EMPLOYEE BENEFIT PLANS

Defined Contribution and Deferred Compensation Plans

The Company has a 401(k) retirement investment plan (“401(k) Plan”), which is open to all otherwise eligible U.S. employees with at least six months of service. The 401(k) Plan calls for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The Company may, at its discretion, make additional contributions to the 401(k) Plan based on the attainment of certain performance targets by its subsidiaries. The Company’s matching contributions are funded bi-monthly and totaled approximately $2.4 million, $2.1 million and $1.9 million for the years 2012, 2011 and 2010, respectively, for continuing operations. No discretionary contributions were made in 2012, 2011 or 2010.

Under the Company’s nonqualified savings plans (“NSPs”), the Company provides eligible employees the opportunity to enter into agreements for the deferral of a specified percentage of their compensation, as defined in the NSPs. The NSPs call for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The obligations of the Company under such agreements to pay the deferred compensation in the future in accordance with the terms of the NSPs are unsecured general obligations of the Company. Participants have no right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to hold, invest and reinvest deferrals and contributions under the NSPs. If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant. Deferred compensation in connection with the NSPs totaled $18.3 million at December 30, 2012. The Company invested the deferrals in insurance instruments with readily determinable cash surrender values.

Foreign Defined Benefit Plans

The Company has trusteed defined benefit retirement plans which cover many of its European employees. The benefits are generally based on years of service and the employee’s average monthly compensation. Pension expense was $0.8 million, $0.3 million and $1.8 million for the years 2012, 2011 and 2010, respectively. Plan assets are primarily invested in equity and fixed income securities. The Company uses a year-end measurement date for the plans. As of December 30, 2012, for the European plans, the Company had a net liability recorded of $2.6 million, an amount equal to their unfunded status, and has recorded in Other Comprehensive Income an amount equal to $31.5 million (net of taxes) related to the future amounts to be recorded in net post-retirement benefit costs.

The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans and required disclosures in accordance with applicable accounting standards


	FISCAL YEAR
	2012			2011
	(in thousands)
Change in benefit obligation
Benefit obligation, beginning of year	$	216,721		$	212,378
Service cost		505			469
Interest cost		10,212			11,386
Benefits and expenses paid		(9,969	)		(11,641	)
Actuarial loss (gain)		17,538			5,224
Member contributions		296			375
Currency translation adjustment		8,346			(1,470	)

Benefit obligation, end of year	$	243,649		$	216,721


	FISCAL YEAR
	2012			2011
	(in thousands)
Change in plan assets
Plan assets, beginning of year	$	206,402		$	205,810
Actual return on assets		31,204			8,769
Company contributions		5,248			5,112
Member contributions		0			0
Benefits paid		(9,704	)		(11,697	)
Currency translation adjustment		7,877			(1,592	)

Plan assets, end of year	$	241,027		$	206,402

Reconciliation to balance sheet
Funded status (benefit liability)	$	(2,622	)	$	(10,319	)

Net amount recognized	$	(2,622	)	$	(10,319	)

Amounts recognized in accumulated other comprehensive income (after tax)
Unrecognized actuarial loss	$	30,711		$	32,455
Unamortized prior service costs		774			809

Total amount recognized	$	31,485		$	33,264

The above disclosure represents the aggregation of information related to the Company’s two defined benefit plans which cover many of its European employees. As of December 30, 2012, and January 1, 2012, one of these plans, which primarily covers certain employees in the United Kingdom (the “UK Plan”), had an accumulated benefit obligation in excess of the plan assets. The other plan, which covers certain employees in Europe (the “Europe Plan”), had assets in excess of the accumulated benefit obligation. The following table summarizes this information as of December 30, 2012, and January 1, 2012.


	2012		2011
	(in thousands)
UK Plan
Projected Benefit Obligation	$	171,381	$	157,600
Accumulated Benefit Obligation		171,381		157,600
Plan Assets		162,998		139,796
Europe Plan
Projected Benefit Obligation	$	72,267	$	59,121
Accumulated Benefit Obligation		69,472		57,247
Plan Assets		78,029		66,606


	FISCAL YEAR
	2012			2011			2010
	(in thousands)
Components of net periodic benefit cost
Service cost	$	505		$	492		$	357
Interest cost		10,212			11,194			10,873
Expected return on plan assets		(11,203	)		(11,966	)		(11,058	)
Amortization of prior service cost		86			0			89
Recognized net actuarial (gains)/losses		1,189			602			1,566

Net periodic benefit cost	$	789		$	322		$	1,827

For 2013, it is estimated that approximately $0.8 million of expenses related to the amortization of unrecognized items will be included in the net periodic benefit cost. During 2012, other comprehensive income was impacted by approximately $2.7 million comprised of actuarial gain of approximately $1.8 million and amortization of $0.8 million


	FISCAL YEAR
	2012			2011			2010
Weighted average assumptions used to determine net periodic benefit cost
Discount rate		4.7	%		5.3	%		5.6	%
Expected return on plan assets		5.7	%		5.9	%		6.6	%
Rate of compensation		2.0	%		2.0	%		2.0	%
Weighted average assumptions used to determine benefit obligations
Discount rate		4.0	%		4.7	%		5.3	%
Rate of compensation		2.0	%		2.0	%		2.0	%

The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers.

The Company’s foreign defined benefit plans’ accumulated benefit obligations were in excess of the fair value of the plans’ assets. The projected benefit obligations, accumulated benefit obligations and fair value of these plan assets are as follows:


	FISCAL YEAR
	2012		2011
	(in thousands)
Projected benefit obligation	$	243,649	$	216,721
Accumulated benefit obligations		240,853		214,848
Fair value of plan assets		241,027		206,402

The investment objectives of the foreign defined benefit plans are to maximize the return on the investments without exceeding the limits of the prudent pension fund investment, to ensure that the assets would be sufficient to exceed minimum funding requirements, and to achieve a favorable return against the performance expectation based on historic and projected rates of return over the short term. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The plans’ net assets did not include the Company’s own stock at December 30, 2012, or January 1, 2012.

The Company’s actual weighted average asset allocations for 2012 and 2011, and the targeted asset allocation for 2013, of the foreign defined benefit plans by asset category, are as follows:


	FISCAL YEAR
	2013			2012			2011
	Target Allocation			Percentage of Plan Assets at Year End
Asset Category:
Equity Securities		55-65	%		68	%		66	%
Debt Securities		30-40	%		28	%		30	%
Other		0-5	%		4	%		4	%

		100	%		100	%		100	%

Fair Value Measurements of Plan Assets

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under applicable accounting standards are described below:



Level 1		Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2		Inputs to the valuation methodology include:

		• quoted prices for similar assets in active markets;

		• quoted prices for identical or similar assets in inactive markets;

		• inputs other than quoted prices that are observable for the asset; and

		• inputs that are derived principally or corroborated by observable data by correlation or other means.

Level 3		Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of December 30, 2012 and January 1, 2012. As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


	Pension Plan Assets by Category as of December 30, 2012
	Europe Plan		UK Plan		Total
			*(in thousands)*
Level 1	$	78,029	$	153,847	$	231,876
Level 2		0		0		0
Level 3		0		9,151		9,151

Total	$	78,029	$	162,998	$	241,027


	Pension Plan Assets by Category as of January 1, 2012
	Europe Plan		UK Plan		Total
			*(in thousands)*
Level 1	$	66,606	$	132,491	$	199,097
Level 2		0		0		0
Level 3		0		7,305		7,305

Total	$	66,606	$	139,796	$	206,402

The assets identified as level 3 above relate to insured annuities held by the UK Plan. The fair value of these assets was calculated using the present value of the future pension payments due under the insurance policies. The table below indicates the change in value related to these level 3 assets during 2012:


	(in thousands)
Balance of level 3 assets, beginning of year	$	7,305
Interest cost		380
Benefits paid		(1,129	)
Actuarial gain		2,243
Translation adjustment		352

Ending Balance of level 3 assets	$	9,151

During 2013, the Company expects to contribute $5.3 million to the plan trust and $10.0 million in the form of direct benefit payments for its foreign defined benefit plans. It is anticipated that future benefit payments for the foreign defined benefit plans will be as follows:


	EXPECTED PAYMENTS
FISCAL YEAR	(in thousands)
2013	$	10,003
2014		10,144
2015		10,343
2016		10,669
2017		10,902
2018-2022		55,684

Domestic Defined Benefit Plan

The Company maintains a domestic nonqualified salary continuation plan (“SCP”), which is designed to induce selected officers of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those which they may receive under the Company’s other retirement plans and benefit programs. The SCP entitles participants to: (i) retirement benefits upon normal retirement at age 65 (or early retirement as early as age 55) after completing at least 15 years of service with the Company (unless otherwise provided in the SCP), payable for the remainder of their lives (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) and in no event less than 10 years under the death benefit feature; (ii) disability benefits payable for the period of any total disability; and (iii) death benefits payable to the designated beneficiary of the participant for a period of up to 10 years. Benefits are determined according to one of three formulas contained in the SCP, and the SCP is administered by the Compensation Committee of the Company’s Board of Directors, which has full discretion in choosing participants and the benefit formula applicable to each. The Company’s obligations under the SCP are currently unfunded (although the Company uses insurance instruments to hedge its exposure thereunder). The Company is required to contribute the present value of its obligations thereunder to an irrevocable grantor trust in the event of a change in control as defined in the SCP. The Company uses a year-end measurement date for the domestic SCP.

The tables presented below set forth the required disclosures in accordance with applicable accounting standards, and amounts recognized in the consolidated financial statements related to the domestic SCP.


	FISCAL YEAR
	2012			2011
	(in thousands)
Change in benefit obligation
Benefit obligation, beginning of year	$	19,308		$	19,008
Service cost		452			393
Interest cost		1,014			1,135
Benefits paid		(847	)		(949	)
Actuarial loss (gain)		1,996			(279	)

Benefit obligation, end of year	$	21,923		$	19,308

The amounts recognized in the consolidated balance sheets are as follows:


	2012		2011
	(in thousands)
Current liabilities	$	847	$	847
Non-current liabilities		21,076		18,461

	$	21,923	$	19,308

The components of the amounts in accumulated other comprehensive income, after tax, are as follows:


	2012		2011
	(in thousands)
Unrecognized actuarial loss	$	3,963	$	2,926
Unrecognized transition asset		0		0
Unamortized prior service cost		43		72

	$	4,006	$	2,998

The accumulated benefit obligation related to the SCP was $18.1 million and $16.0 million as of December 30, 2012, and January 1, 2012, respectively. The SCP is currently unfunded; as such, the benefit obligations disclosed are also the benefit obligations in excess of the plan assets. The Company uses insurance instruments to help limit its exposure under the SCP.


	2012			2011			2010
	(in thousands, except for assumptions)
Assumptions used to determine net periodic benefit cost
Discount rate		4.75	%		5.5	%		6.0	%
Rate of compensation		4.0	%		4.0	%		4.0	%
Assumptions used to determine benefit obligations
Discount rate		4.0	%		4.75	%		5.5	%
Rate of compensation		4.0	%		4.0	%		4.0	%
Components of net periodic benefit cost
Service cost	$	452		$	393		$	342
Interest cost		1,014			1,138			1,121
Amortizations		316			637			545

Net periodic benefit cost	$	1,782		$	2,168		$	2,008

The changes in other comprehensive income during 2012 related to this Plan were approximately $1.0 million, after tax, primarily comprised of a net loss during the period of $1.2 million.

For 2013, the Company estimates that approximately $0.3 million of expenses, after tax, related to the amortization of unrecognized items will be included in net periodic benefit cost for the SCP.

During 2012, the Company contributed $0.8 million in the form of direct benefit payments for its domestic SCP. It is anticipated that future benefit payments for the SCP will be as follows:


	EXPECTED PAYMENTS
FISCAL YEAR	(in thousands)
2013	$	847
2014		847
2015		847
2016		847
2017		847
2018-2022		6,706