PENSION PLANS

12 Months Ended

Dec. 31, 2011

PENSION PLANS

PENSION PLANS

Note 13    PENSION PLANS

        The Company sponsors defined benefit pension plans that cover substantially all of its French and German employees. Plan benefits are provided in accordance with local statutory requirements. Benefits are based on years of service and employee compensation levels. The plans are unfunded. Pension liabilities and charges to expense are based upon various assumptions, updated quarterly, including discount rates, future salary increases, employee turnover, and mortality rates.

        Retirement plans consist of two types of plans. The first plan type covers the Company's French employees and provides for termination benefits paid to employees only at retirement, and consists of approximately one to five months of salary. The second plan type covers the Company's German employees and provides for defined benefit payouts for the employee's post-retirement life, and covers the Company's German employees.

        The aggregate net pension expense relating to the two plan types are as follows:

	Years Ended
	December 31, 2011			December 31, 2010			December 31, 2009
	(In thousands)
Service costs	$	1,289		$	1,577		$	1,477
Interest costs		1,326			1,568			1,469
Amortization of actuarial loss (gain)		67			(49	)		(100	)
Settlement and other related (gains) losses		(726	)		1,149			—
Net pension expenses	$	1,956		$	4,245		$	2,846

        Settlement and other related gains of $0.7 million for the year ended December 31, 2011 related to restructuring activity in the Company's Rousset, France operations initiated in the second quarter of 2010. Settlement and other related losses of $1.1 million for the year ended December 31, 2010 consisted of $0.9 million related to the sale of the Company's manufacturing operations in Rousset, France which was recorded as a charge to cost of revenues and $0.2 million related to the Company's sale of its Secure Microcontroller Solutions business which was recorded as a charge to research and development expenses in the consolidated statements of operations.

        The change in projected benefit obligation during the years ended December 31, 2011 and 2010 and the accumulated benefit obligation at December 31, 2011 and 2010, were as follows:

	December 31, 2011			December 31, 2010
	(In thousands)
Projected benefit of obligation at beginning of the year	$	26,898		$	28,854
Service costs		1,289			1,577
Interest costs		1,326			1,568
Transfer of obligation upon sale		(91	)		(5,284	)
Settlement		(726	)		—
Amendments and plan transfers		422			693
Actuarial loss		199			2,060
Benefits paid		(182	)		(112	)
Foreign currency exchange rate changes		616			(2,458	)
Projected benefit obligation at end of the year	$	29,751		$	26,898
Accumulated benefit obligation at end of the year	$	24,069		$	23,425

        As the defined benefit plans are unfunded, the liability recognized on the consolidated balance sheet as of December 31, 2011 was $29.8 million, of which $0.5 million is included in accrued and other liabilities and $29.3 million is included in other long-term liabilities. The liability recognized on the consolidated balance sheet as of December 31, 2010 was $26.9 million, of which $0.4 million is included in accrued and other liabilities and $26.5 million is included in other long-term liabilities.

        Actuarial assumptions used to determine benefit obligations for the plans were as follows:

	Years Ended
	December 31, 2011			December 31, 2010			December 31, 2009
Assumed discount rate		4.6-5.3	%		4.7-5.0	%		4.9-5.8	%
Assumed compensation rate of increase		2.5-3.0	%		2.1-4.0	%		2.2-4.0	%

        The discount rate is based on the quarterly average yield for Euros treasuries with a duration of 30 years, plus a supplement for corporate bonds (Euros, AA rating).

        Future estimated expected benefit payments over the next ten years are as follows:

Years Ending December 31:
	(In thousands)
2012	$	484
2013		555
2014		506
2015		827
2016		957
2017 through 2021		9,052
	$	12,381

        The Company's pension liability represents the present value of estimated future benefits to be paid.

        With respect to the Company's unfunded pension plans in Europe, for the year ended December 31, 2011, a change in assumed discount rate and compensation rate used to calculate the present value of pension obligation resulted in an increase in pension liability of $0.2 million, which was charged to accumulated other comprehensive income in stockholders' equity.

        The Company's net pension cost for 2012 is expected to be approximately $2.8 million. Cash funding for benefits paid was $0.2 million for the year ended December 31, 2011. Cash funding for benefits to be paid for 2012 is expected to be approximately $0.3 million.

        Amounts recognized in accumulated other comprehensive income consist of net actuarial gain of $1.7 million and $1.9 million at December 31, 2011 and 2010, respectively. Net actuarial gains expected to be minimal and will be recognized as a component of net periodic pension benefit cost during 2012, which included in accumulated other comprehensive income in the consolidated statement of shareholders' equity and comprehensive income as of December 31, 2011.