Famous Footwear 2011 Annual Report Download - page 61

2011 BROWN SHOE COMPANY, INC. FORM 10-K 59
The prior service cost is amortized on a straight-line basis over the average future service of active plan participants
benefi ting under the plan at the time of each plan amendment. The net actuarial loss (gain) subject to amortization is
amortized on a straight-line basis over the average future service of active plan participants as of the measurement date.
The net transition asset is amortized over the estimated service life.
The expected long-term rate of return on plan assets is based on historical and projected rates of return for current and
planned asset classes in the plan’s investment portfolio. Assumed projected rates of return for each asset class were
selected after analyzing experience and future expectations of the returns. The overall expected rate of return for the
portfolio was developed based on the target allocation for each asset class.
Expected Cash Flows
Information about expected cash fl ows for all pension and postretirement benefi t plans follows:
Pension Benefi ts
Other
Postretirement
($ thousands) Funded Plans SERP Total Benefi ts
Employer Contributions
2012 expected contributions to plan trusts . . . . . . . . . . . . . . . . . . . . $ 136 $ – $ 136 $ –
2012 expected contributions to plan participants . . . . . . . . . . . . . . . . . – 224 224 322
Expected Benefi t Payments
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,564 $ 224 $ 9,788 $ 322
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,055 966 11,021 309
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,575 149 10,724 294
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,049 2,416 13,465 277
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,577 590 12,167 260
2017 – 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,307 5,260 71,567 1,013
Defi ned-Contribution Plans
The Company’s domestic defi ned-contribution 401(k) plan covers salaried and certain hourly employees. Company contributions
represent a partial matching of employee contributions, generally up to a maximum of 3.5% of the employee’s salary and
bonus. The Company’s expense for this plan was $4.1 million, $3.0 million and $3.2 million in 2011, 2010 and 2009, respectively.
The Company’s Canadian defi ned contribution plan covers certain salaried and hourly employees. The Company makes
contributions for all eligible employees, ranging from 3% to 5% of the employee’s salary. In addition, eligible employees
may voluntarily contribute to the plan. The Company’s expense for this plan was $0.3 million in 2011, 2010 and 2009.
Deferred Compensation Plan
In 2007, the Company established a non-qualifi ed deferred compensation plan (the “Deferred Compensation Plan”) for the
benefi t of certain management employees. The investment funds o ered to the participants generally correspond to the
funds o ered in the Company’s 401(k) plan, and the account balance fl uctuates with the investment returns on those funds.
The Deferred Compensation Plan permits the deferral of up to 50% of base salary and 100% of compensation received
under the Company’s annual incentive plan. The deferrals are held in a separate trust, which has been established by the
Company to administer the Deferred Compensation Plan. The assets of the trust are subject to the claims of the Company’s
creditors in the event that the Company becomes insolvent. Consequently, the trust qualifi es as a grantor trust for income
tax purposes (i.e., a “Rabbi Trust”). The liabilities of the Deferred Compensation Plan of $1.1 million in 2011 and $1.4 million in
2010 are presented in employee compensation and benefi ts in the accompanying consolidated balance sheets. The assets
held by the trust of $1.1 million in 2011 and $1.4 million in 2010 are classifi ed as trading securities within prepaid expenses
and other current assets in the accompanying consolidated balance sheets, with changes in the deferred compensation
charged to selling and administrative expenses in the accompanying consolidated statements of earnings.
Deferred Compensation Plan for Non-Employee Directors
Non-employee directors are eligible to participate in a deferred compensation plan, whereby deferred compensation
amounts are valued as if invested in the Company’s common stock through the use of phantom stock units (“PSUs”).
Under the plan, each participating director’s account is credited with the number of PSUs equal to the number of
shares of the Company’s common stock that the participant could purchase or receive with the amount of the deferred
compensation, based upon the fair value (as determined based on the average of the high and low prices) of the
Company’s common stock on the last trading day of the fi scal quarter when the cash compensation was earned. Dividend
equivalents are paid on PSUs at the same rate as dividends on the Company’s common stock and are re-invested in
additional PSUs at the next fi scal quarter-end. The PSUs are payable in cash based on the number of PSUs credited to the
participating director’s account, valued on the basis of the fair value at fi scal quarter-end on or following termination of the
director’s service. The liabilities of the plan of $0.6 million as of January 28, 2012 and $0.8 million as of January 29, 2011,
are based on 63,936 and 62,218 outstanding PSUs, respectively, and are presented in other liabilities in the accompanying
consolidated balance sheets. Gains and losses resulting from changes in the fair value of the PSUs are charged to selling
and administrative expenses in the accompanying consolidated statements of earnings.