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8. Retirement and Deferred Compensation Plans
In addition to non-qualified retirement plans, the Company has a deferred compensation plan that allows for the voluntary deferral of a portion of managers’ compensation. Participant balances in the various non-qualified plans are credited with interest at a rate set at the discretion of the Company which, for the three years ended April 2000, was the prime rate as published by a major U.S. bank. To enhance security for the benefits payable under these plans, the Company has established a “Rabbi Trust,” funded with Company-owned life insurance (COLI) policies on the lives of participants. The assets of the trust are not generally available to the Company or its creditors except in the event of the Company’s insolvency. A COLI premium payment of $15.8 million was made to the trust in 1998. In March 1999, the Company effected an exchange under section 1035 of the Internal Revenue Code, in which most of the policies from the original insurance carrier were exchanged for policies with a new carrier. No premium payments were made in 1999 or 2000. The total liability for benefits accrued under the non-qualified plans at the end of 2000 and 1999 totaled $67.8 million and $60.8 million, respectively. The cash values of the related trust assets reflected in the accompanying balance sheets were $65.6 million and $64.9 million, respectively, at those same dates.
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