FBN » Topics » Retirement Plans

These excerpts taken from the FBN 10-K filed Feb 29, 2008.

Retirement Plans

        Defined benefit plan expense and obligation calculations are dependent on various assumptions. These assumptions include discount rate, expected return on plan assets and rate of compensation increase. The discount rate used to calculate the retirement obligations at December 31, 2007 was 6.25% and was determined using Moody's Aa bond index customized to the plan's projected benefit

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cash flow. In 2007, retirement plan expense was calculated using an expected return on plan assets of 7.5% and the rate of compensation increases of 3.5%. The expected return on plan assets was developed through analysis of historical market returns by asset class, current market conditions and the trust funds past experience. The rate of compensation increases was based upon historical experience. We believe these assumptions to be reasonable; however, differences in assumptions would impact the calculated obligation and future expense. For example, a 0.25% change in the discount rate would result in a $14 million change in the pension obligation and a 0.25% change in the expected return on plan assets would result in a $0.9 million change in pension expense.

        On December 31, 2005, the defined benefit plans were amended, freezing and ceasing future benefit accruals as of that date. Certain transition benefits will be provided to participants who had attained age 50 and had completed 10 years of services as of December 31, 2005. We currently provide benefits to our employees through an increased match in the defined contribution plan.

Retirement Plans



        Defined benefit plan expense and obligation calculations are dependent on various assumptions. These assumptions include discount rate, expected return on plan
assets and rate of compensation increase. The discount rate used to calculate the retirement obligations at December 31, 2007 was 6.25% and was determined using Moody's Aa bond index customized
to the plan's projected benefit



22











cash
flow. In 2007, retirement plan expense was calculated using an expected return on plan assets of 7.5% and the rate of compensation increases of 3.5%. The expected return on plan assets was
developed through analysis of historical market returns by asset class, current market conditions and the trust funds past experience. The rate of compensation increases was based upon historical
experience. We believe these assumptions to be reasonable; however, differences in assumptions would impact the calculated obligation and future expense. For example, a 0.25% change in the discount
rate would result in a $14 million change in the pension obligation and a 0.25% change in the expected return on plan assets would result in a $0.9 million change in pension expense.



        On
December 31, 2005, the defined benefit plans were amended, freezing and ceasing future benefit accruals as of that date. Certain transition benefits will be provided to
participants who had attained age 50 and had completed 10 years of services as of December 31, 2005. We currently provide benefits to our employees through an increased match in the
defined contribution plan.




This excerpt taken from the FBN 10-K filed Mar 1, 2007.

Retirement Plans

Defined benefit plan expense and obligation calculations are dependent on various assumptions. These assumptions include discount rate, expected return on plan assets and rate of compensation increase. The discount rate used to calculate the retirement obligations at December 31, 2006 was 6.0% and was determined using Moody’s Aa bond index customized to the plan’s projected benefit cash flow. In 2006, retirement plan expense was calculated using an expected return on plan assets of 7.5% and the rate of compensation increases of 3.5%. The expected return on plan assets was developed through analysis of historical market returns by asset class, current market conditions and the trust funds past experience. The rate of compensation increases was based upon historical experience. We believe these assumptions to be reasonable; however, differences in assumptions would impact the calculated obligation and future expense. For example, a 0.25% change in the discount rate would result in a $15 million change in the pension obligation and a 0.25% change in the expected return on plan assets would result in a $0.9 million change in pension expense.

On December 31, 2005 the defined benefit plans were amended, freezing and ceasing future benefit accruals as of that date. Certain transition benefits will be provided to participants who have attained age 50 and have completed 10 years of services as of December 31, 2005. We currently provide benefits to our employees through an increased match in the defined contribution plan.

This excerpt taken from the FBN 10-K filed Mar 15, 2006.
Retirement Plans

Defined benefit plan expense and obligation calculations are dependent on various assumptions. These assumptions include discount rate, expected return on plan assets and rate of compensation increase. The discount rate used to calculate the retirement obligations at December 31, 2005 was

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5.75% and was determined using Moody’s aa bond index customized to the plan’s projected benefit cash flow. In 2005, retirement plan expense was calculated using an expected return on plan assets of 7.5% and the rate of compensation increases of 3.5%. The expected return on plan assets was developed through analysis of historical market returns by asset class, current market conditions and the trust fund’s past experience. The rate of compensation increases was based upon historical experience. We believe these assumptions to be reasonable; however, differences in assumptions would impact the calculated obligation and future expense. For example, a 0.25% change in the discount rate would result in a $15 million change in the pension obligation and a 0.25% change in the expected return on plan assets would result in a $0.9 million change in pension expense.

On December 31, 2005 the defined benefit plans were amended, freezing and ceasing future benefits as of that date. Certain transition benefits will be provided to participants who have attained age 50 and have completed 10 years of services as of December 31, 2005. We will provide future retirement benefits to our employees by increasing the match in the defined contribution plan. Estimated 2006 expense for the defined benefit plans is expected to decrease by $7.0 million and expense for the defined contribution plan is expected to increase by $12.0 million. This net increase of $5.0 million approximates what the two plans combined would have experienced without the amendment.

This excerpt taken from the FBN DEF 14A filed Mar 24, 2005.

Retirement Plans

        Messrs. Holliman, Foy and Howard are participants in that segment of the Furniture Brands Retirement Plan which applies to corporate office employees. The plan is a noncontributory, defined benefit pension plan designed to provide retirement benefits upon normal retirement at age 65. Covered remuneration is base salary and incentive compensation and, based on straight life annuity, annual benefits at normal retirement are equal to the sum of 1.1% of final average compensation (the highest five consecutive calendar years of the last 10 years) multiplied by credited service up to a maximum of 35 years and 0.45% of final average compensation in excess of "covered compensation" as defined by the IRS multiplied by credited service up to a maximum of 35 years, without deduction for Social Security benefits. In addition, Messrs. Holliman and Foy were participants, and each has a frozen benefit in, the segment of the Furniture Brands Retirement Plan which applies to employees of Lane Furniture Industries, Inc. as described below for Mr. Spak. Messrs. Holliman and Foy both have 17 years of credited service under the corporate office plan and 27 years and 18 years, respectively under the Lane plan segment, which service includes service with Lane prior to its acquisition by the Company.


        Benefits payable to Messrs. Holliman and Foy are limited by applicable laws and regulations. A supplemental retirement plan has been adopted for them providing for payments from general funds of any retirement income that would otherwise be payable pursuant to the retirement plans in the absence of any such limitations.

        Messrs. Holliman and Foy have estimated annual benefits payable at retirement from these plans, including benefits payable from the supplemental plan, of $485,282 and $385,018, respectively, assuming continuation of current covered compensation. Mr. Howard has 21 years of credited service under the plan and has estimated annual benefits payable at retirement of $57,063.

        Mr. Spak is a participant in that segment of the Furniture Brands Retirement Plan which applies to employees of Lane Furniture Industries, Inc. and its subsidiaries. The plan is a noncontributory, defined benefit pension plan designed to provide retirement benefits upon normal retirement at age 65. Covered remuneration is base salary and incentive compensation and, based on a straight life annuity, annual benefits at normal retirement are equal to the sum of 0.65% of an average of the highest five consecutive years (of the last 10 years) of covered remuneration and 0.65% of the said average in excess of the greater of (i) $10,000 or (ii) 50% of "covered compensation" as defined by the IRS, multiplied by years of credited service (not to exceed 35 years), without deduction for Social Security benefits.

        Benefits payable to Mr. Spak are limited by applicable laws and regulations. A supplemental retirement plan has been adopted providing for payments to him from general funds. His supplemental plan provides for payments, commencing at age 65 after 30 or more years service, equal to the difference, if any, between (i) the total of a straight life annuity from his base retirement plans plus Social Security benefits and (ii) 50% of an average of the highest five consecutive years (of the last 10 years) of covered remuneration.

        Mr. Spak has 19 years credited service under the plan, and estimated annual benefits at normal retirement, including benefits payable from the supplemental plan, of $250,000. Offsets due to Social Security benefits have not been considered.

        Mr. Burgette is an active participant in the Broyhill Furniture Industries, Inc. Profit Sharing Retirement Plan. His 2004 plan contribution is reflected in the Summary Compensation Table, above. Until January 1, 1999, Mr. Burgette was a participant in that segment of the Furniture Brands Retirement Plan that applies to employees of Lane Furniture Industries, Inc. as described above for Mr. Spak.

        Benefits payable to Mr. Burgette are limited by applicable laws and regulations. A supplemental retirement plan has been adopted providing for payments to him from general funds. Mr. Burgette's supplemental plan provides for payments, commencing at age 65 after 30 or more years service, equal to the difference, if any, between (i) the total of a straight life annuity equivalent from his base retirement plans plus Social Security benefits and (ii) 50% of an average of the highest five consecutive years (of the last 10 years) of covered remuneration. Mr. Burgette has 26 years of


service under the plan and estimated benefits payable at normal retirement expressed as an annual annuity, including benefits payable from the supplemental plan, of $272,583. Offsets due to Social Security benefits have not been considered.

        In 2004, the Company initiated a Death Benefit Program ("DBO") for certain of its executives. Pursuant to the terms of the DBO, upon the death of Messrs. Foy, Burgette and Spak, a benefit is paid to his designated beneficiary in the amount of $1,712,300, $869,600 and $854,700, respectively. Mr. Holliman participates in an Endorsement Split Dollar Life Insurance Program whereby upon his death his life insurance trust will receive $4,000,000 from a life insurance policy owned by the Company.

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