OfficeMax 2008 Annual Report Download - page 80

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Corp. As a result of this transaction, the Additional Consideration Agreement terminated and no
further payments will be required of either party.
13. Retirement and Benefit Plans
Pension and Other Postretirement Benefit Plans
The Company sponsors noncontributory defined benefit pension plans covering certain
terminated employees, vested employees, retirees, and some active OfficeMax, Contract
employees. The Company’s salaried pension plan was closed to new entrants on November 1,
2003, and on December 31, 2003, the benefits of eligible OfficeMax, Contract participants were
frozen.
Under the terms of the Company’s plans, the pension benefit for salaried employees was
based primarily on the employees’ years of service and highest five-year average compensation.
The pension benefit for hourly employees was generally based on a fixed amount per year of
service. The Company’s general funding policy is to make contributions to the plans in amounts
that are within the limits of deductibility under current tax regulations, and not less than the
minimum contribution required by law.
The Company also sponsors various retiree medical benefit and life insurance plans. The type
of retiree benefits and the extent of coverage vary based on employee classification, date of
retirement, location, and other factors. All of the Company’s postretirement medical plans are
unfunded. The Company explicitly reserves the right to amend or terminate its retiree medical and
life insurance plans at any time, subject only to constraints, if any, imposed by the terms of
collective bargaining agreements. Amendment or termination may significantly affect the amount of
expense incurred.
During the first quarter of 2007, the Company made changes to its Canadian retiree medical
benefit plan that eliminated benefits for certain active employees. As a result of these plan changes,
the accumulated postretirement benefit obligation was reduced by approximately $6.2 million. The
plan changes were considered to be a curtailment, as defined in SFAS No. 106, ‘‘Employers’
Accounting for Postretirement Benefits Other than Pensions.’’ There was no gain related to these
plan changes recognized in the Consolidated Statement of Income (Loss) for 2007.
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