)

Retirement Plans

Domestic Pension Plan

The Company maintains a defined-benefit pension plan (“Domestic Pension Plan”) for certain salaried and certain hourly employees.

It is the Company’s policy to contribute to the domestic pension plan to ensure adequate funds are available in the plan to make benefit payments to plan participants and beneficiaries when required.

The Company also has a Supplemental Executive Retirement Plan (“SERP”) for key executives. This plan is non-qualified and unfunded. Benefits accruing under both plans were frozen in

2007.

July

2008,

the Board of Directors of the Company amended the SERP to allow for lump sum payments effective

January

2009.

The lump sum value as of

January

2009

will be paid in

equal actuarial equivalent installments through

2018.

2014,

the Company announced a program to offer a

one

-time option to elect to receive a voluntary lump-sum pension payout to certain former employees with deferred vested balances in the Company’s U.S. pension plan. As part of this voluntary lump-sum program, the Company settled

$17,381

of pension obligations for the U.S. plan with an equal amount paid from plan assets. As a result, the Company recorded settlement losses of

$7,170

reflecting the accelerated recognition of unamortized losses in the U.S. pension plan proportionate to the obligation that was settled. The loss on voluntary pension settlement is reflected as a separate line in the consolidated income statement with a corresponding balance sheet reduction in accumulated other comprehensive loss.

International Pension Plans

A foreign subsidiary of the Company maintains a pension plan (“International Pension Plan”) for its employees that conforms to the common practice in that country. Based on local laws and customs, this plan is unfunded.

Savings Plan

Cambrex makes available to all domestic employees a savings plan. Employee contributions are matched in part by Cambrex. The cost of this plan amounted to

$1,294,

$1,081

and

$941

2016,

2015

and

2014,

respectively.

The benefit obligations as of

December

31,

2016

and

2015

are as follows:

	Pension Plans
	Domestic						SERP						International
	2016			2015			2016			2015			2016			2015
Change in benefit obligation
Benefit obligation, beginning of year	$	58,556		$	64,825		$	1,800		$	2,389		$	22,748		$	26,700
Service cost		-			-			-			-			742			778
Interest cost		2,390			2,430			18			24			740			589
Actuarial loss/(gain)		427			(5,263	)		-			(4	)		3,255			(2,397	)
Benefits paid		(3,655	)		(3,436	)		(609	)		(609	)		(700	)		(697	)
Currency translation effect		-			-			-			-			(1,783	)		(2,225	)
Benefit obligation, end of year	$	57,718		$	58,556		$	1,209		$	1,800		$	25,002		$	22,748

The plan assets and funded status of the Domestic Pension Plan as of

December

31,

2016

and

2015

are as follows:

	2016			2015
Change in plan assets
Fair value of plan assets, beginning of period	$	39,135		$	41,665
Actual return on plan assets		2,910			(806	)
Contributions		1,134			1,712
Benefits paid		(3,655	)		(3,436	)
Fair value of plan assets, end of period	$	39,524		$	39,135

Unfunded status		(18,194	)		(19,421	)
Accrued benefit cost, end of period	$	(18,194	)	$	(19,421	)

The unfunded status of the SERP was

$1,209

and

$1,800

as of

December

31,

2016

and

2015,

respectively. The unfunded status of the International Pension Plan was

$25,002

and

$22,748

as of

December

31,

2016

and

2015,

respectively.

The amounts recognized in AOCI as of

December

31,

2016

and

2015

consist of the following:

	Pension Plans
	Domestic				SERP				International
	2016		2015		2016		2015		2016			2015

Actuarial loss	$	23,034	$	23,644	$	362	$	544	$	9,720		$	6,887
Prior service cost/(benefit)		-		-		57		115		(7	)		(12	)
Total	$	23,034	$	23,644	$	419	$	659	$	9,713		$	6,875

The components of net periodic benefit cost are as follows:

	Pension Plans
	Domestic									SERP						International
	2016			2015			2014			2016		2015		2014		2016			2015			2014
Components of net periodic benefit cost
Service cost	$	-		$	-		$	-		$	-	$	-	$	-	$	742		$	778		$	674
Interest cost		2,390			2,430			3,310			18		24		33		740			589			884
Expected return on plan assets		(2,649	)		(2,870	)		(4,153	)		-		-		-		-			-			-
Amortization of prior service cost/(benefit)		-			-			-			57		57		57		(5	)		(5	)		(7	)
Recognized actuarial loss		776			811			522			182		154		131		194			330			149
Settlement loss		-			-			7,170			-		-		-		-			-			-
Net periodic benefit cost	$	517		$	371		$	6,849		$	257	$	235	$	221	$	1,671		$	1,692		$	1,700

The estimated amounts that will be amortized from AOCI into net periodic benefit cost in

2017

are as follows:

	Pension Plans
	Domestic		SERP		International
Actuarial loss	$	798	$	241	$	340
Prior service cost/(benefit)		-		57		(5	)
Total	$	798	$	298	$	335

Major assumptions used in determining the benefit obligations are presented in the following table:

	2016			2015
Discount rate:
Domestic Pension Plan		3.95	%		4.20	%
SERP		1.55	%		1.55	%
International Pension Plan		2.80	%		3.35	%

Rate of compensation increase:
International Pension Plan		2.65	%		2.55	%

Major assumptions used in determining the net benefit cost are presented in the following table:

	2016			2015			2014
Discount rate:
Domestic Pension Plan		4.20	%		3.85	%		4.80	%
SERP		1.55	%		1.35	%		1.40	%
International Pension Plan		3.35	%		2.40	%		3.70	%

Expected return on plan assets:
Domestic Pension Plan		7.00	%		7.00	%		7.25	%

Rate of compensation increase:
International Pension Plan		2.55	%		2.20	%		2.20	%

In making its assumption for the long-term rate of return on plan assets, the Company has utilized historical rates earned on securities allocated consistently with its investments. The discount rate was selected by projecting cash flows associated with plan obligations, which were matched to a yield curve of high quality corporate bonds. The Company then selected the single rate that produced the same present value as if each cash flow were discounted by the corresponding spot rate on the yield curve.

The aggregate Accumulated Benefit Obligation (“ABO”) of

$57,718

exceeds plan assets by

$18,194

as of

December

31,

2016

for the Domestic Pension Plan. The aggregate ABO is

$24,134

for the International Pension Plan as of

December

31,

2016.

The International Pension Plan is unfunded.

The Company expects to contribute approximately

$1,585

in cash to the Domestic Pension Plan in

2017.

The Company does

not

expect to contribute cash to its International Pension Plan in

2017.

he following benefit payments are expected to be paid out of the plans:

	Pension Plans
	Domestic		SERP		International

2017	$	3,344	$	609	$	686
2018	$	3,335	$	609	$	740
2019	$	3,404	$	-	$	783
2020	$	3,464	$	-	$	780
2021	$	3,505	$	-	$	767
2022-2026	$	17,445	$	-	$	4,765

The investment objective for the Domestic Pension Plan’s assets is to achieve long-term growth with exposure to risk at an appropriate level. The Company invests in a diversified asset mix consisting of equities (domestic and international) and taxable fixed income securities. Assets are managed to obtain the highest total rate of return in keeping with a moderate level of risk. The target allocations for plan assets are

30%

80%

equity securities,

25%

45%

U.S. fixed income and

15%

all other investments. Equity securities primarily include investments in large cap and small-cap companies, U.S. fixed income securities including high quality corporate bonds, and U.S. government securities. Other types of investments include real asset funds, consisting primarily of investments in commodities, and Treasury Inflation-Protected Securities (“TIPS”).

The fair values of the Company’s pension plan assets by asset category are as follows:

			Fair Value Measurements at December 31, 2016 using:
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. companies	$	15,567	$	-	$	15,567	$	-
International companies		8,647		-		8,647		-
U.S. fixed income		13,432		-		11,234		2,198
Commodities		1,878		-		1,878		-
	$	39,524	$	-	$	37,326	$	2,198

			Fair Value Measurements at December 31, 2015 using:
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. companies	$	13,547	$	-	$	13,547	$	-
International companies		7,377		-		7,377		-
U.S. fixed income		13,375		-		11,207		2,168
Commodities		2,962		-		2,962		-
TIPS		1,874		-		1,874		-
	$	39,135	$	-	$	36,967	$	2,168

The following table sets forth a summary of the changes in the fair value of the Domestic Plan’s Level

assets, which are annuity contracts with an insurance company, for the year ended

December

31,

2016:

	Group Annuity Contract

Balance at December 31, 2015	$	2,168
Net investment gain		30
Balance at December 31, 2016	$	2,198