless such agreement expressly provides for participation. | |||
| Vanguard Fiduciary Trust Company acts as the trustee, recordkeeper, and investment manager for the Plan. Therefore, the Vanguard investment transactions qualify as party-in-interest and related party transactions. | |||
| (b) | Corporate Transactions | ||
| Effective August 4, 2008, the Company sold its Containerboard Packaging and Recycling business to International Paper Company. As a result of the sale, certain Plan participants became employees of International Paper Company and, as former employees of the Company, can elect to take distributions of their accounts in accordance with Plan provisions. | |||
| Effective March 7, 2007, the Company completed a transaction combining its Fine Paper business and related assets with Domtar Inc., forming Domtar Corporation (Domtar). Under the terms of the transaction, Company shareholders were allowed to voluntarily exchange shares of Company common stock for Domtar common stock (Domtar Stock). Domtar Stock was not available as an investment option under the Plan and no shares of Company common stock were exchanged by the Plan. In addition, as a result of the transaction, certain Plan participants became employees of Domtar on the transaction effective date. Accordingly, these participants, as former employees of the Company, can elect to take distributions of their accounts in accordance with Plan provisions. | |||
| (c) | Weyerhaeuser Company Stock Fund Dividend and Voting Rights | ||
| The portion of the Plan invested in the Weyerhaeuser Company Stock Fund is an Employee Stock Ownership Plan. Participants may elect to have any dividends due to them reinvested in the Weyerhaeuser Company Stock Fund or paid in cash. To the extent set forth by the terms of the Plan, participants may exercise voting rights by providing instructions to the trustee related to the number of whole shares of stock represented by the units of the Weyerhaeuser Company Stock Fund allocated to their accounts. Shares of stock for which the trustee does not receive instructions from |
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| (d) | Contributions | ||
| The Plan includes a qualified cash or deferred arrangement described in Section 401(k) of the Internal Revenue Code (IRC) that allows participants to designate any whole percent of their eligible compensation to be contributed to the Plan, subject to certain limitations imposed under the IRC. | |||
| Participant contributions may be suspended under certain circumstances, at the participant’s request or upon a hardship withdrawal. | |||
| The Plan provides for a matching contribution to be made by the Company. During 2008, the first 7% of eligible compensation designated by each participant as the participant’s contribution is matched by the Company at a rate of 70%. All employer matching contributions are initially invested in the Weyerhaeuser Company Stock Fund. Participants may transfer employer matching contributions at any time. | |||
| Performance share contributions under the Plan, if any, are determined annually by the Weyerhaeuser Company Board of Directors (the Board) in its sole and absolute discretion. Generally, such performance share contributions are based on measures established by the Board for this purpose and are stated as a percentage of eligible participants’ eligible pay. Performance share contributions (if any) are made to the following employee groups: |
| • | Employees of the Weyerhaeuser Real Estate Company (WRECO) and its subsidiaries, other than the President of WRECO and WRECO employees eligible for the WRECO Long-Term Incentive Plan, but including employees of Weyerhaeuser International, Inc. who are on foreign assignment on behalf of WRECO; and | ||
| • | All salaried hourly production employees of the Company. |
| (e) | Participant Accounts | ||
| An individual account is maintained for each plan participant to reflect his or her share of the Plan’s income and losses, participant contributions and employer contributions. Allocations of income and losses are based on the number of units of the various investment funds assigned to each participant’s account on a daily basis. | |||
| (f) | Vesting | ||
| Participants are fully vested in their contributions and earnings thereon. The interest of a participant in the employer contributions and earnings thereon becomes fully vested upon the earliest date of |
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| Percent | ||||
| Years of vesting service | vested | |||
Less than two years of service |
0 | % | ||
Two years of service |
20 | |||
Three years of service |
40 | |||
Four years of service |
60 | |||
Five years of service |
80 | |||
Six or more years of service |
100 | |||
| (g) | Investment Options | ||
| Participants are allowed to change their investment election for future contributions at any time. Participants have the option to invest up to 100% of their contributions, in 1% increments, in any of the fourteen investment options listed below: |
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| (h) | Valuation Frequency | ||
| Account balances are valued on a daily basis. | |||
| (i) | Payment of Benefits | ||
| Participant contributions made before 1983 and earnings thereon may be withdrawn at any time upon request. Participant contributions made after 1982 and amounts in the participant’s rollover portion of the account may be withdrawn for financial hardship subject to restrictions under the IRC and the Plan. Participant contributions may also be withdrawn after attaining age 591/2. The participant’s vested interest in his or her employer matching contribution, performance share contribution and rollover portions of the account may be withdrawn two full calendar years after the date of the contribution or rollover, after five years of service or after attaining age 591/2. In addition, a participant may elect to receive in cash any cash dividends paid with respect to units of the Weyerhaeuser Company Stock Fund allocated to the participant’s account or to direct payment to the participant’s account for reinvestment in the Weyerhaeuser Company Stock Fund. Additional distribution options (as described in the Plan) may be available to participants who participated in a plan that was merged into the Plan. | |||
| Participants who have terminated employment and whose vested account balance exceeds $5,000 shall receive a distribution of their entire interest in the Plan when they so elect or at age 65. Participants whose accounts are valued at $5,000 or less receive a distribution of their entire interest in the Plan at the time of termination. Terminated participants with balances less than $5,000 and more than $1,000 receive a distribution in the form of a rollover to an individual retirement account, unless the participants elect otherwise. The nonvested portions of the participants’ accounts are |
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| (j) | Participant Loans | ||
| New loans are not allowed by the Plan. Certain loans were transferred from other plans that were previously merged into the Plan. During 2008, all remaining loans were either fully repaid or deemed distributed. | |||
| (k) | Expenses of the Plan | ||
| The employer generally pays the costs of administering the Plan, including fees and expenses of the trustee, the recordkeeper and the external auditor. Brokerage fees, stock transfer taxes and other investment management fees directly incurred by the trustee in buying and selling any assets of each fund are paid by the trust out of such fund as a part of the cost of such assets, or as a reduction of the proceeds received from the sale of such assets. Participants are charged a 2% redemption fee for transfers from the Vanguard Total International Stock Index Fund (the International Fund) when the investment in the International Fund has been held for less than two months. The 2% fee is calculated on the amount transferred and is paid back into the International Fund. These fees, if any, are included as a component of net investment loss in the statement of changes in net assets available for benefits. |
| (2) | Summary of Accounting Policies |
| (a) | Basis of Accounting | ||
| The financial statements of the Plan are prepared under the accrual method of accounting in accordance with U.S. generally accepted accounting principles. | |||
| As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the FSP, the statements of net assets available for benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The statement of changes in net assets available for benefits is prepared on a contract value basis. See also Note 6. | |||
| (b) | Participation in the Master Trust and Unit Accounting | ||
| All of the Plan’s investments are held in the Weyerhaeuser Company 401(k) and Performance Share Plan Trust (the Master Trust) which was established to hold the investments of the Plan and other Weyerhaeuser Company 401(k) and Performance Share plans. As of December 31, 2008 and 2007, |
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| (c) | Income Recognition and Net Investment Loss from the Master Trust | ||
| Within the Master Trust, purchases and sales of securities are recorded on a trade-date basis. Interest income is accrued when earned. Dividends are recorded on the ex-dividend basis. The change in fair value of assets from one period to the next and realized gains and losses are recorded as net appreciation or depreciation in fair value of investments. Total investment income (loss) of the Master Trust as presented in Note 7 is allocated to each plan investing in the Master Trust based on the units of each fund held by the plan and plan specific participant loans. | |||
| (d) | Risks and Uncertainties | ||
| The Master Trust and Plan assets are invested in a variety of investments. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits. | |||
| (e) | Estimates | ||
| The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates. | |||
| (f) | Payment of Benefits | ||
| Benefits are recorded when paid. | |||
| (g) | Impact of New Accounting Standards and Interpretation | ||
| In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies only to fair value measurements already required or permitted by other accounting standards and does not impose requirements for additional fair value measures. SFAS No. 157 was issued to increase consistency and comparability in reporting fair values. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. | |||
| SFAS No. 157 includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs |
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| • | Level 1 — Inputs are unadjusted quoted prices in active markets for identical assets or liabilities. | ||
| • | Level 2 — Inputs are: |
| – | quoted prices for similar assets or liabilities in an active market; | ||
| – | quoted prices for identical or similar assets or liabilities in markets that are not active; | ||
| – | inputs other than quoted prices that are observable for the asset or liability and market-corroborated inputs which are derived principally from or corroborated by observable market data by correlation or other means. |
| • | Level 3 — Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable. |
| (3) | Plan Termination | |
| Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA and the IRC. In the event of plan termination, participants will become fully vested in their accounts. | ||
| (4) | Tax Status | |
| The Plan has received a favorable determination letter from the Internal Revenue Service stating that the Plan qualifies under Section 401(a) of the IRC. The Plan has subsequently been amended. Management believes the Plan is designed and is currently being operated in compliance with the applicable requirements of Section 401(a) of the IRC, and as a result, is exempt from federal income taxes under Section 501(a) of the IRC. Employees who participate in the Plan are subject to federal income tax on distributions from the Plan in accordance with the provisions of Section 402 of the IRC. |
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| (5) | Plan Transfers | |
| Plan transfers represent the net amount of participant account balances transferred during the year to the Plan from other plans within the Master Trust as a result of the participants changing employment within the Company and the related changes in their eligibility status. | ||
| (6) | Guaranteed Investment Contracts | |
| Fully benefit-responsive guaranteed investment contracts (GICs) and synthetic guaranteed investment contracts (Synthetic GICs) (the Contracts) included in the Weyerhaeuser Stable Value Fund are valued at contract value, which represents the principal balance of the Contracts, plus accrued interest at the stated contract rate, less payments received and contract charges by the insurance companies. The GICs are issued by a variety of insurance companies. The GIC issuers are contractually obligated to repay the principal and a specified interest rate that is guaranteed to the Plan through the Master Trust. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. The Synthetic GICs are investments that simulate the performance of a traditional GIC through the use of Vanguard fixed income common commingled trust funds and benefit-responsive wrapper contracts issued by insurance companies to provide market and cash flow protection at stated interest rates. The contract value of the Synthetic GICs held in the Master Trust is comprised of wrappers and common commingled trust funds which total $4.5 million and $374.5 million, respectively, as of December 31, 2008. The contract value of the Synthetic GICs held in the Master Trust was comprised of wrappers and common commingled trust funds which total $(2.7) million and $357.9 million, respectively, as of December 31, 2007. | ||
| The contracts do not permit the insurance companies to terminate the agreements prior to the scheduled maturity dates. There are no reserves against contract value for credit risk of the contract issuers or otherwise. | ||
| Certain events may limit the ability of the Plan to transact at contract value with the issuer. Such events include the following: (a) amendments to the plan documents (including complete or partial plan termination or merger with another plan); (b) changes to the Plan’s prohibition on competing investment options or deletion of equity wash provisions; (c) bankruptcy of the plan sponsor or other plan sponsor events (e.g. divestitures or spin-offs of a subsidiary) which cause a significant withdrawal from the Plan or (d) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The plan administrator does not believe that the occurrence of any such value event, which would limit the Plan’s ability to transact at contract value with participants is probable. | ||
| Under the terms of the Contracts, the crediting interest rates are determined quarterly based on the insurance companies’ applicable rate schedules. The aggregate average yield of the Contracts in the Master Trust for the years ended December 31, 2008 and 2007 was 3.3% and 4.7%, respectively. The aggregate average yield credited to participants in the plans in the Master Trust for the years ended December 31, 2008 and 2007 was 3.1% and 4.6%, respectively. |
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| (7) | Interest in Master Trust |
| (a) | Values of Investments Held by the Master Trust | ||
| At December 31, 2008 and 2007, the Plan’s interest in the net assets of the Master Trust was approximately 79% and 78%, respectively. The following table presents the values of investments held by the Master Trust as of December 31, 2008 and 2007: |
| December 31 | ||||||||
| 2008 | 2007 | |||||||
| (Dollar amounts in thousands) | ||||||||
Investments: |
||||||||
Investments in shares of registered investment
company funds and Company stock at fair value: |
||||||||
Weyerhaeuser Company Stock Fund including
cash equivalents of $2,029 and $1,669,
respectively |
$ | 213,849 | 473,264 | |||||
Vanguard 500 Index Fund |
392,469 | 760,117 | ||||||
Vanguard Extended Market Index Fund |
140,899 | 292,429 | ||||||
Vanguard Prime Money Market Fund |
68,969 | 77,543 | ||||||
Vanguard Target Retirement 2005 Fund |
11,305 | 22,402 | ||||||
Vanguard Target Retirement 2015 Fund |
57,917 | 91,134 | ||||||
Vanguard Target Retirement 2025 Fund |
38,161 | 56,678 | ||||||
Vanguard Target Retirement 2035 Fund |
19,492 | 30,135 | ||||||
Vanguard Target Retirement 2045 Fund |
12,390 | 19,245 | ||||||
Vanguard Target Retirement Income Fund |
6,252 | 6,512 | ||||||
Vanguard Total Bond Market Index Fund |
87,160 | 77,650 | ||||||
Vanguard Total International Stock Index Fund |
104,420 | 263,162 | ||||||
Vanguard Wellesley Income Fund |
217,986 | 316,549 | ||||||
Investments in Weyerhaeuser Stable Value Fund
at fair value: |
||||||||
Traditional guaranteed investment contracts |
42,945 | 69,823 | ||||||
Synthetic guaranteed investment contracts: |
||||||||
Common commingled trust funds |
370,008 | 360,585 | ||||||
Wrapper contracts |
228 | — | ||||||
Vanguard Prime Money Market Fund |
28,841 | 56,818 | ||||||
Pending trades and other |
(614 | ) | (1,008 | ) | ||||
Participant loans |
— | 36 | ||||||
Total investment at fair value |
1,812,677 | 2,973,074 | ||||||
Adjustment from fair value to contract value
for fully benefit—responsive investment
contracts |
4,126 | (1,283 | ) | |||||
Total investments |
$ | 1,816,803 | 2,971,791 | |||||
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| (b) | Investment Valuation and Interest in the Master Trust at Fair Value | ||
| The interest in the Master Trust at fair value includes the value of fund assets plus any accrued income. Investments in shares of registered investment company funds are reported at fair value based on quoted market prices. The fair value of the Weyerhaeuser Stable Value Fund is calculated by discounting the related cash flows based on the Ryan yield curve and the fair values of the underlying investments and the wrapper contracts. The Weyerhaeuser Company Stock Fund is valued at fair value based on its year-end unit closing price (comprised of year-end market price plus cash equivalent position held if any). Participant loans are valued at cost. | |||
| The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Master Trust and Plan believe valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. | |||
| Additional fair value information related to the investments held by the Master Trust as of December 31, 2008 is provided in the following table: |
| Fair Value Measurements for Master Trust at Decmeber 31, 2008 | ||||||||||||||||
| Quoted | Significant | |||||||||||||||
| Prices in | Other | Significant | ||||||||||||||
| Active | Observable | Unobservable | ||||||||||||||
| Markets | Inputs | Inputs | ||||||||||||||
| (Level 1) | (Level 2) | (Level 3) | Totals | |||||||||||||
| (Dollar amounts in thousands) | ||||||||||||||||
Registered
Investment Company Funds |
$ | 1,157,420 | — | — | 1,157,420 | |||||||||||
Weyerhaeuser
Company Stock Fund |
— | 213,849 | — | 213,849 | ||||||||||||
Weyerhaeuser
Stable Value Fund |
28,841 | 412,567 | — | 441,408 | ||||||||||||
Totals |
$ | 1,186,261 | 626,416 | — | 1,812,677 | |||||||||||
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| (c) | Investment Income (Loss) of the Master Trust | ||
| The following table presents the investment income (loss) of the Master Trust for the year ended December 31, 2008: |
| For the | ||||
| year ended | ||||
| December 31, | ||||
| 2008 | ||||
| (Dollar amounts | ||||
| in thousands) | ||||
Investment income (loss): |
||||
Net depreciation in fair value of investments: |
||||
Weyerhaeuser Company Stock Fund |
$ | (283,060 | ) | |
Vanguard 500 Index Fund |
(266,951 | ) | ||
Vanguard Extended Market Index Fund |
(102,300 | ) | ||
Vanguard Target Retirement 2005 Fund |
(3,481 | ) | ||
Vanguard Target Retirement 2015 Fund |
(22,739 | ) | ||
Vanguard Target Retirement 2025 Fund |
(18,565 | ) | ||
Vanguard Target Retirement 2035 Fund |
(11,135 | ) | ||
Vanguard Target Retirement 2045 Fund |
(6,863 | ) | ||
Vanguard Target Retirement Income Fund |
(1,266 | ) | ||
Vanguard Total Bond Market Index Fund |
(192 | ) | ||
Vanguard Total International Stock Index Fund |
(104,159 | ) | ||
Vanguard Wellesley Income Fund |
(45,420 | ) | ||
Dividend income |
62,501 | |||
Interest income |
20,145 | |||
Net investment loss |
$ | (783,485 | ) | |
| (8) | Subsequent Events |
| (a) | Plan Amendments | ||
| During 2009 and 2008, the Plan was amended as follows: |
| i) | Maximum Participant Deferral Contribution Percentage | ||
| Effective January 1, 2009, the maximum allowable deferral contribution percentage under the Plan changed from 100% to 75% of eligible pay, subject to certain limitations imposed under the IRC. | |||
| ii) | Qualified Default Investment Alternative | ||
| Effective January 1, 2009, if a Plan participant does not specify the investment fund in which to invest their deferral and/or rollover contributions, such contributions will be invested in the Plan’s qualified default investment alternative (QDIA) which is the Vanguard Target Retirement Fund closest to the participant’s retirement age, assuming a retirement age of 65. |
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| iii) | Eligible Pay for Contributions | ||
| Prior to January 1, 2009, eligible pay for purposes of calculating contributions to the Plan was defined as base pay as stated in the plan document. Effective January 1, 2009, the Plan’s definition of eligible pay is expanded to include regular compensation paid to the employee for services during the employee’s regular working hours, and compensation for services outside the employee’s regular working hours (such as overtime, shift differential, and hourly employee premiums), short term disability pay, holiday, vacation or other similar payments. As a result, most types of pay earned for performing job duties are recognized for purposes of calculating deferral and employer matching contributions. | |||
| iv) | Automatic Enrollment | ||
| Effective January 1, 2009, all eligible employees hired or rehired on or after January 1, 2009 are automatically enrolled in the Plan at a contribution rate of 3% of pay and the rate increases 1% per year until the maximum percentage of 7% of pay is reached, unless the employees elect otherwise. Employees may opt out within 60 days from the enrollment kit mailing date and may end Plan participation at any time. |
| (b) | Additional Investment Options | ||
| Effective January 1, 2009, the following five additional Vanguard Target Retirement Funds are added to the interest fund options: |
| (c) | Match Suspension | ||
| During April 2009, the Plan was amended and employer matching contributions became discretionary as determined by the Board. On April 15, 2009, the Compensation Committee of the Board approved the suspension of employer matching contributions under the Plan for all employees, effective for pay periods regularly scheduled to end on and after May 1, 2009. |
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