Harris Teeter 2008 Annual Report Download - page 58

54
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
Managers are expected to generate a total return consistent with their philosophy, offer protection in down
markets and achieve a rate of return which ranks in the top 40% of a universe of similarly managed portfolios
and outperforms a target index, net of expenses, over rolling three year periods.
The Investment Policy Statement contains the following guidelines:
— Categorical restrictions such as limiting the average weighted duration of fixed income investments,
limiting the aggregate amount of American Depository Receipts (ADRs), no direct foreign currency
speculation, limited foreign exchange contracts, and limiting the use of derivatives;
— Portfolio restrictions that address such things as investment restrictions, proxy voting, and brokerage
arrangements; and
— Asset class restrictions that address such things as single security or sector concentration, capitalization
limits and minimum quality standards.
The Company plans to contribute $7.5 million to the Pension Plan and approximately $1.3 million to the
SERP during fiscal 2009. Due to the current economic environment that has resulted in a significant decrease
in the market value of Pension Plan assets subsequent to year end, the Company may increase the planned
contribution in fiscal 2009. The Company’s contribution to the SERP represents the benefit payments made
during the fiscal year.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid by the Company’s defined benefit pension plans (in thousands):
Pension
Plan SERP
2009 ........................................... $11,418 $ 1,285
2010 ............................................ 12,218 1,270
2011 ............................................ 13,040 1,253
2012 ............................................ 13,928 1,352
2013 ............................................ 14,853 1,612
Years 2014-2018 .................................. 87,774 11,846
The Savings Plan is a defined contribution retirement plan pursuant to Section 401(k) of the Internal Revenue
Code, that was authorized for the purpose of providing retirement benefits for employees of the Company. The
Company provides a matching contribution based on the amount of eligible compensation contributed by the
associate and an automatic retirement contribution based on age and years of service.
In prior years the Company sponsored an Employee Stock Ownership Plan (“ESOP”). In connection with
other changes made to the Company’s retirement plans, the Company has ceased contributions to the ESOP
and participants became fully vested in their ESOP account balances as of September 30, 2005. In May 2007,
the Company’s Board of Directors approved a merger of the ESOP into the Savings Plan and in December
2007, the assets of the ESOP were transferred to the Savings Plan. Historically, the Company provided cash
contributions, as determined by the Board of Directors, to a trust for the purpose of purchasing shares of the
Company’s common stock on the open market. Such contributions were based on the Company’s net income for
the fiscal year as a percentage of average shareholders’ equity. The total amount contributed was comprised of
a base contribution of 1.5% of participants’ eligible compensation and an additional contribution of up to 3.5%
of eligible compensation. The Company’s final contribution to the ESOP was made in December 2005 based on
fiscal 2005 results. At September 28, 2008, approximately 11% of the Company’s common shares outstanding
were owned by employees as participants in the ESOP.