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The Corporate Executive, Vol. XXIII, No. 1
January-February 2009

Our Review and Analysis of Pensions and SERPs

We provide retirement benefits to the named executive officers through both qualified and non-qualified defined-benefit and defined-contribution retirement plans. We have historically viewed our retirement benefits as a means of providing financial security to all of our salaried employees after they have spent a substantial portion of their careers with the Company. While many companies today do not provide retirement benefits in the form of a pension or supplemental retirement plan, we believe that pensions and similar retirement benefits remain an important part of the overall compensation approach in our industry. Our named employee officers participate in several retirement plans, including benefits that are available to all of our employees such as the Section 401(k) Savings Plan and the tax-qualified Pension Plan, as well as the Supplemental Executive Retirement Plan ("SERP"). The SERP allows executives to accrue a higher benefit than the qualified pension plan, but it vests more slowly than the pension plan. We have historically maintained the SERP as a means for attracting and retaining executive talent.

These retirement plans create significant ongoing obligations for the Company in terms of funding and administration costs. As our workforce ages, the Company could face increasing costs in the future in order to satisfy obligations under these programs. With respect to our senior executives, the Compensation Committee has, in light of these cost concerns and in reconsidering the elements of compensation, undertaken a wealth accumulation analysis, examining the total amounts that the named executive officers are entitled to receive under all of the Company’s compensation programs. The following table summarizes the total accumulated wealth values as of the end of the fiscal year and projected values over the next five years and ten years for each of the named executive officers:

[Editor’s Note: Include a table summarizing, for each named executive officer, the aggregate realized and unrealized value of previously granted and projected equity awards, deferred compensation balances, pension amounts, supplemental retirement benefits and other accumulated compensation elements, along with disclosure of the relevant assumptions. See the model table entitled "Wealth Accumulation/Full Walk-Away Amounts" posted on CompensationStandards. com.]

The Compensation Committee determined that each of the named executive officers has accumulated sufficient wealth (even in light of current depressed stock values) so that it is no longer necessary to maintain the SERP. The Committee determined that the incremental benefits achieved under the SERP did not provide sufficient incentives to the named executive officers in light of the wealth that they had already accumulated, and there was thus no basis to continue increasing the costs and obligations associated with the SERP. The Compensation Committee decided to maintain the Pension Plan, but to end special benefits provided in some circumstances such as crediting additional years of service upon the achievement of certain specified milestones. The Compensation Committee recognized that the Company’s pension plan provided for some financial security which, in current economic times in particular, serves to help retain our executive talent; however, the Compensation Committee will continue to monitor the feasibility of maintaining the Company’s retirement benefits for the named executive officers going forward.

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