13. EMPLOYEE RETIREMENT PLANS

We have certain employee retirement plans that cover substantially all of our employees. The expense incurred for these plans was $9.1 million, $8.0 million and $2.3 million, for the years ended December 31, 2012, 2011 and 2010, respectively. These plans are discussed below.

Most employees are covered by defined contribution plans under which we made contributions to individual employee accounts. We had expense related to our U.S. defined contribution plan of approximately $4.8 million, $3.7 million and $1.3 million for the years ended December 31, 2012, 2011 and 2010, respectively. We also had an expense related to our Canadian defined contribution plan of approximately $2.5 million and $2.1 million, for the years ended December 31, 2012 and 2011, respectively. In July 2010, we announced the reinstatement of our Company match for our U.S. and Canadian retirement savings plans. On October 1, 2012, we announced and implemented an additional Company Retirement Contribution to our U.S. retirement savings plan.

U.S. employees hired before January 1, 2009 are covered by a defined benefit cash balance pension plan, which was frozen to future benefit accruals in 2009. Employees who worked at our now-closed manufacturing facility in Sarnia, Ontario were previously covered by a defined benefit pension plan. In connection with the closure of that manufacturing facility in December 2008, we decided to wind-up the Canadian pension plan. All future benefit obligations for this pension plan were fully funded in 2011 with a contribution in the amount of approximately $0.8 million with a corresponding settlement charge recognized during the year ended December 31, 2011.

Benefit Obligations. The reconciliation of the beginning and ending balances of the projected benefit obligation for defined benefit plans is as follows:

	As of December 31,

*(In thousands)*	2012			2011
Change in Benefit Obligation
Projected benefit obligation, beginning of year	$	147,290		$	143,133
Interest cost		7,193			7,397
Actuarial loss		19,087			10,226
Foreign currency translation adjustment		-			58
Gross benefits paid		(5,059	)		(13,524	)

Projected benefit obligation, end of year	$	168,511		$	147,290

Accumulated benefit obligation, end of year	$	168,511		$	147,290

The accumulated benefit obligation is defined as the actuarial present value of pension benefits (whether vested or unvested) attributed to employee service rendered before December 31, 2012 and 2011, respectively, and based on employee service and compensation prior to the applicable date. The accumulated benefit obligation is equal to the projected benefit obligation at December 31, 2012 and 2011 because no future benefits are accruing under the pension plans.

Plan Assets. The summary and reconciliation of the beginning and ending balances of the fair value of the plans' assets were as follows:

	As of December 31,

*(In thousands)*	2012			2011
Change in Plan Assets
Fair value of plan assets, beginning of year	$	107,738		$	122,509
Actual return on plan assets		12,732			(2,401	)
Foreign currency translation adjustment		-			60
Employer contribution		419			1,094
Gross benefits paid		(5,059	)		(13,524	)

Fair value of plan assets, end of year	$	115,830		$	107,738

The Plan classifies its investments based on the lowest level of input that is significant to the fair value measurement. The following table sets forth, by level within the fair value hierarchy, a summary of the Plan's investments measured at fair value and the target and current allocation.

Asset Category					Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

*(In thousands, except percentages)*
Short-term investment fund			2	%	$	2,190	$	-	$	2,190	$	-
US Equity securities:
Consumer discretionary sector						1,734		1,734		-		-
Consumer staples sector						4,151		4,151		-		-
Energy sector						1,158		1,158		-		-
Finance sector						581		581
Health care sector						2,985		2,985		-		-
Industrials sector						1,130		1,130		-		-
Information technology sector						4,390		4,390		-		-
Capital appreciation mutual fund						6,365		6,365		-		-
SMALL cap growth mutual fund						5,129		5,129		-		-
Pooled equity fund						19,200		-		-		19,200
Other						849		849		-		-

Total US equity securities:	43	%	41	%		47,672		28,472		-		19,200
International equity securities:
EUROPACIFIC GROWTH fund						24,981		24,981		-		-
Consumer staples sector						394		394		-		-
Emerging markets fund	5	%	5	%		5,340		5,340		-		-

Total International equity securities	20	%	27	%		30,715		30,715		-		-
Fixed income securities:
Pimco total return INSTL						22,899		22,899		-		-
Financial services sector						177		-		177		-

Total fixed income securities:	20	%	20	%		23,076		22,899		177		-
Long-biased hedge fund	10	%	9	%		10,579		-		-		10,579
Real estate partnership	2	%	1	%		1,598		-		-		1,598

Total					$	115,830	$	82,086	$	2,367	$	31,377

Asset Category					Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

*(In thousands, except percentages)*
Short-term investment fund			1	%	$	1,547	$	-	$	1,547	$	-
US equity securities:
Consumer discretionary sector						2,921		2,921		-		-
Consumer staples sector						4,475		4,475		-		-
Energy sector						1,638		1,638		-		-
Health care sector						3,276		3,276		-		-
Industrials sector						1,471		1,471		-		-
Information technology sector						4,258		4,258		-		-
Capital appreciation mutual fund						5,502		5,502		-		-
SMALL cap growth mutual fund						6,456		6,456		-		-
Pooled equity fund						17,308		-		-		17,308
Other						476		476		-		-

Total US equity securities:	43	%	45	%		47,781		30,473		-		17,308
International equity securities:
EUROPACIFIC GROWTH fund						20,955		20,955		-		-
Consumer staples sector						258		258		-		-
Information technology sector						1		1		-		-

Total International equity securities	20	%	20	%		21,214		21,214		-		-
Fixed income securities:
Pimco total return INSTL						25,184		25,184		-		-
Financial services sector						64		-		64		-

Total fixed income securities:	20	%	23	%		25,248		25,184		64		-
Long-biased hedge fund	10	%	10	%		10,359		-		-		10,359
Real estate partnership	2	%	1	%		1,447		-		-		1,447
Other securities						142		142		-		-
Emerging markets	5	%	-	%		-		-		-		-

Total					$	107,738	$	77,013	$	1,611	$	29,114

Funded Status. The following table shows the funded status of the pension benefits, reconciled to the amounts reported on the balance sheets:

	As of December 31,

*(In thousands)*	2012			2011
Funded status, end of year:
Fair value of plan assets	$	115,830		$	107,738
Benefit obligations		168,511			147,290

Unfunded status		(52,681	)		(39,552	)

Amount recognized, end of year	$	(52,681	)	$	(39,552	)

Amounts recognized in the balance sheets consist of:
Current liability	$	(419	)	$	(419	)
Noncurrent liability		(52,262	)		(39,133	)

Amount recognized, end of year	$	(52,681	)	$	(39,552	)

Gross amounts recognized in accumulated other comprehensive loss consist of:
Net actuarial loss	$	77,459		$	64,095
Prior service cost		99			103

Amount recognized, end of year	$	77,558		$	64,198

Changes in Other Comprehensive Income (Loss). The following table summarizes the changes in plan assets and benefit obligations which were recognized in other comprehensive income (loss):

	Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income (Loss) for Pension

	For the Years Ended December 31,
*(In thousands)*	2012			2011			2010
End of year:
Current year actuarial loss	$	15,045		$	22,172		$	6,495
Amortization of actuarial loss		(1,680	)		(1,539	)		(794	)
Current year prior service cost								110
Amortization of prior service cost		(4	)		(4	)		(4	)

Total recognized in other comprehensive income (loss)	$	13,361		$	20,629		$	5,807

Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	13,549		$	20,023		$	4,498

The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2013, excluding any effects of the consummation of the Transactions, is $2.1 million consisting of:

*(In thousands)*	Pension

Actuarial loss	$	2,133
Prior service cost		4

Total	$	2,137

Net Periodic Benefit Cost (Income). The amount of net periodic benefit cost (income) recognized includes the following components:

	Pension Benefit Years Ended December 31,

*(In thousands)*	2012			2011			2010
Components of net periodic benefit cost (income):
Interest cost	$	7,193		$	7,397		$	7,747
Expected return on assets		(8,689	)		(9,548	)		(9,854	)
Amortization of:
Prior service cost		4			4			4
Actuarial loss		1,680			1,539			794

Total net periodic benefit cost (income)	$	188		$	(608	)	$	(1,309	)

Assumptions. The major assumption used to determine benefit obligations for our pension plans is a weighted average discount rate, which was 4.00 percent and 5.00 percent at December 31, 2012 and 2011, respectively. The pension plans were frozen prior to 2010, therefore, a rate of compensation increase is not an applicable assumption in determining benefit obligations for our pension plans.

The major assumptions used to determine net periodic benefit cost (income) for pension plans are presented as weighted averages:

	Years Ended December 31,

	2012			2011			2010
Discount rate		5.00	%		5.48	%		6.00	%
Expected long-term rate of return on plan assets		8.25	%		8.49	%		8.66	%

The expected long-term rate of return on plan assets assumption is based on historical and projected rates of return for current and planned asset classes in the plan's investment portfolio. Projected rates of return for each of the plans' projected asset classes were selected after analyzing historical experience and future expectations of the returns and volatility of the various asset classes. Based on the target asset allocation for each asset class, the overall expected rate of return for the portfolio was developed and adjusted for historical and expected experience of active portfolio management results compared to the benchmark returns and for the effect of expenses paid from plan assets.

Our investment committee establishes investment policies and strategies and regularly monitors the performance of the plans' funds. Our investment strategy with respect to pension assets is to invest the assets in accordance with the "prudent investor" guidelines contained in the Employee Retirement Income Security Act of 1974 and fiduciary standards. Our policy on funding is to contribute an amount within the range of the minimum required and the maximum tax-deductible contribution.

Employer contributions include direct benefits paid under all pension plans of $0.4 million from employer assets in 2012, 2011 and 2010.

Expected Cash Flows. We expect to make contributions of $0.4 million to our pension plans during 2013 in direct benefit payments. These contributions exclude payments to be made in connection with plans assumed upon the consummation of the Transactions. Expected benefit payments for all pension plans, excluding plans assumed in connection with the consummation of the Transactions, are as follows:

*(In thousands)*	Pension Benefits

Expected benefit payments
2013	$	6,150
2014		6,802
2015		7,410
2016		7,996
2017		8,525
2018-2022		49,318