Pier 1 2016 Annual Report Download - page 53

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Term Loan Facility matures as follows (in thousands):
Fiscal Year Amount
2017 $ 2,000
2018 2,000
2019 2,000
2020 2,000
Thereafter 189,000
Total 197,000
Debt Issuance Costs (2,672)
Debt Discount (1,463)
Total Debt $192,865
NOTE 5 – EMPLOYEE BENEFIT PLANS
The Company offers a qualified defined contribution employee retirement plan (“Qualified Plan”) to all of its full- and part-time
personnel who are at least 18 years old and have been employed for a minimum of six months. During fiscal 2016, 2015 and
2014, employees contributing 1% to 5% of their compensation received a matching Company contribution of up to 3%.
Company contributions to the plan were $2,823,000, $2,455,000 and $2,071,000 in fiscal 2016, 2015 and 2014, respectively.
In addition, the Company offers non-qualified deferred compensation plans (“Non-Qualified Plans”) for the purpose of providing
deferred compensation for certain employees whose benefits under the Qualified Plan may be limited under Section 401(k) of the
Internal Revenue Code. The Company’s expense for the Non-Qualified Plans was $13,000, $1,269,000 and $1,381,000 for
fiscal 2016, 2015 and 2014, respectively. The decrease from fiscal 2015 resulted from lower earnings on deferrals. The
Company has trusts established for the purpose of setting aside funds to be used to settle certain obligations of the Non-
Qualified Plans, and contributed $1,223,000 and used $1,344,000 to satisfy a portion of retirement obligations during fiscal
2016. The Company also contributed $3,192,000 and used $1,715,000 to satisfy a portion of retirement obligations during fiscal
2015. The trusts’ assets included investments and life insurance policies on the lives of former key executives. As of
February 27, 2016 and February 28, 2015, the trusts’ investments had an aggregate value of $9,853,000 and $10,571,000,
respectively. The investments were held primarily in mutual funds and are classified as other noncurrent assets. All investments
held in the trusts are valued at fair value using Level 1 Inputs, which are unadjusted quoted prices in active markets for identical
assets or liabilities. The Company has accounted for the restricted investments as trading securities. The life insurance policies
held in the trusts are carried at fair value and were classified as other noncurrent assets. The policies had cash surrender values
of $5,912,000 and $5,736,000, and death benefits of $11,355,000 and $11,336,000 as of February 27, 2016 and
February 28, 2015, respectively. The trusts’ assets are restricted and may only be used to satisfy obligations to the Non-Qualified
Plans’ participants.
The Company also owns and is the beneficiary of a number of life insurance policies on the lives of former key executives that are
unrestricted as to use. At the discretion of the Company’s Board such policies could be contributed to the trusts described
above or to the trusts established for the purpose of setting aside funds to be used to satisfy obligations arising from
supplemental retirement plans described below. The cash surrender value of the unrestricted policies was $13,432,000 and
$13,096,000, and the death benefit was $20,100,000 and $19,927,000 as of February 27, 2016 and February 28, 2015,
respectively. The cash surrender value of these policies is included in other noncurrent assets.
The Company maintains supplemental retirement plans for certain of its current and former executive officers. These plans
provide that upon death, disability, reaching retirement age or certain termination events, a participant will receive benefits based
on highest compensation, years of service and years of plan participation. The Company recorded expenses related to the plans
of $3,555,000, $5,993,000 and $4,023,000 in fiscal 2016, 2015 and 2014, respectively.
These plans are not funded and thus have no plan assets. However, a trust has been established for the purpose of setting
aside funds to be used to settle the plans’ obligations upon retirement or death of certain participants. The trust assets are
consolidated in the Company’s financial statements and consist of interest bearing investments in the amount of $32,000 and
$17,000 as of February 27, 2016 and February 28, 2015, respectively, which are included in other noncurrent assets. The
investments are restricted and may only be used to satisfy retirement obligations to certain participants. The Company has
accounted for the restricted investments as available-for-sale securities. During fiscal 2016, the Company contributed
PIER 1 IMPORTS, INC. 2016 Form 10-K 47