Employee Benefit Plans

12 Months Ended

May 31, 2011

Employee Benefit Plans

Employee Benefit Plans

6. Employee Benefit Plans

        We have defined contribution and defined benefit plans covering substantially all full-time domestic employees and certain employees in The Netherlands.

Defined Benefit Plans

        Prior to January 1, 2000, the pension plan for domestic salaried and non-union hourly employees had a benefit formula based primarily on years of service and compensation. Effective January 1, 2000, we converted our defined benefit plan for substantially all domestic salaried and certain hourly employees to a cash balance pension plan. Under the cash balance pension plan, the retirement benefit is expressed as a dollar amount in an account that grows with annual pay-based credits and interest on the account balance. The interest crediting rate under our cash balance plan is determined quarterly and is equal to 100% of the average 30-year treasury rate for the second month preceding the applicable quarter published by the Internal Revenue Service. The average interest crediting rate under our cash balance plan for the fiscal year ended May 31, 2011 was 5.0%. Effective June 1, 2005, the existing cash balance plan was frozen and the annual pay-based credits were discontinued. Also effective June 1, 2005, the defined contribution plan was modified to include increased employer contributions and an enhanced profit sharing formula. Defined pension benefits for certain union hourly employees are based primarily on a fixed amount per year of service.

        Certain foreign operations of domestic subsidiaries also have a defined benefit pension plan. Benefit formulas are based generally on years of service and compensation. It is the policy of these subsidiaries to fund at least the minimum amounts required by local laws and regulations.

        We provide eligible outside directors with benefits upon retirement on or after age 65 provided they have completed at least five years of service as a director. Benefits are paid quarterly in cash equal to 25% of the annual retainer fee payable to active outside directors. Payment of benefits commence upon retirement and continue for a period equal to the total number of years of the retired director's service up to a maximum of ten years, or death, whichever occurs first. In the fourth quarter of fiscal 2001, we terminated the plan for any new members of the Board of Directors first elected after May 31, 2001.

Obligations and Funded Status

        The following table sets forth the changes in projected benefit obligations and plan assets for all of our pension plans:

		May 31,
		2011			2010
Change in benefit obligation:
	Benefit obligation at beginning of year	$	104,530		$	88,748
	Service cost		2,143			1,528
	Interest cost		5,376			5,578
	Plan participants' contributions		385			392
	Net actuarial (gain) loss		(6,415	)		18,261
	Benefits paid		(5,248	)		(5,035	)
	Curtailment		(1,277	)		—
	Translation		5,597			(4,942	)
Benefit obligation at end of year		$	105,091		$	104,530
Change in plan assets:
	Fair value of plan assets at beginning of year	$	78,892		$	69,853
	Actual return on plan assets		9,987			16,472
	Employer contributions		4,653			1,755
	Plan participants' contributions		385			392
	Benefits paid		(5,248	)		(5,035	)
	Translation		5,753			(4,545	)
Fair value of plan assets at end of year		$	94,422		$	78,892
Funded status at end of year		$	(10,669	)	$	(25,638	)

        Amounts recognized in the consolidated balance sheets consisted of the following:

	May 31,
	2011			2010
Other assets	$	5,498		$	—
Accrued liabilities		(1,610	)		(1,465	)
Other liabilities and deferred income		(14,557	)		(24,173	)
	$	(10,669	)	$	(25,638	)

        Amounts recognized in accumulated other comprehensive loss, net of tax of $12,661 and $16,773 at May 31, 2011 and 2010, respectively, consisted of the following:

	May 31,
	2011		2010
Actuarial loss	$	22,131	$	29,799
Prior service cost		564		534
Total	$	22,695	$	30,333

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

	May 31,
	2011		2010
Projected benefit obligation	$	71,057	$	69,165
Accumulated benefit obligation		70,903		68,907
Fair value of plan assets		54,890		46,404

        The accumulated benefit obligation for all pension plans was $100,529 and $97,750 as of May 31, 2011 and 2010, respectively.

Net Periodic Benefit Cost

        Pension expense charged to results of operations includes the following components:

	For the Year Ended May 31,
	2011			2010			2009
Service cost	$	2,143		$	1,528		$	1,461
Interest cost		5,376			5,578			5,347
Expected return on plan assets		(5,871	)		(5,936	)		(6,514	)
Amortization of prior service cost		138			132			134
Recognized net actuarial loss		1,219			1,148			500
	$	3,005		$	2,450		$	928

Assumptions

        The assumptions used in accounting for the Company's plans are estimates of factors including, among other things, the amount and timing of future benefit payments. The following table presents the key assumptions used in the measurement of the Company's benefit obligations:

		May 31,
		2011			2010
Domestic plans:
	Discount rate		5.26	%		5.60	%
	Rate of compensation increase		3.50			3.50

		May 31,
		2011			2010
Non-domestic plans:
	Discount rate		5.80	%		4.50	%
	Rate of compensation increase		3.00			3.00

        A summary of the weighted average assumptions used to determine net periodic pension expense is as follows:

		For the Year Ended May 31,
		2011			2010			2009
Domestic plans:
	Discount rate		5.60	%		6.82	%		6.45	%
	Rate of compensation increase		3.50			3.50			3.50
	Expected long-term return on plan assets		8.00			8.50			8.50
Non-domestic plans:
	Discount rate		4.50	%		5.90	%		6.10	%
	Rate of compensation increase		3.00			3.00			3.00
	Expected long-term return on plan assets		4.50			6.50			6.50

        The discount rate was determined by projecting the plan's expected future benefit payments as defined for the projected benefit obligation, discounting those expected payments using a theoretical zero-coupon spot yield curve derived from a universe of high-quality bonds as of the measurement date, and solving for the single equivalent discount rate that resulted in the same projected benefit obligation. Constraints were applied with respect to callability and credit quality. In addition, 3% of the bonds were deemed outliers due to questionable pricing information and consequently were excluded from consideration.

Plan Assets

        The following table sets forth the actual asset allocation and target allocations for our U.S. pension plans:

	May 31,
							Target Asset Allocation
	2011			2010
Equity securities		60	%		60	%	45 – 75%
Fixed income securities		22			20		15 – 45%
Other (fund-of funds hedge fund)		18			20		0 – 25%
		100	%		100	%

        The assets of U.S pension plans are invested in compliance with the Employee Retirement Income Security Act of 1974 (ERISA). The investment goals are to provide a total return that, over the long term, optimizes the long-term return on plan assets at an acceptable risk, and to maintain a broad diversification across asset classes and among investment managers. We believe that there are no significant concentrations of risk within our plan assets as of May 31, 2011. Direct investments in our securities and the use of derivatives for the purpose of speculation are not permitted. The assets of the U.S. pension plans are invested primarily in equity and fixed income mutual funds, individual common stocks and investments in fund-of funds hedge funds.

        The assets of the non-domestic plan are invested in compliance with local laws and regulations and are comprised primarily of equity and fixed income mutual funds.

        To develop our expected long-term rate of return assumption on domestic plans, we use long-term historical return information for our targeted asset mix and current market conditions.

        The following table sets forth by level, within the fair value hierarchy, pension plan assets at their fair value as of May 31, 2011:

		Level 11		Level 22		Level 33		Total
Equity securities:
	Large/medium capitalization	$	17,586	$	—	$	—	$	17,586
	Small capitalization		9,039		—		—		9,039
	International		5,958		8,478		—		14,436
Fixed income			10,744		24,697		—		35,441
Hedge funds			—		14,198		1,112		15,310
Cash and other			1,448		1,162		—		2,610
Total investments		$	44,775	$	48,535	$	1,112	$	94,422

¹

Quoted prices in active markets

²

Significant other observable inputs

³

Significant other unobservable inputs

Cash Flow

        The following table summarizes our estimated future pension benefits by fiscal year:

	Fiscal Year
	2012		2013		2014		2015		2016		2017 to 2021
Estimated pension benefits	$	7,534	$	4,983	$	6,158	$	5,074	$	5,179	$	29,194

        Our contribution policy for the domestic plans is to contribute annually, at a minimum, an amount which is deductible for federal income tax purposes and that is sufficient to meet actuarially computed pension benefits. We anticipate contributing $5,000 to $7,000 during fiscal 2012.

Additional Information

        The estimated amounts for our plans that will be amortized from accumulated other comprehensive loss into expense over the next fiscal year are as follows:

Amortization of net actuarial loss	$	1,352
Amortization of prior service cost	$	141

Postretirement Benefits Other Than Pensions

        We provide health and life insurance benefits for certain eligible retirees. The postretirement plans are unfunded and in fiscal 1995, we completed termination of postretirement health and life insurance benefits attributable to future services of collective bargaining and other domestic employees. The unfunded projected benefit obligation for this plan was $1,187 and $1,299 as of May 31, 2011 and 2010, respectively. We have omitted substantially all of the required disclosures related to this plan because the plan is not material to our consolidated financial position or results of operations.

Defined Contribution Plan

        The defined contribution plan is a profit sharing plan which is intended to qualify as a 401(k) plan under the Internal Revenue Code. Under the plan, employees may contribute up to 75% of their pretax compensation, subject to applicable regulatory limits. We may make matching contributions up to 5% of compensation as well as discretionary profit sharing contributions. Company contributions vest on a pro-rata basis during the first three years of employment. We also provide profit sharing benefits for certain executives and key employees to supplement the benefits provided by the defined contribution plan. Expense charged to results of operations for Company matching contributions, including profit sharing contributions, was $10,469 in fiscal 2011, $8,065 in fiscal 2010 and $7,964 in fiscal 2009 for these plans.