Note I – Retirement Benefit Plans

The Company has non-contributory defined benefit pension plans covering certain U.S. employees. Plan benefits are generally based upon age at retirement, years of service and, for its salaried plan, the level of compensation. The Company also sponsors unfunded nonqualified supplemental retirement plans that provide certain current and former officers with benefits in excess of limits imposed by federal tax law.

The Company also provides health care and life insurance for retired salaried employees in the United States who meet specific eligibility requirements.

Effective for fiscal year 2017, the Company changed the method used to measure Service Cost and Interest Cost for pension and other postretirement benefits for the Company's plans. Previously, the Company measured interest costs utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligations. For fiscal year 2017, interest costs will be measured by applying the specific spot rates along the yield curve to the plans' corresponding discounted cash flows that comprise the obligation (i.e., the Spot Rate approach). This new method provides a more precise measurement of interest costs by aligning the timing of the plans' discounted cash flows to the corresponding spot rates on the yield curve; the measurement of our pension and other postretirement benefit obligations is not affected. The Company has accounted for this change as a change in accounting estimate, which is applied prospectively. Consequently, combined pension expense for the Company's pension plans and other postretirement plan under the Spot Rate approach for the six-month period ended July 1, 2017 is approximately $270,000 lower when compared to the prior approach that the Company used.

Significant disclosures relating to these benefit plans for the second quarter and first six months of fiscal years 2017 and 2016 are as follows:

	Pension Benefits
	Six Months Ended						Three Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	634,718		$	1,341,557		$	317,358		$	528,552
Interest cost		1,582,112			1,774,343			791,055			1,007,763
Expected return on plan assets		(2,391,787	)		(2,482,172	)		(1,195,892	)		(1,238,231	)
Amortization of prior service cost		72,874			100,284			36,436			50,141
Amortization of the net loss		615,743			1,042,148			307,873			415,093
Net periodic benefit cost	$	513,660		$	1,776,160		$	256,830		$	763,318

	Postretirement Benefits
	Six Months Ended						Three Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Service cost	$	13,695		$	14,650		$	6,848		$	3,900
Interest cost		40,414			47,436			20,207			26,936
Expected return on plan assets		(25,747	)		(23,766	)		(12,873	)		(12,016	)
Amortization of prior service cost		(10,722	)		(11,945	)		(5,361	)		(5,945	)
Amortization of the net loss		(38,801	)		(46,961	)		(19,401	)		(33,461	)
Net periodic benefit cost	$	(21,161	)	$	(20,586	)	$	(10,580	)	$	(20,586	)

The Company's funding policy with respect to its qualified plans is to contribute at least the minimum amount required by applicable laws and regulations. In 2017, the Company expects to contribute $700,000 into its pension plans and $103,000 into its postretirement plan. As of July 1, 2017 the Company has contributed $161,000 into its pension plans and $72,000 into its postretirement plan and will make the remaining contributions as required during the remainder of the year.

The Company has contributory savings plans under Section 401(k) of the Internal Revenue Code covering substantially all non-union employees. The plan allows participants to make voluntary contributions of up to 100% of their annual compensation on a pretax basis, subject to IRS limitations. The plan provides for contributions by the Company at its discretion. The 401(k) Plan also provides for a transitional credit to certain eligible employees who were active participants of the Salaried Retirement Plan at the time that benefits under the plan were frozen in Fiscal 2016, and a non-discretionary contribution to all eligible employees.

The Company made contributions to the plan as follows:


	Six Months Ended						Three Months Ended
	July 1, 2017			July 2, 2016			July 1, 2017			July 2, 2016
Regular matching contribution		$	235,423		$	132,048		$	118,947		$	75,817
Transitional credit contribution			231,072			41,548			95,702			41,548
Non-discretionary contribution			323,232			51,470			15,664			--
Total contributions for the period		$	789,727		$	225,066		$	230,313		$	117,365

The non-discretionary contributions made in each of the periods disclosed above were expensed in the prior fiscal year.