Famous Footwear 2013 Annual Report Download - page 62

60 2013 BROWN SHOE COMPANY, INC. FORM 10-K
The prior service cost is amortized on a straight-line basis over the average future service of active plan participants
benefiting 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 flows for all pension and postretirement benefit plans follows:
Pension Benefits
Other
Postretirement
($ thousands) Funded Plans SERP Total Benefits
Employer Contributions
2014 expected contributions to plan trusts . . . . . . . . . . . . . . . . . . . . $ 185 $ – $ 185 $ –
2014 expected contributions to plan participants . . . . . . . . . . . . . . . . . – 1,002 1,002 105
Expected Benefit Payments
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,465 $ 1,002 $ 11,467 $ 105
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,969 2,840 13,809 98
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,613 84 11,697 92
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,232 3,756 15,988 86
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000 702 13,702 80
2019 – 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,763 7,347 83,110 312
Defined-Contribution Plans
The Company’s domestic defined-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 $3.4 million in both 2013 and 2012, and $4.1 million in 2011.
The Company’s Canadian defined 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 $0.2 million in 2013 and $0.3 million in
both 2012 and 2011.
Deferred Compensation Plan
The Company has a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for the benefit 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 fluctuates 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 qualifies as a grantor
trust for income tax purposes (i.e., a “Rabbi Trust”). The liabilities of the Deferred Compensation Plan of $2.2 million
and $1.4 million as of February 1, 2014 and February 2, 2013, respectively, are presented in employee compensation
and benefits in the accompanying consolidated balance sheets. The assets held by the trust of $2.2 million as of
February 1, 2014 and $1.4 million as of February 2, 2013 are classified 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 fiscal 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 fiscal 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 fiscal quarter-end on or following termination of
the director’s service. The liabilities of the plan of $1.7 million as of February 1, 2014 and $1.1 million as of February 2, 2013
are based on 67,263 and 66,394 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.