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This excerpt taken from the HR DEF 14A filed Mar 27, 2006. Pension
or Retirement Plans
The Company’s Executive Retirement Plan for certain
officers is a defined benefit plan. The amount of a
retiree’s pension is calculated using pay and years of
service as an employee, rather than by the market value of the
plan’s assets as in defined contribution plans.
Upon retirement, a participant receives an annual pension from
the plan equal to 60% of the participant’s Final Average
Annual Compensation, as defined below, plus 6% for each year of
(but not more than five years) service after age 60 (90%
for retirement at age 65 with at least five years of
service). Plan benefits are reduced by the participant’s
primary Social Security benefits and Company contributions to
the participant’s 401(k) plan. The annual pension benefit
is payable to the participant’s spouse upon the
participant’s death.
The retirement benefit is adjusted annually to reflect changes
in the Consumer Price Index. In addition, a participant may
elect to take the retirement benefit in a lump-sum payment equal
to the present value of the cash payments that would otherwise
be paid to the participant. Such present value shall be
determined as of the date of delivery of the notice of election
and shall be based on a discount rate on
90-day
U.S. Treasury bills, as reported in the Wall Street Journal
(or similar publication).
“Final Average Annual Compensation,” which is
calculated as the average of the three highest, not necessarily
consecutive, years’ earnings, is based upon a
participant’s annual cash compensation (but not including
cash bonuses for employees whose annual salary exceeds
$200,000). The value of any restricted stock awards will not be
included as Final Average Annual Compensation in determining the
annual pension.
The Compensation Committee selects eligible participants in the
plan. As of January 24, 2006, the Compensation Committee
has selected only one executive officer, David R. Emery, as a
participant for this plan. Mr. Emery has provided
13 years of service to the Company as of December 31,
2005.
The following table illustrates the annual pension benefits upon
the normal retirement age of 65 calculated before any offset of
the employee’s primary Social Security benefits or Company
contributions to the participant’s 401(k) plan:
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