DEFINED BENEFIT PENSION PLANS

12 Months Ended

Jul. 31, 2012

DEFINED BENEFIT PENSION PLANS

(18) DEFINED BENEFIT PENSION PLANS

The Company sponsors two defined benefit pension plans covering certain of its employees in its Netherlands facility and one defined benefit pension plan covering certain of its employees in its Taiwan facility. Pension costs are actuarially determined.

The aggregate change in benefit obligation and plan assets related to these plans was as follows:

	July 31,
	2012			2011			2010
	(in thousands)
Change in benefit obligation
Benefit obligation at beginning of year	$	13,791		$	11,441		$	11,224
Service cost		368			365			339
Interest cost		589			617			510
Actuarial (gain) loss		4,300			192			266
Employee contributions		328			390			385
Benefits and administrative expenses paid		(404	)		(184	)		(610	)
Amendments		—			—			(82	)
Transfers		—			1			—
Effect of Curtailment		—			(228	)		—
Currency translation		(1,813	)		1,197			(591	)
Benefit obligation at end of year		17,159			13,791			11,441
Change in plan assets
Fair value of plan assets at beginning of year		15,652			12,265			10,615
Actual return on plan assets		276			597			271
Employee contributions		328			390			385

Employer contributions		498			1,300			1,839
Benefits and administrative expenses paid		(404	)		(180	)		(155	)
Transfers		—			1			—
Currency translation		(2,199	)		1,279			(690	)
Fair value of plan assets at end of year		14,151			15,652			12,265
Funded status
Assets		37			2,886			1,940
Current liability		(1	)		(1	)		(1	)
Noncurrent liability		(3,049	)		(1,028	)		(1,116	)
Net amount recognized in statement of financial position as a non-current asset (liability)	$	(3,013	)	$	1,857		$	823

The accumulated benefit obligation was approximately $13.6 million, $10.8 million, and $8.9 million at July 31, 2012, 2011, and 2010, respectively.

Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:

	Years Ended July 31,
	2012	2011	2010
	(in thousands)
Projected benefit obligation	$2,064	$2,047	$1,991
Accumulated benefit obligation	$1,290	$1,241	$1,171
Fair value of plan assets	$1,024	$1,018	$875

Components of net periodic pension cost were as follows:

	Years Ended July 31,
	2012			2011			2010			2009
	(in thousands)
Service cost	$	368		$	365		$	339		$	711
Interest costs		589			617			510			634
Expected return on plan assets		(473	)		(477	)		(462	)		(546	)
Amortization of net actuarial loss		(88	)		(114	)		(144	)		(135	)
Net periodic pension costs	$	396		$	391		$	243		$	664

The amount included in accumulated other comprehensive income expected to be recognized as a component of net periodic pension costs in fiscal year 2013 is approximately $0.1 million related to amortization of a net actuarial gain and prior service cost.

Assumptions:

Weighted-average assumptions used to determine benefit obligations was as follows:

	Years Ended July 31,
	2012			2011			2010
Discount rate		3.95	%		5.50	%		5.50	%
Rate of compensation increase		2.12	%		2.00	%		2.00	%

Weighted-average assumptions used to determine net periodic pension cost was as follows:

	Years Ended July 31,
	2012			2011			2010			2009
Discount rate		5.50	%		5.50	%		5.50	%		6.25	%
Expected long-term rate of return on plan assets		3.34	%		3.50	%		4.25	%		4.75	%
Rate of compensation increase		2.00	%		2.00	%		2.00	%		2.50	%

To develop the expected long-term rate of return on assets assumptions consideration is given to the current level of expected returns on risk free investments, the historical level of risk premium associated with the other asset classes in which the portfolio is invested and the expectations for the future returns of each asset class. The expected return for each asset class was then weighted based on the target asset allocation to develop the expected long-term rate of return on assets assumption for the portfolio.

Benefit payments:

The following table summarizes expected benefit payments from the plans through fiscal year 2022. Actual benefit payments may differ from expected benefit payments. The minimum required contributions to the plan are expected to be approximately $0.8 million in fiscal year 2013.

	Pension Benefit Payments
	(in thousands)
For the fiscal years ended July 31:
2013	$	55
2014	$	62
2015	$	90
2016	$	141
2017	$	172
Next 5 years	$	1,309

Investment Policy:

The defined benefit plans have 100% of their assets invested in bank-managed portfolios of debt securities and other assets. Conservation of capital with some conservative growth potential is the strategy for the plans.

The Company’s pension plans are outside the United States, where asset allocation decisions are typically made by an independent board of trustees. Investment objectives are aligned to generate returns that will enable the plans to meet their future obligations. The Company acts in a consulting and governance role in reviewing investment strategy and providing a recommended list of investment managers for each plan, with final decisions on asset allocation and investment manager made by local trustees.

The current target allocations for plan assets are 100% for debt securities. The market value of plan assets using Level 2 inputs is approximately $14.1 million.

Valuation Technique

Benefit obligations are computed using the projected unit credit method. Benefits are attributed to service based on the plan’s benefit formula. Cumulative gains and losses in excess of 10% of the greater of the pension benefit obligation or market-related value of plan assets are amortized over the expected average remaining future service of the current active membership.