OTE 3 -

Retirement and Other Benefit Plans:

Noncontributory-Trusteed Defined Benefit Retirement Plans for Sales, Administrative, Supervisory and Certain Other Employees

We have noncontributory-trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other employees. In the third quarter of fiscal 2006, we froze future benefit accruals under this plan for employees classified within the administrative, sales or supervisory job classifications or within any non-bargaining class. The benefits under these plans are primarily based on years of service and compensation levels. The funding policy of the plan is to make contributions which are at least equal to the minimum required contributions needed to avoid a funding deficiency. The measurement date for the plan is our fiscal year end.

Net pension cost consisted of the following:

	52 Weeks
	2015			2014
Service cost	$	113		$	135
Interest cost		2,176			2,226
Expected return on plan assets		(3,346	)		(3,131	)
Amortization of unrecognized loss		1,244			830
Amortization of unrecognized prior service costs		-			1
Net pension cost	$	187		$	61

Net pension costs and benefit obligations are determined using assumptions as of the beginning of each fiscal year. Weighted average assumptions for each fiscal year are as follows:

	2015			2014
Discount rate		4.15	%		4.05	%
Rate of increase in salary levels	N/A			N/A
Expected return on plan assets		8.00	%		8.00	%

The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows:

	52 Weeks
	2015			2014
Change in plan assets:
Fair value of plan assets - beginning of year	$	42,320		$	39,124
Employer contributions		1,157			1,587
Actual return on plan assets		(640	)		2,939
Benefits paid		(1,418	)		(1,330	)
Fair value of plan assets - end of year	$	41,419		$	42,320
Change in benefit obligations:
Benefit obligations - beginning of year	$	54,277		$	49,154
Service cost		113			135
Interest cost		2,176			2,226
Actuarial (gain) loss		4,783			4,093
Benefits paid		(1,418	)		(1,331	)
Benefit obligations - end of year		59,931			54,277
Funded status of the plans		(18,512	)		(11,957	)
Unrecognized prior service costs		0			0
Unrecognized net actuarial loss		25,844			18,319
Net amount recognized	$	7,332		$	6,362

We perform an internal rate of return analysis when making the discount rate selection. The discount rates were based on Citigroup Pension Liability Index as of October 30, 2015 and October 31, 2014 respectively.

Plan assets are primarily invested in marketable equity securities, corporate and government debt securities and are administered by an investment management company. The plans’ long-term return on assets is based on the weighted-average of the plans’ investment allocation as of the measurement date and the published historical returns for those types of asset categories, taking into consideration inflation rate forecasts. Our expected employer contribution to the plan in fiscal year 2016 is $1,150.

During fiscal 2015, our actuary updated mortality tables from the IRS 2014 Combined Static Mortality assumptions to the SOA RP 2014 Total Dataset Adjusted to 2006 with Scale MP-2015. The change in mortality table resulted in a significant liability increase in fiscal 2015 as well as an increased net periodic pension cost (NPPC) projection for fiscal 2016. The expected rate of return on plan assets decreased from 8.00% to 7.00% effective for the 2016 fiscal year. The lower expected rate of return increases net pension costs in future fiscal years.

The actual and target allocation for plan assets are as follows:

Asset Class	2015			Target Asset Allocation			2014			Target Asset Allocation
Large Cap Equities		31.1	%		32.0	%		30.9	%		30.0	%
Mid Cap Equities		0	%		0.0	%		0	%		0.0	%
Small Cap Equities		13.3	%		12.0	%		15.6	%		15.0	%
International (equities only)		20.3	%		21.0	%		18.4	%		20.0	%
Fixed Income		30.8	%		31.0	%		29.2	%		31.0	%
Other (Government/Corporate, Bonds)		1.9	%		2.0	%		2.8	%		2.0	%
Cash		2.6	%		2.0	%		3.1	%		2.0	%
Total		100.0			100	%		100.0			100	%

The fair value of our pension plan assets and the level under which fair values were determined, using the hierarchy described in Note 1, is as follows:

	Year Ended 2015
	Level 1		Level 2		Level 3		Total

Total plan assets	$	41,419		-		-	$	41,419

Expected payments for the pension benefits are as follows:

Fiscal Years	Pension Benefits
2016	$	1,940
2017	$	2,064
2018	$	2,158
2019	$	2,295
2020	$	2,443
2021-2025	$	14,914

Executive Retirement Plans

Non-Qualified Deferred Compensation

Effective January 1, 1991 we adopted a deferred compensation savings plan for certain key employees. Under this arrangement, selected employees contribute a portion of their annual compensation to the plan. We contribute an amount to each participant’s account by computing an investment return equal to Moody’s Average Seasoned Bond Rate plus 2%. Employees receive vested amounts upon death, termination or attainment of retirement age. No benefit expense was recorded under these plans for fiscal years 2015 and 2014.

Supplemental Executive Retirement Plan

In fiscal year 1991, we adopted a non-qualified supplemental retirement plan for certain key employees. Benefits provided under the plan are equal to 60% of the employee’s final average earnings, less amounts provided by our defined benefit pension plan and amounts available through Social Security.

Benefits payable related to these plans and included in the accompanying consolidated financial statements were $4,907 and $4,694 at October 30, 2015 and October 31, 2014, respectively. In connection with this arrangement we are the beneficiary of life insurance policies on the lives of certain key employees and retirees. The aggregate cash surrender value of these policies, included in non-current assets, was $13,660 and $13,654 at October 30, 2015 and October 31, 2014, respectively.

Expected payments for executive postretirement benefits are as follows:

Fiscal Years	Executive Postretirement Benefits
2016	$	280
2017	$	78
2018	$	126
2019	$	280
2020	$	502
2021-2025	$	2,510

Incentive Compensation Plan for Certain Key Executives

We provide an incentive compensation plan for certain key executives, which is based upon our pretax income. The payment of these amounts is generally deferred over three or five-year periods. The total amount payable related to this arrangement was $3,125 and $1,359 at October 30, 2015 and October 31, 2014, respectively. Future payments are approximately $1,196, $900, $868, $102 and $59 for fiscal years 2016 through 2020, respectively.

Postretirement Healthcare Benefits for Selected Executive Employees

We provide postretirement health care benefits for selected executive employees. Net periodic postretirement healthcare cost is determined using assumptions as of the beginning of each fiscal year, except for the total actual benefit payments and the discount rate used to develop the net periodic postretirement benefit expense, which is determined at the end of the fiscal year.

Net periodic postretirement healthcare cost consisted of the following:

	52 Weeks
	2015			2014
Service cost	$	20		$	18
Interest cost		36			37
Amortization of prior service cost		-			-
Amortization of actuarial gain		(37	)		(65	)
Net periodic postretirement healthcare cost (benefit)	$	19		$	(10	)

Weighted average assumptions for the fiscal years ended October 30, 2015 and October 31, 2014 are as follows:

	2015			2014
Discount rate		3.94	%		3.83	%
Medical trend rate next year		8.50	%		8.50	%
Ultimate trend rate		5.00	%		5.00	%
Year ultimate trend rate is achieved	2021			2021

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

	2015		2014
Interest cost plus service cost	$	5	$	5
Accumulated postretirement healthcare obligation	$	80	$	78

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

	2015			2014
Interest cost plus service cost	$	(4	)	$	(4	)
Accumulated postretirement healthcare obligation	$	(66	)	$	(64	)

The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows:

	2015			2014
Change in accumulated postretirement healthcare obligation:
Healthcare obligation - beginning of year	$	965		$	880
Service cost		20			18
Interest cost		36			37
Actuarial loss (gain)		1			52
Benefits paid		(19	)		(22	)
Healthcare obligation – end of year	$	1,003		$	965

Funded status of the plans		1,003			965
Unrecognized prior service costs		-			-
Unrecognized net actuarial gain		(174	)		(212	)
Unrecognized amounts recorded in other comprehensive income		174			212
Postretirement healthcare liability	$	1,003		$	965

Expected payments for the postretirement benefits are as follows:

Fiscal Years	Postretirement Heathcare Benefits
2016	$	41
2017	$	41
2018	$	41
2019	$	41
2020	$	86
2021-2025	$	436

401(K) Plan for Sales, Administrative, Supervisory and Certain Other Employees

During the fiscal year ended November 3, 2006, we implemented a qualified 401(K) retirement plan (the “Plan”) for our sales, administrative, supervisory and certain other employees. During fiscal years 2015 and 2014, we made total employer contributions to the Plan in the amounts of $515 and $500, respectively.

Teamster Pension Withdrawal Liability

During the fourth quarter of fiscal 2014, we closed the refrigerated snack food products division (a division within the Refrigerated and Snack Food Segment involving primarily deli products) and withdrew from the Western Conference of Teamsters Pension Plan. According to the Multi-employer Pension Plan Act of 1980 we are subject to the Western Conference of Teamsters Pension Trust Fund Withdrawal Liability. We recorded a liability in the amount of $798 as of October 31, 2014 and expense in other selling and administrative expenses for fiscal 2014. This amount was paid in October 2015.