10.Benefit Plans

(A) Retirement Benefit Plans

Effective December 31, 2008, we froze both of our noncontributory defined benefit plans: our pension plan (the “pension plan”) and our unfunded, nonqualified plan (the “restoration plan”), which restores retirement benefits for certain associates who are affected by Internal Revenue Code limitations on benefits provided under the pension plan. No additional benefits have accrued under these plans since that date. In connection with benefits earned prior to December 31, 2008, we have a continuing obligation to fund the pension plan and will continue to recognize net periodic pension expense for both plans. We use a fiscal year end measurement date for both the pension plan and the restoration plan.

Benefit Plan Information


	As of February 28
	Pension Plan						Restoration Plan						Total
(In thousands)	2014			2013			2014			2013			2014		2013
Change in projected benefit
obligation:
Obligation at beginning of year		$	177,531		$	154,632		$	9,408		$	9,892	$	186,939		$	164,524
Interest cost			7,583			7,299			433			458		8,016			7,757
Actuarial (gain) loss			(4,980)			17,766			803			(488)		(4,177)			17,278
Benefits paid			(2,460)			(2,166)			(457)			(454)		(2,917)			(2,620)
Obligation at end of year			177,674			177,531			10,187			9,408		187,861			186,939
Change in fair value of plan assets:
Plan assets at beginning of year			107,968			96,897			―			―		107,968			96,897
Actual return on plan assets			19,204			8,175			―			―		19,204			8,175
Employer contributions			―			5,062			457			454		457			5,516
Benefits paid			(2,460)			(2,166)			(457)			(454)		(2,917)			(2,620)
Plan assets at end of year			124,712			107,968			―			―		124,712			107,968
Funded status recognized		$	(52,962)		$	(69,563)		$	(10,187)		$	(9,408)	$	(63,149)		$	(78,971)
Amounts recognized in the
consolidated balance sheets:
Current liability		$	―		$	―		$	(451)		$	(453)	$	(451)		$	(453)
Noncurrent liability			(52,962)			(69,563)			(9,736)			(8,955)		(62,698)			(78,518)
Net amount recognized		$	(52,962)		$	(69,563)		$	(10,187)		$	(9,408)	$	(63,149)		$	(78,971)
Accumulated benefit obligation		$	177,674		$	177,531		$	10,187		$	9,408	$	187,861		$	186,939

Benefit Obligations. Accumulated and projected benefit obligations (“ABO” and “PBO”) represent the obligations of the benefit plans for past service as of the measurement date. ABO is the present value of benefits earned to date with benefits computed based on current service and compensation levels. PBO is ABO increased to reflect expected future service and increased compensation levels. As a result of the freeze of plan benefits under our pension and restoration plans as of December 31, 2008, the ABO and PBO balances are equal to one another at all subsequent dates.

Assumptions Used to Determine Benefit Obligations


	As of February 28
	Pension Plan				Restoration Plan
	2014		2013			2014		2013
Discount rate (1)	4.55	%	4.30	%		4.55	%	4.30	%

(1)For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for the post-2004 lump sum amounts paid from the plan for fiscal 2014 and fiscal 2013.

Fair Value of Plan Assets And Fair Value Hierarchy


	As of February 28
(In thousands)	2014			2013
Mutual funds (Level 1):
Equity securities (1)		$	78,576		$	67,957
Equity securities – international (2)			15,649			13,536
Fixed income securities (3)			29,500			26,218
Collective funds (Level 2):
Short-term investments (4)			1,046			255
Investment (payables) receivables, net (Level 1)			(59)			2
Total		$	124,712		$	107,968

(1)Includes large-, mid- and small-cap companies primarily from diverse U.S. industries including bank, oil and gas, retail and pharmaceutical sectors; approximately 95% of securities relate to U.S. entities and 5% of securities relate to non-U.S. entities as of February 28, 2014 (95% and 5%, respectively, as of February 28, 2013) .

(2)Consists of equity securities of primarily foreign corporations from diverse industries including bank, pharmaceutical, telecommunication, oil and gas, insurance and food sectors; 100% of securities relate to non-U.S. entities as of February 28, 2014 (100% relate to non-U.S. entities, as of February 28, 2013).

(3)Includes debt securities of U.S. and foreign governments, their agencies and corporations, and diverse investments in mortgage-backed securities and banks; approximately 90% of securities relate to U.S. entities and 10% of securities relate to non-U.S. entities as of February 28, 2014 (85% and 15%, respectively, as of February 28, 2013).

(4)Includes pooled funds representing short-term instruments that include governments, their agencies and corporations and large-, mid- and small-cap companies primarily from the U.S. bank sector; nearly 100% of securities relate to U.S. entities as of February 28, 2014 (nearly 100% as of February 28, 2013).

Plan Assets. Our pension plan assets are held in trust and management sets the investment policies and strategies. Long-term strategic investment objectives include asset preservation and appropriately balancing risk and return. We oversee the investment allocation process, which includes selecting investment managers, setting long-term strategic targets and monitoring asset allocations and performance. Target allocations for plan assets are guidelines, not limitations, and occasionally plan fiduciaries may approve allocations above or below the targets. We target allocating 75% of plan assets to equity and equity-related instruments and 25% to fixed income securities. Equity securities are currently composed of mutual funds that include highly diversified investments in large-, mid- and small-cap companies located in the United States and internationally. The fixed income securities are currently composed of mutual funds that include investments in debt securities, mortgage-backed securities, corporate bonds and other debt obligations primarily in the United States. We do not expect any plan assets to be returned to us during fiscal 2015. Plan assets also include collective funds, which are public investment vehicles with the underlying assets representing high quality, short-term instruments that include securities of governments, their agencies and corporations and large, mid, and small cap companies located in the United States and internationally.

The fair values of the plan’s assets are provided by the plan’s trustee and the investment managers. Within the fair value hierarchy (see Note 6), the mutual funds are classified as Level 1 as quoted active market prices for identical assets are used to measure fair value. The collective funds are public investment vehicles valued using a net asset value (“NAV”) provided by the plan’s trustee as a practical expedient for measuring the fair value. The NAV is based on the underlying net assets owned by the fund divided by the number of shares outstanding. The NAV’s unit price is quoted on a private market that was not active. However, the NAV is based on the fair value of the underlying securities within the fund, which were traded on an active market and valued at the closing price reported on the active market on which those individual securities are traded. The collective funds may be liquidated with minimal restrictions and are classified as Level 2.

Funding Policy. For the pension plan, we contribute amounts sufficient to meet minimum funding requirements as set forth in the employee benefit and tax laws, plus any additional amounts as we may determine to be appropriate. We expect to contribute $4.2 million to the pension plan in fiscal 2015. For the non-funded restoration plan, we contribute an amount equal to the benefit payments.

Estimated Future Benefit Payments


	Pension		Restoration
(In thousands)	Plan		Plan
Fiscal 2015	$	2,056		$	451
Fiscal 2016	$	2,407		$	466
Fiscal 2017	$	2,726		$	476
Fiscal 2018	$	3,076		$	482
Fiscal 2019	$	3,464		$	485
Fiscal 2020 to 2024	$	24,182		$	2,810

Components of Net Pension Expense


	Years Ended February 28 or 29
(In thousands)	Pension Plan						Restoration Plan						Total
	2014		2013		2012		2014		2013		2012		2014		2013		2012
Interest cost	$	7,583	$	7,299	$	6,830	$	433	$	458	$	518	$	8,016	$	7,757	$	7,348
Expected return on
plan assets		(7,916)		(7,591)		(6,870)		―		―		―		(7,916)		(7,591)		(6,870)
Recognized actuarial
loss		1,674		1,200		461		―		―		―		1,674		1,200		461
Net pension expense	$	1,341	$	908	$	421	$	433	$	458	$	518	$	1,774	$	1,366	$	939

Changes Recognized in Accumulated Other Comprehensive Loss


	Years Ended February 28
	Pension Plan						Restoration Plan						Total
(In thousands)	2014			2013			2014			2013			2014			2013
Net actuarial (gain) loss		$	(16,268)		$	17,182		$	803		$	(488)		$	(15,465)		$	16,694

In fiscal 2015, we anticipate that $1.4 million in estimated actuarial losses of the pension plan will be amortized from accumulated other comprehensive loss. We do not anticipate that any appreciable estimated actuarial losses will be amortized from accumulated other comprehensive loss for the restoration plan.

Assumptions Used to Determine Net Pension Expense


	Years Ended February 28 or 29
	Pension Plan						Restoration Plan
	2014		2013		2012		2014		2013		2012
Discount rate (1)	4.30	%	4.75	%	5.80	%	4.30	%	4.75	%	5.80	%
Expected rate of return on plan assets	7.75	%	7.75	%	7.75	%	―		―		―

(1)For the restoration plan, the discount rate presented is applied to the pre-2004 annuity amounts. A rate of 4.50% is assumed for post-2004 lump sum amounts paid from the plan for fiscal 2014 and fiscal 2013. For fiscal 2012 and prior years, a rate of 5.00% was assumed for post-2004 lump sum amounts paid from the plan.

Assumptions. Underlying both the calculation of the PBO and the net pension expense are actuarial calculations of each plan’s liability. These calculations use participant-specific information such as salary, age and years of service, as well as certain assumptions, the most significant being the discount rate, rate of return on plan assets and mortality rate. We evaluate these assumptions at least once a year and make changes as necessary.

The discount rate used for retirement benefit plan accounting reflects the yields available on high-quality, fixed income debt instruments. For our plans, we review high quality corporate bond indices in addition to a hypothetical portfolio of corporate bonds with maturities that approximate the expected timing of the anticipated benefit payments.

To determine the expected long-term return on plan assets, we consider the current and anticipated asset allocations, as well as historical and estimated returns on various categories of plan assets. We apply the estimated rate of return to a market-related value of assets, which reduces the underlying variability in the asset values. The use of expected long-term rates of return on pension plan assets could result in recognized asset returns that are greater or less than the actual returns of those pension plan assets in any given year. Over time, however, the expected long-term returns are anticipated to approximate the actual long-term returns, and therefore, result in a pattern of income and expense recognition that more closely matches the pattern of the services provided by the employees. Differences between actual and expected returns, which are a component of unrecognized actuarial gains/losses, are recognized over the average life expectancy of all plan participants.

Given the frozen status of the pension and benefit restoration plans, the rate of compensation increases is not applicable for periods subsequent to December 31, 2008. Mortality rate assumptions are based on the life expectancy of the population and were updated in fiscal 2011 to account for increases in life expectancy.

(B) Retirement Savings 401(k) Plan

We sponsor a 401(k) plan for all associates meeting certain eligibility criteria. In conjunction with the pension plan curtailments, enhancements were made to the 401(k) plan effective January 1, 2009. The enhancements increased the maximum salary contribution for eligible associates and increased our matching contribution. Additionally, an annual company-funded contribution regardless of associate participation was implemented, as well as an additional company-funded contribution to those associates meeting certain age and service requirements. The total cost for company contributions was $25.0 million in fiscal 2014, $23.1 million in fiscal 2013 and $20.9 million in fiscal 2012.

Effective January 1, 2009, we replaced the frozen restoration plan with a new non-qualified retirement plan for certain senior executives who are affected by Internal Revenue Code limitations on benefits provided under the Retirement Savings 401(k) Plan. Under this plan, these associates may continue to defer portions of their compensation for retirement savings. We match the associates’ contributions at the same rate provided under the 401(k) plan, and also provide the annual company-funded contribution made regardless of associate participation, as well as the additional company-funded contribution to the associates meeting the same age and service requirements. This plan is unfunded with lump sum payments to be made upon the associate’s retirement. The total cost for this plan was $1.1 million in fiscal 2014, $0.4 million in fiscal 2013 and $0.5 million in fiscal 2012.

(D) Executive Deferred Compensation Plan

Effective January 1, 2011, we established an unfunded nonqualified deferred compensation plan to permit certain eligible key associates to defer receipt of a portion of their compensation to a future date. This plan also includes a restorative company contribution designed to compensate the plan participants for any loss of company contributions under the Retirement Savings 401(k) Plan and the Retirement Restoration Plan due to a reduction in their eligible compensation resulting from deferrals into the Executive Deferred Compensation Plan. The total cost for this plan was $0.6 million in fiscal 2014, $0.4 million in fiscal 2013 and was not material in fiscal 2012.