I. EMPLOYEE BENEFIT PLANS

The Company accounts for its employee benefit plans in accordance with ASC Topic 715 Compensation – Retirement Benefits. ASC Topic 715 requires an employer to: (a) recognize in its statement of financial position an asset for a plan’s over-funded status or a liability for a plan’s under-funded status; (b) measure a plan’s assets and its obligations that determine its funded status as of the end of the employer’s fiscal year (with limited exceptions); and (c) recognize changes in the funded status of a defined benefit postretirement plan in the year in which the changes occur.

These amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical accounting policy for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as net periodic pension cost in the same periods will be recognized as a component of accumulated other comprehensive items. The amortization of the unrecognized loss included in accumulated other comprehensive income (loss) and expected to be recognized in net periodic pension cost in fiscal 2015 is $943,000.

Noncontributory Pension Plan

In connection with the Casual Male acquisition, the Company assumed the assets and liabilities of the Casual Male Noncontributory Pension Plan “Casual Male Corp. Retirement Plan”, which was previously known as the J. Baker, Inc. Qualified Plan (the “Pension Plan”). Casual Male Corp. froze all future benefits under this plan on May 1, 1997.

The following table sets forth the Pension Plan’s funded status at January 31, 2015 and February 1, 2014:

	January 31, 2015			February 1, 2014
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	15,685		$	16,154
Benefits and expenses paid		(623	)		(587	)
Interest costs		669			651
Settlements		(226	)		(17	)
Actuarial (gain) loss		3,422			(516	)

Balance at end of year	$	18,927		$	15,685

Change in fair value of plan assets
Balance at beginning of period	$	12,625		$	11,813
Actual return on plan assets		701			995
Employer contributions		468			421
Settlements		(226	)		(17	)
Benefits and expenses paid		(623	)		(587	)

Balance at end of period	$	12,945		$	12,625

Reconciliation of Funded Status
Projected benefit obligation	$	18,927		$	15,685
Fair value of plan assets		12,945			12,625
Unfunded Status	$	(5,982	)	$	(3,060	)

Balance Sheet Classification
Other long-term liabilities	$	5,982		$	3,060

Total plan expense and other amounts recognized in accumulated other comprehensive loss for the years ended January 31, 2015, February 1, 2014 and February 2, 2013 include the following components:

	January 31, 2015			February 1, 2014			February 2, 2013
Net pension cost:	(in thousands)
Interest cost on projected benefit obligation	$	669		$	651		$	661
Expected return on plan assets		(1,002	)		(937	)		(814	)
Amortization of unrecognized loss		591			680			669
Net pension cost	$	258		$	394		$	516

Other changes recognized in other comprehensive loss, before taxes:
Unrecognized losses at the beginning of the year	$	6,614		$	7,868		$	8,097
Net periodic pension cost		(258	)		(394	)		(516	)
Employer contribution		468			421			723
Change in plan assets and benefit obligations		2,922			(1,281	)		(436	)
Unrecognized losses at the end of year	$	9,746		$	6,614		$	7,868

For fiscal 2015, the Company is expecting to make a contribution of $0.4 million to the plan.

Assumptions used to determine the benefit obligations as of January 31, 2015 and February 1, 2014 include a discount rate of 3.42% for fiscal 2014 and 4.43% for fiscal 2013. Assumptions used to determine the net periodic benefit cost for the years ended January 31, 2015, February 1, 2014 and February 2, 2013 included a discount rate of 3.42% for fiscal 2014, 4.43% for fiscal 2013 and 4.11% for fiscal 2012. At January 31, 2015, a new mortality table was used to estimate anticipated mortality rates that contributed to an increase in the Company’s projected benefit obligation of approximately $3.2 million.

The expected long-term rate of return for plan assets was assumed to be 8.00% for both fiscal 2014 and fiscal 2013. The expected long-term rate of return assumption was developed considering historical and future expectations for returns for each asset class.

Estimated Future Benefit Payments

The estimated future benefits for the next ten fiscal years are as follows:

	Total
FISCAL YEAR	(in thousands)
2015	$	695
2016		723
2017		794
2018		837
2019		881
2020-2024		5,181
	$	9,111

Plan Assets

The fair values of the Company’s noncontributory defined benefit retirement plan assets at the end of fiscal 2014 and fiscal 2013, by asset category, are as follows:

	Fair Value Measurement
	At January 31, 2015								At February 1, 2014
(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Asset category:
Common Stock	$	7,103	$	—	$	—	$	7,103	$	6,838	$	—	$	—	$	6,838
Mutual Funds:
U.S. Equity		472		—		—		472		504		—		—		504
International Equity		1,808		—		—		1,808		1,695		—		—		1,695
Bond		2,474		—		—		2,474		3,146		—		—		3,146
Cash		1,088		—		—		1,088		442		—		—		442
Total	$	12,945	$	—	$	—	$	12,945	$	12,625	$	—	$	—	$	12,625

The Company’s target asset allocation for fiscal 2015 and its asset allocation at January 31, 2015 and February 1, 2014 were as follows, by asset category:

	Target Allocation			Percentage of plan assets at
	Fiscal 2015			January 31, 2015			February 1, 2014
Asset category:
Equity securities		73.0	%		72.5	%		71.5	%
Debt securities		24.0	%		19.1	%		24.9	%
Cash		3.0	%		8.4	%		3.6	%
Total		100.0	%		100.0	%		100.0	%

The target policy is set to maximize returns with consideration to the long-term nature of the obligations and maintaining a lower level of overall volatility through the allocation of fixed income. The asset allocation is reviewed throughout the year for adherence to the target policy and is rebalanced periodically towards the target weights.

Supplemental Executive Retirement Plan

In connection with the Casual Male acquisition, the Company also assumed the liability of the Casual Male Supplemental Retirement Plan (the “SERP”).

The following table sets forth the SERP’s funded status at January 31, 2015 and February 1, 2014:

	January 31, 2015			February 1, 2014
	in thousands
Change in benefit obligation:
Balance at beginning of period	$	629		$	656
Benefits and expenses paid		(30	)		(30	)
Interest costs		27			26
Actuarial (gain) loss		119			(23	)
Balance at end of year	$	745		$	629

Change in fair value of plan assets
Balance at beginning of period	$	—		$	—
Employer contributions		30			30
Benefits and expenses paid		(30	)		(30	)
Balance at end of period	$	—		$	—

Projected benefit obligation	$	745		$	629

Reconciliation of Funded Status
Projected benefit obligation	$	745		$	629
Fair value of plan assets		—			—
Unfunded Status	$	(745	)	$	(629	)

Balance Sheet Classification
Other long-term liabilities	$	745		$	629

Other changes recognized in other comprehensive loss, before taxes (in thousands):

	January 31, 2015			February 1, 2014			February 2, 2013
Other changes recognized in other comprehensive loss, before taxes:	in thousands
Unrecognized losses at the beginning of the year	$	142		$	171		$	144
Net periodic pension cost		(31	)		(30	)		(30	)
Employer contribution		30			30			30
Change in benefit obligations		115			(29	)		27
Unrecognized losses at the end of year	$	256		$	142		$	171

Assumptions used to determine the benefit obligations as of January 31, 2015 and February 1, 2014 included a discount rate of 3.42% for fiscal 2014 and 4.43% for fiscal 2013. Assumptions used to determine the net periodic benefit cost for the years ended January 31, 2015, February 1, 2014 and February 2, 2013 included a discount rate of 3.42% for fiscal 2014, 4.43% for fiscal 2013 and 4.11% for fiscal 2012.

Defined Contribution Plan

Through December 31, 2014, the Company had two defined contribution plans, the Casual Male 401(k) Salaried Plan and the Casual Male 401(k) Hourly Plan. Effective January 1, 2015, the two plans were merged and renamed the Destination XL Group, Inc. 401(k) Savings Plan (the “401(k) Plan”). Under the 401(k) Plan, the Company will offer a qualified automatic contribution arrangement (“QACA”) with the Company matching 100% of the first 1% of deferred compensation and 50% of the next 5% (with a maximum contribution of 3.5% of eligible compensation). As of January 1, 2015, employees who are 21 years of age or older are eligible to make deferrals after 6 months of employment and are eligible to receive a Company match after one year of employment and 1,000 hours.

The Company recognized $1.6 million, $1.5 million and $1.4 million of expense under these plans in fiscal 2014, fiscal 2013 and fiscal 2012, respectively.