NOTE

–

EMPLOYEE BENEFIT PLANS

Defined Contribution and Deferred Compensation Plans

The Company has a

401

(k) retirement investment plan (

“401

(k) Plan”), which is open to all otherwise eligible U.S. employees with at least

six

months of service. The

401

(k) Plan calls for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The Company

may,

at its discretion, make additional contributions to the

401

(k) Plan based on the attainment of certain performance targets by its subsidiaries. The Company’s matching contributions are funded bi-monthly and totaled approximately

$3.2

million,

$3.0

million, and

$3.1

million for the years

2018,

2017,

and

2016,

respectively.

discretionary contributions were made in

2018,

2017,

2016.

Under the Company’s nonqualified savings plans (“NSPs”), the Company provides eligible employees the opportunity to enter into agreements for the deferral of a specified percentage of their compensation, as defined in the NSPs. The NSPs call for Company matching contributions on a sliding scale based on the level of the employee’s contribution. The obligations of the Company under such agreements to pay the deferred compensation in the future in accordance with the terms of the NSPs are unsecured general obligations of the Company. Participants have

right, interest or claim in the assets of the Company, except as unsecured general creditors. The Company has established a rabbi trust to hold, invest and reinvest deferrals and contributions under the NSPs. If a change in control of the Company occurs, as defined in the NSPs, the Company will contribute an amount to the rabbi trust sufficient to pay the obligation owed to each participant. Deferred compensation in connection with the NSPs totaled

$28.7

million and

$31.9

million at

December 30, 2018

and

December 31, 2017,

respectively. The Company invests the deferrals in insurance instruments with readily determinable cash surrender values. The value of the insurance instruments was

$26.4

million and

$28.0

million as of

December 30, 2018

and

December 31, 2017,

respectively.

Foreign Defined Benefit Plans

The Company has trusteed defined benefit retirement plans which cover many of its European employees. In connection with the nora acquisition on

August 7, 2018,

we acquired an additional defined benefit plan, which covers certain employees in Germany (the “nora Plan”). The benefits under all defined benefit retirement plans are generally based on years of service and the employee’s average monthly compensation. Pension expense was

$1.7

million,

$1.9

million, and

$1.2

million for the years

2018,

2017

and

2016,

respectively. Plan assets are primarily invested in insurance contracts and equity and fixed income securities. The nora plan has

plan assets. The Company uses a year-end measurement date for the plans. As of

December 30, 2018,

for the European plans, the Company had a net liability recorded of

$36.2

million, an amount equal to their underfunded status, and has recorded in Other Comprehensive Income an amount equal to

$36.7

million (net of taxes of approximately

$12

million) related to the future amounts to be recorded in net post-retirement benefit costs.

The tables presented below set forth the funded status of the Company’s significant foreign defined benefit plans and required disclosures in accordance with applicable accounting standards:

	FISCAL YEAR
	2018			2017
	(in thousands)
Change in benefit obligation
Benefit obligation, beginning of year Close File	$	320,548		$	277,813
Service cost		1,112			1,628
Interest cost		5,467			5,559
Benefits and expenses paid		(11,850	)		(10,267	)
Business combinations		36,903			0
Actuarial loss (gain)		(53,753	)		13,351
Member contributions		233			262
Currency translation adjustment		(13,152	)		32,202

Benefit obligation, end of year	$	285,508		$	320,548


Change in plan assets
Plan assets, beginning of year	$	307,166		$	258,365
Actual return on assets		(37,495	)		25,691
Company contributions		4,095			2,812
Benefits paid		(11,850	)		(10,267	)
Currency translation adjustment		(12,603	)		30,565

Plan assets, end of year	$	249,313		$	307,166

Reconciliation to balance sheet
Funded status benefit asset/(liability)	$	(36,195	)	$	(13,382	)

Net amount recognized	$	(36,195	)	$	(13,382	)

Amounts recognized in accumulated other comprehensive income (after tax)
Unrecognized actuarial loss	$	37,141		$	48,443
Unamortized prior service costs		(437	)		(471	)
Total amount recognized	$	36,704		$	47,972


Accumulated Benefit Obligation	$	284,581		$	313,257

The above disclosure represents the aggregation of information related to the Company’s

three

defined benefit plans which cover many of its European employees. As of

December 30, 2018,

one

of these plans, which primarily covers certain employees in the United Kingdom (the “UK Plan”), had assets in excess of the accumulated benefit obligation. The nora Plan is an unfunded defined benefit plan and the accumulated benefit obligation exceeded plan assets. As of

December 31, 2017,

the UK Plan had an accumulated benefit obligation in excess of the plan assets and the Dutch Plan had assets in excess of the accumulated benefit obligation. The following table summarizes this information as of

December 30, 2018

and

December 31, 2017.

	END OF FISCAL YEAR
	2018		2017
	(in thousands)
UK Plan
Projected Benefit Obligation	$	157,351	$	190,992
Accumulated Benefit Obligation		157,351		190,992
Plan Assets		158,990		179,322


Dutch Plan
Projected Benefit Obligation	$	91,837	$	129,554
Accumulated Benefit Obligation		90,910		122,265
Plan Assets		90,323		127,844


Nora Plan
Projected Benefit Obligation	$	36,320		0
Accumulated Benefit Obligation		36,320		0
Plan Assets		0		0

	FISCAL YEAR
	2018			2017			2016
	(in thousands)
Components of net periodic benefit cost
Service cost	$	1,112		$	1,628		$	1,032
Interest cost		5,467			5,559			6,580
Expected return on plan assets		(6,234	)		(6,496	)		(7,553	)
Amortization of prior service cost		(27	)		(34	)		33
Amortization of net actuarial (gains)/losses		1,394			1,287			1,076

Net periodic benefit cost	$	1,712		$	1,944		$	1,168

During

2018,

other comprehensive income was impacted pre-tax by approximately

$11.3

million comprised of actuarial gain of approximately

$9.9

million and amortization of

$1.4

million.

	FISCAL YEAR
	2018			2017			2016
Weighted average assumptions used to determine net periodic benefit cost
Discount rate		1.9	%		2.0	%		2.7	%
Expected return on plan assets		1.8	%		2.3	%		3.1	%
Rate of compensation		1.75	%		1.75	%		2.0	%
Weighted average assumptions used to determine benefit obligations
Discount rate		2.5	%		2.2	%		2.3	%
Rate of compensation		1.75	%		1.75	%		2.0	%

The expected long-term rate of return on plan assets assumption is based on weighted average expected returns for each asset class. Expected returns reflect a combination of historical performance analysis and the forward-looking views of the financial markets, and include input from actuaries, investment service firms and investment managers.

The investment objectives of the foreign defined benefit plans are to maximize the return on the investments without exceeding the limits of the prudent pension fund investment, to ensure that the assets would be sufficient to exceed minimum funding requirements, and to achieve a favorable return against the performance expectation based on historic and projected rates of return over the short term. The goal is to optimize the long-term return on plan assets at a moderate level of risk, by balancing higher-returning assets, such as equity securities, with less volatile assets, such as fixed income securities. The assets are managed by professional investment firms and performance is evaluated periodically against specific benchmarks. The plans’ net assets did

not

include the Company’s own stock at

December 30, 2018

December 31, 2017.

Dutch Plan Assets and Indexation

Benefit

As is common in Dutch pension plans, the Dutch Plan includes a provision for discretionary benefit increases termed “indexation.” The indexation benefit is meant to adjust pension benefits for cost-of-living increases, similar to U.S. consumer price index-based cost-of-living adjustments for U.S. retirement plans. The indexation benefit is

not

guaranteed, and is only provided for and paid out if sufficient assets are available due to favorable asset returns.

Both the vested benefit amounts as well as amounts related to the discretionary indexation benefits under the Dutch Plan are paid pursuant to an insurance contract with a private insurer (the “Contract”). The Plan itself is financed by investment assets held within the Contract. The Contract guarantees payment of vested amounts, regardless of whether Plan assets held through the Contract are ultimately sufficient to pay vested amounts, and also provides for payment of the indexation amount on a contingent basis if the actual return on Dutch Plan assets is sufficient to pay it. This type of insurance arrangement is common in The Netherlands, although

not

necessarily common in other jurisdictions.

Because the prior actual and future projected returns on Dutch Plan assets had been determined to be sufficient to provide for the indexation benefit, in

2017

and

2016,

the Company and the insurer agreed that it was appropriate to provide the indexation benefit under the Contract. The indexation benefit thus becomes an amount payable by the insurer under the Contract, and consequently is recorded as a Plan asset. The corresponding obligation to pay the indexation amount to pensioners thus became a pension liability. During

2018,

the Company and the insurer, based on the expected future returns under the investment assets included in the insurance contract, determined that the indexation was

not

probable and was

not

included as an asset and liability as of the end of

2018.

As of

December 31, 2017,

this indexation liability and corresponding asset was

$32.7

million. The inclusion or exclusion of this amount does

not

have any impact on the funded status of the plan, as both the indexation asset and liability are recorded at the same amount. This indexation asset, along with the remainder of the assets under the Dutch Plan, are identified as Level Three assets under the fair value hierarchy.

Under the express terms of the Contract, contract value is the greater of (i) the value of the discounted vested benefits of the Dutch Plan (i.e., the benefit amount guaranteed by the insurance company), and (ii) the fair value of the underlying investment assets held by the insurance company under the Contract. As between those

two

values, the former was the greater for

2018

and

2017

and this represents the plan assets as shown above for the Dutch Plan. However, as explained above, the Contract also will pay the indexation benefit if sufficient assets are available, which the Company believes

not

to be probable as of the end of

2018

based on recent returns. This indexation was considered probable as of the end of

2017,

and the Company believed that it was appropriate to include the value of the indexation payments, that were added to the vested benefit amounts. As explained above, these indexation benefits will be paid out of the Contract if asset returns continue to exceed expectations. At

December 30, 2018,

the asset returns are

not

of an expected amount to allow for indexation and the Company can, at any time, remove this indexation benefit. The removal of the indexation asset is presented as a negative return on assets, and the removal of the indexation liability is represented by a change in actuarial assumptions in the company’s presentation of

2018

projected benefit obligation.

The Company’s actual weighted average asset allocations for

2018

and

2017,

and the targeted asset allocation for

2019,

of the foreign defined benefit plans by asset category, are as follows:

	FISCAL YEAR
	2019			2018	2017
	Target Allocation			Percentage of Plan Assets at Year End
Asset Category:
Equity Securities	15%	-	20%	16%	16%
Debt and Debt Securities	35%	-	45%	35%	32%
Other	40%	-	50%	49%	52%

		100%		100%	100%

Fair Value Measurements of Plan Assets

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure estimated fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level

measurements) and the lowest priority to unobservable inputs (level

measurements). The

three

levels of the fair value hierarchy under applicable accounting standards are described below:

Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2	Inputs to the valuation methodology include:
		●	quoted prices for similar assets in active markets;
		●	quoted prices for identical or similar assets in inactive markets;
		●	inputs other than quoted prices that are observable for the asset; and
		●	inputs that are derived principally or corroborated by observable data by correlation or other means.

Level 3	Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The following table sets forth by level within the fair value hierarchy the foreign defined benefit plans’ assets at fair value, as of

December 30, 2018

and

December 31, 2017.

The nora plan is currently unfunded. As required by accounting standards, assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. As noted above, the Dutch pension plan assets as represented by the insurance contact are classified as a Level

asset and included in the “Other” asset category.

	P ension Plan Assets by Category as of December 3 0 , 201 8
	Dutch Plan		UK Plan		Total
	(in thousands)
Level 1	$	0	$	79,146	$	79,146
Level 2		0		60,913		60,913
Level 3		90,323		18,931		109,254
Total	$	90,323	$	158,990	$	249,313

	Pension Plan Assets by Category as of December 31, 2017
	Dutch Plan		UK Plan		Total
			(in thousands)
Level 1	$	0	$	87,521	$	87,521
Level 2		0		68,668		68,668
Level 3		127,844		23,133		150,977
Total	$	127,844	$	179,322	$	307,166

The tables below detail the foreign defined benefit plans’ assets by asset allocation and fair value hierarchy:

	201 8
	Level 1		Level 2		Level 3
			(in thousands)
Asset Class
Equity Securities	$	39,392	$	0	$	0
Debt and Debt Securities		33,134		38,619		16,012
Other (including cash)		6,620		22,294		93,242
	$	79,146	$	60,913	$	109,254

	201 7
	Level 1		Level 2		Level 3
			(in thousands)
Asset Class
Equity Securities	$	48,285	$	0	$	0
Debt and Debt Securities		36,780		41,381		19,883
Other (including cash)		2,456		27,287		131,094
	$	87,521	$	68,668	$	150,977

With the exception of the Dutch Plan assets as discussed above, the assets identified as level

above in

2018

and

2017

relate to insured annuities and direct lending assets held by the UK Plan. The fair value of these assets was calculated using the present value of the future cash flows due under the insurance annuities and for the direct lending assets the value is based on the asset value from the latest available valuation with adjustments for any drawdowns and distribution payments made between the valuation date and the reporting date. The table below indicates the change in value related to these level

assets during

2018

and

2017:

	201 8			201 7
	(in thousands)			(in thousands)
Balance of level 3 assets, beginning of year	$	150,977		$	127,953
Interest cost		1,682			2,633
Benefits paid		(4,090	)		(3,728	)
Assets transferred in to (out of) Level 3		696			(2,089	)
Actuarial gain (loss)		(35,202	)		8,753
Translation adjustment		(4,809	)		17,455
Ending Balance of level 3 assets	$	109,254		$	150,977

During

2019,

the Company expects to contribute

$4.2

million to the plans. It is anticipated that future benefit payments for the foreign defined benefit plans will be as follows:

FISCAL YEAR	EXPECTED PAYMENTS
	(in thousands)

2019	$	9,762
2020		9,989
2021		10,251
2022		10,356
2023		10,635
2024-2028		55,231

Domestic Defined Benefit Plan

The Company maintains a domestic nonqualified salary continuation plan (“SCP”), which is designed to induce selected officers of the Company to remain in the employ of the Company by providing them with retirement, disability and death benefits in addition to those which they

may

receive under the Company’s other retirement plans and benefit programs. The SCP entitles participants to: (i) retirement benefits upon normal retirement at age

(or early retirement as early as age

) after completing at least

years of service with the Company (unless otherwise provided in the SCP), payable for the remainder of their lives (or, if elected by a participant, a reduced benefit is payable for the remainder of the participant’s life and any surviving spouse’s life) and in

event less than

years under the death benefit feature; (ii) disability benefits payable for the period of any total disability; and (iii) death benefits payable to the designated beneficiary of the participant for a period of up to

years. Benefits are determined according to

one

three

formulas contained in the SCP, and the SCP is administered by the Compensation Committee of the Company’s Board of Directors, which has full discretion in choosing participants and the benefit formula applicable to each. The Company’s obligations under the SCP are currently unfunded (although the Company uses insurance instruments to hedge its exposure thereunder). The Company is required to contribute the present value of its obligations thereunder to an irrevocable grantor trust in the event of a change in control as defined in the SCP. The Company uses a year-end measurement date for the domestic SCP.

The tables presented below set forth the required disclosures in accordance with applicable accounting standards, and amounts recognized in the consolidated financial statements related to the domestic SCP. There is

service cost component of the change in benefit obligation in

2018

and

2017

as there are

longer any active participants in the plan.

	FISCAL YEAR
	2018			2017
	(in thousands)
Change in benefit obligation
Benefit obligation, beginning of year	$	31,919		$	29,700
Interest cost		1,082			1,256
Benefits paid		(2,030	)		(1,943	)
Actuarial loss (gain)		(1,829	)		2,906

Benefit obligation, end of year	$	29,142		$	31,919

The amounts recognized in the consolidated balance sheets are as follows:

	2018		2017
	(in thousands)
Current liabilities	$	2,030	$	2,030
Non-current liabilities		27,112		29,889
Total benefit obligation	$	29,142	$	31,919

The components of the amounts in accumulated other comprehensive income, after tax, are as follows:

	2018		2017
	(in thousands)
Unrecognized actuarial loss	$	6,906	$	8,582

The accumulated benefit obligation related to the SCP was

$29.1

million and

$31.9

million as of

December 30, 2018

and

December 31, 2017,

respectively. The SCP is currently unfunded; as such, the benefit obligations disclosed are also the benefit obligations in excess of the plan assets. The Company uses insurance instruments to help limit its exposure under the SCP.

	2018			2017			2016
	(in thousands, except for assumptions)
Assumptions used to determine net periodic benefit cost
Discount rate		3.50	%		3.85	%		4.25	%
Rate of compensation		-			-			4.0	%

Assumptions used to determine benefit obligations
Discount rate		4.1	%		3.5	%		3.85	%
Rate of compensation		-			-			4.0	%


Components of net periodic benefit cost
Service cost	$	0		$	0		$	440
Interest cost		1,082			1,256			1,269
Amortizations		464			364			811

Net periodic benefit cost	$	1,546		$	1,620		$	2,520

The changes in other comprehensive income during

2018

related to the SCP as a result of plan activity and valuation were approximately

$1.7

million, after tax, primarily comprised of a net loss during the period of

$1.4

million and amortization of loss of

$0.3

million.

During

2018,

the Company contributed

$2.0

million in the form of direct benefit payments for its domestic SCP. It is anticipated that future benefit payments for the SCP will be as follows:

FISCAL YEAR			EXPECTED PAYMENTS
			(in thousands)
2019			$ 2,030
2020			2,030
2021			2,030
2022			2,030
2023			2,030
2024-2028			9,791