Bridgford Foods Corp | Investor Service

2003 Annual Report

Incentive Compensation Plan for Certain Key Executives

The Company provides an incentive compensation plan for certain key executives, which is based upon the Company’s pretax income. The payment of these amounts is generally deferred over a five-year period. The total amount payable related to this arrangement was $488 and $557 at November 2, 2007 and November 3, 2006, respectively. Future payments are approximately $203, $112, $82, $62 and $30 for fiscal years 2008 through 2012, respectively.

Postretirement Health Care Benefits for Selected Executive Employees

The Company provides postretirement health care benefits for selected executive employees.   Net periodic postretirement benefit cost is determined using assumptions as of the beginning of each fiscal year.

Net periodic postretirement benefit cost consisted of the following:

 

 

2007

 

2006

 

Service cost

 

$

15

 

$

14

 

Interest cost

 

70

 

66

 

Return on plan assets

 

0

 

0

 

Amortization of unrecognized loss

 

0

 

0

 

Amortization of prior service cost

 

75

 

75

 

Amortization of actuarial (gain) / loss

 

10

 

11

 

Net periodic postretirement benefit cost

 

$

170

 

$

166

 

Weighted average assumptions for the fiscal year ended November 2, 2007 are as follows:

 

 

2007

 

2006

 

Discount rate

 

6.25

%

6.00

%

Medical trend rate next year

 

9.00

%

10.0

%

Ultimate trend rate

 

5.00

%

5.00

%

Year ultimate trend rate is achieved

 

2011

 

2011

 

The table below shows the estimated effect of a 1% increase in health care cost trend rate on the following:

 

 

2007

 

2006

 

Interest cost plus service cost

 

$

10

 

$

10

 

Accumulated postretirement benefit obligation

 

$

111

 

$

120

 

The table below shows the estimated effect of a 1% decrease in health care cost trend rate on the following:

 

 

2007

 

2006

 

Interest cost plus service cost

 

$

(9

)

$

(9

)

Accumulated postretirement benefit obligation

 

$

(94

)

$

(113

)