WLT » Topics » Retirement Benefits

This excerpt taken from the WLT DEF 14A filed Mar 31, 2009.
Retirement Benefits

Defined Benefit Plan

     The Pension Plan for Salaried Employees of Walter Industries, Inc., its Subsidiaries, Divisions and Affiliates (the “Pension Plan”) is a tax-qualified defined benefit pension plan for salaried employees of participating subsidiaries of the Company. Benefits are based upon years of service with the subsidiary and the highest average annual compensation, including overtime pay, incentive compensation and certain other forms of compensation reportable as wages taxable for Federal income tax purposes, for the five consecutive years of earnings within the final ten years of employment by the participant. The plan is integrated with social security. Normal retirement under the Pension Plan is age 65, provided the participant has at least 5 years of service. Early retirement benefits are available under the Pension Plan at age 50 provided the participant has at least 10 years of service. Enhanced early retirement benefit payments are available under the Pension Plan upon the attainment of 80 points, a combination of age and years of service.

     Executive officers whose contributions under the Pension Plan have been limited by the statutory provisions of the Internal Revenue Code participate in the Supplemental Pension Plan (the “Supplemental Pension Plan”). The Supplemental Pension Plan allows the Company to provide the same benefit value to impacted employees as other participating employees. The Supplemental Pension Plan is an unfunded plan. The Company pays the present value of such benefits on the first day of the second month following termination of employment or in a manner designed to avoid the imposition of an excise tax under Internal Revenue Service Code Section 409A.

     Mr. Richmond is the only Named Executive Officer who participates in the Company’s defined benefit Pension Plan. Information related to Mr. Richmond’s participation in the Pension Plan and Supplemental Pension Plan is reflected in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 36 and the Pension Benefits Table on page 41.

Tax Qualified 401(k) Plans

Retirement Savings Plan

     The Retirement Savings Plan (“Savings Plan”) is a tax-qualified 401(k) plan with a profit sharing feature. The Savings Plan provides retirement benefits for non-union employees of the Company and participating subsidiaries who do not participate in the Walter Pension Plan. Participating employees can contribute a portion of his or her salary on a pre-tax basis up to a maximum amount as set by the Internal Revenue Service. For 2008, the maximum pre-tax contribution by an employee into the Savings Plan was $15,500, except for certain catch-up contributions permitted by participants who are age 50 or older. The Company matches dollar for dollar up to the first 4% of the employees’ pay contributed on a pre-tax basis. The Company also makes a discretionary contribution at the end of each calendar year. The discretionary contribution is a percentage of base pay. In 2008, consistent with prior years, the Company made a 6% discretionary contribution to participant’s accounts. Vesting of the discretionary portion of the Savings Plan occurs ratably over the employee’s initial 5 years of service. Vested amounts contributed by the Company in the Savings Plan for the benefit of the employee, plus earnings, become payable upon termination of employment, death, disability and retirement.

     Executive officers whose contribution under the Savings Plan has been limited by the statutory provisions of the Internal Revenue Code participate in the Supplemental Retirement Plan (“Supplemental Retirement Plan”). The Supplemental Retirement Plan allows the Company to provide the same contribution, on a percentage basis, to impacted employees as other participating employees. At the time the employee commences participation in the Supplemental Retirement Plan the employee may elect to receive payments upon termination of employment, death, disability and retirement in a lump sum or in equal installments. If the participating employee fails to make an election, accrued amounts are payable, at the discretion of the Company, in either a lump sum or equal installments.

     Our Named Executive Officers Patrick, O’Brien, Troy and Cauthen participate in the Savings Plan and the Supplemental Retirement Plan.

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     The Company’s contributions to the retirement plans for participating Named Executive Officers for 2008 can be found in the “All Other Compensation” column and footnote 5 of the Summary Compensation Table on page 36. Supplemental Retirement Plan information is reflected in the Nonqualified Deferred Compensation Table on page 41.

Subsidiary 401(k) Plan

     Subsidiaries that participate in the Pension Plan and do not participate in the Savings Plan, participate in the 401(k) plan (the “401(k) Plan”). Participating employees can contribute a portion of his or her salary on a pre-tax basis. Effective January 1, 2008, the participating employers elected to add a matching component to the plan of $0.50 per $1.00 up to the first 6% of pay contributed to the plan by the employee on a pre-tax basis. Matching contributions by the subsidiary employer vest ratably over the employee’s initial 5 years of service. Amounts contributed by the subsidiary employer in the 401(k) Plan for the benefit of the employee, plus earnings, become payable upon termination of employment, death, disability and retirement.

     Mr. Richmond is the only Named Executive Officer who participates in the 401(k) Plan. The Company’s contributions to the 401(k) for Mr. Richmond for 2008 can be found in the “All Other Compensation” column and footnote 5 of the Summary Compensation Table on page 36.

Deferred Compensation

     Walter Industries Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) provides executive officers and certain key employees who contribute substantially to the success of the Company the opportunity to defer the receipt of certain compensation. A participant may defer up to 100% of base salary and 100% of amounts earned under the annual cash incentive plan. The principal benefit to executive officers who participate in the Deferred Compensation Plan is that taxes are deferred until the amounts are withdrawn so that savings accumulate on a pre-tax basis. At the time the employee commences participation in the Deferred Compensation Plan the employee may elect to receive payments upon termination of employment, death, disability and retirement in a lump sum or in equal installments. If the participating employee fails to make an election, deferred amounts are payable, at the discretion of the Company, in either a lump sum or equal installments.

     In fiscal 2008, none of our Named Executive Officers participated in the Deferred Compensation Plan.

Employee Stock Purchase Plan

     The Company’s Amended and Restated Employee Stock Purchase Plan (“ESPP”) is a non-qualified stock purchase plan that enables all employees of the Company, and its subsidiaries, the ability to purchase Company Common Stock through regular payroll deductions. Deductions can be made in even dollar amounts or as a percentage of base salary. Participation requires a minimum monthly deduction of $10.00 and cannot exceed 10% of monthly base salary. The Company contributes an additional amount equal to 15% of the employee’s payroll contribution. Upon completion of 5 years of participation in the program, the Company match to the employee contribution automatically increases to 20%.

     The Named Executive Officers currently participating in ESPP include Messrs. Patrick, Richmond and Cauthen. Mr. Troy participated in ESPP through December 31, 2008.

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