NOTE 8 – Benefit Plans:

Defined Benefit Plans

The Company is the sponsor of two noncontributory qualified defined benefit pension plans, providing for normal retirement at age 65, covering all eligible employees (as defined). Periodic benefit payments on retirement are determined based on a fixed amount applied to service or determined as a percentage of earnings prior to retirement. The Company is also the sponsor of an unfunded supplemental executive retirement plan (SERP) in which several of its employees are participants. Pension plan assets for retirement benefits consist primarily of fixed income securities and common stock equities.

Effective June 30, 2013, the Company no longer accrues additional benefits for future service or for future increases in compensation levels for the company’s primary defined benefit pension plan.

Effective December 31, 2014, the Company no longer accrues additional benefits for future service for the Company’s hourly defined benefit plan.

The Company recognizes the funded status of its defined benefit post retirement plans in the Company’s consolidated balance sheets.

At December 31, 2015, the Company’s projected benefit obligation under its pension plans exceeded the fair value of the plans’ assets by $8,925,000 and thus the plans are underfunded.

It is our policy to make contributions to the various plans in accordance with statutory funding requirements and any additional funding that may be deemed appropriate.

The following tables present the changes in the benefit obligations and the various plan assets, the funded status of the plans, and the amounts recognized in the Company's consolidated balance sheets

at December 31, 2015 and 2014:

	December 31,
	2015			2014

Changes in benefit obligation
Benefit obligation at beginning of year	$	25,470,000		$	21,633,000
Service cost		48,000			81,000
Interest cost		951,000			1,001,000
Actuarial loss (gain)		327,000			4,168,000
Benefits paid		(2,006,000	)		(1,413,000	)
Benefit obligation at end of year		24,790,000			25,470,000

Changes in plan assets
Fair value of plan assets at beginning of year		17,386,000			18,016,000
Actual return on assets		(515,000	)		783,000
Employer contributions		1,000,000			-
Benefits paid		(2,006,000	)		(1,413,000	)
Fair value of plan assets at end of year		15,865,000			17,386,000

Funded status at end of year	$	(8,925,000	)	$	(8,084,000	)

Amounts recognized in consolidated balance sheet
Long-term pension liability	$	(8,925,000	)	$	(8,084,000	)


Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial loss	$	10,106,000		$	9,153,000

Information for pension plans with projected

benefit obligation in excess of plan assets

	December 31,
	2015			2014
Projected benefit obligation	$	24,790,000		$	25,470,000
Fair value of plan assets		(15,865,000	)		(17,386,000	)
	$	8,925,000		$	8,084,000

Components of net periodic benefit cost

Net periodic benefits cost	2015			2014
Service cost - benefits earned during the period	$	48,000		$	81,000
Interest cost on projected benefit obligation		951,000			1,001,000
Expected return on plan assets		(1,343,000	)		(1,395,000	)
Recognized actuarial loss		772,000			322,000
Settlement loss		460,000			208,000
Net periodic pension cost after settlements	$	888,000		$	217,000

The pension settlement loss included in the table above relates to lump sum payments made to various employees upon their retirement or termination each year.

The estimated net actuarial loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $1,061,000.

The table below presents various assumptions used in determining the benefit obligation for each year and reflects the percentages for the various plans.

Weighted-average assumptions used to determine benefit obligations at December 31,

	Discount Rate						Long Term Rate of Return						Salary Scale
	Corp.			Plants			Corp.			Plants			Corp.		Plants
2014		3.86	%		3.74	%		8.00	%		8.00	%		N/A		N/A
2015		4.19	%		4.09	%		8.00	%		8.00	%		N/A		N/A

Weighted-average assumptions used to determine net periodic benefit cost for years ending December 31,

	Discount Rate						Long Term Rate of Return						Salary Scale
	Corp.			Plants			Corp.			Plants			Corp.		Plants
2014		4.82	%		4.66	%		8.00	%		8.00	%		N/A		N/A
2015		3.86	%		3.74	%		8.00	%		8.00	%		N/A		N/A

The methodology used to determine the expected rate of return on the pension plan assets was based on a review of actual returns in the past and consideration of projected returns based upon our projected asset allocation. Our strategy with respect to our investments in pension plan assets is to be invested with a long-term outlook. Therefore, the risk and return balance of our asset portfolio should reflect a long-term horizon. Our pension plan asset allocation at December 31, 2015, 2014 and target allocation for 2016 are as follows:

	Percentage of Plan Assets at December 31,				Target Allocation
Investment description	2015		2014		2016
Equity securities		64%		63%		65%
Fixed income		15%		15%		15%
Other		21%		22%		20%
Total		100%		100%		100%

The Company plans to contribute $500,000 to our defined benefit pension plans in 2016.

The following table includes projected benefit payments for the years indicated:

Year	Projected Benefit Payments
2016	$	2,034,000
2017	$	2,182,000
2018	$	1,318,000
2019	$	1,437,000
2020	$	2,054,000
2021-2025	$	7,853,000

Rabbi Trust

In connection with the Company’s unfunded SERP, we have purchased life insurance contracts on the lives of designated individuals during 2015. The insurance contracts associated with the SERP are held in a Rabbi trust.

The trust is the owner and beneficiary of such insurance contracts. The policies are being utilized to help offset the costs and liabilities of the SERP. The cash surrender value of the life insurance contracts was $893,000 at December 31, 2015. We recognized an investment loss on the cash surrender value of these life insurance contracts of $7,000 in 2015. The cash surrender value of these policies is included in other assets in the Consolidated Sheet as of December 31, 2105.

Defined Contribution Plan

The Company provides a defined contribution plan covering qualified employees. The plan includes a provision that allows employees to make pre-tax contributions under Section 401(k) of the Internal Revenue Code. The plan provides for the Company to make a guaranteed match equal to 25% of each employee’s eligible contributions. The plan also provides the Company with the option of making an additional discretionary contribution to the plan each year. Currently the discretionary contribution is set at 3% of eligible employees’ payroll. The Company contributions for the years ended December 31, 2015 and 2014 were approximately $903,000 and $782,000, respectively.