- Annual Report of Employee Stock Plans (11-K)
28 Giugno 2010 - 11:11PM
Edgar (US Regulatory)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS AND SIMILAR PLANS PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
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þ
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ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2009
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
Commission file number 1-9247
A. Full title of the plan and the address of the plan, if different from that of the issuer named
below:
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
CA, Inc., One CA Plaza, Islandia, New York 11749
Report of Independent Registered Public Accounting Firm
CA Savings Harvest Plan Committee
CA Savings Harvest Plan:
We have audited the accompanying statements of net assets available for benefits of CA Savings
Harvest Plan (the Plan) as of December 31, 2009 and March 30, 2009, and the related statements of
changes in net assets available for benefits for the plan years then
ended. These financial statements are the responsibility of the Plans management.
Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2009 and March 30,
2009, and the changes in net assets available for benefits for the
plan years then ended and in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements
taken as a whole. The accompanying supplemental schedule H, line 4i schedule of assets (held at
end of year) as of December 31, 2009 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is supplementary information required by the
Department of Labors Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the
Plans management. The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
New York, New York
June 28, 2010
CA SAVINGS HARVEST PLAN
Statements of Net Assets Available for Benefits
December 31, 2009 and March 30, 2009
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12/31/2009
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03/30/2009
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Assets:
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Investments
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Mutual funds
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$
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800,432,567
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$
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602,512,772
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Common Collective Trusts
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81,244,054
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46,917,345
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ESOP Stock Fund
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132,291,194
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90,540,277
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Participant loans
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15,954,013
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14,149,790
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Total investments
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1,029,921,828
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754,120,184
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Contributions receivable:
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Employer
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24,919,189
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24,119,451
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Participant
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39,823
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2,581,252
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Total contributions receivable
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24,959,012
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26,700,703
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ERISA Account Credit receivable
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53,623
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Total assets
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1,054,880,840
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780,874,510
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Liabilities:
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Administrative fees payable
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166,543
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130,575
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Net assets available for benefits
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$
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1,054,714,297
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$
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780,743,935
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See accompanying notes to financial statements.
CA SAVINGS HARVEST PLAN
Statements of Changes in Net Assets Available for Benefits
Plan Years ended December 31, 2009 and March 30, 2009
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12/31/2009
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03/30/2009
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Additions to net assets available for benefits:
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Investment income/(loss):
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Net appreciation/(depreciation) in fair value of investments
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$
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219,379,605
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$
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(303,414,225
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Dividend income
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11,232,283
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22,811,707
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Participant loan interest
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711,803
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1,059,413
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Net investment gain/(loss)
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231,323,690
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(279,543,105
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Contributions:
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Participants
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51,150,097
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66,930,067
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Employer
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35,461,192
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36,270,445
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Total contributions
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86,611,289
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103,200,512
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ERISA Account Credit
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238,336
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266,817
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Total additions/(reductions)
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318,173,315
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(176,075,776
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Deductions from net assets available for benefits:
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Benefits paid to participants
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43,575,181
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73,486,201
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Administrative expenses
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627,772
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514,273
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Total deductions
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44,202,953
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74,000,474
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Net increase/(decrease) in plan assets
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273,970,362
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(250,076,250
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Net assets available for benefits at beginning of year
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780,743,935
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1,030,820,185
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Net assets available for benefits at end of year
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$
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1,054,714,297
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$
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780,743,935
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See accompanying notes to financial statements.
CA SAVINGS HARVEST PLAN
Notes to Financial Statements
December 31, 2009 and March 30, 2009
(1)
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Description of the Plan
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The following description of the CA Savings Harvest Plan (the Plan) provides only general
information. Participants should refer to the plan document for a more complete description of
the Plans provisions.
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(a)
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General
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The Plan is a defined contribution plan covering all eligible salaried U.S. employees of
CA, Inc. (the Company). The fiscal year end of the Plan was March 30 through March 30,
2009, and thereafter is December 31. The period from March 31, 2009 to December 31, 2009 is referred to herein as the plan year ended December 31, 2009.
Employees are eligible to participate in the Plan
with respect to pre-tax and after-tax contributions effective on their hire date.
Eligibility with respect to employer matching and discretionary contributions occurs in
the month following completion of one full year of service. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
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The Plan is administered by the CA Savings Harvest Plan Committee (Plan Committee), which
consists of employees of the Company. The trustee of the Plan is Fidelity Management
Trust Company.
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(b)
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Contributions
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Plan participants may elect to contribute a percentage of their base compensation ranging
from 2% to 20%. Each participant may change this election at any time.
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To comply with the applicable Internal Revenue Code (IRC) provision, pre-tax
contributions elected by any participant may not exceed $16,500 for the calendar year
ended December 31, 2009. The Plan also allows participants age 50 and over to make an
extra catch-up contribution on a pre-tax basis, which may not exceed $5,500 for the
calendar year ended December 31, 2009. Participants may also contribute on an after-tax
basis up to the IRS limits. The Plan also contains a non-leveraged employee stock ownership plan (ESOP)
feature. The ESOP Stock Fund consists of the common stock of the Company.
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For eligible participants, the Company makes a matching contribution to the Plan on
behalf of each participant equal to 50% of such participants contribution up to a
maximum of 2.5% of the participants base compensation (contributions are subject to
certain IRC limitations). The matching contributions are allocated in the same manner as
participant contributions. The total matching contribution for the plan year ended
December 31, 2009 was $10,747,420 of which $497,507 was funded from plan forfeitures.
The total matching contribution for the plan year ended March 30, 2009 was $14,039,135,
of which $1,300,211 was funded from plan forfeitures. The Company
also made a qualified non-elective (QNEC) contribution to the Plan
for the plan year ended December 31, 2009 of $298,460.
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In addition to its matching contribution, the Company may make a discretionary
contribution to the Plan on behalf of eligible participants in an amount that the board
of directors of the Company may, in its sole discretion, determine. The discretionary
contribution for the plan year ended December 31, 2009 was $24,912,819, which was paid in
the form of 1,265,895 shares of common stock of the Company. The discretionary contribution is
allocated to each eligible participant who is an employee of the Company on December 31
of that year, generally in the same ratio that the participants base compensation for
the plan year bears to the base compensation of all participants for such plan year. The
discretionary contribution for the plan year ended December 31, 2009 was allocated
directly to the ESOP Stock Fund and funded into each
participants account on May 27, 2010.
Subsequent to this initial allocation, the participants of the Plan have the ability to
re-direct these investments into the other investment options. The discretionary
contribution for the plan year ended March 30, 2009 was $23,531,521, which was paid in
the form of 1,343,890 shares of common stock of the Company.
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(c)
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Vesting
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Participants are immediately vested in their elective contributions. The matching and
discretionary contributions made by the Company and earnings thereon
vest as follows as of March 31, 2008 and thereafter:
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Percent vested
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After years of service
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0%
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Less than 1
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33%
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1
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66%
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2
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100%
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3
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In addition, 100% vesting occurs upon death or total disability of a participant, upon
attainment of normal retirement age, or upon termination of the Plan.
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Prior to March 31, 2008, matching and discretionary contributions vested according
to one of the following two vesting schedules:
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Percent vested with respect to portion of
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Percent vested with respect to portion of
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account attributable to matching and
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account attributable to matching and
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discretionary contributions made for Plan
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discretionary contributions made for Plan
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years beginning on or after March 31,
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years ending prior to March 31, 2002
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2002 and prior to March 31, 2008
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After years of service
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0%
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0%
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Less than 1
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0%
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0%
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1
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0%
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20%
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2
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20%
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40%
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3
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40%
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60%
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4
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60%
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80%
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5
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80%
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100%
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6
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100%
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100%
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7
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(d)
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Participant Accounts
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A separate account is established and maintained in the name of each participant and
reflects the participants balance invested therein. Such balance includes contributions,
earnings and losses, and if applicable, expenses, allocated to each participants
account. Allocation of earnings, losses, and expenses is based upon the percentage
investment that each participants account balance bears to the total of all participant
account balances.
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(e)
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Investment Options
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The assets of the Plan are held in custody by Fidelity Management Trust Company. As of
December 31, 2009, participants were able to invest in any of the following investment
fund options:
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Fidelity Institutional Money Market Portfolio
invests in the highest-quality U.S.
dollar denominated money market securities of domestic and foreign issuers, U.S.
Government securities, and repurchase agreements.
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PIMCO Total Return Institutional Fund
invests in all types of bonds, including U.S.
Government, corporate, mortgage and foreign and maintains an average portfolio duration
of three to six years (approximately equal to an average maturity of five to twelve
years) while also investing in shorter or longer maturity bonds.
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Fidelity Puritan Fund
invests approximately 60% of its assets in stocks and other
equity securities and the remainder in bonds and other debt securities.
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Dodge and Cox Stock Fund
invests at least 80% of its assets in a broadly diversified
portfolio of common stocks.
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Pyramis Large Cap Core Commingled Pool
a unitized fund option that invests in
securities that have sustainable competitive advantages in their respective industries or
in market leaders expected to sustain strong earnings growth in their respective markets.
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Vanguard Institutional Index Fund
employing passive management, this fund invests
substantially all of its assets in the common stocks that make up the Standard and Poors
500 Index.
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American Funds Growth Fund of America R5
invests primarily in common stocks.
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Artisan Mid Cap Fund
invests primarily in a diversified portfolio of stocks of
mid-sized U.S. Companies that the investment manager identifies as well positioned for
long term growth, reasonably priced by the market and at the early stage in their profit
cycle.
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Fidelity Low Priced Stock Fund
invests at least 80% of its assets in what the
investment manager believes to be low-priced stocks.
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Fidelity Contra Fund
invests in securities of domestic and foreign issuers whose value
the funds manager believes is not fully recognized by the public. The fund may invest
in growth or value stocks, or both.
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Fidelity Small Cap Stock Fund
invests at least 80% of its assets in common stocks of
companies with small market capitalizations.
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Artisan Mid Cap Value Fund
invests primarily in a diversified portfolio of stocks of
medium sized U.S. companies that Artisan believes are undervalued, in a solid financial
condition and provide a controlled level of risk.
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Fidelity Diversified International Fund
primarily invests in common stocks of foreign
securities.
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American Beacon Small Cap Value Fund
invests at least 80% of its assets in equity
securities of U.S. companies with market capitalization of $3.0 billion or less at the
time of investment.
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ESOP Stock Fund
invests solely in the common stock of the Company.
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Pyramis Index Lifecycle Commingled Pools (2000, 2005, 2010, 2015, 2020, 2025, 2030, 2035,
2040, 2045, 2050)
these are not mutual funds; they are asset allocation commingled
pools of the Pyramis Group Trust for Employee Benefit Plans that is managed by Pyramis
Global Advisors Trust Company (PGTAC). They seek total return until the Pools target
retirement year. They invest in a diversified portfolio of equity index, fixed income
index and / or short term products.
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Of the Investment options listed above, the Fidelity ContraFund replaced the Fidelity
Magellan Fund on August 3, 2009.
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Participants may direct contributions or transfer their current investment balances
between funds on a daily basis.
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The Fidelity Low Priced Stock Fund was closed to all new investors effective July 30,
2004. Participants who had a position in the fund on July 30, 2004 were able to continue
to invest in the fund. Effective May 13, 2008, the fund was re-opened for institutional
investors, including all Plan participants, but remains closed to new retail investors.
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(f)
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Payment of Benefits
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The Plan provides for benefit distributions to plan participants or their beneficiaries
upon the participants retirement, termination of employment, total disability or death.
Any participant may apply to withdraw all or part of his/her vested account balance
subject to specific hardship withdrawal criteria in the Plan.
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(g)
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Participant Loans
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Any participant may take a loan from his/her account once certain provisions of the Plan
have been met. Upon the death, retirement or termination of employment of the
participant, the Plan may deduct the total unpaid balance or any portion thereof from any
payment or distribution to which the participant or his/her beneficiaries may be
entitled. Interest rates on loans are fixed based on the prevailing market rate (prime
rate plus 1%) when the application for the loan is submitted. The interest rate on plan
loans at December 31, 2009 was 4.25%. All loans are being repaid in equal semimonthly
installments, generally through payroll deductions and extend from periods of one to five
years. Certain loans that were transferred from other plans had terms in excess of five
years as they were for purchases of principal residences. Loans outstanding as of
December 31, 2009 and March 30, 2009 bore interest ranging
from 4.25% to 9.75%, and the
terms range from 1 to 20 years. Participant loan fees, which are included in
administrative expenses on the accompanying statements of changes in net assets available
for benefits, are borne by the participant and amounted to $26,787 and $34,934 for the
plan years ended December 31, 2009 and March 30, 2009, respectively.
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(h)
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Administrative Expenses
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Administrative expenses consist of participant fees, including loan fees, and costs of
recordkeeping and administration.
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(i)
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Forfeited Accounts
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When participants leave the Company, the unvested portion of their Employer Contribution
Account (Matching and Discretionary) will be forfeited as of the earlier of the date they
receive a distribution of their vested account or the date they have five consecutive one
year Breaks-in-Service. At December 31, 2009 and March 30, 2009 forfeited non-vested
accounts totaled $758,181 and $321,463 respectively, and are available to fund future
company contributions and to pay administrative expenses of the Plan as noted above.
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(j)
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ERISA Account
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In 2009, Fidelity Investments and the Plan entered into a revenue sharing arrangement
whereby a portion of the revenue earned by Fidelity Investments from certain funds is
passed through to the Plan for payment of permitted Plan expenses. To facilitate the
reimbursement of investment fees and the payment of plan administrative expenses, the
Company created the ERISA reimbursement account under the Plan. The ERISA reimbursement
account is a cash account within the Plan, similar in design to forfeiture accounts, and
is used to record keep the redistribution of plan-generated fund revenue and expenses
that exceed the costs associated with plan administration.
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When the Plan investments pay out revenue-sharing above and beyond what is needed to
offset the current quarters plan administration fees, the amount exceeding the current
quarters fee is deposited in the ERISA reimbursement account, and is available for
payment of future Plan expenses.
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(k)
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Plan Termination
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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. In the event of termination of the Plan, participants will
become 100% vested in their accounts.
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(2)
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Summary of Significant Accounting Policies
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The accompanying financial statements of the Plan have been prepared in accordance with U.S.
generally accepted accounting principles. The more significant accounting policies followed by
the Plan are as follows:
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(a)
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Basis of Presentation
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The accompanying financial statements have been prepared on the accrual method of
accounting.
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(b)
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New Accounting Pronouncements
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On March 31, 2009 the Plan adopted the provisions of Accounting Standards Codification
(ASC) 820,
Investments in Certain Entities That Calculate Net Assets Value per Share (or
Its Equivalent)
for common collective trusts
that do not have
readily determinable fair values. This guidance allows for the
estimation of the fair value of
investments in investment companies for which the investment does not have a readily
determinable fair value using net asset value per share or its equivalent, as reported by
the investment managers.
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Most investments classified in Levels 2 and 3 consist of shares or units in investment
funds as opposed to direct interests in the funds underlying holdings, which may be
marketable. Because the net asset value reported by each fund is used as a practical
expedient to estimate fair value of the Plans interest therein, its classification in
Level 2 or 3 is based on the Plans ability to redeem its interest at or near December
31, 2009. If the interest can be redeemed in the near term, the investment is classified
as Level 2. The classification of investments in the fair value hierarchy is not
necessarily an indication of the risks, liquidity, or degree of difficulty in estimating
the fair value of each investments underlying assets and liabilities.
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(c)
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Investments Valuation and Income Recognition
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Investments in mutual funds and the ESOP Stock Fund are stated at fair value based upon
quoted prices in published sources. Participant loans are shown at their amortized cost
which approximates fair value using a discounted cash flow model. Commingled Pooled Funds
(Collective Trusts) are stated at fair value based on the net asset value (NAV) of the
publicly traded stocks and mutual funds that make up the pooled investments. They are
valued independently by the investment managers; however, the daily prices are not
published in public sources similar to mutual funds.
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Purchases and sales of securities are recorded on a trade-date basis. Dividend income is
recorded on the ex-dividend date and interest is recorded when earned.
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(d)
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Payments of Benefits
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Benefits to participants or their beneficiaries are recorded when paid.
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(e)
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Risks and Uncertainties
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The Plan may invest in various types of investment securities. Investment securities are
exposed to various risks, such as interest rate, market, and/or credit risks. Due to the
level of risk associated with certain investment securities, it is at least reasonably
possible that changes in the values of investment securities will occur in the near term
and that such changes could materially affect participants account balances and the
amounts reported in the statements of net assets available for benefits. At December 31,
2009 and March 30, 2009 approximately 12.54% and 11.60% respectively, of the
Plans net assets were invested in the common stock of the Company. The underlying value
of the common stock of the Company is entirely dependent upon the performance of the
Company and the markets evaluation of such performance.
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The Plan invests indirectly in securities with contractual cash flows, such as asset
backed securities, collateralized mortgage obligations and commercial mortgage backed
securities, including securities backed by subprime mortgage loans. The value, liquidity
and related income of these securities are sensitive to changes in economic conditions,
including real estate value, delinquencies or defaults, or both, and may be adversely
affected by shifts in the markets perception of the issuers and changes in interest
rates.
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(f)
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Use of 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, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those estimates and
assumptions.
|
(3)
|
|
Investments
|
|
|
|
The following individual investments exceeded 5% of the Plans assets available for benefits
at December 31, 2009 and March 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2009
|
|
03/30/2009
|
Mutual funds:
|
|
|
|
|
|
|
|
|
Fidelity Contra Fund
|
|
$
|
63,521,029
|
|
|
$
|
*
|
|
Fidelity Institutional Money Market Portfolio
|
|
|
193,540,796
|
|
|
|
206,484,799
|
|
Fidelity Puritan Fund
|
|
|
68,013,052
|
|
|
|
51,231,451
|
|
PIMCO Total Return Institutional Fund
|
|
|
81,849,999
|
|
|
|
59,570,370
|
|
Dodge and Cox Stock Fund
|
|
|
62,436,866
|
|
|
|
*
|
|
Fidelity Magellan Fund
|
|
|
*
|
|
|
|
42,540,980
|
|
Fidelity Diversified International Fund
|
|
|
104,433,813
|
|
|
|
66,242,013
|
|
Vanguard Institutional Index Fund
|
|
|
66,783,449
|
|
|
|
45,466,816
|
|
ESOP Stock Fund
|
|
|
132,291,194
|
|
|
|
90,540,277
|
|
|
|
|
*
|
|
Investment did not exceed 5% of the Plans Net Assets for this period.
|
|
|
During the plan years ended December 31, 2009 and March 30, 2009, the Plans investments
appreciated/(depreciated) in value (including investments bought, sold, and held during the
year) as follows:
|
|
|
|
|
|
|
|
|
|
|
|
12/31/2009
|
|
|
03/30/2009
|
|
Mutual funds
|
|
$
|
167,051,773
|
|
|
$
|
(250,723,203
|
)
|
Common Collective Trusts
|
|
|
19,871,032
|
|
|
|
(24,572,686
|
)
|
ESOP Stock Fund
|
|
|
32,456,800
|
|
|
|
(28,118,336
|
)
|
|
|
|
|
|
|
|
|
|
$
|
219,379,605
|
|
|
$
|
(303,414,225
|
)
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements:
|
|
|
|
The following table sets forth by level, within the fair value hierarchy, the Plans
investments at fair value measured on a recurring basis as of December 31, 2009 and March 30,
2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2009
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Mutual funds
|
|
$
|
800,432,567
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
800,432,567
|
|
Common stocks
|
|
|
132,291,194
|
|
|
|
|
|
|
|
|
|
|
|
132,291,194
|
|
Common collective trusts
|
|
|
|
|
|
|
81,244,054
|
|
|
|
|
|
|
|
81,244,054
|
|
Participant loans
|
|
|
|
|
|
|
|
|
|
|
15,954,013
|
|
|
|
15,954,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments at fair value
|
|
$
|
932,723,761
|
|
|
$
|
81,244,054
|
|
|
$
|
15,954,013
|
|
|
$
|
1,029,921,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 30, 2009
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Mutual funds
|
|
$
|
602,512,772
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
602,512,772
|
|
Common stocks
|
|
|
90,540,277
|
|
|
|
|
|
|
|
|
|
|
|
90,540,277
|
|
Common collective trusts
|
|
|
|
|
|
|
46,917,345
|
|
|
|
|
|
|
|
46,917,345
|
|
Participant loans
|
|
|
|
|
|
|
|
|
|
|
14,149,790
|
|
|
|
14,149,790
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments at fair value
|
|
$
|
693,053,049
|
|
|
$
|
46,917,345
|
|
|
$
|
14,149,790
|
|
|
$
|
754,120,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value is defined as the exchange price that would be received for an asset or paid
to transfer a liability (at exit price) in the principal or most advantageous market for the
asset or liability in an orderly transaction between market participants on the measurement
date. The three levels of the fair value hierarchy are as follows:
|
|
|
|
Level 1:
Inputs to the valuation methodology are unadjusted quoted prices for
identical assets or liabilities in active markets that the Plan has the ability to
access.
|
|
|
|
|
Level 2:
Inputs to the valuation methodology include:
|
|
|
|
Quoted prices for similar assets or liabilities in active markets;
|
|
|
|
|
Quoted prices for identical or similar assets or liabilities in inactive markets;
|
|
|
|
|
Inputs other than quoted prices that are observable for the asset or liability;
|
|
|
|
|
Inputs that are derived principally from corroborated by observable market data by
correlation or other means.
|
|
|
|
If the asset or liability has a specified (contractual) term, the Level 2 input must be
observable for substantially the full term of the asset or liability.
|
|
|
|
|
Level 3:
Inputs to the valuation methodology are unobservable and significant to the fair
value measurement.
|
|
|
The assets or liabilitys fair value measurement level within the fair value hierarchy is
based on the lowest level of any input that is significant to the fair value measurement.
Valuation techniques used need to maximize the use of observable inputs and minimize the use
of unobservable inputs. The following is a description of the valuation methodologies used for
assets measured at fair value:
|
|
|
|
Common Stocks:
Valued at the closing price reported on the active market on which the
individual securities are traded.
|
|
|
|
|
Mutual Funds:
Valued at quoted prices reported on the active market on which the securities are traded.
|
|
|
|
|
Common Collective Trusts:
Valued at the NAV of shares
held by the Plan at year end. There are no restrictions as to the redemption of these common collective trusts nor does the Plan have any contractual obligations to further invest in any of the individual common collective trusts.
|
|
|
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 Plan believes
its 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.
|
|
|
|
The table below sets forth a summary of changes in the fair value of the Plans Level 3
assets for the plan years ended December 31, 2009 and March 30, 2009:
|
|
|
|
|
|
|
|
|
|
|
Participant
loans at 03/30/2009
|
|
Participant loans at 12/31/2009
|
Balance, beginning of year
|
|
$
|
13,932,075
|
|
$
|
14,149,790
|
|
Realized gains/(losses)
|
|
|
|
|
|
|
|
Unrealized gains/(losses)
|
|
|
|
|
|
|
|
Purchases, sales, issuances, and settlements
|
|
|
217,715
|
|
|
1,804,223
|
|
|
|
|
|
|
|
Balance, end of year
|
|
$
|
14,149,790
|
|
$
|
15,954,013
|
|
|
|
|
|
|
|
(4)
|
|
Related-Party Transactions
|
|
|
|
Certain plan investments are shares of mutual funds managed by Fidelity Investments, an
affiliate of Fidelity Management Trust Company (FMTC). Certain other plan investments are
units of commingled pools (common collective trusts) managed by Pyramis Global Advisors Trust
Company (PGATC), a wholly owned subsidiary of FMTC. Investment management fees and costs of
administering the mutual funds and collective trusts are paid to Fidelity Investments from the
mutual funds and to PGATC from the collective trusts and are reflected in the net
appreciation/depreciation of the mutual funds and commingled
|
|
|
pools. FMTC is the trustee as defined by the Plan and a party-in-interest with respect to the
Plan. Fees paid by the Plan to FMTC were $515,273 and $396,931 for the plan years ended
December 31, 2009 and March 30, 2009, respectively, and include participant fees and
recordkeeping and administrative costs. Of the $515,273 paid to FMTC, $173,573 was paid from
plan forfeitures, $103,364 was paid from participant accounts, and $238,336 was paid from the
ERISA Account (see note (1)(j) for a description of the ERISA Account). The Plan also holds
shares of common stock of the Company, the Plan Sponsor, and is a party-in-interest with
respect to the Plan. All transactions with Fidelity Investments and the Plan Sponsor are
covered by an exemption from the prohibited transaction provisions of ERISA and the IRC.
|
|
(5)
|
|
Tax Status
|
|
|
|
The Internal Revenue Service has determined and informed the Company in a letter dated March
12, 2004, that the Plan and related trust are designed in accordance with applicable sections
of the IRC. The Plan has been amended since receiving the determination letter. However, the
Plan committee and the Plans tax counsel believe that the Plan is designed and is currently
being operated in material compliance with the applicable provisions of the IRC.
|
|
(6)
|
|
Litigation
|
|
|
|
Stockholder Derivative Litigation Background
|
|
|
|
In June and July 2004, three purported derivative actions were filed in the Federal Court by
Ranger Governance, Ltd. (Ranger), Bert Vladimir and Irving Rosenzweig against certain current
or former employees and/or directors of the Company. In November 2004, the Federal Court
issued an order consolidating the three actions into
Computer Associates International, Inc.,
Derivative Litigation
, No. 04 Civ. 2697 (E.D.N.Y.) (the Derivative Action). The derivative
plaintiffs filed a consolidated amended complaint (the Consolidated Complaint) on January 7,
2005. The Consolidated Complaint names as defendants Messrs. Wang, Kumar, Zar, McWade,
Schwartz, de Vogel, Grasso, Pieper, Artzt, DAmato, and Ranieri, Stephen Richards, Steven
Woghin, David Kaplan, David Rivard, Lloyd Silverstein, Michael A. McElroy, Gary Fernandes,
Robert E. La Blanc, Jay W. Lorsch, Kenneth Cron, Walter P. Schuetze, KPMG LLP, and Ernst &
Young LLP. The Company is named as a nominal defendant. The Consolidated Complaint seeks from
one or more of the defendants (1) contribution towards the consideration the Company had
previously agreed to provide then current and former stockholders in settlement of certain
class action litigation commenced against the Company and certain officers and directors in
1998 and 2002, (2) compensatory and consequential damages in an amount not less than $500
million in connection with the investigations giving rise to the Deferred Prosecution
Agreement (DPA) entered into between the Company and the United States Attorneys Office
(USAO) in 2004 and a consent to enter into a final judgment (Consent Judgment) in a parallel
proceeding brought by the SEC regarding certain of the Companys past accounting practices,
including its revenue recognition policies and procedures during certain periods prior to the
adoption of the Companys new business model in October 2000. (In May 2007, based upon the
Companys compliance with the terms of the DPA, the Federal Court ordered dismissal of the
charges that had been filed against the Company in connection with the DPA, and the DPA
expired. The injunctive provisions of the Consent Judgment permanently enjoining the Company
from violating certain provisions of the federal securities laws remain in effect.), (3)
unspecified relief for violations of Section 14(a) of the Exchange Act for alleged false and
material misstatements made in the Companys proxy statements issued in 2002 and 2003, (4)
relief for alleged breach of fiduciary duty, (5) unspecified compensatory, consequential and
punitive damages based upon allegations of corporate waste and fraud, (6) unspecified damages
for breach of duty of reasonable care, (7) restitution and rescission of the compensation
earned under the Companys executive compensation plan and (8) pursuant to Section 304 of the
Sarbanes-Oxley Act, reimbursement of bonus or other incentive-based equity compensation and
alleged profits realized from sales of securities issued by the Company. Although no relief is
sought from the Company, the Consolidated Complaint seeks monetary damages, both compensatory
and consequential, from the other defendants, including current or former employees and/or
directors of the Company, Ernst & Young LLP and KPMG LLP in an amount totaling not less than
$500 million.
|
|
|
|
On February 1, 2005, the Company established a Special Litigation Committee of independent
members of its Board of Directors to, among other things, control and determine the Companys
response to the Derivative Action. On April 13, 2007, the Special Litigation Committee issued
its reports, which announced the Special Litigation Committees conclusions, determinations,
recommendations and actions with respect to the claims asserted in the Derivative Action. The
Special Litigation Committee also served a motion which seeks to dismiss and realign the
claims and parties in accordance with the Special Litigation Committees recommendations. As
summarized below, the Special Litigation Committee concluded as follows:
|
|
|
|
The Special Litigation Committee has concluded that it would be in the best interests of the
Company to pursue certain of the claims against Messrs. Wang and Schwartz.
|
|
|
|
|
The Special Litigation Committee has concluded that it would be in the best interests of the
Company to pursue certain of the claims against the former Company executives who have pled
guilty to various charges of securities fraud and/or obstruction of justice including
Messrs. Kaplan, Richards, Rivard, Silverstein, Woghin and Zar. The Special Litigation
Committee has determined and directed that these claims be pursued by the Company using
counsel retained by the Company, unless the Special Litigation Committee is able to
successfully conclude its ongoing settlement negotiations with these individuals.
|
|
|
|
|
The Special Litigation Committee has reached a settlement (subject to court approval) with
Messrs. Kumar, McWade and Artzt.
|
|
|
|
|
The Special Litigation Committee believes that the claims against current and former Company
directors Messrs. Cron, DAmato, de Vogel, Fernandes, Grasso, La Blanc, Lorsch, Pieper,
Ranieri, Schuetze, et. al. should be dismissed. The Special Litigation Committee has concluded
that these directors did not breach their fiduciary duties and the claims against them lack
merit.
|
|
|
|
|
The Special Litigation Committee has concluded that it would be in the best interests of the
Company to seek dismissal of the claims against Ernst & Young LLP, KPMG LLP and Mr. McElroy.
|
|
|
By letter dated July 19, 2007, counsel for the Special Litigation Committee advised the
Federal Court that the Special Litigation Committee had reached a settlement of the Derivative
Action with two of the three derivative plaintiffs Bert Vladimir and Irving Rosenzweig. In
connection with the settlement, both of these plaintiffs have agreed to support the Special
Litigation Committees motion to dismiss and to realign. The Company has agreed to pay the
attorneys fees of Messrs. Vladimir and Rosenzweig in an amount up to $525,000 each. If
finalized, this settlement would require approval of the Federal Court. On July 23, 2007,
Ranger filed a letter with the Federal Court objecting to the proposed settlement. On October
29, 2007, the Federal Court denied the Special Litigation Committees motion to dismiss and
realign, without prejudice to renewing following a decision by the United States Court of
Appeals for the Second Circuit on an appeal brought by Ranger in other derivative litigation.
|
|
|
|
On December 14, 2009, the Company and the Special Litigation Committee renewed the motion to
dismiss and realign. That motion is pending.
|
|
|
|
Texas Litigation
|
|
|
|
On August 9, 2004, a petition was filed by Sam Wyly and Ranger against the Company in the
District Court of Dallas County, Texas, seeking to obtain a declaratory judgment that
plaintiffs did not breach two separation agreements they entered into with the Company in 2002
(the 2002 Agreements). On February 18, 2005, Mr. Wyly filed a separate lawsuit in the United
States District Court for the Northern District of Texas alleging that he is entitled to
attorneys fees in connection with the original litigation filed in the District Court of
Dallas County, Texas. The two actions have been consolidated and transferred to the Federal
Court. On March 31, 2005, the plaintiffs amended their complaint to allege a claim that they
were defrauded into entering the 2002 Agreements and to seek rescission of those agreements
and damages. On September 29, 2009, the Federal Court entered an order granting the Companys
motion for summary judgment, and dismissing the action in its entirety. That order was
appealed to the Second Circuit on October 28, 2009.
|
|
|
|
Other Civil Litigation
|
|
|
|
The Company, various subsidiaries, and certain current and former officers have been named as
defendants in various other lawsuits and claims arising in the normal course of business. The
Company believes that it has meritorious defenses in connection with such lawsuits and claims,
and intends to vigorously contest each of them. In the opinion of the Companys management,
the results of these other lawsuits and claims, either individually or in the aggregate, are
not expected to have a material adverse effect on the Companys financial position, results of
operations, or cash flows, although the impact could be material to any individual reporting
period.
|
|
(7)
|
|
Subsequent Events
|
|
(a)
|
|
Fund Changes
|
|
|
|
|
Effective January 15, 2010, the Plan Committee added the Vanguard Inflation-Protected
Securities Fund as an available investment fund option.
|
|
|
(b)
|
|
Tax Status
|
|
|
|
|
An application for a favorable determination letter regarding
the continued qualification of the Plan, as amended and restated
effective March 31, 2009, was filed with the Internal Revenue
Service on January 15, 2010.
|
|
|
|
|
The Company has evaluated subsequent events through
June 28, 2010, the date the
financial statements were issued, and noted no additional subsequent
events.
|
Supplemental Schedule
CA SAVINGS HARVEST PLAN
Schedule H, Line 4i Schedule of Assets (Held at End of Year)
December 31, 2009
|
|
|
|
|
|
|
|
|
Description of investment including
|
|
|
Identity of issuer,
|
|
maturity date, rate of
|
|
|
borrower, lessor or
|
|
interest, collateral,
|
|
Current
|
similar party
|
|
par, or maturity value
|
|
value
|
Vanguard
|
|
Vanguard Institutional Index Fund, 654,868.099 shares
|
|
$
|
66,783,449
|
|
PIMCO
|
|
PIMCO Total Return Institutional Fund, 7,578,703.621 shares
|
|
|
81,849,999
|
|
Dodge and Cox
|
|
Dodge and Cox Stock Fund, 649,436.923 shares
|
|
|
62,436,866
|
|
Artisan
|
|
Artisan Mid Cap Fund, 1,745,866.709 shares
|
|
|
44,624,353
|
|
Artisan
|
|
Artisan Mid Cap Value Fund, 1,611,925.237 shares
|
|
|
28,982,416
|
|
American Funds
|
|
American Funds Growth Fund of America R5, 1,288,919.304 shares
|
|
|
35,161,719
|
|
American Beacon
|
|
American Beacon Small Cap Value Fund, 749,404.850 shares
|
|
|
11,870,573
|
|
* Pyramis
|
|
Pyramis Large Cap Core Commingled Pool 4,491,136.076 units
|
|
|
37,091,676
|
|
* Fidelity Investments
|
|
Fidelity Puritan Fund, 4,234,934,757 shares
|
|
|
68,013,052
|
|
* Fidelity Investments
|
|
Fidelity Contra Fund, 1,089,928.439 shares
|
|
|
63,521,029
|
|
* Fidelity Investments
|
|
Fidelity Institutional Money Market Portfolio, 193,540,795.900
shares
|
|
|
193,540,796
|
|
* Fidelity Investments
|
|
Fidelity Low Priced Stock Fund, 485,595.980 shares
|
|
|
15,509,935
|
|
* Fidelity Investments
|
|
Fidelity Diversified International Fund, 3,729,779.037 shares
|
|
|
104,433,813
|
|
* Fidelity Investments
|
|
Fidelity Small Cap Stock Fund, 1,487,112.130 shares
|
|
|
23,704,567
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2000 Commingled Pool, 40,410.361 units
|
|
|
401,679
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2005 Commingled Pool, 18,152.821 units
|
|
|
174,812
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2010 Commingled Pool, 131,711.532 units
|
|
|
1,264,431
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2015 Commingled Pool, 583,666.218 units
|
|
|
5,492,299
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2020 Commingled Pool, 678,601.563 units
|
|
|
6,080,270
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2025 Commingled Pool, 1,137,825.340 units
|
|
|
10,126,645
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2030 Commingled Pool, 892,264.583 units
|
|
|
7,530,713
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2035 Commingled Pool, 717,901.421 units
|
|
|
6,037,551
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2040 Commingled Pool, 539,433.500 units
|
|
|
4,471,904
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2045 Commingled Pool, 241,528.741 units
|
|
|
2,007,104
|
|
* Pyramis
|
|
Pyramis Index Lifecycle 2050 Commingled Pool, 68,731.152 units
|
|
|
564,970
|
|
* CA, Inc.
|
|
ESOP Stock Fund (CA stock) 5,885,364.284 shares
|
|
|
132,291,194
|
|
* Plan participants
|
|
1,379 Loans to participants with interest rates ranging from
4.25% to 9.75% and terms from 1 year to 20 years
|
|
|
15,954,013
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,029,921,828
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
Party-in-interest as defined by ERISA
|
See accompanying report of independent registered public accounting firm.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other
persons who administer the employee benefit plan) have duly caused this annual report to be signed
on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
CA SAVINGS HARVEST PLAN
|
|
|
By:
|
/s/ James H. Hodge
|
|
|
|
Senior Vice President and Treasurer
|
|
|
|
|
|
Date:
June 28, 2010
EXHIBIT INDEX
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Exhibit 23.1
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Consent of Independent Registered Public Accounting Firm
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