Contingencies and Environmental Remediation

6 Months Ended

Jul. 03, 2011

Contingencies and Environmental Remediation

Contingencies and Environmental Remediation

10. Contingencies and Environmental Remediation

As disclosed in Part I, Item 1, “Product Liability, Environmental and Other Litigation Matters” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, the Company is a party to certain litigation, has conducted an investigation regarding information that employees of CWV made payments to employees of state-owned agencies and whether such payments may violate FCPA, and is engaged in certain environmental remediation.  During the second quarter of 2011, the Company revised its estimate of its FCPA liability based on ongoing discussions with the SEC staff.  The Company now estimates a probable pre-tax charge in connection with these matters of approximately $3.8 million, which includes estimated disgorgement of profits, interest, fines, and penalties. There is currently no definitive agreement with the SEC staff or DOJ for the resolution of this matter and any agreement will be subject to the approval by the Commissioners of the SEC and senior DOJ personnel. Therefore, there can be no assurance that the Company’s negotiations with the SEC staff and DOJ will result in a definitive agreement, and the amount of the loss upon final disposition of these matters may exceed its current estimate.  There have been no material developments with respect to the Company’s environmental remediation proceedings during the first six months ended July 3, 2011.