17. POSTRETIREMENT OBLIGATIONS

Effective September 30, 2008, Dan W. Matthias, the Company’s former Chairman of the Board and Former CEO, retired as CEO. In connection with Mr. Matthias’ retirement as CEO, in September 2008 the Company entered into a Transition Agreement (the “D. Matthias Transition Agreement”) with Mr. Matthias, the term of which expired on September 30, 2012. The D. Matthias Transition Agreement provided that Mr. Matthias made himself available to the Company during the term of the agreement for strategic planning, corporate development and other matters as requested by the Board or the Company’s CEO. Subsequent to his retirement, Mr. Matthias continued to serve the Company as non-executive Chairman of the Board until January 2010 and was thereafter available to the Company as stipulated in the D. Matthias Transition Agreement. In consideration of Mr. Matthias’ advisory and board services (and in lieu of all other director compensation), the Company paid Mr. Matthias an annual retainer of $200,000 and continued certain insurance and fringe benefits during the term of the D. Matthias Transition Agreement. The D. Matthias Transition Agreement also provides for the restrictive covenants set forth in Mr. Matthias’ employment agreement to continue in effect until September 30, 2014.

Effective September 30, 2010, Rebecca C. Matthias, the Company’s former President and Chief Creative Officer, retired. In connection with Ms. Matthias’ scheduled retirement, in November 2009 the Company entered into a Transition Agreement (the “R. Matthias Transition Agreement”) with Ms. Matthias, the term of which expired on September 30, 2012. In addition to certain preretirement employment arrangements, the R. Matthias Transition Agreement provided that Ms. Matthias made herself available to the Company during the term of the agreement on a limited basis for strategic planning, merchandising, public relations, publicity and other matters as requested by the Company’s CEO. The R. Matthias Transition Agreement also provides for the restrictive covenants set forth in Ms. Matthias’ employment agreement to continue in effect until September 30, 2014.

The Company had Supplemental Executive Retirement Agreements (the “SERP Agreement(s)”) with Mr. and Ms. Matthias (the “SERP Executives”), which were effective March 2, 2007. Pursuant to the D. Matthias Transition Agreement, Mr. Matthias received SERP Agreement benefits totaling $3,960,000, which were paid to Mr. Matthias in installments that commenced on April 1, 2009, with the final installment paid on October 1, 2012. The Company paid SERP Agreement benefits to Mr. Matthias totaling $150,000, $600,000 and $750,000 in fiscal 2013, 2012 and 2011, respectively. Pursuant to the R. Matthias Transition Agreement, Ms. Matthias received a lump sum payment of the SERP Agreement benefits of $4,166,000 on December 16, 2010. No further amounts are payable to Mr. or Ms. Matthias pursuant to their SERP Agreements.

The Company accounted for the SERP Agreements in accordance with the accounting requirements for defined benefit pension and other post-retirement plans.

17. POSTRETIREMENT OBLIGATIONS (Continued)

Changes in the benefit obligation under the SERP Agreements as of September 30 were as follows (in thousands):

	2013			2012

Benefit obligation at beginning of year	$	150		$	732
Interest cost		—			18
Benefit payments		(150	)		(600	)
Benefit obligation at end of year		—			150
Less: current portion included in accrued expenses and other current liabilities		—			(150	)
Non-current benefit obligation at end of year	$	—		$	—

Net periodic pension cost on a pretax basis for fiscal 2012 and 2011 consisted of interest cost of $18,000 and $88,000, respectively.

The Company had a grantor trust, which was established for the purpose of accumulating assets in anticipation of the Company’s payment obligations under the SERP Agreements (the “Grantor Trust”). In accordance with the Company’s agreements with the SERP Executives and the trustee for the Grantor Trust (the “Trustee”), the Company made partial cash contributions to the Grantor Trust, and provided an irrevocable standby letter of credit to the Trustee, in lieu of any contributions otherwise required, as security for funding obligations under the SERP Agreements. In December 2010, the Company received a distribution of the assets in the Grantor Trust totaling $1,504,000. The amount withdrawn was used to partially fund the December 2010 lump sum payment of $4,166,000 of SERP Agreement benefits to Ms. Matthias. No further amounts remain in the Grantor Trust.