Note 10

EMPLOYEE BENEFIT PLAN OBLIGATIONS

Employee benefit plan obligations consist of:

Profit-Sharing Plans
Substantially all employees are covered under the Steelcase Inc. Employees' Profit-Sharing Retirement Plan and the Steelcase Inc. Employees' Money Purchase Plan or under similar subsidiary plans. Annual Company contributions under the Steelcase Inc. Employees' Profit-Sharing Retirement Plan and similar subsidiary plans are discretionary and declared by the Board at the end of each fiscal year. Under the Steelcase Inc. Employees' Money Purchase Plan, annual Company contributions are required in the amount of 5% of eligible annual compensation. Total expense under these plans approximated $70.1 million, $79.4 million and $67.2 million for 1999, 1998 and 1997, respectively.

Management Incentive and Deferred Compensation Plans
The amended and restated Management Incentive Plan is an annual and long-term incentive compensation program that provides eligible key employees with cash payments based upon the achievement by the Company of specified financial performance goals measured by Economic Value Added ("EVA"), as defined in the plan.

Annual bonuses are payable after the end of the fiscal year and, therefore, are included in accrued compensation in the accompanying consolidated balance sheets, whereas long-term bonus amounts are paid out over a subsequent three-year period. The Company has future retirement obligations to certain employees in return for agreeing not to receive part of their compensation for a period of three to five years. Compensation withheld has been invested in corporate-owned life insurance, which is expected to be sufficient to cover such future obligations.

Long-term management incentive and deferred compensation expense approximated $28.9 million, $21.2 million and $7.7 million for 1999, 1998 and 1997, respectively.

Pension and Postretirement Benefits
During 1999, the Company adopted SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits, which revised and standardized disclosures for pension and other postretirement benefit plans.

The Company's pension plans include a non-qualified supplemental retirement plan that is limited to a select group of management or highly compensated employees. The obligations under this plan and other defined benefit plans at its subsidiaries are included in the pension disclosure.

The Company and certain of its subsidiaries have postretirement benefit plans that provide medical and life insurance benefits to retirees and eligible dependents. The Company accrues the cost of postretirement insurance benefits during the service lives of employees based on actuarial calculations for each plan.

The following sets forth the revised disclosure requirements of SFAS No. 132:

The assumed health care cost trend was 7.0% for 1999, gradually declining to 5.0% in 2004 and thereafter. A one percentage point change in assumed health care cost trend rates would have the following effects: