Note 7.

RETIREMENT BENEFIT PLANS

Pension and Other Postretirement Plans

Certain subsidiaries have pension plans covering substantially all of their employees. These plans are noncontributory, defined benefit pension plans. The benefits to be paid under these plans are generally based on employees’ retirement age and years of service. The Company’s funding policies, subject to the minimum funding requirements of employee benefit and tax laws, are to contribute such amounts as determined on an actuarial basis to provide the plans with assets sufficient to meet the benefit obligations. Plan assets consist primarily of fixed income investments, corporate equities and government securities. The Company also provides certain health care and life insurance benefits for some of its retired employees. The postretirement health plans are unfunded.

The Company recognizes the overfunded or underfunded positions of defined benefit postretirement plans as an asset or liability in its Consolidated Balance Sheets and recognizes as a component of other comprehensive loss the gains or losses and prior service costs or credits that arise during the period but were not recognized as components of net periodic benefit cost.

The Company expects to contribute $90,000 to the pension plans in fiscal 2015. The Company uses a December 31 measurement date for its pension and other postretirement benefit plans. The fair value of plan assets was determined by using quoted prices in active markets for identical assets (Level 1 inputs per the fair value hierarchy). The fair value and allocation of pension plan assets is as follows (amounts in thousands):

	December 31,
	2014					2013
	Plan Assets					Plan Assets
Asset Category	Fair Value		Percentage			Fair Value		Percentage


Equity Securities	$	754		66	%	$	670		63	%
Fixed Income Securities		266		23	%		272		25	%
Money Market		116		10	%		113		11	%
Other		6		1	%		14		1	%
	$	1,142		100	%	$	1,069		100	%

The following table presents the funded status of the Company’s pension and postretirement benefit plans for the years ended December 31, 2014 and 2013:

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
				(Amounts in Thousands)
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	1,422		$	1,454		$	997		$	2,769
Interest cost		59			56			49			41
Actuarial (gain) loss		172			(58	)		448			(1,598	)
Benefits paid		(59	)		(30	)		(194	)		(215	)
Projected benefit obligation at end of year	$	1,594		$	1,422		$	1,300		$	997

Change in plan assets:
Fair value of plan assets at beginning of year	$	1,069		$	941		$	-		$	-
Actuarial return on plan assets		70			100			-			-
Employer contributions		62			58			194			215
Benefits paid		(59	)		(30	)		(194	)		(215	)
Fair value of plan assets at end of year	$	1,142		$	1,069		$	-		$	-

Funded status at end of year	$	(452	)	$	(353	)	$	(1,300	)	$	(997	)

Amounts recognized in Consolidated Balance Sheets:
Other non-current assets	$	(32	)	$	(46	)	$	-		$	-
Accrued expenses		-			-			187			146
Other liabilities		483			399			1,113			851
Total	$	451		$	353		$	1,300		$	997

Accumulated other comprehensive loss at December 31, 2014 and 2013 included unrecognized actuarial losses related to pension benefits of $0.7 million and $0.6 million, respectively, that had not yet been recognized in net periodic pension cost. Accumulated other comprehensive loss at December 31, 2014 included unrecognized actuarial losses related to other benefits of $0.1 million that had not yet been recognized in net periodic pension cost. The actuarial losses included in accumulated other comprehensive loss and expected to be recognized in net periodic pension cost during the fiscal year ending December 31, 2015 are $49,000 loss for pension benefits and a $34,000 loss for other benefits. The accumulated benefit obligation for all pension plans was $1.6 million and $1.4 million at December 31, 2014 and 2013, respectively.

The following table lists the projected benefit obligation (“PBO”), accumulated benefit obligation (“ABO”) and fair value of plan assets for the pension plans with PBOs and ABOs in excess of plan assets at December 31, 2014 and 2013 (amounts in thousands):

	2014				2013
	Projected benefit obligation exceeds plan assets		Accumulated benefit obligation exceeds plan assets		Projected benefit obligation exceeds plan assets		Accumulated benefit obligation exceeds plan assets

Projected benefit obligation	$	1,594	$	1,594	$	1,261	$	1,261
Accumulated benefit obligation	$	1,594	$	1,594	$	1,261	$	1,261
Fair value of plan assets	$	1,143	$	1,143	$	863	$	863

The following table presents the assumptions used to determine the Company’s benefit obligations at December 31, 2014 and 2013 along with sensitivity of the Company’s plans to potential changes in certain key assumptions (dollars in thousands):

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
Assumptions as of December 31:
Discount rates		4.25	%		4.25	%		4.25	%		4.00	%
Expected long-term return rate on assets		5.75	%		5.75	%		N/A			N/A
Assumed rates of compensation increases		N/A			N/A			N/A			N/A
Medical trend rate pre-65 (initial)		N/A			N/A			8.00	%		8.00	%
Medical trend rate post-65 (initial)		N/A			N/A			7.50	%		7.50	%
Medical trend rate (ultimate)		N/A			N/A			5.00	%		5.00	%
Years to ultimate rate pre-65		N/A			N/A			8			8
Years to ultimate rate post-65		N/A			N/A			8			8

Impact of one-percent increase in medical trend rate:
Increase in accumulated postretirement benefit obligation	$	73	$	58
Increase in service cost and interest cost	$	2	$	2

Impact of one-percent decrease in medical trend rate:
Decrease in accumulated postretirement benefit obligation	$	66	$	53
Decrease in service cost and interest cost	$	2	$	2

The discount rate was based on several factors comparing Moody’s AA Corporate rate and actuarial-based yield curves. In determining the expected return on plan assets, the Company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the Company may consult with and consider the opinions of financial and other professionals in developing appropriate return benchmarks.

The following table presents components of the net periodic benefit cost for the Company’s pension and postretirement benefit plans during 2014 and 2013 (amounts in thousands):

	Pension Benefits						Other Benefits
	2014			2013			2014		2013

Interest cost	$	59		$	56		$	49	$	41
Expected return on plan assets		(63	)		(55	)		-		-
Amortization of net loss (gain)		40			48			26		(23	)
Net periodic benefit cost	$	36		$	49		$	75	$	18

The following table presents estimated future benefit payments (amounts in thousands):

	Pension Benefits		Other Benefits

2015	$	44	$	187
2016		339		154
2017		40		139
2018		88		132
2019		265		125
Thereafter		315		481
	$	1,091	$	1,218

In addition to the plans described above, in 1993 the Company’s Board of Directors approved a retirement compensation program for certain officers and employees of the Company and a retirement compensation arrangement for the Company’s then Chairman and Chief Executive Officer. The Board approved a total of $3.5 million to fund such plans. Participants were allowed to defer 50% of their annual compensation as well as be eligible to participate in a profit sharing arrangement in which they vest over a five year period. In 2001, the Company limited participation to existing participants as well as discontinued any profit sharing arrangements. Participants can withdraw from the plan upon the latter of age 62 or termination from the Company. The obligation created by this plan is partially funded. Assets are held in a rabbi trust invested in various mutual funds. Gains and/or losses are earned by the participant. For the unfunded portion of the obligation, interest was accrued at 4% each year until March 2011, when interest earnings were suspended by the Company. The Company had $0.3 million in accrued compensation and other liabilities at December 31, 2014 and 2013, respectively, for this obligation.

401(k) Plans

The Company offers its employees the opportunity to voluntarily participate in the 401(k) plan administered by the Company. The Company makes matching and other contributions in accordance with the provisions of the plan and, under certain provisions, at the discretion of the Company. The Company suspended matching and other contributions on January 1, 2011 and will evaluate on an annual basis whether such contributions will be reinstated. No Company contributions were made for 2014 and 2013.

The Company also provides to the Union employees, under the terms of the collective bargaining agreement, a fixed contribution to the 401K plan administered by the Union. The contributions were $123,000 and $136,000 for 2014 and 2013, respectively.