NOTE I - FRISCH'S EXECUTIVE SAVINGS PLAN

As described more fully under Benefit Plans in NOTE A – ACCOUNTING POLICIES, the Company sponsors a non-qualified savings plan - Frisch's Executive Savings Plan (FESP) for "highly compensated employees" (HCEs).

Although the Company owns the mutual funds of the FESP until the retirement of the participating HCEs, the funds are invested at the direction of the participants. FESP assets are the principal component of “Other long-term assets” in the Consolidated Balance Sheet. Shares of Frisch's common stock under FESP are a “phantom investment” that may be paid in actual shares or in cash upon retirement of the participant. Except for any portion expected to be paid out to HCEs who will be retiring during the next 12 months, the FESP liability to the participants is included in “Deferred compensation” as a long term obligation in the Consolidated Balance Sheet. The mutual funds and the corresponding liability to FESP participants were increased $188 (due to market gains) during Fiscal Year 2015. Market gains increased the mutual funds and corresponding FESP liability by $332 and $399 during Fiscal Years 2014 and 2013, respectively. All of these changes were effected through offsetting investment income or loss and charges (market gains) or credits (market losses) to deferred compensation expense within "Administrative and advertising" expense in the Consolidated Statement of Earnings.

Matching contributions to FESP were $38, $37 and $33, respectively in Fiscal Years 2015, 2014 and 2013.

Fair value measurements are used for recording the assets in FESP. Assets of the plan are grouped into a three-level hierarchy for valuation techniques used to measure the fair values of the assets. These levels are:

Level 1 – Quoted prices in active markets for identical assets.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets, quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets.

The fair values of all FESP assets are determined based on quoted market prices and are classified within Level 1 of the fair value hierarchy:

NOTE I - FRISCH'S EXECUTIVE SAVINGS PLAN (continued)


	Fiscal Year
	2015		2014

	(in thousands)
	Level 1		Level 1
Money market funds	$	516	$	449
Mutual funds		1,685		1,542
Foreign equity mutual funds		301		311
Taxable bond mutual funds		819		740
Large blend target date mutual funds		627		523
Total (1)	$	3,948	$	3,565

(1) The total for Fiscal Year 2015 consists of $3,566 classified as long term and $382 as current.