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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 1, 2009.

The lump sum value as of

January 1, 2009

will be paid in

equal actuarial equivalent installments through

2018.

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.

The benefit obligations as of

December 31, 2017

and

2016

are as follows:

	Pension Plans
	Domestic						SERP						International
	2017			2016			2017			2016			2017			2016
Change in benefit obligation
Benefit obligation, beginning of year	$	57,718		$	58,556		$	1,209		$	1,800		$	25,002		$	22,748
Service cost		-			-			-			-			941			742
Interest cost		2,214			2,390			9			18			732			740
Actuarial loss		2,676			427			-			-			798			3,255
Benefits paid		(3,422	)		(3,655	)		(609	)		(609	)		(725	)		(700	)
Currency translation effect		-			-			-			-			2,675			(1,783	)
Benefit obligation, end of year	$	59,186		$	57,718		$	609		$	1,209		$	29,423		$	25,002

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

December 31, 2017

and

2016

are as follows:

	2017			2016
Change in plan assets
Fair value of plan assets, beginning of period	$	39,524		$	39,135
Actual return on plan assets		6,663			2,910
Contributions		3,885			1,134
Benefits paid		(3,422	)		(3,655	)
Fair value of plan assets, end of period	$	46,650		$	39,524

Unfunded status		(12,536	)		(18,194	)
Accrued benefit cost, end of period	$	(12,536	)	$	(18,194	)

The un

funded status of the SERP was

$609

and

$1,209

as of

December 31, 2017

and

2016,

respectively. The unfunded status of the International Pension Plan was

$29,423

and

$25,002

as of

December 31, 2017

and

2016,

respectively.

The amounts recognized in

AOCI as of

December 31, 2017

and

2016

consist of the following:

	Pension Plans
	Domestic				SERP				International
	2017		2016		2017		2016		2017			2016

Actuarial loss	$	20,956	$	23,034	$	121	$	362	$	10,183		$	9,720
Prior service cost/(benefit)		-		-		-		57		(1	)		(7	)
Total	$	20,956	$	23,034	$	121	$	419	$	10,182		$	9,713

The components of net periodic benefit cost are as follows:

	Pension Plans
	Domestic									SERP						International
	2017			2016			2015			2017		2016		2015		2017			2016			2015
Components of net periodic benefit cost
Service cost	$	-		$	-		$	-		$	-	$	-	$	-	$	941		$	742		$	778
Interest cost		2,214			2,390			2,430			9		18		24		732			740			589
Expected return on plan assets		(2,707	)		(2,649	)		(2,870	)		-		-		-		-			-			-
Amortization of prior service cost/(benefit)		-			-			-			57		57		57		(5	)		(5	)		(5	)
Recognized actuarial loss		798			776			811			241		182		154		361			194			330
Net periodic benefit cost	$	305		$	517		$	371		$	307	$	257	$	235	$	2,029		$	1,671		$	1,692

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

2018

are as follows:

	Pension Plans
	Domestic		SERP		International
Actuarial loss	$	719	$	121	$	407
Prior service cost/(benefit)		-		-		(5	)
Total	$	719	$	121	$	402

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

	2017			2016

Discount rate:
Domestic Pension Plan		3.55	%		3.95	%
SERP		-			1.55	%
International Pension Plan		2.65	%		2.80	%

Rate of compensation increase:
International Pension Plan		2.70	%		2.65	%

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

	2017			2016			2015

Discount rate:
Domestic Pension Plan		3.95	%		4.20	%		3.85	%
SERP		1.55	%		1.55	%		1.35	%
International Pension Plan		2.80	%		3.35	%		2.40	%

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

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

$59,186

exceeds plan assets by

$12,536

as of

December 31, 2017

for the Domestic Pension Plan. The aggregate ABO is

$28,023

for the International Pension Plan as of

December 31, 2017.

The International Pension Plan is unfunded.

The Company expects to contribute approximately

$540

in cash to the Domestic Pension Plan in

2018.

The Company does

not

expect to contribute cash to its International Pension Plan in

2018.

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

	Pension Plans
	Domestic		SERP		International

2018	$	3,321	$	609	$	817
2019	$	3,397	$	-	$	867
2020	$	3,463	$	-	$	861
2021	$	3,504	$	-	$	848
2022	$	3,534	$	-	$	954
2023-2027	$	17,350	$	-	$	5,344

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.

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

			Fair Value Measurements at December 31, 2017 using:
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Equity securities:
U.S. companies	$	18,581	$	-	$	18,581	$	-
International companies		10,280		-		10,280		-
U.S. fixed income		15,543		-		13,329		2,214
Commodities		2,246		-		2,246		-
	$	46,650	$	-	$	44,436	$	2,214

			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

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, 2017:

	Group Annuity Contract

Balance at December 31, 2016	$	2,198
Net investment gain		16
Balance at December 31, 2017	$	2,214

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

$1,491,

$1,294

and

$1,081

2017,

2016

and

2015,

respectively.