Foot Locker 2005 Annual Report Download - page 114

RETIREMENT PLANS
Foot Locker Retirement Plan
The Company maintains the Foot Locker Retirement Plan (the “Retirement Plan’’), a defined
benefit plan with a cash balance formula, which covers associates of the Company and substantially all
of its United States subsidiaries. All qualified associates at least 21 years of age are covered by the
Retirement Plan, and plan participants become fully vested in their benefits under this plan generally
upon completion of five years of service or upon attainment of normal retirement age while actively
employed.
Under the cash balance formula, each participant has an account, for record keeping purposes only,
to which credits are allocated annually based upon a percentage of the participant’s W-2 Compensation,
as defined in the Retirement Plan. This percentage is determined by the participant’s years of service
with the Company as of the beginning of each calendar year. The following table shows the percentage
used to determine credits at the years of service indicated.
Percent of W-2
Percent of All Compensation
Years of Service W-2 Compensation Over $22,000
+
Less than 6............................... 1.10 0.55
6–10...................................... 1.50 0.75
11–15..................................... 2.00 1.00
16–20..................................... 2.70 1.35
21–25..................................... 3.70 1.85
26–30..................................... 4.90 2.45
31–35..................................... 6.60 3.30
More than 35 ............................ 8.90 4.45
In addition, all balances in the participants’ accounts earn interest at the fixed rate of 6 percent,
which is credited annually. At retirement or other termination of employment, an amount equal to the
vested balance then credited to the account under the Retirement Plan is payable to the participant in
the form of a qualified joint and survivor annuity (if the participant is married) or a life annuity (if the
participant is not married). The participant may elect to waive the annuity form of benefit described
above and receive benefits under the Retirement Plan upon retirement in an optional annuity form or
an immediate or deferred lump sum, or, upon other termination of employment, in a lump sum.
Participants may elect one of the optional forms of benefit with respect to the accrued benefit as of
December 31, 1995 if the individual participated in the Retirement Plan as of that date.
Foot Locker Excess Cash Balance Plan
The Internal Revenue Code limits annual retirement benefits that may be paid to, and
compensation that may be taken into account in the determination of benefits for, any person under a
qualified retirement plan such as the Retirement Plan. Accordingly, for any person covered by the
Retirement Plan whose annual retirement benefit, calculated in accordance with the terms of the
Retirement Plan, exceeds the limitations of the Internal Revenue Code, the Company has adopted the
Foot Locker Excess Cash Balance Plan (the “Excess Plan’’). The Excess Plan is an unfunded,
nonqualified benefit plan, under which the individual is paid the difference between the Internal
Revenue Code limitations and the retirement benefit to which he or she would otherwise be entitled
under the Retirement Plan.
Foot Locker Supplemental Executive Retirement Plan
In addition, the Foot Locker Supplemental Executive Retirement Plan (the “SERP’’), which is an
unfunded, nonqualified benefit plan, provides for payment by the Company of supplemental retirement,
death and disability benefits to certain executive officers and certain other key employees of the
Company and its subsidiaries. The named executive officers, excluding Bruce L. Hartman, and three of
the other executive officers of the Company currently participate in the SERP. The Compensation and
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