NOTE I – Employee Benefit Plans

Defined Benefit Plan

The Company has a contributory defined benefit plan that covers certain employees in the United Kingdom (“U.K.”). The net pension and supplemental retirement benefit obligations and the related periodic costs are based on, among other things, assumptions regarding the discount rate, estimated return on plan assets and mortality rates. These obligations and related periodic costs are measured using actuarial techniques and assumptions. The projected unit credit method is the actuarial cost method used to compute the pension liabilities and related expenses.

Net periodic benefit costs associated with the defined benefit plan were approximately $0 million for both the three months ended September 30, 2014 and 2013, and $1 million and $0 million for the nine months ended September 30, 2014 and 2013, respectively.

The following tables set forth the benefit obligation, the fair value of plan assets, and the funded status of the Company’s plan (in thousands):

	Defined Benefit Plan

Change in benefit obligation:
Balance at December 31, 2013	$	149,316
Service cost		250
Interest cost		5,108
Actuarial loss		9,468
Benefits paid		(3,443	)
Currency changes		(3,474	)
Benefit obligation at September 30, 2014	$	157,225
Change in plan assets:
Fair value of plan assets at December 31, 2013	$	116,568
Actual return on plan assets		8,169
Employer contribution		334
Benefits paid		(3,443	)
Currency changes		(2,602	)
Fair value of plan assets at September 30, 2014	$	119,026
Underfunded status at September 30, 2014	$	(38,199	)

Based on an actuarial study performed as of September 30, 2014, the plan is underfunded and a liability is reflected in the Company’s consolidated financial statements as a long-term liability. The weighted-average discount rate assumption used to determine benefit obligations as of September 30, 2014 was 4.1%.

The following weighted-average assumptions were used to determine net periodic benefit costs for the nine months ended September 30, 2014:

Discount rate		4.6	%
Expected long-term return on plan assets		5.9	%

During the second quarter of 2012, the Company adopted a payment plan with the trustees of the defined benefit plan, in which the Company will pay approximately ₤2 million British Pound Sterling (“GBP”) (approximately $3 million based on a USD:GBP exchange rate of 1.6:1) every year from 2012 through 2019. As part of the required pension review, which occurs every three years under the U.K. pension regulations, the Company is currently in discussions with the trustees regarding future contributions for the pension scheme.

The Company also has pension plans in Germany and Asia for which the benefit obligation, fair value of the plan assets and the funded status amounts are deemed immaterial and therefore, are not included in the figures or assumptions above.

Deferred Compensation

The Company maintains a Non-Qualified Deferred Compensation Plan (the “Deferred Compensation Plan”) for executive officers, key employees and members of the Board of Directors (the “Board”). The Deferred Compensation Plan allows eligible participants to defer the receipt of eligible compensation, including equity awards, until designated future dates. The Company offsets its obligations under the Deferred Compensation Plan by investing in the actual underlying investments. These investments are classified as trading securities and are carried at fair value. At September 30, 2014, these investments totaled approximately $5 million. All gains and losses in these investments are materially offset by corresponding gains and losses in the Deferred Compensation Plan liabilities.