M. PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The Company has non-contributory, qualified defined benefit pension plans covering substantially all domestic employees hired prior to October 1, 2003, and certain foreign employees. Domestic plan benefits are based on years of service, and, for salaried employees, on average compensation for benefits earned prior to January 1, 1997, and on a cash balance plan for benefits earned after January 1, 1997. The Company's funding policy for the plans covering domestic employees is to contribute an actuarially determined amount which falls between the minimum and maximum amount that can be deducted for federal income tax purposes.

On June 3, 2009, the Company announced it would freeze future accruals under the domestic defined benefit pension plans effective August 1, 2009.

In addition, the Company has unfunded, non-qualified retirement plans for certain management employees and Directors. In the case of management employees, benefits are based on an annual credit to a bookkeeping account, intended to restore the benefits that would have been earned under the qualified plans, but for the earnings limitations under the Internal Revenue Code. In the case of Directors, benefits are based on years of service on the Board. All benefits vest upon retirement from the Company.

In addition to providing pension benefits, the Company provides other postretirement benefits, including healthcare and life insurance benefits for certain domestic retirees. All employees retiring after December 31, 1992, and electing to continue healthcare coverage through the Company's group plan, are required to pay 100% of the premium cost.

The measurement date for the Company’s pension and postretirement benefit plans in fiscal 2016 and 2015 was June 30.

Obligations and Funded Status

The following table sets forth the Company's defined benefit pension plans’ and other postretirement benefit plans’ funded status

and the amounts recognized in the Company's balance sheets and statement of operations and comprehensive income as of June 30:

	Pension Benefits						Other Postretirement Benefits
	2016			2015			2016			2015
Change in benefit obligation:
Benefit obligation, beginning of year	$	127,733		$	123,832		$	16,372		$	16,584
Service cost		770			465			28			30
Interest cost		4,968			4,862			604			579
Actuarial loss (gain)		7,043			8,384			496			882
Contributions by plan participants		143			154			519			547
Benefits paid		(11,601	)		(9,964	)		(2,086	)		(2,250	)
Benefit obligation, end of year	$	129,056		$	127,733		$	15,933		$	16,372

Change in plan assets:
Fair value of assets, beginning of year	$	104,681		$	102,495		$	-		$	-
Actual return on plan assets		(1,442	)		5,828			-			-
Employer contribution		2,383			6,168			1,567			1,703
Contributions by plan participants		143			154			519			547
Benefits paid		(11,601	)		(9,964	)		(2,086	)		(2,250	)
Fair value of assets, end of year	$	94,164		$	104,681		$	-		$	-

Funded status	$	(34,892	)	$	(23,052	)	$	(15,933	)	$	(16,372	)

Amounts recognized in the balance sheet consist of:
Other assets - noncurrent	$	654		$	638		$	-		$	-
Accrued liabilities - current		(805	)		(764	)		(1,969	)		(2,040	)
Accrued retirement benefits - noncurrent		(34,741	)		(22,926	)		(13,964	)		(14,332	)
Net amount recognized	$	(34,892	)	$	(23,052	)	$	(15,933	)	$	(16,372	)

Amounts recognized in accumulated other comprehensive loss consist of (net of tax):
Net transition obligation	$	285		$	296		$	-		$	-
Actuarial net loss		45,850			38,613			3,166			3,312
Net amount recognized	$	46,135		$	38,909		$	3,166		$	3,312

The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic

benefit cost during the next fiscal year for the qualified domestic defined benefit and other postretirement benefit plans are as

follows:

	Pension Benefits		Other Postretirement Benefits
Net transition obligation	$	99	$	-
Actuarial net loss		3,598		726
Net amount to be recognized	$	3,697	$	726

The accumulated benefit obligation for all defined benefit pension plans was approximately $129,056 and $127,733 at June 30, 2016 and 2015, respectively.

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

	June 30
	2016		2015
Projected and accumulated benefit obligation	$	127,528	$	126,242
Fair value of plan assets		91,982		102,552

Components of Net Periodic Benefit Cost:

	Pension Benefits
	2016			2015			2014
Service cost	$	770		$	465		$	536
Interest cost		4,968			4,862			5,425
Expected return on plan assets		(6,874	)		(7,272	)		(6,591	)
Amortization of transition obligation		33			36			32
Amortization of prior service cost		59			-			-
Amortization of actuarial net loss		3,627			2,436			2,894
Net periodic benefit cost	$	2,583		$	527		$	2,296

	Other Postretirement Benefits
	2016		2015		2014
Service cost	$	28	$	30	$	37
Interest cost		604		579		659
Amortization of actuarial net loss		728		638		602
Net periodic benefit cost	$	1,360	$	1,247	$	1,298

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for Fiscal 2016 (Pre-tax):

	Pension			Other Postretirement Benefits
Net loss	$	15,514		$	496
Prior service cost		58			-
Amortization of transition asset		(33	)		-
Amortization of prior service cost		(59	)		-
Amortization of net (loss) gain		(3,627	)		(728	)
Total recognized in other comprehensive income		11,853			(232	)
Net periodic benefit cost		2,583			1,360
Total recognized in net periodic benefit cost and other comprehensive income	$	14,436		$	1,128

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for Fiscal 2015 (Pre-tax):

	Pension			Other Postretirement Benefits
Net loss	$	9,406		$	882
Amortization of transition asset		(36	)		-
Amortization of net (loss) gain		(2,436	)		(638	)
Total recognized in other comprehensive income		6,934			244
Net periodic benefit cost		527			1,247
Total recognized in net periodic benefit cost and other comprehensive income	$	7,461		$	1,491

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income for Fiscal 2014 (Pre-tax):

	Pension			Other Postretirement Benefits
Net loss	$	(6,303	)	$	(59	)
Amortization of prior service benefit		7			-
Amortization of transition asset		(38	)		-
Amortization of net (loss) gain		(2,894	)		(602	)
Total recognized in other comprehensive income		(9,228	)		(661	)
Net periodic benefit cost		2,296			1,298
Total recognized in net periodic benefit cost and other comprehensive income	$	(6,932	)	$	637

Additional Information

Assumptions

	Pension Benefits						Other Postretirement Benefits
Weighted average assumptions used to determine benefit obligations at June 30
	2016			2015			2016			2015
Discount rate		3.35	%		4.05	%		3.27	%		3.93	%
Expected return on plan assets		6.57	%		7.11	%

	Pension Benefits									Other Postretirement Benefits
Weighted average assumptions used to determine net periodic benefit costs for years ended June 30
	2016			2015			2014			2016			2015			2014
Discount rate		4.05	%		4.06	%		4.35	%		3.93	%		3.76	%		3.99	%
Expected return on plan assets		7.11	%		7.39	%		7.41	%

The assumed weighted-average healthcare cost trend rate was 7.5 % in 2016, grading down to 5% in 2022. A 1% increase in the assumed health care cost trend would increase the accumulated postretirement benefit obligation by approximately $320 and the service and interest cost by approximately $13. A 1% decrease in the assumed health care cost trend would decrease the accumulated postretirement benefit obligation by approximately $313 and the service and interest cost by approximately $13.

Plan Assets

The Company’s Benefits Committee (“Committee”), a non-board management committee, oversees investment matters related to the Company’s funded benefit plans. The Committee works with external actuaries and investment consultants on an ongoing basis to establish and monitor investment strategies and target asset allocations. The overall objective of the Committee’s investment strategy is to earn a rate of return over time to satisfy the benefit obligations of the pension plans and to maintain sufficient liquidity to pay benefits and address other cash requirements of the pension plans. The Committee has established an Investment Policy Statement which provides written documentation of the Company’s expectations regarding its investment programs for the pension plans, establishes objectives and guidelines for the investment of the plan assets consistent with the Company’s financial and benefit-related goals, and outlines criteria and procedures for the ongoing evaluation of the investment program. The Company employs a total return on investment approach whereby a mix of investments among several asset classes are used to maximize long-term return of plan assets while avoiding excessive risk. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, and annual liability measurements.

The Company’s pension plan weighted-average asset allocations at June 30, 2016 and 2015 by asset category are as follows:

	Target			June 30
Asset Category	Allocation			2016			2015
Equity securities		65	%		63	%		62	%
Debt securities		25	%		25	%		25	%
Real estate		10	%		12	%		13	%
		100	%		100	%		100	%

Due to market conditions and other factors, actual asset allocation may vary from the target allocation outlined above. The U.S. pension plans held 98,211 shares of Company stock with a fair market value of $1,054.8 (1.1 percent of total plan assets) at June 30, 2016 and 98,211 shares with a fair market value of $1,830.7 (1.8 percent of total plan assets) at June 30, 2015.

The plans have a long-term return assumption of 7.0%. This rate was derived based upon historical experience and forward-looking return expectations for major asset class categories.

Fair value is defined as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The inputs used to measure fair value are classified into the following hierarchy:

Level I	Unadjusted quoted prices in active markets for identical instruments
Level II	Unadjusted quoted prices in active markets for similar instruments, or
	Unadjusted quoted prices for identical or similar instruments in markets that are not active, or
	Other inputs that are observable in the market or can be corroborated by observable market data
Level III	Use of one or more significant unobservable inputs

The following table presents plan assets using the fair value hierarchy as of June 30, 2016:

	Total		Level I		Level II		Level III
Cash and cash equivalents	$	1,143	$	1,143	$	-	$	-
Equity securities:
U.S. (a)		26,046		26,046		-		-
International (b)		12,674		8,881		3,793		-
Fixed Income (c)		20,842		-		20,842		-
Annuity contracts (d)		9,031		-		-		9,031
Real estate (e)		10,537		-		10,537		-
Other (f)		13,891		-		-		13,891
Total	$	94,164	$	36,070	$	35,172	$	22,922

The following table presents plan assets using the fair value hierarchy as of June 30, 2015:

	Total		Level I		Level II		Level III
Cash and cash equivalents	$	1,034	$	1,034	$	-	$	-
Equity securities:		-
U.S. (a)		28,035		28,035		-		-
International (b)		14,819		10,649		4,170		-
Fixed Income (c)		22,615		8,993		13,622		-
Annuity contracts (d)		9,508		-		-		9,508
Real estate (e)		12,770		-		12,770		-
Other (f)		15,900		-		-		15,900
Total	$	104,681	$	48,711	$	30,562	$	25,408

(a) U.S. equity securities include companies that are well diversified by industry sector and equity style (i.e., growth and value strategies). Investments are primarily in large capitalization stocks and, to a lesser extent, mid- and small-cap stocks. These securities are valued at the closing price reported on the active market on which the individual securities are traded.

(b) International equities are invested in companies that are traded on exchanges outside the U.S. and are well diversified by industry sector, country, capitalization and equity style (i.e., growth and value strategies). Certain assets are invested in international commingled equity funds. The vast majority of the investments are made in companies in developed markets with a smaller percentage in emerging markets. Securities traded on exchanges are valued at the closing price reported on the active market on which the individual securities are traded. International commingled funds are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding.

(c) Fixed income consists of corporate bonds with investment grade BBB or better from diversified industries, as well as government debt securities. Corporate and government debt investments are valued utilizing a market approach that includes various valuation techniques and sources such as value generation models, broker quotes in active and inactive markets, benchmark yields and securities, reported trades, issuer spreads, and/or other applicable reference data.

(d) Annuity contracts represent contractual agreements in which payments are made to an insurance company, which agrees to pay out an income or lump sum amount at a later date. Annuity contracts are valued at the net present value of future cash flows.

(e) Real estate investments invested in common collective trusts and other mutual funds holding real estate investments. They are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding. Level 2 investments represent funds where regular opportunities exist for the Company to sell the holdings, whereas Level 3 investments represent funds where less frequent opportunities exist during the year for the Company to sell its holding in the funds.

(f) Other consists of hedged equity mutual funds. These investments are valued at the net asset value (“NAV”) as determined by the custodian of the fund. The NAV is based on the fair value of the underlying assets owned by the fund, minus its liabilities, divided by the number of units outstanding.

The following tables present a reconciliation of the fair value measurements using significant unobservable inputs (Level III) as of June 30, 2016 and 2015:

	Annuity Contracts			Other
Balance - June 30, 2015	$	9,508		$	15,900
Actual return on plan assets:
Relating to assets still held at reporting date		38			(2,009	)
Purchases, sales and settlements, net		(619	)		-
Transfers in and/or out of Level III		104			-
Balance - June 30, 2016	$	9,031		$	13,891

	Annuity Contracts		Other
Balance - June 30, 2014	$	6,340	$	14,689
Actual return on plan assets:
Relating to assets still held at reporting date		2,978		1,211
Purchases, sales and settlements, net		190		-
Balance - June 30, 2015	$	9,508	$	15,900

Cash Flows

Contributions

The Company expects to contribute $1,467 to its defined benefit pension plans in fiscal 2017.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension Benefits		Other Postretirement Benefits
			Gross Benefits		Part D Reimbursement		Net Benefit Payments
2017	$	10,477	$	2,000	$	-	$	2,000
2018		10,925		1,959		-		1,959
2019		9,675		1,559		-		1,559
2020		9,124		1,465		-		1,465
2021		8,760		1,343		-		1,343
Years 2022 - 2026		38,280		5,258		-		5,258

The Company sponsors defined contribution plans covering substantially all domestic employees and certain foreign employees. These plans provide for employer contributions based primarily on employee participation. The total expense under the plans was $2,058, $2,526 and $2,218 in fiscal 2016, 2015 and 2014, respectively.