Haverty Furniture Companies (HVT)

1.1

“Hypothetical Retirement Benefit” means the retirement benefit a Participant is entitled to receive pursuant to the retirement benefit formula set forth herein. In the event a Participant Separates from Service prior to his or her Normal Retirement Date, his/her Hypothetical Retirement Benefit shall be equal to the amount determined under the retirement benefit formula computed as of his or her date of separation.

1.2

“Appendix A” means this Appendix A to the SERP.

1.3

“Average Annual Compensation” means the annual Compensation of a Participant averaged over the five consecutive Plan Years, including periods prior to the effective date of the SERP, which produce the highest average within the last ten (10) completed years of employment. If a Participant is not employed for at least one day in each month of a calendar year, Compensation for that year shall not be taken into account, and the year preceding and the year subsequent to the partial year shall be considered consecutive. If a Participant's final year of employment is a partial year Compensation for that year will not be counted unless it would result in higher Average Annual Compensation. If a Participant has less than five consecutive Calendar Years of service from his date of employment to his date of termination or the above rules would result in the Participant having no Compensation under this paragraph, his Average Annual Compensation will be based on his Compensation during his period of service from his date of employment to his date of termination.

1.4

“Compensation” with respect to any Participant means such Participant’s wages as defined in Code Section 3401(a) and all other payments of compensation by the Employer (in the course of the Employer’s trade or business) for the Plan Year for which the Employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in

1.5

“Covered Compensation” with respect to any Participant for a Plan Year means the average (without indexing) of the Taxable Wage Bases in effect for each calendar year during the 35-year period (regardless of the Participant’s year of birth) ending with the last day of the calendar year in which the Participant attains (or will attain) Social Security Retirement Age. The determination of each Participant’s Covered Compensation shall be made with reference to Regulation 1.401(l)-1(c)(7). A Participant’s Covered Compensation shall be adjusted each Plan Year and no increase in Covered Compensation shall decrease a Participant’s Hypothetical Retirement Benefit. In determining the Participant’s Covered Compensation for a Plan Year, the Taxable Wage Base for all calendar years beginning after the first day of the Plan Year is assumed to be the same as the Taxable Wage Base in effect as of the beginning of the Plan Year. A Participant’s Covered Compensation for a Plan Year before the 35-year period described above is the Taxable Wage Base in effect as of the beginning of the Plan Year. A Participant’s Covered Compensation for a Plan Year after the 35-year period described above is the Participant’s Covered Compensation for the Plan Year during which the 35-year period ends. Any change in a Participant’s Covered Compensation shall not cause any reduction in his or her Hypothetical Retirement Benefit.

1.6

“415 Compensation” with respect to any Participant means such Participant’s wages as defined in Code Section 3401(a) and all other payments of compensation by the employer (in the course of the employer’s trade or business) for the Plan Year for which the employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. “415 Compensation” must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)). The determination of “415 Compensation” shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount which is contributed or deferred by the employer at the election of the

1.7

“Participant’s Cumulative Permitted Disparity Limit” is equal to 35 minus the number of years credited to the Participant for purposes of the Hypothetical Retirement Benefit, or under one or more qualified plans or simplified employee pensions (whether or not terminated) ever maintained by the Employer, other than years for which a Participant earned a Year of Service under this SERP. For purposes of determining the Participant’s Cumulative Permitted Disparity Limit, all years ending in the same calendar year are treated as the same year. If the Participant’s Cumulative Permitted Disparity Limit is less than the period of years specified in Section 2.1 of this Appendix, then for years after the Participant reaches his Cumulative Permitted Disparity Limit and through the end of the period specified in Section 2.1 of this Appendix, the Participant’s benefit will be equal to the excess/gross benefit percentage.

1.8

“Present Value of Hypothetical Retirement Benefit” means the Actuarial Equivalent lump-sum amount of a Participant’s Hypothetical Retirement Benefit at date of valuation. The Present Value of Hypothetical Retirement Benefit for a Participant who attains his Early Retirement Age is based upon his Hypothetical Retirement Benefit payable at Normal Retirement Date and shall not include the value of any early retirement subsidy.

1.9

“Social Security Retirement Age” means the age used as the retirement age under Section 216(l) of the Social Security Act, except that such section shall be applied without regard to the age increase factor and as if the early retirement age under Section 216(l)(2) of such Act were 62.

1.10

“Taxable Wage Base” means, with respect to any Plan Year, the contribution and benefit base in effect under Section 230 of the Social Security Act at the beginning of the Plan Year.

1.1

“Hypothetical Retirement Benefit” means the retirement benefit a Participant is entitled to receive pursuant to the retirement benefit formula set forth herein. In the event a Participant Separates from Service prior to his or her Normal Retirement Date, his/her Hypothetical Retirement Benefit shall be equal to the amount determined under the retirement benefit formula computed as of his or her date of separation.

1.2

“Appendix A” means this Appendix A to the SERP.

1.3

“Average Annual Compensation” means the annual Compensation of a Participant averaged over the five consecutive Plan Years, including periods prior to the effective date of the SERP, which produce the highest average within the last ten (10) completed years of employment. If a Participant is not employed for at least one day in each month of a calendar year, Compensation for that year shall not be taken into account, and the year preceding and the year subsequent to the partial year shall be considered consecutive. If a Participant's final year of employment is a partial year Compensation for that year will not be counted unless it would result in higher Average Annual Compensation. If a Participant has less than five consecutive Calendar Years of service from his date of employment to his date of termination or the
above rules would result in the Participant having no Compensation under this paragraph, his Average Annual Compensation will be based on his Compensation during his period of service from his date of employment to his date of termination.

1.4

“Compensation” with respect to any Participant means such Participant’s wages as defined in Code Section 3401(a) and all other payments of compensation by the Employer (in the course of the Employer’s trade or business) for the Plan Year for which the Employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in

1.5

“Covered Compensation” with respect to any Participant for a Plan Year means the average (without indexing) of the Taxable Wage Bases in effect for each calendar year during the 35-year period (regardless of the Participant’s year of birth) ending with the last day of the calendar year in which the Participant attains (or will attain) Social Security Retirement Age. The determination of each Participant’s Covered Compensation shall be made with reference to Regulation 1.401(l)-1(c)(7). A Participant’s Covered Compensation shall be adjusted each Plan Year and no increase in Covered Compensation shall decrease a Participant’s Hypothetical Retirement Benefit. In determining the Participant’s Covered Compensation for a Plan Year, the Taxable Wage Base for all calendar years beginning after the
first day of the Plan Year is assumed to be the same as the Taxable Wage Base in effect as of the beginning of the Plan Year. A Participant’s Covered Compensation for a Plan Year before the 35-year period described above is the Taxable Wage Base in effect as of the beginning of the Plan Year. A Participant’s Covered Compensation for a Plan Year after the 35-year period described above is the Participant’s Covered Compensation for the Plan Year during which the 35-year period ends. Any change in a Participant’s Covered Compensation shall not cause any reduction in his or her Hypothetical Retirement Benefit.

1.6

“415 Compensation” with respect to any Participant means such Participant’s wages as defined in Code Section 3401(a) and all other payments of compensation by the employer (in the course of the employer’s trade or business) for the Plan Year for which the employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. “415 Compensation” must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)). The determination of “415 Compensation” shall include any elective deferral (as defined in Code Section 402(g)(3)), and any amount
which is contributed or deferred by the employer at the election of the

1.7

“Participant’s Cumulative Permitted Disparity Limit” is equal to 35 minus the number of years credited to the Participant for purposes of the Hypothetical Retirement Benefit, or under one or more qualified plans or simplified employee pensions (whether or not terminated) ever maintained by the Employer, other than years for which a Participant earned a Year of Service under this SERP. For purposes of determining the Participant’s Cumulative Permitted Disparity Limit, all years ending in the same calendar year are treated as the same year. If the Participant’s Cumulative Permitted Disparity Limit is less than the period of years specified in Section 2.1 of this Appendix, then for years after the Participant reaches his Cumulative Permitted Disparity Limit and through the end of the period specified in
Section 2.1 of this Appendix, the Participant’s benefit will be equal to the excess/gross benefit percentage.

1.8

“Present Value of Hypothetical Retirement Benefit” means the Actuarial Equivalent lump-sum amount of a Participant’s Hypothetical Retirement Benefit at date of valuation. The Present Value of Hypothetical Retirement Benefit for a Participant who attains his Early Retirement Age is based upon his Hypothetical Retirement Benefit payable at Normal Retirement Date and shall not include the value of any early retirement subsidy.

1.9

“Social Security Retirement Age” means the age used as the retirement age under Section 216(l) of the Social Security Act, except that such section shall be applied without regard to the age increase factor and as if the early retirement age under Section 216(l)(2) of such Act were 62.

1.10

“Taxable Wage Base” means, with respect to any Plan Year, the contribution and benefit base in effect under Section 230 of the Social Security Act at the beginning of the Plan Year.