RETIREMENT PLAN

9 Months Ended

Sep. 30, 2011

RETIREMENT PLAN

NOTE J – RETIREMENT PLAN

The Company has a defined benefit plan that covers many of its employees. The benefits are based on years of service and the employee’s five-year final average salary. Contributions are intended to provide for benefits attributable to service both to date and expected to be provided in the future. The Company funds the plan in accordance with the Employee Retirement Income Security Act of 1974 (ERISA) and the Pension Protection Act. The Company anticipates contributing approximately $900,000 to the plan during 2011.

Plan assets consist of equity, debt and short-term money market investment funds. The plan’s current investment policy targets 65% equities, 25% debt and 10% money market funds. Equity and debt investment percentages are allowed to fluctuate plus or minus 20% around the respective targets to take advantage of market conditions. As an example, equities can fluctuate from 78% to 52% of plan assets. At September 30, 2011, the investment mix was approximately 63% equity, 27% debt, and 10% money market funds. At December 31, 2010, the investment mix was approximately 67% equity, 23% debt and 10% money market funds. Equity investments consist of a combination of individual equity securities plus value funds, growth funds, large cap funds and international stock funds. Debt investments consist of U.S. Treasury securities and investment grade corporate debt. The weighted-average discount rate and rate of increase in future compensation levels used in determining the periodic pension cost is 5.5% in 2011 and 2010. The expected long-term rate of return on plan assets is 7.5% in 2011 and 2010. The long-term rate of return on plan assets is based on the historical returns within the plan and expectations for future returns.

The expected total pension and retirement expense was as follows for the nine months ended September 30, 2011 and 2010:

(In thousands)	2011			2010
Cost components:
Service cost-benefits earned during the period	$	(180	)	$	(155	)
Interest cost on projected benefit obligation		(237	)		(180	)
Expected return on plan assets		258			179
Net amortization and deferral		(141	)		(107	)
Total net periodic pension cost	$	(300	)	$	(263	)