BENEFIT PLANS

12 Months Ended

Jan. 28, 2012

BENEFIT PLANS

BENEFIT PLANS

NOTE 13—BENEFIT PLANS

DEFINED BENEFIT AND CONTRIBUTION PLANS

        On December 31, 2008, the Company paid $14.4 million to terminate the defined benefit portion of its Supplemental Executive Retirement Plan (SERP) and recorded a $6.0 million settlement charge. The Company continues to maintain the non-qualified defined contribution portion of the SERP plan (the "Account Plan") for key employees designated by the Board of Directors. The Company's contribution expense for the Account Plan was $0.3 million, $1.2 million and $0.8 million for fiscal 2011, 2010 and 2009, respectively.

        The Company has a qualified 401(k) savings plan and a separate savings plan for employees residing in Puerto Rico, which cover all full-time employees who are at least 21 years of age with one or more years of service. The Company contributes the lesser of 50% of the first 6% of a participant's contributions or 3% of the participant's compensation under both savings plans. For fiscal 2011, 2010 and 2009, the Company's contributions were conditional upon the achievement of certain pre-established financial performance goals which were met in fiscal 2010 and 2009, but not in fiscal 2011. The Company's savings plans' contribution expense was $3.0 million and $3.1 million in fiscal 2010 and 2009, respectively.

        The Company also has a defined benefit pension plan (the "Plan") covering full-time employees hired on or before February 1, 1992. As of December 31, 1996, the Company froze the accrued benefits under the Plan and active participants became fully vested. During the third quarter of fiscal 2011, the Company began the process of terminating the Plan. The termination of the Plan is expected to be completed by the end of fiscal 2012. In order to terminate the Plan, in accordance with Internal Revenue Service and Pension Benefit Guaranty Corporation requirements, the Company is required to fully fund the Plan on a termination basis and will commit to contribute the additional assets necessary to do so. Plan participants will not be adversely affected by the Plan termination, but rather will have their benefits either converted into a lump sum cash payment or an annuity contract placed with an insurance carrier. Until the Plan is terminated, the Plan's trustee will continue to maintain and invest Plan assets and will administer benefits payments. The Company uses a fiscal year end measurement date for determining the benefit obligation and the fair value of Plan assets. The actuarial computations are made using the "projected unit credit method." Variances between actual experience and assumptions for costs and returns on assets are amortized over the remaining service lives of employees under the Plan.

        Pension expense follows:

	Year Ended
(dollar amounts in thousands)	January 28, 2012			January 29, 2011			January 30, 2010
Service cost	$	—		$	—		$	—
Interest cost		2,558			2,561			2,539
Expected return on plan assets		(2,745	)		(2,151	)		(1,804	)
Amortization of prior service cost		14			14			14
Recognized actuarial loss		1,499			1,672			1,766
Total pension expense	$	1,326		$	2,096		$	2,515

        The following actuarial assumptions were used to determine benefit obligation and pension expense:

	Year Ended
	January 22, 2012			January 29, 2011			January 30, 2010
Benefit obligation assumptions:
Discount rate		4.60	%		5.70	%		6.10	%
Rate of compensation increase		N/A			N/A			N/A
Pension expense assumptions:
Discount rate		5.70	%		6.10	%		7.00	%
Expected return on plan assets		6.80	%		6.95	%		6.70	%
Rate of compensation expense		N/A			N/A			N/A

        The Company selected the discount rate for the benefit obligation at January 29, 2011 to reflect a rate commensurate with a model bond portfolio with durations that match the expected payment patterns of the plans. To develop the expected long-term rate of return on assets assumption, the Company considered the historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio. This resulted in the selection of a long-term rate of return on assets of 6.80% for fiscal 2011, 6.95% for fiscal 2010 and 6.70% for fiscal 2009.

        The following table sets forth the reconciliation of the benefit obligation, fair value of plan assets and funded status of the Company's defined benefit plans:

	Year ended
(dollar amounts in thousands)	January 28, 2012			January 29, 2011
Change in benefit obligation:
Benefit obligation at beginning of year	$	46,118		$	42,744
Interest cost		2,558			2,561
Actuarial loss		6,952			2,454
Benefits paid		(1,654	)		(1,641	)
Benefit obligation at end of year	$	53,974		$	46,118
Change in plan assets:
Fair value of plan assets at beginning of year	$	39,063		$	31,857
Actual return on plan assets (net of expenses)		3,193			3,847
Employer contributions		3,000			5,000
Benefits paid		(1,654	)		(1,641	)
Fair value of plan assets at end of year	$	43,602		$	39,063
Unfunded status at fiscal year end	$	(10,372	)	$	(7,055	)
Net amounts recognized on consolidated balance sheet at fiscal year end
Noncurrent benefit liability (included in other long-term liabilities)	$	(10,372	)	$	(7,055	)
Net amount recognized at fiscal year end	$	(10,372	)	$	(7,055	)
Amounts recognized in accumulated other comprehensive income (pre-tax) at fiscal year end
Actuarial loss	$	15,407		$	10,402
Prior service cost		26			40
Net amount recognized at fiscal year end	$	15,433		$	10,442
Other comprehensive (income) loss attributable to change in pension liability recognition	$	4,991		$	(928	)
Accumulated benefit obligation at fiscal year end	$	53,974		$	46,118
Other information
Employer contributions expected in fiscal 2012	$	—		$	—
Estimated actuarial loss and prior service cost amortization in fiscal 2012	$	2,300		$	1,530

        Benefit payments, including amounts to be paid from Company assets, as appropriate, are expected to be paid as follows:

(dollar amounts in thousands)
2013	$	1,987
2014		2,094
2015		2,204
2016		2,326
2017		2,450
2018 - 2022		14,464

• Plan Assets and Investment Policy

        Investment policies are established in accordance with the Company's Benefits Committee (the "Committee") responsibilities to the participants of the Plan and its beneficiaries, and in accordance with the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The objective of the Plan is to meet current and future benefit payment needs within the constraints of diversification and prudent risk taking. The Plan is diversified across asset classes to achieve an optimal balance between risk and return and between income and growth of assets through capital appreciation. Investment objectives for each asset class are determined based on specific risks and investment opportunities identified. The Company believes that the diversification of its assets minimizes the risk due to concentration of the Plan assets.

        The Company updates its long-term, strategic asset allocations annually using various analytics to determine the optimal asset mix and consideration of plan liability characteristics, liquidity characteristics, funding requirements, expected rates of return and the distribution of returns. Actual allocations to each asset class vary from target allocations due to periodic investment strategy changes, market value fluctuations, the length of time it takes to fully implement investment allocation positions (such as private equity and real estate), and the timing of benefit payments and contributions. Short term investments and exchange-traded derivatives are used to rebalance the actual asset allocation to the target asset allocation. The asset allocation is monitored and rebalanced on a monthly basis.

        The manager of the investments provides advice and recommendations to help the Committee discharge its fiduciary responsibilities in furtherance of the Plan's goals and objectives. The manager has the discretion to allocate assets among funds within each asset class to conform to strategic targets and ranges established by the Committee. The target asset allocation is 50% equity securities and 50% fixed income. The investment policy requires that the asset allocation be maintained within certain ranges. The weighted average asset allocations and asset allocation ranges by asset category are as follows:

Weighted Average Asset Allocations

	January 28, 2012			January 29, 2011			Asset Allocation Ranges
Total equities		50	%		52	%		45 - 55	%
Domestic equities		32	%		31	%		28 - 38	%
Non-US equities		18	%		21	%		12 - 22	%
Fixed income		50	%		48	%		45 - 55	%

        The tables below provide the fair values of the Company's pension plan assets at January 28, 2012 and January 29, 2011, by asset category. The tables also identify the level of inputs used to determine the fair value of assets in each category (see Note 16, "Fair Value Measurements" for definition of levels). The significant amount of Level 2 investments in the table relates to investments in pooled funds that contain investments with values based on quoted market prices, but for which the funds are not valued on a quoted market basis, and fixed income securities that are valued using model based pricing services.

(dollar amounts in thousands) Asset Category	Fair Value at January 28, 2012		Level 1		Level 2		Level 3
Domestic equities
US Small/Mid Cap Growth	$	1,372	$	—	$	1,372	$	—
US Small/Mid Cap Value		1,335		—		1,335		—
US Large Cap Passive		11,006		—		11,006		—
Non-U.S. equities
Non-US Core Equity		7,962		—		7,962		—
Fixed income
Long Duration		15,598		—		15,598		—
Long Duration Passive		4,995		—		4,995		—
Guaranteed annuity contracts		1,334		—		—		1,334
Total	$	43,602	$	—	$	42,268	$	1,334

(dollar amounts in thousands) Asset Category	Fair Value at January 29, 2011		Level 1		Level 2		Level 3
Money market fund	$	48	$	48	$	—	$	—
Domestic equities
US Small/Mid Cap Growth		1,299		—		1,299		—
US Small/Mid Cap Value		1,298		—		1,298		—
US Large Cap Passive		9,566		—		9,566		—
Non-U.S. equities
Non-US Core Equity		8,087		—		8,087		—
Fixed income
Long Duration		13,271		—		13,271		—
Long Duration Passive		4,244		—		4,244		—
Guaranteed annuity contracts		1,250		—		—		1,250
Total	$	39,063	$	48	$	37,765	$	1,250

        Generally, investments are valued based on information in financial publications of general circulation, statistical and valuation services, records of security exchanges, appraisal by qualified persons, transactions and bona fide offers. Money market funds are valued using a market approach based on the quoted market prices of identical instruments. These investments are classified within Level 1 of the fair value hierarchy.

        Domestic equities, non-US equities, and both long duration fixed income securities consist of collective trust ("CT") funds. CT funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds (equity securities and fixed income securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available. CT funds are valued at their net asset values that are calculated by the investment manager of the fund and have daily or monthly liquidity. These investments are classified within Level 2 of the fair value hierarchy.

        Guaranteed annuity contracts ("GACs") are annuity insurance contracts. GACs are primarily invested in public bonds with some small placement in common stock, private placement bonds and commercial mortgage products. The GACs are valued based on unobservable inputs, as observable inputs are not available, using valuation methodologies to determine fair value. GACs are deemed to be Level 3 investments.

        The following table provides a summary of changes in fair value of Level 3 financial assets during fiscal 2011:

(dollar amounts in thousands)	Fair Value
Balance, January 29, 2011	$	1,250
Transfers from other investments		1,676
Interest income and gains		143
Administrative fees		(81	)
Benefits paid during the period		(1,654	)
Balance, January 28, 2012	$	1,334

DEFERRED COMPENSATION PLAN

        The Company maintains a non-qualified deferred compensation plan that allows its officers and certain other employees to defer up to 20% of their annual salary and 100% of their annual bonus. Additionally, the first 20% of an officer's bonus deferred into the Company's stock is matched by the Company on a one-for-one basis with Company stock that vests and is expensed over three years. The shares required to satisfy distributions of voluntary bonus deferrals and the accompanying match in the Company's stock are issued from its treasury account.

RABBI TRUST

        The Company establishes and maintains a deferred liability for the non-qualified deferred compensation plan and the Account Plan. The Company plans to fund this liability by remitting the officers' deferrals to a Rabbi Trust where these deferrals are invested in variable life insurance policies. These assets are included in non-current other assets and are considered to be a Level 2 measure within the fair value hierarchy. Accordingly, all gains and losses on these underlying investments, which are held in the Rabbi Trust to fund the deferred liability, are recognized in the Company's Consolidated Statement of Operations. Under these plans, there were liabilities of $6.9 million at January 28, 2012 and $6.2 million at January 29, 2011, respectively, which are recorded primarily in other long-term liabilities.