Stride Rite Announces Changes to Pension Plans; Freezes Its Defined Benefit Pension Plan and Enhances Its Defined Contribution
June 29 2006 - 5:08PM
Business Wire
The Stride Rite Corporation (NYSE: SRR) today announced that it has
adopted changes to its defined benefit pension plan effective
December 31, 2006, and will significantly increase matching
contributions to its defined contribution plans beginning January
1, 2007. These changes will shift the future focus of retirement
benefits toward the more predictable cost structure of 401(k), or
defined contribution plans and away from the defined benefit
pension plan. The changes to the plans will affect most associates
and senior management. They include: -- Stopping the accrual of
future benefits in the company's defined benefit pension plan and
fully preserving all retirement benefits that employees will have
earned as of December 31, 2006. -- Redesigning the 401(k) savings
plans to significantly improve the company-funded contribution so
that there is a dollar for dollar company match on up to 6 percent
of salary deferrals. -- Adopting other enhancements within the
401(k) savings plans to allow all participants to make full use of
the maximum statutory deferral limits. The changes do not affect
the vested accrued pension benefits of former associates, including
Stride Rite retirees. "Continuing to support our associates'
retirements while maintaining Stride Rite's financial strength and
stability is an issue that we have given careful consideration to
over the past year," said David Chamberlain, Stride Rite's Chairman
and CEO. "We believe that these changes, while difficult, will
achieve a balance between controlling our pension costs, while
still enabling our associates to prepare for retirement. "These
actions are being taken to provide Stride Rite with a more
predictable and affordable cost structure for retirement benefits
and will enhance our ability to compete. Many companies today,
including most of the ones that we compete directly with, do not
sponsor defined benefit pension plans. Furthermore, we believe that
these steps are both prudent and appropriate at a time of
uncertainty in the legislative and regulatory direction regarding
defined benefit pension plans." COMPANY OVERVIEW: The Stride Rite
Corporation markets the leading brand of high quality children's
shoes in the United States. Other footwear products for children
and adults are marketed by the Company under well-known brand
names, including Keds, Sperry Top-Sider, Tommy Hilfiger, Saucony,
Grasshoppers, Munchkin, Spot-bilt and Hind. Apparel products are
marketed by the Company under the Saucony and Hind brand names.
Information about the Company is available on our website -
www.strideritecorp.com. Information about the Company's brands and
product lines is available at www.striderite.com, www.keds.com,
www.sperrytopsider.com and www.saucony.com. SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: This
announcement includes forward-looking statements that are not based
on historical facts and that reflect our current views with respect
to the future events or financial performance discussed in the
release, based on management's beliefs and assumptions and
information currently available, including statements regarding the
expected cost savings related to the changes to the Company's
defined benefit plan. Such statements are subject to risks,
uncertainties and assumptions and are not guarantees of future
events or performance, which may be affected by known and unknown
risks, trends and uncertainties. Should one or more of these risks
or uncertainties materialize, or should our assumptions prove
incorrect, actual results may vary materially from those
anticipated, projected or implied. Factors that could affect the
Company's future results are contained in our periodic filings with
the Securities and Exchange Commission. We expressly disclaim any
responsibility to update forward-looking statements.
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