Note

10:

Pension and Postretirement Benefits

Defined Contribution Plan

All U.S. employees have the option of contributing up to

percent of their pre-tax earnings to a

401

(k) plan, subject to IRS limitations. We match up to the

first

percent of each employee's pre-tax earnings, based on the employee

’s contributions. All U.S. employees are eligible for a separate annual retirement contribution to the

401

(k) plan of

percent of pay, that is invested based on the election of the individual participant. The

percent contribution is in addition to our

percent matching contribution described above and is in lieu of participation in our defined benefit pension plan. The total contribution to the

401

(k) plan for

2017

was

$10,899

which included the cost of the

percent company match of

$5,141

and the additional

percent contribution of

$5,758.

The total contributions to the

401

(k) plan were

$10,417

and

$9,375

2016

and

2015,

respectively.

The defined contribution plan liability recorded in the Consolidated Balance Sheets was

$6,307

and

$6,597

2017

and

2016,

respectively for the U.S. Plan and several statutorily required non-U.S. Plans.

Defined Benefit Plan

Noncontributory defined benefit pension plans cover all U.S. employees employed prior to

January 1, 2007.

Benefits for these plans are based primarily on each employee

’s years of service and average compensation. During

2011,

we made significant changes to our U.S. Pension Plan (the Plan). The changes included: benefits under the Plan were locked-in using service and salary as of

May 31, 2011,

participants

longer earn benefits for future service and salary as they had in the past, affected participants receive a

three

percent increase to the locked-in benefit for every year they continue to work for us and we are making a retirement contribution of

three

percent of eligible compensation to the

401

(k) Plan for those participants. The funding policy is consistent with the funding requirements of federal law and regulations. Plan assets consist principally of listed equity securities and bonds. During

2015,

we amended the plan to add a program for eligible employees to take a lump sum distribution.

lump sum payments were paid during

2017.

A total of

$8,399

was paid during

2016

as lump sum distributions under this program. Other U.S. postretirement benefits are funded through a Voluntary Employees' Beneficiaries Association Trust.

Health care and life insurance benefits are provided for eligible retired employees and their eligible dependents. These benefits are provided

through various insurance companies and health care providers. Costs are accrued during the years the employee renders the necessary service.

Certain non-U.S. subsidiaries provide pension benefits for their employees consistent with local practices and regulations. These plans are primarily defined benefit plans covering substantially all employees upon completion of a specified period of service. Benefits for these plans are generally based on years of service and annual compensation.

Royal Adhesives has defined benefit pension plans for its employees in the U.S. and Germany. The balances related to these plans have been adjusted in purchase accounting and are reflected in the tables below. See Note

for further information on this ac

quisition.

Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of

December 2, 2017

and

December 3, 2016:

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2017			2016			2017			2016			2017			2016
Change in projected benefit obligation
Benefit obligation at beginning of year	$	362,213		$	376,098		$	202,176		$	201,172		$	42,721		$	49,923
Service cost		111			110			2,125			2,016			208			342
Interest cost		15,836			15,360			4,709			5,465			1,593			1,956
Participant contributions		-			-			-			-			200			282
Actuarial (gain)/loss 1		14,405			(2,253	)		(6,636	)		15,254			2,078			(6,450	)
Other		-			-			-			19			-			-
Acquisition		6,518			-			12,156			-			-			-
Settlement payments		-			(8,399	)		(62	)		(511	)		-			-
Benefits paid		(19,724	)		(18,703	)		(8,495	)		(7,382	)		(3,475	)		(3,332	)
Foreign currency translation effect		-			-			18,009			(13,857	)		-			-
Benefit obligation at end of year		379,359			362,213			223,982			202,176			43,325			42,721

Change in plan assets
Fair value of plan assets at beginning of year		331,505			336,461			163,322			172,241			66,640			62,585
Acquisition		4,605			-			-			-			-			-
Actual return on plan assets		60,176			20,610			16,889			10,516			14,631			4,388
Employer contributions		1,537			1,536			1,863			2,319			1,304			2,717
Participant contributions		-			-			-			-			200			282
Settlement payments		-			(8,399	)		-			-			-			-
Other		-			-			(272	)		98			-			-
Benefits paid 2		(19,724	)		(18,703	)		(8,223	)		(7,382	)		(3,475	)		(3,332	)
Foreign currency translation effect		-			-			14,129			(14,470	)		-			-
Fair value of plan assets at end of year		378,099			331,505			187,708			163,322			79,300			66,640
Plan assets (less than) in excess of benefit obligation as of year end	$	(1,260	)	$	(30,708	)	$	(36,274	)	$	(38,853	)	$	35,975		$	23,919

Actuarial gain in

2017

for the U.S. Plans is due to plan experience. Actuarial loss in

2016

for the Non-U.S. Plans includes a

$16,330

loss due to assumption changes net of a (

$1,076

) gain due to plan experience.

Amount excludes benefit payments made from sources other than plan assets.

For the U.S. Pension Plan, we adopted the

Adjusted RP-

2014

mortality tables projected generationally using scale MP-

2017

Amounts in accumulated other comprehensive income (loss) that have not been recognized as components of net periodic benefit cost	Pension Benefits										Other Postretirement
	U.S. Plans				Non-U.S. Plans						Benefits
	2017		2016		2017			2016			2017		2016
Unrecognized actuarial loss	$	131,643	$	157,185	$	67,344		$	82,874		$	5,877	$	13,653
Unrecognized prior service cost (benefit)		32		61		(4	)		(7	)		-		-
Ending balance	$	131,675	$	157,246	$	67,340		$	82,867		$	5,877	$	13,653

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2017			2016			2017			2016			2017			2016
Statement of financial position as of fiscal year-end
Non-current assets	$	19,520		$	-		$	10,912		$	-		$	39,163		$	27,093
Accrued benefit cost
Current liabilities		(1,501	)		(1,489	)		(1,879	)		(1,162	)		(210	)		(206	)
Non-current liabilities		(19,279	)		(29,219	)		(45,307	)		(37,691	)		(2,978	)		(2,968	)
Ending balance	$	(1,260	)	$	(30,708	)	$	(36,274	)	$	(38,853	)	$	35,975		$	23,919

The accumulated benefit obligation of the

U.S. pension and other postretirement plans was

$409,376

December 2, 2017

and

$392,400

December 3, 2016.

The accumulated benefit obligation of the non-U.S. pension plans was

$214,512

December 2, 2017

and

$201,151

December 3, 2016.

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of

December 2, 2017

and

December 3, 2016:

	Pension Benefits and Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	2017		2016		2017		2016
Accumulated benefit obligation	$	25,349	$	352,853	$	120,459	$	201,151
Fair value of plan assets		4,669		331,505		82,631		163,323

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of

December 2, 2017

and

December 3, 2016:

	Pension Benefits and Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	2017		2016		2017		2016
Projected benefit obligation	$	25,449	$	362,213	$	137,618	$	202,176
Fair value of plan assets		4,669		331,505		90,434		163,323

Information about the expected cash flows follows:

	Pension Benefits				Other
	U.S. Plans		Non-U.S. Plans		Postretirement Benefits
Employer contributions
2018	$	312	$	527	$	2,000
Expected benefit payments
2018	$	20,111	$	8,478	$	3,207
2019		20,334		8,920		3,198
2020		20,745		8,654		3,173
2021		21,131		9,084		3,148
2022		21,481		9,269		3,109
2023-2027		110,397		47,947		14,494

Components of net periodic benefit cost and other supplemental information for the years ended

December 2, 2017, December

3, 2016

and

November 28, 2015

follow:

	Pension Benefits																		Other
	U.S. Plans									Non-U.S. Plans									Postretirement Benefits
Net periodic cost (benefit)	2017			2016			2015			2017			2016			2015			2017			2016			2015
Service cost	$	111		$	110		$	107		$	2,125		$	2,016		$	1,924		$	208		$	342		$	449
Interest cost		15,836			15,360			16,322			4,709			5,465			5,986			1,593			1,956			2,042
Expected return on assets		(25,458	)		(24,776	)		(25,682	)		(9,853	)		(9,919	)		(10,422	)		(5,788	)		(5,470	)		(5,510	)
Amortization:
Prior service cost		29			29			29			(4	)		(3	)		(4	)		-			(41	)		(2,505	)
Actuarial loss (gain)		5,905			5,271			5,628			3,492			3,106			3,173			1,010			2,169			2,431
Curtailment loss (gain)		-			-			-			-			19			-			-			-			-
Settlement charge (credit)		-			-			-			16			135			-			-			-			-
Net periodic (benefit) cost	$	(3,577	)	$	(4,006	)	$	(3,596	)	$	485		$	819		$	657		$	(2,977	)	$	(1,044	)	$	(3,093	)

	Pension Benefits
	U.S. Plans		Non-U.S. Plans			Postretirement benefits
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year as of December 2, 2017
Amortization of prior service cost (benefit)	$	29	$	(3	)	$	-
Amortization of net actuarial (gain) loss		5,903		2,735			60
	$	5,932	$	2,732		$	60

	Pension Benefits																		Other
	U.S. Plans									Non-U.S. Plans									Postretirement Benefits
Weighted-average assumptions used to determine benefit obligations	2017			2016			2015			2017			2016			2015			2017			2016			2015
Discount rate		3.72	%		4.08	%		4.28	%		2.12	%		2.31	%		2.82	%		3.54	%		3.85	%		4.02	%
Rate of compensation increase 1		4.50	%		4.50	%		4.50	%		1.71	%		1.47	%		1.58	%		N/A			N/A			N/A

Weighted-average assumptions used to determine net costs for years ended	2017			2016			2015			2017			2016			2015			2017			2016			2015
Discount rate		4.08	%		4.28	%		4.08	%		2.15	%		2.83	%		2.95	%		3.85	%		4.02	%		3.84	%
Expected return on plan assets		7.75	%		7.75	%		7.75	%		6.21	%		6.20	%		6.22	%		8.75	%		8.75	%		8.75	%
Rate of compensation increase 1		4.50	%		4.50	%		4.50	%		1.47	%		1.58	%		1.58	%		N/A			N/A			N/A

Benefits under the U.S. Pension Plan were locked-in as of

May 31, 2011

and

longer include compensation increases. The

4.50

percent rate for

2017,

2016

and

2015

are for the supplemental executive retirement plan only.

The discount rate assumption is determined using an actuarial yield curve approach, which

results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that

may

not

be representative of the characteristics of our particular plan. A higher discount rate decreases the present value of the pension obligations. The discount rate for the U.S. pension plan was

3.73

percent at

December 2, 2017,

compared to

4.10

percent at

December 3, 2016

and

4.30

percent at

November 28, 2015.

Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate reduction of

0.5

percentage points at

December 2, 2017

would increase pension and other postretirement plan expense approximately

$33

(pre-tax) in fiscal

2018.

Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plan.

The expected long-term rate of return on plan assets assumption fo

r the U.S. pension plan was

7.75

percent in

2017,

2016

and

2015.

Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of

percent equities and

percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations. For

2017

the expected long-term rate of return on the target equities allocation was

8.25

percent and the expected long-term rate of return on the target fixed-income allocation was

5.6

percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of

0.5

percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately

$2,287

(pre-tax).

Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets.

he expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of

6.21

percent in

2017

compared to

6.20

percent in

2016

and

6.22

percent in

2015.

The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany, respectively. The expected long-term rate of return on plan assets for the United Kingdom was

6.75

percent and the expected long-term rate of return on plan assets for Germany was

5.75

percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.

Assumed health care trend rates	2017			2016			2015
Health care cost trend rate assumed for next year		6.50	%		6.75	%		7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Fiscal year that the rate reaches the ultimate trend rate	2024			2023			2024

Sensitivity Information:

one

-percentage point change in the health care cost trend rate would have the following effects on the

December 2, 2017

service and interest cost and the accumulated postretirement benefit obligation at

December 2, 2017:

	One-Percentage Point
	Increase		Decrease
Effect on service and interest cost components – annual	$	82	$	(73	)
Effect on accumulated postretirement benefit obligation	$	1,969	$	(1,760	)

The asset allocation for the company

’s U.S. and non-U.S. pension plans at the end of

2017

and

2016

follows.

	U.S. Pension Plans									Non-U.S. Pension Plans									Other Postretirement Plans
	Target			Percentage of Plan Assets at Year-End						Target			Percentage of Plan Assets at Year-End						Target			Percentage of Plan Assets at Year-End
Asset Category	2017			2017			2016			2017			2017			2016			2017			2017			2016
Equities		60.0	%		63.3	%		62.4	%		49.2	%		51.5	%		49.8	%		0.0	%		0.0	%		0.0	%
Fixed income		40.0	%		37.6	%		38.4	%		50.8	%		47.9	%		49.6	%		0.0	%		0.0	%		0.0	%
Insurance		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		100.0	%		99.5	%		99.1	%
Cash		0.0	%		-0.9	%		-0.8	%		0.0	%		0.6	%		0.6	%		0.0	%		0.5	%		0.9	%
Total		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

Plan Asset Management

Plan assets are held in trust and invested in mutual funds, separately managed accounts and other commingled investment vehicles holding U.S. and non-U.S. equity securities, fixed income securities and other investment classes. We employ a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk.

Futures and options

may

also be used to enhance risk-adjusted long-term returns while improving portfolio diversification and duration. Risk management is accomplished through diversification across asset classes, utilization of multiple investment managers and general plan-specific investment policies. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and our assessment of our overall liquidity position. This asset allocation policy mix is reviewed annually and actual versus target allocations are monitored regularly and rebalanced on an as-needed basis. Plan assets are invested using a combination of active and passive investment strategies. Passive, or “indexed” strategies, attempt to mimic rather than exceed the investment performance of a market benchmark. The plans’ active investment strategies employ multiple investment management firms which in aggregate cover a range of investment styles and approaches. Performance is monitored and compared to relevant benchmarks on a regular basis.

The U.S. pension plans consist of

two

plans: a pension plan and a supplemental executive retirement plan (

“SERP”). There were

assets in the SERP in

2017

and

2016.

Consequently, all of the data disclosed in the asset allocation table for the U.S. pension plans pertain to our U.S. pension plan.

During

2017

we maintained our assets within the allowed ranges of the target asset allocation mix of

percent equities and

percent fixed income plus or minus

percent and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the plan. We plan to maintain the portfolio at this target allocation in

2018.

The non-U.S. pension plans consist of all the pension plans administered by us outside the U.S., principally consisting of plans in Germany, the United Kingdom

, France and Canada. During

2017

we maintained our assets for the non-U.S. pension plans at the specific target asset allocation mix determined for each plan plus or minus the allowed rate and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the individual plans. We plan to maintain the portfolios at their respective target asset allocations in

2018.

Other postretirement benefits plans consist of

two

U.S. plans: a retiree medical health care plan and a group term life insurance plan. There were

assets in the group term life insurance plan for

2017

and

2016.

Consequently, all of the data disclosed in the asset allocation table for other postretirement plans pertain to our retiree medical health care plan. Our investment strategy for other postretirement benefit plans is to own insurance policies that maintain an asset allocation nearly completely in equities. These equities are invested in a passive portfolio indexed to the S&P

500.

Our large weighting to equities in these plans is driven by the investment options available and the relative underfunded status of the plans.

Fair Value of Plan Assets

The following table presents plan assets categorized

within a

three

-level fair value hierarchy as described in Note

13.

	December 2, 2017
U.S. Pension Plans	Level 1			Level 2		Level 3		Total Assets
Equities	$	144,124		$	95,542	$	-	$	239,666
Fixed income		42,310			99,252		291		141,853
Cash		(3,893	)		126		-		(3,767	)
Total categorized in the fair value hierarchy		182,541			194,920		291		377,752
Other investments measured at NAV 1									347
Total	$	182,541		$	194,920	$	291	$	378,099

Non-U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	35,118	$	1,185	$	-	$	36,303
Fixed income		46,725		6,618		660		54,003
Cash		549		-		-		549
Total categorized in the fair value hierarchy		82,392		7,803		660		90,855
Other investments measured at NAV 1								96,855
Total	$	82,392	$	7,803	$	660	$	187,710

Other Postretirement Benefits	Level 1		Level 2		Level 3		Total Assets
Insurance	$	-	$	-	$	78,894	$	78,894
Cash		406		-		-		406
Total	$	406	$	-	$	78,894	$	79,300

	December 3, 2016
U.S. Pension Plans	Level 1			Level 2		Level 3		Total Assets
Equities	$	127,275		$	79,669	$	-	$	206,944
Fixed income		41,513			85,363		320		127,196
Cash		(2,635	)		-		-		(2,635	)
Total	$	166,153		$	165,032	$	320	$	331,505

Non-U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	30,165	$	1,165	$	-	$	31,330
Fixed income		41,490		6,013		569		48,072
Cash		996		-		-		996
Total categorized in the fair value hierarchy		72,651		7,178		569		80,398
Other investments measured at NAV 1								82,925
Total	$	72,651	$	7,178	$	569	$	163,323

Other Postretirement Benefits	Level 1		Level 2		Level 3		Total Assets
Insurance	$	-	$	-	$	66,064	$	66,064
Cash		576		-		-		576
Total	$	576	$	-	$	66,064	$	66,640

In accordance with ASC Topic

820

10,

Fair Value Measurement, certain investments that are measured at NAV (Net Asset Value per share) (or its equivalent) practical expedient have

not

been classified in the fair value hierarchy. The fair value amounts represented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

The definitions of fair values of our pension and other postretirement benefit plan assets at

December 2, 2017

and

December 3, 2016

by asset category are as follows:

Equities

—Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy allocations. Investments include: (i) U.S. and non-U.S. equity securities and mutual funds valued at closing prices from national exchanges; and (ii) commingled funds valued at unit values or net asset values provided by the investment managers, which are based on the fair value of the underlying investments. Funds valued at net asset value have various investment strategies including seeking maximum total returns consistent with prudent investment management, seeking current income consistent with preservation of capital and daily liquidity and seeking to approximate the risk and return characterized by a specific index fund. There are

restrictions for redeeming holdings out of these funds and the funds have

unfunded commitments.

Fixed income

—Primarily corporate and government debt securities for purposes of total return and managing fixed income exposure to policy allocations. Investments include (i) mutual funds valued at closing prices from national exchanges, (ii) corporate and government debt securities valued at closing prices from national exchanges, (iii) commingled funds valued at unit values or net asset value provided by the investment managers, which are based on the fair value of the underlying investments, and (iv) an annuity contract, the value of which is determined by the provider and represents the amount the plan would receive if the contract were cashed out at year-end.

Insurance

—Insurance contracts for purposes of funding postretirement medical benefits. Fair values are the cash surrender values as determined by the providers which are the amounts the plans would receive if the contracts were cashed out at year end.

Cash

–

Cash balances on hand, accrued income and pending settlements of transactions for purposes of handling plan payments. Fair values are the cash balances as reported by the Trustees of the plans.

The following is a roll forward of the Level

investments of our pension and postretirement benefit plan assets during the year ended

December 2, 2017

and

December 3, 2016:

	Fixed Income
U.S. Pension Plans	2017			2016
Level 3 balance at beginning of year	$	320		$	352
Purchases, sales, issuances and settlements, net		(29	)		(32	)
Level 3 balance at end of year	$	291		$	320

	Fixed Income
Non-U.S. Pension Plans	2017		2016
Level 3 balance at beginning of year	$	569	$	530
Net transfers into / (out of) level 3		21		21
Net gains		3		16
Currency change effect		67		2
Level 3 balance at end of year	$	660	$	569

	Insurance
Other Postretirement Benefits	2017			2016
Level 3 balance at beginning of year	$	66,064		$	62,299
Net transfers into / (out of) level 3		(1,073	)		(435	)
Purchases, sales, issuances and settlements, net		(570	)		(482	)
Net gains		14,473			4,682
Level 3 balance at end of year	$	78,894		$	66,064