16. Executive Benefit Agreements and Employee Savings Plans

In 1981, we entered into individual death benefit agreements with certain key executives (“1981 Agreements”). Under the 1981 Agreements, should the executive die while employed, we are required to pay the beneficiary named in the agreement in 120 equal monthly installments aggregating to an amount specified in the agreement. The monthly installments specified in the 1981 Agreements total $32,000. The benefits under the 1981 Agreements are forfeited if the respective executive’s employment is terminated for any reason prior to death. The 1981 Agreements may be terminated by the Company at any time and for any reason prior to the death of the employee. See table below for information about the 1981 Agreements.

In 1992, we entered into individual benefit agreements with certain key executives (“1992 Agreements”) that provide for annual benefit payments for life (in addition to salary) ranging from $16,000 to $18,000 payable in monthly installments when the employee reaches age 65. As part of the 1992 Agreements, should the executive die prior to attaining the age of 65, we will pay the beneficiary named in the agreement in 120 equal monthly installments aggregating to an amount specified in the agreement. This amount is in addition to any amount payable under the 1981 Agreement should that executive have both a 1981 and 1992 agreement. The benefits under the 1992 Agreements are forfeited if the respective executive’s employment is terminated prior to age 65 for any reason other than death. The 1992 Agreements may be terminated by the Company at any time and for any reason prior to the death of the employee. See table below for information about the 1992 Agreements.

In 2005, we entered into a death benefit agreement (“2005 Agreement”) with our CEO. The Death Benefit Agreement provides that, upon our CEO’s death, we will pay to our CEO’s designated beneficiary, a lump-sum payment of $2,500,000 to be funded from the net proceeds received by us under certain life insurance policies on our CEO’s life that are owned by us. We are obligated to keep in existence life insurance policies with a total face amount of no less than $2,500,000 of the stated death benefit. The benefit under the 2005 Agreement is not contingent upon continued employment and may be amended at any time by written agreement executed by the CEO and the Company. The following table includes information about the 2005 Agreement.


	December 31,
	2012			2011
	(In Thousands)
Total undiscounted death benefits—1981 Agreements	$	3,865		$	4,115

Total undiscounted death benefits—1992 Agreements	$	302		$	302

Total undiscounted death benefits—2005 Agreement	$	2,500		$	2,500

Accrued death benefits—All agreements	$	4,185		$	4,017

Total undiscounted executive benefits—1992 Agreements	$	1,928		$	1,950

Discount rates utilized—1992 Agreements		2.78	%		3.58	%

Accrued executive benefits—1992 Agreements	$	1,365		$	1,262


			December 31,
	2012		2011		2010
	(In Thousands)
Costs associated with executive benefits included in SG&A	$	186	$	158	$	169

Accrued death and executive benefits under the above agreements are included in current and noncurrent accrued and other liabilities. We accrue for such liabilities when they become probable and discount the liabilities to their present value.

To assist us in funding the benefit agreements discussed above and for other business reasons, we purchased life insurance policies on various individuals in which we are the beneficiary. Some of these life insurance policies have cash surrender values that we have borrowed against. The net cash surrender values are included in other assets. The following table summarizes certain information about these life insurance policies.


	December 31,
	2012		2011
	(In Thousands)
Total face value of life insurance policies (1)	$	21,242	$	21,522

Cash surrender values of life insurance policies	$	5,439	$	4,961
Loans on cash surrender values		—		(1,890	)

Net cash surrender values	$	5,439	$	3,071


	2012			2011			2010
	(In Thousands)
Cost of life insurance premiums	$	851		$	851		$	851
Increases in cash surrender values		(479	)		(499	)		(496	)

Net cost of life insurance premiums included in SG&A	$	372		$	352		$	355

(1)	Includes $7,000,000 on the life of our CEO, of which $2,500,000 is required to be paid under the 2005 Agreement as discussed above.

We sponsor a savings plan under Section 401(k) of the Internal Revenue Code under which participation is available to substantially all full-time employees. We do not presently contribute to this plan except for certain employees within the Chemical Business, which amounts were not material for each of the three years ended December 31, 2012.