10-K

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-K

	[X]	Annual Report Pursuant to Section 13 or 15(d)
		of the Securities Exchange Act of 1934
(Mark one)		for the fiscal year ended January 2, 2016
		Or
	[   ]	Transition Report Pursuant to Section 13 or 15(d)
		of the Securities Exchange Act of 1934
		for the transition period from to

Commission file number 0-20388

LITTELFUSE, INC.

(Exact name of registrant as specified in its charter)

Delaware	36-3795742
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
8755 West Higgins Road, Suite 500
Chicago, Illinois	60631
(Address of principal executive offices)	(ZIP Code)

773-628-1000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange
Common Stock, $0.01 par value	On Which Registered
	NASDAQ Global Select MarketSM

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

(Cover continued from previous page)

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act (Check one): Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

The aggregate market value of 22,725,882 shares of voting stock held by non-affiliates of the registrant was approximately $2,201,579,542 based on the last reported sale price of the registrant’s Common Stock as reported on the NASDAQ Global Select Market^SM on June 27, 2015.

As of February 19, 2016, the registrant had outstanding 22,342,813 shares of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Littelfuse, Inc. Proxy Statement for the 2016 Annual Meeting of Stockholders (the “Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.  

2

TABLE OF CONTENTS

		Page
FORWARD-LOOKING STATEMENTS		4
PART I
Item 1.	Business.	4
Item 1A.	Risk Factors.	12
Item 1B.	Unresolved Staff Comments.	17
Item 2.	Properties.	18
Item 3.	Legal Proceedings.	20
Item 4.	Mine Safety Disclosures.	20
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	21
Item 6.	Selected Financial Data.	23
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	39
Item 8.	Financial Statements and Supplementary Data.	41
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. ........	78
Item 9A.	Controls and Procedures.	78
Item 9B.	Other Information.	79
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	80
Item 11.	Executive Compensation.	83
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	83
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	83
Item 14.	Principal Accounting Fees and Services.	83
PART IV
Item 15.	Exhibits, Financial Statement Schedules.	84
	Schedule II – Valuation and Qualifying Accounts and Reserves.	85
	Signatures.	86
	Exhibit Index.	87

3

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Annual Report on Form 10-K that are not historical facts are intended to constitute “forward-looking statements” entitled to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995 (“PSRLA”). These statements may involve risks and uncertainties, including, but not limited to, risks relating to product demand and market acceptance, economic conditions, the impact of competitive products and pricing, product quality problems or product recalls, capacity and supply difficulties or constraints, coal mining exposures reserves, failure of an indemnification for environmental liability, exchange rate fluctuations, commodity price fluctuations, the effect of the company’s accounting policies, labor disputes, restructuring costs in excess of expectations, pension plan asset returns less than assumed, integration of acquisitions and other risks that may be detailed in “Item 1A. Risk Factors” below and in the company’s other Securities and Exchange Commission filings.

PART I

ITEM 1. BUSINESS.

GENERAL

Littelfuse, Inc. and its subsidiaries (the “company” or “Littelfuse” or “we” or “our”) is the world’s leading supplier of circuit protection products for the electronics, automotive and industrial markets. In addition to the broadest and deepest portfolio of circuit protection products and solutions, the company offers electronic reed switches and sensors, automotive sensors for comfort and safety systems and a comprehensive line of highly reliable electromechanical and electronic switch and control devices for commercial and specialty vehicles, as well as protection relays and power distribution centers for the safe control and distribution of electricity. The company has a network of global engineering centers and labs that develop new products and product enhancements, provide customer application support and test products for safety, reliability and regulatory compliance.

In the electronics market, the company supplies leading manufacturers such as Alcatel-Lucent, Cisco, Celestica, Delta, Flextronics, Foxconn, Hewlett-Packard, HTC, Huawei, IBM, Intel, Jabil, LG, Motorola, Nokia, Panasonic, Quanta, Samsung, Sanmina-SCI, Seagate, Siemens and Sony. The company is also the leading provider of circuit protection for the automotive industry and the third largest producer of electrical fuses in North America. In the automotive passenger car and commercial vehicle market, the company’s end customers include original equipment manufacturers (“OEM”) in North America, Europe and Asia such as BMW, Caterpillar, Chrysler, Daimler Trucks NA, Ford Motor Company, General Motors, Hyundai Group and Volkswagen. The company also supplies wiring harness manufacturers and auto parts suppliers worldwide, including Advance Auto Parts, Continental, Delphi, Lear, Leoni, O’Reilly Auto Parts, Pep Boys, Sumitomo, Valeo and Yazaki. In the automotive sensor market, the company end customers include GM, Autoliv, Delphi, Key Safety Systems and Stabilus. In the industrial market, the company supplies representative customers such as Abbott, Acuity Brands, Applied Materials, Caterpillar, Cummins Engine, First Solar, GE, Generac, Heinz, Ingersoll-Rand, John Deere, Lennox, Merck, Poland Springs, Procter & Gamble, Rockwell, Schneider, United Technologies and 3M. The company also supplies industrial ground fault protection in mining and other large industrial operations to customers such as Agrium, Cameco, Mosaic and Potash Corporation of Saskatachewan. See “Business Environment: Circuit Protection Market.”

The company reports its operations by three business segments: Electronics, Automotive and Industrial (formerly Electrical). For segment and geographical information and consolidated net sales and operating earnings see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 15 of the Notes to Consolidated Financial Statements included in this report.

4

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”) for $5.4 million (net of cash acquired). Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel and selective catalytic reduction (SCR) quality sensors, as well as diesel fuel heaters, solenoid valves and rotating oil filters for automotive and commercial vehicle applications. The acquisition further expands the company’s automotive sensor product line offerings within its Automotive business segment. The company funded the acquisition with available cash.

On January 3, 2014, the company acquired 100% of SymCom, Inc. (“SymCom”) for $52.8 million (net of cash acquired). Located in Rapid City, South Dakota, SymCom provides overload relays and pump controllers primarily to the industrial market. The acquisition allows the company to strengthen its position in the relay products market by adding new products and new customers within its Industrial business segment. The company funded the acquisition with available cash and proceeds from credit facilities.

Net sales by business segment for the periods indicated are as follows (in thousands):

	Fiscal Year
	2015		2014		2013
Electronics	$	405,497	$	410,065	$	367,052
Automotive		339,957		325,415		267,207
Industrial		122,410		116,515		123,594
Total	$	867,864	$	851,995	$	757,853

The company operates in three geographic regions: the Americas, Europe and Asia-Pacific. The company manufactures products and sells to customers in all three regions.

Net sales in the company’s three geographic regions, based upon the shipped-to destination, are as follows (in thousands):

	Fiscal Year
	2015		2014		2013
Americas	$	401,173	$	377,660	$	342,353
Europe		152,661		163,918		136,814
Asia-Pacific		314,030		310,417		278,686
Total	$	867,864	$	851,995	$	757,853

The company’s products are sold worldwide through distributors, a direct sales force and manufacturers’ representatives. For the fiscal year 2015, approximately 60% of the company’s net sales were to customers outside the United States, including approximately 22% to China.

The company manufactures many of its products on fully integrated manufacturing and assembly equipment. The company maintains product quality through a Global Quality Management System with most manufacturing sites certified under ISO 9001:2000. In addition, several of the Littelfuse manufacturing sites are also certified under TS 16949 and ISO 14001.

5

References herein to “2015”, “fiscal 2015” or “fiscal year 2015” refer to the fiscal year ended January 2, 2016. References herein to “2014”, “fiscal 2014” or “fiscal year 2014” refer to the fiscal year ended December 27, 2014. References herein to “2013”, “fiscal 2013” or “fiscal year 2013” refer to the fiscal year ended December 28, 2013. The company operates on a “4-4-5” fiscal calendar that normally keeps the number of weeks constant during each quarter except during a leap year, which occurred in fiscal 2015. As a result of using this convention, each of fiscal 2014 and fiscal 2013 contained 52 weeks whereas fiscal 2015 contained 53 weeks.

The company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form

8-K and all amendments to those reports are available free of charge through the “Investor Relations” section of the company’s Internet website (http://www.littelfuse.com), as soon as practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”), accessible via a link to the website maintained by the SEC. Except as otherwise provided herein, such information is not incorporated by reference into this Annual Report on Form 10-K.

BUSINESS ENVIRONMENT: CIRCUIT PROTECTION MARKET

Electronic Products

Electronic circuit protection products are used to protect circuits in a multitude of electronic systems. The company’s product offering includes a complete line of overcurrent and overvoltage solutions, as well as sensors, including (i) fuses and protectors, (ii) positive temperature coefficient (“PTC”) resettable fuses, (iii) varistors, (iv) polymer electrostatic discharge (“ESD”) suppressors, (v) discrete transient voltage suppression (“TVS”) diodes, TVS diode arrays and protection thyristors, (vi) gas discharge tubes, (vii) power switching components, (viii) fuseholders, and (ix) reed switch and sensor assemblies, blocks and related accessories.

Electronic fuses and protectors are devices that contain an element that melts in an overcurrent condition. Electronic miniature and subminiature fuses are designed to provide circuit protection in the limited space requirements of electronic equipment. The company’s fuses are used in a wide variety of electronic products, including mobile phones, flat-screen TVs, computers and telecommunications equipment. The company markets these products under trademarked brand names including PICO® II and NANO2® SMF.

Resettable fuses are PTC polymer devices that limit the current when an overcurrent condition exists and then reset themselves once the overcurrent condition has cleared. The company’s product line offers both radial leaded and surface mount products. Varistors are ceramic-based, high-energy absorption devices that provide transient overvoltage and surge suppression for automotive, telecommunication, consumer electronics and industrial applications. The company’s product line offers both radial leaded and multilayer surface mount products.

Polymer ESD suppressors are polymer-based devices that protect an electronic system from failure due to rapid transfer of electrostatic charge to the circuit. The company’s PulseGuard® line of ESD suppressors is used in PC and PC peripherals, digital consumer electronics and wireless applications.

Discrete diodes, diode arrays and protection thyristors are fast switching silicon semiconductor structures. Discrete diodes protect a wide variety of applications from overvoltage transients such as ESD, inductive load switching or lightning, while diode arrays are used primarily as ESD suppressors. Protection thyristors are commonly used to protect telecommunications circuits from overvoltage transients such as those resulting from lightning. Applications include telephones, modems, data transmission lines and alarm systems. The company markets these products under trademarked brand names including TECCOR®, SIDACtor®, Battrax® and SPA®.

6

Gas discharge tubes are very low capacitance devices designed to suppress any transient voltage event that is greater than the breakover voltage of the device. These devices are primarily used in telecommunication interface and conversion equipment applications as protection from overvoltage transients such as lightning.

Power switching components are used to regulate energy to various types of loads most commonly found in industrial and home applications. These components are easily activated from simple control circuits or interfaced to computers for more complex load control. Typical applications include heating, cooling, battery chargers and lighting.

Magnetic sensing products are used to monitor, sense and measure magnetic fields in a number of applications.  The company’s product offerings include a line of reed switches, reed based sensors and hall effect sensors. Reed switches are non-contact magnetically operated devices that provide an output based on the electrical load during the presence of magnetic field.  They are used in a wide variety of applications including security, medical, fluid monitoring, telephones, fitness equipment, metering, toys, white goods and consumer and industrial controls. Reed switch sensors utilize reed switch technology in various packaging configurations with custom enclosures, terminations and connectors to provide an application specific product as a final assembly.  Key applications include fluid level monitoring, position sensing, fluid flow and proximity sensing. Hall effect sensors utilize hall chip technology to sense magnetic fields to provide ratio metric output based on magnetic fields.  Key applications include motor speed sensing, directional sensing, rotation and linear sensing.

In addition to the above products, the company is also a supplier of fuse holders, fuse blocks (including OMNI-BLOK®) and fuse clips primarily to customers that purchase circuit protection devices from the company.

Automotive Products

Fuses are extensively used in automobiles, trucks, buses and off-road equipment to protect electrical circuits and the wires that supply electrical power to operate lights, heating, air conditioning, radios, windows and other controls. Currently, a typical automobile contains 30 to 100 fuses, depending upon the options installed. The fuse content per vehicle is expected to continue to grow as more electronic features are included in automobiles. The company also supplies fuses for the protection of electric and hybrid vehicles.

The company is a primary supplier of automotive fuses to United States, Asian and European automotive OEMs, automotive component parts manufacturers and automotive parts distributors. The company also sells its fuses in the replacement parts market, with its products being sold through merchandisers, discount stores and service stations, as well as under private label by national firms. The company invented and owns U.S. and foreign patents related to blade-type fuses, which is the standard and most commonly used fuse in the automotive industry. The company’s automotive fuse products are marketed under trademarked brand names, including ATO®, MINI®, MIDI®, MEGA®, Masterfuse^™, JCASE® and CablePro®.

A majority of the company’s automotive fuse sales are made to main-fuse box and wire harness manufacturers that incorporate the fuses into their products. The remaining automotive fuse sales are made directly to automotive manufacturers, retailers who sell automotive parts and accessories, and distributors who in turn sell most of their products to wholesalers, service stations and non-automotive OEMs.

7

The company has expanded into the automotive sensor market with the acquisitions of Sigmar, Hamlin and Accel AB. Additional products in this market include advanced electromechanical, occupant safety sensors, solar sensors, fluid quality sensors and fuel heating systems.

The company has expanded the Automotive Business Segment into the commercial vehicle market with the acquisitions of Cole Hersee and Terra Power. Additional products in this market include:  power distribution modules, low current switches, high current switches, solenoids and relays, electronic switches, battery management products and ignition key switches.

Industrial Products

The company manufactures and sells a broad range of low-voltage and medium-voltage circuit protection products to electrical distributors and their customers in the construction, OEM and industrial maintenance, repair and operating supplies (“MRO”) markets. The company also designs and manufactures portable custom electrical equipment for the mining and utility industry in Canada as well as protection relays for the global mining, oil and gas and general industrial markets.

Power fuses are used to protect circuits in various types of industrial equipment and in industrial and commercial buildings. They are rated and listed under one of many Underwriters Laboratories’ fuse classifications. Major applications for power fuses include protection from overload and short-circuit currents in solar, motor branch circuits, heating and cooling systems, control systems, lighting circuits, solar and electrical distribution networks.

The company’s POWR-GARD® product line features the Indicator® series power fuse used in both the OEM and MRO markets. The Indicator® technology provides visual blown-fuse indication at a glance, reducing maintenance and downtime on production equipment. The Indicator® product offering is widely used in motor protection and industrial control panel applications.

Protection relays are used to protect personnel and equipment in mining, oil & gas and industrial environments from excessive currents, over voltages and electrical shock hazards called ground faults. Major applications for protection relays include protection of motor, transformer and power-line distribution circuits. Ground-fault relays are used to protect personnel and equipment in wet environments such as underground mining or water treatment applications where there is a greater risk for electricity to come in contact with water and create a shock hazard.

Littelfuse custom-engineered electrical equipment is designed and built for use in harsh or demanding environments where standard industrial electrical gear will not meet customer needs for reliability and durability.  Portable power substations are used throughout mines to transform voltage from distribution to utilization levels and provide local protection and control for equipment such as mining machines, pumps, fans, conveyors, and other electrical machinery. Custom-built switchgear is used in mining, oil and gas, and power generation where rugged designs, quick turnaround, unique footprints, or arc-resistant equipment is required. E-Houses, complete with switchgear, protective-relay panels, and other related equipment, are designed and built in the company’s factory and then shipped to remote sites with potentially extreme environments where a permanent structure may not be feasible or economical.

PRODUCT DESIGN AND DEVELOPMENT

The company employs scientific, engineering and other personnel to continually improve its existing product lines and to develop new products at its research, product design and development (“R&D”) and engineering facilities in Champaign and Mt. Prospect, Illinois, Boston, Massachusetts, Canada, China, Denmark, Italy, the Philippines, Taiwan, Lithuania and Mexico. The Product & Development Technology departments maintain a staff of engineers, chemists, material scientists and technicians whose primary responsibility is to design and develop new products.

8

Proposals for the development of new products are initiated primarily by sales and marketing personnel with input from customers. The entire product development process usually ranges from a few months to 18 months based on the complexity of development, with continuous efforts to reduce the development cycle. During fiscal years 2015, 2014 and 2013, the company expended $30.8 million, $31.1 million and $24.4 million, respectively, on R&D.

PATENTS, TRADEMARKS AND OTHER INTELLECTUAL PROPERTY

The company generally relies on patents, trademarks, licenses and nondisclosure agreements to protect its intellectual property and proprietary products. In cases where it is deemed necessary by management, key employees are required to sign an agreement that they will maintain the confidentiality of the company’s proprietary information and trade secrets.

As of January 2, 2016, the company owned 640 worldwide patents including 289 patents in the United States and 351 patents in other countries. The company also has registered trademark protection for certain of its brand names and logos. The 640 worldwide patents are in the following product categories: 346 electronics, 227 automotive and 67 industrial. Patents and licenses are amortized over a period of 7-50 years, with a weighted average life of 11.6 years. Distribution networks are amortized over a period of 3-20 years, with a weighted average life of 12.4 years. Trademarks and tradenames are amortized over a period of 5-20 years, with a weighted average life of 13.0 years. The company recorded amortization expense of $11.9 million, $12.5 million and $9.3 million in 2015, 2014 and 2013, respectively, related to amortizable intangible assets.

New products are continually being developed to replace older products. The company regularly applies for patent protection on such new products. Although, in the aggregate, the company’s patents are important in the operation of its businesses, the company believes that the loss by expiration or otherwise of any one patent or group of patents would not materially affect its business.

License royalties amounted to $0.4 million, $0.5 million and $0.6 million for fiscal 2015, 2014 and 2013, respectively, and are included in other expense (income), net on the Consolidated Statements of Net Income.

MANUFACTURING

The company performs the majority of its own fabrication, stamps some of the metal components used in its fuses, holders and switches from raw metal stock and makes its own contacts and springs. In addition, the company fabricates silicon wafers for certain applications and performs its own plating (silver, nickel, zinc, tin and oxides). All thermoplastic molded component requirements used for such products as the ATO® and MINI® fuse product lines are met through the company’s in-house molding capabilities. After components are stamped, molded, plated and readied for assembly, final assembly is accomplished on fully automatic and semi-automatic assembly machines. Quality assurance and operations personnel, using techniques such as statistical process control, perform tests, checks and measurements during the production process to maintain the highest levels of product quality and customer satisfaction.

The principal raw materials for the company’s products include copper and copper alloys, heat-resistant plastics, zinc, melamine, glass, silver, gold, raw silicon, solder and various gases. The company uses a sole source for several heat-resistant plastics and for zinc, but believes that suitable alternative heat-resistant plastics and zinc are available from other sources at comparable prices. All other raw materials are purchased from a number of readily available outside sources.

9

A computer-aided design and manufacturing system (CAD/CAM) expedites product development and machine design and the company’s laboratories test new products, prototype concepts and production run samples. The company participates in “just-in-time” delivery programs with many of its major suppliers and actively promotes the building of strong cooperative relationships with its suppliers by utilizing early supplier involvement techniques and engaging them in pre-engineering product and process development.

MARKETING

The company’s domestic sales and marketing staff of over 100 people maintains relationships with major OEMs and distributors. The company’s sales, marketing and engineering personnel interact directly with OEM engineers to ensure appropriate circuit protection and reliability within the parameters of the OEM’s circuit design. Internationally, the company maintains a sales and marketing staff of over 100 people with sales offices in the U.K., Germany, Spain, Brazil, Singapore, Taiwan, Japan, Hong Kong, Korea, China and India. The company also markets its products indirectly through a worldwide organization of over 60 manufacturers’ representatives and distributes through an extensive network of electronics, automotive and electrical distributors.

Electronics

The company uses manufacturers’ representatives to sell its electronics products domestically and to call on major domestic and international OEMs and distributors. The company sells approximately 15% of its domestic products directly to OEMs, with the remainder sold through distributors nationwide.

In the Asia-Pacific region, the company maintains a direct sales staff and utilizes distributors in Japan, Singapore, Korea, Taiwan, China, Malaysia, Hong Kong, India and the Philippines. In the Americas, the company maintains a direct sales staff in the U.S. and Brazil and utilizes manufacturers’ representatives and distributors in Canada. In Europe, the company maintains a direct sales force and utilizes manufacturers’ representatives and distributors to support a wide array of customers.

Automotive

The company maintains a direct sales force to service all the major automotive and commercial vehicle OEMs and system suppliers domestically. Over 20 manufacturers’ representatives sell the company’s products to aftermarket fuse retailers such as O’Reilly Auto Parts and Pep Boys. The company also uses about 15 manufacturers’ representatives to sell to the commercial vehicle aftermarket.

In Europe, the company uses both a direct sales force and manufacturers’ representatives to distribute its products to OEMs, major system suppliers and aftermarket distributors. In the Asia-Pacific region, the company uses both a direct sales force and distributors to supply to major OEMs and system suppliers.

Industrial

The company markets and sells its power fuses and protection relays through more than 50 manufacturers’ representatives across North America. These representatives sell power fuse products through an electrical and industrial distribution network comprised of over 2,500 distributor buying locations. These distributors have customers that include electrical contractors, municipalities, utilities and factories (including both MRO and OEM).

The company’s field sales force (including regional sales managers and application engineers) and manufacturers’ representatives call on both distributors and end-users (consulting engineers, municipalities, utilities and OEMs) in an effort to educate these customers on the capabilities and characteristics of the company’s products.

10

CUSTOMERS

The company sells to over 5,800 customers and distributors worldwide. No single customer accounted for more than 10% of net sales during any of the last three years. During fiscal 2015, 2014 and 2013, net sales to customers outside the United States accounted for approximately 60%, 63% and 64%, respectively, of the company’s total net sales.

COMPETITION

The company’s products compete with similar products of other manufacturers, some of which have substantially greater financial resources than the company. In the electronics market, the company’s competitors include Cooper Industries (a subsidiary of Eaton Corporation plc), Bel Fuse Inc., Bourns Inc., EPCOS, On Semiconductor Corporation, STMicroelectronics NV, Semtech Corporation, Vishay Intertechnology Inc, and TE Connectivity Ltd. In the automotive market, the company’s competitors include Cooper Industries, Pacific Engineering (a private company in Japan), MTA (a private company in Italy), D&R Technologies (a subsidiary of CTS Corporation) and Sensata Technologies Holding NV. In the industrial market, the company’s major competitors include Cooper Industries, GE Multilin and Mersen. The company believes that it competes on the basis of innovative products, the breadth of its product line, the quality and design of its products and the responsiveness of its customer service, in addition to price.

BACKLOG

The backlog of unfilled orders at January 2, 2016 was approximately $96.4 million, compared to $92.9 million at December 27, 2014. Substantially all of the orders currently in backlog are scheduled for delivery in 2016.

EMPLOYEES 

As of January 2, 2016, the company employed approximately 8,800 employees worldwide. Approximately 1,900 employees in Mexico are covered by collective bargaining agreements. In Mexico the company has two separate collective bargaining agreements, one for 1,200 employees in Piedras Negras, expiring January 31, 2018 and the second for 720 employees in Matamoros, expiring January 1, 2018. Approximately 22% of the company's total workforce was employed under collective bargaining agreements at January 2, 2016.  The company has no employees covered by a collective bargaining agreement that will expire within one year of January 2, 2016. The Germany collective bargaining agreement, which covers three employees in Essen, will expire March 31, 2016.

Overall, the company has historically maintained satisfactory employee relations and considers employee relations to be good.

ENVIRONMENTAL REGULATION

The company is subject to numerous foreign, federal, state and local regulations relating to air and water quality, the disposal of hazardous waste materials, safety and health. Compliance with applicable environmental regulations has not significantly changed the company’s competitive position, capital spending or earnings in the past and the company does not presently anticipate that compliance with such regulations will change its competitive position, capital spending or earnings for the foreseeable future.

11

The company employs a chemical engineer to monitor regulatory matters and believes that it is currently in compliance in all material respects with applicable environmental laws and regulations.

Littelfuse GmbH, which was acquired by the company in May 2004, is responsible for maintaining closed coal mines from legacy operations. The company is compliant with German regulations pertaining to the maintenance of the mines and has an accrual related to certain of these coal mine shafts based on an engineering study estimating the cost of remediating the dangers (such as a shaft collapse) of certain of these closed coal mine shafts in Germany. The accrual is reviewed annually and calculated based upon the cost of remediating the shafts. Further information regarding the coal mine liability accrual is provided in Note 10 of the Notes to Consolidated Financial Statements included in this report.

ITEM 1A. RISK FACTORS.

Our business, financial condition and results of operations are subject to various risks and uncertainties, including the risk factors we have identified below. These factors are not necessarily listed in order of importance. We may amend or supplement the risk factors from time to time by other reports that we file with the SEC in the future.

Our industry is subject to intense competitive pressures.

We operate in markets that are highly competitive. We compete on the basis of price, quality, service and/or brand name across the industries and markets we serve. Competitive pressures could affect the prices we are able to charge our customers or the demand for our products.

We may not always be able to compete on price, particularly when compared to manufacturers with lower cost structures. Some of our competitors have substantially greater sales, financial and manufacturing resources and may have greater access to capital than Littelfuse. As other companies enter our markets or develop new products, competition may further intensify. Our failure to compete effectively could materially adversely affect our business, financial condition and results of operations.

We may be unable to manufacture and deliver products in a manner that is responsive to our customers’ needs.

The end markets for our products are characterized by technological change, frequent new product introductions and enhancements, changes in customer requirements and emerging industry standards. The introduction of products embodying new technologies and the emergence of new industry standards could render our existing products obsolete and unmarketable before we can recover any or all of our research, development and commercialization expenses on capital investments. Furthermore, the life cycles of our products may change and are difficult to estimate.

Our future success will depend upon our ability to manufacture and deliver products in a manner that is responsive to our customers’ needs. We will need to develop and introduce new products and product enhancements on a timely basis that keep pace with technological developments and emerging industry standards and address increasingly sophisticated requirements of our customers. We invest heavily in research and development without knowing that we will recover these costs. Our competitors may develop products or technologies that will render our products non-competitive or obsolete. If we cannot develop and market new products or product enhancements in a timely and cost-effective manner, our business, financial condition and results of operations could be materially adversely affected.

12

Our business may be interrupted by labor disputes or other interruptions of supplies.

A work stoppage could occur at certain of our facilities, most likely as a result of disputes under collective bargaining agreements or in connection with negotiations of new collective bargaining agreements. In addition, we may experience a shortage of supplies for various reasons, such as financial distress, work stoppages, natural disasters or production difficulties that may affect one of our suppliers. A significant work stoppage, or an interruption or shortage of supplies for any reason, if protracted, could substantially adversely affect our business, financial condition and results of operations. The transfer of our manufacturing operations and changes in our distribution model could disrupt operations for a limited time.

Our revenues may vary significantly from period to period.

Our revenues may vary significantly from one accounting period to another due to a variety of factors including:

● changes in our customers’ buying decisions;

● changes in demand for our products;

● changes in our distributor inventory stocking;

● our product mix;

● our effectiveness in managing manufacturing processes;

● costs and timing of our component purchases;

● the effectiveness of our inventory control;

● the degree to which we are able to utilize our available manufacturing capacity;

● our ability to meet delivery schedules;

● general economic and industry conditions;

● local conditions and events that may affect our production volumes, such as labor conditions and political instability; and

● seasonality of certain product lines.

The bankruptcy or insolvency of a major customer could adversely affect us.

The bankruptcy or insolvency of a major customer could result in lower sales revenue and cause a material adverse effect on our business, financial condition and results of operations. In addition, the bankruptcy or insolvency of a major U.S. auto manufacturer or significant supplier likely could lead to substantial disruptions in the automotive supply base, resulting in lower demand for our products, which likely would cause a decrease in sales revenue and have a substantial adverse impact on our business, financial condition and results of operations.

13

Our ability to manage currency or commodity price fluctuations or shortages is limited.

As a resource-intensive manufacturing operation, we are exposed to a variety of market and asset risks, including the effects of changes in foreign currency exchange rates, commodity prices and interest rates. We have multiple sources of supply for the majority of our commodity requirements. However, significant shortages that disrupt the supply of raw materials or result in price increases could affect prices we charge our customers, our product costs and the competitive position of our products and services. We monitor and manage these exposures as an integral part of our overall risk management program, which recognizes the unpredictability of markets and seeks to reduce the potentially adverse effects on our results. Nevertheless, changes in currency exchange rates, commodity prices and interest rates cannot always be predicted. In addition, because of intense price competition and our high level of fixed costs, we may not be able to address such changes even if they are foreseeable. Substantial changes in these rates and prices could have a material adverse effect on our results of operations and financial condition. In addition, significant portions of our revenues and earnings are exposed to changes in foreign currency rates. As we operate in multiple foreign currencies, changes in those currencies relative to the U.S. dollar will impact our revenues and expenses. The impact of possible currency devaluation in countries experiencing high inflation rates or significant exchange fluctuations can impact our results and financial guidance. For additional discussion of interest rate, currency or commodity price risk, see "Item 7A. Quantitative and Qualitative Disclosures about Market Risks.”

Operations and supply sources located outside the United States, particularly in emerging markets, exposes us to political, economic and other risks.

Our operating activities outside the United States contribute significantly to our revenues and earnings. Serving a global customer base and remaining competitive in the global marketplace requires the company to place our production in countries outside the United States, including emerging markets, to capitalize on market opportunities and maintain a cost-efficient structure. In addition, we source a significant amount of raw materials and other components from third-party suppliers in low-cost countries. Our international operating activities are subject to a number of risks generally associated with international operations, including risks relating to the following:

● general economic conditions;

● currency fluctuations and exchange restrictions;

● import and export duties and restrictions;

● the imposition of tariffs and other import or export barriers;

● compliance with regulations governing import and export activities;

● current and changing regulatory requirements;

● political and economic instability;

● potentially adverse income tax consequences;

● transportation delays and interruptions;

● labor unrest;

● natural disasters;

● terrorist activities;

● public health concerns;

● difficulties in staffing and managing multi-national operations; and

● limitations on our ability to enforce legal rights and remedies.

Any of these factors could have a material adverse effect on our business, financial condition and results of operations.

14

We engage in acquisitions and may encounter difficulties in integrating these businesses.

We are a company that, from time to time, seeks to grow through strategic acquisitions. We have in the past acquired a number of businesses or companies and additional product lines and assets. We intend to continue to expand and diversify our operations with additional acquisitions. The success of these transactions depends on our ability to integrate the assets and personnel acquired in these acquisitions. We may encounter difficulties in integrating acquisitions with our operations, material weaknesses in the acquired company’s internal control environment and may not realize the degree or timing of the benefits that we anticipated from an acquisition.

We may also discover liabilities or deficiencies associated with the companies or assets we acquire that were not identified in advance, which may result in significant unanticipated costs. The effectiveness of our due diligence review and our ability to evaluate the results of such due diligence are dependent upon the accuracy and completeness of statements and disclosures made or actions taken by the companies we acquire or their representatives, as well as the limited amount of time in which acquisitions are executed. In addition, we may fail to accurately forecast the financial impact of an acquisition transaction, including tax and accounting charges. Acquisitions may also result in our recording of significant additional expenses to our results of operations and recording of substantial finite-lived intangible assets on our balance sheet upon closing. Any of these factors may adversely affect our financial condition or results of operations.

Reorganization activities may lead to additional costs and material adverse effects.

We are a company that, from time to time, seeks to optimize its production and manufacturing capabilities and efficiencies through relocations, consolidations, plant closings or asset sales. We may make further specific determinations to consolidate, close or sell additional facilities. Possible adverse consequences related to such actions may include various charges for such items as idle capacity, disposition costs and severance costs, in addition to normal or attendant risks and uncertainties. We may be unsuccessful in any of our current or future efforts to restructure or consolidate our business. Our plans to minimize or eliminate any loss of revenues during restructuring or consolidation may not be achieved. These activities may have a material adverse effect upon our business, financial condition or results of operations.

Environmental liabilities could adversely impact our financial position.

Foreign, federal, state and local laws and regulations impose various restrictions and controls on the discharge of materials, chemicals and gases used in our manufacturing processes or in our finished goods. These environmental regulations have required us to expend a portion of our resources and capital on relevant compliance programs. Under these laws and regulations, we could be held financially responsible for remedial measures if our current or former properties are contaminated or if we send waste to a landfill or recycling facility that becomes contaminated, even if we did not cause the contamination. We may be subject to additional common law claims if we release substances that damage or harm third parties. In addition, future changes in environmental laws or regulations may require additional investments in capital equipment or the implementation of additional compliance programs. Any failure to comply with new or existing environmental laws or regulations could subject us to significant liabilities and could have a material adverse effect on our business, financial condition or results of operations.

In the conduct of our manufacturing operations, we have handled and do handle materials that are considered hazardous, toxic or volatile under federal, state and local laws. The risk of accidental release of such materials cannot be completely eliminated. In addition, we operate or own facilities located on or near real property that was formerly owned and operated by others. Certain of these properties were used in ways that involved hazardous materials. Contaminants may migrate from, within or through these properties. These releases or migrations may give rise to claims. Where third parties are responsible for contamination, the third parties may not have funds, or not make funds available when needed, to pay remediation costs imposed upon us under environmental laws and regulations.

The company is responsible for the maintenance of discontinued coal mining operations in Germany. The risk of environmental remediation exists and the company is in the process of remediating the mines considered to be the most at risk.

15

Disruptions in our manufacturing, supply or distribution chain could result in an adverse impact on results of operations.

A disruption could occur within our manufacturing, distribution or supply chain network. This could include damage or destruction due to natural disasters or political instability which would cause one or more of these network channels to become non-operational. This could adversely affect our ability to manufacture or deliver our products in a timely manner, impair our ability to meet customer demand for products and result in lost sales or damage to our reputation. Such a disruption could have a material adverse effect upon our business, financial condition or results of operations.

We derive a substantial portion of our revenues from customers in the automotive, consumer electronics and communications industries, and we are susceptible to trends and factors affecting those industries including unexpected product recalls as well as the success of our customers’ products.

Net sales to the automotive, consumer electronics and communications industries represent a substantial portion of our revenues. Factors negatively affecting these industries and the demand for products also negatively affect our business, financial condition or results of operations. Any adverse occurrence, including industry slowdown, recession, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules, unexpected product recalls or labor disturbances, that results in significant decline in the volume of sales in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition or results of operations. For example, the automotive industry as well as the consumer electronics market is highly cyclical in nature and sensitive to changes in general economic conditions, consumer preferences and interest rates. In addition, the global automotive and electronic industries have overall manufacturing capacity far exceeding demand. To the extent that demand for certain of our customers’ products declines, the demand for our products may decline. Reduced demand relating to general economic conditions, consumer preferences, interest rates or industry over-capacity may have a material adverse effect upon our business, financial condition or results of operations.

The inability to maintain access to capital markets may adversely affect our business and financial results.

Our ability to invest in our businesses, make strategic acquisitions and refinance maturing debt obligations may require access to the capital markets and sufficient bank credit lines to support short-term borrowings. If we are unable to access the capital markets or bank credit facilities, we could experience a material adverse effect on our business, financial condition and results of operations.

Fixed costs may reduce operating results if our sales fall below expectations.

Our expense levels are based, in part, on our expectations for future sales. Many of our expenses, particularly those relating to capital equipment and manufacturing overhead, are relatively fixed. We might be unable to reduce spending quickly enough to compensate for reductions in sales. Accordingly, shortfalls in sales could materially and adversely affect our operating results.

The volatility of our stock price could affect the value of an investment in our stock and our future financial position.

The market price of our stock can fluctuate widely. Between December 27, 2014 and January 2, 2016, the closing sale price of our common stock ranged between a low of $83.06 and a high of $114.09. The volatility of our stock price may be related to any number of factors, such as volatility in the financial markets, general macroeconomic conditions, industry conditions, analysts’ expectations concerning our results of operations, or the volatility of our revenues as discussed above under “Our Revenues May Vary Significantly from Period to Period.” The historic market price of our common stock may not be indicative of future market prices. We may not be able to sustain or increase the value of our common stock. Declines in the market price of our stock could adversely affect our ability to retain personnel with stock incentives, to acquire businesses or assets in exchange for stock and/or to conduct future financing activities with or involving our common stock.

16

Customer demands and new regulations related to conflict-free minerals may force us to incur additional expenses.

The Dodd-Frank Wall Street Reform and Consumer Protection Act requires disclosure of use of “conflict” minerals mined from the Democratic Republic of Congo and adjoining countries and efforts to prevent the use of such minerals. In the semiconductor industry, these minerals are most commonly found in metals. As there may be only a limited number of suppliers offering “conflict free” metals, we cannot be sure that we will be able to obtain necessary metals in sufficient quantities or at competitive prices. Also, we may face challenges with our customers and suppliers if we are unable to sufficiently verify that the metals used in our products are “conflict free.”

Our Information Technology (“IT”) systems could be breached.

We face certain security threats relating to the confidentiality and integrity of our IT systems. Despite implementation of security measures, our IT systems may be vulnerable to damage from computer viruses, cyber attacks and other unauthorized access and these security breaches could result in a disruption to our operations. A material network breach of our IT systems could involve the theft of intellectual property or customer data which may be used by competitors. To the extent that any security breach results in a loss or damage to data, or inappropriate disclosure of confidential or proprietary information, it could cause damage to our reputation, affect our customer relations, lead to claims against us, increase our costs to protect against future damage and could result in a material adverse effect on our business and financial position.

Lapses in disclosure controls and procedures or internal control over financial reporting could materially and adversely affect our operations, profitability or reputation.

We are committed to maintaining high standards of internal control over financial reporting and disclosure controls and procedures. Nevertheless, lapses or deficiencies in disclosure controls and procedures or in our internal control over financial reporting may occur from time to time.

There can be no assurance that our disclosure controls and procedures will be effective in the future or that a material weakness or significant deficiency in internal control over financial reporting will not exist. Any such lapses or deficiencies may materially and adversely affect our business and results of operations or financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the lapses or deficiencies, expose us to regulatory or legal proceedings, subject us to fines, penalties, judgments or losses not covered by insurance, harm our reputation, or otherwise cause a decline in investor confidence.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

17

ITEM 2. PROPERTIES.

LITTELFUSE FACILITIES 

The company’s operations are located in 48 owned or leased facilities worldwide, totaling approximately 2.3 million square feet. The company’s corporate headquarters is located in the U.S. in Chicago, Illinois. The company has North American manufacturing facilities in Saskatoon, Canada, Winnipeg, Canada, Piedras Negras, Mexico, Melchor Muzquiz, Mexico, Matamoros, Mexico, Lake Mills, Wisconsin and Rapid City, South Dakota. The company has European manufacturing facilities in Roskilde, Denmark, Kaunas, Lithuania and Ozegna, Italy. Asia-Pacific operations include sales and distribution centers located in Singapore, Taiwan, Japan, China and Korea, with manufacturing plants located in various cities in China and the Philippines.

During 2015, the company began the transfer of its Lake Mills, Wisconsin manufacturing operations to the Philippines. This transfer is expected to be completed during 2016.

The company does not believe that it will encounter any difficulty in renewing its existing leases upon the expiration of their current terms. Management believes that the company’s facilities are adequate to meet its requirements for the foreseeable future.

The following table provides certain information concerning the company’s facilities at January 2, 2016, and the use of these facilities during fiscal year 2015:

Location	Use	Size (sq. ft.)	Lease/Own	Lease Expiration Date	Primary Product
Chicago, Illinois	Administrative, Engineering, Research and Development and Testing	54,838	Leased	2024	Auto, Electronics and Industrial
Mount Prospect, Illinois	Engineering and Research and Development	23,515	Leased	2018	Auto and Electronics
Champaign, Illinois	Research and Development	13,503	Leased	2025	Auto, Electronics and Industrial
Lake Mills, Wisconsin	Manufacturing, Administrative, Engineering, Sales and Research and Development	65,000	Leased	2020	Auto and Electronics
San Jose, California	Engineering	960	Leased	2016	Electronics
Troy, Michigan	Sales	2,224	Leased	2016	Auto
Rapid City, South Dakota	Manufacturing and Administrative	230,000	Owned	—	Industrial
Cicero, New York	Office	1,200	Leased	2017	Industrial
Boston, Massachusetts	Administrative, Engineering, Research and Development	26,000	Leased	2016	Auto
Melchor Muzquiz, Mexico	Manufacturing	39,364	Leased	2016	Auto
Bellingham, Washington	Office	2,000	Leased	2017	Auto
Piedras Negras, Mexico	Administrative,  Manufacturing	99,822	Leased	2016	Auto
Piedras Negras, Mexico	Manufacturing	291,860	Owned	—	Auto and Industrial
Matamoros, Mexico	Administrative, Logistics, Manufacturing, Engineering, Testing and Distribution	106,000	Owned	—	Auto

18

Location	Use	Size (sq. ft.)	Lease/Own	Lease Expiration Date	Primary Product
Eagle Pass, Texas	Distribution	7,600	Leased	2016	Auto, Electronics and Industrial
Saskatoon, Canada	Administrative, Manufacturing, Engineering, Research and Development	88,585	Owned	—	Industrial
Calgary, Canada	Sales	240	Leased	2017	Industrial
Winnipeg, Canada	Administrative and Manufacturing	63,500	Leased	2018	Industrial
Sao Paulo, Brazil	Sales	3,229	Leased	2016	Electronics and Auto
Manaus, Brazil	Warehouse	2,152	Leased	2016	Electronics and Auto
Roskilde, Denmark	Administrative, Manufacturing, Research and Development and Sales	18,740	Leased	2016	Industrial
Swindon, U.K.	Administrative	304	Leased	2016	Electronics
Bremen, Germany	Administrative	13,455	Leased	2021	Auto, Electronics and Industrial
Norwich, U.K.	Engineering	7,964	Leased	2020	Auto
Essen, Germany	Leased to third party	37,244	Owned	—	—
Essen, Germany	Administrative	3,703	Leased	2017	Auto and Electronics
Amsterdam, Netherlands	Warehouse	21,851	Leased	2016	Auto and Electronics
Lauf, Germany	Adminstrative	127	Leased	2018	Auto
Lenzenburg, Switzerland	Administrative	215	Leased	2016	Auto, Electronics and Industrial
Arstad, Sweden	Sales	328	Leased	2016	Auto
Kaunas, Lithuania	Administrative, Manufacturing, Testing, Research and Development and Engineering	43,239	Owned	—	Auto
Kaunas, Lithuania	Manufacturing	62,862	Leased	2016	Auto
Kaunas, Lithuania	Research and Development	4,596	Leased	2017	Auto
Ozegna, Italy	Administrative, Manufacturing and Research and Development	32,292	Leased	2021	Auto
Singapore	Sales and Distribution	1,572	Leased	2018	Electronics
Taipei, Taiwan	Sales	7,876	Leased	2017	Electronics
Seoul, Korea	Sales	3,643	Leased	2016	Electronics
Lipa City, Philippines	Manufacturing	116,046	Owned	—	Electronics
Lipa City, Philippines	Manufacturing	105,827	Owned	—	Electronics
Dongguan, China	Manufacturing	264,792	Leased	2023	Electronics
Suzhou, China	Manufacturing	143,458	Owned	—	Auto and Electronics
Suzhou, China	Manufacturing	37,674	Leased	2016	Auto and Electronics
Beijing, China	Sales	452	Leased	2016	Electronics
Shanghai, China	Sales	6,324	Leased	2018	Auto and Electronics
Chu-Pei City, Taiwan	Research and Development	10,505	Leased	2019	Electronics
Wuxi, China	Manufacturing	221,214	Owned	—	Electronics
Hong Kong, China	Sales	743	Leased	2017	Auto, Electronics and Industrial
Yokohama, Japan	Sales	3,509	Leased	2017	Auto, Electronics and Industrial

Properties with lease expirations in 2016 may be renewed at various times throughout the year. The company does not anticipate any material impact as a result of such expirations.

19

ITEM 3. LEGAL PROCEEDINGS.

The company is not a party to any material legal proceedings, other than routine litigation incidental to our business.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

20

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Shares of the company’s common stock are traded under the symbol “LFUS” on the NASDAQ Global Select Market^SM. As of February 19, 2016, there were 81 holders of record of the company’s common stock.

Stock Performance Graph

The following stock performance graph and related information shall not be deemed “soliciting material” or “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the company specifically incorporates it by reference into such filing.

The following stock performance graph compares the five-year cumulative total return on Littelfuse common stock to the five-year cumulative total returns on the Russell 2000 Index and the Dow Jones Electrical Components and Equipment Industry Group Index. The company believes that the Russell 2000 Index and the Dow Jones Electrical Components and Equipment Industry Group Index represent a broad market index and peer industry group for total return performance comparison. The stock performance shown on the graph below represents historical stock performance and is not necessarily indicative of future stock price performance.

21

The Dow Jones Electrical Components and Equipment Industry Group Index includes the common stock of American Superconductor Corp.; Amphenol Corp.; Arrow Electronics, Inc.; Avnet, Inc.; AVX Corp.; Benchmark Electronics, Inc.; Capstone Turbine Corp.; CTS Corp.; General Cable Corp.; Hubbell Inc. Class B; Jabil Circuit, Inc.; KEMET Corp.; Littelfuse, Inc.; Methode Electronics, Inc.; Park Electrochemical Corp.; Plexus Corp.; Powerwave Technologies, Inc.; Regal-Beloit Corp.; Sanmina Corp.; Valence Technology, Inc.; Vicor Corp.; and Vishay Intertechnology, Inc.

In the case of the Russell 2000 Index and the Dow Jones Electrical Components and Equipment Industry Group Index, a $100 investment made on December 31, 2010 and reinvestment of all dividends is assumed. In the case of the company, a $100 investment made on December 31, 2010 is assumed. Returns for the company’s fiscal years presented above are as of the last day of the respective fiscal year which was, December 31, 2011, December 29, 2012, December 28, 2013, December 27, 2014, and January 2, 2016 for the fiscal years 2011, 2012, 2013, 2014 and 2015, respectively.

The company expects that its practice of paying quarterly dividends on its common stock will continue although future dividend policy will be determined by the Board of Directors based upon its evaluation of earnings, cash availability and general business prospects. Currently, there are restrictions on the payment of dividends contained in the company’s credit agreements that relate to the maintenance of certain financial ratios. However, the company expects to continue paying cash dividends on a quarterly basis for the foreseeable future.

The Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2015 to April 30, 2016. The company repurchased 350,000 shares of its common stock during the third quarter of 2015 and 650,000 shares remain available for purchase under the program as of January 2, 2016.

The company withheld 28,286 shares of stock in lieu of withholding taxes on behalf of employees who became vested in restricted share units during fiscal 2015 during the period April 25, 2014 to January 2, 2016. Shares withheld are classified as Treasury stock on the Consolidated Balance Sheet.

The table below provides information with respect to the company’s quarterly stock prices and cash dividends declared and paid for each quarter during fiscal 2015 and 2014:

	2015								2014
	4Q		3Q		2Q		1Q		4Q		3Q		2Q		1Q
High	$	114.90	$	97.96	$	102.78	$	103.08	$	100.82	$	97.45	$	99.46	$	97.54
Low		87.32		82.53		93.31		89.11		78.68		84.14		84.60		85.55
Close		107.01		89.09		97.76		98.36		98.76		87.65		93.20		91.20
Dividends		0.29		0.29		0.25		0.25		0.25		0.25		0.22		0.22

22

ITEM 6. SELECTED FINANCIAL DATA.

The information presented below provides selected financial data of the company during the past five fiscal years and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and Notes to Consolidated Financial Statements set forth in Item 7 and Item 8, respectively, for the respective years presented (amounts in thousands, except per share data):

	2015		2014		2013		2012		2011
Net sales	$	867,864	$	851,995	$	757,853	$	667,913	$	664,955
Gross profit		330,499		324,428		296,232		258,467		256,694
Operating income		104,157		133,830		129,881		106,870		113,904
Net income		82,466		99,418		88,784		75,332		87,024
Per share of common stock:
Income from continuing operations
- Basic		3.65		4.41		3.98		3.45		3.96
- Diluted		3.63		4.37		3.94		3.40		3.90
Cash dividends paid		1.08		0.94		0.84		0.76		0.63
Cash and cash equivalents		328,786		297,571		305,192		235,404		164,016
Total assets		1,064,981		1,070,826		1,024,373		777,728		678,424
Short-term debt		87,000		88,500		126,000		84,000		85,000
Long-term debt, less current portion		84,474		106,658		93,750		—		—

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Littelfuse Overview

Introduction

Littelfuse, Inc. and its subsidiaries (the “company” or “Littelfuse” or “we” or “our”) is the worldwide leader in circuit protection offering the industry's broadest and deepest portfolio of circuit protection products and solutions. The company’s devices protect products in virtually every market that uses electrical energy, from consumer electronics to automobiles to industrial equipment. The company conducts its business through three reportable segments, which are defined by markets and consist of Electronics, Automotive, and Industrial (formerly Electrical). The company’s customer base includes original equipment manufacturers, tier one automotive suppliers and distributors.

In addition to protecting and growing its core circuit protection business, Littelfuse has been investing in power control and sensing technologies. These newer platforms, combined with the company’s strong balance sheet and operating cash flow, provide opportunities for increased organic and acquisition growth. In 2012, the company set a five-year strategic target plan to grow annual sales at 15% per year; 5% organically and 10% through acquisitions. As of January 2, 2016, three years into the five-year plan, the company has achieved an annual sales growth of 9%; 4% organically and 5% through acquisitions.

In November, 2015, the company announced its planned acquisition of TE Connectivity’s circuit protection devices business (“CPD”) which is expected to close by the end of the first quarter of 2016. The company believes that the pending acquisition of the CPD business in 2016 puts the company on track with the five-year growth targets set in 2012 as described above.

23

The company remains focused on only those acquisitions that will add shareholder value. Overall, the company believes its strategy is sound, the fundamentals of its business have not changed, and its long-term goals are achievable. 

To maximize shareholder value, the company’s primary strategic goals are to:

● Grow organically faster than its markets;

● Continue the pace of acquisitions;

● Sustain operating margins in the high teens;

● Improve return on investment; and

● Return excess cash to shareholders.

The company serves markets that are directly impacted by global economic trends with significant exposures to the consumer electronics, automotive, industrial and mining end markets. The company’s results will be impacted positively or negatively by changes in these end markets.

Electronics Segment Overview

The Electronics segment, which accounted for approximately 47% of total sales in 2015, has produced modest revenue growth and strong operating margins over the last few years. In 2015, sales decreased 1% (a 2% increase excluding currency effects) and operating margins were 19.0% for 2015 as compared to 21.2% in 2014. Strong sales in both Europe and China helped to offset continued adjustments in channel inventory and capacity constraints for electronic sensor products as the company continues to transfer production to the Philippines. The company believes the revenue growth is the result of a stable electronics market combined with ongoing design wins and market share gains for Littelfuse.

The electronics business is affected by seasonality. Sales are typically weaker in the first and fourth quarters and stronger in the second quarter and third quarters. This reflects the production ramp-up for consumer electronics in advance of the year-end holidays and other factors.

Fourth quarter 2015 sales for Electronics were consistent with normal seasonality as channel inventories remain at appropriate levels. The book-to-bill ratio of 1.00 at the end of the fourth quarter is also consistent with normal seasonal trends.

Automotive Segment Overview 

The Automotive segment, which accounted for approximately 39% of sales in 2015, has been the company’s fastest growing business over the last few years. In 2015, Automotive sales increased 4% (11% excluding currency effects) primarily resulting from a strong performance in automotive sensor sales which increased 20% over the prior year.

Passenger car fuse sales continue to outperform global car production due primarily to the success of the company’s new high current fuses which are driving increases in content per vehicle. Automotive sensors also had its third consecutive year of double-digit sales growth primarily reflecting ramp-up of new solar sensor and speed and position sensor platforms. The company continues to make good progress on its objective to improve sensor margins by growing the business and replacing low margin legacy business with more profitable design wins.

24

In summary, 2015 was a record year for the Automotive segment. Growth in fuse content was driven by more sophisticated electronics in vehicles and sales of our high-current products, especially the Masterfuse^TM line. Our automotive sensor business had an excellent year, with strong growth in sales and a significant improvement in margins. For the CVP business, the main contributor to sales was the North American heavy duty truck market.

Industrial Segment Overview

The Industrial segment, which accounted for approximately 14% of total sales in 2015, experienced an improved performance in 2015 with sales increasing 5% (9% excluding currency effects) over the prior year with strong sales in power fuses and continued improvement in the custom business more than offsetting a decline in relay sales. The increase in fuse sales was due to continuing strength in the solar market, as well as distributors increasing purchases after working down inventories in response to the weak end markets. Within the custom business, the company has diversified its portfolio beyond the potash market and into e-houses used in the heavy industrial and utility markets.

In summary,2015 was a good year for the Industrial segment overall. The business saw a rebound in electrical fuse sales and margins, with fuse sales into the solar market almost doubling. It also made progress in diversifying the custom products and relay businesses beyond potash mining.

Business Acquisitions

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”) for $5.4 million (net of cash acquired). Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel and selective catalytic reduction (SCR) quality sensors, as well as diesel fuel heaters, solenoid valves and rotating oil filters for automotive and commercial vehicle applications. The acquisition further expands the company’s automotive sensor product line offerings within its Automotive business segment.

On January 3, 2014, the company acquired 100% of SymCom, Inc. (“SymCom”) for $52.8 million (net of cash acquired). Located in Rapid City, South Dakota, SymCom provides overload relays and pump controllers primarily to the industrial market. The acquisition allows the company to strengthen its position in the relay products market by adding new products and new customers within its Industrial business segment.

Business Segment Information

U.S. Generally Accepted Accounting Principles (“GAAP”) dictates annual and interim reporting standards for an enterprise's operating segments and related disclosures about its products, services, geographic areas and major customers. Within U.S. GAAP, an operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the company’s President and Chief Executive Officer.

25

The following table is a summary of the company’s business unit segments’ net sales by business unit and geography (in millions):

	Fiscal Year
	2015		2014		2013
Business Unit
Electronics(b)	$	405.5	$	410.1	$	367.1
Automotive(c)		340.0		325.4		267.2
Industrial(g)		122.4		116.5		123.6
Total	$	867.9	$	852.0	$	757.9
Geography(a)
Americas(d)(g)	$	401.2	$	377.7	$	342.4
Europe(e)		152.7		163.9		136.8
Asia-Pacific(f)		314.0		310.4		278.7
Total	$	867.9	$	852.0	$	757.9

(a) Sales by geography represent sales to customer or distributor locations.

(b) 2014 includes incremental Hamlin net sales of $36.5 million.

(c) 2014 includes incremental Hamlin net sales of $20.2 million.

(d) 2014 includes incremental Hamlin net sales of $16.7 million.

(e) 2014 includes incremental Hamlin net sales of $9.3 million.

(f) 2014 includes incremental Hamlin net sales of $10.4 million.

(g) 2014 includes incremental SymCom net sales of $19.6 million.

Business segment information is described more fully in Note 15 of the Notes to Consolidated Financial Statements. The following discussion provides an analysis of the information contained in the Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements at January 2, 2016 and December 27, 2014, and for the three fiscal years ended January 2, 2016, December 27, 2014 and December 28, 2013.

Results of Operations — 2015 compared with 2014

The following table summarizes the company’s consolidated results of operations for the periods presented. There were additional charges incurred during 2015. These included $4.6 million in acquisition-related costs primarily related to the transaction and integration planning costs for the pending acquisition of TE Connectivity’s circuit protection device business, $5.2 million in charges related to the transfer of the company’s reed switch manufacturing operations from its Lake Mills, Wisconsin and Suzhou, China locations to the Philippines, $3.6 million in internal restructuring costs that will improve the company’s worldwide legal structure and $31.9 million in pension settlement and wind-up costs.

Fiscal year 2015 also included $1.5 million in foreign currency gains primarily attributable to changes in the value of both the euro and Philippine peso against the U.S. dollar while fiscal year 2014 included $3.9 million in foreign currency losses primarily related to the value of the Philippine peso against the dollar.

	Fiscal Year
(In thousands)	2015			2014			% Change
Sales	$	867,864		$	851,995			2%
Gross profit		330,499			324,428			2%
Operating expenses		226,342			190,598			19%
Operating income		104,157			133,830			(22%)
Other expense (income), net		(5,417	)		(6,644	)		(18%)
Income before income taxes		106,948			131,646			(19%)
Net income	$	82,466		$	99,418			(17%)

26

Net sales increased $15.9 million or 2% to $867.9 million for fiscal year 2015 compared to $852.0 million in fiscal year 2014 due primarily to strong growth in automotive products and improvement in the Industrial business segment partially offset by lower Electronics sales. The company also experienced $38.9 million in unfavorable foreign currency effects in 2015 as compared to 2014 primarily resulting from sales denominated in the euro. Excluding currency effects, net sales increased $54.7 million or 6% year-over-year. The Automotive business segment sales increased $14.5 million or 4% to $340.0 million. The Electronics business segment sales decreased $4.6 million or 1% to $405.5 million, and the Industrial business segment sales increased $5.9 million or 5% to $122.4 million. Sales levels in 2015, excluding currency effects, were positively impacted by increased demand for the company’s automotive and industrial products partially offset by lower demand for the company’s electronics products.

The increase in Automotive sales was primarily due to strong growth for automotive sensor products. Sales in the commercial vehicle market were up slightly year-over-year as continued strength in the heavy truck market was offset by general market weakness in construction, agriculture and the global mining industry. Automotive sales were negatively impacted by net unfavorable currency effects of $22.4 million in 2015 as compared to 2014 primarily resulting from sales denominated in the euro. Excluding currency effects, Automotive sales increased $37.0 million or 11% year-over-year.

The decrease in Electronics sales primarily resulted from net unfavorable currency effects of $11.7 million for the full year 2015. Excluding currency effects, Electronics sales increased $7.2 million or 2% year-over-year reflecting solid growth for passive components offset by lower sensor sales. Strong sales of electronic products in Europe and China helped to offset continued adjustments in channel inventory and capacity constraints for our electronic sensor products as the company continues to transfer production from the U.S. and China to the Philippines.

The increase in Industrial sales was primarily from higher custom and power fuse sales which were offset by lower relay sales. The Industrial segment experienced net unfavorable currency effects of $4.7 million primarily from sales denominated in Canadian dollars and the euro. Excluding currency effects, Industrial sales increased $10.6 million or 9% year over year. The increase in fuse sales is primarily due to continuing strength in the solar market, while higher custom product sales benefited from some recovery in the potash mining end market.

On a geographic basis, sales in the Americas increased $23.5 million or 6% in 2015 as compared to 2014 due primarily to growth in all business segments offset by $3.6 million in unfavorable currency effects resulting from sales denominated in Canadian dollars. Excluding currency effects, Americas’ sales increased $27.1 million or 7%. Automotive sales increased $15.1 million or 9% primarily reflecting strong growth in the automotive sensor and passenger vehicle markets. Electronics sales increased $3.2 million or 3% primarily reflecting higher demand for passive products. Industrial sales increased $5.2 million or 5% resulting from increases in demand for power fuses and custom products.

European sales decreased $11.3 million or 7% in 2015 compared to 2014 primarily due to net unfavorable currency effects of $32.8 million primarily from sales denominated in the euro. Excluding currency effects, European sales increased $21.5 million or 13% reflecting strong demand across all business segments. Automotive sales decreased $6.9 million or 7% in 2015 reflecting net unfavorable currency effects. Excluding currency effects, Automotive sales increased $14.2 million or 13% reflecting strong demand for automotive sensor products. Electronics sales decreased $3.7 million or 7% reflecting the impact of net unfavorable currency effects. Excluding currency effects, Electronics sales increased $6.6 million or 13% reflecting strong demand for semiconductor products. Industrial sales decreased $0.7 million or 10% in 2015 primarily from the impact of net unfavorable currency effects. Excluding currency effects, Industrial sales increased $0.7 million or 10%.

27

Asia-Pacific sales increased $3.6 million or 1% in 2015 compared to 2014 primarily due to increased demand for Automotive and Industrial products offset by lower Electronics sales. Net unfavorable currency effects amounted to $2.5 million. Excluding currency effects, Asia-Pacific sales increased $6.1 million or 2%. Electronics sales decreased $4.1 million or 2% reflecting weakness in the Taiwan, Japan and Korea markets. Automotive sales increased $6.4 million or 11% reflecting continued increased demand for passenger vehicles in China as well as gains in market share. Industrial sales increased $1.4 million or 19%.

Gross profit was $330.5 million or 38.1% of sales in 2015, compared to $324.4 million or 38.1% of sales in 2014. Gross profit for 2015 was negatively impacted by $5.3 million of charges related to the transfer of the company’s reed switch production from the U.S. and China to the Philippines. Gross profit for 2014 was negatively impacted by $2.8 million for accounting adjustments related to the SymCom inventory which had been stepped up to fair value at the acquisition date as required by purchase accounting rules. Additionally, 2014 gross profit was negatively impacted by $2.7 million in severance charges. These severance charges primarily related to post-Hamlin acquisition reorganization changes. Excluding the impact of these charges, gross profit was $335.8 million or 38.7% of sales in 2015 as compared to $329.9 million or 38.7% of sales in 2014.

Total operating expense was $226.3 million or 26.1% of net sales for 2015 compared to $190.6 million or 22.4% of net sales for 2014. Operating expense in 2015 included $39.9 million of charges primarily related to pension settlement and wind-up costs of $31.9 million and restructuring and acquisition costs of $8.0 million. Operating expense in 2014 included $3.5 million in restructuring, acquisition and impairment costs, $2.2 million of which was to effect changes in the company’s legal structure to allow tax-efficient repatriation of cash. Excluding these charges, total operating expense was $186.4 million or 21.5% of net sales for 2015 compared to $187.1 million or 22.0% of net sales in 2014.

Operating income was $104.2 million or 12.0% of net sales in 2015 compared to $133.8 million or 15.7% of net sales in the prior year. The decrease in operating income in the current year was due primarily to the factors affecting operating expenses discussed above.

Interest expense was $4.1 million in 2015 as compared to $4.9 million in 2014 and is primarily related to the company’s increased borrowing to fund acquisitions. The lower interest expense in 2015 resulted from lower average debt balances as compared to the prior year.

Foreign exchange (gain) loss was $1.5 million of gain in 2015 compared to $3.9 million of loss in 2014. The fluctuation in foreign exchange was primarily attributable to changes in the value of both the euro and the Philippine peso against the U.S. dollar in 2015 and 2014.

Other expense (income), net, consisting of interest income, royalties and non-operating income was $5.4 million of income in 2015 compared to $6.6 million of income in 2014. The year-over-year decrease in income primarily reflects lower interest income in 2015.

Income before income taxes was $106.9 million in 2015 compared to $131.6 million in 2014. Income tax expense was $24.5 million in 2015 compared to $32.2 million in 2014. The 2015 effective income tax rate was 22.9% compared to 24.5% in 2014. The lower effective tax rate in 2015 is primarily related to more income earned in low-tax jurisdictions in 2015 as compared to 2014. The effective tax rates are lower than the U.S. statutory tax rate primarily as a result of income earned in low-tax jurisdictions.

28

Results of Operations — 2014 compared with 2013

The following table summarizes the company’s consolidated results of operations for the periods presented. The results include incremental activity from the company’s business acquisitions as described, where applicable, in the below analysis. There were also additional charges and accounting adjustments during 2014. These include a $2.8 million inventory adjustment in 2014 related to the SymCom acquisition as described in Note 2, $0.4 million in acquisition-related costs, $3.2 million in severance charges related to the Lake Mills, Wisconsin and Matamoros, Mexico locations, $2.2 million in internal legal restructuring costs that will improve the company’s worldwide legal structure and $0.3 million in asset impairments.

Fiscal year 2014 also included $3.9 million in foreign currency losses primarily attributable to changes in the value of both the euro and Philippine peso against the U.S. dollar while fiscal year 2013 included $3.3 million in foreign currency gains primarily related to the value of the Philippine peso against the U.S. dollar.

	Fiscal Year
(In thousands)	2014			2013			% Change
Sales	$	851,995		$	757,853			12	%
Gross profit		324,428			296,232			10	%
Operating expenses		190,598			166,351			15	%
Operating income		133,830			129,881			3	%
Other expense (income), net		(6,644	)		(4,646	)		43	%
Income before income taxes		131,646			124,235			6	%
Net income	$	99,418		$	88,784			12	%

Net sales increased $94.1 million or 12% to $852.0 million for fiscal year 2014 compared to $757.9 million in fiscal year 2013 due primarily to an incremental $56.1 million from business acquisitions and growth in electronic and automotive products, offset by lower Industrial sales. The company also experienced $0.4 million in unfavorable foreign currency effects in 2014 as compared to 2013 primarily resulting from sales denominated in Canadian dollars and Japanese yen. During the fourth quarter of 2014, sales were negatively impacted by the steep decline in the euro. Excluding acquisitions and currency effects, net sales increased $38.5 million or 5% year over year. The Automotive business segment sales increased $58.2 million or 22% to $325.4 million. The Electronics business segment sales increased $43.0 million or 12% to $410.1 million, and the Industrial business segment sales decreased $7.1 million or 6% to $116.5 million. Sales levels in 2014, excluding acquisitions and currency effects, were positively impacted by increased demand for the company’s automotive and electronic products partially offset by slowing demand for the company’s industrial products.

The increase in Automotive sales was primarily due to strong organic growth in all product categories and an incremental $20.2 million in sales from Hamlin. Currency effects increased sales by $0.6 million for the full year 2014 compared to 2013. Excluding incremental sales from Hamlin and currency effects, Automotive sales increased $37.3 million or 14% year over year due primarily to increases in content per vehicle and strength in the heavy truck market.

The increase in Electronics sales reflected solid growth for both semiconductor and passive components and incremental sales from Hamlin of $16.3 million. In addition, sales were positively impacted by net favorable currency effects of $0.2 million for the full year 2014. Excluding acquisitions and currency effects, Electronics sales increased $26.5 million or 7% year over year.

29

The decrease in Industrial sales was primarily from declines in custom and relay sales into the mining market and power fuses into the solar market. These declines more than offset incremental sales of $19.6 million from the SymCom acquisition in 2014. The Industrial segment experienced net unfavorable currency effects of $1.3 million primarily from sales denominated in Canadian dollars. Excluding incremental sales and currency effects, Industrial sales decreased $25.4 million or 21% year over year.

On a geographic basis, sales in the Americas increased $35.3 million or 10% in 2014 as compared to 2013 due primarily to incremental sales from business acquisitions of $36.3 million offset by $1.4 million in unfavorable currency effects resulting from sales denominated in Canadian dollars. Excluding acquisitions and currency effects, Americas’ sales increased $0.4 million or less than 1%. Increases in the company’s Automotive and Electronics sales were mostly offset by a decline in Industrial sales. Automotive sales increased $33.4 million or 26% primarily reflecting incremental sales from acquisitions of $12.5 million, strong growth in the passenger vehicle market and growth in the commercial vehicle market. Electronics sales increased $9.6 million or 9% primarily reflecting higher demand and incremental sales from Hamlin of $4.3 million. Industrial sales decreased $7.7 million or 7% resulting from decreases in demand for protection relays and custom products due to continued weakness in the mining segment. This decrease more than offset $19.6 million in incremental sales from SymCom in 2014.

European sales increased $27.1 million or 20% in 2014 compared to 2013 primarily due to strong demand for electronics and automotive products, incremental sales from Hamlin of $9.4 million and $1.0 million in favorable currency effects from sales denominated in euros. Excluding acquisitions and currency effects, European sales increased $16.8 million or 12%. This resulted from increases in the company’s Electronics and Automotive sales partially offset by a decrease in Industrial sales. Automotive sales increased $18.2 million or 21% in 2014 primarily reflecting incremental sales from Hamlin sensors of $6.2 million and higher sales in the passenger vehicle markets driven primarily by increased content. Excluding the impact of incremental sales from Hamlin and favorable currency effects, Automotive sales increased $11.5 million or 13%. Electronics sales increased $9.2 million or 22% reflecting incremental sales from Hamlin of $3.2 million and higher demand in 2014. Industrial sales decreased $0.3 million or 4% in 2014 primarily from decreased demand in the marine market for relays.

Asia-Pacific sales increased $31.7 million or 11% in 2014 compared to 2013 primarily due to increased demand across all product categories and incremental sales from Hamlin of $10.4 million. Currency effects amounted to less than $0.1 million. Excluding acquisitions and currency effects, Asia-Pacific sales increased $21.3 million or 8%. Electronics sales increased $24.2 million or 11% reflecting incremental sales from Hamlin of $8.9 million and increased sales in China offset by weakness in the Taiwan, Japan and Korea markets. Automotive sales increased $6.6 million or 12% reflecting incremental sales from acquisitions of $1.5 million and continued increased demand for passenger vehicles in China as well as gains in market share.

Gross profit was $324.4 million or 38.1% of sales in 2014, compared to $296.2 million or 39.1% of sales in 2013. Gross profit in both 2014 and 2013 were negatively impacted by purchase accounting adjustments in cost of sales of $2.8 million and $1.5 million, respectively. These charges were the additional cost of goods sold for SymCom and Hamlin inventories which had been stepped up to fair value at the acquisition dates as required by purchase accounting rules. Additionally, 2014 gross profit was negatively impacted by $2.7 million in severance charges. These severance charges primarily related to post-Hamlin acquisition reorganization changes. Excluding the impact of these charges, gross profit was $329.9 million or 38.7% of sales as compared to $297.8 million or 39.3% of sales in 2013. The decrease in gross margin was primarily attributable to higher sales of sensors in 2014 which carry lower margins than the company’s core products.

30

Total operating expense was $190.6 million or 22.4% of net sales for 2014 compared to $166.4 million or 22.0% of net sales for 2013. The increase in operating expenses primarily reflects incremental operating expenses of $14.2 million from business acquisitions and $3.5 million in restructuring, acquisition and impairment costs, $2.2 million of which was to effect changes in the company’s legal structure to allow tax-efficient repatriation of approximately $90.0 million of cash in the fourth quarter of 2014.

Operating income was $133.8 million or 15.7% of net sales in 2014 compared to $129.9 million or 17.1% of net sales in the prior year. The increase in operating income and decrease in operating margin in the current year was due primarily to the factors affecting gross profit and operating expenses discussed above.

Interest expense was $4.9 million in 2014 as compared to $2.9 million in 2013 and is primarily related to the company’s increased borrowing to fund acquisitions.

Impairment and equity in net loss of unconsolidated affiliate was $10.7 million in 2013. During the first quarter of 2013, the company fully impaired its investment in and loan receivable from Shocking Technologies, Inc. (“Shocking”) as described in Note 6 of the Notes to Consolidated Financial Statements included in this report.

Foreign exchange (gain) loss was $3.9 million of loss in 2014 compared to $3.3 million of gain in 2013. The fluctuation in foreign exchange was primarily attributable to changes in the value of both the euro and the Philippine peso against the U.S. dollar in 2014 and the Philippine peso against the dollar in 2013.

Other expense (income), net, consisting of interest income, royalties and non-operating income was $6.6 million of income in 2014 compared to $4.6 million of income in 2013. The year-over-year increase in income primarily reflects higher interest income in 2014.

Income before income taxes was $131.6 million in 2014 compared to $124.2 million in 2013. Income tax expense was $32.2 million in 2014 compared to $35.5 million in 2013. The 2014 effective income tax rate was 24.5% compared to 28.5% in 2013. The lower effective tax rate in 2014 is primarily related to the $6.1 million Shocking tax adjustment booked in 2013. The 2014 and 2013 effective tax rates are lower than the U.S. statutory tax rate primarily the result of income earned in low-tax jurisdictions.

Liquidity and Capital Resources

As of January 2, 2016, $318.5 million of the $328.8 million of the company’s cash and cash equivalents was held by foreign subsidiaries. Of the $318.5 million held by foreign subsidiaries, approximately $24.6 million could be repatriated with minimal tax consequences. The company expects to maintain its foreign cash balances (other than the aforementioned $24.6 million) for local operating requirements, to provide funds for future capital expenditures and for potential acquisitions. The company does not expect to repatriate these funds to the U.S.

The company historically has financed capital expenditures through cash flows from operations. Management expects that cash flows from operations and available lines of credit will be sufficient to support both the company’s operations and its debt obligations for the foreseeable future.

31

Term Loan and Revolving Credit Facilities

On May 31, 2013, the company entered into a new credit agreement with J.P. Morgan Securities LLC for up to $325.0 million which consists of an unsecured revolving credit facility of $225.0 million and an unsecured term loan of $100.0 million. The new credit agreement is for a five year period. At January 2, 2016, the company had available $197.9 million of borrowing capacity under the credit agreement at an interest rate of LIBOR plus 1.25%, or a total interest rate of 1.68% as of January 2, 2016.

The credit agreement replaced the company’s previous credit agreement dated June 13, 2011, which was terminated on May 31, 2013.

On January 30, 2014, the company increased the unsecured revolving credit facility entered into on May 31, 2013, by $50.0 million thereby increasing the total revolver borrowing capacity from $225.0 million to $275.0 million.

This arrangement contains covenants that, among other matters, impose limitations on the incurrence of additional indebtedness, future mergers, sales of assets, payment of dividends, and changes in control, as defined in the agreement. In addition, the company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At January 2, 2016, the company was in compliance with all covenants under the credit agreement.

Entrusted Loan

During the fourth quarter of 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “Lender”) and Suzhou Littelfuse OVS Ltd. (the “Borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 61.5 million (approximately $9.5 million) at January 2, 2016.

Other Obligations

For the fiscal year ended January 2, 2016, the company had $0.1 million available in letters of credit. No amounts were drawn under these letters of credit at January 2, 2016.

Cash Flows and Working Capital

The company started 2015 with $297.6 million of cash. Net cash provided by operating activities in 2015 was approximately $165.8 million and included $82.5 million in net income, $82.1 million in non-cash adjustments (primarily $41.6 million in depreciation and amortization) and $1.2 million of favorable changes in operating assets and liabilities.

32

Changes in operating assets and liabilities (including short-term and long-term items) that negatively impacted cash flows in 2015 consisted of changes in accounts receivable ($14.4 million), inventory ($3.6 million) and accrued taxes ($1.0 million). Increases in accounts receivable and inventory resulted from higher sales volumes in 2015. Positively impacting cash flows were changes in accrued expenses including post-retirement ($6.5 million), accounts payable ($2.6 million), accrued payroll and severance ($5.9 million) and prepaid expenses and other ($5.2 million).

Net cash used in investing activities in 2015 was approximately $44.2 million and included $44.0 million in purchases of property, plant and equipment (primarily production equipment and facilities for capacity expansion and new products at the company’s locations in Piedras Negras, Mexico, Wuxi, China and the Philippines), $3.5 million for the purchase of an investment and $4.6 million for a business acquisition. Offsetting the cash used in investing activities was a $7.8 million decrease in the Entrusted Loan receivable (see Note 7 of the Notes to Consolidated Financial Statements included in this report) and $0.1 million in proceeds from sales of property, plant and equipment.

Net cash used in financing activities in 2015 was approximately $67.7 million, which included $23.1 million in net payments of debt, $1.9 million in excess tax benefits on share-based compensation and $9.2 million in cash proceeds from the exercise of stock options. The company also repurchased $31.3 million of its own stock in 2015. Additionally the company paid cash dividends of $24.3 million during the year. Information regarding the company’s debt is provided in Note 7 of the Notes to Consolidated Financial Statements included in this report.

The effect of exchange rate changes decreased cash by $22.8 million in 2015. The net cash provided by operating activities less net cash used in financing and provided by investing activities plus the effect of exchange rate changes, resulted in a $31.2 million increase in cash and cash equivalents in 2015. This left the company with a cash balance of $328.8 million at January 2, 2016.

Days sales outstanding (DSO) in accounts receivable was 59 days at year-end 2015 compared to 60 days at year-end 2014 and 59 days at year-end 2013. Days inventory outstanding was 65 days at year-end 2015, compared to 68 days at year-end 2014 and 70 days at year-end 2013.

The ratio of current assets to current liabilities was 2.8 to 1 at year-end 2015, compared to 2.7 to 1 at year-end 2014 and 2.7 to 1 at year-end 2013. The change in the current ratio at the end of 2015 compared to the prior year reflected increased current assets in 2015, primarily related to higher cash balances. The carrying amounts of total debt decreased $23.1 million in 2015, compared to a decrease of $24.6 million in 2014 and an increase of $135.8 million in 2013. The decrease in 2015 was due to higher net payments under the revolving credit facility in 2015. The ratio of long-term debt to equity was 0.11 to 1 at year-end 2015 compared to 0.15 to 1 at year-end 2014 and 0.14 to 1 at year-end 2013. Further information regarding the company’s debt is provided in Note 7 of the Notes to Consolidated Financial Statements included in this report.

The company started 2014 with $305.2 million of cash. Net cash provided by operating activities in 2014 was approximately $153.1 million and included $99.4 million in net income and $47.8 million in non-cash adjustments (primarily $41.9 million in depreciation and amortization), and $5.9 million of favorable changes in operating assets and liabilities.

Changes in operating assets and liabilities (including short-term and long-term items) that negatively impacted cash flows in 2014 consisted of changes in accounts receivable ($13.1 million), inventory ($2.3 million), accrued expenses including post-retirement ($1.6 million) and accrued taxes ($0.5 million). Increases in accounts receivable and inventory resulted from higher sales volumes in 2014. Accrued expenses including post-retirement included pension contributions of $9.9 million in 2014 and $5.0 million in 2013. Positively impacting cash flows were changes in accounts payable ($17.3 million), accrued payroll and severance ($2.4 million) and prepaid expenses and other ($3.7 million). The increase in accounts payable primarily resulted from large capital purchases in December 2014 and the lengthening of vendor payment terms.

33

The company’s capital expenditures were $44.0 million in 2015, $32.3 million in 2014 and $35.0 million in 2013.

The company’s Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2015 to April 30, 2016. The company repurchased 350,000 shares of its common stock during 2015 under this program and 650,000 shares may yet be purchased under the program as of January 2, 2016. The company withheld 28,286 shares of stock in lieu of withholding taxes on behalf of employees who became vested in restricted stock option grants during 2015.

Contractual Obligations and Commitments

The following table summarizes contractual obligations and commitments as of January 2, 2016:

(In thousands )	Total		< 1 Year		> 1 - < 3 Years		> 3 - < 5 Years		> 5 Years
Term loan	$	85,000	$	10,000	$	75,000	$	—	$	—
Revolving credit facility		77,000		77,000		—		—		—
Entrusted loan		9,474		—		—		9,474		—
Interest payments		3,098		1,365		1,733		—		—
Supplemental Executive
Retirement Plan		2,461		31		1,880		63		487
Operating lease payments		34,639		8,886		9,211		6,521		10,021
Purchase obligations		51,658		51,658		—		—		—
Total	$	263,330	$	148,940	$	87,824	$	16,058	$	10,508

Off-Balance Sheet Arrangements

As of January 2, 2016, the company did not have any off-balance sheet arrangements, as defined under SEC rules. Specifically, the company was not liable for guarantees of indebtedness owed by third parties, the company was not directly liable for the debt of any unconsolidated entity and the company did not have any retained or contingent interest in assets. The company does not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities.

Recent Accounting Pronouncements 

In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17 – Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes which amends the presentation of deferred income tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. The amendments in the ASU are effective for financial statements issued for annual periods beginning after December 15, 2016. The company has adopted the new standard on January 2, 2016 and has restated the presentation of deferred income taxes on its comparative Consolidated Balance Sheets as of December 27, 2014 to reflect the change.

34

In May 2014, the FASB amended prior authoritative guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements.

Critical Accounting Policies and Estimates

Certain of the accounting policies as discussed below require the application of significant judgment by management in selecting the appropriate estimates and assumptions for calculating amounts to record in the financial statements. Actual results could differ from those estimates and assumptions, impacting the reported results of operations and financial position. Significant accounting policies are more fully described in the Notes to Consolidated Financial Statements included elsewhere in this Annual Report. Certain accounting policies, however, are considered to be critical in that they are most important to the depiction of the company’s financial condition and results of operations and their application requires management’s subjective judgment in making estimates about the effect of matters that are inherently uncertain. The company believes the following accounting policies are the most critical to aid in fully understanding and evaluating its reported financial results, as they require management’s most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. The company has reviewed these critical accounting policies and related disclosures with the Audit Committee of its Board of Directors.

Net Sales

Revenue Recognition: The company recognizes revenue on product sales in the period in which the sales process is complete. This generally occurs when persuasive evidence of an arrangement exists, products are shipped (FOB origin) to the customer in accordance with the terms of the sale, the risk of loss has been transferred, collectability is reasonably assured and the pricing is fixed and determinable. At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The company’s distribution channels are primarily through direct sales and independent third party distributors.

Revenue and Billing: The company accepts orders from customers based on long term purchasing contracts and written sales agreements. Contract pricing and selling agreement terms are based on market factors, costs and competition. Pricing normally is negotiated as an adjustment (premium or discount) from the company’s published price lists. The customer is invoiced when the company’s products are shipped to them in accordance with the terms of the sales agreement.

Returns and Credits: Some of the terms of the company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization to reduce its price to its buyer. If the company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The company establishes reserves for this program based on historic activity and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

35

Return to Stock: The company has a return to stock policy whereby a customer with previous authorization from Littelfuse management can return previously purchased goods for full or partial credit. The company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.

Volume Rebates: The company offers incentives to certain customers to achieve specific quarterly or annual sales targets. If customers achieve their sales targets, they are entitled to rebates. The company estimates the future cost of these rebates and recognizes this estimated cost as a reduction to revenue as products are sold.

Allowance for Doubtful Accounts: The company evaluates the collectability of its trade receivables based on a combination of factors. The company regularly analyzes its significant customer accounts and, when the company becomes aware of a specific customer’s inability to meet its financial obligations, the company records a specific reserve for bad debt to reduce the related receivable to the amount the company reasonably believes is collectible. The company also records allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and past experience. Historically, the allowance for doubtful accounts has been adequate to cover bad debts. If circumstances related to specific customers change, the estimates of the recoverability of receivables could be further adjusted.

Inventory

The company performs regular detailed assessments of inventory, which include a review of, among other factors, demand requirements, product life cycle and development plans, component cost trends, product pricing, shelf life and quality issues. Based on the analysis, the company records adjustments to inventory for excess quantities, obsolescence or impairment when appropriate to reflect inventory at net realizable value. Historically, inventory reserves have been adequate to reflect inventory at net realizable values. During 2014, the company was required to step up the value of inventory acquired in business combinations to its selling prices less the cost to sell under business combination accounting. This step-up was approximately $2.8 million for SymCom in 2014.

Goodwill and Other Intangible Assets

The company annually tests goodwill for impairment on the first day of its fiscal fourth quarter or at an interim date if there is an event or change in circumstances that indicates the asset may be impaired. The company has eight reporting units for goodwill testing purposes. Management determines the fair value of each of its reporting units by using a discounted cash flow model (which includes forecasted five-year income statement and working capital projections, a market-based weighted average cost of capital and terminal values after five years) to estimate market value. In addition, the company compares its derived enterprise value on a consolidated basis to the company’s market capitalization as of its test date to ensure its derived value approximates the market value of the company when taken as a whole.

36

As of the most recent annual test conducted on September 27, 2015, the company concluded the fair value of each of the reporting units exceeded its carrying value of invested capital and therefore, no potential goodwill impairment existed. Specifically, the company noted that its headroom, defined as the excess of fair value over the carrying value of invested capital, was 148%, 95%, 188%, 218%, 76%, 26%, 12% and 198% for its reporting units; electronics (non-silicon), electronics (silicon), passenger car, commercial vehicle products, sensors, relays, custom products and power fuse, respectively, at September 27, 2015.

Certain key assumptions used in the annual test included a discount rate of 11.7% and a long-term growth rate of 3.0% which were used for all reporting units except for automotive sensor and relay which had a discount rate of 13.7% as a result of a 2.0% premium factor and custom products which had a discount rate of 14.7% as a result of a 3.0% premium factor.

In addition, the company performed a sensitivity test at September 27, 2015 that showed either a 100 basis point increase in its discount rate or a 100 basis point decrease in the long-term growth rate for each reporting unit would not have changed the company’s conclusion that no potential goodwill impairment existed at September 27, 2015.

The company will continue to perform a goodwill impairment test as required on an annual basis and on an interim basis, if certain conditions exist. Factors the company considers important, which could result in changes to its estimates, include underperformance relative to historical or projected future operating results and declines in acquisitions and trading multiples. Due to the diverse end user base and non-discretionary product demand, the company does not believe its future operating results will vary significantly relative to its historical and projected future operating results.

Long-Lived Assets

The company evaluates long-lived asset groups on an ongoing basis. Long-lived asset groups are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the related asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset group. If it is determined to be impaired, the impairment recognized is measured by the amount by which the carrying value of the asset exceeds its fair value. The company’s estimates of future cash flows from such assets could be impacted if it underperforms relative to historical or projected future operating results. The company recorded asset impairment charges of $0.0 million, $0.3 million and $0.0 million for the fiscal years ended 2015, 2014 and 2013, respectively. Further information regarding asset impairments is provided in Note 11 of the Notes to Consolidated Financial Statements included in this report.

Environmental Liabilities

Environmental liabilities are accrued based on estimates of the probability of potential future environmental exposure. Costs related to on-going maintenance of environmental sites are expensed as incurred. If actual or estimated probable future losses exceed the company’s recorded liability for such claims, it would record additional charges as other expense during the period in which the actual loss or change in estimate occurred. The company evaluates its reserve for coal mine remediation annually utilizing a third party expert.

37

Pension and Supplemental Executive Retirement Plan

Littelfuse has a number of company-sponsored defined benefit plans primarily in Europe and the Asia-Pacific region. The company recognizes the full unfunded status of these plans on the balance sheet. Actuarial gains and losses and prior service costs and credits are recognized as a component of accumulated other comprehensive income. Accounting for pensions requires estimating the future benefit cost and recognizing the cost over the employee’s expected period of employment with the company. Certain assumptions are required in the calculation of pension costs and obligations. These assumptions include the discount rate, salary scales and the expected long-term rate of return on plan assets. The discount rate is intended to represent the rate at which pension benefit obligations could be settled by purchase of an annuity contract. These assumptions are subject to change based on stock and bond market returns and other economic factors. Actual results that differ from the company’s assumptions are accumulated and amortized over future periods and, therefore, generally affect its recognized expense and accrued liability in such future periods. While the company believes that its assumptions are appropriate given current economic conditions and its actual experience, significant differences in results or significant changes in the company’s assumptions may materially affect its pension obligations and related future expense. During 2015, the company settled its U.S. defined benefit pension plan as described in Note 12 of the Notes to Consolidated Financial Statements included in this report. Further information regarding these plans is also provided in Note 12 of the Notes to Consolidated Financial Statements included in this report.

Equity-based Compensation

Equity-based compensation expense is recorded for stock-option awards and restricted share units based upon the fair values of the awards. The fair value of stock-option awards is estimated at the grant date using the Black-Scholes option pricing model, which includes assumptions for volatility, expected term, risk-free interest rate and dividend yield. Expected volatility is based on implied volatilities from traded options on Littelfuse stock, historical volatility of Littelfuse stock and other factors. Historical data is used to estimate employee termination experience and the expected term of the options. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The company initiated a quarterly cash dividend in 2010 and expects to continue making cash dividend payments in the foreseeable future.

Total equity-based compensation expense for all equity compensation plans was $10.7 million, $9.4 million, and $8.9 million in 2015, 2014, and 2013, respectively. Further information regarding this expense is provided in Note 13 of the Notes to Consolidated Financial Statements included in this report.

Income Taxes

The company accounts for income taxes using the liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using tax rates in effect for the years in which the differences are expected to reverse. The company recognizes deferred taxes for temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Federal and state income taxes are provided on the portion of foreign income that is expected to be remitted to the U.S. and be taxable.

The company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.

Further information regarding income taxes, including a detailed reconciliation of current year activity, is provided in Note 14 of the Notes to Consolidated Financial Statements included in this report.

38

Outlook 

Sales for the first quarter of 2016 are expected to be in the range of $213.0 to $223.0 million which represents 4% revenue growth over the prior quarter at the midpoint of the range (approximately 6% growth excluding currency effects). Despite concerns about the global economy and weakness in some of its end markets, the company believes it can grow revenue in the low to mid single digits in 2016. Assuming modest top-line growth, the company believes it can expand its operating margin by approximately 150 basis points compared to 2015 as it benefits from completion of its footprint consolidation projects, further progress on automotive sensor profitability initiatives and continued gains in manufacturing performance.

The company expects capital expenditures in 2016 to be in the range of $40 to $45 million, primarily for capacity to support volume increases, new product introductions and restructuring activities. The company expects to fund 2016 capital expenditures from operating cash flows.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The company is exposed to market risk from changes in interest rates, foreign exchange rates and commodity prices.

Interest Rates

The company had $162.0 million in debt outstanding at January 2, 2016 related to the unsecured revolving credit facility and term loan which are described in Item 7 under Liquidity and Capital Resources. While this debt has a variable interest rate of LIBOR plus 1.25%, the company’s interest expense is not materially sensitive to changes in interest rate levels since debt levels and potential interest expense increases are insignificant relative to earnings.

Foreign Exchange Rates

The majority of the company’s operations consist of manufacturing and sales activities in foreign countries. The company has manufacturing facilities in the U.S., Mexico, Canada, Denmark, China, Italy, Lithuania and the Philippines. During 2015, sales to customers outside the U.S. were approximately 60% of total net sales. Substantially all sales in Europe are denominated in euros and substantially all sales in the Asia-Pacific region are denominated in U.S. dollars, Japanese yen, Korean won, Chinese yuan and Taiwanese dollars.

The company’s foreign exchange exposures result primarily from sale of products in foreign currencies, foreign currency denominated purchases, employee-related and other costs of running operations in foreign countries and translation of balance sheet accounts denominated in foreign currencies. The company’s most significant net long exposure is to the euro. The company’s most significant net short exposures are to the Chinese yuan, Mexican peso and Philippine peso. Changes in foreign exchange rates could affect the company’s sales, costs, balance sheet values and earnings. The company uses netting and offsetting intercompany account management techniques to reduce known foreign currency exposures where possible and also, from time to time, utilizes derivative instruments to hedge certain foreign currency exposures deemed to be material.

39

Commodity Prices

The company uses various metals in the manufacturing of its products, including copper, zinc, tin, gold and silver. Prices of these commodities can and do fluctuate significantly, which can impact the company’s earnings. The most significant of these exposures is to copper, zinc, gold and silver, where at current prices and volumes, a 10% price change would affect annual pre-tax profit by approximately $1.6 million for copper, $0.6 million for zinc, $0.2 million for gold and $0.6 million for silver.

The cost of oil has fluctuated dramatically over the past several years. Consequently, there is a risk that a return to high prices for oil and electricity in 2016 could have a significant impact on the company’s transportation and utility expenses.

While the company is exposed to significant changes in certain commodity prices and foreign currency exchange rates, the company actively monitors these exposures and takes various actions to mitigate any negative impacts of these exposures.

40

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index		Page
Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements		42
Report of Independent Registered Public Accounting Firm – Consolidated Financial Statements		43
Report of Independent Registered Public Accounting Firm – Internal Control Over Financial Reporting		44
Consolidated Financial Statements
	Consolidated Balance Sheets	45
	Consolidated Statements of Net Income	46
	Consolidated Statements of Comprehensive Income	46
	Consolidated Statements of Cash Flows	47
	Consolidated Statements of Equity	48
Notes to Consolidated Financial Statements
	1. Summary of Significant Accounting Policies and Other Information	49
	2. Acquisition of Businesses	54
	3. Inventories	56
	4. Goodwill and Other Intangible Assets	56
	5. Other Investments	57
	6. Investment in Unconsolidated Affiliate	57
	7. Debt	58
	8. Financial Instruments and Risk Management	60
	9. Fair Value of Assets and Liabilities	60
	10. Coal Mining Liability	61
	11. Asset Impairments	62
	12. Benefit Plans	62
	13. Shareholders’ Equity	67
	14. Income Taxes	70
	15. Business Unit Segment Information 71	72
	16. Lease Commitments	75
	17. Earnings Per Share	75
	18. Selected Quarterly Financial Data (Unaudited)	77
	19. Subsequent Event	77

41

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Littelfuse, Inc.

We have audited the accompanying consolidated balance sheets of Littelfuse, Inc. (a Delaware corporation) and subsidiaries (the Company) as of January 2, 2016 and December 27, 2014, and the related consolidated statements of net income, comprehensive income, equity, and cash flows for each of the two years in the period ended January 2, 2016. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 15(a)(2). These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Littelfuse, Inc. and subsidiaries as of January 2, 2016 and December 27, 2014, and the results of their operations and their cash flows for each of the two years in the period ended January 2, 2016 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, the Company adopted new accounting guidance in 2015 and 2014, related to the presentation of deferred income taxes.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of January 2, 2016, based on criteria established in the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 1, 2016, expressed an unqualified opinion.

/s/ GRANT THORNTON LLP

Chicago, Illinois

March 1, 2016

42

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Littelfuse, Inc.

We have audited the accompanying consolidated statements of net income, comprehensive income, equity, and cash flows of Littelfuse, Inc. for the year ended December 28, 2013. Our audit also included the financial statement schedule listed in the Index at Item 15(a)(2)(i). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, Littelfuse Inc.’s consolidated results of its operations and its cash flows for the year ended December 28, 2013, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ Ernst & Young LLP

Chicago, Illinois

February 25, 2014

43

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Littelfuse, Inc.

We have audited the internal control over financial reporting of Littelfuse, Inc. (a Delaware corporation) and subsidiaries (the Company) as of January 2, 2016, based on criteria established in the 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of January 2, 2016, based on criteria established in the 2013 Internal Control - Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements of the Company as of and for the period ended January 2, 2016, and our report dated March 1, 2016, expressed an unqualified opinion on those financial statements.

/s/ GRANT THORNTON LLP

Chicago, Illinois

March 1, 2016

44

CONSOLIDATED BALANCE SHEETS

(In thousands of USD)	January 2, 2016			December 27, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	328,786		$	297,571
Short-term investments		4,179			4,302
Accounts receivable, less allowances (2015 - $17,487; 2014 - $19,418)		142,882			135,356
Inventories		98,629			97,391
Prepaid expenses and other current assets		8,959			13,904
Assets held for sale		—			5,500
Total current assets		583,435			554,024
Property, plant, and equipment:
Land		5,236			5,697
Buildings		71,383			64,609
Equipment		382,429			370,179
Accumulated depreciation and amortization		(296,480	)		(281,845	)
Net property, plant and equipment		162,568			158,640
Intangible assets, net of amortization:
Patents, licenses and software		20,221			23,640
Distribution network		16,490			19,428
Customer lists, trademarks and tradenames		54,912			60,605
Goodwill		189,767			196,256
Investments		15,197			12,056
Deferred income taxes		8,333			22,874
Other assets		14,058			23,303
Total assets	$	1,064,981		$	1,070,826
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	51,658		$	50,793
Accrued payroll		32,611			30,511
Accrued expenses		24,145			13,059
Accrued severance		3,798			790
Accrued income taxes		10,621			9,045
Current portion of accrued post-retirement benefits		—			11,768
Current portion of long-term debt		87,000			88,500
Total current liabilities		209,833			204,466
Long-term debt, less current portion		84,474			106,658
Deferred income taxes		8,014			11,076
Accrued post-retirement benefits		5,653			5,147
Other long-term liabilities		12,809			15,814
Shareholders’ equity:
Preferred stock, par value $0.01 per share: 1,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, 2015 –22,420,785; 2014 – 22,585,529		224			226
Treasury stock, at cost: 362,748 and 199,266 shares, respectively		(32,766	)		(18,724	)
Additional paid-in capital		259,553			243,844
Accumulated other comprehensive income		(45,673	)		(21,126	)
Retained earnings		562,717			523,302
Littelfuse, Inc. shareholders’ equity		744,055			727,522
Non-controlling interest		143			143
Total equity		744,198			727,665
Total liabilities and equity	$	1,064,981		$	1,070,826

See accompanying Notes to Consolidated Financial Statements.

45

CONSOLIDATED STATEMENTS OF NET INCOME

	Year Ended
(In thousands of USD, except per share amounts)	January 2, 2016			December 27, 2014			December 28, 2013
Net sales	$	867,864		$	851,995		$	757,853
Cost of sales		537,365			527,567			461,621
Gross profit		330,499			324,428			296,232
Selling, general and administrative expenses		153,714			146,975			132,657
Research and development expenses		30,802			31,122			24,415
Pension settlement expenses		29,928			—			—
Amortization of intangibles		11,898			12,501			9,279
Total operating expenses		226,342			190,598			166,351
Operating income		104,157			133,830			129,881
Interest expense		4,091			4,903			2,917
Impairment and equity in net loss of unconsolidated affiliate		—			—			10,678
Foreign exchange (gain) loss		(1,465	)		3,925			(3,303	)
Other expense (income), net		(5,417	)		(6,644	)		(4,646	)
Income before income taxes		106,948			131,646			124,235
Income taxes		24,482			32,228			35,451
Net income	$	82,466		$	99,418		$	88,784
Income per share:
Basic	$	3.65		$	4.41		$	3.98
Diluted	$	3.63		$	4.37		$	3.94
Weighted-average shares and equivalent shares outstanding:
Basic		22,565			22,543			22,315
Diluted		22,719			22,727			22,537

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended
(In thousands of USD )	January 2, 2016			December 27, 2014			December 28, 2013
Net income	$	82,466		$	99,418		$	88,784
Other comprehensive income (loss):
Pension liability adjustments (net of tax of $106, $6,308 and ($5,270), respectively)		(1,761	)		(12,475	)		3,739
Pension and postemployment reclassification adjustments, (net of tax of $746, $0 and $0, respectively)		1,530			—			—
Unrealized gain on investments		793			1,398			1,526
Reclassification of pension settlement costs to expense (net of tax of $11,742, $0 and $0, respectively)		21,124			—			—
Foreign currency translation adjustments		(46,231	)		(30,466	)		(1,396	)
Comprehensive income	$	57,921		$	57,875		$	92,653

See accompanying Notes to Consolidated Financial Statements.

46

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended
(In thousands of USD)	January 2, 2016			December 27, 2014			December 28, 2013
Operating activities
Net income	$	82,466		$	99,418		$	88,784
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		29,701			29,374			25,201
Amortization of intangibles		11,898			12,501			9,279
Impairment of assets		—			293			—
Provision for bad debts		164			130			289
Non-cash inventory charge		—			2,769			1,525
Net loss on pension settlement, net of tax		19,308			—			—
Impairment and equity in net loss of unconsolidated affiliate		—			—			10,678
Loss on sale of property, plant and equipment		1,253			1,042			92
Stock-based compensation		10,266			9,069			8,609
Excess tax benefit on share-based compensation		(1,891	)		(2,843	)		(4,054	)
Deferred income taxes		11,479			(4,488	)		6,640
Changes in operating assets and liabilities:
Accounts receivable		(14,377	)		(13,062	)		(16,683	)
Inventories		(3,577	)		(2,258	)		(5,486	)
Accounts payable		2,573			17,281			2,000
Accrued expenses (including post-retirement)		6,482			(1,577	)		(8,906	)
Accrued payroll and severance		5,883			2,360			8,032
Accrued taxes		(1,043	)		(549	)		(10,773	)
Prepaid expenses and other		5,241			3,681			2,140
Net cash provided by operating activities		165,826			153,141			117,367
Investing activities
Acquisitions of businesses, net of cash acquired		(4,558	)		(56,368	)		(144,382	)
Purchases of short-term investments		—			(4,331	)		(8,478	)
Purchase of cost method investment		(3,500	)		—			—
Proceeds from maturities of short-term investments		—			6,770			2,044
Decrease (increase) in entrusted loan receivable (see note 7)		7,811			(17,908	)		—
Purchases of property, plant and equipment		(44,019	)		(32,281	)		(34,953	)
Proceeds from sale of property, plant and equipment		102			125			176
Net cash used in investing activities		(44,164	)		(103,993	)		(185,593	)
Financing activities
Proceeds from debt		49,000			97,500			260,500
Payments of term debt		(8,750	)		(5,000	)		(1,250	)
Payments of revolving credit facility		(55,500	)		(135,000	)		(123,500	)
Proceeds from exercise of stock options		9,150			14,061			21,959
(Payments) proceeds from entrusted loan (see note 7)		(7,811	)		17,908			—
Debt issuance costs		(42	)		(107	)		(809	)
Cash dividends paid		(24,341	)		(21,175	)		(18,722	)
Excess tax benefit on share-based compensation		1,891			2,843			4,054
Purchases of common stock		(31,252	)		(14,283	)		—
Net cash (used in) provided by financing activities		(67,655	)		(43,253	)		142,232
Effect of exchange rate changes on cash and cash equivalents		(22,792	)		(13,516	)		(4,218	)
Increase (decrease) in cash and cash equivalents		31,215			(7,621	)		69,788
Cash and cash equivalents at beginning of year		297,571			305,192			235,404
Cash and cash equivalents at end of year	$	328,786		$	297,571		$	305,192

See accompanying Notes to Consolidated Financial Statements.

47

CONSOLIDATED STATEMENTS OF EQUITY

	Littelfuse, Inc. Shareholders’ Equity
(In thousands of USD)	Common Stock			Addl. Paid in Capital			Treasury Stock			Accum. Other Comp. Inc. (Loss)			Retained Earnings			Non-controlling Interest		Total
Balance at December 29, 2012	$	220		$	195,803		$	(60,496	)	$	16,548		$	435,340		$	143	$	587,558
Comprehensive income:
Net income for the year		—			—			—			—			88,784			—		88,784
Pension liability adjustments *		—			—			—			3,739			—			—		3,739
Unrealized gain on investments		—			—			—			1,526			—			—		1,526
Foreign currency translation adjustments		—			—			—			(1,396	)		—			—		(1,396	)
Comprehensive income																			92,653
Stock-based compensation		—			8,609			—			—			—			—		8,609
Withheld 32,671 shares on restricted share units for withholding taxes		—			—			(2,200	)		—			—			—		(2,200	)
Retirement of 1,576,757 shares of treasury stock		—			—			60,343			—			(60,343	)		—		—
Stock options exercised, including tax impact of ($2,940)		5			19,013			—			—			—			—		19,018
Cash dividends paid ($0.84 per share)		—			—			—			—			(18,722	)		—		(18,722	)
Balance at December 28, 2013	$	225		$	223,425		$	(2,353	)	$	20,417		$	445,059		$	143	$	686,916
Comprehensive income:
Net income for the year		—			—			—			—			99,418			—		99,418
Pension liability adjustments *		—			—			—			(12,475	)		—			—		(12,475	)
Unrealized gain on investments		—			—			—			1,398			—			—		1,398
Foreign currency translation adjustments		—			—			—			(30,466	)		—			—		(30,466	)
Comprehensive income																			57,875
Stock-based compensation		—			6,926			—			—			—			—		6,926
Withheld 19,439 shares on restricted share units for withholding taxes		—			—			(2,655	)		—			—			—		(2,655	)
Purchase of 161,751 shares of common stock		(2	)		(565	)		(13,716	)		—			—			—		(14,283	)
Stock options exercised, including tax impact of ($2,143)		3			14,058			—			—			—			—		14,061
Cash dividends paid ($0.94 per share)		—			—			—			—			(21,175	)		—		(21,175	)
Balance at December 27, 2014	$	226		$	243,844		$	(18,724	)	$	(21,126	)	$	523,302		$	143	$	727,665
Comprehensive income:
Net income for the year		—			—			—			—			82,466			—		82,466
Pension liability adjustments *		—			—			—			(1,761	)		—			—		(1,761	)
Pension settlement, including tax impact of ($11,742)		—			—			—			21,124			—			—		21,124
Pension and postemployment reclassification adjustments, including tax impact of ($746)		—			—			—			1,530			—			—		1,530
Unrealized gain on investments		—			—			—			793			—			—		793
Foreign currency translation adjustments		—			—			—			(46,231	)		—			—		(46,231	)
Comprehensive income																			57,921
Stock-based compensation		—			7,782			—			—			—			—		7,782
Withheld 28,286 shares on restricted share units for withholding taxes		—			—			(2,727	)		—			—			—		(2,727	)
Retirement of 214,609 shares of treasury stock		—			—			18,712			—			(18,712	)		—		—
Purchase of 350,000 shares of common stock		(4	)		(1,221	)		(30,027	)		—			—			—		(31,252	)
Stock options exercised, including tax impact of ($2,485)		2			9,148			—			—			—			—		9,150
Cash dividends paid ($1.08 per share)		—			—			—			—			(24,341	)		—		(24,341	)
Balance at January 2, 2016	$	224		$	259,553		$	(32,766	)	$	(45,671	)	$	562,715		$	143	$	744,198

*Including related tax impact (see Note 14).

See accompanying Notes to Consolidated Financial Statements.

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information

Nature of Operations: Littelfuse, Inc. and subsidiaries (the “company”) design, manufacture and sell circuit protection devices for use in the automotive, electronics and industrial markets throughout the world. In addition to the broadest and deepest portfolio of circuit protection products and solutions, the company offers a comprehensive line of highly reliable electromechanical and electronic switch and control devices for commercial and specialty vehicles and sensors for automobile safety systems, as well as protection relays and power distribution centers for the safe control and distribution of electricity.

Fiscal Year: The company’s fiscal years ended on January 2, 2016, December 27, 2014 and December 28, 2013. Fiscal year 2015 contained 53 weeks while fiscal years 2014 and 2013 each contained 52 weeks.

Basis of Presentation: The Consolidated Financial Statements include the accounts of Littelfuse, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The company’s Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America and include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the company exercises control.

Use of Estimates: The process of preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses and the accompanying notes. The company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in its evaluation, as considered necessary. Actual results could differ from those estimates.

Cash Equivalents: All highly liquid investments, with an original maturity of three months or less when purchased, are considered to be cash equivalents.

Short-Term and Long-Term Investments: The company has determined that certain of its investment securities are to be classified as available-for-sale. Available-for-sale securities are carried at fair value with the unrealized gains and losses reported as a component of “Accumulated Other Comprehensive Income (Loss).” Realized gains and losses and declines in unrealized value judged to be other-than-temporary on available-for-sale securities are included in other expense (income), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Short-term investments, which are primarily certificates of deposits, are carried at cost which approximates fair value.

Fair Value of Financial Instruments: The company’s financial instruments include cash and cash equivalents, accounts receivable, investments and long-term debt. The carrying values of such financial instruments approximate their estimated fair values.

Accounts Receivable: The company performs credit evaluations of customers’ financial condition and generally does not require collateral. Credit losses are provided for in the financial statements based upon specific knowledge of a customer’s inability to meet its financial obligations to the company. Historically, credit losses have consistently been within management’s expectations and have not been a material amount. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write-offs are recorded at the time a customer receivable is deemed uncollectible.

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information, continued

The company also maintains allowances against accounts receivable for the settlement of rebates and sales discounts to customers. These allowances are based upon specific customer sales and sales discounts as well as actual historical experience.

Inventories: Inventories are stated at the lower of cost or market (first in, first out method), which approximates current replacement cost. The company maintains excess and obsolete allowances against inventory to reduce the carrying value to the expected net realizable value. These allowances are based upon a combination of factors including historical sales volume, market conditions, lower of cost or market analysis and expected realizable value of the inventory.

Investment in Unconsolidated Affiliate: Investments in unconsolidated affiliates over which the company has significant influence over the investees’ operating and financing activities are accounted for under the equity method of accounting. Investments in affiliates over which the company does not have the ability to exert significant influence over the investees’ operating and financing activities are accounted for under the cost method.

Property, Plant and Equipment: Land, buildings and equipment are carried at cost. Depreciation is calculated using the straight-line method with useful lives of 21 years for buildings, seven to nine years for equipment, seven years for furniture and fixtures, five years for tooling and three years for computer equipment.

Goodwill and Indefinite-Lived Intangible Assets: The company annually tests goodwill and indefinite-lived intangible assets for impairment on the first day of its fiscal fourth quarter or at other dates if there is an event or change in circumstances that indicates the asset may be impaired. The company has eight reporting units for testing purposes. Management determines the fair value of each of its reporting units by using a discounted cash flow model (which includes forecasted five-year income statement and working capital projections, a market-based weighted average cost of capital and terminal values after five years) to estimate market value. In addition, the company compares its derived enterprise value on a consolidated basis to the company’s market capitalization as of its test date to ensure its derived value approximates the market value of the company when taken as a whole.

As of the most recent annual test conducted on September 27, 2015, the company concluded the fair value of each of the reporting units exceeded its carrying value of invested capital and therefore, no potential goodwill impairment existed. Specifically, the company noted that its headroom, defined as the excess of fair value over the carrying value of invested capital, was 148%, 95%, 188%, 218%, 76%, 26%, 12% and 198% for its electronics (non-silicon), electronics (silicon), passenger car products, commercial vehicle products, automotive sensor products, relay, custom and power fuse reporting units, respectively, at September 27, 2015. Certain key assumptions used in the annual test included a discount rate of 11.7% and a long-term growth rate of 3.0% which were used for all reporting units except for automotive sensor and relay which had a discount rate of 13.7% as a result of a 2.0% premium factor and custom products which had a discount rate of 14.7% as a result of a 3.0% premium factor.

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information, continued

In addition, the company performed a sensitivity test at September 27, 2015 that showed a 100 basis point increase in its discount rate or a 100 basis point decrease in the long-term growth rate for each reporting unit would not have changed the company’s conclusion that no potential goodwill impairment existed at September 27, 2015.

The company will continue to perform a goodwill and indefinite-lived intangible asset impairment test as required on an annual basis and on an interim basis, if certain impairment conditions exist. Factors the company considers important, which could result in changes to its estimates, include underperformance relative to historical or projected future operating results and declines in acquisitions and trading multiples. Due to the diverse end user base and non-discretionary product demand, the company does not believe its future operating results will vary significantly relative to its historical and projected future operating results.

Other Intangible Assets: Trademarks and tradenames are amortized using the straight-line method over estimated useful lives that have a range of five to 20 years. Patents, licenses and software are amortized using the straight-line method or an accelerated method over estimated useful lives that have a range of seven to 17 years. The distribution networks are amortized on either a straight-line or accelerated basis over estimated useful lives that have a range of three to 20 years. Other intangible assets are also tested for impairment when there is a significant event that may cause the asset to be impaired.

Environmental Liabilities: Environmental liabilities are accrued based on engineering studies estimating the cost of remediating sites. Expenses related to on-going maintenance of environmental sites are expensed as incurred. If actual or estimated probable future losses exceed the company’s recorded liability for such claims, the company would record additional charges during the period in which the actual loss or change in estimate occurred.

Pension and Other Post-retirement Benefits: Accounting for pensions requires estimating the future benefit cost and recognizing the cost over the employee’s expected period of employment with the company. Certain assumptions are required in the calculation of pension costs and obligations. These assumptions include the discount rate, salary scales and the expected long-term rate of return on plan assets. The discount rate is intended to represent the rate at which pension benefit obligations could be settled by purchase of an annuity contract. These assumptions are subject to change based on stock and bond market returns and other economic factors. Actual results that differ from the company’s assumptions are accumulated and amortized over future periods and therefore generally affect its recognized expense and accrued liability in such future periods. While the company believes that its assumptions are appropriate given current economic conditions and its actual experience, significant differences in results or significant changes in the company’s assumptions may materially affect its pension obligations and related future expense. During 2015, the company terminated the U.S. defined benefit pension plan which resulted in a settlement of the plan’s liabilities resulting in a pre-tax charge of $29.9 million. See Note 12 for additional information.

Reclassifications: Certain amounts presented in the 2014 financial statements have been reclassified to conform to the 2015 presentation - specifically a reclassification was made to the company’s current deferred tax assets from short-term to long-term. This reclassification resulted from the company’s early adoption of ASU 2015-17 “Balance Sheet Classification of Deferred Taxes (ASC 740, income taxes)” which requires all deferred taxes to be presented as long-term. The amount of current deferred tax assets that were reclassified to long-term deferred tax assets for the fiscal year 2014 was $17.5 million at December 27, 2014. This reclassification had no impact on net income, cash flows or shareholders’ equity.

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information, continued

Revenue Recognition: The company recognizes revenue on product sales in the period in which the sales process is complete. This generally occurs when persuasive evidence of an arrangement exists, products are shipped (FOB origin) to the customer in accordance with the terms of the sale, the risk of loss has been transferred, collectability is reasonably assured and the pricing is fixed and determinable.

At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The company’s distribution channels are primarily through direct sales and independent third party distributors.

Revenue and Billing: The company accepts orders from customers based on long term purchasing contracts and written sales agreements. Contract pricing and selling agreement terms are based on market factors, costs and competition. Pricing normally is negotiated as an adjustment (premium or discount) from the company’s published price lists. The customer is invoiced when the company’s products are shipped to them in accordance with the terms of the sales agreement.

Returns and Credits: Some of the terms of the company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization to reduce its price to its buyer. If the company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The company establishes reserves for this program based on historic activity and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

Return to Stock: The company has a return to stock policy whereby a customer with prior authorization from Littelfuse management can return previously purchased goods for full or partial credit. The company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.

Volume Rebates: The company offers incentives to certain customers to achieve specific quarterly or annual sales targets. If customers achieve their sales targets, they are entitled to rebates. The company estimates the future cost of these rebates and recognizes this estimated cost as a reduction to revenue as products are sold.

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information, continued

Allowance for Doubtful Accounts: The company evaluates the collectability of its trade receivables based on a combination of factors. The company regularly analyzes its significant customer accounts and, when the company becomes aware of a specific customer’s inability to meet its financial obligations, the company records a specific reserve for bad debt to reduce the related receivable to the amount the company reasonably believes is collectible. The company also records allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and past experience. Accounts receivable balances that are deemed to be uncollectible, are written off against the reserve on a case-by-case basis. Historically, the allowance for doubtful accounts has been adequate to cover bad debts. If circumstances related to specific customers change, the estimates of the recoverability of receivables could be further adjusted. However, due to the company’s diverse customer base and lack of credit concentration, the company does not believe its estimates would be materially impacted by changes in its assumptions.

Advertising Costs: The company expenses advertising costs as incurred, which amounted to $2.3 million in 2015, $2.8 million in 2014 and $1.6 million in 2013, and are included as a component of selling, general and administrative expenses.

Shipping and Handling Fees and Costs: Amounts billed to customers related to shipping and handling is classified as revenue. Costs incurred for shipping and handling of $7.0 million, $6.7 million and $6.5 million in 2015, 2014 and 2013, respectively, are classified in selling, general and administrative expenses.

Foreign Currency Translation/Remeasurement: The company’s foreign subsidiaries use the local currency or the U.S. dollar as their functional currency, as appropriate. Assets and liabilities are translated using exchange rates at the balance sheet date, and revenues and expenses are translated at weighted average rates. The amount of foreign currency gain or loss from remeasurement recognized in the income statement was a loss of $7.9 million in 2015, a loss of $4.6 million in 2014 and a gain of $5.2 million in 2013. Adjustments from the translation process are recognized in “Shareholders’ equity” as a component of “Accumulated other comprehensive income.”

Stock-based Compensation: The company recognizes compensation expense for the cost of awards of equity compensation using a fair value method. Benefits of tax deductions in excess of recognized compensation expense are reported as both operating and financing cash flows. See Note 13 for additional information on stock-based compensation.

Other Expense (Income), Net: Other expense (income), net consisting of interest income, royalties and non-operating income, was ($5.4 million), ($6.6 million) and ($4.6 million) of income in 2015, 2014, and 2013, respectively.

Income Taxes: The company accounts for income taxes using the liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using enacted tax rates in effect for the years in which the differences are expected to reverse. The company recognizes deferred taxes for temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Federal and state income taxes are provided on the portion of foreign income that is expected to be remitted to the U.S. and be taxable.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies and Other Information, continued

Accounting Pronouncements: In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2015-17 – Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies the balance sheet classification of deferred taxes. The new guidance requires that all deferred taxes be presented as noncurrent. The company has adopted the new guidance for the year ended January 2, 2016 with all prior periods presented retrospectively adjusted to conform to the new ASU.

In May 2014, the FASB amended prior authoritative guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements.

2. Acquisition of Businesses

The company accounts for acquisitions using the purchase method in accordance with ASC 805, “Business Combinations.” The results of operations of each acquisition have been included in the accompanying consolidated financial statements as of the dates of the acquisition. Acquisition-related costs associated with acquisition activity were $4.6 million, $0.5 million and $1.7 million for fiscal years 2015, 2014, and 2013, respectively and were recorded in Selling, general and administrative expenses.

Sigmar S.r.l

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”). The total purchase price for Sigmar is $5.4 million, net of cash acquired, subject to post-closing adjustments. The purchase also includes an earn-out clause of an additional payment of up to $0.6 million, subject to the achievement of certain milestones.

Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel and selective catalytic reduction (SCR) quality sensors, as well as diesel fuel heaters, solenoid valves and rotating oil filters for automotive and commercial vehicle applications. The acquisition further expands the company’s automotive sensor product line offerings within its Automotive business segment. The company funded the acquisition with available cash.

The following table sets forth the preliminary purchase price allocation for Sigmar acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values.

Sigmar preliminary purchase price allocation (in thousands):
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,060
Patents		2,845
Current liabilities		(1,704	)
Other non-current liabilities		(2,906	)
	$	5,633

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisition of Businesses, continued

All Sigmar goodwill and other assets and liabilities were recorded in the Automotive business unit segment and reflected in the Europe geographical area. The patents are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Sigmar’s products with the company’s existing automotive product offerings. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

SymCom

On January 3, 2014, the company acquired 100% of SymCom, Inc. (“SymCom”) for $52.8 million net of cash acquired. Located in Rapid City, South Dakota, SymCom provides overload relays and pump controllers primarily to the industrial market. The acquisition allows the company to strengthen its position in the relay products market by adding new products and new customers within its Industrial business unit segment. The company funded the acquisition with available cash and proceeds from credit facilities.

The following table sets forth the final purchase price allocation for SymCom acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values.

SymCom final purchase price allocation (in thousands):
Cash	$	325
Current assets, net		9,154
Property, plant and equipment		11,193
Goodwill		15,018
Trademarks		17,020
Patents		1,500
Other non-current assets		20
Current liabilities		(1,137	)
	$	53,093

All SymCom goodwill and other assets and liabilities were recorded in the Industrial business segment and reflected in the Americas geographical area. The trademarks are being amortized over 15 to 20 years. The patents are being amortized over 16 to 17 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining SymCom’s products with the company’s existing electrical product offerings. Goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company initially recorded a $2.6 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. During the first quarter of 2014, as a portion of this inventory was sold, cost of goods sold included a $1.4 million non-cash charge for this step-up.

During the second quarter of 2014, the inventory step-up valuation was finalized at $2.8 million which resulted in an additional $1.4 million non-cash charge to cost of goods sold for the second quarter of 2014. Pro forma financial information is not presented for the above acquisitions due to amounts not being materially different than actual results.

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. Inventories

The components of inventories at January 2, 2016 and December 27, 2014 are as follows (in thousands):

	2015		2014
Raw materials	$	33,599	$	29,756
Work in process		16,479		15,164
Finished goods		48,551		52,471
Total	$	98,629	$	97,391

4. Goodwill and Other Intangible Assets

The amounts for goodwill and changes in the carrying value by business unit segment are as follows at January 2, 2016 and December 27, 2014 (in thousands):

	2015		Additions (Reductions)(a)			Adjustments(c)			2014		Additions (Reductions)(b)		Adjustments(c)			2013
Electronics	$	58,246	$	(524	)	$	(1,740	)	$	60,510	$	1,654	$	(1,590	)	$	60,446
Automotive		80,262		1,994			(3,449	)		81,717		—		(3,264	)		84,981
Industrial		51,259		—			(2,770	)		54,029		14,920		(1,928	)		41,037
Total	$	189,767	$	1,470		$	(7,959	)	$	196,256	$	16,574	$	(6,782	)	$	186,464

^(a) Electronics reduction resulted from reclassification of goodwill to customer lists. Automotive addition of $2.0 million resulted from business acquisitions.

^(b) Electronics addition of $1.7 million and Industrial addition of $14.9 million in 2014 resulted from business acquisitions.

^(c) Adjustments reflect the impact of changes in foreign exchange rates.

There were no accumulated goodwill impairment losses at January 2, 2016, December 27, 2014 or December 28, 2013.

The company recorded amortization expense of $11.9 million in 2015, $12.5 million in 2014 and $9.3 million in 2013. The details of other intangible assets and related future amortization expense of existing intangible assets at January 2, 2016 and December 27, 2014 are as follows:

	2015						2014
(in thousands)	Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization		Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization
Patents, licenses and software(a)		11.6	$	61,297	$	41,076		11.7	$	62,378	$	38,738
Distribution network(a)		12.4		45,564		29,074		12.4		46,850		27,422
Customer lists, trademarks and tradenames(a)		13.0		81,233		30,534		13.2		80,821		25,246
Tradenames(b)		—		4,213		—		—		5,030		—
Total		12.4	$	192,307	$	100,684		12.5	$	195,079	$	91,406

^(a) Decrease to gross carrying value in 2015 primarily due to the impact of foreign currency translation adjustments partially offset by the preliminary Sigmar acquisition purchase price allocation discussed in Note 2.

^(b) Tradenames with indefinite lives.

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4. Goodwill and Other Intangible Assets, continued

Estimated amortization expense related to intangible assets with definite lives at January 2, 2016 is as follows (in thousands):

2016	$	11,162
2017		10,745
2018		10,628
2019		10,582
2020		10,582
2021 and thereafter		33,711
	$	87,410

5. Other Investments

The company’s other investments represent shares of Polytronics Technology Corporation Ltd. (“Polytronics”), a Taiwanese company and shares of Monolith Semiconductor, Inc. (“Monolith”), a Texas-based startup company.

Polytronics

The Polytronics investment was acquired as part of the Littelfuse GmbH acquisition. The company’s Polytronics shares held at the end of fiscal 2015 and 2014 represent approximately 7.2% of total Polytronics shares outstanding. The fair value of the Polytronics investment was €10.7 million (approximately $11.7 million) at January 2, 2016 and €9.9 million (approximately $12.1 million) at December 27, 2014. Included in 2015 other comprehensive income is an unrealized gain of $0.9 million, due to the increase in fair market value of the Polytronics investment. The remaining movement year over year was due to the impact of changes in exchange rates.

Monolith 

In December 2015, the company invested $3.5 million in the preferred stock of Monolith, a U.S. start-up company developing silicon carbide (SiC) technology, which represents approximately 12% of the common stock of Monolith on an as-converted basis. The company accounts for its investment in Monolith under the cost method with any changes in value recorded in other comprehensive income. The value of the Monolith investment was $3.5 million at January 2, 2016.

6. Investment in Unconsolidated Affiliate

Investments in unconsolidated entities over which the company has significant influence over the investees’ operating and financing activities are accounted for under the equity method of accounting. Investments in affiliates in which the company does not have such ability are accounted for under the cost method of accounting.

In April 2012, the company invested an additional $10.0 million in certain common and preferred stock of Shocking Technologies, Inc. (“Shocking”) increasing its previous investment interest in Shocking to $16.0 million or approximately 18.4%. In addition, in late-November 2012, the company provided an additional $2.0 million short-term secured loan to Shocking and determined that the company then had the ability to exert significant influence. As a result, the company began accounting for the investment in Shocking using the equity method. In accordance with ASC 323, the company retroactively recorded its proportional share of Shocking's operating losses, which amounted to approximately $4.0 million in 2012.

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Investment in Unconsolidated Affiliate, continued

Impairment

During the first quarter of 2013, the company fully impaired its investment in a loan receivable from Shocking owing to their filing for Chapter 7 bankruptcy on March 12, 2013. The impairment charge of approximately $10.7 million consisted of the remaining equity method investment of $8.7 million and a $2.0 million loan receivable, and reduced the carrying value of both the investment and loan receivable to zero at March 30, 2013.

During the fourth quarter of 2013, the company incurred a $6.1 million charge to income tax expense related to the company’s investment in Shocking which had been fully impaired and written off as described above. $3.3 million of this charge was pushed back to the first quarter of 2013 with the remaining $2.8 million (which related to the fourth quarter of 2012) recorded in the fourth quarter of 2013 as the correction of an immaterial error under ASC 250. This charge was determined to be a capital loss for tax purposes, instead of an ordinary loss as the company had previously determined in consultation with a third party expert.

7. Debt

The carrying amounts of debt at January 2, 2016 and December 27, 2014 are as follows (in thousands):

	2015		2014
Term loan	$	85,000	$	93,750
Revolving credit facility		77,000		83,500
Entrusted loan		9,474		17,908
Total debt		171,474		195,158
Less: Current maturities		87,000		88,500
Total long-term debt	$	84,474	$	106,658

Term Loan and Revolving Credit Facilities

On May 31, 2013, the company entered into a new credit agreement with J.P. Morgan Securities LLC for up to $325.0 million which consists of an unsecured revolving credit facility of $225.0 million and an unsecured term loan of $100.0 million. The credit agreement is for a five year period. At January 2, 2016, the company had available $197.9 million of borrowing capacity under the credit agreement at an interest rate of LIBOR plus 1.25%, or a total interest rate of 1.68% as of January 2, 2016.

The credit agreement replaced the company’s previous credit agreement dated June 13, 2011, which was terminated on May 31, 2013.

The company incurred debt issuance costs of $0.8 million which will be amortized over the life of the new credit agreement.

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Debt, continued

On January 30, 2014, the company increased the unsecured revolving credit facility entered into on May 31, 2013 by $50.0 million, thereby increasing the total revolver borrowing capacity from $225.0 million to $275.0 million. The company incurred debt issuance costs of $0.1 million which will be amortized over the life of the existing credit agreement.

This arrangement contains covenants that, among other matters, impose limitations on the incurrence of additional indebtedness, future mergers, sales of assets, payment of dividends and changes in control, as defined in the agreement. In addition, the company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At January 2, 2016, the company was in compliance with all covenants under the revolving credit facility.

The company assumed three credit lines with the acquisition of Hamlin totaling RMB 41.0 million (approximately $6.6 million) as of June 29, 2013 with expiration dates from August 23, 2013 through April 22, 2014. Two of these credit lines expired during the third quarter of 2013 and the remaining credit line expired during the second  quarter of 2014.

For the fiscal years ended January 2, 2016, December 27, 2014 and December 28, 2013, the company had $0.1, $0.8 and $0.8 million outstanding in letters of credit, respectively. No amounts were drawn under these lines of credit at January 2, 2016.

Entrusted Loan

During 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “Lender”) and Suzhou Littelfuse OVS Ltd. (the “Borrower”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 61.5 million (approximately $9.5 million) at January 2, 2016.

Interest paid on all company debt was approximately $4.1 million in 2015, $4.9 million in 2014 and $2.9 million in 2013.

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Financial Instruments and Risk Management

Occasionally, the company uses financial instruments to manage its exposures to movements in commodity prices, foreign exchange and interest rates. The use of these financial instruments modifies the company’s exposure to these risks with the goal of reducing the risk or cost to the company. The company does not use derivatives for trading purposes and is not a party to leveraged derivative contracts.

9. Fair Value of Assets and Liabilities

Applicable accounting literature establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Applicable accounting literature defines levels within the hierarchy based on the reliability of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level 2—Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker-traded transactions.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Investments

Investments in equity securities listed on a national market or exchange are valued at the last sales price. Such securities are further detailed in Note 5 and classified within Level 1 of the valuation hierarchy.

The company has an investment in Monolith as described in Note 5 to the Notes to Consolidated Financial Statements for which the value of $3.5 million represents the cost of the investment.

There were no changes during the year ended January 2, 2016 to the company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of January 2, 2016 and December 27, 2014, the company held no non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.      Fair Value of Assets and Liabilities, continued

The following table presents assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	12,056	$	—	$	—	$	12,056
Total	$	12,056	$	—	$	—	$	12,056

The company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable and long-term debt. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and accounts receivable approximate their fair values. The company’s long-term debt fair value approximates book value at January 2, 2016 and December 27, 2014.

10. Coal Mining Liability

Included in other long-term liabilities is an accrual related to former coal mining operations at Littelfuse GmbH (formerly known as Heinrich Industries, AG) for the amounts of €1.8 million ($2.0 million) and €1.9 million ($2.4 million) at January 2, 2016 and December 27, 2014, respectively.  Management, in conjunction with an independent third-party, performs an annual evaluation of the former coal mining operations in order to develop an estimate of the probable future obligations in regard to remediating the dangers (such as a shaft collapse) of abandoned coal mine shafts in the former coal mining operations. Management accrues for costs associated with such remediation efforts based on management's best estimate when such costs are probable and reasonably able to be estimated. The ultimate determination can only be done after respective investigations because the concrete conditions are mostly unknown at this time. The accrual is not discounted as management cannot reasonably estimate when such remediation efforts will take place.

61

NOTES TO CONSOLIDATED FIN     ANCIAL STATEMENTS

11. Asset Impairments

The company recorded no impairments of assets during the year ended January 2, 2016.

For the year ended December 27, 2014, the company recorded an asset impairment charge of approximately $0.3 million within selling, general and administrative expenses. This charge reflects the write-down of assets from project cancellations. The charge was recognized as an “other” charge for segment reporting purposes. The carrying values of the company’s assets held for sale were $0.0 million and $5.5 million for the previously closed manufacturing facility in Des Plaines, Illinois as of January 2, 2016 and December 27, 2014, respectively.

12. Benefit Plans

The company previously had a company-sponsored defined benefit pension plan, the Littelfuse Inc. Retirement Plan, which covered certain of its North American employees. The amount of the retirement benefit was based on years of service and final average pay. The plan also provided a temporary supplemental retirement income benefit to help retirees pay the cost of post-retirement medical coverage if the retiree has reached age 62 and has provided at least ten years of service prior to retirement. Such benefits generally cease once the retiree attains age 65. The plan was frozen in 2009 and terminated in 2015 as described below.

The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Singapore and the Philippines. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

Littelfuse Inc. Retirement Plan Termination

The company received approval from the IRS on April 14, 2015 on its Application for Determination for Terminating Plan to terminate the U.S. defined benefit pension plan, the Littelfuse Inc. Retirement Plan, effective July 30, 2014. All plan liabilities were settled (either via lump sum payout or purchase of a group annuity contract) in the third quarter of 2015. A cash contribution of $9.1 million was made to the U.S. defined benefit plan’s trust in the third quarter of 2015 to fully fund the plan on a buyout basis, and the eventual settlement of the plan’s liabilities triggered a settlement charge of $30.2 million in the third quarter of 2015. In the fourth quarter of 2015 there was an adjustment to the price of the annuity contract which resulted in a refund of premium to the company of $0.3 million. This refund of premium, effectively a re-measurement gain, was recognized in the fourth quarter of 2015 as a dollar-for-dollar adjustment to the $30.2 million earnings charge recognized in the third quarter of 2015, resulting in a final settlement loss of $29.9 million for the fiscal year ended January 2, 2016.

Total pension expense was $32.4 million, $0.3 million and $0.8 million in 2015, 2014 and 2013, respectively. The increase in pension expense in 2015 primarily resulted from the termination and settlement of the U.S. plan. The decrease in pension expense in 2014 resulted from returns on assets exceeding interest and service costs.

62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Benefit Plans, continued

Benefit plan related information is as follows:

	2015									2014
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	105,759		$	52,740		$	158,499		$	84,422		$	50,331		$	134,753
Service cost		750			824			1,574			600			925			1,525
Interest cost		3,093			1,735			4,828			3,884			2,060			5,944
Net actuarial loss (gain)		(9,127	)		648			(8,479	)		22,025			5,652			27,677
Benefits paid from the trust		(100,475	)		(1,732	)		(102,207	)		(5,172	)		(2,525	)		(7,697	)
Benefits paid directly by company		—			(410	)		(410	)		—			(155	)		(155	)
Curtailments and settlements		—			(294	)		(294	)		—			—			—
Effect of exchange rate movements		—			(3,229	)		(3,229	)		—			(3,548	)		(3,548	)
Benefit obligation at end of year	$	—		$	50,282		$	50,282		$	105,759		$	52,740		$	158,499
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	93,991		$	47,593		$	141,584		$	83,748		$	42,477		$	126,225
Actual return on plan assets		(2,375	)		389			(1,986	)		10,416			5,141			15,557
Employer contributions		8,859			1,072			9,931			5,000			5,596			10,596
Benefits paid		(100,475	)		(1,732	)		(102,207	)		(5,173	)		(2,525	)		(7,698	)
Effect of exchange rate movements		—			(2,693	)		(2,693	)		—			(3,096	)		(3,096	)
Fair value of plan assets at end of year		—			44,629			44,629			93,991			47,593			141,584
Net amount recognized/(unfunded status)	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability	$	—		$	—		$	—		$	(11,768	)	$	—		$	(11,768	)
Accrued benefit liability		—			(5,653	)		(5,653	)		—			(5,147	)		(5,147	)
Total liability recognized	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Accumulated other comprehensive loss	$	—		$	9,383		$	9,383		$	34,801		$	7,671		$	42,472

Amounts recognized in accumulated other comprehensive income (loss), pre-tax consist of:

	2015						2014
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472
Prior service (cost)		—		—		—		—		—		—
Net amount recognized /occurring, pre-tax	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472

63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Benefit Plans, continued

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2016 is approximately $0.3 million.

	U.S.									Foreign
(In thousands)	2015			2014			2013			2015			2014			2013
Components of net periodic benefit cost:
Service cost	$	750		$	600		$	600		$	824		$	925		$	744
Interest cost		3,093			3,884			3,565			1,735			2,060			1,376
Expected return on plan assets		(2,749	)		(5,646	)		(5,360	)		(2,346	)		(2,292	)		(1,207	)
Amortization of prior service (credit)		—			—			—			—			—			—
Amortization of losses		870			549			942			221			216			130
Total cost (credit) of the plan for the year		1,964			(613	)		(253	)		434			909			1,043
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit cost (credit)		1,964			(613	)		(253	)		434			909			1,043
Settlement loss		29,928			—			—			—			—			—
Total expense (income) for the year	$	31,892		$	(613	)	$	(253	)	$	434		$	909		$	1,043

Weighted average assumptions used to determine net periodic benefit cost for the years 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	2015			2014			2013			2015			2014			2013
Discount rate		3.9	%		4.8	%		3.9	%		3.7	%		3.7	%		4.5	%
Expected return on plan assets		6.8	%		6.8	%		6.8	%		5.1	%		4.9	%		4.8	%
Compensation increase rate		—			—			—			5.3	%		3.8	%		3.6	%
Measurement dates	9/30/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

The accumulated benefit obligation for the U.S. defined benefit plan was $0.0 million and $105.8 million at January 2, 2016 and December 27, 2014, respectively. The accumulated benefit obligation for the foreign plans was $46.2 million and $48.9 million at January 2, 2016 and December 27, 2014, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	2015			2014			2013			2015			2014			2013
Discount rate		3.9	%		3.9	%		4.8	%		3.8	%		3.7	%		4.5	%
Compensation increase rate		—			—			—			6.2	%		5.3	%		3.8	%
Measurement dates	12/31/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Benefit Plans, continued

Expected benefit payments to be paid to participants for the fiscal year ending are as follows (in thousands):

	Expected
	Benefit
	Payments
Year	(Foreign)
2016	1,964
2017	2,012
2018	2,032
2019	2,065
2020	2,101
2021-2025	11,831

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical returns by type of investment, the company has assumed that the expected long-term rate of return will be 5.1% on foreign plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:

	U.S. Asset Allocation					Foreign Asset Allocation
		2015*		2014			2015		2014
Equity securities		0	%	0	%		30	%	30	%
Debt securities		0	%	91	%		65	%	68	%
Cash		0	%	9	%		5	%	2	%
		0	%	100	%		100	%	100	%

* The U.S. pension plan was terminated during the third quarter of 2015 as described above.

65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Benefit Plans, continued

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	12,801	$	—	$	12,801
Philippine Stock		836		—		—		836
Fixed income:
Investment grade corporate bond funds		6,807		—		—		6,807
Over 15y Gilts Index Fund		—		3,428		—		3,428
Active Corp Bond – Over 10 Yr Fund		—		6,440		—		6,440
Over 5y Index-Linked Gilts Fund		—		10,248		—		10,248
Philippine Long Govt Securities		1,227		—		—		1,227
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		2,061		—		—		2,061
Total pension plan assets	$	11,712	$	32,917	$	—	$	44,629

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	13,168	$	—	$	13,168
Philippine Stock		1,069		—		—		1,069
Fixed income:
Long U.S. Credit Corp Index Fund		—		42,911		—		42,911
Long U.S. Govt Bond Index Fund		—		24,116		—		24,116
Intermediate U.S. Govt Bond Index Fund		—		18,884		—		18,884
Investment grade corporate bond funds		8,118		—		—		8,118
Over 15y Gilts Index Fund		—		3,814		—		3,814
Active Corp Bond – Over 10 Yr Fund		—		7,065		—		7,065
Over 5y Index-Linked Gilts Fund		—		11,352		—		11,352
Philippine Long Govt Securities		1,059		—		—		1,059
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		9,247		—		—		9,247
Total pension plan assets	$	20,274	$	121,310	$	—	$	141,584

66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

12. Benefit Plans, continued

Defined Contribution Plans

The company also maintains a 401(k) savings plan covering substantially all U.S. employees. The company matches 100% of the employee’s annual contributions for the first 4% of the employee’s eligible compensation. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $2.8 million, $2.1 million and $1.7 million in each of the years 2015, 2014 and 2013, respectively.

The company has a non-qualified Supplemental Retirement and Savings Plan. The company will provide additional retirement benefits for certain management employees and named executive officers by allowing participants to contribute up to 90% of their annual compensation with matching contributions of 4% and 5% of the participant’s annual compensation in excess of the IRS compensation limits.

The company previously provided additional retirement benefits for certain key executives through its unfunded defined contribution Supplemental Executive Retirement Plan (“SERP”). The company amended the SERP during 2009 to freeze contributions and set the annual interest rate credited to the accounts until distributed at the five-year Treasury constant maturity rate. The charge to expense for the SERP plan amounted to $0.1 million in 2015 and less than $0.1 million in each of 2014 and 2013.

13. Shareholders’ Equity

Equity Plans: The company has equity-based compensation plans authorizing the granting of stock options, restricted shares, restricted share units, performance shares and other stock rights of employees and directors. As of January 2, 2016, there were approximately 0.6 million shares available for issuance of future awards under the company’s equity-based compensation plans.

Stock options granted prior to 2002 vested over a five-year period and are exercisable over a ten-year period commencing from the date of vesting. The stock options granted in 2002 through February 2005 vested over a five-year period and are exercisable over a ten-year period commencing from the date of the grant. Stock options granted after February 2005 vest over a three, four or five-year period and are exercisable over either a seven or ten-year period commencing from the date of the grant. Restricted shares and share units granted by the company vest over three to four years.

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Shareholders’ Equity, continued

The following table provides a reconciliation of outstanding stock options for the fiscal year ended January 2, 2016.

	Shares Under Option			Weighted Average Price		Weighted Average Remaining Contract Life (Years)		Aggregate Intrinsic Value (000’s)
Outstanding December 27, 2014		421,862		$	67.88
Granted		145,140			96.18
Exercised		(95,548	)		48.74
Forfeited		(550	)		29.68
Outstanding January 2, 2016		470,904			80.53		4.8	$	12,470
Exercisable January 2, 2016		199,472			66.23		3.6		8,135

The following table provides a reconciliation of non-vested restricted share and share unit awards for the fiscal year ended January 2, 2016.

	Shares			Weighted Average Grant-Date Fair Value
Nonvested December 27, 2014		188,998		$	78.91
Granted		103,002			94.10
Vested		(88,901	)		73.59
Forfeited		(8,638	)		80.40
Nonvested January 2, 2016		194,461			89.32

The total intrinsic value of options exercised during 2015, 2014 and 2013 was $5.0 million, $9.6 million, and $15.3 million, respectively. The total fair value of shares vested was $8.1 million, $7.6 million, and $6.5 million for 2015, 2014 and 2013, respectively. The total amount of share-based liabilities paid was $0.4 million, $0.3 million and $0.1 million for 2015, 2014 and 2013, respectively.

The company recognizes compensation cost of all share-based awards as an expense on a straight-line basis over the vesting period of the awards. At January 2, 2016, the unrecognized compensation cost for options, restricted shares and performance shares was $13.2 million before tax, and will be recognized over a weighted-average period of 1.9 years. Compensation cost included as a component of selling, general and administrative expense for all equity compensation plans discussed above was $10.7 million, $9.4 million and $8.9 million for 2015, 2014 and 2013, respectively. The total income tax benefit recognized in the Consolidated Statements of Net Income was $3.7 million, $3.3 million and $3.2 million for 2015, 2014 and 2013, respectively.

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Shareholders’ Equity, continued

The company uses the Black-Scholes option valuation model to determine the fair value of awards granted. The weighted average fair value of and related assumptions for options granted are as follows:

	2015			2014			2013
Weighted average fair value of options granted	$	21.99		$	26.25		$	23.90
Assumptions:
Risk-free interest rate		1.25	%		1.67	%		0.70	%
Expected dividend yield		1.04	%		0.93	%		1.20	%
Expected stock price volatility		28.0	%		33.0	%		45.0	%
Expected life of options (years)		4.6			4.6			5.1

Expected volatilities are based on the historical volatility of the company’s stock price. The expected life of options is based on historical data for options granted by the company. The risk-free rates are based on yields available at the time of grant on U.S. Treasury bonds with maturities consistent with the expected life assumption.

Accumulated Other Comprehensive Income (Loss) (AOCI): The following table sets forth the changes in the components of AOCI by component for fiscal years 2015, 2014 and 2013 (in thousands):

	Pension liability adjustments (a)			Gain on investments (b)		Foreign currency translation adjustment			Accumulated other comprehensive income (loss)
Balance at December 28, 2013	$	(17,140	)	$	9,393	$	28,164		$	20,417
2014 activity		(12,475	)		1,398		(30,466	)		(41,543	)
Balance at December 27, 2014		(29,615	)		10,791		(2,302	)		(21,126	)
2015 activity		20,893			793		(46,231	)		(24,545	)
Balance at January 2, 2016	$	(8,722	)	$	11,584	$	(48,533	)	$	(45,671	)

(a) Net of tax of $661, $12,587, and $6,549 for 2015, 2014 and 2013, respectively.

(b) Net of tax of $0, $0 and $0 for 2015, 2014 and 2013, respectively.

Preferred Stock: The Board of Directors may authorize the issuance of preferred stock from time to time in one or more series with such designations, preferences, qualifications, limitations, restrictions and optional or other special rights as the Board may fix by resolution.

The Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2015 to April 30, 2016. The company repurchased 350,000 of its shares in fiscal 2015 and 650,000 shares remain available for purchase under the initial program as of January 2, 2016.

69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes

Domestic and foreign income (loss) before income taxes is as follows (in thousands):

	2015		2014		2013
Domestic	$	1,313	$	35,264	$	20,254
Foreign		105,635		96,382		103,982
Income before income taxes	$	106,948	$	131,646	$	124,236

Federal, state and foreign income tax (benefit) expense consists of the following (in thousands):

Current:
Federal	$	(6,686	)	$	8,003		$	8,265
State		2,078			1,275			2,084
Foreign		17,611			27,438			18,462
Subtotal		13,003			36,716			28,811
Deferred:
Federal and State		11,330			(1,513	)		3,251
Foreign		149			(2,975	)		3,389
Subtotal		11,479			(4,488	)		6,640
Provision for income taxes	$	24,482		$	32,228		$	35,451

The current federal tax benefit for 2015 includes an $11.7 million benefit reclassified from AOCI as a result of the company’s termination of the U.S. defined benefit pension plan as described in Note 12 of the Notes to Consolidated Financial Statements included in this report.

A reconciliation between income taxes computed on income before income taxes at the federal statutory rate and the provision for income taxes is provided below (in thousands):

	2015			2014			2013
Tax expense at statutory rate of 35%	$	37,432		$	46,076		$	43,481
State and local taxes, net of federal tax benefit		1,907			1,186			1,076
Foreign income tax rate differential		(19,853	)		(14,981	)		(15,497	)
Capital loss valuation allowance		—			—			6,085
Tax on unremitted earnings		—			—			(349	)
Mexico manufacturing operations restructuring		4,841			—			—
Nondeductible professional fees		1,011			—			—
Other, net		(856	)		(53	)		655
Provision for income taxes	$	24,482		$	32,228		$	35,451

70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes, continued

Deferred income taxes are provided for the tax effects of temporary differences between the financial reporting bases and the tax bases of the company’s assets and liabilities. Significant components of the company’s deferred tax assets and liabilities at January 2, 2016 and December 27, 2014, are as follows (in thousands):

	2015			2014
Deferred tax assets:
Accrued expenses	$	19,738		$	27,088
Foreign tax credit carryforwards		1,529			5,299
AMT credit carryforwards		—			167
Accrued restructuring		1,115			124
Capital losses		4,557			4,557
Domestic and foreign net operating loss carryforwards		684			525
Gross deferred tax assets		27,623			37,760
Less: Valuation allowance		(4,557	)		(4,557	)
Total deferred tax assets		23,066			33,203
Deferred tax liabilities:
Tax depreciation and amortization in excess of book		22,747			21,405
Total deferred tax liabilities		22,747			21,405
Net deferred tax assets	$	319		$	11,798

The deferred tax asset valuation allowance is related to a U.S. capital loss carryover which is not expected to be realized. The remaining domestic and foreign net operating losses either have no expiration date or are expected to be utilized prior to expiration. The foreign tax credit carryforwards begin to expire in 2019. The company paid income taxes of approximately $23.3 million, $26.6 million and $30.4 million in 2015, 2014 and 2013, respectively.

U.S. income taxes were not provided on a cumulative total of approximately $367.9 million of undistributed earnings for certain non-U.S. subsidiaries as of January 2, 2016, and accordingly, no deferred tax liability has been established relative to these earnings. The determination of the deferred tax liability associated with the distribution of these earnings is not practicable. The company has three subsidiaries in China on “tax holidays.” The tax holidays begin to expire in 2017. The company expects to be granted extensions. Such tax holidays contributed approximately $2.6 million in tax benefits ($0.11 per diluted share) during 2015 with similar amounts expected in future years while tax holidays are in effect.

71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

14. Income Taxes, continued

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of January 2, 2016, December 27, 2014 and December 28, 2013 is as follows (in thousands):

Balance at December 28, 2013	$	112
Balance at December 27, 2014		112
Increases/decreases for tax positions taken in the current year		—
Additions for tax positions taken in prior years		—
Settlements		—
Lapses of statute of limitations		—
Other		(10	)
Balance at January 2, 2016	$	102

The amount of unrecognized tax benefits at January 2, 2016 was approximately $0.1 million. Of this total, approximately $0.1 million represents the amount of tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The company expects a decrease in unrecognized tax benefits in the next 12 months of $0.1 million upon concluding a German tax examination. None of the positions included in unrecognized tax benefits are related to tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. The U.S. federal statute of limitations remains open for 2012 onward. Foreign and U.S. state statute of limitations generally range from three to seven years. During 2015, the company received an examination notice from the Illinois state taxing authority for the 2012 and 2013 tax years as well as the Ohio state taxing authority for the 2012 to 2014 tax years. In February 2016, the company received an examination notice from the Internal Revenue Service for the 2014 tax year. The company is currently under examination in Germany for tax years 2008 through 2010. The company does not expect to recognize a significant amount of additional tax expense as a result of concluding the state, U.S. federal or German tax examinations.

The company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense.

15. Business Unit Segment Information

An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the company’s President and Chief Executive Officer (“CEO”).

The company reports its operations by the following business unit segments: Electronics, Automotive and Industrial.

● Electronics. Provides circuit protection components and expertise to leading global manufacturers of a wide range of electronic products including mobile phones, computers, LCD TVs, telecommunications equipment, medical devices, lighting products and white goods. The Electronics business segment has the broadest product offering in the industry including fuses and protectors, positive temperature coefficient (“PTC”) resettable fuses, varistors, polymer electrostatic discharge (“ESD”) suppressors, discrete transient voltage suppression (“TVS”) diodes, TVS diode arrays and protection thyristors, gas discharge tubes, power switching components and fuseholders, blocks and related accessories.

72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Business Unit Segment Information, continued

● Automotive. Provides circuit protection products to the worldwide automotive original equipment manufacturers (“OEM”) and parts distributors of passenger automobiles, trucks, buses and off-road equipment. The company also sells its fuses in the automotive replacement parts market. Products include blade fuses, high current fuses, battery cable protectors and varistors.

● Industrial (formerly Electrical). Provides circuit protection products for industrial and commercial customers. Products include power fuses and other circuit protection devices that are used in commercial and industrial buildings and large equipment such as HVAC systems, elevators and machine tools.

Each of the operating segments is directly responsible for sales, marketing and research and development. Manufacturing, purchasing, logistics, customer service, finance, information technology and human resources are shared functions that are allocated back to the three operating segments. The CEO allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss), but does not evaluate the operating segments using discrete balance sheet information.

Sales, marketing and research and development expenses are charged directly into each operating segment. All other functions are shared by the operating segments and expenses for these shared functions are allocated to the operating segments and included in the operating results reported below. The company does not report inter-segment revenue because the operating segments do not record it. The company does not allocate interest and other income, interest expense, equity in loss of unconsolidated affiliate, or taxes to operating segments. Although the CEO uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except as discussed above, the accounting policies for segment reporting are the same as for the company as a whole.

The company has provided this business unit segment information for all comparable prior periods. Segment information is summarized as follows (in thousands):

	2015		2014		2013
Net sales
Electronics	$	405,497	$	410,065	$	367,052
Automotive		339,957		325,415		267,207
Industrial		122,410		116,515		123,594
Total net sales	$	867,864	$	851,995	$	757,853
Depreciation and amortization
Electronics	$	22,936	$	22,177	$	20,735
Automotive		13,437		14,204		9,928
Industrial		5,268		5,494		3,817
Total depreciation and amortization	$	41,641	$	41,875	$	34,480

73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Business Unit Segment Information, continued

(Table continued from prior page.)
	2015			2014			2013
Operating income (loss)
Electronics	$	78,194		$	86,981		$	69,559
Automotive		53,086			45,086			39,170
Industrial		18,094			10,674			24,363
Other (1)		(45,217	)		(8,911	)		(3,211	)
Total operating income		104,157			133,830			129,881
Interest expense		4,091			4,903			2,917
Impairment and equity in net loss of unconsolidated affiliate (2)		—			—			10,678
Foreign exchange loss (gain)		(1,465	)		3,925			(3,303	)
Other expense (income), net		(5,417	)		(6,644	)		(4,646	)
Income before income taxes	$	106,948		$	131,646		$	124,235

(1) Included in “Other” Operating income (loss) for 2015 are costs related to the transfer of the company’s reed switch manufacturing operations from its Lake Mills, Wisconsin and Suzhou, China locations to the Philippines ($5.2 million in Cost of sales (“COS”)), acquisition related fees ($4.6 million included in Selling, general and administrative expenses (“SG&A”)), pension settlement and other costs ($31.9 million in SG&A), internal legal restructuring costs ($3.6 million in SG&A) and (($0.2 million) of other in SG&A).

Included in “Other” Operating income (loss) for 2014 are acquisition related fees ($0.4 million included in SG&A), non-cash charges for the sale of inventory that had been stepped-up to fair value at the acquisition date of SymCom ($2.8 million included in COS (See Note 2)), severance charges ($2.7 million in COS and $0.5 million in SG&A), internal legal restructuring costs ($2.2 million in SG&A) and asset impairments ($0.2 million in Research and development and $0.1 million in SG&A). 

Included in “Other” Operating income (loss) for 2013 are acquisition related fees ($1.7 million included in SG&A) and non-cash charges for the sale of inventory that had been stepped-up to fair value at the acquisition date of Hamlin ($1.5 million included in COS). 

(2) During the first quarter of 2013, the company recorded approximately $10.7 million related to the impairment of Shocking Technologies. (See Note 6).

The company’s significant net sales, long-lived assets and additions to long-lived assets by country for the fiscal years ended 2015, 2014 and 2013 are as follows (in thousands):

	2015		2014		2013
Net sales
United States	$	344,305	$	313,762	$	274,666
China		193,792		189,191		158,494
Other countries		329,767		349,042		324,693
Total net sales	$	867,864	$	851,995	$	757,853
Long-lived assets
United States	$	23,965	$	34,179	$	27,294
China		37,241		40,981		45,843
Canada		10,488		12,899		14,429
Other countries		90,874		70,581		62,607
Total long-lived assets	$	162,568	$	158,640	$	150,173

74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15. Business Unit Segment Information, continued

	2015		2014		2013
Additions to long-lived assets
United States	$	8,609	$	9,134	$	4,644
China		9,710		7,265		7,864
Canada		506		555		2,280
Other countries		25,194		15,327		20,165
Total additions to long-lived assets	$	44,019	$	32,281	$	34,953

For the year ended January 2, 2016, approximately 60% of the company’s net sales were to customers outside the United States (exports and foreign operations) including 22% to China. No single customer accounted for more than 10% of net sales during the last three years.

16. Lease Commitments

The company leases certain office and warehouse space as well as certain machinery and equipment under non-cancellable operating leases. Rent expense under these leases was approximately $11.1 million in 2015, $8.9 million in 2014 and $8.9 million in 2013.

Rent expense is recognized on a straight-line basis over the term of the leases. The difference between straight-line basis rent and the amount paid has been recorded as accrued lease obligations. The company also has leases that have lease renewal provisions. As of January 2, 2016, all operating leases outstanding were with third parties. The company did not have any capital leases as of January 2, 2016.

Future minimum payments for all non-cancellable operating leases with initial terms of one year or more at January 2, 2016 are as follows (in thousands):

2016	$	8,886
2017		5,227
2018		3,984
2019		3,358
2020		3,163
2021 and thereafter		10,021
	$	34,639

17. Earnings Per Share

As of January 2014, the company no longer had “participating securities” as defined under ASC 260. As such, the company now calculates its earnings per share using the treasury method. All of the previous participating securities that resulted in the company using the two-class method have become fully vested or have otherwise expired.

In 2013, the company calculated its earnings per share using the two-class method which included an earnings allocation formula that determined earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. Previously, the company’s reported net earnings were reduced by the amount allocated to participating securities to arrive at the earnings allocated to common stock shareholders for purposes of calculating earnings per share under the two-class method.

75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. Earnings Per Share, continued

Under the previous two-class method calculation, the dilutive effect of participating securities was calculated using the more dilutive of the treasury stock or the two-class method. The company previously determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation was adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method:

(In thousands, except per share amounts)	2015		2014		2013
Net income as reported	$	82,466	$	99,418	$	88,784
Less: Distributed earnings available to participating securities		—		—		(35	)
Less: Undistributed earnings available to participating securities		—		—		(16	)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Add: Undistributed earnings allocated to participating securities		—		—		16
Less: Undistributed earnings reallocated to participating securities		—		—		(16	)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Denominator for basic earnings per share —
Weighted-average shares		22,565		22,543		22,315
Effect of dilutive securities:
Common stock equivalents		154		184		222
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions		22,719		22,727		22,537
Basic earnings per share	$	3.65	$	4.41	$	3.98
Diluted earnings per share	$	3.63	$	4.37	$	3.94

The following potential shares of common stock attributable to stock options were excluded from the earnings per share calculation because their effect would be anti-dilutive: 113,130 in 2015; 43,693 in 2014; and 96,401 in 2013.

76

NOTES TOCONSOLIDATEDFINANCIAL STATEMENTS

18. Selected Quarterly Financial Data (Unaudited)

The quarterly periods listed in the table below for 2015 are for the 14-weeks ended January 2, 2016 and the 13-weeks ended September 26, 2015, June 27, 2015 and March 28, 2015, respectively. The quarterly periods for 2014 are for the 13-weeks ended December 27, 2014, September 27, 2014, June 28, 2014 and March 29, 2014, respectively.

(In thousands, except per share data)

	2015								2014
	4Qa		3Qb		2Qc		1Qd		4Qe		3Qf		2Qg		1Qh
Net sales	$	220,020	$	215,510	$	222,021	$	210,313	$	206,620	$	217,608	$	220,908	$	206,859
Gross profit		82,706		86,182		85,281		76,330		75,559		87,380		82,995		78,494
Operating income		29,854		8,584		36,171		29,548		26,391		40,130		33,719		33,590
Net income		22,463		11,324		28,684		19,995		19,511		29,940		24,578		25,389
Net income per share:
Basic	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.33	$	1.09	$	1.13
Diluted	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.32	$	1.08	$	1.12

a – In the fourth quarter of 2015, the company recorded $2.1 million related to the company’s transfer of its reed switch manufacturing operations from the U.S. and China to the Philippines, ($0.1) million related to the reorganization of its internal legal structure, $4.0 million in acquisition costs, ($0.3) million in pension settlement refunds (See Note 12) and ($0.3) million in other.

b – In the third quarter of 2015, the company recorded $1.2 million related to the reed switch manufacturing transfer as noted above, $0.9 million related to the company’s reorganization of its internal legal structure as noted above, $0.3 million in acquisition costs, $30.8 million in pension settlement and wind-up costs (See Note 12) and $0.1 million in other.

c – In the second quarter of 2015, the company recorded $0.9 million related to the reed switch manufacturing transfer as noted above, $1.7 million related to the company’s reorganization of its internal legal structure as noted above, $0.2 million in acquisition costs, and $0.7 million in pension wind-up costs.

d – In the first quarter of 2015, the company recorded $1.0 million related to the reed switch manufacturing transfer as noted above, $1.2 million in charges related to the reorganization of its internal legal structure as noted above, $0.2 million in acquisition costs, and $0.7 million in pension wind-up costs.

e – In the fourth quarter of 2014, the company recorded $2.2 million in charges related to severance and to the company’s reorganization of its internal legal structure as noted above. The company also recorded $0.3 million in acquisition costs and $0.3 million in impairment costs.

f – In the third quarter of 2014, the company recorded $1.1 million in charges related to the company’s reorganization of its internal legal structure, as noted above.

g – In the second quarter of 2014, the company recorded a $1.4 million non-cash charge related to the step-up of inventory from the SymCom acquisition (See Note 2), $2.0 million in severance charges and $0.2 million in acquisition costs.

h – In the first quarter of 2014, the company recorded a $1.4 million non-cash charge related to the step-up of inventory from the SymCom acquisition (See Note 2).

19. Subsequent Event

On November 7, 2015, the company and TE Connectivity Ltd., a Swiss corporation, entered into a stock and asset purchase agreement for $350.0 million, pursuant to which the company has agreed to acquire TE’s circuit protection business. The company expects to close the acquisition by the end of the first quarter of 2016. The company will fund the acquisition with available cash and proceeds from credit facilities.

77

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Section 404 of the Sarbanes-Oxley Act of 2002 requires management to include in this Annual Report on Form 10-K a report on management’s assessment of the effectiveness of the company’s internal control over financial reporting, as well as an attestation report from the company’s independent registered public accounting firm on the effectiveness of the company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

The management of Littelfuse is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). The Littelfuse internal control system was designed to provide reasonable assurance to its management and the Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined effective can provide only reasonable assurance with respect to financial statement preparation and presentation. A material weakness is a deficiency, or a combination of deficiencies, in the internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statement will not be prevented or detected on a timely basis.

Littelfuse management, including the company’s principal executive officer and principal financial officer, assessed the effectiveness of the company’s internal control over financial reporting as of January 2, 2016, based upon the updated framework in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 1992 and updated in May 2013. Based on this assessment, the company’s management concluded that, as of January 2, 2016, the company’s internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

There has been no change in the company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the 12 months or fiscal quarter ended January 2, 2016, that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

78

Evaluation of Disclosure Controls and Procedures

The company maintains disclosure controls and procedures, including a formal disclosure committee, that are designed to ensure that information required to be disclosed in the company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of January 2, 2016, the Chief Executive Officer and Chief Financial Officer of the company evaluated the effectiveness of the disclosure controls and procedures of the company and concluded that these disclosure controls and procedures were effective, for the reasons set forth above.

ITEM 9B. OTHER INFORMATION.

None.

79

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Executive Officers of the Registrant [ITEM 10 UPDATES PENDING]

The executive officers of the company are as follows:

Name	Age	Position
Gordon Hunter	64	Chairman of the Board of Directors, President and Chief Executive Officer
David W. Heinzmann	52	Chief Operating Officer
Philip G. Franklin	64	Executive Vice President and Chief Financial Officer
Ryan K. Stafford	48	Executive Vice President and Chief Legal and Human Resources Officer
Meenal A. Sethna	46	Sr. Vice President, Finance
Matthew J. Cole	44	Sr. Vice President and General Manager, Industrial Business Unit
Dieter Roeder	59	Sr. Vice President and General Manager, Automotive Business Unit
Deepak Nayar	56	Sr. Vice President and General Manager, Electronics Business Unit
Ian Highley	52	Sr. Vice President and General Manager, Semiconductor Products and Chief Technology Officer
Michael P. Rutz	44	Sr. Vice President Global Operations
Mary S. Muchoney	70	Corporate Secretary

Officers of Littelfuse are elected by the Board of Directors and serve at the discretion of the Board.

Gordon Hunter was elected as the Chairman of the Board of Directors of the company and President and Chief Executive Officer effective January 1, 2005. Mr. Hunter served as Chief Operating Officer of the company from November 2003 to January 2005. Mr. Hunter has been a member of the Board of Directors of the company since June 2002, where he has served as Chairman of the Technology Committee. Prior to joining Littelfuse, Mr. Hunter was employed with Intel Corporation, where he was Vice President, Intel Communications Group, and General Manager, Optical Products Group, responsible for managing the access and optical communications business segments, from 2002 to 2003. Mr. Hunter was CEO for Calmar Optcom during 2001. From 1997 to 2002, he also served as a Vice President for Raychem Corporation. His experience includes 20 years with Raychem Corporation in the United States and Europe, with responsibilities in sales, marketing, engineering and general management.

David W. Heinzmann, Chief Operating Officer, is responsible for the company’s business unit leadership, manufacturing and supply chain groups for all three of the company’s business units. Mr. Heinzmann began his career at the company in 1985 and possesses a broad range of experience within the organization. He has held positions as a Manufacturing Manager, Quality Manager, Plant Manager and Product Development Manager. Mr. Heinzmann also served as Director of Global Operations of the Electronics Business Unit from early 2000 through 2003. He served as Vice President and General Manager, Automotive Business Unit, from 2004 through August 2007 and as Vice President, Global Operations from September 2007 until January 2014, when he was promoted to his current position.

Philip G. Franklin, Executive Vice President and Chief Financial Officer, joined the company in 1998 and is responsible for finance and accounting, investor relations, mergers and acquisitions, and information systems. Prior to joining Littelfuse, Mr. Franklin was Vice President and Chief Financial Officer for OmniQuip International, a private equity sponsored roll-up in the construction equipment industry, which he helped take public. Before that, Mr. Franklin served as Chief Financial Officer for both Monarch

80

Executive Officers of the Registrant, continued

Marking Systems, a subsidiary of Pitney Bowes, and Hill Refrigeration, a company controlled by Sam Zell. Earlier in his career, he worked in a variety of finance and general management positions at FMC Corporation. Mr. Franklin currently serves on the Board of Directors and as chairman of the Audit Committees of TTM Technologies and Tribune Publishing. Mr. Franklin will retire from his position as Executive Vice President and Chief Financial Officer, effective March 31, 2016, and will remain with the company as an employee through July 2016 in an advisory role.

Ryan K. Stafford, Executive Vice President and Chief Legal and Human Resources Officer, leads the company’s legal, compliance, internal audit, human resources and corporate marketing and communications functions. Mr. Stafford joined the company’s executive team as its first general counsel in January 2007. Prior to joining the company, Mr. Stafford served in a number of roles at Tyco International Ltd., including Vice President of China Operations and Vice President & General Counsel for its Engineered Products & Services business segment. Prior to that he was with the law firm Sulloway & Hollis P.L.L.C.

Meenal A. Sethna, Senior Vice President, Finance, is responsible for the treasury, investor relations and financial planning and analysis for the company. Effective March 31, 2016, Ms. Sethna will become Executive Vice President and Chief Financial Officer of the company. Prior to joining the company in 2015, Ms. Sethna served as Vice President and Corporate Controller of Illinois Tool Works Inc., a global manufacturer of industrial products and equipment, from 2011 to 2015. Prior to that, Ms. Sethna worked for Motorola, Inc. from 2004 through 2010.

Matthew J. Cole, Senior Vice President and General Manager, Industrial Business Unit, is responsible for the electrical fuse, protection relay and custom electrical products businesses of the Industrial Business Unit. Prior to joining the company in 2015, Mr. Cole served as Vice President and General Manager of AMTETEK’s Advanced Measurement Technology division, a global leader in electronic instruments and electromechanical devices from 2009 to 2015. Before that, Mr. Cole held positions in general management, marketing and operations at Danaher and Allied Signal/Honeywell.

Dieter Roeder, Senior Vice President and General Manager, Automotive Business Unit, is responsible for marketing, sales, product development and customer relationships for all automotive business reporting units which include passenger car products, automotive sensor products and commercial vehicle products. Mr. Roeder joined the company in 2005 leading the Automotive Business Unit’s European sales team, based in Germany, before he was promoted to his current position in August 2007. Prior to joining the company, Mr. Roeder served as Director of Business Development Europe for TDS Automotive from 2002 to 2005. Before that, Mr. Roeder spent 10 years with Raychem GmbH (later Tyco Electronics) where he had various sales and marketing responsibilities within the European automotive industry.

Deepak Nayar, Senior Vice President and General Manager, Electronics Business Unit, is responsible for marketing, sales, product development and customer relationships of the Electronics Business Unit. Mr. Nayar joined the company in 2005 as Business Line Director of the Electronics Business Unit. In July 2007, Mr. Nayar was promoted to Vice President, Global Sales, Electronics Business Unit, before he was promoted to his current position in 2011. Prior to joining the company, Mr. Nayar served as Worldwide Sales Director of Tyco Electronics Power Components Division from 1999 to 2005. Before that, Mr. Nayar served as Director of Business Development, Raychem Electronics OEM Group from 1997 to 1999.

81

Executive Officers of the Registrant, continued

Ian Highley, Senior Vice President and General Manager, Semiconductor Products and Chief Technology Officer, is responsible for the marketing, sales, product development and strategic planning efforts of the company’s semiconductor products in addition to being responsible for the company’s overall information technology efforts. Mr. Highley joined the company in 2002 as Product Line Director, Semiconductor Products. Mr. Highley served as General Manager Semiconductor Products from August 2008 to May 2012 and Vice President and General Manager, Semiconductor Products from May 2012 to January 2015. Mr. Highley was promoted to his current position in January 2015.

Michael P. Rutz, Senior Vice President, Global Operations, is responsible for the company's sourcing, supplier development, supply chain, quality and manufacturing engineering services. From February 2014 to January 2015, Mr. Rutz was Vice President Supply Chain & Operational Excellence. From August 2011 until February 2014, Mr. Rutz was Senior Vice President Global Supply Chain at WMS Industries Inc., a Chicago-based manufacturer of equipment and software for the gaming industry. Prior to that, Mr. Rutz served for 16 years, in various positions of increasing responsibility, at Motorola Solutions, Inc., most recently as Vice President of Networks Supply Chain from 2009 until August 2011.

Mary S. Muchoney has served as Corporate Secretary since 1991, after joining Littelfuse in 1977. She is responsible for providing all secretarial and administrative functions for the President and Littelfuse Board of Directors. Ms. Muchoney is a member of the Society of Corporate Secretaries & Governance Professionals.

The information set forth under “Election of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement is incorporated herein by reference. The company maintains a code of conduct, which applies to all employees, executive officers and directors. The company’s code of conduct meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K and applies to our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer as well as all other executive officers and employees. The code of conduct is available for public viewing on the company’s website at www.littelfuse.com under the heading “Investors – Corporate Governance.”

If the company makes substantive amendments to the code of conduct or grants any waiver to its Chief Executive Officer, Chief Financial Officer or persons performing similar functions, Littelfuse will disclose the nature of such amendment or waiver on its website or in a Current Report on Form 8-K in accordance with applicable rules and regulations. The information contained on or connected to the company’s website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report Littelfuse files or furnishes with the SEC. There have been no material changes to the procedures by which security holders may recommend nominees to the company’s Board of Directors in 2015.

82

ITEM 11. EXECUTIVE COMPENSATION.

The information set forth under “Election of Directors – Compensation of Directors” and “Executive Compensation” in the Proxy Statement is incorporated herein by reference, except the section captioned “Compensation Committee Report” is hereby “furnished” and not “filed” with this Annual Report on Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The information set forth under “Ownership of Littelfuse, Inc. Common Stock” and “Compensation Plan Information” in the Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

The information set forth under “Certain Relationships and Related Transactions” and “Election of Directors” in the Proxy Statement is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The information set forth under “Audit and Non-Audit Fees” in the Proxy Statement is incorporated herein by reference.

83

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) Financial Statements and Schedules

(1) The following Financial Statements are filed as a part of this report:

(i) Reports of Independent Registered Public Accounting Firms (pages 42-44).

(ii) Consolidated Balance Sheets as of January 2, 2016 and December 27, 2014 (page 45).

(iii) Consolidated Statements of Net Income for the years ended January 2, 2016, December 27, 2014 and December 28, 2013 (page 46).

(iv) Consolidated Statements of Comprehensive Income for the years ended January 2, 2016, December 27, 2014 and December 28, 2013 (page 46).

(v) Consolidated Statements of Cash Flows for the years ended January 2, 2016, December 27, 2014 and December 28, 2013 (page 47).

(vi) Consolidated Statements of Equity for the years ended January 2, 2016, December 27, 2014 and December 28, 2013 (page 48).

(vii) Notes to Consolidated Financial Statements (pages 49-77).

(2) The following Financial Statement Schedule is submitted herewith for the periods indicated therein.

(i) Schedule II - Valuation and Qualifying Accounts and Reserves (page 85).

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

(3) Exhibits. See Exhibit Index on pages 87-91.

84

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

(In thousands of USD)

Description	Balance at Beginning of Year		Charged to Costs and Expenses (1)		Deductions (2)		Other (3)			Balance at End of Year
Year ended January 2, 2016
Allowance for losses on accounts receivable	$	278	$	164	$	150	$	27		$	319
Reserves for sales discounts and allowances	$	19,140	$	81,335	$	82,997	$	(310	)	$	17,168
Deferred tax valuation allowance	$	4,557	$	—	$	—	$	—		$	4,557
Year ended December 27, 2014
Allowance for losses on accounts receivable	$	790	$	130	$	656	$	14		$	278
Reserves for sales discounts and allowances	$	16,117	$	85,825	$	82,568	$	(234	)	$	19,140
Deferred tax valuation allowance	$	6,250	$	—	$	1,693	$	—		$	4,557
Year ended December 28, 2013
Allowance for losses on accounts receivable	$	705	$	2,289	$	2,316	$	112		$	790
Reserves for sales discounts and allowances	$	12,803	$	77,659	$	74,432	$	87		$	16,117
Deferred tax valuation allowance	$	784	$	6,085	$	619	$	—		$	6,250

(1) Includes provision for doubtful accounts, sales returns and sales discounts granted to customers.

(2) Represents uncollectible accounts written off, net of recoveries and credits issued to customers and the write-off of certain deferred tax assets that previously had full valuation allowances.

(3) Represents business acquisitions and foreign currency translation adjustments.

85

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Littelfuse, Inc.
By:	/s/ Gordon Hunter
	Gordon Hunter,
	Chairman of the Board of Directors,
	President and Chief Executive Officer

Date: March 1, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant on March 1, 2016 and in the capacities indicated.

/s/ Gordon Hunter	Chairman of the Board of Directors, President and
Gordon Hunter	Chief Executive Officer (Principal Executive Officer)
/s/ Tzau-Jin Chung	Director
Tzau-Jin Chung
/s/ Cary T. Fu	Director
Cary T. Fu
/s/ Anthony Grillo	Director
Anthony Grillo
/s/ John E. Major	Director
John E. Major
/s/ William P. Noglows	Director
William P. Noglows
/s/ Ronald L. Schubel	Director
Ronald L. Schubel
/s/ Philip G. Franklin	Executive Vice President and Chief Financial Officer
Philip G. Franklin	(Principal Financial and Principal Accounting Officer)

86

 EXHIBIT INDEX 

The following documents listed below that have been previously filed with the SEC (1934 Act File No. 0-20388) are incorporated herein by reference:

Exhibit No.	Description
2.1+	Stock Purchase Agreement, dated as of April 15, 2013, by and among Littelfuse, Inc. and Key Safety Systems, Inc. (filed as Exhibit 2.1 to the company’s Current Report on Form 8-K dated April 15, 2013).
2.2+	Stock and Asset Purchase Agreement, dated November 7, 2015, by and between Littelfuse, Inc. and TE Connectivity Ltd. (filed as Exhibit 2.1 to the company’s Current Report on Form 8-K dated November 7, 2015).
3.1	Certificate of Incorporation, as amended to date (filed as Exhibit 3(I) to the company’s Form 10-K for the fiscal year ended January 3, 1998).
3.2	Certificate of Designations of Series A Preferred Stock (filed as Exhibit 4.2 to the company’s Current Report on Form 8-K dated December 1, 1995).
3.3	Bylaws, as amended to date (filed as Exhibit 3.1 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2014).
10.1	Amendment to Non-Qualified Stock Option Agreement and Agreement for Deferred Compensation between Littelfuse, Inc. and Gordon Hunter (filed as Exhibit 10.27 to the company’s Form 10-K for the fiscal year ended December 31, 2005).++
10.2	Amended and Restated Employment Agreement dated as of December 31, 2007, between Littelfuse, Inc. and Gordon Hunter (filed as Exhibit 10.1 to the company’s Form 10-K for the fiscal year ended December 29, 2007).++
10.3	Amended and Restated Employment Agreement, effective as of January 1, 2014, between Littelfuse, Inc. and Dieter Roeder (filed as Exhibit 10.2 to the company’s Quarterly Report on Form 10-Q for the period ended March 29, 2014).++
10.4	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Gordon Hunter (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated December 22, 2014).++
10.5	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Philip G. Franklin (filed as Exhibit 10.2 to the company’s Current Report on Form 8-K dated December 22, 2014).++
10.6	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and David W. Heinzmann (filed as Exhibit 10.3 to the company’s Current Report on Form 8-K dated December 22, 2014).++
10.7	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Dieter Roeder (filed as Exhibit 10.4 to the company’s Current Report on Form 8-K dated December 22, 2014).++
10.8	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Ryan K. Stafford (filed as Exhibit 10.5 to the company’s Current Report on Form 8-K dated December 22, 2014).++
10.9	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Ian Highley (filed as Exhibit 10.9 to the company’s Form 10-K for the fiscal year ended December 27, 2014).++

87

Exhibit No.	Description
10.10	Change of Control Agreement effective as of January 1, 2015, between Littelfuse, Inc. and Deepak Nayar (filed as Exhibit 10.9 to the company’s Form 10-K for the fiscal year ended December 27, 2014).++
10.11	Change of Control Agreement effective as of February 10, 2014, between Littelfuse, Inc. and Michael Rutz (filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the period ended March 29, 2014).++
10.12	Change of Control Agreement effective as of February 1, 2016, between Littelfuse, Inc. and Meenal A. Sethna (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated February 3, 2016).++
10.13*	Change of Control Agreement effective as of May 26, 2015 between Littelfuse, Inc. and Matthew J. Cole.++
10.14*	Summary of Director Compensation.++
10.15*	Amended and Restated Littelfuse, Inc. 401(k) Retirement and Savings Plan.++
10.16	1993 Stock Plan for Employees and Directors of Littelfuse, Inc. as amended (filed as Exhibit 10.1 to the company’s Form 10-Q for the quarterly period ended July 2, 2005).++
10.17	Form of Non-Qualified Stock Option Agreement under the 1993 Stock Plan for Employees and Directors of Littelfuse, Inc. for employees of the company (filed as Exhibit 99.1 to the company’s Current Report on Form 8-K dated November 8, 2004).++
10.18	Form of Performance Shares Agreement under the 1993 Stock Plan for Employees and Directors of Littelfuse, Inc. (filed as Exhibit 10.23 to the company’s Form 10-K for the fiscal year ended January 1, 2005).++
10.19	Form of Non-Qualified Stock Option Agreement under the 1993 Stock Plan for Employees and Directors of Littelfuse, Inc., for non-employee directors of the company (filed as Exhibit 10.24 to the company’s Form 10-K for the fiscal year ended January 1, 2005).++
10.20	Stock Plan for New Directors of Littelfuse, Inc., as amended (filed as Exhibit 10.2 to the company’s Form 10-Q for the quarterly period ended July 2, 2005).++
10.21	Stock Plan for Employees and Directors of Littelfuse, Inc., as amended (filed as Exhibit 10.3 to the company’s Form 10-Q for the quarterly period ended July 2, 2005).++
10.22	Littelfuse, Inc. Equity Incentive Compensation Plan (filed as Exhibit A to the company’s Proxy Statement for Annual Meeting of Stockholders held on May 5, 2006).++
10.23	First Amendment to the Littelfuse, Inc. Equity Incentive Compensation Plan dated as of July 28, 2008 (filed as Exhibit 10.2 to the company’s Form 10-Q for the quarterly period ended March 28, 2009).++
10.24	Form of Non-Qualified Stock Option Agreement under the Littelfuse, Inc. Equity Incentive Compensation Plan (filed as Exhibit 99.4 to the company’s Current Report on Form 8-K dated May 5, 2006).++
10.25	Form of Performance Shares Agreement under the Littelfuse, Inc. Equity Incentive Compensation Plan (filed as Exhibit 99.1 to the company’s Current Report on Form 8-K dated March 12, 2008).++
10.26	Littelfuse, Inc. Outside Directors’ Stock Option Plan (filed as Exhibit B to the company’s Proxy Statement for Annual Meeting of Stockholders held on May 5, 2006).++
10.27	Form of Non-Qualified Stock Option Agreement under the Littelfuse, Inc. Outside Directors Stock Option Plan (filed as Exhibit 99.6 to the company’s Current Report on Form 8-K dated May 5, 2006).++

88

Exhibit No.	Description
10.28	Littelfuse, Inc. Outside Directors’ Equity Plan (filed as Exhibit A to the company’s Proxy Statement for Annual Meeting of Stockholders held on April 27, 2007).++
10.29	First Amendment to the Littelfuse, Inc. Outside Directors’ Equity Plan, dated as of July 28, 2008 (filed as Exhibit 10.1 to the company’s Form 10-Q for the quarterly period ended March 28, 2009).++
10.30	Form of Stock Option Award Agreement under the Littelfuse, Inc. Outside Directors' Equity Plan (filed as Exhibit 99.3 to the company’s Current Report on Form 8-K dated April 25, 2008).++
10.31	Form of Restricted Stock Unit Award Agreement under the Littelfuse, Inc. Outside Directors' Equity Plan (filed as Exhibit 99.4 to the company’s Current Report on Form 8-K dated April 25, 2008).++
10.32	Amended and Restated, Littelfuse, Inc. Deferred Compensation Plan for Non-employee Directors (filed as Exhibit 10.4 to the company’s Form 10-K for the fiscal year ended December 29, 2007).++
10.33	Amended and Restated Littelfuse, Inc. Retirement Plan (filed as Exhibit 10.13 to the company’s Form 10-K for the fiscal year ended December 29, 2007).++
10.34	Amendment to Amended and Restated Littelfuse, Inc. Retirement Plan (filed as Exhibit 10.30 to the company’s Form 10-K for the fiscal year ended January 2, 2010).++
10.35	Termination of Amendment to the Littelfuse, Inc. Retirement Plan (filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2014).
10.36*	Termination of Amended and Restated Littelfuse, Inc. Retirement Plan.++
10.37	Amended and Restated, Littelfuse, Inc. Annual Incentive Plan (filed as Exhibit 10.1 to the company’s Form 10-Q for the quarterly period ended April 2, 2010).++
10.38	Form of Restricted Stock Award Agreement under the Littelfuse, Inc. Equity Incentive Compensation Plan (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated April 28, 2009).++
10.39	Form of Stock Option Award Agreement under the Littelfuse, Inc. Equity Incentive Compensation Plan (filed as Exhibit 10.2 to the company’s Current Report on Form 8-K dated April 28, 2009).++
10.40	Littelfuse, Inc. Supplemental Retirement and Savings Plan (filed as Exhibit 10.3 to the company’s Current Report on Form 8-K dated October 9, 2009).++
10.41	Fourth Amendment to the Littelfuse, Inc. Supplemental Retirement and Savings Plan (filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended September 26, 2015).++
10.42	Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 10.1 to the company’s Form 8-K dated May 5, 2010).++
10.43	First Amendment to the Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 10.36 to the company’s Form 10-K for the fiscal year ended December 29, 2012.++
10.44	Form of Restricted Stock Unit Award Agreement (Outside Director) under the Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 4.4 to the company’s Form S-8 dated May 19, 2010).++
10.45	Form of Restricted Stock Unit Award Agreement (Executive) under the Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 10.2 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 27, 2015).++
10.46	Form of Restricted Stock Unit Award Agreement (Tier II Management) under the Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 10.3 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 27, 2015).++

89

Exhibit No.	Description
10.47	Form of Stock Option Award Agreement under the Littelfuse, Inc. Long-Term Incentive Plan (filed as Exhibit 4.6 to the company’s Form S-8 dated May 19, 2010).++
10.48	Credit Agreement, dated as of May 31, 2013, among Littelfuse, Inc., as borrower, JPMorgan Chase Bank, N.A. as Agent, Bank of America, N.A., as Syndication Agent, Wells Fargo Bank, National Association and PNC Bank, National Association, as Co-Documentation Agents, J.P. Morgan Securities LLC, as Sole Bookrunner and Joint Lead Arranger, and Merrill, Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arranger (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated June 5, 2013).
10.49	Master Increasing Lender Supplement, dated as of January 30, 2014, among Littelfuse, Inc., as borrower, JPMorgan Chase Bank, N.A. as Agent, and each of the banks, financial institutions and other institutional lenders listed on the respective signature pages thereof (filed as Exhibit 10.1 to the company’s Current Report on Form 8-K dated February 4, 2014).
10.50	Amendment No. 1, dated as of May 2, 2014, to Credit Agreement, dated as of May 30, 2013, by and among Littelfuse, Inc., as borrower, JPMorgan Chase Bank, N.A. as Agent, and each of the banks, financial institutions listed on the respective signature pages thereof (filed as Exhibit 10.47 to the company’s Form 10-K for the fiscal year ended December 27, 2014).
10.51	Amendment No. 2, dated as of January 14, 2015, to Credit Agreement, dated as of May 31, 2013, by and among Littelfuse, Inc., as borrower, JPMorgan Chase Bank, N.A. as Agent, and each of the banks, financial institutions listed on the respective signature pages thereof (filed as Exhibit 10.48 to the company’s Form 10-K for the fiscal year ended December 27, 2014).
10.52	Amendment No. 3, dated as of May 4, 2015, to Credit Agreement, dated as of May 31, 2013, by and among Littelfuse, Inc., as borrower, JPMorgan Chase Bank, N.A., as Agent, and each of the banks, financial institutions listed on the respective signature pages thereof (filed as Exhibit 10.1 to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 27, 2015).
14.1	Code of Conduct (filed as Exhibit 14.1 to the company’s Current Report on Form 8-K dated October 24, 2008).
21.1*	Subsidiaries.
23.1*	Consent of Independent Registered Public Accounting Firm.
23.2*	Consent of Independent Registered Public Accounting Firm.
31.1*	Rule 13a-14(a)/15d-14(a) certification of Gordon Hunter.
31.2*	Rule 13a-14(a)/15d-14(a) certification of Philip G. Franklin.
32.1+++	Section 1350 certification.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.

Exhibits 10.1 through 10.47 are management contracts or compensatory plans or arrangements.

90

* Filed with this Report.

+ Exhibits and schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. Littelfuse agrees to furnish a supplemental copy of an omitted exhibit or schedule to the SEC upon request.

++ Management contract or compensatory plan or arrangement.

+++ Furnished with this Report.

91

EX-10.13

Exhibit 10.13

CHANGE OF CONTROL AGREEMENT

for

Matt Cole

THIS AGREEMENT is made effective as of the 26th day of May, 2015, by and between LITTELFUSE, INC., a Delaware corporation (the “Company”), and the executive named above (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to provide the Executive with certain protections against the uncertainties usually created by a Change of Control; and

WHEREAS, the Board wishes to better enable the Executive to devote his full time, attention and energy to the business of the Company and its Affiliated Companies prior to and after a Change of Control, thereby benefiting the Company and its stockholders.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Company and the Executive hereby agree as follows:

CHANGE OF CONTROL BENEFITS

Section 1.     Certain Definitions.

(a)     “Affiliated Companies” shall mean any company controlled by, controlling or under common control with the Company.

(b)     “Change of Control” shall mean:

(i)     The acquisition by any one person or more than one person acting as a group (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v)(B)), other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliated Company, (a “Person”) of any of stock of the Company that, together with stock held by such Person, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. For purposes of this paragraph (i), the following acquisitions shall not constitute a Change of Control: (A) the acquisition of additional stock by a Person who is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, (B) any acquisition pursuant to a transaction which complies with paragraph (iii) or (C) any acquisition of the Company’s assets pursuant to a transaction which complies with paragraph (iv). An increase in the percentage of stock owned by any one Person as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph;

(ii)     The replacement of individuals who as of the date hereof constitute a majority of the Board, during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of the appointment or election, provided that, if the Company is not the relevant corporation for which no other corporation is a majority shareholder for purposes of Treasury Regulation Section 1.409A-3(i)(5)(vi)(A)(2), this paragraph (ii) shall be applied instead with respect to the members of the board of the directors of such relevant corporation for which no other corporation is a majority shareholder;

(iii)     The acquisition by any one person or more than one person acting as a group (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vi)(D)), other than the Company or any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliated Company, during the 12-month period ending on the date of the most recent acquisition by such person or persons, of ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company. For purposes of this paragraph (iii), the following acquisitions shall not constitute a Change of Control: (A) the acquisition of additional control by a person or more than one person acting as a group who are considered to effectively control the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vi) or (B) any acquisition pursuant to a transaction which complies with paragraph (i); or

(iv)     The acquisition by any person or more than one person acting as a group (within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vii)(C)), other than a transfer to a related person within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vii)(B), during the 12-month period ending on the date of the most recent acquisition by such person or persons, of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition(s). For purposes of this paragraph (iv), “gross fair market value” means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

This definition of “Change of Control” shall be interpreted by the Board, in good faith, to apply in a similar manner to transactions involving partnerships and partnership interests, and to comply with Section 409A.

(c)     “Change of Control Period” shall mean the period commencing on the date hereof and ending on December 31, 2017.

(d)     “Effective Date” shall mean the first date during the Change of Control Period on which a Change of Control occurs. Notwithstanding anything to the contrary contained in this Agreement, if a Change of Control occurs and if the Executive Separates from Service with the Company and its Affiliated Companies prior to the date on which the Change of Control occurs, and if it is reasonably demonstrated by the Executive that such Separation from Service (i) was at the direct or indirect request of a third party who theretofore had taken any steps intended to effect a Change of Control or (ii) otherwise arose in connection with or in anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such Separation from Service.

2

(e)     “Section 409A” shall mean Section 409A of the Internal Revenue Code and Treasury Regulations and official guidance issued thereunder from time to time.

(f)     “Separation from Service,” “Termination of Service” and words of similar import shall have the same meaning as “separation from service” as defined by Section 409A. By way of illustration, and without limiting the generality of the foregoing, the following principles shall apply:

(i)     The Executive shall not be considered to have Separated from Service so long as the Executive is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Executive retains a right to return to service with the Company or its Affiliated Companies under an applicable statute or by contract.

(ii)     Regardless of whether the Executive has formally Separated from Service, the Executive will be considered to have Separated from Service as of the date it is reasonably anticipated that no further services will be performed by the Executive for the Company or its Affiliated Companies, or that the level of bona fide services the Executive will perform after such date will permanently decrease to no more than 20% of the average level of bona fide services performed over the immediately preceding 36-month period. For purposes of the preceding test, during any paid leave of absence the Executive shall be considered to have been performing services at the level commensurate with the amount of compensation received, and unpaid leaves of absence shall be disregarded.

(iii)     For purposes of determining whether the Executive has Separated from Service, all services provided for the Company or its Affiliated Companies, or for any other entity that is part of a controlled group that includes the Company as defined in Section 414(b) or (c) of the Internal Revenue Code (“Code”), shall be taken into account, whether provided as an employee or as a consultant or other independent contractor; provided that the Executive shall not be considered to have not Separated from Service solely by reason of service as a non-employee director of the Company or any other such entity.

(g)     “Service Period” shall mean the period commencing on the Effective Date and ending on the second anniversary of such date.

Section 2.     Service Period. The Company or one or more of its Affiliated Companies hereby agrees to continue to retain the services of the Executive, and the Executive hereby agrees to provide services to the Company or one or more of its Affiliated Companies and its successors, subject to the following terms and conditions of this Agreement, for the Service Period.

(a)     Position and Duties During the Service Period,

(i)      (A) the Executive’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 120-day period immediately preceding the Effective Date and (B) the Executive’s services shall be performed at the location where the Executive was providing services to the Company or its Affiliated Companies immediately preceding the Effective Date or any office or location less than 20 miles from such location.

3

(ii)     excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and its Affiliated Companies and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Service Period, it shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee or service provider of the Company and its Affiliated Companies in accordance with this Agreement.

(b)     Compensation During the Service Period, the Executive shall receive

(i)      Base Salary. An annual base salary (the “Annual Base Salary”), which shall be paid at a monthly rate, equal to at least twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company and its Affiliated Companies during the twelve-month period immediately preceding the calendar month in which the Effective Date occurs. During the Service Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any such increase and the term Annual Base Salary as used in this Agreement shall refer to Annual Base Salary as so increased.

(ii)     Annual Bonus. For each fiscal year ending during the Service Period, an annual bonus in cash at least equal to the greater of: (i) the average of the Executive’s annual bonuses paid under the Company’s Annual Incentive Plan or any successor plan (such plan(s) hereinafter collectively referred to as the “Bonus Plan”) for the last three full fiscal years prior to the Effective Date; or (ii) the Executive’s target annual bonus under the Bonus Plan for the fiscal year in which the Effective Date occurs. Each such annual bonus shall be paid following the fiscal year for which such annual bonus is awarded but no later than the fifteenth day of the third month of such following fiscal year, unless the Executive shall elect to defer the receipt of such annual bonus. Any such deferral election shall be made not later than the first day of the fiscal year for which the annual bonus is paid, and shall be made in accordance with policies adopted by the Company in compliance with Section 409A.

(iii)     Incentive, Savings and Retirement Plans. Participation in all incentive, savings and retirement plans, practices, policies and programs applicable generally to other peer executives of the Company and its Affiliated Companies, but in no event shall such plans, practices, policies and programs provide the Executive with incentive opportunities (measured with respect to both regular and special incentive opportunities, to the extent, if any, that such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than the most favorable of those provided by the Company and its Affiliated Companies for the Executive under such plans, practices, policies and programs as in effect at any time during the 120-day period immediately preceding the Effective Date or if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its Affiliated Companies.

4

(iv)     Welfare Benefit Plans. Eligibility for participation of Executive and/or the Executive’s immediate family, as the case may be, in benefits under welfare benefit plans, practices, policies and programs provided by the Company and its Affiliated Companies (including, without limitation, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to other peer executives of the Company and its Affiliated Companies. In the event such plans, practices, policies and programs are not reasonably able to provide the Executive with coverage or provide the Executive with benefits which are less favorable, in the aggregate, than the most favorable of such plans, practices, policies and programs in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to other peer executives of the Company and its Affiliated Companies, then the Company shall provide individual insurance policies or reimburse the Executive, on at least a monthly basis, to cover any post-tax difference in the benefits received by the Executive.

(v)     Expenses. Prompt reimbursement for all reasonable expenses incurred by the Executive in accordance with the most favorable policies, practices and procedures of the Company and its Affiliated Companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and to the extent that any resulting change in reimbursement or payment dates would comply with Section 409A, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliated Companies.

(vi)     Fringe Benefits. Fringe benefits, including, without limitation, tax and financial planning services, payment of club dues, and, if applicable, use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its Affiliated Companies in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and to the extent that any resulting change in reimbursement or payment dates would comply with Section 409A, as in effect generally at any time thereafter with respect to other peer executives of the Company and its Affiliated Companies.

(vii)     Office and Support Staff. An office or offices of a size and with furnishings and other appointments, and to exclusive personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Executive by the Company and its Affiliated Companies at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive and to the extent that any resulting change in reimbursement or payment dates would comply with Section 409A, as provided generally at any time thereafter with respect to other peer executives of the Company and its Affiliated Companies.

5

(viii)     Vacation. Paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its Affiliated Companies as in effect for the Executive at any time during the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive, as in effect generally at any time thereafter with respect to other peer executives of the Company and its affiliated companies.

The requirements of paragraphs (iii) through (viii) above shall not apply to the extent prohibited by applicable law or to the extent such provision would cause the applicable plan, practice, policy, or program to fail nondiscrimination or coverage tests imposed thereon by applicable law.

Section 3.     Separation from Service.

(a)     Disability. If the Company determines in good faith that the Disability of the Executive has occurred during the Service Period (pursuant to the definition of Disability set forth below), it may terminate the Executive’s service with the Company and its Affiliated Companies effective upon the date the Company provides written notice to the Executive. For purposes of this Agreement, “Disability” shall mean the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Company or its Affiliated Companies.

(b)     Cause. The Company may terminate the Executive’s service with the Company and its Affiliated Companies during the Service Period for Cause. For purposes of this Agreement, “Cause” shall mean:

(i)     the willful and continued failure of the Executive to perform substantially the Executive’s duties with the Company and its Affiliated Companies (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties and such failure is not cured within sixty (60) calendar days after receipt of such written demand; or

6

(ii)     the willful engaging by the Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company or its Affiliated Companies.

For purposes of this provision, any act or failure to act on the part of the Executive in violation or contravention of any order, resolution or directive of the Board shall be considered “willful” unless such order, resolution or directive is illegal or in violation of the certificate of incorporation or by-laws of the Company; provided, however, that no other act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company and its Affiliated Companies. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or General Counsel of the Company or based upon the advice of outside counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company and its Affiliated Companies. The Separation from Service of the Executive shall not be deemed to be for Cause unless and until there shall have been delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (¾) of the entire membership of the Board (other than the Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in paragraph (i) or (ii) above, and specifying the particulars thereof in detail.

(c)     Good Reason. The Executive’s service with the Company and its Affiliated Companies may be terminated by the Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall mean:

(i)     the Executive is not elected to, or is removed from, any elected office of the Company which the Executive held immediately prior to the Effective Date;

(ii)     the assignment to the Executive of any duties materially inconsistent in any respect with the Executive’s position, authority, duties or responsibilities as contemplated by Subsection 2(a)(i) hereof, or any other action by the Company or its Affiliated Companies which results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company or its Affiliated Company (as applicable) promptly after receipt of notice thereof given by the Executive;

(iii)     any failure by the Company or its Affiliated Companies to comply with any of the provisions of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company or its Affiliated Company (as applicable) promptly after receipt of notice thereof given by the Executive;

7

(iv)     the Company’s or its Affiliated Companies requiring the Executive to travel on Company or its Affiliated Companies business to a substantially greater extent than required immediately prior to the Effective Date; or

(v)     any purported termination by the Company of the Executive’s service with the Company and its Affiliated Companies other than as expressly permitted by this Agreement.

For purposes of this Subsection 3(c), a good faith determination of “Good Reason” made by the Executive shall be conclusive.

(d)     Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by Notice of Termination to the other party given in accordance with Subsection 11(b). For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s service under the provision so indicated, and (iii) specifies the termination date. To qualify as “Good Reason,” the Executive must provide such notice within 90 days following the initial existence of the condition described in Subsections 3(c)(i) through (v) above, upon notice of which the Company or its Affiliated Company (as applicable) shall have 30 days during which it may remedy the condition, in which case “Good Reason” shall not exist. The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

Section 4.     Obligations of the Company upon Separation during the Service Period.

(a)     Good Reason; Other Than for Cause, Death or Disability. If, during the Service Period, the Company causes the Executive to Separate from Service other than for Cause or Disability, or the Executive shall voluntarily Separate from Service for Good Reason as described in Subsection 3(c), the Company shall pay to the Executive:

(i)     The amounts set forth in paragraphs A and B below.

A.     The sum of the following (“Accrued Obligations”):

(1)     the Executive’s Annual Base Salary through the Separation from Service to the extent not theretofore paid, payable on the next regularly scheduled payroll date (or such earlier date as required by law),

(2)     an amount equal to the greatest of the Executive’s target annual bonus under the Bonus Plan for the fiscal year in which the Separation from Service occurs (“Target Bonus”), the Executive’s annual bonus under the Bonus Plan for the current fiscal year based on performance through date of separation, or the Executive’s average annual bonus under the Bonus Plan for the last three fiscal years ending prior to the Separation from Service (“Average Annual Bonus”), multiplied by a fraction, the numerator of which is the number of days in the fiscal year through the Separation from Service, and the denominator of which is 365, payable in a lump sum on the 30^th day following the Separation from Service,

8

(3)     any compensation previously deferred by the Executive (together with any accrued interest or earnings thereon), paid in accordance with the Executive’s deferral elections in effect under any such deferral program, plus

(4)     any accrued but unpaid vacation pay, paid in a lump sum on the 30th day following the Separation from Service (or such earlier date as required by law).

B.     The amount equal to the product of (I) two multiplied by (II) the sum of (x) the Executive’s Annual Base Salary plus (y) the greater of the Executive’s Average Annual Bonus or Target Bonus, which shall be paid in a lump sum on the 30^th day following the Separation from Service.

(ii)     Reimbursement for the additional premium costs incurred by the Executive, in excess of the active employee rate for the Executive’s peer group, to continue group medical coverage for the Executive and/or the Executive’s family under Section 4980B of the Code and applicable state laws (“COBRA”) for the maximum period of time as permitted by law. The Executive shall submit to the Company satisfactory evidence of premium costs incurred within 30 days following the date such costs were incurred. Within 30 days following receipt of such evidence, the Company shall pay to the Executive such reimbursement, plus additional severance pay in an amount such that the net amount of such reimbursement and additional severance pay, after all applicable tax withholding, equals the difference between the full COBRA premium and the premium charged to active employees in Executive’s peer group. Following the end of COBRA coverage, the Company shall reimburse the Executive for the additional premium costs incurred by the Executive, in excess of the former employee COBRA rate for the Executive’s peer group, for the purchase of an individual insurance policy providing medical coverage to the Executive and/or the Executive’s family which is substantially similar to the coverage provided by the Company’s group medical plan. In no event shall the combined period of reimbursable coverage under COBRA and any individual insurance policy exceed two (2) years from Separation from Service.

(iii)     For a period of up to two (2) years after the Separation from Service, monthly outplacement services at reasonable levels as provided to peer executives of the Company or the applicable Affiliated Company, for the purpose of assisting the Executive to seek a new position; provided, however, that the Company shall have no further obligations to provide such outplacement services once the Executive has accepted a position with any third party.

(iv)     Notwithstanding anything to the contrary set forth in any stock option plans pursuant to which the Executive has been granted any stock options or other rights to acquire securities of the Company or its Affiliates, as defined in Rule 12b-2 of the General Rules and Regulations under the Exchange Act (the “Plans”), any option or right granted to the Executive under any of the Plans shall be exercisable by the Executive until the earlier of (A) the date on which the option or right terminates in accordance with the terms of its grant, or (B) the expiration of 12 months after the Separation from Service.

9

(v)     To the extent not theretofore paid or provided, any other amounts or benefits required to be paid or provided or which the Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its Affiliated Companies (such other amounts and benefits shall hereinafter be referred to collectively as the “Other Benefits”).

(vi)     Notwithstanding anything to the contrary contained in any employment agreement, benefit plan or other document, in the event the Executive incurs a Separation from Service during the Service Period by the Executive for Good Reason or by the Company other than for Cause or Disability, on and after the Separation from Service the Executive shall not be bound or prejudiced by any non-competition agreement benefiting the Company or its Affiliated Companies.

(b)     Death. If the Executive dies during the Service Period, this Agreement shall terminate without further obligations by the Company to the Executive’s legal representatives under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive’s estate or beneficiary, as applicable, at the time and in the form as provided in Subsection 4(a)(i)(A) above. With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this paragraph shall include, without limitation, and the Executive’s estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most favorable benefits provided by the Company and its Affiliated Companies to the estates and beneficiaries of peer executives of the Company and such Affiliated Companies under such plans, programs, practices and policies relating to death benefits, if any, as in effect with respect to other peer executives and their beneficiaries at any time during the 120-day period immediately preceding the Effective Date.

(c)     Disability. If the Company causes the Executive to Separate from Service by reason of the Executive’s Disability during the Service Period as set forth in Subsection 3(a), this Agreement shall terminate without further obligations by the Company to the Executive under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be paid to the Executive at the time and in the form provided in Subsection 4(a)(i)(A). With respect to the provision of Other Benefits, the term “Other Benefits” as utilized in this Subsection 4(c) shall include, and the Executive shall be entitled after the Executive’s Separation from Service to receive, disability and other benefits at least equal to the most favorable of those generally provided by the Company and its Affiliated Companies to disabled executives and/or their families in accordance with such plans, programs, practices and policies relating to disability, if any, as in effect generally with respect to other peer executives and their families at any time during the 120-day period immediately preceding the Effective Date.

10

(d)     Cause; Other than for Good Reason. If the Company causes the Executive to Separate from Service for Cause during the Service Period as described in Subsection 3(b), this Agreement shall terminate without further obligations to the Executive other than the obligation to pay to the Executive (x) his Annual Base Salary through the Separation from Service, payable on the next regularly scheduled payroll date (or such earlier date as required by law), (y) the amount of any compensation previously deferred by the Executive (which shall be paid at the time and in the form it would otherwise have been paid had this Agreement not applied), and (z) Other Benefits, in each case to the extent theretofore unpaid and at the times provided in the applicable plan or agreement. If the Executive voluntarily Separates from Service during the Service Period, excluding a Separation from Service for Good Reason as described in Subsection 3(c), this Agreement shall terminate without further obligations of the Company to the Executive under this Agreement, other than for payment of Accrued Obligations and the timely payment or provision of Other Benefits. In such case, all Accrued Obligations shall be paid to the Executive at the time and in the form provided in Subsection 4(a)(i)(A) and the Company shall timely pay or provide the Other Benefits to the Executive. In no event shall the Executive be liable to the Company or its Affiliated Companies for any damages caused by such voluntary Separation from Service by the Executive nor shall the Executive be in any way restricted from providing service to any other party after such voluntary Separation from Service.

Section 5.     Section 409A Payment Limits.

(a)     To the maximum extent possible, the provisions of this Agreement shall be construed in such a manner that no amounts payable to the Executive are subject to the additional tax and interest provided in Section 409A(a)(1)(B). In no event whatsoever shall the Company or its Affiliated Companies be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or any damages for failing to comply with Section 409A. If any payment (whether cash or in-kind), including but not limited to reimbursements and Other Benefits, would constitute a “deferral of compensation” under Section 409A and a payment date that complies with Section 409A(a)(2) is not otherwise provided for such benefit either in this Agreement or a Company or its Affiliated Companies program or policy, then such payment shall be made not later than 2 ½ months after the end of the calendar year in which the payment is no longer subject to a substantial risk of forfeiture. Any receipts or other proof of expenses (if required) shall be submitted to the Company by the Executive no later than one month after the end of the calendar year in which the payment is no longer subject to a substantial risk of forfeiture.

(b)     Notwithstanding any provision in this Agreement to the contrary, if at the time of Separation from Service the Executive is a “specified employee” within the meaning of Section 409A, any cash or in-kind payments which constitute a “deferral of compensation” under Section 409A and which would otherwise become due under this Agreement during the first 6 months (or such longer period as required by Section 409A) after Separation from Service shall be delayed and all such delayed payments shall be paid in full in the 7th month after the Separation from Service, and all subsequent payments shall be paid in accordance with their original payment schedule. To the extent that any insurance premiums or other benefit contributions constituting a “deferral of compensation” become subject to the above delay, the Executive shall be responsible for paying such amounts directly to the insurer or other third party and shall receive reimbursement from the Company for such amounts in the 7th month as described above. The above specified employee delay shall not apply to any payments that are excepted from coverage by Section 409A, such as those payments covered by the short-term deferral exception described in Treasury Regulations Section 1.409A-1(b)(4).

11

(c)     The Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. In no event may the Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered “deferral of compensation.”

Section 6.     Nonexclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its Affiliated Companies and for which the Executive may qualify, nor, subject to Subsection 11(f), shall anything herein limit or otherwise affect such rights as the Executive may have under any contract or agreement with the Company or any of its Affiliated Companies. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company or any of its Affiliated Companies at or subsequent to his or her Separation from Service shall be payable in accordance with such plan, policy, practice or program or contract or agreement, except as explicitly modified by this Agreement.

Section 7.     Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or its Affiliated Companies may have against the Executive or others. In no event shall the Executive be obligated to seek another position or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains another position. To the extent that any amount due hereunder has become subject to a bona fide dispute, payment of such amount may be delayed until no later than the end of the first taxable year of the Executive in which the Company and the Executive enter into a legally binding settlement of such dispute, the Company concedes that the amount is payable, or the Company is required to make such payment pursuant to a final and nonappealable judgment or other binding decision, as set forth in Treasury Regulation Section 1.409A-3(g), and any such payment shall include interest on such delayed amount from the original due date thereof until paid at the prime rate from time to time reported in The Wall Street Journal during said period, plus, to the fullest extent permitted by law, the amount of all legal fees and expenses which the Executive reasonably incurs as a result of any contest by the Company, the Executive or others in which the Executive is the prevailing party.

Section 8.     Confidential Information. The Executive shall hold in a fiduciary capacity for the benefit of the Company and its Affiliated Companies all secret or confidential information, knowledge or data relating to the Company or any of its Affiliated Companies, and their respective businesses, which shall have been obtained by the Executive during the Executive’s service with the Company or any of its Affiliated Companies and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After Executive’s Separation from Service with the Company and its Affiliated Companies, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data to anyone other than the Company and its Affiliated Companies and those designated by it. In no event shall an asserted violation of the provisions of this Section constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. The provisions of this Section shall survive any termination of this Agreement or the Executive’s separation of service with the Company and its Affiliated Companies.

12

Section 9.     Excise Tax on Parachute Payments. Anything in this Agreement to the contrary notwithstanding and except as set forth below, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section, except as otherwise provided in this Section) (hereinafter referred to collectively as a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Payments shall be reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Executive shall exceed the net after-tax benefit that would be received by the Executive if no such reduction was made.

“Net after-tax benefit” shall mean (a) the total of all Payments which the Executive receives or is then entitled to receive from the Company or its Affiliated Companies that would constitute “excess parachute payments” within the meaning of Section 280G of the Code, less (b) the amount of all foreign, federal, state and local income and employment taxes payable by the Executive with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which such payments shall be made to the Executive (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first such payment), less (c) the amount of Excise Tax imposed with respect to the Payments described in (a) above.

If a reduction is to occur pursuant to this Section, the payments and benefits under this Agreement shall be reduced in the following order: any cash severance (in reverse order of payment), then outplacement services (in reverse order), then any other amount that is a “parachute payment” within the meaning of Section 280G of the Code in such order as determined in the sole discretion of the Company and not the Executive.

Section 10.     Successors. (a) This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

(b)     This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)     The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, the term “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

13

Section 11.     Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without reference to principles of conflict of laws. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(b)     Each notice, request, demand, approval or other communication which may be or is required to be given under this Agreement shall be in writing and shall be deemed to have been properly given when delivered personally at the address set forth below for the intended party during normal business hours at such address, when sent by facsimile or other electronic transmission to the respective facsimile transmission numbers of the parties set forth below with telephone confirmation of receipt, or when sent by recognized overnight courier or by the United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:

Littelfuse, Inc.
8755 W. Higgins Road

O'Hare Plaza, Suite 500

Chicago, IL 60631
Attention: President

Phone: (773) 628-0800

Facsimile: (773) 628-0802

If to the Executive, to the last address shown in the records of the Company.

Notices shall be given to such other addressee or address, or both, or by way of such other facsimile transmission number, as a particular party may from time to time designate by written notice to the other party hereto. Each notice, request, demand, approval or other communication which is sent in accordance with this Section shall be deemed given and received for all purposes of this Agreement as of two business days after the date of deposit thereof for mailing in a duly constituted United States post office or branch thereof, one business day after deposit with a recognized overnight courier service or upon confirmation of receipt of any facsimile transmission. Notice given to a party hereto by any other method shall only be deemed to be given and received when actually received in writing by such party.

(c)     The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d)     The Company may withhold from any amounts payable under this Agreement such Federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

14

(e)     The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to promptly assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to Separate from Service for Good Reason pursuant to Subsection 3(c)(i)-(v) hereof, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(f)     The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment or other service of the Executive by or with the Company and its Affiliated Companies is “at will” and, subject to Subsection 1(d) hereof and/or any other written agreement between the Executive and the Company, prior to the Effective Date, the Executive’s employment and/or service and/or this Agreement may be terminated by either the Executive or the Company or its Affiliated Companies at any time prior to the Effective Date upon written notice to the other party, in which case the Executive shall have no further rights under this Agreement. From and after the Effective Date, this Agreement shall supersede any other agreement between the parties with respect to the subject matter hereof.

(g)     This Agreement may be executed in two or more counterparts, all of which taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Change of Control Agreement on the dates set forth below.

	EXECUTIVE
Date: May 26, 2015	/s/ Matt Cole
	Matt Cole

		LITTELFUSE, INC.
Date: June 8, 2015	By:	/s/ Gordon Hunter
		Gordon Hunter, Chief Executive Officer

EX-10.14

Exhibit 10.14

Littelfuse, Inc.

Summary of Director Compensation

Directors of Littelfuse, Inc. (the “Company”) who are not also employees of the Company are paid an annual fee of $65,000, plus reimbursement of reasonable expenses related to attendance at meetings. Our lead director is paid an additional $15,000 annually; the chairperson of the Audit Committee is paid an additional $18,000 annually; the chairperson of the Compensation Committee is paid an additional $15,000 annually; the chairperson of the Nominating and Governance Committee is paid an additional $10,000 annually; and the chairperson of the Technology Committee is paid an additional $10,000 annually. No fees are paid to directors who are also full-time employees of the Company.

In addition, each non-employee director receives a grant of equity under the Littelfuse, Inc. Long-Term Incentive Plan (the “Long-Term Plan”) comprised of one-third options to purchase shares of common stock and two-thirds restricted stock units upon his election or reelection to the Board of Directors at the Company’s annual meeting of stockholders. The value of the grant is equal to $105,000. The stock options vest ratably over three years, have an exercise price equal to the fair market value of the Company’s common stock on the date of grant, and have a seven-year term. The restricted stock units vest ratably over three years and entitle the director to receive one share of common stock per unit upon vesting.

Non-employee directors may elect to defer receipt of their cash fees under the Littelfuse Deferred Compensation Plan for Non-employee Directors (the “Directors Plan”) and defer payout of their equity grants and any dividend distributions under the Long-Term Plan. All deferrals are deposited with a third-party trustee, where they (and any distributions) are invested in Littelfuse common stock. Deferred cash fees are generally paid in a lump sum or installments when the director ceases to be a director of Littelfuse. Deferred equity grants are generally paid out when the director ceases to be a director or the date specified by the director at the time of his deferral election.

EX-10.15

Exhibit 10.15

T. Rowe Price Retirement Plan Services, Inc.

PDS PREMIERTm VOLUME SUBMITTER 401(K) SAVINGS/PS PLAN
Base Plan Document No. 01

©2014 Plan Document Systems^TM

TABLE OF CONTENTS

PREAMBLE		1
ARTICLE I DEFINITIONS AND INTERPRETATION		1
1.1	PLAN DEFINITIONS	1
1.2	INTERPRETATION	14
ARTICLE II SERVICE		15
2.1	SPECIAL DEFINITIONS	15
2.2	CREDITING OF HOURS OF SERVICE	15
2.3	HOURS OF SERVICE EQUIVALENCIES	16
2.4	LIMITATIONS ON CREDITING OF HOURS OF SERVICE	16
2.5	DEPARTMENT OF LABOR RULES	17
2.6	CREDITING OF "CONTINUOUS SERVICE"	17
2.7	CREDITING ELIGIBILITY SERVICE	17
2.8	CREDITING VESTING SERVICE	18
2.9	EXCLUSION OF VESTING SERVICE COMPLETED FOLLOWING A BREAK FOR DETERMINING VESTED INTEREST IN PRIOR ACCRUED BENEFIT	18
2.10	CREDITING OF HOURS OF SERVICE WITH RESPECT TO SHORT COMPUTATION PERIODS	18
2.11	CHANGE OF SERVICE CREDITING METHOD	19
ARTICLE III ELIGIBILITY		19
3.1	ELIGIBILITY	19
3.2	TRANSFERS OF EMPLOYMENT	19
3.3	REEMPLOYMENT	19
3.4	NOTIFICATION CONCERNING NEW ELIGIBLE EMPLOYEES	20
3.5	EFFECT AND DURATION	20
ARTICLE IV 401(K) CONTRIBUTIONS		20
4.1	401(K) CONTRIBUTIONS	20
4.2	ROTH 401(K) CONTRIBUTIONS	20
4.3	SPECIAL BONUS/COMMISSIONS ELECTION	21
4.4	TRUE-UP 401(K) CONTRIBUTIONS	21
4.5	COMBINED LIMIT ON 401(K) AND AFTER-TAX CONTRIBUTIONS	22
4.6	CATCH-UP 401(K) CONTRIBUTIONS	22
4.7	AMENDMENTS TO REDUCTION AUTHORIZATION	22
4.8	SUSPENSION OF 401(K) CONTRIBUTIONS	22
4.9	RESUMPTION OF 401(K) CONTRIBUTIONS	23
4.10	AUTOMATIC CONTRIBUTION ARRANGEMENT (ACA)	23
4.11	AUTOMATIC ESCALATION PROVISIONS	23
4.12	NOTICE OF ACA OR AUTOMATIC ESCALATION PROVISIONS	23
4.13	AFFIRMATIVE ELECTIONS UNDER ACA OR AUTOMATIC ESCALATION PROVISIONS	24
4.14	AUTOMATIC ESCALATION FOR EMPLOYEES ELECTING OUT OF QACA	25
4.15	CONTRIBUTIONS LIMITED TO CURRENTLY AVAILABLE COMPENSATION	25
4.16	DELIVERY OF 401(K) CONTRIBUTIONS	25
4.17	VESTING OF 401(K) CONTRIBUTIONS	25
ARTICLE V AFTER-TAX AND ROLLOVER CONTRIBUTIONS		26
5.1	AFTER-TAX CONTRIBUTIONS	26
5.2	COMBINED LIMIT ON 401(K) AND AFTER-TAX CONTRIBUTIONS	26
5.3	AMENDMENTS TO PAYROLL WITHHOLDING AUTHORIZATION	26
5.4	SUSPENSION OF AFTER-TAX CONTRIBUTIONS BY PAYROLL WITHHOLDING	26

i

5.5	RESUMPTION OF AFTER-TAX CONTRIBUTIONS BY PAYROLL WITHHOLDING	26
5.6	DELIVERY OF AFTER-TAX CONTRIBUTIONS	27
5.7	PRIOR/TRANSFERRED AFTER-TAX CONTRIBUTIONS	27
5.8	SEPARATE ACCOUNTING FOR AFTER-TAX CONTRIBUTIONS	27
5.9	ROLLOVER CONTRIBUTIONS	27
5.10	IN-PLAN ROTH ROLLOVER CONTRIBUTIONS	28
5.11	SPECIAL RULES APPLICABLE TO DESIGNATED ROTH ROLLOVER CONTRIBUTION OR IN-PLAN ROTH ROLLOVER CONTRIBUTION	28
5.12	SEPARATE ACCOUNTING FOR AFTER-TAX ROLLOVER CONTRIBUTIONS, DESIGNATED ROTH ROLLOVER CONTRIBUTIONS, AND IN-PLAN ROTH ROLLOVER CONTRIBUTIONS	28
5.13	VESTING OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS	29
ARTICLE VI EMPLOYER CONTRIBUTIONS		29
6.1	CONTRIBUTION PERIOD	29
6.2	AMOUNT AND ALLOCATION OF STANDARD NONELECTIVE CONTRIBUTIONS	29
6.3	AMOUNT AND ALLOCATION OF ADDITIONAL DISCRETIONARY NONELECTIVE CONTRIBUTIONS	32
6.4	QUALIFIED NONELECTIVE CONTRIBUTIONS	32
6.5	ADDITIONAL, DISCRETIONARY QUALIFIED NONELECTIVE CONTRIBUTIONS	33
6.6	REGULAR MATCHING CONTRIBUTIONS	33
6.7	ADDITIONAL DISCRETIONARY MATCHING CONTRIBUTIONS	34
6.8	TRUE-UP MATCHING CONTRIBUTIONS	34
6.9	QUALIFIED MATCHING CONTRIBUTIONS	35
6.10	MAXIMUM DOLLAR AMOUNT OF DISCRETIONARY MATCH	35
6.11	NoN-QACA SAFE HARBOR MATCHING CONTRIBUTIONS	36
6.12	QACA SAFE HARBOR MATCHING CONTRIBUTIONS	36
6.13	SAFE HARBOR NONELECTIVE CONTRIBUTIONS (QACA AND NoN-QACA)	36
6.14	VERIFICATION OF AMOUNT OF EMPLOYER CONTRIBUTIONS BY THE PLAN SPONSOR	37
6.15	PAYMENT OF EMPLOYER CONTRIBUTIONS	37
6.16	ALLOCATION REQUIREMENTS	37
6.17	VESTING OF EMPLOYER CONTRIBUTIONS	38
6.18	ELECTION OF FORMER VESTING SCHEDULE	38
6.19	PROFITS LIMITATION	38
6.20	FORFEITURES TO REDUCE EMPLOYER CONTRIBUTIONS	39
ARTICLE VII LIMITATIONS ON CONTRIBUTIONS		39
7.1	SPECIAL DEFINITIONS	39
7.2	CODE SECTION 402(G) LIMIT	47
7.3	DISTRIBUTION OF "EXCESS DEFERRALS"	48
7.4	LIMITATION ON 401(K) CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES - ADP TEST	48
7.5	DETERMINATION AND ALLOCATION OF "EXCESS CONTRIBUTIONS" AMONG HIGHLY COMPENSATED EMPLOYEES	50
7.6	TREATMENT OF EXCESS 401(K) CONTRIBUTIONS	50
7.7	LIMITATION ON MATCHING CONTRIBUTIONS AND AFTER-TAX CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES - ACP TEST	51
7.8	DETERMINATION AND ALLOCATION OF "EXCESS AGGREGATE CONTRIBUTIONS" AMONG HIGHLY COMPENSATED EMPLOYEES	53
7.9	FORFEITURE OR DISTRIBUTION OF "EXCESS AGGREGATE CONTRIBUTIONS"	53
7.10	TREATMENT OF FORFEITED MATCHING CONTRIBUTIONS	54
7.11	DETERMINATION OF INCOME OR Loss	54
7.12	DEEMED SATISFACTION OF THE ADP TEST	54
7.13	DEEMED SATISFACTION OF THE LIMITATIONS ON MATCHING CONTRIBUTIONS OF HIGHLY COMPENSATED EMPLOYEES	55
7.14	NOTICE REQUIREMENTS FOR SAFE HARBOR MATCHING CONTRIBUTIONS AND SAFE HARBOR NONELECTIVE CONTRIBUTIONS	55
7.15	CODE SECTION 415 LIMITATIONS ON CREDITING OF CONTRIBUTIONS AND FORFEITURES	56
7.16	APPLICATION OF CODE SECTION 415 LIMITATIONS WHERE PARTICIPANT IS COVERED UNDER OTHER QUALIFIED DEFINED CONTRIBUTION PLAN	57

ii

7.17	SCOPE OF LIMITATIONS	57
ARTICLE VIII TRUST FUNDS AND ACCOUNTS		57
8.1	GENERAL FUND	57
8.2	INVESTMENT FUNDS	58
8.3	LOAN INVESTMENT FUND	58
8.4	EMPLOYER STOCK INVESTMENT FUND	58
8.5	INCOME ON TRUST	59
8.6	ACCOUNTS	59
8.7	SUB-ACCOUNTS	59
ARTICLE IX LIFE INSURANCE CONTRACTS		59
9.1	LIFE INSURANCE CONTRACTS	59
9.2	PAYMENT OF PREMIUMS AND DISPOSITION OF DIVIDENDS	60
9.3	OVERRIDING CONDITIONS AND LIMITATIONS	60
9.4	DEATH BENEFITS	61
9.5	OTHER DISTRIBUTIONS; VESTING	61
9.6	SUSPENSION OF FURTHER PURCHASES OF LIFE INSURANCE CONTRACTS	62
ARTICLE X DEPOSIT AND INVESTMENT OF CONTRIBUTIONS		62
10.1	FUTURE CONTRIBUTION INVESTMENT ELECTIONS	62
10.2	DEPOSIT OF CONTRIBUTIONS	62
10.3	ELECTION TO TRANSFER BETWEEN FUNDS	63
10.4	404(c) PROTECTION	63
10.5	DIVERSIFICATION OF INVESTMENTS IN EMPLOYER STOCK	63
ARTICLE XI CREDITING AND VALUING ACCOUNTS		65
11.1	CREDITING ACCOUNTS	65
11.2	VALUING ACCOUNTS	65
11.3	PLAN VALUATION PROCEDURES	65
11.4	UNIT ACCOUNTING PERMITTED	66
11.5	FINALITY OF DETERMINATIONS	66
11.6	NOTIFICATION	66
ARTICLE XH LOANS		66
12.1	APPLICATION FOR LOAN	66
12.2	COLLATERAL FOR LOAN	66
12.3	REDUCTION OF ACCOUNT UPON DISTRIBUTION	67
12.4	REQUIREMENTS TO PREVENT A TAXABLE DISTRIBUTION	67
12.5	ADMINISTRATION OF LOAN INVESTMENT FUND	68
12.6	DEFAULT	69
12.7	DEEMED DISTRIBUTION UNDER CODE SECTION 72(P)	69
12.8	TREATMENT OF OUTSTANDING BALANCE OF LOAN DEEMED DISTRIBUTED UNDER CODE SECTION 72(P)	69
12.9	PRIOR LOANS	69
ARTICLE XIII WITHDRAWALS WHILE EMPLOYED		70
13.1	NON-HARDSHIP WITHDRAWALS	70
13.2	WITHDRAWAL OF CONTRIBUTIONS SUBJECT TO DISTRIBUTION RESTRICTIONS UNDER CODE SECTION 401(K) UPON DEEMED SEVERANCE FROM EMPLOYMENT DUE TO QUALIFIED MILITARY SERVICE	70
13.3	QUALIFIED RESERVIST WITHDRAWALS OF 401(K) CONTRIBUTIONS	70
13.4	SPECIAL IN-SERVICE WITHDRAWALS OF OTHER CONTRIBUTIONS WHILE PERFORMING MILITARY SERVICE	71
13.5	OVERALL LIMITATIONS ON NON-HARDSHIP WITHDRAWALS	71
13.6	HARDSHIP WITHDRAWALS	71

3

13.7	HARDSHIP DETERMINATION	72
13.8	SATISFACTION OF NECESSITY REQUIREMENT FOR HARDSHIP WITHDRAWALS	73
13.9	CONDITIONS AND LIMITATIONS ON HARDSHIP WITHDRAWALS	73
13.10	ORDER OF WITHDRAWAL FROM A PARTICIPANT'S SUB-ACCOUNTS	74
13.11	PERMISSIBLE WITHDRAWALS UNDER EACA	74
ARTICLE XIV TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE		75
14.1	TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE	75
14.2	SEPARATE ACCOUNTING FOR NON-VESTED AMOUNTS	75
14.3	DISPOSITION OF NON-VESTED AMOUNTS	75
14.4	TREATMENT OF FORFEITED AMOUNTS	75
14.5	RECREDITING OF FORFEITED AMOUNTS	75
ARTICLE XV DISTRIBUTIONS		76
15.1	DISTRIBUTIONS TO PARTICIPANTS	76
15.2	SPECIAL IN-SERVICE DISTRIBUTIONS	77
15.3	PARTIAL DISTRIBUTIONS	77
15.4	VOLUNTARY ELECTIVE TRANSFERS	77
15.5	DISTRIBUTIONS TO BENEFICIARIES	77
15.6	CODE SECTION 401(A)(9) REQUIREMENTS	77
15.7	CASH OUTS AND PARTICIPANT CONSENT	82
15.8	REQUIRED COMMENCEMENT OF DISTRIBUTION	82
15.9	REEMPLOYMENT OF A PARTICIPANT	82
15.10	RESTRICTIONS ON ALIENATION	83
15.11	FACILITY OF PAYMENT	83
15.12	INABILITY TO LOCATE PAYEE	83
15.13	DISTRIBUTION PURSUANT TO QUALIFIED DOMESTIC RELATIONS ORDERS	84
ARTICLE XVI FORM OF PAYMENT		84
16.1	SPECIAL DEFINITIONS	84
16.2	FORM OF PAYMENT	85
16.3	MINIMUM REQUIRED DISTRIBUTIONS	86
16.4	CHANGE OF ELECTION	86
16.5	AUTOMATIC ANNUITY REQUIREMENTS	86
16.6	QUALIFIED PRERETIREMENT SURVIVOR ANNUITY REQUIREMENTS	86
16.7	DIRECT ROLLOVER	87
16.8	NOTICE REGARDING FORM OF PAYMENT	88
16.9	REEMPLOYMENT	89
16.10	ELIMINATION OF OPTIONAL FORM OF PAYMENT	89
ARTICLE XVH BENEFICIARIES		89
17.1	DESIGNATION OF BENEFICIARY	89
17.2	SPOUSAL CONSENT REQUIREMENTS	90
17.3	REVOCATION OF BENEFICIARY DESIGNATION UPON DIVORCE	90
ARTICLE XVIII ADMINISTRATION		91
18.1	AUTHORITY OF THE PLAN SPONSOR	91
18.2	DISCRETIONARY AUTHORITY	91
18.3	ACTION OF THE PLAN SPONSOR	91
18.4	CLAIMS REVIEW PROCEDURE	91
18.5	SPECIAL RULES APPLICABLE TO CLAIMS RELATED TO INVESTMENT ERRORS	96
18.6	EXHAUSTION OF REMEDIES AND LIMITATION ON FILING CIVIL ACTION	96
18.7	GROUNDS FOR JUDICIAL REVIEW	96
18.8	QUALIFIED DOMESTIC RELATIONS ORDERS	96
18.9	CORRECTION OF ERRONEOUS PAYMENTS AND OVERPAYMENTS	96
18.10	INDEMNIFICATION	97

4

18.11	PRUDENT MAN STANDARD OF CARE	97
18.12	ACTIONS BINDING	97
ARTICLE XIX AMENDMENT AND TERMINATION		97
19.1	AMENDMENT BY PLAN SPONSOR	97
19.2	AMENDMENT BY VOLUME SUBMITTER PRACTITIONER	98
19.3	LIMITATION ON AMENDMENT	98
19.4	TERMINATION	98
19.5	REORGANIZATION	99
19.6	WITHDRAWAL OF AN EMPLOYER	100
19.7	EFFECT OF FAILURE TO QUALIFY UNDER CODE	100
ARTICLE XX ADOPTION BY OTHER COMPANIES		100
20.1	ADOPTION BY OTHER COMPANIES	100
20.2	EFFECTIVE PLAN PROVISIONS	100
ARTICLE XXI MISCELLANEOUS PROVISIONS		101
21.1	No COMMITMENT AS TO EMPLOYMENT	101
21.2	BENEFITS	101
21.3	No GUARANTEES	101
21.4	EXPENSES	101
21.5	PRECEDENT	101
21.6	DUTY TO FURNISH INFORMATION	101
21.7	MERGER, CONSOLIDATION, OR TRANSFER OF PLAN ASSETS	101
21.8	CONDITION ON EMPLOYER CONTRIBUTIONS	102
21.9	RETURN OF CONTRIBUTIONS TO AN EMPLOYER	102
21.10	VALIDITY OF PLAN	102
21.11	TRUST AGREEMENT	102
21.12	PARTIES BOUND	102
21.13	APPLICATION OF CERTAIN PLAN PROVISIONS	102
21.14	MERGED PLANS	103
21.15	APPLICATION OF PLAN PROVISIONS IN MULTIPLE EMPLOYER PLANS	103
21.16	SPECIAL RULES APPLICABLE TO PARTICIPANTS ABSENT DUE TO MILITARY SERVICE	104
21.17	DELIVERY OF CASH AMOUNTS	105
21.18	WRITTEN COMMUNICATIONS	105
21.19	TRUST TO TRUST TRANSFER	105
21.20	TRANSFERRED FUNDS	105
21.21	PLAN CORRECTION PROCEDURES	105
ARTICLE XXII TOP-HEAVY PROVISIONS		106
22.1	SPECIAL DEFINITIONS	106
22.2	APPLICABILITY	107
22.3	MINIMUM EMPLOYER CONTRIBUTION	107
22.4	ACCELERATED VESTING	108
22.5	EXCLUSION OF COLLECTIVELY-BARGAINED EMPLOYEES	108

5

PREAMBLE

This volume submitter plan consists of the Base Plan Document and a separate Adoption Agreement that is executed by an adopting Employer and is incorporated into the provisions of the Base Plan Document by reference. The volume submitter plan is intended to qualify under Code Section 401(a). Depending upon elections made in the Adoption Agreement, the volume submitter plan may be used to implement a profit sharing plan or a profit sharing plan with a cash or deferred arrangement intended to qualify under Code Section 401(k).

The Plan provisions include Compliance Addenda reflecting changes in the law that became effective after the Volume Submitter specimen plan was submitted to the Internal Revenue Service for pre-approval. These Addenda may override or augment specific Sections of the Plan as reflected in the body of the document or in prior Addenda.

ARTICLE I
DEFINITIONS AND INTERPRETATION

1.1 Plan Definitions

As used herein, the following words and phrases, when they appear with initial letters capitalized as indicated below, have the meanings hereinafter set forth:

(a) An "ACA" means an automatic contribution arrangement under which 401(k) Contributions are automatically withheld from an Eligible Employee's Compensation unless the Eligible Employee affirmatively elects otherwise.

(b) An "Account" means the account maintained in the name of a Participant that reflects his interest in the Plan and any Sub-Accounts maintained thereunder, as provided in Article VIII.

(c) An "Additional Discretionary Matching Contribution" means any Matching Contribution made to the Plan at an Employer's discretion in addition to the Employer's Regular Matching Contribution as provided in the Adoption Agreement, other than a True-Up Matching Contribution or any such contribution characterized by the Employer as a Qualified Matching Contribution.

(d) An "Additional Discretionary Nonelective Contribution" means any Nonelective Contribution made to the Plan at an Employer's discretion that may be made in addition to the Employer's Standard Nonelective Contribution.

(e) The "Administrator" means the Plan Sponsor unless the Plan Sponsor designates another person or persons to act as such. The Plan Sponsor may designate different persons to act as its delegate in performing different functions of the Administrator.

(f) The "Adoption Agreement" means the separate agreement executed by a participating Employer or the Plan Sponsor under which the Employer or Plan Sponsor elects the optional provisions that apply under the Plan. The Adoption Agreement may also describe certain mandatory Plan provisions, provisions that apply under the Plan without the Employer electing them. A feature is "provided" under the Adoption Agreement if either (1) it is an optional provision and is elected by the Employer or Plan Sponsor or (2) it is a mandatory Plan provision described in the Adoption Agreement. The provisions of the Adoption Agreement are an integral part of the Plan.

(g) An "After-Tax Contribution" means any after-tax employee contribution made by a Participant to the Plan as may be permitted under the Adoption Agreement or as may have been permitted under the terms of the Plan prior to this amendment and restatement or any after-tax employee contribution made by a Participant to another plan that is transferred directly to the Plan.

1

(h) An "After-Tax Rollover Contribution" means any portion of a Participant's Rollover Contribution that is attributable to after-tax employee contributions.

(i) The "Base Plan Document" means this PDS Premier' Volume Submitter 401(k) Savings/PS Plan document qualified with the Internal Revenue Service as Base Plan Document No. 01.

(1) The "Beneficiary" of a Participant means the person or persons entitled under the provisions of the Plan to receive distribution hereunder in the event the Participant dies before receiving distribution of his entire interest under the Plan.

(k) A Participant's "Benefit Payment Date" means (i) if payment is made through the purchase of an annuity, the first day of the first period for which the annuity is payable or (ii) if payment is made in any other form, the first day on which all events have occurred which entitle the Participant to receive payment of his benefit.

(1) A "Break in Eligibility Service" means the following:

(1) If Eligibility Service is credited on an Hours of Service basis, as provided in the Adoption Agreement, any "eligibility computation period" (as described in Section 2.1) during which an Employee completes no more than (1) if 1,000 Hours of Service is required for a year of Eligibility Service, 500 Hours of Service or (2) if fewer than 1,000 Hours of Service is required for a year of Eligibility Service, 1/2 the number of Hours of Service required for a year of Eligibility Service. Notwithstanding the foregoing, no Employee shall incur a Break in Eligibility Service solely by reason of temporary absence from work not exceeding 12 months resulting from illness, layoff, or other cause if authorized in advance by an Employer or a Related Employer pursuant to its uniform leave policy, if his employment shall not otherwise be terminated during the period of such absence.

(2) If Eligibility Service is credited on an elapsed time basis, as provided in the Adoption Agreement, a 12-consecutive-month period beginning on a person's Severance Date or any anniversary thereof during which the person is not credited with an Hour of Service, as defined in Section 2.2(a). Notwithstanding the foregoing, the following special rules apply in determining whether a person who is on a leave of absence has incurred a Break in Eligibility Service:

(A) If the person is absent because of a Maternity/Paternity Absence beyond the first anniversary of his Severance Date, the 12-consecutive month period beginning on his Severance Date shall not constitute a Break in Eligibility Service.

(B) If the person is absent because of a "FMLA leave", and returns to employment with an Employer or a Related Employer following such "FMLA leave", he shall not incur a Break in Eligibility Service for any 12-consecutive-month period beginning on his Severance Date or anniversaries thereof in which he is absent because of "FMLA leave". A "FMLA leave" means an approved leave of absence pursuant to the Family and Medical Leave Act of 1993.

(m) A "Break in Vesting Service" means the following:

(1) If Vesting Service is credited on an Hours of Service basis, as provided in the Adoption Agreement, any "vesting computation period" (as defined in the Adoption Agreement) during which an Employee completes no more than (1) if 1,000 Hours of Service is required for a year of Vesting Service, 500 Hours of Service or (2) if fewer than 1,000 Hours of Service is required for a year of Vesting Service, 1/2 the number of Hours of Service required for a year of Vesting Service. Notwithstanding the foregoing, no Employee shall incur a Break in Vesting Service solely by reason of temporary absence from work not exceeding 12 months resulting from illness, layoff, or other cause if authorized in advance by an Employer or a Related Employer pursuant to its uniform leave policy, if his employment shall not otherwise be terminated during the period of such absence.

2

(2) If Vesting Service is credited on an elapsed time basis, as provided in the Adoption Agreement, a 12-consecutive-month period beginning on a person's Severance Date or any anniversary thereof during which the person is not credited with an Hour of Service, as defined in Section 2.2(a). Notwithstanding the foregoing, the following special rules apply in determining whether a person who is on a leave of absence has incurred a Break in Vesting Service:

(A) If the person is absent because of a Maternity/Paternity Absence beyond the first anniversary of his Severance Date, the 12-consecutive month period beginning on his Severance Date shall not constitute a Break in Vesting Service.

(B) If the person is absent because of a "FMLA leave", and returns to employment with an Employer or a Related Employer following such "FMLA leave", he shall not incur a Break in Vesting Service for any 12-consecutive-month period beginning on his Severance Date or anniversaries thereof in which he is absent because of "FMLA leave". A "FMLA leave" means an approved leave of absence pursuant to the Family and Medical Leave Act of 1993.

(n) A "Catch-Up 401(k) Contribution" means any 401(k) Contribution made to the Plan pursuant to Section 4.6 that is in excess of an applicable Plan limit and is made pursuant to, and is intended to comply with, Code Section 414(v). Catch-Up 401(k) Contributions may include Pre-Tax 401(k) Contributions and/or Roth 401(k) Contributions.

(o) The "Code" means the Internal Revenue Code of 1986, as amended from time to time. Reference to a Code section includes such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section.

(p) The "Compensation" of a Participant for purposes of determining the amount and allocation of each contribution source under the Plan means Compensation as defined for such contribution source in the Adoption Agreement, including those amounts, if any, designated for such contribution source in the Adoption Agreement and excluding those amounts, if any, designated for such contribution source in the Adoption Agreement.

If provided in the Adoption Agreement, the following definitions of Compensation have the following meanings:

(1) W-2 Compensation. A Participant's wages as defined in Code Section 3401(a), determined without regard to any rules that limit compensation included in wages based on the nature or location of the employment or services performed, and all other payments made to him for services as a Covered Employee for which his Employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3), and 6052 (commonly referred to as W-2 earnings).

(2) W-2 Compensation less moving expenses only. A Participant's wages as defined in Code Section 3401(a), determined without regard to any rules that limit compensation included in wages based on the nature or location of the employment or services performed, and all other payments made to him for services as a Covered Employee for which his Employer is required to furnish the Participant a written statement under Code Sections 6041(d), 6051(a)(3), and 6052 (commonly referred to as W-2 earnings), excluding moving expenses.

(3) Withholding Compensation. A Participant's wages as defined in Code Section 3401(a), paid to him for services as a Covered Employee that would be used for purposes of income tax withholding at the source, determined without regard to any rules that limit compensation included in wages based on the nature or location of the employment or services performed.

3

(4) General Section 415 Compensation. A Participant's general Section 415 Compensation includes (i) his wages, salaries, fees for professional service, and all other amounts received (without regard to whether such amounts are paid in cash) for personal services actually rendered in the course of employment with an Employer as a Covered Employee, to the extent the amounts are includible in gross income (or would have been received and includable in gross income but for the Participant's election, or deemed election, under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)), including, but not limited to, commissions paid to salesperson, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan described in Treasury Regulations Section 1.62-2(c), (ii) in case of a Participant who is an employee within the meaning of Code Section 401(c)(1), the Participant's earned income, as described in Code Section 401(c)(2) and regulations issued thereunder, (iii) amounts described in Code Section 104(a)(3), 105(a), or 105(h), but only to the extent such amounts are includible in the gross income of the Participant, (iv) amounts paid or reimbursed by the Employer for moving expenses incurred by the Participant, but only to the extent it is reasonable to believe the amounts are not deductible by the Participant under Code Section 217, (v) the value of a non-statutory option (an option other than a statutory option, as defined in Treasury Regulations Section 1.421-1(b)) granted to the Participant by the Employer, but only to the extent that the value of the option is includible in the gross income of the Participant for the taxable year in which granted, (vi) amounts includible in the gross income of the Participant upon making an election described in Code Section 83(b), and (vii) amounts that are includible in the gross income of the Participant under the rules of Code Section 409A or 457(f)(1)(A) or because the amounts are constructively received by the Participant. General Section 415 Compensation excludes (A) contributions (other than elective contributions described in Code Section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) made by the Participant's Employer to a plan of deferred compensation (including a simplified employee pension described in Code Section 408(k) or a simple retirement account described in Code Section 408(p)), whether or not qualified, to the extent that, before application of the limitations of Code Section 415 to such plan, the contributions are not includible in the gross income of the Participant for the taxable year in which contributed, (B) any distributions from a plan of deferred compensation, whether or not qualified, (except amounts received pursuant to an unfunded non-qualified plan in the year such amounts are includible in the gross income of the Participant), (C) amounts realized from the exercise of a non-qualified option or when restricted stock or other property held by the Participant either becomes freely transferable or is no longer subject to substantial risk of forfeiture, (D) amounts received from the sale, exchange or other disposition of stock acquired under a qualified stock option, (E) any other amounts that receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includible in the gross income of the Participant and are not salary reduction amounts that are described in Code Section 125), and (F) other items that are similar to the items listed in (A) through (E) above.

(5) Modified Section 415 Compensation. A Participant's modified Section 415 Compensation includes his wages, salaries, fees for professional service, and all other amounts received for personal services actually rendered in the course of employment with an Employer as a Covered Employee. Modified Section 415 Compensation excludes (i) contributions (other than elective contributions described in Code Section 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or 457(b)) made by the Participant's Employer to a plan of deferred compensation (including a simplified employee pension described in Code Section 408(k) or a simple retirement account described in Code Section 408(p)), whether or not qualified, to the extent that, before application of the limitations of Code Section 415 to such plan, the contributions are not includible in the gross income of the Participant for the taxable year in which contributed, (ii) any distributions from a plan of deferred compensation, whether or not qualified, (except amounts received pursuant to an unfunded non-qualified plan in the year such amounts are includible in the gross income of the Participant), (iii) amounts realized from the exercise of a non-qualified option or when restricted stock or other property held by the Participant either becomes freely transferable or is no longer subject to substantial risk of forfeiture, (iv) amounts received from the sale, exchange or other disposition of stock acquired under a qualified stock option, (v) any other amounts that receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includible in the gross income of the Participant and are not salary reduction amounts that are described in Code Section 125), and (vi) other items that are similar to the items listed in (i) through (v) above.

4

(6) Base Pay. A Participant's base pay means his base wages received for personal services actually rendered in the course of employment with an Employer as a Covered Employee, excluding bonuses, overtime, shift differential, and any other special compensation.

(7) Total Compensation excluding non-cash compensation. A Participant's total compensation excluding non-cash compensation means his wages, salaries, fees for professional service, and all other amounts received for personal services actually rendered in the course of employment with an Employer as a Covered Employee, except any such amounts that are not paid to the Participant in cash. For this purpose, an amount that would have been payable to the Participant in cash, but which is not paid because of the Participant's election under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b), is treated as having been paid to the Participant in cash.

(8) Regular Rate of Pay. A Participant's regular rate of pay for any period means the Participant's basic or regular rate of pay for such period for services as a Covered Employee, based on the hourly pay scale, weekly salary, or similar unit of base or regular pay applicable to such Participant.

Unless otherwise provided in the Adoption Agreement, a Participant's Compensation includes the following:

(9) any eligible amount that would have been received and included in the Participant's taxable gross income but for the Participant's election under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b);

(10) amounts paid to the Participant after his severance from employment (as defined in Treasury Regulations Section 1.401(k)-1(d)(2), for plans that include a cash or deferred arrangement or as defined in Treasury Regulations Section 1.415(a)-1(f)(5), for plans that do not include a cash or deferred arrangement), but before (1) the end of the "limitation year" in which the Participant's severance from employment occurs or (2) within 2 1/2 months of such severance from employment, whichever is later, provided such amounts would have been paid to the Participant in the course of employment and are regular compensation for services by the Participant or commissions, bonuses or other similar compensation, but only to the extent such amounts would have been included in the Participant's Compensation if his employment had continued;

(11) if the Participant is absent from employment as a Covered Employee to perform service in the uniformed services (as defined in Chapter 43 of Title 38 of the United States Code), his Compensation will include any "differential pay," as defined hereunder, he receives or is entitled to receive from his Employer. For purposes of this paragraph, "differential pay" means any payment made to the Participant by the Employer after December 31, 2008, with respect to a period during which the Participant is performing service in the uniformed services while on active duty for a period of more than 30 days that represents all or a portion of the wages the Participant would have received if he had continued employment with the Employer as a Covered Employee.

For any Self-Employed Individual, Compensation for any period means his Earned Income for such period for services as a Covered Employee adjusted so that it is equivalent under regulations issued under Code Section 414(s) to Compensation for Participants who are not Self-Employed Individuals.

5

In no event, however, shall the Compensation of a Participant taken into account under the Plan for any Plan Year exceed the limit elected in the Adoption Agreement, or, if no limit is elected, the limit in effect under Code Section 401(a)(17) ($250,000 for Plan Years beginning in 2012, subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for Plan Years beginning in such calendar year). If the Compensation of a Participant is determined over a period of time that contains fewer than 12 calendar months, then the annual limit in effect under Code Section 401(a)(17) shall be adjusted with respect to that Participant by multiplying the annual compensation limitation in effect for the Plan Year by a fraction the numerator of which is the number of full months in the period and the denominator of which is 12; provided, however, that no proration is required for a Participant who is covered under the Plan for less than one full Plan Year if either (i) the individual becomes an Eligible Employee part way through the Plan Year and the Adoption Agreement provides that Compensation prior to becoming an Eligible Employee is excluded in allocating contributions or (ii) the formula for allocations is based on Compensation for a period of at least 12 months.

(q) A "Contribution Period" means the period specified in the Adoption Agreement for which Employer Contributions shall be made.

(r) A "Covered Employee" means any Employee of an Employer who is in a class of Employees eligible to participate in the Plan, as provided in the Adoption Agreement. If an Employee is excluded from the definition of Covered Employee under the Adoption Agreement based on an expectation that he shall not complete a specified number of Hours of Service, he shall become a Covered Employee hereunder on the date on which he first satisfies both of the following requirements: (I) he has attained age 21 and (II) he has completed at least 1,000 Hours of Service during the 12 consecutive month period beginning on the first date he completes an Hour of Service or any Plan Year beginning after that date. An Employee who becomes a Covered Employee pursuant to the preceding sentence shall be treated as having transferred to employment as a Covered Employee for purposes of Article III.

Regardless of the elections in the Adoption Agreement, any individual who has executed a contract, letter of agreement, or other document acknowledging his status as an independent contractor not entitled to benefits under the Plan or any other individual who performs services for an Employer who is otherwise not classified by the Employer as an Employee and with respect to whom the Employer does not withhold income taxes and file Form W-2 (or any replacement Form) with the Internal Revenue Service, shall be excluded from the class of Employees eligible to participate in the Plan even if such individual is later adjudicated to be an Employee of the Employer unless and until the Employer extends coverage to such individual.

(s) A "Designated Roth Rollover Contribution" means any portion of a Participant's Rollover Contribution that is made by a direct rollover to the Plan and is attributable to designated Roth contributions, as described in Code Section 402A. Designated Roth Rollover Contributions do not include In-Plan Roth Rollover Contributions.

(t) "Disabled" means a Participant can no longer continue in the service of his employer because of a mental or physical condition that is likely to result in death or is expected to be of long-continued and indefinite duration. A Participant shall be considered Disabled only if he meets the criteria specified in the Adoption Agreement.

(u) A Participant's "Domestic Partner" means the person with whom a Participant maintains a domestic partnership, as determined by the Administrator. The Administrator shall determine that a Participant maintains a domestic partnership with a person if all of the following requirements are met:

(1) the Participant and the Participant's partner (i) maintain an intimate, committed relationship of mutual caring, (ii) share the same principal residence, (iii) agree to be responsible for each other's basic living expenses during the period of the relationship, and (iv) are not so closely related by blood that a legal marriage between them would otherwise be prohibited solely by reason of such blood relationship;

6

(2) neither the Participant nor the Participant's partner is married to a third party;

(3) the Participant has filed written notice with the Administrator, which the Participant has not subsequently withdrawn or revoked, identifying the person as his or her Domestic Partner;

(4) the Participant and the Participant's partner have complied with all requirements, if any, imposed by the political subdivision in which they are resident, for recognition of domestic partner status (such as declaration or registration requirements, duration of relationship requirements, cohabitation requirements, requirements relating to conduct of financial or contractual obligations, etc.); and

(5) the Participant's partner does not deny his or her status as the Participant's Domestic Partner or claim to be the domestic partner of, Spouse of, or subject to a civil union with any third person.

Any written statement provided by the Participant to the Administrator identifying an individual as his Domestic Partner, other than any such declaration that has subsequently been withdrawn, shall create a rebuttable presumption consistent with such declaration. The Administrator may rely on such presumption

unless and until a claimant presents contrary evidence to the Administrator that the Administrator determines is clear and sufficient to rebut such presumption. The Administrator shall have no responsibility to inquire into the accuracy, veracity, or authenticity of any such declaration or to ascertain whether the Participant and the Participant's partner have complied with all the requirements of the political subdivision in which they reside, it being the burden of any contrary claimant to disprove such compliance.

For those purposes specifically identified in the Plan, a Participant's Domestic Partner shall be treated the same as a Participant's Spouse.

(v) An "EACA" means an automatic contribution arrangement that satisfies the requirements of Code Section 414(w)(3) to be an eligible automatic contribution arrangement.

(w) The "Early Retirement Date" of an Employee means the date he satisfies the requirements specified by the Plan Sponsor in the Adoption Agreement, if any. If a Participant separates from service before satisfying the age requirement for early retirement, but has satisfied the service requirement, the Participant will be entitled to elect an early retirement benefit upon satisfaction of such age requirement.

(x) The "Earned Income" of an individual means the net earnings from self-employment in the trade or business with respect to which the Plan is established, for which personal services of the individual are a material income-producing factor. Net earnings will be determined without regard to items not included in gross income and the deductions allocable to such items. Net earnings are reduced by contributions by the individual's Employer to a qualified plan to the extent the contributions are deductible under Code Section 404. Net earnings shall be determined with regard to the deduction allowed to the taxpayer by Code Section 164(f) for taxable years beginning after December 31, 1989.

(y) The "Eligibility Service" of an Employee means the period or periods of service credited to him under the provisions of Article II for purposes of determining his eligibility to participate in the Plan as may be required under Article III.

(z) An "Eligible Employee" means any Covered Employee who has met the eligibility requirements of Article III to participate in the Plan.

(aa) An "Employee" means any common law employee of an Employer or a Related Employer, any Self-Employed Individual, any Leased Employee ( as required under Code Section 414(n)), or any individual treated as an employee of an Employer or a Related Employer under Code Section 414(o).

(bb) An "Employer" means any entity which has adopted the Plan to provide benefits to its employees.

7

(cc) An "Employer Contribution" means the amount, if any, that an Employer contributes to the Plan on behalf of its Eligible Employees in accordance with the provisions of the Adoption Agreement or Article XXII and that an Eligible Employee may not elect instead to receive in cash.

(dd) The "Employment Commencement Date" of an Employee means (i) the first date on which he completes an Hour of Service as defined in Section 2.2(a) or (ii) if the Employee incurs a Break in Eligibility Service or a Break in Vesting Service, as applicable, the first date following such Break in Eligibility Service or Break in Vesting Service on which he again completes an Hour of Service as defined in Section 2.2(a).

(ee) An "Entry Date" means the date or dates specified for each contribution source in the Adoption Agreement as of which a Covered Employee becomes an Eligible Employee with respect to such contribution source.

(ff) "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to a section of ERISA includes such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section.

(gg) A "401(k) Contribution" means any amount contributed to the Plan on behalf of a Participant that the Participant could elect to receive in cash, but that the Participant elects, either affirmatively or if the Adoption Agreement includes an ACA and/or automatic escalation provision, pursuant to the ACA or automatic annual escalation provision, to have contributed to the Plan in accordance with the provisions of Article IV as either a Pre-Tax 401(k) Contribution or a Roth 401(k) Contribution.

(hh) The "General Fund" means a Trust Fund maintained by the Trustee as required to hold and administer any assets of the Trust that are not allocated among any separate Investment Funds as may be provided in the Plan or the Trust Agreement. No General Fund shall be maintained if all assets of the Trust are allocated among separate Investment Funds.

(ii) A "Highly Compensated Employee" means any Covered Employee who performs services for an Employer or any Related Employer during the Plan Year and who (i) was a 5% owner at any time during the Plan Year or the "look back year" or (ii) received "415 compensation" from the Employers and Related Employers during the "look back year" in excess of the dollar amount in effect under Code Section 414(q)(1)(B)(i) adjusted pursuant to Code Section 415(d) (e.g., $115,000 for "look back years" beginning after December 31, 2011) and, if provided in the Adoption Agreement, was in the top paid group of employees for the "look back year". A Covered Employee is in the top paid group of Employees if he is in the top 20% of Employees when ranked on the basis of compensation paid during the "look back year". The $115,000 amount is adjusted at the same time and in the same manner as under Code Section 415(d), except that the base period is the calendar quarter ending September 30, 1996.

The determination of who is a Highly Compensated Employee hereunder, including determinations as to the number and identity of Employees in the top paid group, shall be made in accordance with the provisions of Code Section 414(q) and regulations issued thereunder.

For purposes of this defmition, the following terms have the following meanings:

(1) An Employee's "415 compensation" means his "415 compensation", as defined in the Adoption Agreement.

(2) The "look back year" means the 12-month period immediately preceding the Plan Year, unless the Adoption Agreement provides that the "look back year" is the calendar year beginning within the 12-month period immediately preceding the Plan Year for which testing is being performed.

(jj) An "Hour of Service" with respect to an Employee means each hour, if any, that may be credited to him in accordance with the provisions of Article II.

8

(kk) An "In-Plan Roth Rollover Contribution" means any Rollover Contribution of amounts held under the Plan made by a Participant pursuant to Code Section 402A(c)(4) and in accordance with the provisions of the Adoption Agreement.

(11) The "Investment Fiduciary" means the fiduciary responsible for investments under the Plan, including, if applicable, selection of the Investment Funds and direction of the Trustee. Unless otherwise specified in the Adoption Agreement, the Plan Sponsor shall be the Investment Fiduciary.

(mm) An "Investment Fund" means any separate investment Trust Fund maintained by the Trustee as may be provided in the Plan or the Trust Agreement or any separate investment fund maintained by the Trustee, to the extent that there are Participant Sub-Accounts under such funds, to which assets of the Trust may be allocated and separately invested.

(nn) A "Leased Employee" means any person (other than an "excludable leased employee") who performs services for an Employer or a Related Employer (the "recipient") (other than an employee of the "recipient") pursuant to an agreement between the "recipient" and any other person (the "leasing organization") on a substantially full-time basis for a period of at least one year, provided that such services are performed under primary direction of or control by the "recipient". An "excludable leased employee" means any Leased Employee of the "recipient" who (a) is covered by a money purchase pension plan maintained by the "leasing organization" which provides for (i) a nonintegrated employer contribution on behalf of each participant in the plan equal to at least 10% of, as defined in Code Section 415 and regulations issued thereunder, (ii) full and immediate vesting, and (iii) immediate participation by employees of the "leasing organization", or (b) performs substantially all of his services for the "leasing organization", or (c) whose compensation from the "leasing organization" in each plan year during the 4-year period ending with the plan year is less than $1,000. Notwithstanding the foregoing, Leased Employees of the recipient shall only be considered "excludable leased employees" if Leased Employees do not constitute more than 20% of the "recipient's" nonhighly compensated work force. For purposes of this Section, contributions or benefits provided to a Leased Employee by the "leasing organization" that are attributable to services performed for the "recipient" shall be treated as provided by the "recipient".

(oo) A "Matching Contribution" means any Employer Contribution made to the Plan on account of a Participant's 401(k) Contributions or After-Tax Contributions to the Plan, as provided in the Adoption Agreement, or, if provided in the Adoption Agreement, a Participant's salary reduction contributions or employee after-tax contributions to a plan maintained by his Employer under Code Section 403(b) or Code Section 457(b). Matching Contributions include Regular Matching Contributions, Safe Harbor Matching Contributions, Additional Discretionary Matching Contributions, True-Up Matching Contributions, and Qualified Matching Contributions.

(pp) A "Maternity/Paternity Absence" means a person's absence from employment with an Employer or a Related Employer because of the person's pregnancy, the birth of the person's child, the placement of a child with the person in connection with the person's adoption of the child, or the caring for the person's child immediately following the child's birth or adoption. A person's absence from employment will not be considered a Maternity/Paternity Absence unless the person furnishes the Administrator such timely information as may reasonably be required to establish that the absence was for one of the purposes enumerated in this paragraph and to establish the number of days of absence attributable to such purpose.

(qq) A "Nonelective Contribution" means any Employer Contribution made to the Plan as provided in the Adoption Agreement that is not contingent upon a Participant's "elective contributions" or "employee contributions", as those terms are defined in Section 7.1. Nonelective Contributions include Standard Nonelective Contributions and Additional Discretionary Nonelective Contributions. Nonelective Contributions do not include the following:

(1) Safe Harbor Nonelective Contributions

(2) Qualified Nonelective Contributions

9

(rr) A "Non-QACA Safe Harbor Matching Contribution" means any Matching Contribution designated as such in the Adoption Agreement and made to the Plan as provided in Article VI that meets the requirements of Code Section 401(k)(12)(B).

(ss) A "Non-QACA Safe Harbor Nonelective Contribution" means any Employer Contribution designated as such in the Adoption Agreement and made to the Plan as provided in Article VI that meets the requirements of Code Section 401(k)(12)(C).

(tt) The "Normal Retirement Age" of an Employee means the date he satisfies the requirements specified in the Adoption Agreement.

(uu) The "Normal Retirement Date" of an Employee means the Employee's Normal Retirement Age, unless otherwise specified in the Adoption Agreement.

(vv) A "Participant" means any person who has satisfied the requirements of Article III to become an Eligible Employee and/or who has an Account in the Trust.

(ww) The "Plan" means the plan established by an adopting Employer in the form of this volume submitter plan by execution of an Adoption Agreement, as in effect from time to time.

(xx) The "Plan Sponsor" means the entity that sponsors the Plan, as identified in the Adoption Agreement.

(yy) A "Plan Year" means the period designated in the Adoption Agreement.

(zz) A "Prevailing Wage Law Contribution" means any contribution an Employer is required to make to the Plan pursuant to a Prevailing Wage Law.

(aaa) A "Prevailing Wage Law" means any federal, state, or municipal prevailing wage law or the Davis Bacon Act, as amended, 40 U.S.C.A., Sections 3141-3144, 3146, and 3147 (2002).

(bbb) A "Predecessor Employer" means any company that is a predecessor organization to an Employer under the Code. Unless otherwise provided in the Adoption Agreement, a predecessor organization shall be treated as a Predecessor Employer under the Plan only if the Employer maintains a plan of such predecessor organization. In addition, a Predecessor Employer includes the employers listed in the Adoption Agreement, if any, for the purposes specified in the Adoption Agreement.

(ccc) A "Pre-Tax 401(k) Contribution" means any 401(k) Contribution made to the Plan on behalf of a Participant that is not includable in the Participant's taxable gross income, pursuant to Code Section 401(k), until distributed from the Plan.

(ddd) A "Prior Matching Contribution" means any contribution made by a Participant's employer on account of the Participant's "elective contributions" or "employee contributions", as those terms are defined in Section 7.1, either (i) to the Plan pursuant to provisions of the Plan that are no longer in effect or (ii) to another plan and that was transferred directly to the Plan from such other plan (in connection with a spinoff or plan merger). Prior Matching Contributions do not include Prior Safe Harbor Contributions.

(eee) A "Prior Money Purchase Pension Plan Contribution" means any contribution made by a Participant's employer either (i) to the Plan while it was qualified as a money purchase pension plan or (ii) to another plan that was qualified as a money purchase pension plan and that was transferred directly to the Plan from such other plan (in connection with a spinoff or plan merger).

(fff) A "Prior Nonelective Contribution" means any contribution made by a Participant's employer that was not contingent upon the Participant's "elective contributions" or "employee contributions", as those terms are defined in Section 7.1, and that was made either (i) to the Plan pursuant to provisions of the Plan that are no longer in effect or (ii) to another plan and that was transferred directly to the Plan from such other plan (in connection with a spinoff or plan merger).

10

(ggg) A "Prior Safe Harbor Contribution" means any Safe Harbor Matching Contribution or Safe Harbor Nonelective Contribution that was made either (i) to the Plan pursuant to provisions of the Plan that are no longer in effect or (ii) to another plan and that was transferred directly to the Plan from such other plan (in connection with a spinoff or plan merger).

(hhh) "Profits" means the current and accumulated net earnings of an Employer for any Plan Year or Contribution Period, as applicable, as determined by the Employer in accordance with the accounting procedures and principles customarily used in the preparation of its annual statement, consistently applied; provided, however, that the determination of the current and accumulated net earnings of the Employer shall be made before taking into account any of the following:

(1) any gains or losses resulting from the sale or exchange of capital assets or depreciable property;

(2) Federal, state, and municipal income taxes, excess profit taxes, and any other taxes imposed upon income and profits; and

(3) contributions under this Plan or any other plan of deferred compensation for Employees of the Employer.

(iii) A "QACA" means an automatic contribution arrangement that satisfies the requirements of Code Section 401(k)(13) to be a qualified automatic contribution arrangement.

(jjj) A "QACA Safe Harbor Matching Contribution" means any Matching Contribution designated as such in the Adoption Agreement and made to the Plan as provided in Article VI that meets the requirements of Code Section 401(k)(13)(D).

(kkk) A "QACA Safe Harbor Nonelective Contribution" means any Employer Contribution designated as such in the Adoption Agreement and made to the Plan as provided in Article VI that meets the requirements of Code Section 401(k)(13)(D).

(111) A "Qualified Joint and Survivor Annuity" means an immediate annuity payable at earliest retirement age under the Plan, as defined in regulations issued under Code Section 401(a)(11), that is payable (i) for the life of a Participant, if the Participant is not married, or (ii) for the life of a Participant with a survivor annuity payable for the life of the Participant's Spouse that is equal to at least 50%, but not more than 100%, of the amount of the annuity payable during the joint lives of the Participant and his Spouse, if the Participant is married. No survivor annuity shall be payable to the Participant's Spouse under a Qualified Joint and Survivor Annuity if such Spouse is not the same Spouse to whom the Participant was married on his Benefit Payment Date.

(mmm) A "Qualified Matching Contribution" means any Matching Contribution made to the Plan that is 100% vested when made and may be taken into account to satisfy the limitations on 401(k) Contributions made by Highly Compensated Employees under Article VII.

(nnn) A "Qualified Nonelective Contribution" means any Employer Contribution made to the Plan as provided in the Adoption Agreement that (i) is not contingent upon a Participant's "elective contributions" or "employee contributions", as those terms are defined in Section 7.1, (ii) is 100% vested when made, and (iii) may be taken into account to satisfy the ADP test described in Section 7.4 or the ACP test described in Section 7.7.

(ooo) A "Qualified Optional Survivor Annuity" means a Qualified Joint and Survivor Annuity other than the "automatic annuity form" described in Section 16.5(a) that provides a survivor annuity to the Participant's surviving Spouse equal to the following percentage of the amount being paid to the Participant: (a) if the "automatic annuity form" designated in the Adoption Agreement provides a survivor annuity that is less than 75% of the amount payable to the Participant, the Qualified Optional Survivor Annuity shall provide a survivor annuity equal to 75% of the amount payable to the Participant; or (b) if the "automatic annuity form" designated in the Adoption Agreement provides a survivor annuity that is 75% or more of the amount payable to the Participant, the Qualified Optional Survivor Annuity shall provide a survivor annuity equal to 50% of the amount payable to the Participant.

11

(ppp) A "Qualified Preretirement Survivor Annuity" means an annuity payable for the life of a Participant's surviving Spouse if the Participant dies prior to his Benefit Payment Date.

(qqq) A "Qualified Voluntary Employee Contribution (QVEC)" means any voluntary, deductible employee contribution made by a Participant prior to January 1, 1987 in accordance with provisions of the Code that are no longer in effect.

(rrr) A "Regular Matching Contribution" means any Matching Contribution made to the Plan at the rate specified in the Adoption Agreement, other than the following:

(1) an Additional Discretionary Matching Contribution.

(2) A True-Up Matching Contribution.

(3) A Safe Harbor Matching Contribution.

(4) A Qualified Matching Contribution.

(sss) A "Related Employer" means any corporation or business that would be aggregated with an Employer for a relevant purpose under Code Section 414, including members of an affiliated service group under Code Section 414(m), a controlled group of corporations under Code Section 414(b), or a group of trades or businesses under common control under Code Section 414(c) of which the adopting Employer is a member, and any other entity required to be aggregated with the Employer pursuant to Code Section 414(o).

(ttt) A Participant's "Required Beginning Date" means the following:

(1) If the "old rule" is elected in the Adoption Agreement, Required Beginning Date means April 1 of the calendar year following the calendar year in which the Participant attains age 70 1/2.

(2) If the "modified new rule" or "new rule" is elected in the Adoption Agreement, Required Beginning Date means the following:

(A) for a Participant who is not a "5% owner", April 1 of the calendar year following the calendar year in which occurs the later of the Participant's (i) attainment of age 70 1/2 or (ii) Settlement Date

(B) for a Participant who is a "5% owner", April 1 of the calendar year following the calendar year in which the Participant attains age 70 1/2.

A Participant is a "5% owner" if he is a 5% owner, as defined in Code Section 416(i) and determined in accordance with Code Section 416, but without regard to whether the Plan is top-heavy, for the Plan Year ending with or within the calendar year in which the Participant attains age 70 1/2. The Required Beginning Date of a Participant who is a "5% owner" hereunder shall not be re-determined if the Participant ceases to be a 5% owner as defined in Code Section 416(i) with respect to any subsequent Plan Year.

(uuu) A "Rollover Contribution" means any rollover contribution made to the Plan by an individual, as may be permitted under the Adoption Agreement.

12

(vvv) A "Roth 401(k) Contribution" means any 401(k) Contribution made on behalf of a Participant for a Plan Year beginning after December 31, 2005, that is irrevocably designated as being made pursuant to, and is intended to comply with, Code Section 402A. Roth 401(k) Contributions are includable in a Participant's taxable gross income for the year in which they are contributed to the Plan.

(www) The term "Safe Harbor Contribution" includes Safe Harbor Matching Contributions, Safe Harbor Nonelective Contributions, and Prior Safe Harbor Contributions.

(xxx) A "Safe Harbor Matching Contribution" means any Employer Contribution made to the Plan as provided in Article VI that is either a Non-QACA Safe Harbor Matching Contribution or a QACA Safe Harbor Matching Contribution.

(yyy) A "Safe Harbor Nonelective Contribution" means any Employer Contribution made to the Plan as provided in Article VI that is either a Non-QACA Safe Harbor Nonelective Contribution or a QACA Safe Harbor Nonelective Contribution.

(zzz) "Self-Employed Individual" means any individual who has Earned Income for the taxable year from the trade or business with respect to which the Plan is established or who would have had Earned Income but for the fact that the trade or business had no net profits for the taxable year.

(aaaa) The "Settlement Date" of a Participant means the date on which a Participant's interest under the Plan becomes distributable in accordance with Article XV.

(bbbb) The "Severance Date" of an Employee means the earlier of (i) the date on which he retires, dies, or his employment with all Employers and Related Employers is otherwise terminated, or (ii) the first anniversary of the first date of a period during which he is absent from work with all Employers and Related Employers for any other reason; provided, however, that the following special rules shall apply:

(1) If the Employee terminates employment with or is absent from work with all Employers and Related Employers on account of service with the armed forces of the United States, he shall not incur a Severance Date if he is eligible for reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 and he returns to work with an Employer or a Related Employer within the period during which he retains such reemployment rights, but, if he does not return to work within such period, his Severance Date shall be the earlier of (i) the date which is one year after his absence commenced or (ii) the last day of the period during which he retains such reemployment rights.

(2) If the Employee is on a Maternity/Paternity Absence beyond the first anniversary of the first day of such absence, he shall not incur a Severance Date if he returns to employment before the second anniversary of the first day of such absence but, if he does not return within such period, his Severance Date shall be the second anniversary of the first date of such Maternity/Paternity Absence. Unless otherwise provided in the Adoption Agreement, the provisions of this paragraph shall apply solely for purposes of preventing a Break in Eligibility Service or a Break in Vesting Service.

(3) If provided in the Adoption Agreement, if the Employee is on a paid leave of absence beyond the first anniversary of the first day of such absence, he shall not incur a Severance Date if he returns to employment before the second anniversary of the first day of such absence but, if he does not return within such period, his Severance Date shall be the first anniversary of the first date of such paid leave of absence.

(cccc) A "Single Life Annuity" means an annuity payable for the life of a Participant.

13

(dddd) A Participant's "Spouse" means the person to whom the Participant is legally married under the laws of the state or country in which the marriage originated, even if such marriage is not recognized under the laws of the state or country in which the Participant resides.

(eeee) A "Standard Nonelective Contribution" means a Nonelective Contribution made in accordance with the provisions of Section 6.2.

(ffff) A "Sub-Account" means any of the individual sub-accounts of a Participant's Account that is maintained as provided in Article VIII.

(gggg) A "Transfer Contribution" means any amount transferred to the Plan on an Employee's behalf directly from another qualified plan pursuant to a trust to trust transfer as provided in Section 21.19.

(hhhh) A "True-Up Matching Contribution" means any Matching Contribution made to the Plan for a Plan Year that when aggregated with the Regular Matching Contributions made on a Participant's behalf for the Plan Year will provide Matching Contributions at the maximum rate specified in the Plan taking into account the Participant's contributions for the full Plan Year that are eligible for match and his Compensation for the full Plan Year.

(iiii) The "Trust" means the trust, annuity contracts, or insurance contracts maintained by the Trustee under the Trust Agreement.

(jjjj) The "Trust Agreement" means any agreement or agreements entered into between the Plan Sponsor and the Trustee relating to the holding, investment, and reinvestment of the assets of the Plan, together with all amendments thereto and shall include any agreement establishing an annuity or insurance contract (other than a life, health or accident, property, casualty, or liability insurance contract) for the investment of assets if the contract would, except for the fact that it is not a trust, constitute a qualified trust under Code Section 401.

(kkkk) The "Trustee" means the trustee or any successor trustee which at the time shall be designated, qualified, and acting under the Trust Agreement. The Plan Sponsor may designate a person or persons other than the Trustee to perform any responsibility of the Trustee under the Plan, other than trustee responsibilities as defined in ERISA Section 405(c)(3), and the Trustee shall not be liable for the performance of such person in carrying out such responsibility except as otherwise provided by ERISA. The term Trustee shall include any delegate of the Trustee as may be provided in the Trust Agreement.

(1111) A "Trust Fund" means any fund maintained under the Trust by the Trustee.

(mmmm) A "Valuation Date" means the date or dates designated for the purpose of valuing the General Fund and each Investment Fund and adjusting Accounts and Sub-Accounts thereunder, which dates need not be uniform with respect to the General Fund, each Investment Fund, Account, or Sub-Account. A Valuation Date must occur on the last day of the Plan Year. However, the Administrator may value the General Fund or any Investment Fund more frequently, including, but not limited to, semi-annually, quarterly, monthly, or each day a stock exchange under the Plan is open for business.

(nnmn) The "Vesting Service" of an Employee means the period or periods of service credited to him under the provisions of Article II for purposes of determining his vested interest in his Employer Contributions Sub-Account, if Employer Contributions are provided for under either Article VI or Article XXII.

1.2 Interpretation

Where required by the context, the noun, verb, adjective, and adverb forms of each defined term shall include any of its other forms. Wherever used herein, the masculine pronoun shall include the feminine, the singular shall include the plural, and the plural shall include the singular.

14

ARTICLE II
SERVICE

2.1 Special Definitions

For purposes of this Article, the following terms have the following meanings.

(a) If the Adoption Agreement provides for elapsed time crediting for either Vesting or Eligibility Service, the "continuous service" of an Employee means the continuous service credited to him in accordance with the provisions of this Article.

(b) If the Adoption Agreement provides for Hours of Service crediting for Eligibility Service, an "eligibility computation period" means (i) the 12-consecutive-month period beginning on his Employment Commencement Date, and (ii) either each 12-consecutive-month period beginning on an anniversary of such date or, if provided in the Adoption Agreement, each Plan Year beginning after such date; provided, however, that if an Employee's Employment Commencement Date is prior to the effective date of the Plan, a Plan Year shall not mean any short Plan Year beginning on the effective date of the Plan, if any, but shall mean any 12-consecutive-month period beginning before the effective date of the Plan that would have been a Plan Year if the Plan had been in effect.

If provided in the Adoption Agreement, if an Employee returns to active employment after a Break in Eligibility Service and if he had previously completed sufficient Hours of Service during a prior "eligibility computation period" to prevent a Break in Eligibility Service, his initial "eligibility computation period" for purposes of determining his years of Eligibility Service following such return shall begin on his Employment Commencement Date following the Break in Eligibility Service. Subsequent "eligibility computation periods" shall be based on anniversaries of such Employment Commencement Date or, if provided in the Adoption Agreement, Plan Years beginning after such date.

(c) If the Adoption Agreement provides for Hours of Service crediting for Vesting Service, a "vesting computation period" means the 12-month period specified in the Adoption Agreement.

2.2 Crediting of Hours of Service

An Employee shall be credited with an Hour of Service for:

(a) Each hour for which he is paid, or entitled to payment, for the performance of duties for an Employer, a Predecessor Employer, or a Related Employer during the applicable computation period; provided, however, that hours compensated at a premium rate shall be treated as straight-time hours.

(b) Subject to the provisions of Section 2.4, each hour for which he is paid, or entitled to payment, by an Employer, a Predecessor Employer, or a Related Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), lay-off, jury duty, military duty, or leave of absence.

(c) Each hour for which he would have been scheduled to work for an Employer, a Predecessor Employer, or a Related Employer during the period that he is absent from work because of service with the armed forces of the United States provided he is eligible for reemployment rights under the Uniformed Services Employment and Reemployment Rights Act of 1994 and returns to work with an Employer or a Related Employer within the period during which he retains such reemployment rights; provided, however, that the same Hour of Service shall not be credited under paragraph (b) of this Section and under this paragraph (c).

(d) Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by an Employer, a Predecessor Employer, or a Related Employer; provided, however, that the same Hour of Service shall not be credited both under paragraph (a) or (b) or (c) of this Section, as the case may be, and under this paragraph (d); and provided, further, that the crediting of Hours of Service for back pay awarded or agreed to with respect to periods described in such paragraph (b) shall be subject to the limitations set forth therein and in Section 2.4.

15

(e) If the Adoption Agreement provides for Hours of Service crediting for Eligibility or Vesting Service, solely for purposes of determining whether an Employee who is on a Maternity/Paternity Absence has incurred a Break in Eligibility Service or a Break in Vesting Service for a computation period, Hours of Service shall include those hours with which such person would otherwise have been credited but for such Maternity/Paternity Absence, or shall include 8 Hours of Service for each day of Maternity/Paternity Absence if the actual hours to be credited cannot be determined; except that not more than the minimum number of hours required to prevent a Break in Eligibility Service or a Break in Vesting Service shall be credited by reason of any Maternity/Paternity Absence; provided, however, that any hours included as Hours of Service pursuant to this paragraph shall be credited to the computation period in which the absence from employment begins, if such person otherwise would incur a Break in Eligibility Service or a Break in Vesting Service in such computation period, or, in any other case, to the immediately following computation period.

(f) If the Adoption Agreement provides for Hours of Service crediting for Eligibility or Vesting Service, solely for purposes of determining whether he has incurred a Break in Eligibility Service or a Break in Vesting Service, each hour for which he would have been scheduled to work for an Employer, a Predecessor Employer, or a Related Employer during the period of time that he is absent from work on an approved leave of absence pursuant to the Family and Medical Leave Act of 1993; provided, however, that Hours of Service shall not be credited to an Employee under this paragraph if the Employee fails to return to employment with an Employer or a Related Employer following such leave.

Except as otherwise specifically provided with respect to Predecessor Employers or as otherwise provided in the Adoption Agreement, Hours of Service shall not be credited for employment with a corporation or business prior to the date such corporation or business becomes a Related Employer.

2.3 Hours of Service Equivalencies

Notwithstanding any other provision of the Plan to the contrary, if an Employer does not maintain records that accurately reflect actual hours of service with respect to an Employee, the Employer shall credit Hours of Service in accordance with one of the equivalencies described in this Section. In addition, the Administrator may prescribe rules crediting Hours of Service in accordance with one of the equivalencies described in this Section either for all Employees or for Employees in one or more different classifications (provided such classifications are reasonable and determinable). Hours of Service shall be credited hereunder in a consistent and nondiscriminatory manner.

In accordance with this Section, an Employee may be credited with:

(a) 10 Hours of Service for each day on which he performs an Hour of Service;

(b) 45 Hours of Service for each week in which he performs an Hour of Service;

(c) 95 Hours of Service for each semi-monthly payroll period in which he performs an Hour of Service; or

(d) 190 Hours of Service for each month in which he performs an Hour of Service.

2.4 Limitations on Crediting of Hours of Service

In applying the provisions of Section 2.2(b), the following shall apply:

(a) An hour for which a person is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed shall not be credited to him if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workers' compensation, unemployment compensation, or disability insurance laws.

16

(b) Hours of Service shall not be credited with respect to a payment which solely reimburses a person for medical or medically-related expenses incurred by him.

(c) A payment shall be deemed to be made by or due from an Employer, a Predecessor Employer, or a Related Employer (i) regardless of whether such payment is made by or due from such employer directly or indirectly, through (among others) a trust fund or insurer to which any such employer contributes or pays premiums, and (ii) regardless of whether contributions made or due to such trust fund, insurer, or other entity are for the benefit of particular persons or are on behalf of a group of persons in the aggregate.

(d) Except as otherwise provided in the Adoption Agreement, no more than 501 Hours of Service shall be credited to a person on account of any single continuous period during which he performs no duties (whether or not such period occurs in a single computation period), unless no duties are performed due to service with the armed forces of the United States for which the person retains reemployment rights as provided in Section 2.2(c).

2.5 Department of Labor Rules

The rules set forth in paragraphs (b) and (c) of Department of Labor Regulations Section 2530.200b-2, which relate to determining Hours of Service attributable to reasons other than the performance of duties and crediting Hours of Service to computation periods, are hereby incorporated into the Plan by reference.

2.6 Crediting of "Continuous Service"

A person shall be credited with "continuous service" for the aggregate of the periods of time between his Employment Commencement Date and the Severance Date that next follows such Employment Commencement Date; provided, however, that if an Employee's Severance Date occurs and such Employee has an Employment Commencement Date within the 12-consecutive-month period following the earlier of the first date of his absence or his Severance Date, he shall be credited with "continuous service" for the period between his Severance Date and such Employment Commencement Date.

2.7 Crediting Eligibility Service

Eligibility Service shall be credited as provided below:

(a) If the Adoption Agreement provides for Hours of Service crediting for Eligibility Service, an Employee shall be credited with a year of Eligibility Service for each "eligibility computation period" in which he completes at least 1,000 Hours of Service, or such other number of Hours of Service provided in the Adoption Agreement. If the Adoption Agreement provides that the" eligibility computation period" changes to the Plan Year, an Employee who is credited with 1,000 Hours of Service (or such other number of Hours of Service specified in the Adoption Agreement) in both the initial "eligibility computation period" and the first Plan Year that commences prior to the first anniversary of the Employee's initial "eligibility computation period" shall be credited with 2 years of Eligibility Service.

(b) If the Adoption Agreement provides for elapsed time crediting for Eligibility Service, an Employee shall be credited with Eligibility Service equal to his "continuous service". If provided in the Adoption Agreement, Eligibility Service shall be computed to the nearest 1/12th of a year treating each calendar month or portion of a calendar month in which an Employee is credited with "continuous service" as 1/12th year of Eligibility Service.

(c) Notwithstanding the provisions of paragraph (a) or (b), as applicable, to the extent provided in the Adoption Agreement, if an Employee incurs a Break in Eligibility Service, Eligibility Service completed by the Employee prior to such Break in Eligibility Service, shall be disregarded.

17

2.8 Crediting Vesting Service

Vesting Service shall be credited as provided below:

(a) If the Adoption Agreement provides for Hours of Service crediting for Vesting Service, an Employee shall be credited with a year of Vesting Service for each "vesting computation period" during which he completes at least 1,000 Hours of Service, or such other number of Hours of Service specified in the Adoption Agreement.

(b) If the Adoption Agreement provides for elapsed time crediting for Eligibility Service, an Employee shall be credited with Vesting Service equal to his "continuous service". If provided in the Adoption Agreement, Vesting Service shall be computed to the nearest 1/12th of a year treating each calendar month or portion of a calendar month in which an Employee is credited with "continuous service" as 1/12th year of Vesting Service.

(c) Notwithstanding the provisions of paragraph (a) or (b), as applicable, if provided in the Adoption Agreement, the following service shall be disregarded in determining an Employee's Vesting Service:

(1) Service completed by the Employee prior to the original effective date of the Plan.

(2) Service completed by the Employee prior to his attainment of age 18.

(3) To the extent provided in the Adoption Agreement, service completed by an Employee prior to a Break in Vesting Service.

2.9 Exclusion of Vesting Service Completed Following a Break for Determining Vested Interest in Prior Accrued Benefit

Notwithstanding any other provision of the Plan to the contrary, if provided in the Adoption Agreement, Vesting Service completed by an Employee after a Break in Vesting Service shall not be included in determining his vested interest in his Account attributable to employment prior to such Break in Vesting Service if the number of his consecutive Breaks in Vesting Service is 5 or more.

2.10 Crediting of Hours of Service with Respect to Short Computation Periods

The following provisions shall apply with respect to crediting Hours of Service with respect to any short computation period:

(a) For purposes of this Article, the following terms have the following meanings:

(1) An "old computation period" means any computation period that ends immediately prior to a change in the computation period.

(2) A "short computation period" means any computation period of fewer than 12 consecutive months.

(b) Notwithstanding any other provision of the Plan to the contrary, no person shall incur a Break in Eligibility Service or a Break in Vesting Service for a "short computation period" solely because of such "short computation period".

(c) For purposes of determining the years of Eligibility Service to be credited to an Employee, an "eligibility computation period" shall not include the "short computation period", but shall include the 12-consecutivemonth period ending on the last day of the "short computation period" and the 12-consecutive-month period ending on the first anniversary of the last day of the "old computation period"; provided, however, that no more than one year of Eligibility Service shall be credited to an Employee with respect to such periods.

18

(d) For purposes of determining the years of Vesting Service to be credited to an Employee, a "vesting computation period" shall not include the "short computation period", but if an Employee completes at least the number of Hours of Service required under the Adoption Agreement for a year of Vesting Service in the 12-consecutive-month period beginning on the first day of the "short computation period", such Employee shall be credited with a year of Vesting Service for such 12-consecutive-month period.

2.11 Change of Service Crediting Method

Notwithstanding any other provision of the Plan to the contrary, if an amendment to the Plan or a transfer of employment from employment covered under another qualified plan maintained by an Employer or a Related Employer results in a change in the method of crediting Eligibility and/or Vesting Service from the Hours of Service method to the elapsed time method or vice versa, Eligibility and/or Vesting Service shall be credited to an affected Employee in accordance with Treasury Regulations Section 1.410(a)-7(f)(1).

ARTICLE III
ELIGIBILITY

3.1 Eligibility

If this is an amendment and restatement of the Plan, each Covered Employee who was an Eligible Employee with respect to a particular contribution source immediately prior to the effective date of the restatement shall continue to be an Eligible Employee with respect to such contribution source on such effective date. Otherwise, a Covered Employee shall become an Eligible Employee with respect to a particular contribution source as of the applicable Entry Date, as provided in the Adoption Agreement, upon satisfying the requirements in the Adoption Agreement, if any.

3.2 Transfers of Employment

If an Employee is transferred directly from employment with an Employer or with a Related Employer in a capacity other than as a Covered Employee to employment as a Covered Employee, he shall become an Eligible Employee as of the later of the date he is so transferred or the date he would have become an Eligible Employee in accordance with the provisions of Section 3.1 if he had been a Covered Employee for his entire period of employment with the Employer or Related Employer.

3.3 Reemployment

If a person who terminated employment with an Employer and all Related Employers is reemployed as a Covered Employee and if he had been an Eligible Employee prior to his termination of employment, he shall again become an Eligible Employee on the date he is reemployed, unless the Plan applies an Eligibility Service requirement and the Covered Employee's prior Eligibility Service is disregarded under the provisions of the Adoption Agreement. Otherwise, the Covered Employee's eligibility to participate shall be determined in accordance with Section 3.1.

If such person was not an Eligible Employee prior to his termination of employment, but had satisfied the requirements of Section 3.1 prior to such termination, he shall become an Eligible Employee as of the later of (1) the date he is reemployed or (2) the date he would have become an Eligible Employee in accordance with the provisions of Section 3.1 if he had continued employment as a Covered Employee, unless the Plan applies an Eligibility

Service requirement and the Covered Employee's prior Eligibility Service is disregarded under the provisions of the Adoption Agreement. If the Covered Employee's prior Eligibility Service is disregarded under the Adoption Agreement solely because the Covered Employee has not completed a year of Eligibility Service upon reemployment, upon completion of such year of Eligibility Service the Covered Employee shall participate retroactively to the date described in clause (1) or (2) above, as applicable. Otherwise, the Covered Employee's eligibility to participate shall be determined in accordance with Section 3.1.

19

In any other case, the eligibility of a person who terminated employment with an Employer and all Related Companies and who is reemployed by an Employer or a Related Company to participate in the Plan shall be determined in accordance with Section 3.1 or 3.2.

3.4 Notification Concerning New Eligible Employees

Each Employer shall notify the Administrator as soon as practicable of Covered Employees becoming Eligible Employees as of any date.

3.5 Effect and Duration

Upon becoming an Eligible Employee with respect to a contribution source, a Covered Employee shall be entitled to make or receive contributions with respect to such source, provided with respect to Employer Contributions, that he meets any applicable requirements therefor. Eligible Employees shall be bound by all the terms and conditions of the Plan and the Trust Agreement. A person shall continue as an Eligible Employee only so long as he continues employment as a Covered Employee.

ARTICLE IV
401(K) CONTRIBUTIONS

4.1 401(k) Contributions

If provided in the Adoption Agreement, effective as of the date he becomes an Eligible Employee, each Eligible Employee may elect, in accordance with rules prescribed by the Administrator, to have 401(k) Contributions made each payroll period on his behalf by his Employer as provided in the Adoption Agreement. An Eligible Employee's election shall include his authorization for his Employer to reduce his Compensation and make 401(k) Contributions on his behalf each payroll period. The amount to be withheld from an Eligible Employee's Compensation as 401(k) Contributions shall be a specified dollar amount or percentage of Compensation, as permitted under rules prescribed by the Administrator, not to exceed the maximum contribution amount specified in the Adoption Agreement. Unless an Eligible Employee is subject to an ACA, if the Eligible Employee does not make a timely election to have 401(k) Contributions made to the Plan as of the first Entry Date he becomes eligible to participate, he shall be deemed to have elected a 0% reduction and may only change such deemed election pursuant to the provisions of this Article for amending reduction authorizations.

401(k) Contributions on behalf of an Eligible Employee shall commence as of the date specified in the Adoption Agreement; provided, however, that in no event shall an Eligible Employee's salary reduction authorization become effective earlier than the later of (a) the effective date of the provisions permitting 401(k) Contributions or (b) the date such provisions are adopted. Under no circumstances may a salary reduction authorization be adopted retroactively.

4.2 Roth 401(k) Contributions

If provided in the Adoption Agreement, an Eligible Employee may designate, in accordance with rules prescribed by the Administrator, that a portion or all (as permitted by the Administrator) of his 401(k) Contributions be treated as Roth 401(k) Contributions. Any such designation must be made before the Compensation to which the Participant's 401(k) Contribution relates becomes available to the Eligible Employee and shall remain in effect until the Eligible Employee amends his election as prescribed in this Article. Except as provided in the Adoption Agreement with respect to Eligible Employee subject to an ACA, if an Eligible Employee does not affirmatively designate that his 401(k) Contributions are to be treated as Roth 401(k) Contributions, his 401(k) Contributions shall be treated as Pre-Tax 401(k) Contributions.

20

Any Roth 401(k) Contributions made to the Plan on behalf of a Participant shall be allocated to a separate Sub-Account maintained with respect to such contributions. The Administrator shall maintain a record of the portion of a Participant's Roth 401(k) Contributions Sub-Account that is not taxable upon distribution from the Plan. Earnings, losses, and other credits and charges shall be allocated on a reasonable and consistent basis among a Participant's Roth 401(k) Contributions Sub-Account and his other Sub-Accounts under the Plan. No amounts other than Roth 401(k) Contributions and properly attributable earnings shall be credited to a Participant's Roth 401(k) Contributions Sub-Account. Notwithstanding the foregoing, Designated Roth Rollover Contributions and In-Plan Roth Rollover Contributions may be allocated to a Participant's Roth 401(k) Contributions Sub-Account.

Notwithstanding any other provision of the Plan to the contrary, any distribution from a Participant's Roth 401(k) Contributions Sub-Account made after the Participant's 5-taxable-year period of participation, as described in Code Section 402A(d)(2)(B), that is a qualified distribution under Code Section 402A(d)(2)(A), shall not be taxable to the Participant or his Beneficiary. Except as otherwise provided in Section 5.11, the Participant's 5-taxable-year period of participation shall begin on January 1 of the taxable year in which the Participant first makes a Roth 401(k) Contribution to the Plan that is not distributed as an "excess deferral" or "excess contribution" (as those terms are defined in Sections 7.1(1) and 7.1(k), respectively) and is not returned as a permissible withdrawal in accordance with the provisions of Code Section 414(w).

4.3 Special Bonus/Commissions Election

If provided in the Adoption Agreement, an Eligible Employee may authorize a special reduction in that portion of his Compensation that is attributable to any Employer paid cash bonuses made for the Plan Year and/or his commissions. Any such election is subject to the limits specified in the Adoption Agreement. The Employer may designate the bonuses for which the special reduction authorization is available; provided, however, that such designation shall be made on a uniform and non-discriminatory basis.

Notwithstanding any other provision of the Plan to the contrary, if a person is no longer a Covered Employee on the date a bonus or commission would otherwise be paid, no 401(k) Contribution with respect to such bonus or commission shall be made on his behalf, and the person shall receive payment of his full bonus or commission, if any.

4.4 True-Up 401(k) Contributions

If provided in the Adoption Agreement, an Eligible Employee whose 401(k) Contributions for the Plan Year will be less than the maximum allowed under the Adoption Agreement for the full Plan Year may authorize a special reduction in his Compensation for those payroll periods designated by the Employer (in a uniform and nondiscriminatory manner) in an amount up to 100% of his Compensation for such payroll periods, provided that the Eligible Employee's total 401(k) Contributions for the Plan Year do not exceed the maximum allowed under the Adoption Agreement for the full Plan Year.

21

4.5 Combined Limit on 401(k) and After-Tax Contributions

If provided in the Adoption Agreement, in no event may the 401(k) Contributions made on behalf of an Eligible Employee for the Plan Year, when combined with the After-Tax Contributions made by the Eligible Employee for the Plan Year, exceed the percentage specified in the Adoption Agreement of the Eligible Employee's Compensation for the Plan Year.

4.6 Catch-Up 401(k) Contributions

If provided in the Adoption Agreement, an Eligible Employee who is or will be age 50 or older by the end of the taxable year may make Catch-Up 401(k) Contributions to the Plan in excess of the limits otherwise applicable to 401(k) Contributions under the Plan, but not in excess of (i) the dollar limit in effect under Code Section 414(v)(2)(B)(i) for the taxable year ($5,500 for 2012) or (ii) the contribution limit prescribed in the Adoption Agreement, if any, provided that such contribution limit allows the Eligible Employee to make 401(k) Contributions of not less than 75% of such Eligible Employee's Compensation. Otherwise applicable limits that do not apply to Catch-Up 401(k) Contributions include: (1) except as provided in clause (ii) above, the contribution limitation described in the Adoption Agreement; (2) the dollar limitation on 401(k) Contributions under Code Section 402(g), described in Section 7.2; (3) the limitations on "annual additions" in effect under Code Section 415, described in Section 7.15; and (4) the limitation on 401(k) Contributions for Highly Compensated Employees under Code Section 401(k)(3), described in Section 7.4.

If the percentage of Compensation limit described in the Adoption Agreement or the administrative limit described in Section 7.4, as applicable, changes during the Plan Year, for purposes of determining Catch-Up 401(k) Contributions for the Plan Year in which the change occurs, the limit shall be determined under one of the following methods, as determined by the Administrator:

(a) The limit shall be the sum of the dollar amounts of the limits applicable to the Eligible Employee for each portion of the Plan Year.

(b) The limit shall be the product of the Eligible Employee's Compensation for the Plan Year multiplied by the time-weighted average of the percentage limits.

(c) The limit shall be the product of the Eligible Employee's "test compensation", as defined in Section 7.1(r), multiplied by the time-weighted averages of the percentage limits.

4.7 Amendments to Reduction Authorization

An Eligible Employee may elect, in the manner prescribed by the Administrator, to change the amount of his future Compensation that his Employer contributes on his behalf as 401(k) Contributions and, if Roth 401(k) Contributions are provided in the Adoption Agreement, to change his designation of all or a part of his 401(k) Contributions as Pre-Tax or Roth 401(k) Contributions. An Eligible Employee may amend his reduction authorization as of the dates prescribed in the Adoption Agreement by giving such number of days advance notice of his election as the Administrator may prescribe. An Eligible Employee who amends his reduction authorization shall be limited to selecting an amount of his Compensation that is otherwise permitted under this Article IV. 401(k) Contributions shall be made on behalf of such Eligible Employee by his Employer pursuant to his properly amended reduction authorization commencing with Compensation paid to the Eligible Employee on or after the date such amendment is effective, until otherwise altered or terminated in accordance with the Plan.

4.8 Suspension of 401(k) Contributions

An Eligible Employee on whose behalf 401(k) Contributions are being made may elect, in the manner prescribed by the Administrator, to have such contributions suspended at any time by giving such number of days advance notice of his election as the Administrator may prescribe. Any such voluntary suspension shall take effect as soon as administratively feasible after expiration of any required notice period and shall remain in effect until 401(k) Contributions are resumed as hereinafter set forth.

22

4.9 Resumption of 401(k) Contributions

An Eligible Employee who has voluntarily suspended his 401(k) Contributions may elect, in the manner prescribed by the Administrator, to have such contributions resumed as of the date(s) provided in the Adoption Agreement for modification of contribution elections, by giving such number of days advance notice of his election as the Administrator may prescribe. Notwithstanding the foregoing, the Administrator may establish a minimum suspension period, provided that such minimum suspension period is applied on a consistent and non-discriminatory basis.

4.10 Automatic Contribution Arrangement (ACA)

If the Adoption Agreement provides for an ACA, except as otherwise provided in Section 4.13, an Employer shall automatically reduce the Compensation payable to an Eligible Employee who is subject to the ACA and make 401(k) Contributions on his behalf in the amount specified in the Adoption Agreement. 401(k) Contributions made in accordance with this Section shall be treated as Pre-Tax 401(k) Contributions or Roth 401(k) Contributions, as provided in the Adoption Agreement.

Automatic 401(k) Contributions on behalf of an Eligible Employee shall commence as prescribed in the Adoption Agreement; provided, however, that unless the ACA is a QACA or an EACA, the Administrator may prescribe an opt-out period before commencing 401(k) Contributions under the ACA. Subject to the automatic escalation provisions of Section 4.11, if applicable, automatic 401(k) Contributions shall continue on an Eligible Employee's behalf in accordance with the provisions of this Section until the Eligible Employee affirmatively elects, as provided in Section 4.13, to change the amount of his 401(k) Contributions, to have 401(k) Contributions suspended, or to change his designation for future 401(k) Contributions between Pre-Tax and Roth 401(k) Contribution.

4.11 Automatic Escalation Provisions

If provided in the Adoption Agreement, except as otherwise provided in Section 4.13, an Employer shall automatically increase the amount of the 401(k) Contributions it makes on behalf of each of its Eligible Employees who is subject to the automatic escalation provision and is not making 401(k) Contributions equal to or greater than the maximum automatic contribution amount specified in the Adoption Agreement. As of the adjustment date specified in the Adoption Agreement, the Compensation otherwise payable to an Eligible Employee subject to automatic escalation shall be further reduced in the amount necessary to provide the increase specified in the Adoption Agreement, and such amount shall be contributed on the Eligible Employee's behalf as 401(k) Contributions. Any additional 401(k) Contributions made in accordance with this Section shall be treated as Pre-Tax 401(k) Contributions and/or Roth 401(k) Contributions, as specified in the Adoption Agreement.

4.12 Notice of ACA or Automatic Escalation Provisions

The Administrator shall provide each Eligible Employee who is or becomes subject to an ACA and/or automatic escalation provision a notice explaining (i) the automatic reduction in his Compensation for purposes of making 401(k) Contributions in accordance with the ACA and/or automatic escalation provision (including the amount of such reduction), (ii) the Eligible Employee's right to affirmatively elect either a different reduction amount or no reduction, (iii) the manner in which the Eligible Employee's 401(k) Contributions and, if applicable, any Safe Harbor Contributions will be invested in the absence of an investment election by the Eligible Employee, and (iv) in the case of an EACA, the Eligible Employee's right to make a withdrawal in accordance with Section 13.11. The notice shall describe the procedures for affirmatively electing not to make 401(k) Contributions or to make 401(k) Contributions in a different amount and the period in which such an election may be made.

In the case of a QACA, the notice shall also include information necessary to satisfy the safe harbor notice requirements described in Section 7.14.

23

The notice shall be written in a manner calculated to be understood by the average Eligible Employee. The Employer shall provide such notice within a reasonable period before his Compensation is first subject to reduction in accordance with the provisions of the ACA and/or automatic escalation provision. In the case of a QACA or an EACA, the Employer shall provide such notice within one of the following periods, whichever is applicable:

(a) for an Employee who is an Eligible Employee 90 days before the beginning of the Plan Year, within the period beginning 90 days and ending 30 days before the beginning of the Plan Year, or

(b) for an Employee who becomes an Eligible Employee after that date, within the period beginning 90 days before the date he becomes an Eligible Employee and ending on the date such employee becomes an Eligible Employee; or

(c) for an Employee who becomes an Eligible Employee after the date specified in paragraph (a) above and for whom it is not practicable to provide the notice before the date he becomes an Eligible Employee, as soon as practicable on or after the date he becomes an Eligible Employee, and before the pay date for the payroll period that includes the date he becomes an Eligible Employee.

An Eligible Employee shall have a reasonable period after receiving the notice described herein to elect not to have automatic 401(k) Contributions made on his behalf or to make 401(k) Contributions in a different amount.

If the ACA is not a QACA, but is an EACA and the Adoption Agreement provides that Employees making an affirmative election are excluded from the EACA, then notwithstanding any other provision of this Section, the Administrator shall not provide the notice described herein to an Eligible Employee who is excluded from the EACA because he makes an affirmative election not to have automatic 401(k) Contributions made on his behalf or to make 401(k) Contributions in a different amount.

4.13 Affirmative Elections under ACA or Automatic Escalation Provisions

An Eligible Employee who is subject to an ACA, as described in Section 4.10, may elect out of the ACA by affirmatively electing, in accordance with rules prescribed by the Administrator, either (i) not to have 401(k) Contributions made on his behalf or (ii) to have 401(k) Contributions made on his behalf in a different amount. An Eligible Employee who is subject to the automatic escalation provision described in Section 4.11 may elect out of escalation, in accordance with rules prescribed by the Administrator. If the Plan provides for Roth 401(k) Contributions, any such Eligible Employee may also affirmatively designate that the 401(k) Contributions to be made on his behalf be treated as Roth 401(k) Contributions and/or Pre-Tax 401(k) Contributions, instead of as provided under the ACA or automatic escalation provision. An Eligible Employee's affirmative election will be effective as soon as reasonably practicable following receipt by the Administrator. To avoid having 401(k) Contributions made under the ACA or increased under the automatic escalation provision, an Eligible Employee's affirmative election must be received by the Administrator within a reasonable period of time before the first date 401(k) Contributions are to be withheld from his Compensation pursuant to the ACA or the date 401(k) Contributions are to be increased under the automatic escalation provisions.

An Eligible Employee's affirmative election made in accordance with this Section shall continue in effect until the Eligible Employee makes a subsequent election or until the Eligible Employee's affirmative election expires, as provided in the Adoption Agreement.

Notwithstanding any other provision of the Plan to the contrary, if an Eligible Employee's 401(k) Contributions are suspended because the Eligible Employee receives a hardship withdrawal in accordance with the terms of the Plan or is on an unpaid leave of absence, and the Adoption Agreement does not provide that an Eligible Employee's affirmative election expires upon such suspension, any affirmative election made by the Eligible Employee prior to such suspension shall be re-instated at the end of the mandatory suspension period or upon his return to active employment, as applicable.

If an Eligible Employee's affirmative election expires and the Eligible Employee becomes subject to the ACA and/or the automatic escalation provisions, 401(k) Contributions shall be made on the Eligible Employee's behalf as provided in the Adoption Agreement.

24

4.14 Automatic Escalation for Employees Electing Out of QACA

If the Adoption Agreement provides for automatic escalation under a QACA and requires Eligible Employees who have affirmatively elected against automatic enrollment under the QACA to make a separate election out of automatic escalation, automatic escalation shall apply to an Eligible Employee who does not affirmatively elect against it as follows:

(a) If the Eligible Employee is not making any 401(k) Contributions on the applicable adjustment date and the Adoption Agreement requires Employees with a 0% contribution rate to make a separate election out of automatic escalation, beginning on the applicable adjustment date, the Eligible Employee's Compensation shall be reduced by the amount of the increase specified in the Adoption Agreement for that default period, and such amount shall be contributed on the Eligible Employee's behalf as 401(k) Contributions.

(b) If the Eligible Employee is making 401(k) Contributions on the applicable adjustment date in an amount less than the maximum default percentage specified in the Adoption Agreement, the Eligible Employee's Compensation shall be further reduced by the amount of the increase specified in the Adoption Agreement for that default period, and such amount shall be contributed on the Eligible Employee's behalf as additional 401(k) Contributions.

If the Eligible Employee has not at any time had automatic 401(k) Contributions made under the QACA, the applicable default period shall be determined assuming that automatic contributions commenced to the Participant on the date they would have commenced absent the Eligible Employee's affirmative election against automatic enrollment under the QACA. 401(k) Contributions made in accordance with this Section shall be treated as Pre-Tax 401(k) Contributions and/or Roth 401(k) Contributions, as specified in the Adoption Agreement. 401(k) Contributions shall be increased in accordance with this Section until the earlier of the date the Eligible Employee affirmatively elects out of automatic escalation or the Eligible Employee is making 401(k) Contributions at the maximum default percentage specified in the Adoption Agreement.

4.15 Contributions Limited to Currently Available Compensation

Notwithstanding any other provision of the Plan or of an Eligible Employee's salary reduction authorization, in no event will 401(k) Contributions, including Catch Up 401(k) Contributions, be made for a payroll period in excess of an Eligible Employee's "effectively available" Compensation or, if the Adoption Agreement provides for the special bonus election described in Section 4.3, "effectively available" bonuses. Effectively available Compensation means the Compensation remaining after all other required amounts have been withheld, e.g., tax withholding, withholding for contributions to a cafeteria plan under Code Section 125, etc. Effectively available bonuses are the bonus amount remaining after all other required amounts have been withheld.

4.16 Delivery of 401(k) Contributions

As soon after the date an amount would otherwise be paid to an Eligible Employee as it can reasonably be separated from Employer assets, each Employer shall cause to be delivered to the Trustee in cash all 401(k) Contributions attributable to such amounts.

In no event shall an Employer deliver 401(k) Contributions to the Trustee on behalf of an Eligible Employee prior to the date the Eligible Employee performs the services with respect to which the 401(k) Contribution is being made, unless such pre-funding is to accommodate a bona fide administrative concern and is not for the principal purpose of accelerating deductions.

4.17 Vesting of 401(k) Contributions

A Participant's vested interest in his 401(k) Contributions Sub-Account shall be at all times 100%.

25

ARTICLE V
AFTER-TAX AND ROLLOVER CONTRIBUTIONS

5.1 After-Tax Contributions

If provided in the Adoption Agreement, effective as of the date he becomes an Eligible Employee, each Eligible Employee may elect, in accordance with rules prescribed by the Administrator, to make After-Tax Contributions to the Plan as provided in the Adoption Agreement. After-Tax Contributions may be made either by payroll withholding and/or by delivery of a cash amount to an Eligible Employee's Employer as provided in the Adoption Agreement. However, in no event may the After-Tax Contributions made by an Eligible Employee for a Plan Year exceed the maximum specified in the Adoption Agreement, if any. An Eligible Employee's election to make After-Tax Contributions by payroll withholding may be made effective as of the Entry Date on which he becomes an Eligible Employee. An Eligible Employee who does not timely elect to make After-Tax Contributions by payroll withholding as of the first Entry Date on which he becomes eligible to participate shall be deemed to have elected not to make After-Tax Contributions and may only change such deemed election pursuant to the provisions of this Article for amending his payroll withholding authorization.

After-Tax Contributions by payroll withholding shall commence as of the date specified in the Adoption Agreement.

5.2 Combined Limit on 401(k) and After-Tax Contributions

If provided in the Adoption Agreement, in no event may the After-Tax Contributions made by an Eligible Employee for the Plan Year, when combined with the 401(k) Contributions made on behalf of the Eligible Employee for the Plan Year, exceed the percentage specified in the Adoption Agreement of the Eligible Employee's Compensation for the Plan Year.

5.3 Amendments to Payroll Withholding Authorization

An Eligible Employee may elect, in the manner prescribed by the Administrator, to change the amount of his future Compensation that he contributes to the Plan as After-Tax Contributions by payroll withholding. An Eligible Employee may amend his payroll withholding authorization as of the date(s) prescribed by the Administrator by giving such number of days advance notice of his election as the Administrator may require. An Eligible Employee who changes his payroll withholding authorization shall be limited to selecting an amount of his Compensation that is otherwise permitted under the Adoption Agreement. After-Tax Contributions shall be made on behalf of such Eligible Employee pursuant to his properly amended payroll withholding authorization commencing with Compensation paid to the Eligible Employee on or after the date such amendment is effective, until otherwise altered or terminated in accordance with the Plan.

5.4 Suspension of After-Tax Contributions by Payroll Withholding

An Eligible Employee who is making After-Tax Contributions by payroll withholding may elect, in the manner prescribed by the Administrator, to have such contributions suspended at any time by giving such number of days advance notice to his Employer as the Administrator may prescribe. Any such voluntary suspension shall take effect commencing with Compensation paid to such Eligible Employee on or after expiration of any required notice period and shall remain in effect until After-Tax Contributions are resumed as hereinafter set forth.

5.5 Resumption of After-Tax Contributions by Payroll Withholding

An Eligible Employee who has voluntarily suspended his After-Tax Contributions by payroll withholding in accordance with Section 5.4 may elect, in the manner prescribed by the Administrator, to have such contributions resumed as of the date(s) prescribed by the Administrator for modification of contribution elections, by giving such number of days advance notice of his election as the Administrator may require. Notwithstanding the foregoing, the Administrator may establish a minimum suspension period, provided that such minimum suspension period is applied on a consistent and non-discriminatory basis.

26

5.6 Delivery of After-Tax Contributions

As soon after the date an amount would otherwise be paid to an Eligible Employee as it can reasonably be separated from Employer assets or as soon as reasonably practicable after an amount has been delivered to an Employer by an Eligible Employee, the Employer shall cause to be delivered to the Trustee in cash the After-Tax Contributions attributable to such amount.

5.7 Prior/Transferred After-Tax Contributions

If provided in the Adoption Agreement, the Plan may include assets attributable to After-Tax Contributions that were made under provisions of the Plan that are no longer in effect or made to another plan and transferred directly to the Plan from such other plan.

5.8 Separate Accounting for After-Tax Contributions

Any After-Tax Contributions made or transferred to the Plan on behalf of a Participant shall be allocated to a separate Sub-Account maintained with respect to such contributions. The Administrator shall maintain a record of the portion of a Participant's After-Tax Contributions Sub-Account that is not taxable upon distribution from the Plan. Earnings, losses, and other credits and charges shall be allocated on a reasonable and consistent basis among a Participant's After-Tax Contributions Sub-Account and his other Sub-Accounts under the Plan. No amounts other than After-Tax Contributions and properly attributable earnings shall be credited to a Participant's After-Tax Contributions Sub-Account. Notwithstanding the foregoing, After-Tax Rollover Contributions may be allocated to a Participant's After-Tax Contributions Sub-Account.

5..9 Rollover Contributions

If and to the extent provided in the Adoption Agreement, a Covered Employee or other individual who is eligible to receive or receives an "eligible rollover distribution," within the meaning of Code Section 402(c)(4) or a distribution from an individual retirement account or annuity that is eligible for rollover to the Plan in accordance with the provisions of Code Section 408(d)(3) and the Adoption Agreement, may elect to make a Rollover Contribution to the Plan. The Administrator shall require an individual making a Rollover Contribution to provide it with such information as it deems necessary or desirable to show that he is entitled to roll over such distribution to a qualified retirement plan. Certification by the individual making a Rollover Contribution that the amount presented is eligible for roll over into the Plan shall be conclusive evidence that the individual is entitled to roll over such amount to the Plan. An individual shall make a Rollover Contribution to the Plan by delivering or causing to be delivered to the Trustee the cash and/or, if provided in the Adoption Agreement, promissory notes that constitute the Rollover Contribution.

If the Adoption Agreement provides for "Participant rollovers," any individual making a Rollover Contribution of amounts that have previously been distributed to him must deliver to the Trustee the cash that constitutes his Rollover Contribution within 60 days of receipt of the distribution from the "eligible retirement plan." Such delivery must be made in the manner prescribed by the Administrator.

If the Plan accepts rollover of a promissory note, such loan shall continue to be administered in accordance with the provisions of such note rather than in accordance with the provisions of Article XII.

If the Adoption Agreement permits an individual who is not otherwise eligible to participate in the Plan to make Rollover Contributions to the Plan, such individual shall treated as a Participant with respect to his Rollover Contributions Sub-Account and shall be bound by all the terms and conditions of the Plan and the Trust Agreement.

27

5.10 In-Plan Roth Rollover Contributions

If and to the extent provided in the Adoption Agreement, a Participant who is eligible to receive or receives from his Account an "eligible rollover distribution," within the meaning of Code Section 402(c)(4), may elect in accordance with rules prescribed by the Administrator to roll over all or any portion of such distribution, other than any amount attributable to his Roth 401(k) Contributions or Designated Roth Rollover Contributions, as an In-Plan Roth Rollover Contribution. If a Participant makes an election pursuant to this Section, his In-Plan Roth Rollover Contribution shall be irrevocably designated as being made pursuant to, and intended to comply with, Code Section 402A and the nontaxable portion of his In-Plan Roth Rollover Contribution shall be included in his gross income for the taxable year in which the In-Plan Roth Rollover Contribution is made.

If provided in the Adoption Agreement, a Participant's surviving Spouse or his Spouse or former Spouse who is an alternate payee under a qualified domestic relations order shall be entitled to make an In-Plan Roth Rollover Contribution upon the same terms as the Participant.

5.11 Special Rules Applicable to Designated Roth Rollover Contribution or In-Plan Roth Rollover Contribution

Notwithstanding any other provision of the Plan to the contrary, any distribution from a Participant's Designated Roth Contributions Sub-Account and/or In-Plan Roth Rollover Contributions Sub-Account made after the Participant's 5-taxable-year period of participation, as described in Code Section 402A(d)(2)(B), that is a qualified distribution under Code Section 402A(d)(2)(A), shall not be taxable to the Participant or his Beneficiary. A Participant's 5-taxable-year period of participation shall begin on January 1 of the taxable year in which occurs the earliest of the following:

(a) the date the Participant first makes a Roth 401(k) Contribution to the Plan that is not distributed as an "excess deferral" or "excess contribution" (as those terms are defined in Sections 7.1(1) and 7.1(k), respectively) and is not returned as a permissible withdrawal in accordance with the provisions of Code Section 414(w);

(b) the date the Participant first makes a Designated Roth Rollover Contribution to the Plan;

(c) if the Participant makes a Designated Roth Rollover Contribution to the Plan directly from a designated Roth account under another plan, the date the Participant first made a contribution to the designated Roth account under such other plan that was not distributed or returned as described in paragraph (a) above; or

(d) the date the Participant first makes an In-Plan Roth Rollover Contribution.

In administering Designated Roth Rollover Contributions, the Trustee and the Administrator shall be entitled to rely on a statement from the distributing plan's administrator identifying (i) the Covered Employee's basis in the rolled over amounts and (ii) the date on which the Covered Employee's 5-taxable-year period of participation started under the distributing plan.

5.12 Separate Accounting for After-Tax Rollover Contributions, Designated Roth Rollover Contributions, and In-Plan Roth Rollover Contributions

To the extent the Plan accepts After-Tax Rollover Contributions, the Trustee shall account for such contributions separately from other Rollover Contributions. The Administrator shall maintain a record of the portion of a Participant's After-Tax Rollover Contributions Sub-Account that is not taxable upon distribution from the Plan. Earnings, losses, and other credits and charges shall be allocated on a reasonable and consistent basis among a Participant's After-Tax Rollover Contributions Sub-Account and his other Sub-Accounts under the Plan. No amounts other than After-Tax Rollover Contributions and properly attributable earnings shall be credited to a Participant's After-Tax Rollover Contributions Sub-Account. Notwithstanding the foregoing, as provided in Section 5.8, After-Tax Rollover Contributions may be allocated to and held in a Participant's After-Tax Contributions Sub-Account.

28

To the extent the Plan accepts Designated Roth Rollover Contributions or In-Plan Roth Rollover Contributions, the Trustee shall account for such amounts separately from other Rollover Contributions. The Administrator shall maintain a record of the portion of a Participant's Designated Roth Rollover Contributions Sub-Account and/or In-Plan Roth Rollover Contributions Sub-Account that is not taxable upon distribution from the Plan. Earnings, losses, and other credits and charges shall be allocated on a reasonable and consistent basis among a Participant's Designated Roth Rollover Contributions Sub-Account and/or In-Plan Roth Rollover Contributions Sub-Account and his other Sub-Accounts under the Plan. No amounts other than Designated Roth Rollover Contributions and/or In-Plan Roth Rollover Contributions and properly attributable earnings shall be credited to a Participant's Designated Roth Rollover Contributions Sub-Account and/or In-Plan Roth Rollover Contributions Sub-Account. Notwithstanding the foregoing, as provided in Section 4.2, Designated Roth Rollover Contributions and/or In-Plan Roth Rollover Contributions may be allocated to and held in a Participant's Roth 401(k) Contributions Sub-Account.

5.13 Vesting of After-Tax Contributions and Rollover Contributions

A Participant's vested interest in his After-Tax Contributions Sub-Account and his Rollover Contributions Sub-Account shall be at all times 100%.

ARTICLE VI
EMPLOYER CONTRIBUTIONS

6.1 Contribution Period

The Contribution Period for Employer Contributions shall be as specified in the Adoption Agreement. 6.2 Amount and Allocation of Standard Nonelective Contributions

If so provided in the Adoption Agreement, an Employer shall make a Standard Nonelective Contribution to the Plan for a Contribution Period in accordance with the provisions of the Adoption Agreement. The Standard Nonelective Contribution shall be allocated among the Eligible Employees who have met the allocation requirements for Standard Nonelective Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement and, if the Employer must use cross-testing to satisfy non-discrimination requirements under Code Section 401(a)(4) and elects to use the minimum allocation gateway described in the Adoption Agreement, further modified as provided in Section 6.2(b)(1) below.

The allocable share of each such Eligible Employee shall be determined in accordance with the formula specified in the Adoption Agreement. The following special rules shall apply in administering the provisions of this Section:

(a) If an integrated allocation formula is provided in the Adoption Agreement, the following shall apply:

(1) If the Standard Nonelective Contribution amount is either discretionary or non-discretionary based on a formula other than the allocation formula (e.g., a percentage of net profits), the allocable share of each such Eligible Employee shall be determined as follows:

(A) If the Adoption Agreement does not provide that the top-heavy allocation will always be made first and the Plan is not top-heavy for the year in which the allocation is being made, each such Eligible Employee's allocable share shall be equal to (i) a uniform percentage of his Compensation from the Employer for the Contribution Period plus (ii) a separate uniform percentage of his "excess Compensation" from the Employer for the Contribution Period; provided, however, that the percentage of "excess Compensation" shall not exceed the lesser of the percentage of Compensation allocated pursuant to (i) above or the greater of the "applicable percentage" or the rate of tax applicable at the beginning of the Plan Year to the Employer under Code Section 3111(a) that is attributable to old-age insurance under the OASDI provisions. If the Adoption Agreement provides for Safe Harbor Nonelective Contributions, the Safe Harbor Nonelective

29

Contribution made on behalf of an Eligible Employee may offset the allocation otherwise required to be made to the Eligible Employee under clause (i) above. The percentage of "Compensation" and the percentage of "excess Compensation" allocated to Eligible Employees shall be determined for each Contribution Period in such manner as shall maximize the percentage of "excess Compensation" allocated to Eligible Employees, subject to the foregoing limitations.

For purposes of this paragraph (A), the "applicable percentage" means:

(I) 5.7%, if the "integration level" is the Social Security taxable wage base or is not greater than 20% of the Social Security taxable wage base in effect at the beginning of the Plan Year;

(II) 4.3%, if the "integration level" is at least 20%, but less than 80% of the Social Security taxable wage base in effect at the beginning of the Plan Year; or

(III) 5.4%, if the "integration level" is at least 80%, but less than 100% of the Social Security taxable wage base in effect at the beginning of the Plan Year.

(B) If the Adoption Agreement provides that the top-heavy allocation will always be made first or if the Plan is top-heavy for the year in which the allocation is being made, such Eligible Employee's allocable share shall be:

(I) First, a percentage of his Compensation, not to exceed 3%, determined in the ratio which his Compensation from the Employer for the Contribution Period bears to the aggregate of all such Compensation for all such Eligible Employees.

(II) Second, if any Standard Nonelective Contribution remains after allocation has been made to all such Eligible Employees in accordance with paragraph (A) up to the specified limit, a percentage of his "excess Compensation" for the Contribution Period, not to exceed 3%, determined in the ratio which his "excess Compensation" from the Employer for the Contribution Period bears to the aggregate of such "excess Compensation" for all such Eligible Employees. If the Adoption Agreement provides for Safe Harbor Nonelective Contributions, the Safe Harbor Nonelective Contribution made on behalf of an Eligible Employee may offset the allocation otherwise required to be made to the Eligible Employee under this paragraph.

(III) Third, if any Standard Nonelective Contribution remains after allocation has been made in accordance with paragraph (B) up to the specified limit, a percentage of the sum of his Compensation and his "excess Compensation" for the Contribution Period, not to exceed the "applicable percentage", determined in the ratio which the sum of his Compensation and his "excess Compensation" from the Employer bears to the aggregate of the sums of such Compensation and "excess Compensation" for all such Eligible Employees.

(IV) Fourth, if any Standard Nonelective Contribution remains after allocation has been made to all such Eligible Employees in accordance with paragraph (C) up to the specified limit, the allocable share of each such Eligible Employee shall be in the ratio which his Compensation from the Employer for the Contribution Period bears to the aggregate of such Compensation for all such Eligible Employees.

30

For purposes of this paragraph (B), the "applicable percentage" means:

(V) 2.7%, if the "integration level" is the Social Security taxable wage base or is not greater than 20% of the Social Security taxable wage base in effect at the beginning of the Plan Year;

(VI) 1.3%, if the "integration level" is at least 20%, but less than 80% of the Social Security taxable wage base in effect at the beginning of the Plan Year; or

(VII) 2.4%, if the "integration level" is at least 80%, but less than 100% of the Social Security taxable wage base in effect at the beginning of the Plan Year.

(2) If an Employer or a Related Employer maintains another qualified plan, in no event shall the "overall permitted disparity limits" of Internal Revenue Service regulations Section 1.401(l)-5 be exceeded. The "annual overall permitted disparity limit" of Section 1.401(l)-5(b) shall not be exceeded if the "total annual disparity fraction" determined as of the end of the Plan Year for each Eligible Employee who has met the allocation requirements for Standard Nonelective Contributions during the Plan Year does not exceed 1. If any such Eligible Employee's "total annual disparity fraction" would otherwise exceed 1 for any Plan Year, the "annual overall disparity limit" shall be satisfied as provided in the Adoption Agreement.

(3) In no event shall the "cumulative permitted disparity limit" of Internal Revenue Service regulations Section 1.401(l)-5(c) be exceeded with respect to an Eligible Employee. The "cumulative permitted disparity limit" shall not be exceeded if an Eligible Employee's "cumulative disparity fraction" does not exceed 35. If an Eligible Employee's "cumulative permitted disparity limit" would otherwise be exceeded, any Standard Nonelective Contributions made by an Employer for a Contribution Period shall be allocated to such Eligible Employee based on his full Compensation rather than on his Compensation and "excess Compensation".

(4) The following special definitions shall apply:

(A) An Eligible Employee's "cumulative disparity fraction" is the sum of the Eligible Employee's "total annual disparity fractions" attributable to the Eligible Employee's total years of service under all plans maintained by an Employer or a Related Employer.

(B) "Excess compensation" means Compensation in excess of the "integration level"; provided, however, that if provided in the Adoption Agreement, the "excess Compensation" of a Covered Employee who becomes an Eligible Employee with respect to Standard Nonelective Contributions on a date other than the first day of a Contribution Period, means his Compensation in excess of the product of (i) and (ii) where (i) is the "integration level" and (ii) is a fraction the numerator of which is the number of months during the Contribution Period for which the Covered Employee has been an Eligible Employee with respect to Standard Nonelective Contributions and the denominator of which is 12.

(C) The "integration level" means the Social Security taxable wage base in effect at the beginning of the Plan Year, unless the Plan Sponsor specifies a different integration level in the Adoption Agreement.

(D) An Eligible Employee's "total annual disparity fraction" is the sum of the Eligible Employee's "annual disparity fractions" under all qualified plans maintained by an Employer or a Related Employer, as determined under Internal Revenue Service regulations Sections 1.401(l)-5(b)(3) through 1.401(l)-5(b)(8) for the plan year ending in the current Plan Year.

31

(b) If the Plan must be cross-tested to satisfy Treasury Regulations Section 1.401(a)(4)-2, the following special provisions shall apply:

(1) If the age-weighted allocation method is provided in the Adoption Agreement, the "equivalent accrual rate" is the annual annuity commencing at the Eligible Employee's Normal Retirement Age (or current age, if older), expressed as a percentage of his Compensation, which is provided from the amount of Employer Contributions (other than Matching Contributions) and forfeitures allocated to the Eligible Employee for a Contribution Period.

(2) The gateway requirement will be satisfied using the minimum allocation gateway method. Under this method, the allocation rate of each Eligible Employee who is not a Highly Compensated Employee and has either (1) met the allocation requirements for Standard Nonelective Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement, or (ii) benefits under the Plan (within the meaning of Treasury Regulations Section 1.410(b)-3), for example because he is entitled to an allocation under Article XXII due to the Plan being top-heavy, shall not be less than 5% of his "415 compensation" (as defined in Section 7.1(m)) or, if less, 1/3 of the allocation rate for the Highly Compensated Employee with the highest allocation rate.

(3) An Eligible Employee's "allocation rate" means the amount of Employer Contributions (other than Matching Contributions) and forfeitures allocated to the Eligible Employee for a Contribution Period, expressed as a percentage of the Eligible Employee's Compensation for the Contribution Period.

6.3 Amount and Allocation of Additional Discretionary Nonelective Contributions

If the Adoption Agreement provides for Additional Discretionary Nonelective Contributions, any Additional Discretionary Nonelective Contribution made by an Employer for the Contribution Period shall be allocated among the Eligible Employees who have met the allocation requirements for Additional Discretionary Nonelective Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement. The allocable share of each such Eligible Employee shall be determined in accordance with the formula specified in the Adoption Agreement.

6.4 Qualified Nonelective Contributions

If provided in the Adoption Agreement, an Employer may re-characterize any portion or all of its Nonelective Contribution as a Qualified Nonelective Contribution, provided that the amount designated by the Employer as a Qualified Nonelective Contribution does not exceed the "QNEC limit" Amounts that are re-characterized as Qualified Nonelective Contributions shall be accounted for separately from Nonelective Contributions.

If provided in the Adoption Agreement, each Employer shall make a separate Qualified Nonelective Contribution to the Plan for the Contribution Period in accordance with the provisions of the Adoption Agreement. The Qualified Nonelective Contribution shall be allocated among the Eligible Employees who have met the allocation requirements for Qualified Nonelective Contributions described in the Adoption Agreement, as modified by any exception to the allocation requirements provided in the Adoption Agreement, but, if provided in the Adoption Agreement, excluding any such Eligible Employee who is a Highly Compensated Employee for the Contribution Period. The Qualified Nonelective Contribution shall be allocated as provided in the Adoption Agreement.

An Employer may not use the failsafe Qualified Nonelective Contribution correction method to satisfy the ADP and/or ACP test for any Plan Year in which it uses the prior year testing method to satisfy such test.

For purposes of this Section, the following terms have the following meanings:

(a) The "QNEC limit" means the product of the Eligible Employee's "test compensation" (as defined in Section 7.1(r)) for the Plan Year multiplied by the greater of 5% or 2 times the Plan's "representative contribution rate". The "QNEC limit" will be applied separately in allocating Qualified Nonelective Contributions that may be included in calculating an Eligible Employee's "deferral percentage" (as defined in Section 7.1(d)) and his "contribution percentage" (as defined in Section 7.1(c)).

32

Notwithstanding the foregoing, any Prevailing Wage Law Contribution made on behalf of an Eligible Employee that the Administrator treats as a Qualified Nonelective Contribution may be taken into account in calculating the Eligible Employee's "deferral percentage" or his "contribution percentage" to the extent the contribution does not exceed 10% of the Eligible Employee's "test compensation".

(b) The Plan's "representative contribution rate" is the lowest "applicable contribution rate" of any Eligible Employee who is not a Highly Compensated Employee for the Plan Year in either (i) the group consisting of half of all Eligible Employees who are not Highly Compensated Employees for the Plan Year or (ii) the group of all Eligible Employees who are not Highly Compensated Employees for the Plan Year and who are employed by the Employer or a Related Employer on the last day of the Plan Year, whichever results in the greater amount.

(c) An Eligible Employee's "applicable contribution rate" for purposes of calculating his "deferral percentage" means (i) the sum of the Eligible Employee's Qualified Matching Contributions included in calculating his "deferral percentage" and the Qualified Nonelective Contributions allocated to the Eligible Employee for the Plan Year (excluding any Qualified Nonelective Contributions that are included in calculating his "contribution percentage" for the Plan Year) (ii) divided by the Eligible Employee's "test compensation" for the Plan Year.

(d) An Eligible Employee's "applicable contribution rate" for purposes of calculating his "contribution percentage" means (i) the sum of the Eligible Employee's Matching Contributions included in calculating his "contribution percentage" and the Qualified Nonelective Contributions allocated to the Eligible Employee for the Plan Year (excluding any Qualified Nonelective Contributions that are included in calculating his "deferral percentage" for the Plan Year) (ii) divided by the Eligible Employee's "test compensation" for the Plan Year.

6.5 Additional, Discretionary Qualified Nonelective Contributions

If the Adoption Agreement provides for an additional, discretionary Qualified Nonelective Contribution, any additional, discretionary Qualified Nonelective Contribution made by an Employer for the Contribution Period shall be allocated among the Eligible Employees who have met the allocation requirements for Qualified Nonelective Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement, but, if provided in the Adoption Agreement, excluding any such Eligible Employee who is a Highly Compensated Employee for the Contribution Period. The allocable share of each such Eligible Employee shall be determined based on the formula applicable to additional, discretionary Qualified Nonelective Contributions provided in the Adoption Agreement.

An Employer may not use the failsafe Qualified Nonelective Contribution correction method to satisfy the ADP and/or ACP test for any Plan Year in which it uses the prior year testing method to satisfy such test.

6.6     Regular Matching Contributions

If so provided in the Adoption Agreement, an Employer shall make a Regular Matching Contribution to the Plan for each Contribution Period in accordance with the provisions of the Adoption Agreement. The Regular Matching Contribution shall be allocated among the Eligible Employees who have met the allocation requirements for Regular Matching Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement. The Regular Matching Contribution shall be allocated as follows:

(a) If the Adoption Agreement provides for a required contribution amount, the allocable share of each such Eligible Employee shall be the amount determined under the matching formula provided in the Adoption Agreement, subject to any limitations provided in the Adoption Agreement.

(b) If the Adoption Agreement provides for a discretionary contribution amount, the allocable share of each such Eligible Employee shall be equal to a uniform percentage, determined by the Employer, in its discretion, of the eligible contributions made for the Contribution Period by or on behalf of such Eligible Employee; provided, that:

33

(1) The Employer may designate a different uniform match percentage applicable to eligible contributions above and below designated dollar amounts or levels of Compensation. The match percentage may not increase as an Eligible Employee's eligible contributions increase.

(2) If provided in the Adoption Agreement, the Employer may designate different uniform match percentages to apply to different Employee groups. The Employer may determine any such groups in its discretion, provided that each separate group must be clearly identified using determinable characteristics and each separate match rate must satisfy the requirements of Code Section 401(a)(4) as a separate feature under the Plan.

Any Regular Matching Contribution under this paragraph (b) shall be subject to the limitations elected in the Adoption Agreement.

If the Adoption Agreement provides that Catch-Up 401(k) Contributions will not be matched, the Employer shall not make Matching Contributions, other than Safe Harbor Matching Contributions, with respect to Catch-Up 401(k) Contributions. If, due to application of an administrative Plan limit, Matching Contributions other than Safe Harbor Matching Contributions become attributable to Catch-Up 401(k) Contributions, such Matching Contributions plus any income and minus any loss allocable thereto, shall be forfeited and applied as provided in Section 7.10.

6.7 Additional Discretionary Matching Contributions

If Additional Discretionary Matching Contributions are provided in the Adoption Agreement, an Employer may make an Additional Discretionary Matching Contribution for a Plan Year in accordance with the provisions of the Adoption Agreement. Any Additional Discretionary Matching Employer Contribution shall be allocated among the Eligible Employees who have met the allocation requirements for Additional Discretionary Matching Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement. The allocable share of each such Eligible Employee shall be equal to a uniform percentage, determined by the Employer, in its discretion, of the eligible contributions made for the Contribution Period by or on behalf of such Eligible Employee; provided, that:

(a) The Employer may designate a different uniform match percentage applicable to eligible contributions above and below designated dollar amounts or levels of Compensation. The match percentage may not increase as an Eligible Employee's eligible contributions increase.

(b) If provided in the Adoption Agreement, the Employer may designate different uniform match percentages to apply to different Employee groups. The Employer may determine any such groups in its discretion, provided that each separate group must be clearly identified using determinable characteristics and each separate match rate must satisfy the requirements of Code Section 401(a)(4) as a separate feature under the Plan.

Any Additional Discretionary Matching Contribution shall be subject to the limitations elected in the Adoption Agreement.

6.8 True-Up Matching Contributions

If the Adoption Agreement provides for True-Up Matching Contributions, an Employer shall make a True-Up Matching Contribution for each Plan Year in accordance with the provisions of the Adoption Agreement. The True-Up Matching Contribution shall be allocated among the Eligible Employees during the Contribution Period who have met the allocation requirements for True-Up Matching Contributions described in the Adoption Agreement, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement. Such True-Up Matching Contribution shall be in the amount which, when aggregated with the Regular Matching Contributions made with respect to Contribution Periods within such Plan Year, will provide the maximum Regular Matching Contribution provided in the Adoption Agreement, taking into account the Eligible Employee's Compensation and eligible contributions for the full Plan Year. The maximum Regular Matching Contribution for a Plan Year shall be determined applying any limitations on Regular Matching Contributions provided in the Adoption Agreement.

34

If provided in the Adoption Agreement, the Employers may determine annually whether or not to make a True-Up Matching Contribution for the Plan Year.

6.9 Qualified Matching Contributions

If provided in the Adoption Agreement, an Employer may designate any portion or all of its Matching Contribution as a Qualified Matching Contribution; provided, however, that the amount designated by the Employer as a Qualified Matching Contribution with respect to an Eligible Employee shall not exceed the "QMAC limit" described below. Amounts that are designated as Qualified Matching Contributions shall be accounted for separately and may be withdrawn only as permitted under the Plan.

If provided in the Adoption Agreement, each Employer may make a failsafe Qualified Matching Contribution to the Plan for each Contribution Period on behalf of any of its Eligible Employees who has made 401(k) Contributions for the Contribution Period and is not a Highly Compensated Employee for the Contribution Period. The amount of any failsafe Qualified Matching Contribution made on behalf of an Eligible Employee shall be a percentage, which percentage need not be uniform with respect to all Eligible Employees, of either (1) the 401(k) Contributions made on behalf of such Eligible Employee for the Plan Year (and After-Tax Contributions for the Plan Year, if the Adoption Agreement provides that After-Tax Contributions are matched) or (2) the Compensation paid to such Eligible Employee for the Plan Year. In no event shall the amount of any failsafe Qualified Matching Contribution allocated to an Eligible Employee hereunder exceed the "QMAC limit" described below.

For purposes of this Section, the following terms have the following meanings:

(a) The "QMAC limit" applicable to an Eligible Employee means the greatest of (1) 5% of the Eligible Employee's Compensation, (2) the Eligible Employee's 401(k) Contributions for the Plan Year (and After-Tax Contributions for the Plan Year, if the Adoption Agreement provides that After-Tax Contributions are matched), or (3) 2 times the "representative match rate" multiplied by the Eligible Employee's 401(k) Contributions for the Plan Year.

(b) The "representative match rate" means the lowest "match rate" for any Eligible Employee who is not a Highly Compensated Employee for the Plan Year and who is in either (1) a determination group consisting of 1/2 of all Eligible Employees during the Plan Year who are not Highly Compensated Employees for the Plan Year or (2) the group consisting of all Eligible Employees who are employed by an Employer or a Related Employer on the last day of the Plan and who are not Highly Compensated Employees for the Plan Year, whichever would provide the greater representative rate.

(c) A "match rate" means the Matching Contributions made on behalf of an Eligible Employee for the Plan Year divided by the Eligible Employee's 401(k) Contributions for the Plan Year (and After-Tax Contributions for the Plan Year, if the Adoption Agreement provides that After-Tax Contributions are matched); provided, however, that if Matching Contributions are made at different rates for different levels of Compensation, the "match rate" shall be determined assuming 401(k) Contributions (and After-Tax Contributions for the Plan Year, if the Adoption Agreement provides that After-Tax Contributions are matched) equal to 6% of "test compensation", as defined in Section 7.1(r).

An Employer may not use the failsafe Qualified Matching Contribution correction method to satisfy the ADP and/or ACP test for any Plan Year in which it uses the prior year testing method to satisfy such test.

6.10 Maximum Dollar Amount of Discretionary Match

If pursuant to the Adoption Agreement, the non-discrimination requirements applicable to Matching Contributions are to be satisfied using the safe harbor method, then notwithstanding any other provision of the Plan to the contrary, in no event shall the aggregate dollar amount of any discretionary Matching Contributions made to the Plan for the Plan Year on behalf of an Eligible Employee who has satisfied any age and/or years of Eligibility Service requirements specified in the Adoption Agreement to receive allocations of Safe Harbor Matching or Safe Harbor Nonelective Contributions exceed 4% of the Eligible Employee's Compensation for the Plan Year. If provided in the Adoption Agreement, Compensation earned by an Eligible Employee during the Contribution Period, but prior to the date on which the Covered Employee first became an Eligible Employee with respect to Matching Contributions, shall be excluded in applying the limitation contained in this paragraph.

35

6.11 Non-QACA Safe Harbor Matching Contributions

If provided in the Adoption Agreement, each Employer shall make a Non-QACA Safe Harbor Matching Contribution to the Plan for a Contribution Period in accordance with the provisions of the Adoption Agreement. The Non-QACA Safe Harbor Matching Contribution shall be allocated among Participants who were Eligible Employees at any time during the Contribution Period as follows:

(a) If the basic matching formula is provided in the Adoption Agreement, an Eligible Employee's allocable share shall be equal to the following:

(1) 100% of the first 3% of the Eligible Employee's Compensation that he contributes as contributions eligible for the match under the provisions of the Adoption Agreement; plus

(2) 50% of the next 2% of the Eligible Employee's Compensation that he contributes as contributions eligible for the match under the provisions of the Adoption Agreement.

(b) If the enhanced matching formula is provided in the Adoption Agreement, an Eligible Employee's allocable share shall be the amount determined in the Adoption Agreement based on the percentage of Compensation contributed by the Eligible Employee as contributions eligible for the match under the provisions of the Adoption Agreement.

6.12 QACA Safe Harbor Matching Contributions

If provided in the Adoption Agreement, each Employer shall make a QACA Safe Harbor Matching Contribution to the Plan for a Contribution Period in accordance with the provisions of the Adoption Agreement. The QACA Safe Harbor Matching Contributions shall be allocated among Participants who were Eligible Employees at any time during the Contribution Period as follows:

(a) If the basic matching formula is provided in the Adoption Agreement, an Eligible Employee's allocable share shall be equal to the following:

(1) 100% of the first 1% of the Eligible Employee's Compensation that he contributes as contributions eligible for the match under the provisions of the Adoption Agreement; plus

(2) 50% of the next 5% of the Eligible Employee's Compensation that he contributes as contributions eligible for the match under the provisions of the Adoption Agreement.

(b) If the enhanced matching formula is provided in the Adoption Agreement, an Eligible Employee's allocable share shall be the amount determined in the Adoption Agreement based on the percentage of Compensation contributed by the Eligible Employee as contributions eligible for the match under the provisions of the Adoption Agreement.

6.13 Safe Harbor Nonelective Contributions (QACA and Non-QACA)

If provided in the Adoption Agreement, each Employer shall make either a QACA or a Non-QACA Safe Harbor Nonelective Contribution (as designated in the Adoption Agreement) to the Plan for a Contribution Period in accordance with the provisions of the Adoption Agreement. The Safe Harbor Nonelective Contribution shall be allocated among Participants who were Eligible Employees with respect to Safe Harbor Nonelective Contributions at any time during the Contribution Period as follows:

36

(a) If the discretionary formula amount is provided in the Adoption Agreement, the provisions of this Section shall apply with respect to each Plan Year for which an amendment is adopted providing that the Employers shall make Safe Harbor Nonelective Contributions for such Plan Year. Any such amendment must be adopted at least 30 days prior to the end of the Plan Year for which Safe Harbor Nonelective Contributions are being made. The allocable share of each such Eligible Employee in the Safe Harbor Nonelective Contribution shall be the percentage of his Compensation specified in the amendment adopting the Safe Harbor Nonelective Contribution, but in no event shall such allocable share be less than 3% of the Eligible Employee's Compensation for the Plan Year.

(b) If the required contribution amount is provided in the Adoption Agreement, the allocable share of each such Eligible Employee shall be equal to the percentage of his Compensation specified in the Adoption Agreement.

6.14 Verification of Amount of Employer Contributions by the Plan Sponsor

The Plan Sponsor shall verify the amount of Employer Contributions to be made by each Employer in accordance with the provisions of the Plan. Notwithstanding any other provision of the Plan to the contrary, the Plan Sponsor shall determine the portion of the Employer Contribution to be made by each Employer with respect to a Covered Employee who transfers from employment with one Employer as a Covered Employee to employment with another Employer as a Covered Employee.

6.15 Payment of Employer Contributions

Employer Contributions made for a Contribution Period shall be paid to the Trustee within the period of time required under the Code in order for the contribution to be deductible by the Employer in determining its Federal income taxes for the Plan Year or, if the Employer is not subject to Federal taxation, within the period of time such contributions would be required to be made under the Code if the Employer were subject to Federal taxation. If the Adoption Agreement provides for Safe Harbor Matching Contributions and the Contribution Period is not the Plan Year, the Safe Harbor Matching Contributions attributable to eligible contributions made during a Plan Year quarter shall be paid into the Plan no later than the last day of the immediately following Plan Year quarter. Payments shall be made in cash or, if provided in the Adoption Agreement, in qualifying employer securities, as defined in ERISA Section 407(d)(5).

Any in kind contribution made under the terms of the Plan shall be discretionary and unencumbered.

6.16 Allocation Requirements

A Participant who was an Eligible Employee at any time during a Contribution Period shall be eligible to receive an allocation of Employer Contributions for such Contribution Period only if:

(a) he is a Covered Employee with respect to such Employer Contributions, as provided in the Adoption Agreement:

(b) he satisfies any requirements specified in the Section of the Base Plan Document describing the contribution; and

(c) he meets the allocation requirements specified in the Adoption Agreement with respect to such Employer Contribution, as modified by any exceptions to the allocation requirements provided in the Adoption Agreement.

37

If the Adoption Agreement provides for Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, a Participant who was an Eligible Employee at any time during the Contribution Period shall be eligible to receive an allocation of such contributions.

If the Adoption Agreement provides for an Hours of Service requirement, the number of Hours of Service required to receive an allocation of Employer Contributions hereunder shall be pro-rated for any short Contribution Period.

6.17 Vesting of Employer Contributions

A Participant's vested interest in his Non-QACA Safe Harbor Matching, Non-QACA Safe Harbor Nonelective, Prior Non-QACA Safe Harbor, Qualified Matching, and/or Qualified Nonelective Contributions Sub-Account(s) shall be at all times 100%.

A Participant's vested interest in his other Employer Contribution Sub-Accounts shall be determined in accordance with the applicable vesting schedule specified in the Adoption Agreement.

Notwithstanding any other provision of the Plan to the contrary, if a Participant is employed by an Employer or a Related Employer on or after Normal Retirement Age or, if provided in the Adoption Agreement, on or after his Early Retirement Date, date of death, or the date he becomes Disabled, as applicable, his vested interest in his full Employer Contributions Sub-Account shall be 100%. For purposes of this Section, a Participant who dies while performing qualified military service (as described in the Uniformed Services Employment and Reemployment Rights Act of 1994) shall be treated as having returned to employment with an Employer immediately prior to his death and as having died while employed as a Covered Employee.

6.18 Election of Former Vesting Schedule

If there is a change in the vesting schedule because the Plan Sponsor adopts an amendment to the Plan that directly or indirectly affects the computation of a Participant's vested interest in his Employer Contributions Sub Account, the following shall apply:

(a) In no event shall a Participant's vested interest in his Account on the effective date of the change in vesting schedule be less than his vested interest in his Account immediately prior to the effective date of the amendment.

(b) In no event shall a Participant's vested interest in attributable to his Account determined as of the later of (i) the effective date of such amendment or (ii) the date such amendment is adopted, be determined on and after the effective date of such amendment under a vesting schedule that is more restrictive than the vesting schedule applicable to such Account immediately prior to the effective date of such amendment.

(c) Any Participant with 3 or more years of Vesting Service shall have a right to have his vested interest in his Account (including amounts credited to such Account following the effective date of such amendment) continue to be determined under the vesting provisions in effect prior to the amendment rather than under the new vesting provisions, unless the vested interest of the Participant in his Account under the Plan as amended is not at any time less than such vested interest determined without regard to the amendment. A Participant shall exercise his right under this Section by giving written notice of his exercise thereof to the Administrator within 60 days after the latest of (i) the date he receives notice of the amendment from the Administrator, (ii) the effective date of the amendment, or (iii) the date the amendment is adopted.

6.19 Profits Limitation

If provided in the Adoption Agreement, with respect to discretionary Matching Contributions, other than Safe Harbor Matching Contributions, and/or with respect to discretionary Nonelective Contributions, other than Safe Harbor Nonelective Contributions, such contributions shall be made only out of the Profits of the Employer.

38

6.20 Forfeitures to Reduce Employer Contributions

If provided in the Adoption Agreement, and notwithstanding any other provision of the Plan to the contrary, the amount of the Employer Contribution required under this Article for a Plan Year shall be reduced by the amount of any forfeitures occurring during the Plan Year or any prior Plan Year that are not used to pay Plan expenses and that are applied against Employer Contributions.

ARTICLE VII
LIMITATIONS ON CONTRIBUTIONS

7.1 Special Definitions

For purposes of this Article, the following terms have the following meanings:

(a) The "annual addition" with respect to a Participant for a "limitation year" means the sum of the following amounts allocated to the Participant for the "limitation year":

(1) all employer contributions allocated to the Participant's account under any qualified defined contribution plan maintained by an Employer or a Related Employer, including "elective contributions" and amounts attributable to forfeitures applied to reduce the employer's contribution obligation, but excluding "catch-up contributions";

(2) all "employee contributions" allocated to the Participant's account under any qualified defined contribution plan maintained by an Employer or a Related Employer or any qualified defined benefit plan maintained by an Employer or a Related Employer if separate accounts are maintained under the defined benefit plan with respect to such employee contributions;

(3) all forfeitures allocated to the Participant's account under any qualified defined contribution plan maintained by the Employer or a Related Employer;

(4) all amounts allocated to an individual medical benefit account, as described in Code Section 415(1)(2), established for the Participant as part of a pension or annuity plan maintained by the Employer or a Related Employer;

(5) if the Participant is a key employee, as defined in Code Section 419A(d)(3), all amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after that date, that are attributable to post-retirement medical benefits allocated to the Participant's separate account under a welfare benefit fund, as defined in Code Section 419(e), maintained by the Employer or a Related Employer; and

(6) all allocations to the Participant under a simplified employee pension.

(b) A "catch-up contribution"means any elective deferral, as defined in Code Section 414(u)(2)(C), that is treated as a catch-up contribution in accordance with the provisions of Code Section 414(v).

(c) The "contribution percentage"with respect to an "eligible participant" for a particular Plan Year means the ratio of the sum of the included contributions, described below, to his "test compensation" for such Plan Year.

(1) Contributions made by or on behalf of an "eligible participant" that may be used in computing the "eligible participant's" "contribution percentage" include the following:

(A) After-Tax Contributions, excluding contributions to the Plan made pursuant to Code Section 414(u) that are treated as After-Tax Contributions;

39

(B) Matching Contributions, except as specifically provided below;

(C) as directed by the Administrator, 401(k) Contributions, including Roth 401(k) Contributions and Catch-Up 401(k) Contributions, to the extent such 401(k) Contributions are subject to the ADP test described in Section 7.4 and the ADP test is satisfied whether or not such 401(k) Contributions are included in determining the "eligible participant's" "deferral percentage" for the Plan Year;

(D) as directed by the Administrator, Qualified Nonelective Contributions, to the extent such Qualified Nonelective Contributions are not included in determining the "eligible participant's" "deferral percentage" for such Plan Year; and

(E) as directed by the Administrator, Safe Harbor Nonelective Contributions, to the extent such contributions are not required to satisfy the safe harbor contribution requirement of Code Section 401(k)(12)(C), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12).

(2) Notwithstanding the foregoing, the following Matching Contributions are not included in computing an "eligible participant's" "contribution percentage" for a Plan Year:

(A) Matching Contributions that are forfeited because they relate to 401(k) Contributions that are distributed as "excess contributions", "excess deferrals", or because they exceed the Code Section 402(g) limit;

(B) contributions to the Plan made pursuant to Code Section 414(u) that are treated as Matching Contributions;

(C) if the Adoption Agreement provides that Catch-Up 401(k) Contributions will not be matched, Matching Contributions that are forfeited because they relate to 401(k) Contributions that are re-characterized as Catch-Up 401(k) Contributions; and

(D) Qualified Matching Contributions that are included in determining an "eligible participant's" "deferral percentage" for the Plan Year.

(3) Matching Contributions in excess of 100% of the contributions eligible for match ("eligible contributions") made by an "eligible participant" who is not a Highly Compensated Employee for a Plan Year are not included in computing such "eligible participant's" "contribution percentage" for the Plan Year to the extent that such Matching Contributions exceed the greater of (i) 5% of the "eligible participant's" "test compensation" for the Plan Year or (ii) the product of 2 times the Plan's "representative match rate" multiplied by the "eligible participant's" eligible contributions for the Plan Year. The Plan's "representative match rate" is the lowest "match rate" of any "eligible participant" who is not a Highly Compensated Employee for the Plan Year in either (i) the group consisting of half of all "eligible participants" who are not Highly Compensated Employees for the Plan Year or (ii) the group of all "eligible participants" who are not Highly Compensated Employees for the Plan Year and who are employed by the Employer or a Related Employer on the last day of the Plan Year and who make eligible contributions for the Plan Year, whichever results in the greater amount. An "eligible participant's "match rate" means the Matching Contributions made on behalf of the "eligible participant" for the Plan Year divided by the "eligible participant's" eligible contributions for the Plan Year; provided, however, that if Matching Contributions are made at different rates for different levels of Compensation, the "match rate" shall be determined assuming eligible contributions equal to 6% of "test compensation".

(4) Notwithstanding the foregoing, the following special rules apply for any Plan Year in which the ADP test described in Section 7.4 is deemed satisfied with respect to some or all 401(k) Contributions, as provided in Section 7.12, and/or the ACP test described in Section 7.7 is deemed satisfied for the Plan Year with respect to some or all Matching Contributions, as provided in Section 7.13:

40

(A) 401(k) Contributions with respect to which the ADP test described in Section 7.4 is deemed satisfied, as provided in Section 7.12, shall not be used in computing an "eligible participant's" "contribution percentage."

(B) As directed by the Administrator, if the ACP test described in Section 7.7 is deemed satisfied for the Plan Year with respect to some or all Matching Contributions, as provided in Section 7.13, those Matching Contributions with respect to which the limitations are deemed satisfied may be excluded in computing an "eligible participant's" "contribution percentage".

(C) As directed by the Administrator, if the ADP test is deemed satisfied under Section 7.12 using Safe Harbor Matching Contributions, and the ACP test is not deemed satisfied with respect to some or all Matching Contributions under Section 7.13 for the Plan Year, those Matching Contributions with respect to which the limitations are not deemed satisfied may be excluded in computing an "eligible participant's" "contribution percentage", but only in an amount up to 4% of the "eligible participant's" "test compensation" for the Plan Year (3.5% if the ADP test is satisfied using QACA Safe Harbor Matching Contributions).

(D) Except as otherwise specifically provided above, Qualified Matching Contributions shall be included in determining the numerator of an "eligible participant's" "contribution percentage" for such Plan Year.

(5) After-Tax Contributions made by an "eligible participant" shall be included in determining his "contribution percentage" for a Plan Year only if they are contributed to the Plan before the end of such Plan Year. Notwithstanding the foregoing, "excess contributions" that are re-characterized as After-Tax Contributions as provided in Section 7.6(b) shall be included in a Highly Compensated Employee's "contribution percentage" for the Plan Year that includes the time at which the "excess contribution" is included in the Highly Compensated Employee's gross income. Other contributions made on an "eligible participant's" behalf for a Plan Year shall be included in determining his "contribution percentage" for such Plan Year only if the contributions are allocated to the "eligible participant's" Account as of a date within such Plan Year and are made to the Plan before the end of the 12-month period immediately following the Plan Year to which the contributions relate. For Plan Years in which the "testing year" means the Plan Year preceding the Plan Year for which the ACP test described in Section 7.7 is being determined, contributions included for purposes of determining the "contribution percentage" for the "testing year" of an "eligible participant" who is not a Highly Compensated Employee must be made before the last day of the Plan Year for which the limitation is being determined.

(6) If an Employer elects to change from the current year testing method to the prior year testing method, the following shall not be included in computing a non-Highly Compensated Employee's "contribution percentage" for the Plan Year immediately preceding the Plan Year in which the prior year testing method is first effective:

(A) 401(k) Contributions that were included in computing the "eligible participant's" "contribution percentage" under the current year method for such immediately preceding Plan Year

(B) Qualified Nonelective Contributions that were included in computing the "eligible participant's" "deferral percentage" or "contribution percentage" under the current year method for such immediately preceding Plan Year

41

(C) Qualified Matching Contributions that were included in computing the "eligible participant's" "deferral percentage" under the current year testing method for such immediately preceding Plan Year

(D) Safe Harbor Matching Contributions that were included in computing the "eligible participant's" "deferral percentage" or "contribution percentage" under the current year testing method for such immediately preceding Plan Year or that were required to satisfy the safe harbor contribution requirement under Code Section 401(k)(12)(B), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12) for such preceding Plan Year

(E) Safe Harbor Nonelective Contributions that were included in computing the "eligible participant's" "deferral percentage" or "contribution percentage" under the current year testing method for such immediately preceding Plan Year or that were required to satisfy the safe harbor contribution requirement under Code Section 401(k)(12)(C), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12) for such preceding Plan Year

The determination of an "eligible participant's" "contribution percentage" shall be made after any reduction required to satisfy the Code Section 415 limitations is made as provided in this Article VII and shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

(d) The "deferral percentage"with respect to an Eligible Employee for a particular Plan Year means the ratio of the sum of the included contributions, described below, to the Eligible Employee's "test compensation" for such Plan Year.

(1) Contributions made on behalf of an Eligible Employee for the Plan Year that are used in computing the Eligible Employee's "deferral percentage" include the following:

(A) 401(k) Contributions, including Roth 401(k) Contributions, except as specifically provided below;

(B) as directed by the Administrator, Qualified Matching Contributions;

(C) as directed by the Administrator, Qualified Nonelective Contributions, to the extent such Qualified Nonelective Contributions are not included in determining the Eligible Employee's "contribution percentage" for such Plan Year;

(D) as directed by the Administrator, Safe Harbor Nonelective Contributions, to the extent such contributions are not required to satisfy the safe harbor contribution requirement of Code Section 401(k)(12)(C) or 401(k)(13)(D); and

(E) as directed by the Administrator, Safe Harbor Matching Contributions, to the extent such contributions are not required to satisfy the safe harbor contribution requirement of Code Section 401(k)(12)(C), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12) and are not included in determining the Eligible Employee's "contribution percentage".

(2) Notwithstanding the foregoing, the following 401(k) Contributions are not included in computing an Eligible Employee's "deferral percentage" for a Plan Year:

(A) 401(k) Contributions that are distributed to a non-Highly Compensated Employee in accordance with the provisions of Section 7.2 because they exceed the Code Section 402(g) limit;

(B) contributions made to the Plan pursuant to Code Section 414(u) that are treated as 401(k) Contributions;

42

(C) Catch-Up 401(k) Contributions, except to the extent the Eligible Employee's 401(k) Contributions are re-characterized as Catch-Up 401(k) Contributions as a result of a failure to satisfy the non-discrimination requirements applicable to 401(k) Contributions;

(D) 401(k) Contributions that are included in determining an Eligible Employee's "contribution percentage" for the Plan Year; and

(E) for any Plan Year in which the non-discrimination requirements applicable to 401(k) Contributions are deemed satisfied with respect to some 401(k) Contributions, as provided in this Article, 401(k) Contributions with respect to which the limitations are deemed satisfied.

(3) To be included in computing an Eligible Employee's "deferral percentage" for a Plan Year, contributions must be allocated to the Eligible Employee's Account as of a date within such Plan Year and be made to the Plan before the end of the 12-month period immediately following the Plan Year to which the contributions relate. For Plan Years in which the prior year testing method is used in applying the ADP test described in Section 7.4, contributions used in computing the "deferral percentage" for the "testing year" of a non-Highly Compensated Employee must be made before the last day of the Plan Year for which the test is being applied.

(4) 401(k) Contributions included in computing an Eligible Employee's "deferral percentage" for a Plan Year must relate to Compensation that either (i) would have been received by the Eligible Employee in such Plan Year or (ii) is attributable to services performed by the Eligible Employee in such Plan Year and would have been received by the Eligible Employee within 2 1/2 months of the close of such Plan Year. The Administrator shall direct, in accordance with uniform and nondiscriminatory rules, whether 401(k) Contributions related to Compensation described in (ii) shall be included in an Eligible Employee's "deferral percentage" for the Plan Year in which the services were performed or for the Plan Year in which the Compensation would have been received, provided that such 401(k) Contributions shall not be included in an Eligible Employee's "deferral percentage" for both such Plan Years.

(5) If an Employer elects to change from the current year testing method to the prior year testing method, the following shall not be included in computing a non-Highly Compensated Employee's "deferral percentage" for the Plan Year immediately preceding the Plan Year in which the prior year testing method is first effective:

(A) 401(k) Contributions that were included in computing the Eligible Employee's "contribution percentage" under the current year method for such immediately preceding Plan Year;

(B) Qualified Nonelective Contributions that were included in computing the Eligible Employee's "deferral percentage" or "contribution percentage" under the current year method for such immediately preceding Plan Year;

(C) Qualified Matching Contributions that were included in computing the Eligible Employee's "deferral percentage" under the current year testing method for such immediately preceding Plan Year;

(D) Safe Harbor Nonelective Contributions that were included in computing the Eligible Employee's "deferral percentage" or "contribution percentage" under the current year testing method for such immediately preceding Plan Year or that were required to satisfy the safe harbor contribution requirement under Code Section 401(k)(12)(C), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12) for such preceding Plan Year; and

43

(E) Safe Harbor Matching Contributions that were included in computing the Eligible Employee's "deferral percentage" or "contribution percentage" under the current year testing method for such immediately preceding Plan Year or that were required to satisfy the safe harbor contribution requirement under Code Section 401(k)(12)(B), 401(k)(13)(D), 401(m)(11)(B), or 401(m)(12) for such preceding Plan Year.

The determination of an Eligible Employee's "deferral percentage" shall be made after any reduction required to satisfy the Code Section 415 limitations is made as provided in this Article VII and shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

(e) A "designated Roth contribution" means any Roth 401(k) Contributions made to the Plan and any "elective contributions" made to another plan that would be excludable from a Participant's income, but for
the Participant's election to designate such contributions as Roth contributions and include them in income.

(f) An "elective contribution" means any employer contribution made to a plan maintained by an Employer or a Related Employer on behalf of a Participant in lieu of cash compensation pursuant to his election (whether such election is an active election or a passive election) to defer under any qualified CODA as described in Code Section 401(k), any simplified employee pension cash or deferred arrangement as described in Code Section 402(h)(1)(B), any eligible deferred compensation plan under Code Section 457, or any plan as described in Code Section 501(c)(18), and any contribution made on behalf of the Participant by an Employer or a Related Employer for the purchase of an annuity contract under Code Section 403(b) pursuant to a salary reduction agreement. "Elective contributions" include "designated Roth contributions". For purposes of applying the limitations described in this Article VII, the term "elective contribution" excludes "catch-up contributions".

(g) An "elective 401(k) contribution" means any employer contribution made to a plan maintained by an Employer or a Related Employer on behalf of a Participant in lieu of cash compensation pursuant to his election (whether such election is an active election or a passive election) to contribute under any qualified CODA as described in Code Section 401(k) including a designated Roth contribution. For purposes of applying the limitations described in this Article VII, the term "elective 401(k) contribution" excludes "catch-up contributions".

(h) An "eligible participant" means any Eligible Employee who is eligible to make After-Tax Contributions or to have 401(k) Contributions made on his behalf (if 401(k) Contributions are taken into account in determining "contribution percentages"), or to participate in the allocation of Matching Contributions (including forfeitures that are allocated based on a Participant's 401(k) or After-Tax Contributions).

Notwithstanding the foregoing, Eligible Employees who are covered by a collective bargaining agreement between their Employer and employee representatives shall not be included as "eligible participants" if retirement benefits were the subject of good faith bargaining.

(i) An "employee contribution" means any employee after-tax contribution allocated to an Eligible Employee's account under any qualified plan of an Employer or a Related Employer.

(j) An "excess aggregate contribution" means any contribution made to the Plan by or on behalf of a Highly Compensated Employee that is designated as an excess contribution pursuant to Section 7.8 in order to satisfy the ACP test described in Section 7.7.

(k) An "excess contribution" means any contribution made to the Plan on behalf of a Highly Compensated Employee that is designated as an excess contribution pursuant to Section 7.5 in order to satisfy the ADP test described in Section 7.4.

(1) An "excess deferral" with respect to a Participant means that portion of a Participant's 401(k) Contributions, other than Catch-Up 401(k) Contributions, for his taxable year that, when added to amounts deferred for such taxable year under other plans or arrangements described in Code Section 401(k), 408(k),408(p), or 403(b) (other than any such plan or arrangement that is maintained by an Employer or a Related Employer), would exceed the dollar limit imposed under Code Section 402(g) as in effect on January 1 of the calendar year in which such taxable year begins and is includible in the Participant's gross income under Code Section 402(g).

44

(m) A Participant's "415 compensation" for a "limitation year" means his 415 compensation as defined in theAdoption Agreement.

(1) "415 compensation" includes the following:

(A) any eligible amount that would have been received and included in the Participant's taxable gross income but for the Participant's his election (or deemed election) under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b);

(B) any "differential pay" (as defined hereunder) he receives or is entitled to receive from the Employer;

(C) if and to the extent provided in the Adoption Agreement, amounts received by a Participant who is permanently and totally disabled (as defined in Code Section 22(e)(3)); and

(D) if the Participant incurs a severance from employment (as defined in Treasury Regulations Section 1.415(a)-1(f)(5)), amounts paid to the Participant before (1) the end of the "limitation year" in which the Participant's severance from employment occurs or (2) within 2 1/2 months of such severance from employment, whichever is later, provided such amounts:

(I) would have been paid to the Participant in the course of employment and are regular compensation for services by the Participant or commissions, bonuses or other similar compensation, but only to the extent such amounts would have been included in the Participant's "415 compensation" if his employment had continued;

(II) if provided in the Adoption Agreement, are payments for accrued bona fide sick, vacation or other leave, but only if the Participant would have been able to use such leave if his employment had continued; or

(III) if provided in the Adoption Agreement, are payments received by the Participant pursuant to a non-qualified, unfunded deferred compensation plan, to the extent such payments are includible in income and the Participant would have received such payments at the same time if he had continued in employment.

For purposes of this subparagraph (1), "differential pay" means any payment made to the Participant by the Employer after December 31, 2008, with respect to a period during which the Participant is performing service in the uniformed services (as defined in Chapter 43 of Title 38 of the United States Code) while on active duty for a period of more than 30 days that represents all or a portion of the wages the Participant would have received if he had continued employment with the Employer as an Employee.

(2) Back pay, within the meaning of Treasury Regulations Section 1.415(c)-2(g)(8), shall be treated as "415 compensation" for the "limitation year" to which the back pay relates to the extent back pay represents wages and compensation that would otherwise be included in "415 compensation".

(3) Other post-termination or severance pay is not included in "415 compensation".

45

To be included in a Participant's "415 compensation" for a particular "limitation year", an amount must have been received by the Participant (or would have been received, but for the Participant's election, or deemed election, under Code Section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)) within such "limitation year". Notwithstanding the foregoing, at the direction of the Administrator, amounts earned during a particular "limitation year", that are not paid until the next "limitation year" because of the timing of pay periods and pay dates, may be included in "415 compensation" for the "limitation year" in which they were earned if (1) the amounts are paid within the first few weeks of the next "limitation year", (2) are included on a uniform and consistent basis with respect to similarly-situated employees, and (3) are not also included as "415 compensation" in the "limitation year" in which they were paid.

In no event, however, shall the "415 compensation" of a Participant taken into account under the Plan for any "limitation year" exceed the limit in effect under Code Section 401(a)(17) ($250,000 for Plan Years beginning in 2012, subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for "limitation years" beginning in such calendar year). ). If the "415 compensation" of a Participant is determined over a period of time that contains fewer than 12 calendar months, then the annual compensation limitation described above shall be adjusted with respect to that Participant by multiplying the annual compensation limitation in effect for the Plan Year by a fraction the numerator of which is the

number of full months in the period and the denominator of which is 12; provided, however, that no proration is required for a Participant who is covered under the Plan for less than one full Plan Year if either (i) the individual becomes an Eligible Employee part way through the Plan Year and the Adoption Agreement provides that Compensation prior to becoming an Eligible Employee is excluded in allocating contributions or (ii) the formula for allocations is based on Compensation for a period of at least 12 months.

(n) A "limitation year" means the period specified in the Adoption Agreement.

(o) A "matching contribution" means any employer contribution allocated to an Eligible Employee's account under any plan of an Employer or a Related Employer solely on account of "elective contributions" made on his behalf or "employee contributions" made by him.

(p) A "qualified matching contribution" means any employer contribution allocated to an Eligible Employee's account under any plan of an Employer or a Related Employer solely on account of "elective contributions" made on his behalf or "employee contributions" made by him that is a qualified matching contribution as defined in regulations issued under Code Section 401(k), is nonforfeitable when made, and is distributable only as permitted in regulations issued under Code Section 401(k).

(q) A "qualified nonelective contribution" means any employer contribution allocated to an Eligible Employee's account under any plan of an Employer or a Related Employer that the Participant could not elect instead to receive in cash until distributed from the Plan, that is a qualified nonelective contribution as defined in Code Sections 401(k) and 401(m) and regulations issued thereunder, is nonforfeitable when made, and is distributable (other than for hardships) only as permitted in regulations issued under Code Section 401(k).

(r) The "test compensation" of an Eligible Employee or "eligible participant" for a Plan Year means any definition of compensation designated by the Administrator that satisfies the requirements of Code Section 414(s). The Administrator may exclude from "test compensation" amounts earned by an individual during a Plan Year, but while the individual was not an Eligible Employee or "eligible participant", provided such exclusion is applied on a uniform and consistent basis with respect to similarly-situated employees.

46

In no event, however, shall the "test compensation" of an Eligible Employee or "eligible participant" taken into account under the Plan for any Plan Year exceed the limit in effect under Code Section 401(a)(17) ($250,000 for Plan Years beginning in 2012, subject to adjustment annually as provided in Code Sections 401(a)(17)(B) and 415(d); provided, however, that the dollar increase in effect on January 1 of any calendar year, if any, is effective for Plan Years beginning in such calendar year). If the "test compensation" of an Eligible Employee or "eligible participant" is determined over a period of time that contains fewer than 12 calendar months, then the annual compensation limitation described above shall be adjusted with respect to that Eligible Employee or "eligible participant" by multiplying the annual compensation limitation in effect for the Plan Year by a fraction the numerator of which is the number of full months in the period and the denominator of which is 12; provided, however, that no proration is required for an Eligible Employee or "eligible participant" who is covered under the Plan for less than one full Plan Year if either (i) the individual becomes an Eligible Employee or "eligible participant" part way through the Plan Year and "test compensation" prior to becoming an Eligible Employee or "eligible participant" is excluded or (ii) the formula for allocations is based on "test compensation" for a period of at least 12 months.

(s) The "testing year" means the following, as provided in the Adoption Agreement:

(1) If the current year testing method is provided for ADP and/or ACP testing, the Plan Year for which the limitations on "deferral percentages" and/or "contribution percentages" (as applicable) of Highly Compensated Employees are being determined.

(2) If the prior year testing method is provided for ADP and/or ACP testing, the Plan Year immediately preceding the Plan Year for which the limitations on "deferral percentages" and/or "contribution percentages" (as applicable) of Highly Compensated Employees is being determined.

If a Plan uses the current year testing method for ADP and/or ACP testing, the Plan Sponsor may only change to the prior year testing method if either (1) the Plan has used the current year testing method for each of the preceding 5 Plan Years (or, if less, the number of Plan Years the Plan has been in existence) or (2) as a result of a merger or acquisition described in Code Section 410(b)(6)(C)(i), the Plan Sponsor acquires a plan that uses the prior year testing method for ADP and/or ACP testing (as applicable) and the change is made within the transition period described in Code Section 410(b)(6)(C)(ii).

For purposes of applying the limitations described in this Article, an Eligible Employee is a Highly Compensated Employee for a particular Plan Year or "testing year", as applicable, if he meets the defmition of Highly Compensated Employee as in effect for that year. An Eligible Employee who does not meet the definition of Highly Compensated Employee as in effect for a particular Plan Year or "testing year", as applicable, shall not be a Highly Compensated Employee for such year.

7.2 Code Section 402(g) Limit

In no event shall the amount of the 401(k) Contributions, excluding Catch-Up 401(k) Contributions, made on behalf of an Eligible Employee for his taxable year, when aggregated with any "elective contributions" made on behalf of the Eligible Employee under any other plan of an Employer or a Related Employer for his taxable year, exceed the dollar limit imposed under Code Section 402(g), as in effect on January 1 of the calendar year in which such taxable year begins. In the event that the Administrator determines that the reduction percentage elected by an Eligible Employee will result in his exceeding the Code Section 402(g) limit, the Administrator may adjust the reduction authorization of such Eligible Employee by reducing the percentage of his 401(k) Contributions to such smaller percentage that will result in the Code Section 402(g) limit not being exceeded. If the Administrator determines that the 401(k) Contributions made on behalf of an Eligible Employee would exceed the Code Section 402(g) limit for his taxable year, the 401(k) Contributions for such Participant shall be automatically suspended for the remainder, if any, of such taxable year.

If an Employer notifies the Administrator that the Code Section 402(g) limit has nevertheless been exceeded by an Eligible Employee for his taxable year, the 401(k) Contributions that, when aggregated with "elective contributions" made on behalf of the Eligible Employee under any other plan of an Employer or a Related Employer, would exceed the Code Section 402(g) limit, plus any income and minus any losses attributable thereto, shall be either re-characterized as Catch-Up 401(k) Contributions or distributed to the Eligible Employee no later than the April 15 immediately following such taxable year. If an Eligible Employee to whom distribution must be made in accordance with the preceding sentence has made both Pre-Tax and Roth 401(k) Contributions for the year, the type of 401(k) Contributions to be distributed shall be determined as provided in the Adoption Agreement.

47

Any 401(k) Contributions that are distributed to an Eligible Employee in accordance with this Section shall not be taken into account in determining the Eligible Employee's "deferral percentage" for the "testing year" in which the 401(k) Contributions were made, unless the Eligible Employee is a Highly Compensated Employee.

If an amount of 401(k) Contributions is distributed to a Participant in accordance with this Section or the Adoption Agreement provides that Catch-Up 401(k) Contributions will not be matched and 401(k) Contributions are re-characterized as Catch-Up 401(k) Contributions hereunder, Matching Contributions that are attributable solely to the distributed or re-characterized 401(k) Contributions, plus any income and minus any losses attributable thereto, shall be forfeited by the Participant no earlier than the date on which distribution of 401(k) Contributions pursuant to this Section occurs and no later than the last day of the Plan Year following the Plan Year for which the Matching Contributions were made.

7.3 Distribution of "Excess Deferrals"

If provided in the Adoption Agreement, and notwithstanding any other provision of the Plan to the contrary, if a Participant notifies the Administrator in writing (or in any other form acceptable to the Administrator) no later than the March 1 following the close of the Participant's taxable year that "excess deferrals" have been made on his behalf under the Plan for such taxable year, the "excess deferrals", plus any income and minus any losses attributable thereto, shall be distributed to the Participant no later than the April 15 immediately following such taxable year. If the Participant has made both Pre-Tax and Roth 401(k) Contributions for the year, the Participant must designate the extent to which the "excess deferrals" are Pre-Tax and/or Roth 401(k) Contributions.

Any 401(k) Contributions that are distributed to a Participant in accordance with this Section shall nevertheless be taken into account in determining the Participant's "deferral percentage" for the "testing year" in which the 401(k) Contributions were made.

If an amount of 401(k) Contributions is distributed to a Participant in accordance with this Section, Matching Contributions that are attributable solely to the distributed 401(k) Contributions, plus any income and minus any losses attributable thereto, shall be forfeited by the Participant no earlier than the date on which distribution of 401(k) Contributions pursuant to this Section occurs and no later than the last day of the Plan Year following the Plan Year for which the Matching Contributions were made.

7.4 Limitation on 401(k) Contributions of Highly Compensated Employees — ADP Test

The provisions of this Section shall apply to all Eligible Employees, unless the Adoption Agreement provides for Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions to be made on behalf of all or some Eligible Employees. If the Adoption Agreement provides for Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, the provisions of this Section shall apply only with respect to Eligible Employees during the Plan Year who are eligible to make 401(k) Contributions to the Plan, but are not eligible to receive Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, as applicable, or, if the Adoption Agreement provides for discretionary Safe Harbor Nonelective Contributions, for any Plan Year in which the Plan Sponsor does not timely amend the Plan to provide for Safe Harbor Nonelective Contributions.

Notwithstanding any other provision of the Plan to the contrary, the 401(k) Contributions made with respect to a Plan Year on behalf of Eligible Employees who are Highly Compensated Employees may not result in an average "deferral percentage" for such Eligible Employees that exceeds the greater of:

(a) a percentage that is equal to 125% of the average "deferral percentage" for all other Eligible Employees for the "testing year"; or

(b) a percentage that is not more than 200% of the average "deferral percentage" for all other Eligible Employees for the "testing year" and that is not more than 2 percentage points higher than the average "deferral percentage" for all other Eligible Employees for the "testing year", unless the "excess contributions", determined as provided in Section 7.5, are re-characterized or distributed as provided in Section 7.6.

48

If the Plan provides that Employees are eligible to make 401(k) Contributions before they have satisfied the minimum age and service requirements under Code Section 410(a)(1) and applies Code Section 410(b)(4)(B) in determining whether the cash or deferred arrangement meets the requirements of Code Section 410(b)(1), the Administrator may apply the limitations described above either:

(c) by comparing the average "deferral percentage" of all Eligible Employees who are Highly Compensated Employees for the Plan Year to the average "deferral percentage" for the "testing year" of all other Eligible Employees who have satisfied the minimum age and service requirements under Code Section 410(a)(1(A)); or

(d) separately with respect to Eligible Employees who have not satisfied the minimum age and service requirements under Code Section 410(a)(1)(A) and Eligible Employees who have satisfied such minimum age and service requirements.

If the prior year testing method applies for the first Plan Year in which the Plan permits Eligible Employees to make 401(k) Contributions, for purposes of the above limitations, the average "deferral percentage" for Eligible Employees who are not Highly Compensated Employees shall be either (1) 3% or (2) the average "deferral percentage" for such Eligible Employees for such first Plan Year, as provided in the Adoption Agreement.

In order to assure that the limitation contained herein is not exceeded with respect to a Plan Year, the Administrator is authorized to suspend completely further 401(k) Contributions, other than Catch-Up 401(k) Contributions, on behalf of Highly Compensated Employees for any remaining portion of a Plan Year or to adjust the projected "deferral percentages" of Highly Compensated Employees by reducing the percentage of their deferral elections for any remaining portion of a Plan Year to such smaller percentage that will result in the limitation set forth above not being exceeded. If the Administrator limits the 401(k) Contributions that may be made by Highly Compensated Employees for a Plan Year, the Administrator shall communicate that limit as soon as reasonably practicable. In the event of a suspension or reduction, Highly Compensated Employees affected thereby shall be notified of the reduction or suspension as soon as possible. An affected Highly Compensated Employee may be entitled to make a new deferral election for the following Plan Year.

In determining the "deferral percentage" for any Eligible Employee who is a Highly Compensated Employee for the Plan Year, "elective 401(k) contributions", "qualified nonelective contributions", and "qualified matching contributions" (to the extent that "qualified nonelective contributions" and "qualified matching contributions" are taken into account in determining "deferral percentages") made to his accounts under any plan of an Employer or a Related Employer that is not mandatorily disaggregated pursuant to Treasury Regulations Section 1.410(b)-7(c), as modified by Section 1.401(k)-1(b)(4) (without regard to the prohibition on aggregating plans with inconsistent testing methods contained in Section 1.401(k)-1(b)(4)(iii)(B) and the prohibition on aggregating plans with different plan years contained in Section 1.410(b)-7(d)(5)), shall be treated as if all such contributions were made to the Plan; provided, however, that if such a plan has a plan year different from the Plan Year, any such contributions made to the Highly Compensated Employee's accounts under the other plan during the Plan Year shall be treated as if such contributions were made to the Plan.

If one or more plans of an Employer or Related Employer are aggregated with the Plan for purposes of satisfying the requirements of Code Section 401(a)(4) or 410(b), then "deferral percentages" under the Plan shall be calculated as if the Plan and such one or more other plans were a single plan. Pursuant to Treasury Regulations Section 1.401(k)- 1(b)(4)(v), an Employer may elect to calculate "deferral percentages" aggregating ESOP and non-ESOP plans. In addition, an Employer may elect to calculate "deferral percentages" aggregating bargained plans maintained for different bargaining units, provided that such aggregation is done on a reasonable basis and is reasonably consistent from year to year. Plans may be aggregated under this paragraph only if they have the same plan year and utilize the same testing method to satisfy the requirements of Code Section 401(k).

49

The Administrator shall maintain records sufficient to show that the limitation contained in this Section was not exceeded with respect to any Plan Year and the amount of the "qualified nonelective contributions" and/or "qualified matching contributions" taken into account in determining "deferral percentages" for any Plan Year.

7.5 Determination and Allocation of "Excess Contributions" Among Highly Compensated Employees

Notwithstanding any other provision of the Plan to the contrary, if the ADP test described in Section 7.4 is not satisfied in any Plan Year, the Administrator shall determine the dollar amount of the excess by reducing the dollar amount of the contributions included in determining the "deferral percentage" of Highly Compensated Employees in order of their "deferral percentages" as follows:

(a) The highest "deferral percentage(s)" shall be reduced to the greater of (1) the maximum "deferral percentage" that satisfies the ADP test described in Section 7.4 or (2) the next highest "deferral percentage".

(b) If the ADP test described in Section 7.4 is still not satisfied after application of the provisions of paragraph (a), the Administrator shall continue reducing "deferral percentages" of Highly Compensated Employees, continuing with the next highest "deferral percentage", in the manner provided in paragraph (a) until the ADP test described in Section 7.4 is satisfied.

The determination of the amount of "excess contributions" hereunder shall be made after 401(k) Contributions and "excess deferrals" have been re-characterized or distributed pursuant to Sections 7.2 and 7.3, if applicable.

After determining the dollar amount of the "excess contributions" that have been made to the Plan, the

Administrator shall allocate such excess among Highly Compensated Employees in order of the dollar amount of the 401(k), Qualified Nonelective, and Qualified Matching Contributions (to the extent such contributions are included in determining "deferral percentages") allocated to their Accounts as follows:

(c) The contributions included in the "deferral percentages" of the Highly Compensated Employee(s) with the largest dollar amount of "deferral percentage" for the Plan Year shall be reduced by the dollar amount of the excess (with such dollar amount being allocated equally among all such Highly Compensated Employees), but not below the dollar amount of the "deferral percentage" of the Highly Compensated Employee(s) with the next highest dollar amount of "deferral percentage" for the Plan Year.

(d) If the excess has not been fully allocated after application of the provisions of paragraph (c), the Administrator shall continue reducing the contributions included in the "deferral percentages" of Highly Compensated Employees, continuing with the Highly Compensated Employees with the largest remaining dollar amount of "deferral percentages" for the Plan Year, in the manner provided in paragraph (c) until the entire excess determined above has been allocated.

7.6 Treatment of Excess 401(k) Contributions

Except as otherwise provided in this Section, "excess contributions" allocated to a Highly Compensated Employee pursuant to Section 7.5, plus any income and minus any losses attributable thereto, shall be distributed to the Highly Compensated Employee prior to the end of the next succeeding Plan Year. If such excess amounts are distributed more than 2 1/2 months after the last day of the Plan Year for which the excess occurred, an excise tax of 10% may be imposed under Code Section 4979 on the Employer maintaining the Plan with respect to such amounts. Notwithstanding the foregoing, if the Plan is an eligible EACA and if provided in the Adoption Agreement, the 2 1/2 month period for distributing "excess contributions" before application of the 10% excise tax shall be extended until the end of the 6th month following the close of the Plan Year for which the excess occurred. The provisions of the preceding sentence shall not apply unless all Eligible Employees under the Plan are eligible to participate in the EACA, except Eligible Employees who are mandatorily disaggregated under Code Section 410(b).

50

In lieu of distribution, the following may apply:

(a) If the Adoption Agreement provides for Catch-Up 401(k) Contributions, a Highly Compensated Employee's "excess contributions" shall be treated as Catch-Up 401(k) Contributions to the extent permissible.

(b) If the Adoption Agreement provides for After-Tax Contributions to be made by Highly Compensated Employees, a Highly Compensated Employee's "excess contributions" may be re-characterized as After-Tax Contributions, but only to the extent such re-characterization does not result in a failure of the ACP test. Amounts re-characterized as After-Tax Contributions shall be included in a Highly Compensated Employee's "contribution percentage" for the year in which they were contributed to the Plan as 401(k) Contributions.

Except as otherwise provided below, "excess contributions" shall be allocated among a Highly Compensated Employee's Sub-Accounts in the order prescribed by the Administrator, which order shall be uniform with respect to all Highly Compensated Employees and non-discriminatory. If "excess contributions" are to be distributed from the 401(k) Contributions Sub-Account of a Highly Compensated Employee who has made both Pre-Tax and Roth 401(k) Contributions for the year, the type of 401(k) Contributions to be distributed shall be determined as provided in the Adoption Agreement.

If an amount of 401(k) Contributions is distributed to a Participant in accordance with this Section or the Adoption Agreement provides that Catch-Up 401(k) Contributions are not matched and 401(k) Contributions are re-characterized as Catch-Up 401(k) Contributions hereunder, Matching Contributions that are attributable solely to the distributed or re-characterized 401(k) Contributions, plus any income and minus any losses attributable thereto, shall be forfeited by the Participant no earlier than the date on which distribution of 401(k) Contributions pursuant to this Section occurs and no later than the last day of the Plan Year following the Plan Year for which the Matching Contributions were made.

7.7 Limitation on Matching Contributions and After-Tax Contributions of Highly Compensated Employees — ACP Test

The provisions of this Section shall apply to all "eligible participants", unless the Adoption Agreement provides that the non-discrimination requirements applicable to Matching Contributions will be satisfied using the safe harbor rule for some or all years. If the Adoption Agreement provides that the safe harbor will be used to satisfy the nondiscrimination requirements applicable to some or all Matching Contributions, the provisions of this Section shall apply as follows:

(a) If the Adoption Agreement provides for required Safe Harbor Nonelective Contributions or Safe Harbor Matching Contributions, the provisions of this Section shall apply only with respect to "eligible participants" during the Plan Year who are eligible to receive Matching Contributions under the Plan, but are not eligible to receive Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, as applicable.

(b) If the Adoption Agreement provides for discretionary Safe Harbor Nonelective Contributions, the provisions of this Section shall apply with respect to all "eligible participants" for any Plan Year in which the Plan Sponsor does not timely amend the Plan to provide for Safe Harbor Nonelective Contributions.

(c) Notwithstanding the provisions of paragraph (a) or (b) above, if the Adoption Agreement provides for current After-Tax Contributions, the provisions of this Section shall apply with respect to all "eligible participants", for purposes of applying the non-discrimination requirements applicable to After-Tax Contributions.

Except as specifically provided above with respect to Matching Contributions to which the safe harbor rule applies and notwithstanding any other provisions of the Plan to the contrary, the Matching Contributions and After-Tax Contributions made with respect to a Plan Year by or on behalf of "eligible participants" who are Highly Compensated Employees may not result in an average "contribution percentage" for such "eligible participants" that exceeds the greater of:

51

(d) a percentage that is equal to 125% of the average "contribution percentage" for all other "eligible participants" for the "testing year"; or

(e) a percentage that is not more than 200% of the average "contribution percentage" for all other "eligible participants" for the "testing year" and that is not more than 2 percentage points higher than the average "contribution percentage" for all other "eligible participants" for the "testing year", unless the "excess aggregate contributions", determined as provided in Section 7.8, are forfeited or distributed as provided in Section 7.9.

If the Plan provides that Employees are eligible to make After-Tax Contributions and/or receive Matching Contributions before they have satisfied the minimum age and service requirements under Code Section 410(a)(1)(A) and applies Code Section 410(b)(4)(B) in determining whether the portion of the Plan subject to Code Section 401(m) meets the requirements of Code Section 410(b)(1), the Administrator may apply the limitations described above either:

(f) by comparing the average "contribution percentage" of all "eligible participants" who are Highly Compensated Employees for the Plan Year to the average "contribution percentage" for the "testing year" of all other "eligible participants" who have satisfied the minimum age and service requirements under Code Section 410(a)(1)(A); or

(g) separately with respect to "eligible participants" who have not satisfied the minimum age and service requirements under Code Section 410(a)(1)(A) and "eligible participants" who have satisfied such minimum age and service requirements.

If the prior year testing method applies for the first Plan Year in which the Plan provides for After-Tax or Matching Contributions, for purposes of the above limitations, the average "contribution percentage" for "eligible participants" who are not Highly Compensated Employees shall be either (1) 3% or (2) the average "contribution percentage" for such Eligible Employees for such first Plan Year, as provided in the Adoption Agreement.

In determining the "contribution percentage" for any "eligible participant" who is a Highly Compensated Employee for the Plan Year, "matching contributions", "employee contributions", "qualified nonelective contributions", and "elective 401(k) contributions" (to the extent that "qualified nonelective contributions" and "elective 401(k) contributions" are taken into account in determining "contribution percentages") made to his accounts under any plan of an Employer or a Related Employer that is not mandatorily disaggregated pursuant to Treasury Regulations Section 1.410(b)-7(c), as modified by Section 1.401(m)-1(b)(4) (without regard to the prohibition on aggregating plans with inconsistent testing methods contained in Section 1.401(m)-1(b)(4)((iii)(B) and the prohibition on aggregating plans with different plan years contained in Section 1.410(b)-7(d)(5)), shall be treated as if all such contributions were made to the Plan; provided, however, that if such a plan has a plan year different from the Plan Year, any such contributions made to the Highly Compensated Employee's accounts under the other plan during the Plan Year shall be treated as if such contributions were made to the Plan.

If one or more plans of an Employer or a Related Employer are aggregated with the Plan for purposes of satisfying the requirements of Code Section 401(a)(4) or 410(b), the "contribution percentages" under the Plan shall be calculated as if the Plan and such one or more other plans were a single plan. Pursuant to Treasury Regulations Section 1.401(m)-1(b)(4)(v), an Employer may elect to calculate "contribution percentages" aggregating ESOP and non-ESOP plans. In addition, an Employer may elect to calculate "contribution percentages" aggregating bargained plans maintained for different bargaining units, provided that such aggregation is done on a reasonable basis and is reasonably consistent from year to year. Plans may be aggregated under this paragraph only if they have the same plan year and utilize the same testing method to satisfy the requirements of Code Section 401(m).

The Administrator shall maintain records sufficient to show that the limitation contained in this Section was not exceeded with respect to any Plan Year and the amount of the "elective contributions", "qualified nonelective contributions", and/or "qualified matching contributions" taken into account in determining "contribution percentages" for any Plan Year.

52

7.8 Determination and Allocation of "Excess Aggregate Contributions" Among Highly Compensated Employees

Notwithstanding any other provision of the Plan to the contrary, if the ACP test described in Section 7.7 is not satisfied in any Plan Year, the Administrator shall determine the dollar amount of the excess by reducing the dollar amount of the contributions included in determining the "contribution percentage" of Highly Compensated Employees in order of their "contribution percentages", as follows:

(a) The highest "contribution percentage(s)" shall be reduced to the greater of (1) the maximum "contribution percentage" that satisfies the ACP test described in Section 7.7 or (2) the next highest "contribution percentage".

(b) If the ACP described in Section 7.7 is still not satisfied after application of the provisions of paragraph (a), the Administrator shall continue reducing "contribution percentages" of Highly Compensated Employees, continuing with the next highest "contribution percentage", in the manner provided in paragraph (a) until the ACP test described in Section 7.7 is satisfied.

The determination of the amount of "excess aggregate contributions" shall be made after application of Sections 7.2, 7.3, and 7.6, if applicable.

After determining the dollar amount of the "excess aggregate contributions" that have been made to the Plan, the Administrator shall allocate such excess among Highly Compensated Employees in order of the dollar amount of their "contribution percentages" as follows:

(c) The contributions included in the "contribution percentages" of the Highly Compensated Employee(s) with the largest dollar amount of "contribution percentage" shall be reduced by the dollar amount of the excess (with such dollar amount being allocated equally among all such Highly Compensated Employees), but not below the dollar amount of the "contribution percentage" of the Highly Compensated Employee(s) with the next highest dollar amount of "contribution percentage" for the Plan Year.

(d) If the excess has not been fully allocated after application of the provisions of paragraph (c), the Administrator shall continue reducing the contributions included in the "contribution percentages" of Highly Compensated Employees, continuing with the Highly Compensated Employees with the largest remaining dollar amount of "contribution percentages" for the Plan Year, in the manner provided in paragraph (c) until the entire excess determined above has been allocated.

7.9 Forfeiture or Distribution of "Excess Aggregate Contributions"

"Excess aggregate contributions" allocated to a Highly Compensated Employee pursuant to the preceding Section, plus any income and minus any losses attributable thereto, shall be forfeited, to the extent forfeitable, or distributed to the Participant prior to the end of the next succeeding Plan Year as hereinafter provided. If such excess amounts are distributed more than 2 1/2 months after the last day of the Plan Year for which the excess occurred, an excise tax of 10% may be imposed under Code Section 4979 on the Employer maintaining the Plan with respect to such amounts. Notwithstanding the foregoing, if the Plan is an EACA and if provided in the Adoption Agreement, the 2 1/2 month period for distributing "excess aggregate contributions" before application of the 10% excise tax shall be extended until the end of the 6th month following the close of the Plan Year for which the excess occurred. The provisions of the preceding sentence shall not apply unless all Eligible Employees under the Plan are eligible to participate in the EACA, except Eligible Employees who are mandatorily disaggregated under Code Section 410(b).

Except as otherwise provided below, excess amounts shall be allocated among a Highly Compensated Employee's Sub-Accounts in the order prescribed by the Administrator, which order shall be uniform with respect to all Highly Compensated Employees and non-discriminatory, and such amounts shall be forfeited or distributed, as appropriate. Excess amounts attributable to After-Tax, 401(k), and Qualified Nonelective Contributions of a Participant shall in all cases be distributed. Excess amounts attributable to Matching Contributions shall be distributed only to the extent a Participant has a vested interest in his Matching Contributions Sub-Account and shall otherwise be forfeited. Any amounts forfeited with respect to a Participant pursuant to this Section shall be treated as a forfeiture under the Plan no later than the last day of the Plan Year following the Plan Year for which the Matching Contributions were made.

53

If excess amounts are to be distributed from the 401(k) Contributions Sub-Account of a Highly Compensated Employee who has made both Pre-Tax and Roth 401(k) Contributions for the year, the type of 401(k) Contributions to be distributed shall be determined as provided in the Adoption Agreement.

7.10 Treatment of Forfeited Matching Contributions

Any Matching Contributions that are forfeited pursuant to the provisions of the preceding Sections of this Article shall be treated as a forfeiture under the Plan and applied in accordance with the provisions of the Adoption Agreement.

7.11 Determination of Income or Loss

The income or loss attributable to "excess contributions", "excess aggregate contributions", or "excess deferrals" shall be determined using the method otherwise used for allocating income or loss to Participants' Accounts, unless the Adoption Agreement provides that the IRS alternative method is used. If the Adoption Agreement provides for use of the IRS alternative method, income or loss will be determined by multiplying the income or loss for the preceding Plan Year attributable to the Eligible Employee's Sub-Account to which the contributions were credited by a fraction, the numerator of which is the contributions made to such Sub-Account on the Eligible Employee's behalf for the preceding Plan Year and the denominator of which is (a) the balance of the Sub-Account on the first day of the preceding Plan Year, plus (b) the contributions made to such Sub-Account for the preceding Plan Year.

7.12 Deemed Satisfaction of the ADP Test

Notwithstanding any other provision of this Article to the contrary, if Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions are provided in the Adoption Agreement, the provisions of this Section shall

apply with respect to Eligible Employees who are eligible to make 401(k) Contributions and to receive allocations of Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, as applicable; provided, however, that if discretionary Safe Harbor Nonelective Contributions are provided in the Adoption Agreement, the provisions of this Section shall apply for a Plan Year only if the Plan Sponsor timely amends the Plan to provide for Safe Harbor Nonelective Contributions.

For Plan Years in which the Employers satisfy the safe harbor notice requirements described in Section 7.14, the Plan shall be deemed to have satisfied the ADP test described in Section 7.4. Notwithstanding the foregoing, if the Adoption Agreement provides for Safe Harbor Matching Contributions, the Plan shall not be deemed to have satisfied the ADP test described in Section 7.4 for any Plan Year unless the ratio of the Matching Contributions made on behalf of each Highly Compensated Employee for the Plan Year to the Highly Compensated Employee's 401(k) Contributions and After-Tax Contributions, if After-Tax Contributions are matched pursuant to the Adoption Agreement, is not greater than the same ratio calculated with respect to each non-Highly Compensated Employee who has made 401(k) Contributions and After-Tax Contributions, if applicable, for the Plan Year at the same percentage of "test compensation" for the Plan Year as such Highly Compensated Employee. For purposes of determining such ratio, "matching contributions", "elective 401(k) contributions", and "employee contributions", if "employee contributions" are matched, made by or on behalf of a Highly Compensated Employee under another qualified defined contribution plan for any period during which the Highly Compensated Employee participated simultaneously under both the Plan and such other plan, shall be aggregated with the Matching Contributions and 401(k) and After-Tax Contributions of such Highly Compensated Employee.

In accordance with Treasury Regulations Section 1.401(k)-1(e)(7), it is impermissible for the Employer to use ADP testing for a Plan Year in which it is intended for the Plan, as provided through its written terms, to be a Code Section 401(k) safe harbor plan and the Employer fails to satisfy the requirements for the safe harbor for the Plan Year.

54

7.13 Deemed Satisfaction of the Limitations on Matching Contributions of Highly Compensated Employees

If the Adoption Agreement provides that the safe harbor will be used to satisfy the non-discrimination requirements applicable to some or all Matching Contributions, the provisions of this Section shall apply with respect to "eligible participants" who are eligible to receive allocations of Matching Contributions and to receive allocations of Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions, as applicable; provided, however, that if the Adoption Agreement provides for discretionary Safe Harbor Nonelective Contributions, the provisions of this Section shall apply only if the Plan Sponsor timely amends the Plan to provide for Safe Harbor Nonelective Contributions.

For Plan Years in which the Employers satisfy the safe harbor notice requirements described in Section 7.14, the Plan shall be deemed to have satisfied the ACP test described in Section 7.7 with respect to Matching Contributions. Notwithstanding the foregoing, the Plan shall not be deemed to have satisfied the ACP test described in Section 7.7 for any Plan Year unless the ratio of Matching Contributions made with respect to the contributions eligible for the match made by each Highly Compensated Employee for the Plan Year is not greater than the ratio of Matching Contributions made with respect to eligible contributions made by each non-Highly Compensated Employee who has made eligible contributions for the Plan Year at the same percentage of "test compensation" for the Plan Year as such Highly Compensated Employee. For purposes of determining such ratio, "matching contributions", "elective

401(k) contributions", and "employee contributions", if "employee contributions" are matched, made by or on behalf of a Highly Compensated Employee under another qualified defined contribution plan for any period during which the Highly Compensated Employee participated simultaneously under both the Plan and such other plan, shall be aggregated with the Matching Contributions and 401(k) and After-Tax Contributions of such Highly Compensated Employee.

Even if the Plan is deemed to have satisfied the ACP test described in Section 7.7 with respect to Matching Contributions, it will not be deemed to have satisfied the ACP test with respect to After-Tax Contributions.

For purposes of determining whether the Plan satisfies the ACP test described in Section 7.7, any Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions that are not required to comply with the safe harbor contribution requirements of Code Section 401(k)(12), Code Section 401(k)(13), 401(m)(11), or 401(m)(12) may be included in calculating "contribution percentages".

In accordance with Treasury Regulations Section 1.401(m)-1(c)(2), it is impermissible for the Employer to use ACP testing for a Plan Year in which it is intended for the Plan, as provided through its written terms, to be a Code Section 401(m) safe harbor plan and the Employer fails to satisfy the requirements for the safe harbor for the Plan Year.

7.14 Notice Requirements for Safe Harbor Matching Contributions and Safe Harbor Nonelective Contributions

For each Plan Year in which an Employer makes a Safe Harbor Matching Contribution or Safe Harbor Nonelective Contribution on behalf of its Eligible Employees, the Employer shall provide such Eligible Employees a notice describing (i) the formula used for determining Safe Harbor Matching Contributions or Safe Harbor Nonelective Contributions or that the Plan may be amended during the Plan Year to provide that his Employer will make a Safe Harbor Nonelective Contribution for the Plan Year equal to at least 3% of each Eligible Employee's Compensation; (ii) any other Employer Contributions available under the Plan and the requirements that must be satisfied to receive an allocation of such Employer Contributions; (iii) the type and amount of Compensation that may be contributed under the Plan or another plan maintained by the Employer as contributions eligible for a match under the Plan; (iv) how to make an election to contribute under the Plan and the periods in which such elections may be made or changed; and (v) the withdrawal and vesting provisions applicable to contributions under the Plan, including the vesting provisions applicable to QACA Safe Harbor Matching Contributions or QACA Safe Harbor Nonelective Contributions, if applicable. To the extent permitted under Treasury regulations or other guidance, in lieu of including such descriptions in the notice, the descriptions required by this paragraph may be provided by cross-references to the relevant section(s) of an up to date summary plan description or as otherwise permitted under such regulations or other guidance.

55

The notice shall be written in a manner calculated to be understood by the average Eligible Employee. The Employer shall provide such notice within one of the following periods, whichever is applicable:

(a) for an Employee who is an Eligible Employee 90 days before the beginning of the Plan Year, within the period beginning 90 days and ending 30 days before the beginning of the Plan Year, or

(b) for an Employee who becomes an Eligible Employee after that date, within the period beginning 90 days before the date he becomes an Eligible Employee and ending on the date such Employee becomes an Eligible Employee.

Notwithstanding any other provision of the Plan to the contrary, an Eligible Employee shall have a reasonable period (not fewer than 30 days) following receipt of such notice in which to make or amend his election to have his Employer make 401(k) Contributions to the Plan on his behalf.

If an Employer that provides notice that the Plan may be amended to provide a Safe Harbor Nonelective Contribution for the Plan Year does amend the Plan to provide such contribution, the Employer shall provide a supplemental notice to all Eligible Employees stating that a Safe Harbor Nonelective Contribution in the specified amount shall be made for the Plan Year. Such supplemental notice shall be provided to Eligible Employees at least 30 days before the last day of the Plan Year.

7.15 Code Section 415 Limitations on Crediting of Contributions and Forfeitures

Notwithstanding any other provision of the Plan to the contrary, the "annual addition" with respect to a Participant for a "limitation year" shall in no event exceed the lesser of (i) the maximum dollar amount permitted under Code Section 415(c)(1)(A), adjusted as provided in Code Section 415(d) (e.g., $50,000 for the "limitation year" beginning in 2012) or (ii) 100% of the Participant's "415 compensation" for the "limitation year"; provided, however, that the limit in clause (i) shall be pro-rated for any short "limitation year". The limit in clause (ii) shall not apply to any contribution to an individual medical account, as defined in Code Section 415(1), or to a post-retirement medical benefits account maintained for a key employee which is treated as an "annual addition" under Code Section 419A(d)(2). A Participant's 401(k) Contributions may be re-characterized as Catch-Up 401(k) Contributions and excluded from the Participant's "annual additions" for the "limitation year" to satisfy the preceding limitation.

If the Employer or a Related Employer participates in a multiemployer plan, in determining whether the "annual additions" made on behalf of a Participant to the Plan, when aggregated with "annual additions" made on the Participant's behalf under the multiemployer plan satisfy the above limitation, only "annual additions" made by the Employer (or a Related Employer) to the multiemployer plan shall be aggregated with the "annual additions" under the Plan and "415 compensation" shall include only compensation paid to the Participant by the Employer (or a Related Employer).

If the "annual addition" to the Account of a Participant in any "limitation year" nevertheless exceeds the amount that may be applied for his benefit under the limitations described in clauses (i) and (ii) above, correction may be made in accordance with the Employee Plans Compliance Resolution System, as set forth in Revenue Procedure 2013-12, or any superseding guidance.

56

7.16 Application of Code Section 415 Limitations Where Participant is Covered Under Other Qualified Defined Contribution Plan

If a Participant is covered by any other qualified defined contribution plan (whether or not terminated) maintained by an Employer or a Related Employer concurrently with the Plan, and if the "annual addition" to be made under the Plan for the "limitation year" when combined with the "annual addition" to be made under such other qualified defined contribution plan(s) would otherwise exceed the amount that may be applied for the Participant's benefit under the limitation contained in the preceding Section, the following shall apply:

(a) If the Adoption Agreement provides that other plans will be reduced first, the "annual addition" to be made to such other plan(s) shall be reduced, to the extent necessary so that the limitation in the preceding Section is satisfied.

(b) If the Adoption Agreement provides for a pro rata reduction among all plans, the "annual additions" to be made under the Plan and such other plan(s) shall be reduced on a pro rata basis, to the extent necessary so that the limitation in the preceding Section is satisfied.

(c) If the Adoption Agreement provides that the Plan will be reduced first, the "annual addition" to be made under the Plan shall be reduced, to the extent necessary so that the limitation in the preceding Section is satisfied.

(d) If the Adoption Agreement provides that the last amounts to be allocated will be reduced first, the "annual additions" last scheduled for allocation under the Plan and such other plan(s) shall be reduced to the extent necessary so that the limitation in the preceding Section is satisfied. If "annual additions" are scheduled to be allocated as of the same date, any excess shall be allocated pro rata among the defined contribution plans.

(e) If the Adoption Agreement provides another method of reduction, the "annual additions" to be allocated (rather than any excess already allocated) shall be reduced as provided in the Adoption Agreement.

If the "annual addition" to the Account of a Participant in any "limitation year", when combined with the "annual addition" made under any other qualified defined contribution plan maintained by an Employer or a Related Employer, nevertheless exceeds the amount that may be applied for the Participant's benefit under the limitation contained in the preceding Section, correction may be made in accordance with the Employee Plans Compliance Resolution System, as set forth in Revenue Procedure 2013-12, or any superseding guidance.

7.17 Scope of Limitations

The Code Section 415 limitations contained in the preceding Sections shall be applicable only with respect to benefits provided pursuant to defined contribution plans and defined benefit plans described in Code Section 415(k). For purposes of applying the Code Section 415 limitations contained in the preceding Sections, the term "Related Employer" shall be adjusted as provided in Code Section 415(h).

ARTICLE VIII
TRUST FUNDS AND ACCOUNTS

8.1 General Fund

If the Adoption Agreement provides that Participants do not direct the investment of all or some contributions to the Plan and the Adoption Agreement does not specify a particular Investment Fund to which such contributions will be invested, a General Fund shall be maintained to hold and administer such contributions. A General Fund shall also be maintained to hold and administer Plan assets that are not allocated to an Investment Fund, unless otherwise provided under the Trust Agreement or any other separate agreement governing the holding and investment of Plan assets. If a General Fund is maintained, it shall be held and administered as a separate common trust fund. The interest of each Participant or Beneficiary under the Plan in the General Fund shall be an undivided interest.

57

8.2 Investment Funds

If the Adoption Agreement provides for Participant direction of investments, Investment Funds shall be made available for investment as follows:

(a) If the Adoption Agreement provides that the Investment Fiduciary selects the available investment options, then except as otherwise provided in this paragraph (a), the Investment Fiduciary shall determine the number and type of Investment Funds and shall communicate the same and any changes therein in writing to the Administrator and the Trustee. The interest of each Participant or Beneficiary under the Plan in any Investment Fund shall be an undivided interest.

If the Plan Sponsor elected as settlor for the Plan to establish an Employer stock Investment Fund, in addition to the Investment Funds selected by the Investment Fiduciary, an Employer stock Investment Fund shall be established and maintained under the Trust. It is the intent of the Plan Sponsor, as "senior" of the Plan that the Employer stock Investment Fund be maintained in order to align the interest of Participants and the shareholders of the Employer, and any action that frustrates that purpose is contrary to such intent. Therefore, as provided in Section 8.4 below, the Employer stock Investment Fund shall be invested in shares of Employer stock; provided, however, that solely as necessary to provide funds for exchanges or redemptions or to pay Plan expenses, the Employer stock Investment Fund may also include a level of short-term liquid investments as may be established by the Trustee and the Investment Fiduciary from time to time.

If the Plan Sponsor elected as settlor for the Plan to establish a self-directed brokerage Investment Fund, in addition to the Investment Funds selected by the Investment Fiduciary, a self-directed brokerage Investment Fund shall be established and maintained under the Trust. Notwithstanding any other provision of this paragraph, in the action directing establishment of the self-directed brokerage Investment Fund, the Plan Sponsor may limit availability of the fund to Participants who have an Account balance in excess of a uniform, minimum dollar amount.

(b) If the Adoption Agreement provides that Participants select the available investment options, each Participant shall determine the number and type of Investment Funds and select the investments for such Investment Funds and shall communicate the same and any changes therein in writing (or in any other form acceptable to the Administrator and the Trustee) to the Administrator and the Trustee. In no event may the assets of any Investment Fund be invested in any collectible as that term is defined in Code Section 408(m)(2).

Each Investment Fund shall be held and administered as a separate trust fund. 8.3 Loan Investment Fund

If a loan from the Plan to a Participant is approved in accordance with the provisions of Article XII, the Investment Fiduciary shall direct the establishment and maintenance of a loan Investment Fund in the Participant's name. The assets of the loan Investment Fund shall be held as a separate trust fund. A Participant's loan Investment Fund shall be invested in the note(s) reflecting the loan(s) made to the Participant in accordance with the provisions of Article XII. Notwithstanding any other provision of the Plan to the contrary, income received with respect to a Participant's loan Investment Fund shall be allocated and the loan Investment Fund shall be administered as provided in Article XII.

8.4 Employer Stock Investment Fund

If required by the Plan Sponsor as settlor of the Plan or directed by the Investment Fiduciary as permitted in the Adoption Agreement, the Trustee shall maintain an Employer stock Investment Fund. The Employer stock Investment Fund shall be held and administered as a separate common trust fund. The interest of each Participant or Beneficiary under the Plan in the Employer stock Investment Fund shall be an undivided interest. The Employer stock Investment Fund is intended to be invested primarily in equity securities issued by an Employer or a Related Employer that are "qualifying employer securities" as defined in ERISA Section 407(d)(5).

58

If the Adoption Agreement does not provide for Participant direction with respect to 401(k) Contributions, 401(k) Contributions may not be used to acquire Employer stock if immediately after such acquisition the aggregate fair market value of the Employer stock held with respect to the portion of the Plan attributable to 401(k) Contributions exceeds 10% of the fair market value of all assets held with respect to the portion of the Plan attributable to 401(k) Contributions.

8.5 Income on Trust

Any dividends, interest, distributions, or other income received by the Trustee with respect to any Trust Fund maintained hereunder shall be allocated by the Trustee to the Trust Fund for which the income was received, provided the Trust Fund may accept such income. If a Trust Fund is closed and may not accept such income, the income will be allocated among the Accounts of Participants who have invested in the closed Trust Fund and will be re-invested among the other Trust Funds as provided under rules prescribed by the Administrator with respect to the closed Trust Fund.

8.6 Accounts

As of the first date a contribution is made by or on behalf of an Eligible Employee there shall be established an Account in his name reflecting his interest in the Plan. Each Account shall be maintained and administered for each Participant and Beneficiary in accordance with the provisions of the Plan. The balance of each Account shall be the balance of the account after all credits and charges thereto, for and as of such date, have been made as provided herein.

Amounts a service provider agrees to credit to the Plan as an adjustment to its compensation for Plan services shall be credited to a suspense account held under the Plan. The Administrator may either (i) apply amounts held in such account to pay Plan expenses or (ii) allocate such amounts among the Accounts of Participants and Beneficiaries as income, as provided in the applicable service agreement.

8.7 Sub-Accounts

A Participant's Account shall be divided into such separate, individual Sub-Accounts as are necessary or appropriate to reflect the Participant's interest in the Trust.

ARTICLE IX
LIFE INSURANCE CONTRACTS

9.1 Life Insurance Contracts

If provided in the Adoption Agreement, upon written instructions from the Investment Fiduciary, the Trustee shall apply a portion of the interest of a Participant in the Trust toward the purchase, from a legal reserve life insurance company, of a life insurance contract or contracts, including a term life insurance contract or contracts, on the life of such Participant; provided, however, that if any portion of a Participant's interest is used during any year to purchase such a contract, each other Participant shall be given the option to have the same proportion of his interest applied toward the purchase of such a contract for him. All such contracts shall designate the Trustee as the sole owner with exclusive power to exercise all rights, privileges, options and elections granted or permitted thereunder; provided, however, that the exercise of such power by the Trustee shall be subject to the right of the Administrator to direct the Trustee with respect thereto or to require the Trustee to obtain its approval before exercising any such power. If Participants direct investments, subject to any restrictions pertaining to a particular Investment Fund, amounts needed to purchase a life insurance contract or contracts either (1) shall be charged against each Investment Fund in the ratio that the balance of the Participant's Account invested in the Investment Fund as of the most recent Valuation Date bears to the balance of the Participant's entire Account, determined without regard to amounts held in his Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions Sub-Accounts or (2) shall be charged against the Participant's interest in the Investment Funds selected by the Participant, excluding any portion of his Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions Sub-Accounts, as provided in the Adoption Agreement. If Participants do not direct investment, amounts needed to purchase a life insurance contract or contracts shall be charged against the Participant's Account, excluding any portion of his Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions Sub-Accounts.

59

9.2 Payment of Premiums and Disposition of Dividends

The Trustee, upon written instructions from the Administrator, shall pay each premium on any such contract or contracts held for a Participant and shall charge such premium payment to the Account of such Participant. The Trustee shall be under no obligation to pay any premium, however, unless there are sufficient funds available from the interest of such Participant in the Trust to make such payment. If benefits are provided under the Plan through annuity or insurance contracts without a trust, each contract shall provide that all dividends and other credits payable thereunder, if any, shall be applied in reduction of premiums, except that any postmortem or termination dividend shall be added to and become a part of the proceeds payable to the beneficiary under the contract. If benefits are provided under the Plan through a trust, each contract shall provide that all dividends and other credits payable thereunder, if any, shall be shall be allocated to the Employer Contributions Sub-Account for the Participant on whose behalf the contract is purchased.

9.3 Overriding Conditions and Limitations

Notwithstanding any other provision of the Plan to the contrary, the provisions of this Section shall govern:

(a) In the event of any conflict between the provisions of the Plan and the terms of any insurance contract or contracts purchased pursuant to this Article, the provisions of the Plan shall control.

(b) At no time shall the aggregate of the premiums paid for any ordinary life or term life insurance contract or contracts upon the life of any Participant hereunder equal or exceed the sum of his After-Tax Contributions under the Plan and

(1) if only ordinary life insurance contracts upon the life of such Participant are held hereunder, 50% of the 401(k) Contributions made on his behalf and the Employer Contributions allocated to him under the Plan, excluding Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions; or

(2) if only term life insurance contracts upon the life of such Participant are held hereunder, 25% of the 401(k) Contributions made on his behalf and the Employer Contributions allocated to him under the Plan, excluding Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions.

If both ordinary life and term life insurance contracts upon the life of any Participant are held hereunder, at no time shall the aggregate of one-half of the premiums paid for any ordinary life insurance contracts plus the premiums paid for any term life insurance contract equal or exceed the sum of his After-Tax Contributions under the Plan and 25% of the 401(k) Contributions made on his behalf and the Employer Contributions allocated to him under the Plan, excluding Qualified Nonelective, Qualified Matching, Safe Harbor Matching, and Safe Harbor Nonelective Contributions. In order to comply with these limitations, the Administrator shall direct the Trustee in writing to take such action with respect to any such contract or contracts held by it as the Administrator shall deem advisable, including, but not limited to, conversion to paid-up basis or surrender of such contract or contracts or any part or parts thereof.

60

(c) At all times each such contract upon the life of any Participant shall be held by the Trustee separate and apart from the Trust. The value of such contract shall not be taken into account in valuing the assets of the Trust nor shall such value be considered in determining the amount of a Participant's interest in the Trust.

(d) A Participant, with such advance written notice as may be required by the Administrator, may elect to have the purchase of insurance on his life discontinued. Any such notice shall specify the date on which such purchase is to be discontinued, but in no event shall any such notice be effective with respect to premiums which have been paid. Upon receipt of such notice, the Administrator shall direct the Trustee in writing to surrender any contract or contracts held on the Participant's life on the date specified in the notice. The cash surrender value, if any, of any such contracts shall be added to the Trust when received by the Trustee and shall be credited to the Participant's Account. The Participant's vested interest in the cash surrender value of any such contract shall be determined as provided in Section 9.5(a).

9.4 Death Benefits

Upon the death of any Participant on whose life any contract is held hereunder prior to his termination of employment with his Employer and all Related Employers, the proceeds of such contract shall be paid to the Trustee for deposit in the Participant's Account, to be paid to the Participant's Beneficiary in accordance with the distribution provisions of the Plan.

9.5 Other Distributions; Vesting

(a) If a Participant's Settlement Date occurs before his Normal Retirement Date for any reason other than death or disability, the former Participant shall have a vested interest in the cash surrender value, if any, of each contract on his life then held hereunder, which shall be (i) a fraction thereof the numerator of which shall be the aggregate of the total premiums paid under the contract which were charged to his 401(k) Contributions Sub-Account and his After-Tax Contributions Sub-Account and the denominator of which shall be the aggregate premiums paid under the contract; plus (ii) a percentage of the remaining fraction thereof which shall be the same percentage which is applied to determine his vested interest in the balance of his Account, as provided in Article VI.

(b) If a Participant's Settlement Date occurs under any other circumstances, or in the event of a termination of the Plan, the Participant shall have a fully vested interest in the cash surrender value, if any, of each contract held on his life hereunder.

(c) Subject to the "automatic annuity" provisions under Article XVI, if applicable, a Participant whose Settlement Date has occurred shall receive distribution of his vested interest determined under this Section in the form of an insurance contract or contracts delivered to such Participant as soon as reasonably practicable, but in no event later than the 60th day after the close of the Plan Year in which his Settlement Date occurred; provided, however, that at the election of the Participant, and upon written instructions to the Trustee from the Administrator, such interest shall be transferred to the Trust in cash, and the amount thereof shall be credited to the Participant's Account to be distributed to or for the benefit of the former Participant and, in the event of his death, to or for the benefit of his Beneficiary. If the Plan provides for Participant direction, either (1) the cash surrender value of the policy will be credited to the Participant's Account and invested among the Investment Funds in accordance with his currently effective election or (2) the amount to be credited to the Participant's interest in each Investment Fund shall be in each case the cash surrender value of the policy times a fraction, the numerator of which in each case shall be the total premiums charged against the Participant's interest in each Investment Fund and the denominator of which shall be the aggregate premiums paid under the contract, as provided in the Adoption Agreement.

(d) Any portion of the cash surrender value, if any, of any contract held on the life of a Participant hereunder which is not vested in him, shall be forfeited by the former Participant and deposited by the Trustee in the Trust, the amount thereof to be treated in the same manner as other forfeitures, as provided in Article XIV.

61

(e) To implement the provisions of this Section, the Administrator shall direct the Trustee in writing to take such action with respect to any contract or contracts held hereunder as necessary, including, but not limited to, conversion to a paid-up basis or surrender of the contract or contracts or any part or parts thereof. In no event may any contract or contracts, or any portion of the value thereof, be retained in the Trust after a Participant's Settlement Date, or after any termination of the Plan, for the purpose of continuing life insurance protection for such Participant.

9.6 Suspension of Further Purchases of Life Insurance Contracts

If provided in the Adoption Agreement, no further life insurance policies shall be purchased hereunder on or after the date specified in the Adoption Agreement. Unless otherwise directed by the Investment Fiduciary, policies purchased prior to that date shall be maintained in accordance with this Article. Policies that are not maintained in accordance with this Article shall be treated as having been discontinued by the Participant and shall be disposed of as provided in Section 9.3(d).

ARTICLE X
DEPOSIT AND INVESTMENT OF CONTRIBUTIONS

10.1 Future Contribution Investment Elections

If the Adoption Agreement provides for Participant direction of investments, each Eligible Employee shall make an investment election in the manner and form prescribed by the Administrator directing the manner in which the Sub-Accounts over which he has investment authority, as determined under the Adoption Agreement, shall be invested. If the Adoption Agreement provides that the Investment Fiduciary shall direct the investment of any or all Sub-Accounts, the Investment Fiduciary shall direct the manner in which the Sub-Accounts specified therein shall be invested.

An Eligible Employee's investment election shall be in the form required by the Administrator (or its delegate) and shall specify the percentage of contributions made on his behalf to be allocated to one or more of the Investment Funds with the sum of such percentages equaling 100%. The investment election by a Participant shall remain in effect until his entire interest under the Plan is distributed or forfeited in accordance with the provisions of the Plan or until he records a change of investment election with the Administrator (or its delegate), in such form as the Administrator (or its delegate) shall prescribe. Unless a later date is prescribed in the Adoption Agreement, if recorded in accordance with any rules prescribed by the Administrator (or its delegate), a Participant's change of investment election shall be implemented effective as of the business day it is received by the Administrator (or its delegate) or the next following business day.

10.2 Deposit of Contributions

All contributions made on a Participant's behalf shall be deposited in the Trust and shall be invested as follows:

(a) to the extent the Participant does not have investment authority over such contributions and the Adoption Agreement does not specify the Investment Fund in which such contributions shall be invested, the contributions shall be invested in the General Fund;

(b) to the extent the Participant does not have investment authority over such contributions and the Adoption Agreement specifies the Investment Fund(s) in which such contributions shall be invested, the contributions shall be invested in the designated Investment Fund(s);

(c) to the extent the Participant has investment authority over such contributions, the contributions shall be invested among the Investment Funds in accordance with the Participant's currently effective investment election; provided, however, that any contributions made to the Plan in qualifying employer securities shall be allocated to the Employer stock Investment Fund, pending directions to the Administrator regarding their future investment; or

62

(d) to the extent the Participant has investment authority over such contributions, but no investment election is recorded with the Administrator at the time contributions are to be deposited to the Participant's Account, the contributions shall be invested as provided in the Adoption Agreement.

10.3 Election to Transfer Between Funds

A Participant may elect to transfer investments over which he has investment authority from any Investment Fund to any other Investment Fund; provided, however, that if all or some Employer Contributions are required to be invested in Employer stock under the Adoption Agreement, unless otherwise specified in the Adoption Agreement, Participants may not elect to transfer investment out of or into the Employer stock Investment Fund except as required under Section 10.5. The Participant's transfer election shall specify a percentage, of the amount eligible for transfer that is to be transferred, which percentage may not exceed 100%. If permitted under rules prescribed by the Administrator, a Participant may specify a dollar amount that is to be transferred. Any transfer election must be recorded with the Administrator, in such form as the Administrator shall prescribe. Subject to any restrictions pertaining to a particular Investment Fund, unless a later date is prescribed in the Adoption Agreement, if recorded in accordance with any rules prescribed by the Administrator (or its delegate), a Participant's transfer election shall be implemented effective as of the business day it is received by the Administrator (or its delegate) or the next following business day.

Notwithstanding any other provision of this Section to the contrary, the Administrator may prescribe such rules restricting Participants' transfer elections as it deems necessary or appropriate to preclude excessive or abusive trading or market timing.

10.4 404(c) Protection

If provided in the Adoption Agreement, the Plan is intended to constitute a plan described in ERISA Section 404(c) and regulations issued thereunder. The fiduciaries of the Plan may be relieved of liability for any losses that are the direct and necessary result of investment instructions given by a Participant, his Beneficiary, or an alternate payee under a qualified domestic relations order.

A Participant's directions to the Trustee regarding investment in and transfers to and from the Employer stock Investment Fund shall be communicated in confidence and shall not be divulged to the Employers or to any officer, director, or employee of the Employers. The Plan Sponsor shall establish procedures to provide and maintain such confidentiality and shall appoint a fiduciary with the responsibility of overseeing such procedures. An independent fiduciary shall be appointed to the extent required under Department of Labor Regulations Section 2550.404c1(d)(2)(ii)(E)(4)(ix) to maintain such confidentiality.

10.5 Diversification of Investments in Employer Stock

The provisions of this Section shall apply to any Plan that provides for investment in Employer stock if such Employer stock is publicly traded or treated as publicly traded under Code Section 401(a)(35). Employer stock that is not publicly-traded shall be treated as publicly-traded securities if the Employer or any member of its controlled group (determined as provided in Code Section 414(b), but substituting 50% for 80%) has issued publicly-traded securities, unless neither the Employer nor its parent company has issued either (i) publicly-traded securities or (ii) a special class of stock that grants particular rights to or bears particular risks for the holder or issuer with respect to any member of the controlled group.

Subject to the effective date provisions of this Section, notwithstanding any other provision of the Plan to the contrary, a Participant whose 401(k) and/or After-Tax and/or Rollover Contributions Sub-Accounts are invested, in whole or in part, in the Employer stock Investment Fund shall be permitted to divest such investments and re-invest such Sub-Account(s) in other Investment Funds provided under the Plan. This paragraph shall also apply to an alternate payee who has an Account under the Plan and the Beneficiary of a deceased Participant.

63

A Participant whose Employer Contributions Sub-Account is invested, in whole or in part, in the Employer stock Investment Fund shall be permitted to divest such investment and re-invest his Employer Contributions Sub-Account in other Investment Funds provided under the Plan beginning on the day immediately preceding the third anniversary of his date of hire. This paragraph shall also apply to an alternate payee who has an Account under the Plan with respect to a Participant who meets the requirements of this paragraph and the Beneficiary of a deceased Participant.

The Plan shall offer at least 3 Investment Fund options (other than Employer securities) as alternatives to the Employer stock Investment Fund. Each such alternative Investment Fund shall be diversified and shall have materially different risk and return characteristics.

The Administrator shall notify each eligible Participant of his diversification rights no later than 30 days prior to the date he is first eligible to divest his investment in the Employer stock Investment Fund.

Except as otherwise specifically provided below, the Plan shall not be treated as meeting the requirements of this Section if the Plan imposes any restrictions or conditions on investment in the Employer stock Investment Fund, either directly or indirectly, that do not also apply to investment in the other Investment Funds. A prohibited restriction or condition means:

(a) conditioning a benefit on investment in the Employer stock Investment Fund; or

(b) restricting a Participant's right to divest his investment in the Employer stock Investment Fund if such restriction does not also apply to the Participant's right to divest his investment in any other Investment Fund.

Examples of prohibited restrictions and conditions include, but are not limited to, provisions that:

(c) permit a Participant to divest investments in the Employer stock Investment Fund on a less frequent basis than the Participant may divest his investments in any other Investment Fund (e.g., quarterly divestment from the Employer stock Investment Fund, but daily divestment from other Investment Funds);

(d) treat a Participant who divests his investment in the Employer stock Investment Fund less favorably than a Participant who retains such investment (e.g., the Plan provides a higher match rate for Participants who invest in the Employer stock Investment Fund); and

(e) preclude a Participant who divests his investment in the Employer stock Investment Fund from re-investing in the Employer stock Investment Fund for a specified period of time.

Notwithstanding the foregoing, the following restrictions or conditions may be imposed under the Plan:

(f) The Plan may limit the extent to which a Participant's Account may be invested in the Employer stock Investment Fund, provided such limit applies without regard to a Participant's prior exercise of rights to divest investment in the Employer stock Investment Fund;

(g) The Plan may impose reasonable restrictions on the timing and number of investment elections a Participant may make with respect to the Employer stock Investment Fund, provided the restrictions are designed to limit short-term trading in Employer stock;

(h) The Plan will not be considered to condition a benefit on investment in the Employer stock Investment Fund if it imposes fees on other Investment Funds that are not imposed on the Employer stock Investment Fund;

(i) The Plan will not be considered to have impermissibly restricted diversification of investments in the Employer stock Investment Fund if it imposes a reasonable fee for the divestment of Employer stock;

(j) The Plan may allow transfers into or out of a stable value or similar Investment Fund more frequently than it allows transfers into or out of the Employer stock Investment Fund. A stable value of similar Investment

64

Fund means an Investment Fund designed to preserve principal and provide a reasonable rate of return, while providing liquidity;

(k) The Plan may allow transfers out of a qualified default investment option, within the meaning of Department of Labor Regulations Section 2550.404c-5(e), more frequently than it allows transfers out of the Employer stock Investment Fund; and

(1) The Plan may treat the Employer stock Investment Fund as a closed Investment Fund in which no future contributions are invested and to which no other amounts may be transferred. (The Plan may provide for dividends paid on Employer stock held under the Plan to be re-invested in the Employer stock Investment Fund without violating this requirement.).

ARTICLE XI
CREDITING AND VALUING ACCOUNTS

11.1 Crediting Accounts

All contributions made under the provisions of the Plan shall be credited to Accounts in the Trust Funds by the Trustee, in accordance with procedures established in writing by the Administrator, either when received or on the succeeding Valuation Date after valuation of the Trust Fund has been completed for such Valuation Date, as shall be determined by the Administrator.

11.2 Valuing Accounts

Accounts in the Trust Funds shall be valued by the Trustee on the Valuation Date, in accordance with procedures established in writing by the Administrator, either in the manner adopted by the Trustee and approved by the Administrator or in the manner set forth in Section 11.3 as Plan valuation procedures.

11.3 Plan Valuation Procedures

With respect to the Trust Funds, the Administrator may determine that the following valuation procedures shall be applied. As of each Valuation Date hereunder, the portion of any Accounts in a Trust Fund shall be adjusted to reflect any increase or decrease in the value of the Trust Fund for the period of time occurring since the immediately preceding Valuation Date for the Trust Fund (the "valuation period") in the following manner:

(a) First, the value of the Trust Fund shall be determined by valuing all of the assets of the Trust Fund at fair market value.

(b) Next, the net increase or decrease in the value of the Trust Fund attributable to net income and all profits and losses, realized and unrealized, during the valuation period shall be determined on the basis of the valuation under paragraph (a) taking into account appropriate adjustments for contributions, loan payments, and transfers to and distributions, withdrawals, loans, and transfers from such Trust Fund during the valuation period.

(c) Finally, the net increase or decrease in the value of the Trust Fund shall be allocated among Accounts in the Trust Fund in the ratio of the balance of the portion of such Account in the Trust Fund as of the preceding Valuation Date less any distributions, withdrawals, loans, and transfers from such Account balance in the Trust Fund since the Valuation Date to the aggregate balances of the portions of all Accounts in the Trust Fund similarly adjusted, and each Account in the Trust Fund shall be credited or charged with the amount of its allocated share. Notwithstanding the foregoing, the Administrator may adopt such accounting procedures as it considers appropriate and equitable to establish a proportionate crediting of net increase or decrease in the value of the Trust Fund for contributions, loan payments, and transfers to and distributions, withdrawals, loans, and transfers from such Trust Fund made by or on behalf of a Participant during the valuation period.

65

11.4 Unit Accounting Permitted

The Administrator may, for administrative purposes, establish unit values for one or more Investment Fund (or any portion thereof) and maintain the accounts setting forth each Participant's interest in such Investment Fund (or any portion thereof) in terms of such units, all in accordance with such rules and procedures as the Administrator shall deem to be fair, equitable, and administratively practicable. In the event that unit accounting is thus established for an Investment Fund (or any portion thereof), the value of a Participant's interest in that Investment Fund (or any portion thereof) at any time shall be an amount equal to the then value of a unit in such Investment Fund (or any portion thereof) multiplied by the number of units then credited to the Participant.

11.5 Finality of Determinations

The Trustee shall have exclusive responsibility for determining the value of each Account maintained hereunder. The Trustee's determinations thereof shall be conclusive upon all interested parties.

11.6 Notification

Within a reasonable period of time after the end of each Plan Year, the Administrator shall notify each Participant and Beneficiary of the value of his Account and Sub-Accounts as of a Valuation Date during the Plan Year.

ARTICLE MI
LOANS

12.1 Application for Loan

If the Adoption Agreement provides for Plan loans, a Participant may make application to the Administrator for a loan from his Account. Loans shall not be made from the portion(s) of a Participant's Account specified in the Adoption Agreement as unavailable for loans. In addition, loans shall not be made from a Participant's Qualified Voluntary Employee Contributions Sub-Account.

Loans shall be made to Participants in accordance with written guidelines which are hereby incorporated into and made a part of the Plan. To the extent such guidelines are more restrictive than the provisions of the Plan and are not inconsistent with the provisions of Code Section 72(p) and regulations issued thereunder, the guidelines shall be controlling.

Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees.

12.2 Collateral for Loan

As collateral for any loan granted hereunder, the Participant shall grant to the Plan a security interest in his vested interest under the Plan; provided, however, that in no event may the security interest exceed 50% of the Participant's vested interest under the Plan determined as of the date as of which the loan is originated in accordance with Plan provisions. The portion(s) of a Participant's Account designated in the Adoption Agreement shall be excluded in determining the maximum amount of the Plan's security interest.

If provided in the Adoption Agreement, in the case of a Participant who is an active employee, the Participant also shall enter into an agreement to repay the loan by payroll withholding.

A loan shall not be granted unless the Participant consents to the charging of his Account for unpaid principal and interest amounts in the event the loan is declared to be in default. If a Participant's Account is subject to the "automatic annuity" provisions under Article XVI or the Adoption Agreement otherwise requires Spouse consent to a loan, a Participant's Spouse must consent in writing to any loan hereunder. Any Spouse consent given pursuant to this Section must be made within the 180-day period ending on the date the Plan acquires a security interest in the 05/05/14     67

66

Participant's Account, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or a notary public. Such Spouse consent shall be binding with respect to the consenting Spouse and any subsequent Spouse with respect to the loan. A new Spouse consent shall be required if the Participant's Account is used for security in any renegotiation, extension, renewal, or other revision of the loan. If the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, a Participant's Domestic Partner shall be treated as the Participant's Spouse for purposes of this paragraph.

12.3 Reduction of Account Upon Distribution

Notwithstanding any other provision of the Plan, the amount of a Participant's Account that is distributable to the Participant or his Beneficiary under Article XIII or XV shall be reduced by the portion of his vested interest that is held by the Plan as security for any loan outstanding to the Participant, provided that the reduction is used to repay the loan. If distribution is made because of the Participant's death prior to the commencement of distribution of his Account and the Participant's vested interest in his Account is payable to more than one individual as Beneficiary, then the balance of the Participant's vested interest in his Account shall be adjusted by reducing the vested account balance by the amount of the security used to repay the loan, as provided in the preceding sentence, prior to determining the amount of the benefit payable to each such individual.

12.4 Requirements to Prevent a Taxable Distribution

Notwithstanding any other provision of the Plan to the contrary, the following terms and conditions shall apply to any loan made to a Participant under this Article:

(a) Subject to the requirements of the Servicemembers Civil Relief Act, the interest rate on any loan to a Participant shall be a reasonable interest rate commensurate with current interest rates charged for loans made under similar circumstances by persons in the business of lending money.

(b) The amount of any loan to a Participant (when added to the outstanding balance of all other loans to the Participant from the Plan or any other plan maintained by an Employer or a Related Employer) shall not exceed the lesser of:

(1) $50,000, reduced by the excess, if any, of the highest outstanding balance of any other loan to the Participant from the Plan or any other plan maintained by an Employer or a Related Employer during the preceding 12-month period over the outstanding balance of such loans on the date a loan is made hereunder; or

(2) 50% of the vested portions of the Participant's Account and his vested interest under all other plans maintained by an Employer or a Related Employer; provided, however, that if provided in the Adoption Agreement, the portion(s) of a Participant's Account designated in the Adoption Agreement shall be excluded in determining this limit.

Notwithstanding the foregoing, if provided in the written guidelines governing Plan loans, the Administer may permit a loan in excess of the limit in (2) above, provided that (i) the loan amount does not exceed the lesser of $10,000 or 100% of the vested portions of the Participant's Account, excluding the portion(s) of the Participant's Account designated in the Adoption Agreement, if any, and (ii) the Participant also grants

to the Plan a security interest in additional collateral consisting of real, personal, or other property satisfactory to the Administrator sufficient to provide adequate security for the loan.

(c) The term of any loan to a Participant shall be no greater than 5 years, except in the case of a loan used to acquire any dwelling unit which within a reasonable period of time is to be used (determined at the time the loan is made) as a principal residence (as defined in Code Section 121) of the Participant.

(d) Substantially level amortization shall be required over the term of the loan with payments made not less frequently than quarterly. If a loan is made from a Participant's Roth 401(k) Contributions Sub-Account and from his other Sub-Accounts under the Plan, the level amortization requirement shall be met with respect to both his Roth 401(k) Contributions Sub-Account and his other Sub-Accounts. Notwithstanding the foregoing, if so provided in the written guidelines applicable to Plan loans, the amortization schedule may be waived and payments suspended while a Participant is on a leave of absence from employment with an Employer or any Related Employer (for periods in which the Participant does not perform military service as described in paragraph (e) below), provided that all of the following requirements are met:

67

(1) Such leave is either without pay or at a reduced rate of pay that, after withholding for employment and income taxes, is less than the amount required to be paid under the amortization schedule;

(2) Payments resume after the earlier of (a) the date such leave of absence ends or (b) the 1-year anniversary of the date such leave began;

(3) The period during which payments are suspended does not exceed one year;

(4) Payments resume in an amount not less than the amount required under the original amortization schedule; and

(5) The waiver of the amortization schedule does not extend the period of the loan beyond the maximum period permitted under this Article.

(e) If a Participant is absent from employment with any Employer or any Related Employer for a period during which he performs services in the uniformed services (as defined in chapter 45 of title 38 of the United States Code), whether or not such services constitute qualified military service, the suspension of payments shall not be taken into account for purposes of applying either paragraph (c) or paragraph (d) of this Section provided that all of the following requirements are met:

(1) Payments resume upon completion of such military service;

(2) Payments resume in an amount not less than the amount required under the original amortization schedule and continue in such amount until the loan is repaid in full;

(3) Upon resumption, payments are made no less frequently than required under the original amortization schedule and continue under such schedule until the loan is repaid in full; and

(4) The loan is repaid in full, including interest accrued during the period of such military service, no later than the maximum period otherwise permitted under this Article extended by the period of such military service.

(f) The loan shall be evidenced by a legally enforceable agreement that demonstrates compliance with the provisions of this Section.

12.5 Administration of Loan Investment Fund

Upon approval of a loan to a Participant, the Administrator shall direct the Trustee to transfer an amount equal to the loan amount from the Investment Funds in which it is invested, as directed by the Administrator, to the loan Investment Fund established in the Participant's name. Any loan approved by the Administrator shall be made to the Participant out of the Participant's loan Investment Fund. All principal and interest paid by the Participant on a loan made under this Article shall be deposited to his Account and, if the Adoption Agreement provides that Participants direct the investment of contributions made to their Accounts under the Plan, shall be allocated upon receipt among the Investment Funds in accordance with the Participant's currently effective investment election. The balance of the Participant's loan Investment Fund shall be decreased by the amount of principal payments and the loan Investment Fund shall be terminated when the loan has been repaid in full.

68

12.6 Default

If either (1) a Participant fails to make or cause to be made, any payment required under the terms of the loan within the period prescribed in the Adoption Agreement, unless payment is not made because the Participant is on a leave of absence and the amortization schedule is waived as provided in Section 12.4(d) or (e), or (2) there is an outstanding principal balance existing on a loan after the last scheduled repayment date (extended as provided in Section 12.4(e), if applicable), the Administrator shall direct the Trustee to declare the loan to be in default, and the entire unpaid balance of such loan, together with accrued interest, shall be immediately due and payable. In any such event, if such balance and interest thereon is not then paid, the Trustee shall charge the Account of the borrowerwith the amount of such balance and interest no later than the date distribution of the Account is made to the Participant or his Beneficiary following the Participant's termination of employment.

12.7 Deemed Distribution Under Code Section 72(p)

If a Participant's loan is in default as provided in Section 12.6, the Participant shall be deemed to have received a taxable distribution in the amount of the outstanding loan balance as required under Code Section 72(p), whether or not distribution may actually be made from the Plan without adversely affecting the tax qualification of the Plan; provided, however, that the taxable portion of such deemed distribution shall be reduced in accordance with the provisions of Code Section 72(e) to the extent the deemed distribution is attributable to the Participant's After-Tax Contributions.

If a Participant is deemed to have received distribution of an outstanding loan balance hereunder, no further loans may be made to such Participant from his Account unless there is a legally enforceable arrangement among the Participant, the Plan, and the Participant's employer that repayment of such loan shall be made by payroll withholding.

12.8 Treatment of Outstanding Balance of Loan Deemed Distributed Under Code Section 72(p)

With respect to any loan made on or after January 1, 2002, the balance of such loan that is deemed to have been distributed to a Participant under Section 12.7 shall cease to be an outstanding loan for purposes of Code Section 72(p) and a Participant shall not be treated as having received a taxable distribution when his Account is offset by such outstanding loan balance as provided in Section 12.6. Any interest that accrues on a loan after it is deemed to have been distributed shall not be treated as an additional loan to the Participant and shall not be included in the Participant's taxable income as a deemed distribution. Notwithstanding the foregoing, however, unless a Participant repays such loan, with interest, the amount of such loan, with interest thereon calculated as provided in the original loan note, shall continue to be considered an outstanding loan for purposes of determining the maximum permissible amount of any subsequent loan under Section 12.4(b).

If a Participant elects to make payments on a loan after it is deemed to have been distributed hereunder, such payments shall be treated as After-Tax Contributions to the Plan for purposes of determining the taxable portion of the Participant's Account, but shall not be treated as After-Tax Contributions for purposes of applying the limitations on contributions applicable under Code Sections 401(m) and 415. For purposes of in-service withdrawals loan repayments shall be treated as provided in the Adoption Agreement.

The provisions of this Section shall apply with respect to any loan made prior to January 1, 2002, except to the extent provided under the transition rules in Q&A 22(c)(2) of Treasury Regulations Section 1.72(p)-1.

12.9 Prior Loans

Notwithstanding any other provision of this Article to the contrary, any loan made under the provisions of the Plan as in effect prior to this amendment and restatement or rolled over to the Plan from another plan or made under the provisions of a prior plan before the date such plan was merged into the Plan or the date assets and liabilities from such other plan were spun off to the Plan, as applicable, shall remain outstanding until repaid in accordance with its terms or the otherwise applicable Plan provisions.

69

 ARTICLE XIII
WITHDRAWALS WHILE EMPLOYED

13.1 Non-Hardship Withdrawals

If provided in the Adoption Agreement, a Participant who is employed by an Employer or a Related Employer and has satisfied any requirements applicable to non-hardship withdrawals provided in the Adoption Agreement may, subject to the limitations and conditions prescribed in this Article and the Adoption Agreement, elect to make a cash withdrawal from his vested interest in those Sub-Accounts specified in the Adoption Agreement. Notwithstanding the foregoing, if the Participant's Account is subject to the "automatic annuity" provisions of Article XVI, the withdrawal shall be made through the purchase of a Qualified Joint and Survivor Annuity, a Qualified Optional Survivor Annuity, or a Single Life Annuity, as provided in Article XVI, unless the Participant and his Spouse consent to distribution in a single sum.

13.2 Withdrawal of Contributions Subject to Distribution Restrictions under Code Section 401(k) Upon Deemed Severance from Employment Due to Qualified Military Service

Notwithstanding any other provision of the Plan to the contrary, if provided in the Adoption Agreement, a Participant who is absent from employment because of service with the uniformed services (as described in United Stated Code, Title 38, Chapter 43) for more than 30 days shall be treated as if he had incurred a severance from employment for purposes of receiving a distribution under Code Section 401(k)(2)(B)(1)(I). A Participant who is deemed to have incurred a severance from employment hereunder may elect, subject to the limitations and conditions prescribed in the Adoption Agreement, to receive a cash withdrawal or, if the Participant's Account is subject to the "automatic annuity" provisions of Article XVI, a withdrawal through the purchase of a Qualified Joint and Survivor Annuity, a Qualified Optional Survivor Annuity, or a Single Life Annuity, as provided in Article XVI, from his vested interest in those Sub-Accounts specified in the Adoption Agreement.

If a Participant receives distribution in accordance with the provisions of this Section and would not otherwise be entitled to receive distribution under the terms of the Plan other than this Section, his 401(k) Contributions and After-Tax Contributions under the Plan and the Participant's "elective contributions" and "employee contributions", as defined in Section 7.1, under all other qualified and non-qualified deferred compensation plans maintained by an Employer or any Related Employer shall be suspended for at least 6 months after his receipt of the withdrawal. However, if the Adoption Agreement provides for "qualified reservist withdrawals" and the distribution meets the requirements of Section 13.3 below, the suspension shall not apply.

Any distribution made hereunder shall be subject to the 10% excise tax imposed on early distributions under Code Section 72(t), unless such distribution is also a "qualified reservist distribution", as described in Section 13.3 below.

13.3 Qualified Reservist Withdrawals of 401(k) Contributions

Notwithstanding any other provision of the Plan to the contrary, if provided in the Adoption Agreement, a Participant who is a member of a reserve component (as defined in Section 101 of Title 37 of the United States Code) who is ordered or called to active duty for a period in excess of 179 days, or for an indefinite period, may elect to receive a cash withdrawal or, if the Participant's Account is subject to the "automatic annuity" provisions of Article XVI, a withdrawal through the purchase of a Qualified Joint and Survivor Annuity, Qualified Optional Survivor Annuity, or a Single Life Annuity, as provided in Article XVI, of all or any portion of his Pre-Tax and/or Roth 401(k) Contributions Sub-Account, as designated in the Adoption Agreement. Any distribution made to a Participant pursuant to this Section is subject to the limitations and conditions prescribed in the Adoption Agreement and must be made during the period beginning on the date of his order or call to active duty and ending on the close of his active duty period.

Any distribution made hereunder to a Participant who is ordered or called to active duty after September 11, 2001 shall not be subject to the 10% excise tax imposed under Code Section 72(t).

70

13.4 Special In-Service Withdrawals of Other Contributions While Performing Military Service

If provided in the Adoption Agreement, a Participant who is employed by an Employer or a Related Employer and who is absent from employment because of service with the uniformed services (as described in United Stated Code, Title 38, Chapter 43) may elect, subject to the limitations and conditions prescribed in the Adoption Agreement, to make a cash withdrawal or, if the Participant's Account is subject to the "automatic annuity" provisions of Article XVI, a withdrawal through the purchase of a Qualified Joint and Survivor Annuity, Qualified Optional Survivor Annuity, or a Single Life Annuity, as provided in Article XVI, from his vested interest in the Sub-Accounts specified in the Adoption Agreement. If provided in the Adoption Agreement, a Participant must be absent from employment because of service with the uniformed service for the specified number of days to be eligible for a withdrawal hereunder.

13.5 Overall Limitations on Non-Hardship Withdrawals

Non-hardship withdrawals made pursuant to this Article shall be subject to the following conditions and limitations:

(a) A Participant must apply for a non-hardship withdrawal such number of days prior to the date as of which it is to be effective as the Administrator may prescribe.

(b) Non-hardship withdrawals may be made effective as of the date provided in the Adoption Agreement.

(c) Non-hardship withdrawals are subject to any restrictions or limitations provided in the Adoption Agreement.

(d) If a Participant's Account is subject to the "automatic annuity" provisions of Article XVI, the Participant's Spouse must consent to any non-hardship withdrawal hereunder, unless distribution is made in the form of a Qualified Joint and Survivor Annuity.

(e) If the Adoption Agreement requires Spouse consent to a withdrawal, the Participant's Spouse must consent to any non-hardship withdrawal hereunder. If the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, a Participant's Domestic Partner shall be treated as the Participant's Spouse for purposes of this paragraph.

13.6 Hardship Withdrawals

If provided in the Adoption Agreement, a Participant who is employed by an Employer or a Related Employer and who is determined by the Administrator to have incurred a hardship in accordance with the provisions of this Article may elect, subject to the limitations and conditions prescribed in this Article and the Adoption Agreement, to make a cash withdrawal from his vested interest in any of the Sub-Accounts specified in the Adoption Agreement; provided, however, that a Participant may not withdraw any income credited to his Pre-Tax 401(k) Contributions Sub-Account after the later of (a) the last day of the Plan Year ending before July 1, 1989 or (b) December 31, 1988 or any

income credited to his Roth 401(k) Contributions Sub-Account. If prior to the effective date of final 401(k) regulations, the Plan permitted hardship withdrawals from a Participant's Qualified Nonelective Contributions Sub-Account or Qualified Matching Contributions Sub-Account, the Participant may make a hardship withdrawal of amounts credited to such Sub-Account(s) as of the later of (i) December 31, 1988 or (ii) the last day of the Plan Year that ends prior to July 1, 1989. Notwithstanding the foregoing, if the Participant's Account is subject to the "automatic annuity" provisions of Article XVI, the withdrawal shall be made through the purchase of a Qualified Joint and Survivor Annuity, a Qualified Optional Survivor Annuity, or a Single Life Annuity as provided in Article XVI, unless the Participant and his Spouse consent to distribution in a single sum.

Notwithstanding any other provision of the Plan, a Participant may not make a hardship withdrawal from his Safe Harbor Matching Contributions Sub-Account, his Prior Safe Harbor Matching Contributions Sub-Account, his Safe Harbor Nonelective Contributions Sub-Account, or his Prior Safe Harbor Nonelective Contributions Sub-Account.

71

13.7 Hardship Determination

The Administrator shall grant a hardship withdrawal only if it determines that the withdrawal is necessary to meet an immediate and heavy financial need of the Participant for which a hardship withdrawal is available under the Adoption Agreement. If the Adoption Agreement provides that hardship withdrawals are based on the safe harbors specified in 401(k) regulations, an immediate and heavy fmancial need of the Participant includes a financial need on account of:

(a) expenses previously incurred by or necessary to obtain for the Participant, the Participant's Spouse, or any dependent of the Participant (as defined in Code Section 152 , without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof) medical care deductible under Code Section 213(d), determined without regard to whether the expenses exceed any applicable income limit;

(b) costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;

(c) payment of tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for the Participant, or the Participant's Spouse, child or other dependent (as defined in Code Section 152 , without regard to subsections (b)(1), (b)(2) and (d)(1)(B) thereof);

(d) payments necessary to prevent the eviction of the Participant from his principal residence or foreclosure on the mortgage on the Participant's principal residence;

(e) payment of funeral or burial expenses for the Participant's deceased parent, Spouse, child or dependent (as defined in Code Section 152, without regard to subsection (d)(1)(B) thereof);

(f) expenses for the repair of damage to the Participant's principal residence that would qualify for a casualty loss deduction under Code Section 165 (determined without regard to whether the loss exceeds any applicable income limit); or

(g) if provided in the Adoption Agreement, an immediate and heavy financial need of the Participant's primary Beneficiary under the Plan. A Participant's primary Beneficiary is any individual named as the Participant's Beneficiary under the Plan who has an unconditional right to all or a portion of the Participant's Account upon the death of the Participant. An immediate and heavy financial need of a Participant's primary Beneficiary means a financial need on account of:

(1) expenses previously incurred by or necessary to obtain for the primary Beneficiary medical care deductible under Code Section 213(d), determined without regard to whether the expenses exceed any applicable income limit;

(2) payment of tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for the primary Beneficiary; or

(3) payment of funeral or burial expenses for the primary Beneficiary

If the Adoption Agreement provides for hardship withdrawals to be made under other non-discriminatory facts and circumstances, an immediate and heavy financial need includes any financial need described in the Adoption Agreement. If provided in the Adoption Agreement, a Participant's withdrawal of 401(k) Contributions may be limited to the safe harbors.

Certification by a Participant regarding the existence of an immediate and heavy financial need shall be conclusive evidence of the existence of the need.

72

13.8 Satisfaction of Necessity Requirement for Hardship Withdrawals

A withdrawal shall be deemed to be necessary to satisfy a Participant's immediate and heavy financial need only if the Participant satisfies either the IRS suspension safe harbor or the Employee certification requirements described below, whichever is provided in the Adoption Agreement.

If the Adoption Agreement provides for the IRS suspension safe harbor, all of the following requirements must be met:

(a) The withdrawal is not in excess of the amount of the immediate and heavy financial need of the Participant, including amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated to result from the withdrawal.

(b) The Participant has obtained all distributions, other than hardship distributions, and all non-taxable loans currently available under all qualified and non-qualified deferred compensation plans maintained by an Employer or any Related Employer, including a cash or deferred arrangement that is part of a cafeteria plan under Code Section 125, but excluding mandatory employee contributions under a defined benefit plan or a health or welfare plan, to the extent obtaining such distribution or loan would not increase the hardship.

(c) The Participant's 401(k) Contributions and After-Tax Contributions and the Participant's "elective contributions" and "employee contributions", as defined in Article VII, under all other qualified and non-qualified deferred compensation plans maintained by an Employer or any Related Employer, including a cash or deferred arrangement that is part of a cafeteria plan under Code Section 125 and any stock option, stock purchase, or similar plan, but excluding mandatory employee contributions under a defined benefit plan or a health or welfare plan, shall be suspended for 6 months after his receipt of the withdrawal. If provided in the Adoption Agreement, the provisions of this paragraph (c) shall apply only with respect to hardship withdrawals from a Participant's 401(k) Contributions Sub-Account.

A Participant shall not fail to be treated as an Eligible Employee for purposes of applying the limitations contained in Article VII of the Plan merely because his 401(k) Contributions are suspended in accordance with paragraph (c) above.

If the Adoption Agreement provides for Employee certification, the Participant must certify that his financial need cannot be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by reasonable liquidation of the Participant's assets, (iii) by suspending 401(k) Contributions and After-Tax Contributions to the Plan, (iv) by other distributions under or nontaxable loans from any qualified and non-qualified deferred compensation plans maintained by an Employer or any Related Employer, including a cash or deferred arrangement that is part of a cafeteria plan under Code Section 125, but excluding mandatory employee contributions under a defined benefit plan or a health or welfare plan, or (v) by borrowing from commercial sources. The Administrator may rely on the Participant's certification.

13.9 Conditions and Limitations on Hardship Withdrawals

Hardship withdrawals made pursuant to this Article shall be subject to the following conditions and limitations:

(a) A Participant must apply for a hardship withdrawal such number of days prior to the date as of which it is to be effective as the Administrator may prescribe.

(b) Hardship withdrawals may be made effective as of the date provided in the Adoption Agreement.

(c) Hardship withdrawals are subject to any restrictions or limitations provided in the Adoption Agreement.

(d) If a Participant's Account is subject to the "automatic annuity" provisions of Article XVI, the Participant's Spouse must consent to any hardship withdrawal hereunder, unless distribution is made in the form of a Qualified Joint and Survivor Annuity.

73

(e) If the Adoption Agreement requires Spouse consent to a withdrawal, the Participant's Spouse must consent to any hardship withdrawal hereunder. If the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, a Participant's Domestic Partner shall be treated as the Participant's Spouse for purposes of this paragraph.

13.10 Order of Withdrawal from a Participant's Sub-Accounts

Distribution of a withdrawal amount shall be made from a Participant's Sub-Accounts, to the extent necessary, in the order prescribed by the Administrator, which order shall be uniform with respect to all Participants and nondiscriminatory. If the Sub-Account from which a Participant is receiving a withdrawal is invested in more than one Investment Fund, the withdrawal shall be charged against the Investment Funds as directed by the Administrator.

13.11 Permissible Withdrawals under EACA

If provided in the Adoption Agreement, an Eligible Employee who has had 401(k) Contributions automatically made to the Plan pursuant to the provisions of an EACA may elect to withdraw such amounts from the Plan in accordance with this Section. An Eligible Employee's permissible withdrawal election must be made in such form as the Administrator shall require and must be submitted to the Administrator, in accordance with procedures established by the Administrator, within the period provided in the Adoption Agreement. Such period may not extend beyond 90 days following the date the first automatic 401(k) Contribution is made to the Plan on the Eligible Employee's behalf pursuant to the provisions of the EACA. For purposes of this Section, the date the first automatic 401(k) Contribution is made to the Plan is the first date Compensation subject to the EACA would otherwise have been included in the Eligible Employee's income. For purposes of determining an Eligible Employee's election period, 401(k) Contributions made on the Eligible Employee's behalf under any other EACA that is required to be aggregated with the EACA shall be taken into account.

The amount to be distributed to an Eligible Employee as a permissible withdrawal hereunder shall be equal to the amount of the automatic 401(k) Contributions made on his behalf under the EACA through the effective date of the Eligible Employee's withdrawal election, adjusted for allocable gains and losses to the date of distribution. An Eligible Employee's withdrawal election shall be effective no later than the earlier of (a) the pay date for the second payroll period beginning after the date the election is made or (b) the first pay date °curing at least 30 days after the election is made.

Any withdrawal hereunder shall be made in cash in accordance with the timing and procedures applicable to any other distribution payable from the Plan. The amount of the withdrawal may be reduced by any generally applicable fees, provided that the Plan shall not charge a higher distribution fee for withdrawals in accordance with this Section than would apply to any other cash distribution.

401(k) Contributions that are withdrawn in accordance with this Section shall not be taken into account in applying the limitation on elective deferrals under Code Section 402(g) or, to the extent applicable, the ADP test described in Section 7.4. In addition, such 401(k) Contributions shall not be taken into account in determining the amount of any Matching Contributions to be allocated to the Eligible Employee under the Plan. Any Matching Contributions that have been allocated to an Eligible Employee's Account based on 401(k) Contributions that are withdrawn in accordance with this Section shall be forfeited and treated as provided in Section 7.10.

Notwithstanding any other provision of this Section, if provided in the Adoption Agreement, if no automatic 401(k) Contributions are made on an Eligible Employee's behalf under the EACA for a full year, the Eligible Employee will be treated as if he had never had automatic 401(k) Contributions made on his behalf under the EACA and will be entitled to elect a permissible withdrawal hereunder if automatic 401(k) Contributions are subsequently made to the Plan on his behalf pursuant to the provisions of the EACA. For this purpose, automatic 401(k) Contributions made on the Eligible Employee's behalf under any other EACA that is required to be aggregated with this EACA shall be taken into account.

74

ARTICLE XIV
TERMINATION OF EMPLOYMENT AND SETTLEMENT DATE

14.1 Termination of Employment and Settlement Date

A Participant's Settlement Date shall occur on the date he terminates employment with the Employers and all Related Employers because of death, disability, retirement, or other termination of employment. Written notice of a Participant's Settlement Date shall be given by the Administrator to the Trustee.

Unless the Adoption Agreement provides for application of the same desk rule, a Participant's Settlement Date shall also occur on the date he has a severance from employment with the Employer and all Related Employers in connection with a liquidation, merger, or consolidation of the Employer.

14.2 Separate Accounting for Non-Vested Amounts

If as of a Participant's Settlement Date the Participant's vested interest in his Employer Contributions Sub-Account is less than 100%, that portion of his Employer Contributions Sub-Account that is not vested shall be accounted for separately from the vested portion and shall be disposed of as provided in the following Section. If prior to such Settlement Date the Participant received a distribution under the Plan, his vested interest in his Employer Contributions Sub-Account shall be an amount ("X") determined under the formula provided in the Adoption Agreement.

14.3 Disposition of Non-Vested Amounts

That portion of a Participant's Employer Contributions Sub-Account that is not vested upon the occurrence of his Settlement Date shall be forfeited on the date the Participant incurs 5 consecutive Breaks in Vesting Service or such earlier date provided in the Adoption Agreement.

14.4 Treatment of Forfeited Amounts

Whenever the non-vested balance of a Participant's Employer Contributions Sub-Account is forfeited during a Plan Year in accordance with the provisions of the preceding Section, the amount of such forfeiture shall be treated as provided in the Adoption Agreement. If forfeitures offset the Employers' contribution obligations and either (a) forfeitures that occurred during the prior Plan Year remain after all contribution obligations for the current Plan Year have been satisfied or (b) forfeitures remain upon termination of the Plan, and such forfeitures cannot be used to pay Plan expenses, including expenses of the termination, the excess forfeitures shall be re-allocated among Covered Employees who are employed on the allocation date in the ratio that each such Covered Employee's Compensation for the Plan Year in which the allocation is made bears to the aggregate of such Compensation for all such Covered Employees.

14.5 Recrediting of Forfeited Amounts

A former Participant who forfeited the non-vested portion of his Employer Contributions Sub-Account in accordance with the provisions of Section 14.3 before incurring 5-consecutive Breaks in Vesting Service and who is

reemployed by an Employer or a Related Employer shall have such forfeited amounts recredited to a new Account if he meets the requirements of this Section. Unless the non-vested amounts were forfeited immediately upon termination and before the Participant received distribution (or deemed distribution) of the vested portion of his Account, the forfeited amount will not be adjusted for interim gains or losses experienced by the Trust. (If the non-vested amounts were forfeited immediately upon termination and before the Participant received distribution (or deemed distribution) of the vested portion of his Account, adjustment may be required.)

75

Forfeited amounts will be restored to such Participant if:

(a) The Participant is reemployed by an Employer or a Related Employer before incurring 5-consecutive Breaks in Vesting Service beginning after the date he received, or is deemed to have received, distribution of his vested interest in his Account. Unless paragraph (b) below applies, the forfeited amounts will be restored as of the Participant's reemployment date.

(b) If the Adoption Agreement provides that forfeited amounts will be restored only if the Participant repays any distribution, forfeited amounts shall be restored following such reemployment only if the following additional requirements are met:

(1) the Participant resumes employment covered under the Plan before the earlier of (i) the end of the 5-year period beginning on the date he is reemployed or (ii) the date he incurs 5 consecutive Breaks in Vesting Service commencing after the date he received, or is deemed to have received, distribution of his vested interest in his Account; and

(2) if the Participant received actual distribution of his vested interest in his Account, he repays to the Plan the full amount of such distribution before the earlier of (i) the end of the 5-year period beginning on the date he is reemployed or (ii) the date he incurs 5 consecutive Breaks in Vesting Service beginning after the date he received distribution of his vested interest in his Account. If the Adoption Agreement provides that the repayment provisions only apply to distributions of Employer Contributions, the reemployed Participant shall only be required to repay the portion of the distribution that is attributable to Employer Contributions and may not repay any portion of the distribution attributable to 401(k) Contributions, After-Tax Contributions, or Rollover Contributions, including After-Tax Rollover Contributions, Designated Roth Rollover Contributions, and In-Plan Roth Rollover Contributions.

If the Adoption Agreement provides that a Participant may repay a distribution, a Participant who received an actual distribution and who returns to employment within the time period described in (a) above may elect to repay to the Plan the full amount of such distribution before the earlier of (i) the end of the 5-year period beginning on the date he is reemployed or (ii) the date he incurs 5 consecutive Breaks in Vesting Service beginning after the date he received, or is deemed to have received, distribution of his vested interest in his Account. If the Adoption Agreement provides that the repayment provisions only apply to distributions of Employer Contributions, the reemployed Participant may only repay the portion of the distribution that is attributable to Employer Contributions and may not repay any portion of the distribution attributable to 401(k) Contributions, After-Tax Contributions, or Rollover Contributions, including After-Tax Rollover Contributions, Designated Roth Rollover Contributions, and In-Plan Roth Rollover Contributions.

Funds needed in any Plan Year to recredit the Account of a Participant with the amounts of prior forfeitures in accordance with the preceding sentence shall come first from forfeitures that arise during such Plan Year, and then from Trust income earned in such Plan Year, to the extent that it has not yet been allocated among Participants' Accounts as provided in Article XI, with each Trust Fund being charged with the amount of such income proportionately, unless his Employer chooses to make an additional Employer Contribution, and shall fmally be provided by his Employer by way of a separate Employer Contribution.

ARTICLE XV
DISTRIBUTIONS

15.1 Distributions to Participants

A Participant whose Settlement Date occurs and who applies for distribution in accordance with procedures established by the Administrator, shall receive distribution of his vested interest in his Account in the form provided under Article XVI beginning as of the date provided in the Adoption Agreement.

76

15.2 Special In-Service Distributions

If provided in the Adoption Agreement, a Participant who continues in employment with an Employer or a Related Employer may elect to receive distribution of all or any portion of his Account in the form provided under Article XVI at any time following:

(a) his Normal Retirement Date;

(b) April 1 of the calendar year following the calendar year in which he attains age 70 1/2; and/or

(c) the date the Administrator determines he is Disabled.

15.3 Partial Distributions

If provided in the Adoption Agreement, a Participant whose Settlement Date has occurred or who is entitled to an in-service distribution in accordance with Section 15.2 may elect to receive partial distribution of any portion of his Account at any time in the form provided in Article XVI.

15.4 Voluntary Elective Transfers

Notwithstanding any other provision of the Plan to the contrary, the Administrator may prescribe uniform and nondiscriminatory rules permitting Participants to make voluntary elective transfers in accordance with the provisions of this Section. If permitted by the Administrator, a Participant whose Settlement Date has not occurred and who is not otherwise eligible to receive distribution of his Account under the Plan may elect to transfer his entire Account from the Plan to another plan maintained by the Employer or a Related Employer if all of the following requirements are met:

(a) the Participant transfers from employment as a Covered Employee to other employment with an Employer or a Related Employer that is not covered by the Plan;

(b) such other employment is covered by another profit sharing plan that includes a cash or deferred arrangement qualified under Code Section 401(k); and

(c) the Participant makes a voluntary, fully-informed election to transfer his entire Account to such other plan.

If a Participant elects a voluntary transfer, his transferred Account shall be subject to the provisions of such other plan and benefits shall be paid at the time and in the form provided under such other plan without regard to the provisions of the Plan prior to such transfer.

15.5 Distributions to Beneficiaries

If a Participant dies prior to his Benefit Payment Date, his Beneficiary shall receive distribution of the Participant's vested interest in his Account in the form provided under Article XVI beginning as soon as reasonably practicable following the date the Beneficiary's application for distribution is filed with the Administrator. If distribution is to be made to a Participant's Spouse, it shall be made available within a reasonable period of time after the Participant's death that is no less favorable than the period of time applicable to other distributions.

15.6 Code Section 401(a)(9) Requirements

The provisions of this Section take precedence over any inconsistent provision of the Plan; provided, however, that nothing in this Section is intended to provide a form of payment other than the form(s) provided in the Adoption Agreement.

77

All distributions required under this Section shall be determined and made in accordance with Code Section 401(a)(9) and the minimum distribution incidental benefits requirements of Code Section 401(a)(9)(G).

(a) Distributions Prior to Participant's Death. Distribution to a Participant shall commence no later than his Required Beginning Date. Distributions required to commence under this paragraph (a) shall be made in the form provided under Article XVI, subject to the provisions of (1) and (2) below and of paragraph (d).

(1) Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before his Required Beginning Date, as of the first "distribution calendar year", distributions will be made to the Participant in accordance with the provisions of paragraph (2) below over one of the following periods:

(A) the life of the Participant;

(B) the joint lives of the Participant and a designated Beneficiary;

(C) a period certain not extending beyond the life expectancy of the Participant; or

(D) a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a designated Beneficiary.

If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury regulations.

(2) During the Participant's lifetime, the minimum amount that will be distributed for each "distribution calendar year" is the lesser of:

(A) the quotient obtained by dividing the "Participant's account balance" by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9, Q&A-2 of the Treasury regulations, using the Participant's age as of the Participant's birthday in the "distribution calendar year"; or

(B) if the Participant's sole "designated beneficiary" for the "distribution calendar year" is the Participant's Spouse, the quotient obtained by dividing the "Participant's account balance" by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9, Q&A-3 of the Treasury regulations, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the "distribution calendar year".

Required minimum distributions will be determined under this paragraph (2) beginning with the first "distribution calendar year" and up to and including the "distribution calendar year" that includes the Participant's date of death. Notwithstanding the foregoing, if the Adoption Agreement provides that a Participant will receive required minimum distributions only while employed, required minimum distributions to the Participant will be determined under this paragraph (2) only up to the "distribution calendar year" in which the Participant's employment terminates. The required minimum distribution for the "distribution calendar year" in which the Participant's employment terminates shall be made in a single sum or through purchase of an annuity that satisfies the requirements of paragraph (1) above, as permitted under Section 16.2 of the Plan, based on the provisions of the Adoption Agreement; provided, however, that if the Administrator cannot distribute the full balance of the Participant's vested interest in his Account in such form by December 31 of the "distribution calendar year" in which the Participant's employment terminates, the required minimum distribution for such "distribution calendar year" shall be determined under this paragraph (2).

(b) Death of Participant After Distribution Begins. If a Participant dies on or after the date distribution begins and before receiving distribution of his full vested interest in his Account, distributions to the Participant's Beneficiary shall be made no less rapidly than distributions were made under the method of payment in effect prior to the Participant's death and in accordance with the following:

78

(1) Unless the full balance of the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum before December 31 of the first "distribution calendar year" after the year of the Participant's death, beginning with such "distribution calendar year", distributions will be made in accordance with the provisions of paragraphs (2) or (3) below, as applicable. If the full balance of the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401(a)(9) and the Treasury regulations.

(2) If there is a "designated beneficiary", the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the longer of the remaining "life expectancy" of the Participant or the remaining "life expectancy" of the Participant's "designated beneficiary", determined as follows:

(A) The Participant's remaining "life expectancy" is calculated using the age of the Participant in the year of death, reduced by 1 for each subsequent year.

(B) If the Participant's surviving Spouse is the Participant's sole "designated beneficiary", the remaining "life expectancy" of the surviving Spouse is calculated for each "distribution calendar year" after the year of the Participant's death using the surviving Spouse's age as of the Spouse's birthday in that year. For "distribution calendar years" after the year of the surviving Spouse's death, the remaining "life expectancy" of the surviving Spouse is calculated using the age of the surviving Spouse as of the Spouse's birthday in the calendar year of the Spouse's death, reduced by 1 for each subsequent calendar year.

(C) If the Participant's surviving Spouse is not the Participant's sole "designated beneficiary", the "designated beneficiary's" remaining "life expectancy" is calculated using the age of the beneficiary in the year following the year of the Participant's death, reduced by 1 for each subsequent year.

(3) If there is no "designated beneficiary" as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each "distribution calendar year" after the year of the Participant's death is the quotient obtained by dividing the "Participant's account balance" by the Participant's remaining "life expectancy" calculated using the age of the Participant in the year of death, reduced by 1 for each subsequent year.

(c) Death of Participant Before Distribution Begins. If a Participant dies before the date distribution begins and before receiving distribution of his full vested interest in his Account, the Participant's entire interest will be distributed, or begin to be distributed, in a form of payment permitted under Article XVI, based on the provisions of the Adoption Agreement, as follows:

(1) If the 5-year rule applies under the Adoption Agreement, except as provided in paragraph (5) below, and subject to the special rules in paragraph (3) below regarding commencement of distribution to a Spouse who qualifies as a Participant's sole "designated beneficiary", if there is a "designated beneficiary" as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire vested interest in his Account must be completed to such "designated beneficiary" by December 31 of the calendar year containing the fifth anniversary of the Participant's death. If the Participant's surviving Spouse is the Participant's sole "designated beneficiary" and the surviving Spouse dies after the Participant but before distribution commences to the surviving Spouse, the 5-year rule described in this paragraph (1) shall apply as if the surviving Spouse were the Participant.

(2) If the life expectancy rule applies under the Adoption Agreement, except as provided in paragraph (5) below, and subject to the special rules in paragraph (3) below regarding commencement of distribution to a Spouse who qualifies as a Participant's sole "designated beneficiary", if there is a "designated beneficiary" as of September 30 of the year following the year of the Participant's death, distribution shall be made to the Participant's "designated beneficiary" as provided in this paragraph (2).

79

(A) Distribution must commence no later than December 31 of the calendar year following the calendar year in which the Participant died.

(B) Distribution shall be made over the "designated beneficiary's" life or over a period certain not exceeding the "designated beneficiary's" "life expectancy". For purposes of determining such period certain, a "designated beneficiary's" "life expectancy" is calculated based on his age on his birthday in the calendar year immediately following the calendar year of the Participant's death.

(C) The minimum amount that will be distributed to the "designated beneficiary" for each "distribution calendar year" during the "designated beneficiary's" lifetime is the quotient obtained by dividing the "Participant's account balance" by the remaining "life expectancy" of the Participant's "designated beneficiary", determined as provided in Section 15.6(b) above.

If a Participant's surviving Spouse is his sole "designated beneficiary", and the surviving Spouse dies before the date distributions are required to begin to the surviving Spouse under Section 15.6(c)(1) or Section 15.6(c)(3), as applicable, the life expectancy rule described in this paragraph (2) shall apply as if the surviving Spouse were the Participant.

(3) If a Participant's Spouse is his sole "designated beneficiary" with respect to all or any part of the Participant's Account, the surviving Spouse may elect to postpone commencement of distribution until the later of (i) December 31 of the calendar year immediately following the calendar year in which the Participant dies or (ii) December 31 of the calendar year in which the Participant would have attained age 70 1/2.

(4) If there is no "designated beneficiary" as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.

(5) If provided in the Adoption Agreement, Participants or Beneficiaries may elect on an individual basis whether the 5-year rule described in Section 15.6(c)(1) or the "life expectancy" rule described in 15.6(c)(2) applies to distributions after the death of a Participant who has a "designated beneficiary". The election must be made no later than September 30 of the calendar year in which distribution would be required to begin under Section 15.6(c)(2). If neither the Participant nor the Beneficiary makes an election under this Section, distributions will be made as provided in the Adoption Agreement, subject to the consent rules in Section 15.7.

(d) 242(b)(2) Elections. Notwithstanding any other provisions of this Section 15.6 and subject to the automatic annuity and Qualified Preretirement Survivor Annuity requirements described in Article XVI, distribution on behalf of a Participant, including a 5% owner, may be made pursuant to a valid election under Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 and in accordance with all of the following requirements:

(1) The distribution is one which would not have disqualified the Trust under Code Section 401(a)(9) as in effect prior to amendment by the Deficit Reduction Act of 1984.

(2) The distribution is in accordance with a method of distribution elected by the Participant whose interest in the Trust is being distributed or, if the Participant is deceased, by a Beneficiary of such Participant.

80

(3) Such election was in writing, was signed by the Participant or the Beneficiary, and was made before January 1, 1984.

(4) The Participant had accrued a benefit under the Plan as of December 31, 1983.

(5) The method of distribution elected by the Participant or the Beneficiary specifies the time at which distribution will commence, the period over which distribution will be made, and in the case of any distribution upon the Participant's death, the Beneficiaries of the Participant listed in order of priority.

A distribution upon death shall not be made under this paragraph (d) unless the information in the election contains the required information described above with respect to the distributions to be made upon the death of the Participant. For any distribution which commences before January 1, 1984, but continues after December 31, 1983, the Participant or the Beneficiary to whom such distribution is being made will be presumed to have designated the method of distribution under which the distribution is being made, if this method of distribution was specified in writing and the distribution satisfies the requirements in paragraphs (1) and (5) of this paragraph (d). If an election is revoked, any subsequent distribution will be in accordance with the other provisions of the Plan. Any changes in the election will be considered to be a revocation of the election. However, the mere substitution or addition of another Beneficiary (one not designated as a Beneficiary in the election), under the election will not be considered to be a revocation of the election, so long as such substitution or addition does not alter the period over which distributions are to be made under the election directly, or indirectly (for example, by altering the relevant measuring life).

(e) Special Definitions. For purposes of this Section 15.6, the following terms have the following meanings:

(1) A Participant's "designated beneficiary" means the individual who is designated as the Participant's Beneficiary under Article XVII of the Plan and is the designated beneficiary under Code Section 401(a)(9) and Section 1.401(a)(9)-4 of the Treasury regulations.

(2) A "distribution calendar year" means a calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first "distribution calendar year" is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions beginning after the Participant's death, the first "distribution calendar year" is the calendar year in which distributions are required to begin under Section 15.5(a) or (b). The required minimum distribution for the Participant's first "distribution calendar year" will be made on or before the Participant's Required Beginning Date. The required minimum distribution for other "distribution calendar years", including the required minimum distribution for the "distribution calendar year" in which the Participant's Required Beginning Date occurs, will be made on or before December 31 of that "distribution calendar year".

(3) A Participant's or Beneficiary's "life expectancy" means his life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9 of the Treasury regulations.

(4) A "Participant's account balance" means the Account balance as of the last Valuation Date in the calendar year immediately preceding the "distribution calendar year" (the "valuation calendar year") increased by the amount of any contributions made and allocated or forfeitures allocated to the Account balance as of dates in the "valuation calendar year" after the Valuation Date and decreased by distributions made in the "valuation calendar year" after the Valuation Date. The Account balance for the "valuation calendar year" includes any amounts rolled over or transferred to the Plan either in the "valuation calendar year" or in the "distribution calendar year" if distributed or transferred in the "valuation calendar year".

For purposes of this Section 15.6, distribution is considered to begin on the Participant's Required Beginning Date or, if distribution under an annuity irrevocably commences to the Participant before that date, the date distribution under the annuity actually commences. If a Participant's surviving Spouse is to be treated as if the Spouse were the Participant, as provided in Section 15.6(c)(2), distribution is considered to begin to such Spouse on the date distribution is required to begin to the Spouse under Section 15.6(c)(1) or Section 15.6(c)(3), as applicable, or, if distribution under an annuity irrevocably commences to the Spouse before that date, the date distribution under the annuity actually commences.

81

15.7 Cash Outs and Participant Consent

Notwithstanding any other provision of the Plan to the contrary, if the Adoption Agreement provides for cash-outs and a Participant's vested interest in his Account does not exceed the dollar amount specified in the Adoption Agreement, distribution of such vested interest shall be made to the Participant in a single sum payment or through a direct rollover, as described in Section 16.7, as soon as reasonably practicable following his Settlement Date. If the vested interest to be distributed to a Participant pursuant to the preceding sentence exceeds $1,000, distribution of such vested interest shall be made through a direct rollover to an individual retirement account selected by the Administrator, unless the Participant affirmatively elects distribution in a single sum payment or through a direct rollover to the "eligible retirement plan" (as defined in Section 16.7(a) below) specified by the Participant. If a direct rollover is made to an individual retirement account selected by the Administrator, the Administrator shall also make an initial election as to the investment of amounts held in such individual retirement account. If a Participant has no vested interest in his Account on his Settlement Date, he shall be deemed to have received distribution of such vested interest as of his Settlement Date.

If a Participant's vested interest in his Account exceeds the dollar amount specified in the Adoption Agreement or, if the Adoption Agreement does not provide for cash-outs, distribution shall not commence to such Participant prior to the later of (a) the date he attains age 62 or (b) his Normal Retirement Date without the Participant's written consent and, if the Participant is married and his Account is subject to the "automatic annuity" provisions of Article XVI, the written consent of his Spouse. Notwithstanding the foregoing, Spouse consent shall not be required if distribution is made through the purchase of a Qualified Joint and Survivor Annuity or Qualified Optional Survivor Annuity, the Spouse cannot be located, or Spouse consent cannot be obtained for other reasons set forth in Code Section 401(a)(11) and regulations issued thereunder.

If a Participant's Account is subject to the "automatic annuity" provisions of Article XVI, the Participant's vested interest in his Account shall be deemed to exceed the applicable dollar amount described above if the Participant's Benefit Payment Date has occurred with respect to amounts currently held in his Account and as of such Benefit Payment Date his vested interest in his Account exceeded the applicable dollar amount described above.

15.8 Required Commencement of Distribution

Notwithstanding any other provision of the Plan to the contrary, distribution of a Participant's vested interest in his Account shall commence to the Participant no later than the earlier of:

(a) unless the Participant elects a later date, 60 days after the close of the Plan Year in which occurs the latest of (i) the earlier of the date the Participant attains age 65 or the Participant's Normal Retirement Date, (ii) the tenth anniversary of the year in which the Participant commenced participation in the Plan, or (iii) the Participant's Settlement Date; or

(b) his Required Beginning Date.

15.9 Reemployment of a Participant

If a Participant whose Settlement Date has occurred is reemployed by an Employer or a Related Employer the following shall apply, as provided in the Adoption Agreement:

(a) he shall lose his right to any distribution or further distributions from the Trust arising from his prior Settlement Date and his interest in the Trust shall thereafter be treated in the same manner as that of any other Participant whose Settlement Date has not occurred; or

82

(b) he shall continue to have a right to any distribution or further distributions from the Trust arising from his prior Settlement Date and any amounts credited to his Account with respect to employment after his prior Settlement Date shall be accounted for separately.

15.10 Restrictions on Alienation

Except as provided in Code Section 401(a)(13) (relating to qualified domestic relations orders), Code Section 401(a)(13)(C) and (D) (relating to offsets ordered or required under a criminal conviction involving the Plan, a civil judgment in connection with a violation or alleged violation of fiduciary responsibilities under ERISA, or a settlement agreement between the Participant and the Department of Labor in connection with a violation or alleged violation of fiduciary responsibilities under ERISA), Section 1.401(a)-13(b)(2) of Treasury regulations (relating to Federal tax levies and judgments), or as otherwise required by law, no benefit under the Plan at any time shall be subject in any manner to anticipation, alienation, assignment (either at law or in equity), encumbrance, garnishment, levy, execution, or other legal or equitable process; and no person shall have power in any manner to anticipate, transfer, assign (either at law or in equity), alienate or subject to attachment, garnishment, levy, execution, or other legal or equitable process, or in any way encumber his benefits under the Plan, or any part thereof, and any attempt to do so shall be void.

15.11 Facility of Payment

If the Administrator finds that any individual to whom an amount is payable hereunder is incapable of attending to his financial affairs because of any mental or physical condition, including the infirmities of advanced age, such amount may, in the discretion of the Administrator, be paid to such individual's court appointed guardian, to another person with a valid power of attorney, or to another person authorized under state law to receive the benefit. If the individual is receiving installment payments, the monthly payment for the month in which the individual dies shall, if not paid to such individual prior to his death, be paid to such individual's spouse, parent, brother, sister, or estate, or in accordance with local or state law, as the Administrator shall determine.

If an amount is payable to a minor Beneficiary, the Administrator may, in its discretion, pay the amount to a duly qualified guardian or other legal representative, to the authorized person or entity (e.g., custodian or guardian) under the applicable state Uniform Gifts to Minors Act or Uniform Transfers to Minors Act, or to a trust that has been established for the benefit of the minor.

The Trustee shall make such payment only upon receipt of written instructions to such effect from the Administrator. Any payment made in accordance with the provisions of this Section shall be charged to the Account from which any such payment would otherwise have been paid and shall be a complete discharge of any liability therefore under the Plan.

15.12 Inability to Locate Payee

If any benefit becomes payable to any person, or to the executor or administrator of any deceased person ( the "payee"), and if either (i) the payee does not satisfy the administrative requirements for distribution as of the date distribution is required to be made under the Plan or (ii) the payee does not present himself to the Administrator within a reasonable period after the Administrator mails written notice of his eligibility to receive a distribution hereunder to his last known address and makes such other diligent effort to locate the person as the Administrator determines, such as (1) sending a registered letter, return receipt requested to the person's last known address, (2) using a commercial locator service, the internet, or other general search method, or (3) using the Social Security Administration search program, the Administrator may elect, in its discretion, to do any of the following:

(a) segregate the distributable amount into a separate, interest-bearing account, in which event an annual maintenance fee (as determined from time to time by the Plan Sponsor) may be assessed against the segregated account;

83

(b) subject to a policy established by the Administrator, distribute the benefit at any time in any manner which is sanctioned by the Internal Revenue Service and/or the Department of Labor, which may include (but not be limited to):

(1) distributing the benefit in an automatic direct rollover to an individual retirement plan designated by the Administrator; such individual retirement plan, as defined in Code Section 7701(a)(37), may be either an individual retirement account within the meaning of Code Section 408(a) or an individual retirement annuity within the meaning of Code Section 408(b); or

(2) distributing the benefit to any authorized Federal Department or agency;

(c) distribute the benefit to any person or entity who is appointed under State (or Commonwealth) law to act as a duly authorized guardian, legal representative, conservator, or power of attorney; or

(d) treat the entire benefit as a forfeiture. Except as otherwise provided below with respect to escheat proceedings, if the benefit is forfeited and the payee is subsequently located, the benefit will be restored and shall not be considered an "annual addition", as defined in Section 7.1(a), under Code Section 415.

If the Plan is joined as a party to any escheat proceedings involving an amount held under the Plan, the Plan may comply with the final judgment as if it were a complaint filed by the payee and may pay in accordance with the judgment. In such event, the payment shall be treated as a distribution to the legal representative of the payee and no further payment to the payee shall be due under the Plan.

15.13 Distribution Pursuant to Qualified Domestic Relations Orders

Notwithstanding any other provision of the Plan to the contrary, if a qualified domestic relations order so provides, distribution may be made to an alternate payee pursuant to a qualified domestic relations order, as defined in Code Section 414(p), regardless of whether the Participant's Settlement Date has occurred or whether the Participant is otherwise entitled to receive a distribution under the Plan.

ARTICLE XVI
FORM OF PAYMENT

16.1 Special Definitions

If the Adoption Agreement provides for grandfathered annuities or annuities, for purposes of this Article, the following terms have the following meanings:

(a) The "automatic annuity form" means the form of annuity that will be purchased on behalf of a Participant who has elected to receive distribution through the purchase of an annuity contract that provides for payment over his life (or whose Account includes assets transferred directly from a plan subject to Code Section 417) unless the Participant elects another form of annuity.

(b) A "qualified election" means an election that is made during the qualified election period. A "qualified election" of a form of payment other than a Qualified Joint and Survivor Annuity or designating a Beneficiary other than the Participant's Spouse to receive amounts otherwise payable as a Qualified Preretirement Survivor Annuity must include the written consent of the Participant's Spouse, if any. A Participant's Spouse will be deemed to have given written consent to the Participant's election if the Participant establishes to the satisfaction of a Plan representative that spousal consent cannot be obtained because the Spouse cannot be located or because of other circumstances set forth in Code Section 401(a)(11) and regulations issued thereunder. The Spouse's written consent must acknowledge the effect of the Participant's election and must be witnessed by a Plan representative or a notary public. In addition, the Spouse's consent must specify the form of payment selected instead of a Qualified Joint and Survivor Annuity, if applicable, and that such form may not be changed (except to a Qualified Joint and Survivor Annuity) without written Spouse consent and specify any non-Spouse Beneficiary designated by the Participant, if applicable, and that such Beneficiary may not be changed without written spousal consent. If permitted by the Administrator, instead of limiting consent to the specific form of payment and Beneficiary designated by the Participant on the election, the Spouse's consent may acknowledge that the Spouse has the right to limit such consent, but permit the Participant to change the form of payment selected or the designated Beneficiary without the Spouse's further consent. Any written consent given or deemed to have been given by a Participant's Spouse hereunder shall be irrevocable and shall be effective only with respect to such Spouse and not with respect to any subsequent Spouse.

84

(c) The "qualified election period" with respect to the "automatic annuity form" means the 180-day period ending on the Participant's Benefit Payment Date, unless otherwise provided in the Adoption Agreement. If the Adoption Agreement provides for waiver of the Qualified Preretirement Survivor Annuity, the "qualified election period" with respect to a Qualified Preretirement Survivor Annuity means the period beginning on the later of (i) the date his Account becomes subject to the automatic annuity provisions of this Article or (ii) the first day of the Plan Year in which the Participant attains age 35 or, if he terminates employment prior to such date, the day he terminates employment with his Employer and all Related Employers. If provided in the Adoption Agreement, a Participant whose employment has not terminated may make a "qualified election" designating a Beneficiary other than his Spouse prior to the Plan Year in which he attains age 35; provided, however, that such election shall cease to be effective as of the first day of the Plan Year in which the Participant attains age 35.

16.2 Form of Payment

Subject to the automatic annuity and Qualified Preretirement Survivor Annuity requirements described in this Article, a Participant, or his Beneficiary, if the Participant has died, shall receive distribution in any of the following forms of payment, as elected by the Participant or Beneficiary and as provided in the Adoption Agreement. If provided in the Adoption Agreement, the Participant or Beneficiary may elect to receive distribution in a combination of the forms of payment offered under the Adoption Agreement.

(a) Single Sum Payment - Distribution shall be made in a single sum payment. Except to the extent the Adoption Agreement provides for in kind distributions, distribution shall be made in cash.

(b) Annuity - Distribution shall be made through the purchase of a single premium, nontransferable annuity contract for such term and in such form as the Participant, or his Beneficiary, as the case may be, shall select; provided, however, that unless the Adoption Agreement provides that the Participant or his Beneficiary may select any form of annuity, a Participant or his Beneficiary may only select among the forms of annuity provided in the Adoption Agreement. Notwithstanding any other provision of this Article, a Participant's Beneficiary may not elect to receive distribution of an annuity payable over the joint lives of the Beneficiary and any other individual. The terms of any annuity contract purchased hereunder and distributed to a Participant or his Beneficiary shall comply with the requirements of the Plan.

(c) Installment Payments - Distribution shall be made in a series of installments over a period specified by the Participant or his Beneficiary, if the Participant has died. Each installment shall be equal in amount except as necessary to adjust for any changes in the value of the Participant's Account unless otherwise specified in the Adoption Agreement. Payments hereunder must satisfy the distribution requirements described in Section 15.6. Except to the extent the Adoption Agreement provides for in kind distributions, installment payments shall be made in cash.

Any in kind distribution of non-publicly traded securities of an Employer, Related Employer, former Employer, or former Related Employer shall be valued by a third party appraisal.

85

16.3 Minimum Required Distributions

Notwithstanding any other provisions of the Plan to the contrary and subject to the automatic annuity requirements of this Article, if the Adoption Agreement provides for minimum required distributions, a Participant who satisfies the requirements provided in the Adoption Agreement or a Participant's Beneficiary may elect to receive distribution in periodic payments made not less frequently than annually, equal to the minimum amount necessary to satisfy the distribution requirements of Code Section 401(a)(9) and regulations issued thereunder. If the Adoption Agreement provides that minimum required distributions may be made with respect to Participants who commence payment April 1 of the calendar year following the year in which they attain age 70 1/2, but who have not reached their Required Beginning Date because they have not terminated employment with the Employer and all Related Employers, the minimum required distribution shall be determined as if the Participant's Benefit Payment Date were his Required Beginning Date Minimum required distributions shall continue to the Participant as provided under the Adoption Agreement.

16.4 Change of Election

Subject to the automatic annuity requirements of this Article, a Participant or Beneficiary who has elected a form of payment may revoke or change his election at any time prior to his Benefit Payment Date by filing his election with the Administrator in the form prescribed by the Administrator. The number of revocations shall not be limited.

16.5 Automatic Annuity Requirements

If the Adoption Agreement provides for annuities or grandfathered annuities and either (i) the Participant elects to receive distribution through the purchase of an annuity contract that provides for payment over his life or (ii) the Adoption Agreement provides that life annuities are the normal form of payment, distribution shall be made to a Participant through the purchase of an annuity contract that provides for payment in one of the following "automatic annuity forms", unless the Participant elects another form of payment provided under the Plan.

(a) The "automatic annuity form" for a Participant who has a Spouse on his Benefit Payment Date is the Qualified Joint and Survivor Annuity designated in the Adoption Agreement.

(b) The "automatic annuity form" for a Participant who does not have a Spouse on his Benefit Payment Date is the Single Life Annuity.

At any time during the "qualified election period," a Participant may elect an annuity other than the "automatic annuity form," including a Qualified Optional Survivor Annuity, or any other form of payment available under the Plan, or revoke or change his form of payment election. However, the Participant's election of a form of payment other than the "automatic annuity form" shall not be effective unless it is a "qualified election;" provided that Spouse consent shall not be required if the form of payment elected by the Participant is a Qualified Joint and Survivor Annuity.

16.6 Qualified Preretirement Survivor Annuity Requirements

If the Adoption Agreement provides for annuities or grandfathered annuities and either (i) the Participant elects to receive distribution through the purchase of an annuity contract that provides for payment over his life or (ii) the Adoption Agreement provides that life annuities are the normal form of payment, distribution of a Qualified Preretirement Survivor Annuity shall be made to the eligible Spouse of a married Participant who dies prior to his Benefit Payment Date. If elected in the Adoption Agreement, a Participant's Spouse shall not be eligible for a Qualified Preretirement Survivor Annuity unless such Spouse has been married to the Participant throughout the one-year period immediately preceding the Participant's death. The Qualified Preretirement Survivor Annuity shall be purchased with 50% or 100% of the Participant's vested Account balance, as provided in the Adoption Agreement. A Participant's Spouse may elect to receive distribution under any one of the other forms of payment available under the Adoption Agreement instead of in the Qualified Preretirement Survivor Annuity form.

86

If the Adoption Agreement provides that the Qualified Preretirement Survivor Annuity shall be purchased with 50% of a Participant's vested Account balance, a married Participant whose Account is subject to the requirements of this Section may designate a non-Spouse Beneficiary pursuant to Article XVII to receive distribution of the Participant's vested interest in his Account that is not payable to his Spouse as a Qualified Preretirement Survivor Annuity. A

married Participant whose Account is subject to the requirements of this Section may only designate a non-Spouse Beneficiary to receive distribution of that portion of his Account otherwise payable as a Qualified Preretirement Survivor Annuity pursuant to a "qualified election".

16.7 Direct Rollover

Notwithstanding any other provision of the Plan to the contrary, in lieu of receiving distribution in a form of payment provided under this Article, a "qualified distributee" may elect in writing, in accordance with rules prescribed by the Administrator, to have a portion or all of any "eligible rollover distribution" paid directly by the Plan to the "eligible retirement plan" designated by the "qualified distributee". Any such payment by the Plan to another "eligible retirement plan" shall be a direct rollover.

Notwithstanding the foregoing, the Administrator may provide, on a non-discriminatory and uniform basis, that a "qualified distributee" may not elect a direct rollover with respect to an "eligible rollover distribution" if the total value of such distribution is less than $200 or with respect to a portion of an "eligible rollover distribution" if the value of such portion is less than $500. In determining whether the total value of a "qualified distributee's" "eligible rollover distributions" for the year is less than $200, "eligible rollover distributions" from a Participant's Roth 401(k) Contributions Sub-Account, Designated Roth Rollover Contributions Sub-Account, and In-Plan Roth Rollover Contributions Sub-Account shall be considered separately from "eligible rollover distributions" from the Participant's other Sub-Accounts. In applying the $500 minimum on rollovers of a portion of a distribution, any "eligible rollover distribution" from a Participant's Roth 401(k) Contributions Sub-Account, Designated Roth Rollover Contributions Sub-Account, and In-Plan Roth Rollover Contributions Sub-Account shall be treated as a separate distribution from any "eligible rollover distribution" from the Participant's other Sub-Accounts (rather than as a part of such distribution), even if the distributions are made at the same time.

For purposes of this Section, the following terms have the following meanings:

(a) An "eligible retirement plan" with respect to the Participant, the Participant's Spouse, or the Participant's former Spouse who is an alternate payee under a qualified domestic relations order means any of the following: (i) an individual retirement account described in Code Section 408(a), (ii) an individual retirement annuity described in Code Section 408(b), (iii) an annuity plan described in Code Section 403(a) that accepts rollovers, (iv) a qualified trust described in Code Section 401(a), (v) an annuity contract described in Code Section 403(b) that accepts rollovers, (vi) an eligible plan under Code Section 457(b) that is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and that agrees to separately account for amounts transferred into such plan from the Plan, or (vii) a Roth IRA, as described in Code Section 408A.

Notwithstanding any other provision of this Section 16.7(a), the following special rules shall apply:

(1) A plan described in clause (vi) above shall not constitute an "eligible retirement plan" with respect to a distribution of After-Tax Contributions or After-Tax Rollover Contributions

(2) A plan, trust, or contract described in clause (iii), (iv), or (v) above shall not constitute an "eligible retirement plan" with respect to a distribution of After-Tax Contributions or After-Tax Rollover Contributions unless such plan or contract separately accounts for such distribution, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not includible in gross income, and, in the case of a trust described in clause (iv), is part of a defined contribution plan.

(3) The portion of any "eligible rollover distribution" consisting of Roth 401(k) Contributions, Designated Roth Rollover Contributions, or In-Plan Roth Rollover Contributions may only be rolled over to another designated Roth account established for the individual under an applicable retirement plan described in Code Section 402A(e)(1) or to a Roth individual retirement account described in Code Section 408A.

87

An "eligible retirement plan" with respect to any other "qualified distributee" means either an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) (including any such individual retirement account or annuity designated as a Roth IRA pursuant to Code Section 408A) (an "IRA"). Such IRA must be treated as an IRA inherited from the deceased Participant by the "qualified distributee" and must be established in a manner that identifies it as such.

(b) An "eligible rollover distribution" means any distribution of all or any portion of the balance of a Participant's Account; provided, however, that an eligible rollover distribution does not include the following:

(1) any distribution to the extent such distribution is required under Code Section 401(a)(9).

(2) any distribution that is one of a series of substantially equal periodic payment made not less frequently than annually for the life or life expectancy of the "qualified distributee" or the joint lives or life expectancies of the "qualified distributee" and the "qualified distributee's" designated beneficiary, or for a specified period of ten years or more.

(3) any hardship withdrawal made in accordance with the provisions of Article XIII.

(c) A "qualified distributee" means a Participant, the Participant's surviving Spouse, the Participant's Spouse or former Spouse who is an alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), or the Participant's non-Spouse Beneficiary who is his designated beneficiary within the meaning of Code Section 401(a)(9)(E).

16.8 Notice Regarding Form of Payment

The Administrator shall provide the Participant with a written explanation of (i) the Participant's right to defer distribution until the later of (a) his Normal Retirement Date or (b) the date he attains age 62 (or such later date as may be provided in the Plan) and the consequences of failing to defer any distribution, (ii) the Participant's right to make a direct rollover of any eligible distribution, and (iii) the forms of payment provided under the Plan, including a description of the effect upon the Participant's benefit of electing an optional form. If the Adoption Agreement provides for annuities or grandfathered annuities, the notice shall also include a description of (1) the terms and conditions of the "automatic annuity form", (2) the Participant's right to choose a form of payment other than the "automatic annuity form" or to revoke such choice, and (3) the rights of the Participant's Spouse. Unless otherwise provided in the Adoption Agreement, the Administrator shall provide the explanations described in this paragraph no more than 180 days and no fewer than 30 days before the Participant's Benefit Payment Date.

Unless otherwise provided in the Adoption Agreement, distribution of the Participant's Account may commence fewer than 30 days after such notice is provided to the Participant if (i) the Administrator clearly informs the Participant of his right to consider his election of a form of payment, whether to make a direct rollover, and whether to receive early distribution for a period of at least 30 days following his receipt of the notice, (ii) the Participant, after receiving the notice, affirmatively elects an early distribution with his Spouse's written consent, if necessary, and (iii), if the Participant's Account is subject to the automatic annuity provisions of this Article, (A) the Participant may revoke his election at any time prior to the later of his Benefit Payment Date or the expiration of the 7-day period beginning the day after the date the explanation is provided to him, and (B) distribution does not commence to the Participant before such revocation period ends.

88

In addition, if the Adoption Agreement provides for waiver of the Qualified Preretirement Survivor Annuity, the Administrator shall provide a Participant whose Account is subject to the automatic annuity provisions of this Article with a written explanation of (i) the terms and conditions of the Qualified Preretirement Survivor Annuity, (ii) the Participant's right to designate a non-Spouse Beneficiary to receive distribution of that portion of his Account otherwise payable as a Qualified Preretirement Survivor Annuity or to revoke such designation, and (iii) the rights of the Participant's Spouse. The Administrator shall provide such explanation within one of the following periods, whichever ends last:

(a) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending on the last day of the Plan Year preceding the Plan Year in which the Participant attains age 35;

(b) the period beginning 12 calendar months before the date an individual becomes a Participant and ending 12 calendar months after such date; or

(c) unless the Adoption Agreement or the Grandfathered Annuities Addendum to the Adoption Agreement provides that annuities are the normal form of payment, the period beginning 12 calendar months before the date the Participant elects to receive distribution through the purchase of an annuity contract that provides for payment over his life and ending 12 calendar months after such date;

provided, however, that in the case of a Participant who separates from service prior to attaining age 35, the explanation shall be provided to such Participant within the period beginning 12 calendar months before the Participant's severance from employment and ending 12 calendar months after his severance from employment.

16.9 Reemployment

If a Participant is reemployed by an Employer or a Related Employer prior to receiving distribution of the entire balance of his vested interest in his Account, the form in which any subsequent distribution of his Account shall be made will be as provided in the Adoption Agreement.

16.10 Elimination of Optional Form of Payment

If provided in the Adoption Agreement, the restatement amends the Plan to eliminate an installment and/or annuity form of payment. In order for the amendment to be effective, the Plan must provide the following:

(a) A single sum payment option that is otherwise identical to the installment and/or annuity form of payment being eliminated. A single sum payment option is only otherwise identical if it is identical in all respects to the eliminated form of payment (or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement.

(b) Elimination of the optional form shall be effective for distributions with a Benefit Payment Date after the date the amendment eliminating such form is adopted.

ARTICLE XVII
BENEFICIARIES

17.1 Designation of Beneficiary

If a Participant does not have a Spouse, his Beneficiary shall be the person or persons the Participant designates in accordance with rules prescribed by the Administrator. If a Participant has a Spouse, his Beneficiary shall be his Spouse, unless the Participant designates a person or persons other than his Spouse as Beneficiary with his Spouse's written consent. For purposes of this Section, a Participant shall be treated as unmarried and Spouse consent shall not be required if the Participant is not married on his Benefit Payment Date. A Participant's designation of a Beneficiary shall be subject to the Qualified Preretirement Survivor Annuity provisions of Article XVI, if applicable.

If no Beneficiary has been designated pursuant to the provisions of this Section, or if no Beneficiary survives the Participant and he has no surviving Spouse, then the Beneficiary under the Plan shall be the individual or individuals designated in the Adoption Agreement. If a Beneficiary dies after becoming entitled to receive a distribution under the Plan but before distribution is made to him in full, the estate of the deceased Beneficiary shall be the Beneficiary as to the balance of the distribution, unless the Administrator permits a Beneficiary to designate his or her own beneficiary and the Beneficiary is survived by such designated beneficiary.

89

If the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, a Participant's Domestic Partner shall be treated as the Participant's Spouse for purposes of this Section 17.1.

17.2 Spousal Consent Requirements

Any written Spouse consent given pursuant to this Article must acknowledge the effect of the action taken and must be witnessed by a Plan representative or a notary public. In addition, the Spouse's consent must specify the non-Spouse Beneficiary designated by the Participant and that such Beneficiary may not be changed without written spousal consent. If permitted by the Administrator, instead of limiting consent to the specific Beneficiary designated by the Participant on the election, the Spouse's consent may acknowledge that the Spouse has the right to limit such consent, but permit the Participant to change the designated Beneficiary without the Spouse's further consent. A Participant's Spouse will be deemed to have given written consent to the Participant's designation of Beneficiary if the Participant establishes to the satisfaction of a Plan representative that such consent cannot be obtained because the Spouse cannot be located or because of other circumstances set forth in Code Section 401(a)(11) and regulations issued thereunder. Any written consent given or deemed to have been given by a Participant's Spouse hereunder shall be valid only with respect to the Spouse who signs the consent.

If the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, a Participant's Domestic Partner shall be treated as the Participant's Spouse for purposes of this Section 17.2.

17.3 Revocation of Beneficiary Designation Upon Divorce

Notwithstanding any other provision of this Article XVII to the contrary, if a Participant designates his Spouse as Beneficiary under the Plan, such designation shall automatically become null and void as of the date of any final divorce or similar decree or order unless either (i) the Participant re-designates such former Spouse as his or her Beneficiary after the date of the fmal decree or order or (ii) such former Spouse is designated as the Participant's Beneficiary under a qualified domestic relations order; provided, however, that such former Spouse shall be the Participant's Beneficiary under this clause (ii) only to the extent required in accordance with the qualified domestic relations order.

Similarly, if the Adoption Agreement provides that a Participant's Domestic Partner is treated as a Spouse for certain Plan provisions, and the Participant designates his Domestic Partner as his Beneficiary under the Plan, such designation shall automatically become null and void as of the date of the dissolution of the domestic partnership unless either (i) the Participant re-designates such former Domestic Partner as his or her Beneficiary after the date of the dissolution or (ii) such former Domestic Partner is designated as the Participant's Beneficiary under a qualified domestic relations order; provided, however, that such former Domestic Partner shall be the Participant's Beneficiary under this clause (ii) only to the extent required in accordance with the qualified domestic relations order.

90

ARTICLE XVIII
ADMENTISTRATION

18.1 Authority of the Plan Sponsor

The Plan Sponsor, which shall be the administrator for purposes of ERISA and the plan administrator for purposes of the Code, shall be responsible for the administration of the Plan and, in addition to the powers and authorities expressly conferred upon it in the Plan, shall have all such powers and authorities as may be necessary to carry out the provisions of the Plan, including the power and authority to interpret and construe the provisions of the Plan, to make benefit determinations, and to resolve any disputes which arise under the Plan. The Plan Sponsor may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist in carrying out its duties hereunder. The Plan Sponsor shall be a "named fiduciary" as that term is defined in ERISA Section 402(a)(2). The Plan Sponsor, by action in accordance with the requirements of its organizational authority, may:

(a) allocate any of the powers, authority, or responsibilities for the operation and administration of the Plan (other than trustee responsibilities as defined in ERISA Section 405(c)(3)) among named fiduciaries; and

(b) designate a person or persons other than a named fiduciary to carry out any of such powers, authority, or responsibilities;

except that no allocation by the Plan Sponsor of, or designation by the Plan Sponsor with respect to, any of such powers, authority, or responsibilities to another named fiduciary or a person other than a named fiduciary shall become effective unless such allocation or designation shall first be accepted by such named fiduciary or other person in a writing signed by it and delivered to the Plan Sponsor.

18.2 Discretionary Authority

In carrying out its duties under the Plan, including making benefit determinations, interpreting or construing the provisions of the Plan, and resolving disputes, the Plan Sponsor (or any individual to whom authority has been delegated in accordance with Section 18.1) shall have absolute discretionary authority.

Any interpretation of Plan provisions and any findings of fact, including eligibility to participate and eligibility for benefits, made by the Plan Sponsor (or any named fiduciary to whom the Plan Sponsor has allocated authority to make such interpretations and findings of fact) are final and will not be subject to "de novo" review unless shown to be arbitrary and capricious.

18.3 Action of the Plan Sponsor

Any act authorized, permitted, or required to be taken under the Plan by the Plan Sponsor and which has not been delegated in accordance with Section 18.1, may be taken by a majority of the members of the board of directors (or similar governing body) of the Plan Sponsor, either by vote at a meeting, or in writing without a meeting, or by the employee or employees of the Plan Sponsor designated by the board of directors (or similar governing body) to carry out such acts on behalf of the Plan Sponsor. All notices, advice, directions, certifications, approvals, and instructions required or authorized to be given by the Plan Sponsor under the Plan shall be in writing and signed by either (i) a majority of the members of the Plan Sponsor's board of directors (or similar governing body) or by such member or members as may be designated by an instrument in writing, signed by all the members thereof, as having authority to execute such documents on its behalf, or (ii) the Employee or Employees authorized to act for the Plan Sponsor in accordance with the provisions of this Section.

18.4 Claims Review Procedure

Except to the extent that the provisions of any applicable collective bargaining agreement provide another method of resolving claims under the Plan, the provisions of this Section shall control whenever a claim for benefits under the Plan is filed by any person (referred to in this Section as the "claimant") is denied, in whole or in part. The provisions of this Section shall also control whenever a claimant seeks a remedy under any provision of ERISA or other applicable law in connection with any error regarding his benefit under the Plan and such claim is denied, in whole or in part.

91

(a) Standard Claims Review: The provisions of this Section 18.4(a) shall apply to any claim that is not subject to review under the provisions of Section 18.4(b) below.

(1) Whenever the Administrator decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by a claimant, the Administrator shall transmit to the claimant a written notice of its decision within 90 days of the date the claim was filed or, if special circumstances require an extension, within 180 days of such date. If the claimant does not receive notice from the Administrator regarding disposition of his claim within 90 days of the date his claim for benefits was received by the Administrator (or, if special circumstances require an extension, within 180 days of that date; provided that the delay and the reasons for the delay are communicated to the claimant within the initial 90-day period), the claimant's claim for benefits shall be deemed to have been denied.

The notice shall be written in a manner calculated to be understood by the claimant and shall contain the following information:

(A) the specific reasons for the denial of the claim;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such information is necessary;

(D) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant's claim;

(E) a description of the review procedures and in the event of an adverse review decision, a statement describing any voluntary review procedures and the claimant's right to obtain copies of such procedures; and

(F) a statement that if the claimant requests a review of the Administrator's decision and the review fiduciary's decision on review is adverse to the claimant, there is no further administrative review following such initial review, and that the claimant then has a right to bring a civil action under ERISA Section 502(a).

The notice shall also include a statement advising the claimant that, within 60 days of the date on which he receives such notice, he may obtain review of the decision of the Administrator in accordance with the procedures set forth in Section 18.4(a)(2) below.

(2) Within the 60-day period beginning on the earlier of (i) the date the claimant receives notice regarding disposition of his claim or (ii) the date the claimant's claim for benefits is deemed denied hereunder, the claimant or his authorized representative may request that the claim denial be reviewed by filing with the Administrator a written request therefor, which request shall contain the following information:

(A) the date on which the claimant's request was received by the Administrator provided that the date on which the claimant's request for review was in fact received by the Administrator shall control in the event that the date of the actual filing is later than the date stated by the claimant pursuant to this paragraph;

92

(B) the specific portions of the denial of his claim which the claimant requests the Administrator to review;

(C) a statement by the claimant setting forth the basis upon which he believes the Administrator should reverse its previous denial of his claim for benefits and accept his claim as made; and

(D) any written or other material (offered as exhibits) which the claimant desires the Administrator to examine in its consideration of his position as stated pursuant to paragraph (C) of this Section.

(3) Within 60 days of the date determined pursuant to Section 0 (or, if special circumstances require an extension, within 120 days of that date; provided that the delay and the reasons for the delay are communicated to the claimant within the initial 60-day period), the reviewing fiduciary shall conduct a full and fair review of its decision denying the claimant's claim for benefits and shall render its written decision on review to the claimant. The reviewing fiduciary's decision on review shall be written in a manner calculated to be understood by the claimant and shall contain the following information:

(A) the specific reasons for the denial on review;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim;

(D) a statement describing any voluntary review procedures and the claimant's right to obtain copies of such procedures; and

(E) a statement that there is no further administrative review of the reviewing fiduciary's decision upon review, and that the claimant has a right to bring a civil action under ERISA Section 502(a).

(b) Disability Claims Review: The provisions of this Section 18.4(b) shall apply to any claim that requires a determination as to whether or not a Participant is disabled, unless disability is determined under the Plan solely by reference to whether the Participant is entitled to disability benefits under the Social Security Act or under the Employer's long term disability plan.

(1) Whenever the Administrator decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by a claimant, the Administrator shall transmit to the claimant a written notice of its decision within 45 days of the date the claim was filed. If special circumstances require an extension, the Administrator will notify the claimant before the end of the 45-day review period that additional review time is necessary. The notice will:

(A) specify the circumstances requiring a delay and the date a decision is expected to be made;

(B) explain the standards for approving a disability claim;

(C) state the unresolved issues that prevent the Administrator from reaching a decision; and

(D) describe any additional information needed to resolve the issues.

93

Unless the Administrator requires additional information from the Participant to process the disability claim, the review period cannot be extended beyond an additional 30 days. If the Administrator requires additional information from the Participant to process the disability claim, the Participant must respond within 45 days of the date the notice is provided and the review period may be extended accordingly. If special circumstances require a further extension, the Administrator will notify the claimant before the end of the initial 30-day extension that additional review time is necessary and the date by which a fmal decision is expected.

If within 45 days of the date his claim for benefits was received by the Administrator the claimant does not receive notice from the Administrator either disposing of his claim or requesting an extension of the review period, the claimant's claim for benefits shall be deemed to have been denied. Similarly, if the Administrator notifies the Participant that the review period has been extended, but does not provide further notice within the prescribed review period, the claimant's claim for benefits shall be deemed to have been denied.

(2) The notice denying a claimant's claim for disability benefit shall be written in a manner calculated to be understood by the claimant and shall contain the following information:

(A) the specific reasons for the denial of the claim;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such information is necessary;

(D) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant's claim;

(E) if the claim denial is based on an internal rule, guideline, protocol, or other similar provision, a statement that a copy of the provision is available upon request, free of charge;

(F) if the claim denial is based on an exclusion or limit (such as a medical necessity requirement or an experimental treatment exclusion) that an explanation of the scientific or clinical judgment applying the exclusion or limit is available upon request, free of charge;

(G) a description of the review procedures and in the event of an adverse review decision, a statement describing any voluntary review procedures and the claimant's right to obtain copies of such procedures; and

(H) a statement that if the claimant requests a review of the Administrator's decision and the reviewing fiduciary's decision on review is adverse to the claimant, there is no further administrative review following such initial review, and that the claimant then has a right to bring a civil action under ERISA Section 502(a).

The notice shall also include a statement advising the claimant that, within 180 days of the date on which he receives such notice, he may obtain review of the decision of the Administrator in accordance with the procedures set forth in Section 18.4(b)(3) below.

(3) Within the 180-day period beginning on the earlier of (A) the date the claimant receives notice regarding disposition of his claim or (B) the date the claimant's claim for benefits is deemed denied hereunder, the claimant or his authorized representative may request that the claim denial be reviewed by filing with the Administrator a written request therefor, which request shall contain the following information:

94

(A) the date on which the claimant's request was received by the Administrator provided that the date on which the claimant's request for review was in fact received by the Administrator shall control in the event that the date of the actual filing is later than the date stated by the claimant pursuant to this paragraph;

(B) the specific portions of the denial of his claim which the claimant requests the Administrator to review;

(C) a statement by the claimant setting forth the basis upon which he believes the Administrator should reverse its previous denial of his claim for benefits and accept his claim as made; and

(D) any written or other material (offered as exhibits) which the claimant desires the Administrator to examine in its consideration of his position as stated pursuant to paragraph (C) of this Section.

(4) Review of a disability claim that has been denied in accordance with the provisions of Sections 18.4(b)(1) and (2) will be conducted by a Plan fiduciary who is different from and not subordinate to the fiduciary who denied the claim. If the original claim was denied based on a medical judgment, the reviewing fiduciary shall consult with an appropriate health care professional who (i) was not consulted on the original claim and (ii) is not subordinate to someone who was consulted on the original claim. Any medical or vocational experts who were consulted on the original claim must be identified during the review. The claimant may request, in writing, a list of such experts.

(5) Within 45 days of the date determined pursuant to Section 18.4(b)(3)(A), the reviewing fiduciary shall conduct a full and fair review of the original decision denying the claimant's claim for benefits and shall render its written decision on review to the claimant. The reviewing fiduciary's decision on review shall be written in a manner calculated to be understood by the claimant and shall contain the following information:

(A) the specific reasons for the denial on review;

(B) specific reference to pertinent Plan provisions on which the denial is based;

(C) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim;

(D) if the claim denial is based on an internal rule, guideline, protocol, or other similar provision, a statement that a copy of the provision is available upon request, free of charge;

(E) if the claim denial is based on an exclusion or limit (such as a medical necessity requirement or an experimental treatment exclusion) that an explanation of the scientific or clinical judgment applying the exclusion or limit is available upon request, free of charge;

(F) a statement describing any voluntary review procedures and the claimant's right to obtain copies of such procedures; and

95

(G) the following statement: "You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency."

18.5 Special Rules Applicable to Claims Related to Investment Errors

Any person alleging that there has been a failure or error in implementing investment directions with respect to a Participant's Account must file a claim with the Administrator on or before the earlier of (a) 60 days (or such other number of days prescribed by the Administrator) from the mailing of a trade confirmation, account statement, or any other document, from which the error can be discovered, or (b) 1 year from the date of the transaction related to the error. Any claim filed outside of such period shall be limited to the benefit that would have been determined if the claim were timely filed, and therefore any adjustments shall be calculated for such period only.

18.6 Exhaustion of Remedies and Limitation on Filing Civil Action

No civil action for benefits under the Plan shall be brought unless and until the aggrieved person has:

(a) submitted a timely claim for benefits in accordance with the provisions of the Plan;

(b) been notified by the Administrator that the claim has been denied (or such claim is deemed denied);

(c) filed a written request for a review of the claim in accordance with Section 18.4(a)(2) or 18.4(b)(3), as applicable;

(d) been notified in writing of an adverse benefit determination on review; and

(e) filed the civil action within 12 months of the date he receives a final adverse determination of his claim on review.

Notwithstanding the foregoing, an aggrieved person who fails to engage in or exhaust the claims and review procedures established under the Plan before bringing a claim for benefits under the Plan, based on a claim of futility or any other grounds, must file such action within 12 months of the first date he or she allegedly became entitled to the benefits at issue, based on the facts or conduct he or she alleges give rise to the claim. The foregoing shall not relieve a person from engaging in and exhausting the claims and review procedures established under the Plan. A claimant who fails to file a civil action within the applicable 12-month period will lose all rights to bring a civil action thereafter.

18.7 Grounds for Judicial Review

Any civil action by an aggrieved person shall be based solely on the contentions advanced by the aggrieved person in the administrative review process and the judicial review will be limited to the Plan document and the record developed during the administrative review process.

18.8 Qualified Domestic Relations Orders

The Plan Sponsor shall establish reasonable procedures to determine the status of domestic relations orders and to administer distributions under domestic relations orders which are deemed to be qualified orders. Such procedures shall be in writing and shall comply with the provisions of Code Section 414(p) and regulations issued thereunder.

18.9 Correction of Erroneous Payments and Overpayments

If payment is made from the Plan to any individual to whom no payment should have been made or the amount paid to an individual exceeds the amount to which such individual is entitled under the Plan, the Plan has an equitable lien on the erroneous payment or the overpayment. The Administrator may correct the erroneous payment or the overpayment using any one or a combination of the following methods:

96

(a) The Administrator may offset, set off, or obtain restitution of all or any part of future payments from the Plan to the individual until the erroneous payment or the overpayment is entirely recouped by the Plan.

(b) The Administrator may request the individual to repay to the Plan the amount of the erroneous payment or the overpayment and, if repayment is not made voluntarily, take any action deemed by the Administrator to be reasonable and necessary to compel repayment, including, but not limited to, instituting legal proceedings against the individual.

(c) If permitted by the Plan Sponsor, the Administrator may take any reasonable action, including applying forfeitures that would otherwise offset Plan expenses or the Employers' contributions as a correction to make the Plan whole as to any erroneous payment or overpayment.

(d) The Administrator may take appropriate action in accordance with the provisions of Section 21.21.

18.10 Indemnification

In addition to whatever rights of indemnification the members of the Plan Sponsor's board of directors (or similar governing body) or any employee or employees of the Plan Sponsor to whom any power, authority, or responsibility is delegated pursuant to Section 18.1, may be entitled under the articles of incorporation or regulations of the Plan Sponsor, under any provision of law, or under any other agreement, the Plan Sponsor shall satisfy any liability actually and reasonably incurred by any such person or persons, including expenses, attorneys' fees, judgments, fines, and amounts paid in settlement (other than amounts paid in settlement not approved by the Plan Sponsor), in connection with any threatened, pending or completed action, suit, or proceeding which is related to the exercising or failure to exercise by such person or persons of any of the powers, authority, responsibilities, or discretion as provided under the Plan, or reasonably believed by such person or persons to be provided hereunder, and any action taken by such person or persons in connection therewith, unless the same is judicially determined to be the result of such person or persons' gross negligence or willful misconduct.

18.11 Prudent Man Standard of Care

Any fiduciary under the Plan shall discharge his duties under the Plan solely in the interests of Participants and Beneficiaries and, in accordance with the requirements of ERISA Section 404(a)(1)(B), with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent man acting in a like capacity and familiar with such matters would use in conducting an enterprise of like character with like aims.

18.12 Actions Binding

Subject to the provisions of Section 18.4, any action taken by the Plan Sponsor which is authorized, permitted, or required under the Plan shall be final and binding upon the Employers, the Trustee, all persons who have or who claim an interest under the Plan, and all third parties dealing with the Employers or the Trustee.

ARTICLE XIX
AMENDMENT AND TERMINATION

19.1 Amendment by Plan Sponsor

Subject to the provisions of Section 19.3, the Plan Sponsor may at any time and from time to time, either prospectively or retroactively, amend the Plan. Any such amendment shall be by means of a written instrument executed in the name of the Plan Sponsor by its duly authorized representatives.

97

19.2 Amendment by Volume Submifter Practitioner

In the event that there is a change in the law applicable to the Plan, as reflected in the Code, regulations issued thereunder, revenue rulings, or other statements published by the Internal Revenue Service, the "volume submitter practitioner" (as defined in Section 19.2(b) below) may amend the Plan to comply with such changes on behalf of the Plan Sponsors who have adopted its "specimen plan" (as defined in Section 19.2(a) below) prior to the date that its "specimen plan" is amended to comply with such change. In addition, the "volume submitter practitioner" may amend the Plan to correct its prior approved "specimen plan."

The "volume submitter practitioner" shall maintain, or have maintained on its behalf, a record of the Plan Sponsors adopting its "specimen plan." The "volume submitter practitioner" shall make reasonable and diligent efforts to ensure that a copy of any amendment adopted hereunder is provided to each Plan Sponsor at the Plan Sponsor's last known address, as shown in the record maintained in accordance with the preceding sentence. The "volume submitter practitioner" shall make reasonable and diligent efforts to ensure that each Plan Sponsor adopts new documents when necessary.

An amendment made by the "volume submitter practitioner" in accordance with the provisions of this Section may be made effective on a date prior to the first day of the Plan Year in which it is adopted if, in published guidance, the Internal Revenue Service either permits or requires such an amendment to be made to enable the Plan and Trust to satisfy the applicable requirements of the Code and all requirements for the retroactive amendment are satisfied.

The "volume submitter practitioner" may not amend a Plan on behalf of a Plan Sponsor if (a) the Plan Sponsor modifies the "specimen plan" to incorporate a type of plan or provision that is not permitted under the volume submitter program, as described in applicable Revenue Procedures or other statements of the Internal Revenue Service, (b) the Internal Revenue Service has advised the Plan Sponsor that the Plan modifies the "specimen plan" in such a manner or to such an extent that the Plan must be treated as an individually-designed plan and will not receive the extended 6-year remedial amendment cycle applicable to volume submitter plans, or (c) the Plan Sponsor's Plan does not attain or retain qualified status under Code Section 401(a).

For purposes of this Section, the following terms have the following meanings:

(a) The "specimen plan" means the plan with respect to which the Internal Revenue Service has issued an advisory letter to the "volume submitter practitioner."

(b) The "volume submifter practitioner" means Thompson Hine, LLP d/b/a Plan Document Systems.

19.3 Limitation on Amendment

To the extent protected by Code Section 411(d)(6) or other applicable law, the Plan Sponsor shall make no amendment to the Plan which shall decrease the accrued benefit of any Participant or Beneficiary or eliminate an optional form of benefit, except as otherwise provided in Section 16.10 of the Plan. Moreover, no such amendment shall be made hereunder which shall permit any part of the Trust to revert to an Employer or any Related Employer or be used or be diverted to purposes other than the exclusive benefit of Participants and Beneficiaries. The Plan Sponsor shall make no retroactive amendment to the Plan unless such amendment satisfies the requirements of Code Section 401(b) and/or Section 1.401(a)(4)-11(g) of the Treasury regulations, as applicable.

19.4 Termination

The Plan Sponsor reserves the right, by board of directors' resolution or similar action, to terminate the Plan as to all Employers at any time (the effective date of such termination being hereinafter referred to as the "termination date"). Upon any such termination of the Plan, the following actions shall be taken for the benefit of Participants and Beneficiaries:

98

(a) As of the termination date, each Investment Fund shall be valued and all Accounts and Sub-Accounts shall be adjusted in the manner provided in Article XI, with any unallocated contributions being allocated as of the termination date in the manner otherwise provided in the Plan. Notwithstanding any other provision of the Plan to the contrary (including any provision of the Adoption Agreement), the Administrator may direct that unallocated forfeitures shall be used to pay expenses in connection with the termination. Any forfeitures remaining shall be allocated among Participants in the manner otherwise provided in the Adoption Agreement or Section 14.4, as applicable. The termination date shall become a Valuation Date for purposes of Article XI. In determining the net worth of the Trust, there shall be included as a liability such amounts as shall be necessary to pay all expenses in connection with the termination of the Trust and the liquidation and distribution of the property of the Trust, as well as other expenses, whether or not accrued, and shall include as an asset all accrued income.

(b) All Accounts shall then be disposed of to or for the benefit of each Participant or Beneficiary in accordance with the provisions of Article XV as if the termination date were his Settlement Date; provided, however, that notwithstanding the provisions of Article XV, if the Plan does not offer an annuity option and if neither his Employer nor a Related Employer establishes or maintains another defined contribution plan (other than an employee stock ownership plan as defined in Code Section 4975(e)(7)), the Participant's written consent to the commencement of distribution shall not be required regardless of the value of the vested portions of his Account.

(c) Notwithstanding the provisions of paragraph (b) of this Section, no distribution shall be made to a Participant of any portion of the balance of his 401(k) Contributions Sub-Account prior to his severance from employment (other than a distribution made in accordance with Article XIII or required in accordance with Code Section 401(a)(9)) unless (i) neither his Employer nor a Related Employer establishes or maintains another defined contribution plan (other than an employee stock ownership plan as defined in Code Section 4975(e)(7), a tax credit employee stock ownership plan as defined in Code Section 409, a simplified employee pension plan as defined in Code Section 408(k), a SIMPLE IRA plan as defined in Code Section 408(p), a plan or contract described in Code Section 403(b) or a plan described in Code Section 457(b) or (f)) either at the time the Plan is terminated or at any time during the period ending 12 months after distribution of all assets from the Plan; provided, however, that this provision shall not apply if fewer than 2% of the Eligible Employees under the Plan were eligible to participate at any time in such other defined contribution plan during the 24- month period beginning 12 months before the Plan termination, and (ii) the distribution the Participant receives is a "lump sum distribution" as defined in Code Section 402(e)(4), without regard to clauses (I), (II), (III), and (IV) of sub-paragraph (D)(i) thereof.

Notwithstanding anything to the contrary contained in the Plan, upon any such Plan termination, the vested interest of each Participant and Beneficiary in his Employer Contributions Sub-Account shall be 100%; and, if there is a partial termination of the Plan, the vested interest of each Participant and Beneficiary who is affected by the partial termination in his Employer Contributions Sub-Account shall be 100%. For purposes of the preceding sentence only, the Plan shall be deemed to terminate automatically if there shall be a complete discontinuance of contributions hereunder by all Employers.

19.5 Reorganization

The merger, consolidation, or liquidation of any Employer with or into any other Employer or a Related Employer shall not constitute a termination of the Plan as to such Employer. If the Adoption Agreement provides that distribution is only permitted upon severance from service, if an Employer disposes of substantially all of the assets used by the Employer in a trade or business or disposes of a subsidiary and in connection therewith one or more Participants terminates employment but continues in employment with the purchaser of the assets or with such subsidiary, no distribution from the Plan shall be made to any such Participant from his 401(k) Contributions Sub-Account prior to his severance from employment (other than a distribution made in accordance with Article XIII or required in accordance with Code Section 401(a)(9)), except that a distribution shall be permitted to be made in such a case, subject to the Participant's consent (to the extent required by law), if (i) the distribution would constitute a "lump sum distribution" as defined in Code Section 402(e)(4), without regard to clauses (I), (II), (III), or (IV) of subparagraph (D)(i) thereof, (ii) the Employer continues to maintain the Plan after the disposition, (iii) the purchaser does not maintain the Plan after the disposition, and (iv) the distribution is made by the end of the second calendar year after the calendar year in which the disposition occurred.

99

19.6 Withdrawal of an Employer

An Employer other than the Plan Sponsor may withdraw from the Plan at any time upon notice in writing to the Administrator (the effective date of such withdrawal being hereinafter referred to as the "withdrawal date"), and shall thereupon cease to be an Employer for all purposes of the Plan. An Employer shall be deemed automatically to withdraw from the Plan in the event of its complete discontinuance of contributions or, unless the Plan is a multiple employer plan pursuant to the Adoption Agreement, it ceases to be a Related Employer of the Plan Sponsor or any other Employer.

If the Plan is not a multiple employer plan, in the event of any such withdrawal of an Employer, the withdrawing Employer shall determine whether a partial termination has occurred with respect to its Employees. In the event that the withdrawing Employer determines a partial termination has occurred, the action specified in Section 19.4 shall be taken as of the withdrawal date, as on a termination of the Plan, but with respect only to Participants who are employed solely by the withdrawing Employer, and who, upon such withdrawal, are neither transferred to nor continued in employment with any other Employer or a Related Employer. The interest of any Participant employed by the withdrawing Employer who is transferred to or continues in employment with any other Employer or a Related Employer, and the interest of any Participant employed solely by an Employer or a Related Employer other than the withdrawing Employer, shall remain unaffected by such withdrawal; no adjustment to his Accounts shall be made by reason of the withdrawal; and he shall continue as a Participant hereunder subject to the remaining provisions of the Plan.

19.7 Effect of Failure to Qualify Under Code.

Notwithstanding any other provision of the Plan to the contrary, if the Plan maintained by an Employer using the "volume submitter practitioner's" "specimen plan" plan fails to qualify or remain qualified under Code Section 401(a), the Plan as maintained by such Employer may no longer participate in this volume submitter plan arrangement and shall be considered an individually-designed plan.

ARTICLE XX
ADOPTION BY OTHER COMPANIES

20.1 Adoption by Other Companies

Those companies that have adopted the Plan with the Plan Sponsor's consent shall be Employers under the Plan. Adoption of the Plan shall be by appropriate action in accordance with the adopting entity's organizational authority. Consent of the Plan Sponsor may be evidenced by the Plan Sponsor's action, by written authorization, or by any other evidence illustrating the Plan Sponsor's intent to permit adoption of the Plan by the other company. Unless the Adoption Agreement provides that the Plan is a multiple employer plan, no entity other than a Related Employer may adopt the Plan.

20.2 Effective Plan Provisions

An Employer who adopts the Plan shall be bound by the provisions of the Plan in effect at the time of the adoption and as subsequently in effect because of any amendment to the Plan.

100

ARTICLE XXI
MISCELLANEOUS PROVISIONS

21.1 No Commitment as to Employment

Nothing contained herein shall be construed as a commitment or agreement upon the part of any person to continue his employment with an Employer or Related Employer, or as a commitment on the part of any Employer or Related Employer to continue the employment, compensation, or benefits of any person for any period.

21.2 Benefits

Nothing in the Plan or the Trust Agreement shall be construed to confer any right or claim upon any person, firm, or corporation other than the Employers, the Trustee, Participants, and Beneficiaries.

21.3 No Guarantees

None of the Employers, the Plan Sponsor, the Investment Fiduciary, the Administrator, or the Trustee guarantees the Trust from loss or depreciation, nor do they guarantee the payment of any amount which may become due to any person hereunder.

21.4 Expenses

Reasonable expenses of administration of the Plan, including the expenses of the Administrator and fees of the Trustee, may be paid from Plan assets as provided in the Adoption Agreement. If provided in the Adoption Agreement, forfeitures may be used to pay Plan expenses.

21.5 Precedent

Except as otherwise specifically provided, no action taken in accordance with the Plan shall be construed or relied upon as a precedent for similar action under similar circumstances.

21.6 Duty to Furnish Information

Each of the Employers, the Plan Sponsor, the Investment Fiduciary, the Administrator, and the Trustee shall furnish to any of the others any documents, reports, returns, statements, or other information that the other reasonably deems necessary to perform its duties hereunder or otherwise imposed by law.

21.7 Merger, Consolidation, or Transfer of Plan Assets

The Plan shall not be merged or consolidated with any other plan, nor shall any of its assets or liabilities be transferred to another plan, unless, immediately after such merger, consolidation, or transfer of assets or liabilities, each Participant in the Plan would receive a benefit under the Plan which is at least equal to the benefit he would have received immediately prior to such merger, consolidation, or transfer of assets or liabilities (assuming in each instance that the Plan had then terminated).

101

21.8 Condition on Employer Contributions

Notwithstanding anything to the contrary contained in the Plan or the Trust Agreement, any contribution of an Employer hereunder is conditioned upon the continued qualification of the Plan under Code Section 401(a), the exempt status of the Trust under Code Section 501(a), and the deductibility of the contribution under Code Section 404 and the exempt status of the Trust under Code Section 501(a). Except as otherwise provided in this Section and Section 21.9, however, in no event shall any portion of the property of the Trust ever revert to or otherwise inure to the benefit of an Employer or any Related Employer.

21.9 Return of Contributions to an Employer

Notwithstanding any other provision of the Plan or the Trust Agreement to the contrary, in the event any contribution of an Employer made hereunder:

(a) is made under a mistake of fact, or

(b) is disallowed as a deduction under Code Section 404,

such contribution may be returned to the Employer within one year after the payment of the contribution or the disallowance of the deduction to the extent disallowed, whichever is applicable. If the contribution is returned because of a mistake of fact, the amount returned will be reduced for any losses experienced by the Trust Fund. In the event the Plan does not initially qualify under Code Section 401(a), any contribution of an Employer made hereunder may be returned to the Employer within one year of the date of denial of the initial qualification of the Plan, but only if an application for determination was made within the period of time prescribed under ERISA Section 403(c)(2)(B).

21.10 Validity of Plan

The validity of the Plan shall be determined and the Plan shall be construed and interpreted in accordance with the laws of the state or commonwealth in which the Trustee has its principal place of business or, if the Trustee is an individual or group of individuals, the state or commonwealth in which the Plan Sponsor has its principal place of business, except as preempted by applicable Federal law. The invalidity or illegality of any provision of the Plan shall not affect the legality or validity of any other part thereof.

21.11 Trust Agreement

If Plan assets are to be held outside of any insurance contract, or group annuity contract that would, except for the fact that it is not a trust, constitute a qualified trust under Code Section 401, a separate Trust Agreement shall be adopted by the Plan Sponsor. If such Trust Agreement has not been approved by the Internal Revenue Service for use with this volume submitter plan, the provisions of the Trust Agreement shall be treated as modifications to the pre-approved specimen plan.

The Trust Agreement and the Trust maintained thereunder shall be deemed to be a part of the Plan as if fully set forth herein and the provisions of the Trust Agreement are hereby incorporated by reference into the Plan.

21.12 Parties Bound

The Plan shall be binding upon the Employers, all Participants and Beneficiaries hereunder, and, as the case may be, the heirs, executors, administrators, successors, and assigns of each of them.

21.13 Application of Certain Plan Provisions

For purposes of the general administrative provisions and limitations of the Plan, a Participant's Beneficiary or alternate payee under a qualified domestic relations order shall be treated as any other person entitled to receive benefits under the Plan. Upon any termination of the Plan, any such Beneficiary or alternate payee under a qualified domestic relations order who has an interest under the Plan at the time of such termination, which does not cease by reason thereof, shall be deemed to be a Participant for all purposes of the Plan. A Participant's Beneficiary, if the Participant has died, or alternate payee under a qualified domestic relations order shall be treated as a Participant for purposes of directing investments as provided in Article X.

102

21.14 Merged Plans

In the event another defined contribution plan (the "merged plan") is merged into and made a part of the Plan, each Employee who was eligible to participate in the "merged plan" immediately prior to the merger shall become an Eligible Employee on the date of the merger. In no event shall a Participant's vested interest in his Sub-Account attributable to amounts transferred to the Plan from the "merged plan" (his "transferee Sub-Account") on and after the merger be less than his vested interest in his account under the "merged plan" immediately prior to the merger. Notwithstanding any other provision of the Plan to the contrary, a Participant's service credited for eligibility and vesting purposes under the "merged plan" as of the merger, if any, shall be included as Eligibility and Vesting Service under the Plan to the extent Eligibility and Vesting Service are credited under the Plan.

21.15 Application of Plan Provisions in Multiple Employer Plans

Notwithstanding any other provision of the Plan to the contrary, if one of the Employers adopting the Plan is not a Related Employer of the Sponsor, the Plan shall be administered as a multiple employer plan in accordance with the provisions of Code Section 413(c). Notwithstanding any other provision of the Plan to the contrary, the following special rules shall apply:

(a) The Plan Sponsor and each participating Employer shall be treated as a single Employer for the following purposes:

(1) crediting Eligibility and Vesting Service; and

(2) determining whether a Participant has had a severance of employment.

(b) The requirements of Code Sections 402(g), 414(v), and 415 shall be applied to the Plan as a whole.

(c) If a Participant is a 5% owner of a participating Employer, his Required Beginning Date shall be determined based on the rules applicable to 5% owners for all Plan purposes.

(d) Each Employer or group of Employers that is not a Related Employer of another Employer shall be treated as a separate Employer for purposes of the following:

(1) contributions to the Plan;

(2) Highly Compensated Employee determinations;

(3) application of the minimum coverage requirements under Code Section 410(b);

(4) application of the nondiscrimination requirements under Code Section 401(a)(4);

(5) application of the ADP test described in Section 7.4;

(6) application of the ACP test described in Section 7.7;

(7) application of the top heavy requirements under Article XXII; and

(8) application of such other Plan provisions as the Plan Sponsor determines to be appropriate, subject to the provisions of (a), (b), and (c) above.

103

21.16 Special Rules Applicable to Participants Absent Due to Military Service

Notwithstanding any other provision of the Plan to the contrary, contributions, benefits, and service credit with respect to qualified military service shall be provided in accordance with Code Section 414(u) and the regulations thereunder. The Administrator shall notify the Trustee of any Participant with respect to whom additional contributions are made because of qualified military service. Additional contributions made to the Plan pursuant to Code Section 414(u) shall be treated as 401(k) Contributions (if 401(k) Contributions are provided in the Adoption Agreement, including if provided in the Adoption Agreement to the extent designated by the Participant, Roth 401(k) Contributions), After-Tax Contributions, Matching Contributions, Nonelective Contributions, or Qualified Nonelective Contributions based on the character of the contribution they are intended to replace; provided, however, that the Plan shall not be treated as failing to meet the requirements of Code Section 401(a)(4), 401(k)(3), 401(k)(12), 401(k)(13), 401(m), 410(b) or 416 by reason of the making of or the right to make such contribution.

For purposes of this Section, the following shall apply:

(a) If provided in the Adoption Agreement, a Participant who dies while performing qualified military service shall be treated as having returned to employment as a Covered Employee immediately prior to his death and shall be entitled to have additional Nonelective Contributions, Qualified Nonelective Contributions, Safe Harbor Nonelective Contributions, and Matching Contributions made to his Account. If provided in the Adoption Agreement, the amount of any Matching Contributions (including Qualified Matching Contributions and Safe Harbor Matching Contributions) to be made on the deceased Participant's behalf for the period of such military leave shall be determined assuming that while on military leave the Participant made contributions eligible for the match equal to the Participant's average actual contributions for (a) the 12-consecutive-month period of service with his Employer immediately preceding his period of qualified military service or (b), if the Participant has fewer than 12 months of service with his Employer prior to such military service, his actual length of continuous service with the Employer prior to such military service. All employees of the Employers and any Related Employers who die while performing qualified military service must receive plan contributions on reasonably equivalent terms.

(b) If provided in the Adoption Agreement, a Participant who becomes disabled while performing qualified military service and cannot therefore return to employment as a Covered Employee shall nevertheless be treated as having returned to covered employment immediately prior to his disability date and shall be entitled to have additional Nonelective Contributions, Qualified Nonelective Contributions, and Safe Harbor Nonelective Contributions made to his Account. The amount of any Matching Contributions to be made on behalf of the disabled Participant shall be determined as provided in the Adoption Agreement.

If provided in the Adoption Agreement, such a disabled Participant shall also be entitled to make 401(k) and/or After-Tax Contributions for his period of military leave up to the date he became disabled in an

amount up to the maximum amount he would have been permitted to contribute under Code Section 414(u)(8)(c) if he had actually returned to employment immediately prior to his disability date. The Administrator shall designate the period in which the disabled Participant must make such contributions hereunder.

(c) If provided in the Adoption Agreement, a Participant who becomes disabled while performing qualified military service shall be credited with Vesting Service for his period of military leave as if he returned to employment immediately prior to the date he became disabled and then terminated employment on his disability date.

(d) The Administrator shall determine whether a Participant is disabled on the basis of medical evidence satisfactory to it. All Employees of the Employers and any Related Employers who become disabled while performing qualified military service must receive plan contributions and service credit on reasonably equivalent terms.

(e) Notwithstanding any provision of the Plan to the contrary, if a Participant who is absent from employment as a Covered Employee because of military service dies after December 31, 2006, while performing qualified military service (as defined in Code Section 414(u)), the Participant shall be treated as having returned to employment as a Covered Employee on the day immediately preceding his death for purposes of determining the Participant's vested interest in his Account (e.g., his Vesting Service) and his Beneficiary's eligibility for death benefits under the Plan.

104

21.17 Delivery of Cash Amounts

To the extent the Plan requires Employers to deliver cash amounts to the Trustee, such delivery may be made through any means acceptable to the Trustee, including wire transfer.

21.18 Written Communications

Any communication among the Employers, the Plan Sponsor, the Administrator, and the Trustee that is stipulated under the Plan to be made in writing may be made in any medium that is acceptable to the receiving party and permitted under applicable law.

21.19 Trust to Trust Transfer

Any Employee, including an Employee who has not yet satisfied any age and/or service requirements to become an Eligible Employee under the Plan, may, with the approval of the Administrator, have Transfer Contributions made to the Plan on his behalf by causing assets to be directly transferred by the trustee of another qualified retirement plan to the Trustee of the Plan.

Amounts contributed to the Plan through a direct rollover shall not constitute Transfer Contributions.

Transfer Contributions made on behalf of an Employee shall be deposited in the Trust and credited to a Transfer Contributions Sub-Account established in the Employee's name. Such Sub-Account shall share in the allocation of earnings, losses, and expenses of the Trust Fund(s) in which it is invested, but shall not share in allocations of Employer Contributions.

In the event a Transfer Contribution is made on behalf of an Employee who has not yet satisfied the requirements to become an Eligible Employee under the Plan, such Transfer Contributions Sub-Account shall represent the Employee's sole interest in the Plan until he becomes an Eligible Employee.

21.20 Transferred Funds

If funds from another qualified plan are transferred or merged into the Plan, such funds shall be held and administered in accordance with any restrictions applicable to them under such other plan to the extent required by law and shall be accounted for separately to the extent necessary to accomplish the foregoing.

21.21 Plan Correction Procedures

The Plan Sponsor shall take such action as it deems necessary to correct any Plan failure, including, but not limited to, operational failures, documentation failures (such as a failure to timely amend), failures affecting Plan qualification, etc. Subject to the requirements of the Employee Plans Compliance Resolution System, as set forth in Revenue Procedure 2013-12, or any superseding guidance ("EPCRS"), the Plan Sponsor may adopt any correction method that it deems appropriate under the circumstances. In addition to any correction method specified in the Plan, the Plan Sponsor may, where appropriate, make correction in accordance with EPCRS, including the making of a Qualified Nonelective Contribution permitted under EPCRS, but not otherwise provided under the Plan.

In the event of a fiduciary breach or a prohibited transaction, correction shall be made in accordance with the requirements of ERISA and the Code.

105

ARTICLE XXII
TOP-HEAVY PROVISIONS

22.1 Special Definitions

For purposes of this Article, the following terms shall have the following meanings:

(a) The "compensation" of an Employee means his "415 compensation", as defined in the Adoption Agreement.

(b) The "determination date" with respect to any Plan Year means the last day of the preceding Plan Year, except that the "determination date" with respect to the first Plan Year of the Plan, shall mean the last day of such Plan Year.

(c) The "distribution period" means (i) for any distribution made to an employee on account of severance from employment, death, disability, or termination of a plan which would have been part of the "required aggregation group" had it not been terminated, the 1-year period ending on the "determination date" and (ii) for any other distribution, the 5-year period ending on the "determination date".

(d) A "key employee" means any Employee or former Employee (including any deceased Employee) who at any time during the Plan Year that includes the "determination date" was an officer of an Employer or a Related Employer having annual "compensation" greater than the dollar amount specified in Code Section 416(i)(1)(A)(i) adjusted under Code Section 416(i)(1) for Plan Years beginning after December 31, 2002 (e.g. $165,000 for Plan Years beginning in 2012), a 5% owner of an Employer or a Related Employer, or a 1% owner of an Employer or a Related Employer having annual "compensation" of more than $150,000. The determination of who is a "key employee" will be made in accordance with Code Section 416(i)(1) and the applicable regulations and other guidance of general applicability issued thereunder.

(e) A "non-key employee" means any Employee who is not a "key employee".

(f) A "permissive aggregation group" means those plans included in each Employer's "required aggregation group" together with any other plan or plans of the Employer, so long as the entire group of plans would continue to meet the requirements of Code Sections 401(a)(4) and 410.

(g) A "required aggregation group" means the group of tax-qualified plans maintained by an Employer or a Related Employer consisting of each plan in which a "key employee" participates and each other plan that enables a plan in which a "key employee" participates to meet the requirements of Code Section 401(a)(4) or Code Section 410, including any plan that terminated within the 5-year period ending on the relevant "determination date".

(h) A "top-heavy group" with respect to a particular Plan Year means a "required" or "permissive aggregation group" if the sum, as of the "determination date", of the present value of the cumulative accrued benefits for "key employees" under all defined benefit plans included in such group and the aggregate of the account balances of "key employees" under all defined contribution plans included in such group exceeds 60% of a similar sum determined for all employees covered by the plans included in such group.

(i) A "top-heavy plan" with respect to a particular Plan Year means (i), in the case of a defined contribution plan (including any simplified employee pension plan), a plan for which, as of the "determination date", the aggregate of the accounts (within the meaning of Code Section 416(g) and the regulations and rulings thereunder) of "key employees" exceeds 60% of the aggregate of the accounts of all participants under the plan, with the accounts valued as of the relevant "valuation date" and increased for any distribution of an account balance made during the "distribution period", (ii), in the case of a defined benefit plan, a plan for which, as of the "determination date", the present value of the cumulative accrued benefits payable under the plan (within the meaning of Code Section 416(g) and the regulations and rulings thereunder) to "key employees" exceeds 60% of the present value of the cumulative accrued benefits under the plan for all employees, with the present value of accrued benefits for employees (other than "key employees") to be determined under the accrual method uniformly used under all plans maintained by an Employer or, if no such method exists, under the slowest accrual method permitted under the fractional accrual rate of Code Section 411(b)(1)(C) and including the present value of any part of any accrued benefits distributed during the "distribution period", and (iii) any plan (including any simplified employee pension plan) included in a "required aggregation group" that is a "top-heavy group". For purposes of this paragraph, the accounts and accrued benefits of a Participant shall be disregarded if the Participant either (A) is not a "key employee" for the current Plan Year, but was a "key employee" in a prior Plan Year or (B) has not performed services for an Employer or a Related Employer during the 1-year period ending on the "determination date". For purposes of this paragraph, the present value of cumulative accrued benefits under a defined benefit plan for purposes of top-heavy determinations shall be calculated using the actuarial assumptions otherwise employed under such plan, except that the same actuarial assumptions shall be used for all plans within a "required" or "permissive aggregation group". A Participant's interest in the Plan attributable to any Rollover Contributions, except Rollover Contributions made from a plan maintained by an Employer or a Related Employer, shall not be considered in determining whether the Plan is top-heavy. Notwithstanding the foregoing, if a plan is included in a "required" or "permissive aggregation group" that is not a "top-heavy group", such plan shall not be a "top-heavy plan".

106

Notwithstanding the foregoing, a plan that consists solely of a cash or deferred arrangement that satisfies the non-discrimination requirements under Code Section 401(k) by application of Code Section 401(k)(12) or 401(k)(13) and, if matching contributions are provided under such plan, satisfies the non-discrimination requirements under Code Section 401(m) by application of Code Section 401(m)(11) or 401(m)(12) is not a "top-heavy plan".

(j) The "valuation date" with respect to any "determination date" means the most recent Valuation Date occurring within the 12-month period ending on the "determination date".

22.2 Applicability

Notwithstanding any other provision of the Plan to the contrary, the provisions of this Article shall be applicable during any Plan Year in which the Plan is determined to be a "top-heavy plan" as hereinafter defined. If the Plan is determined to be a "top-heavy plan" and upon a subsequent "determination date" is determined no longer to be a "top-heavy plan", the accelerated vesting provisions in Section 22.4 shall continue to apply for all subsequent Plan Years.

22.3 Minimum Employer Contribution

Except as otherwise specifically provided in this Section or in the Adoption Agreement, if the Plan is determined to be a "top-heavy plan", the Employer shall make an Employer Contribution to the Plan on behalf of each "non-key employee", and, if provided in the Adoption Agreement, each "key employee", who is an Eligible Employee and who is employed by an Employer or a Related Employer on the last day of such top-heavy Plan Year equal to the lesser of (i) 3% of his "compensation" or (ii), in the case where neither the Employers nor any Related Employer maintains a defined benefit plan which uses the Plan to meet the requirements of Code Section 401(a)(4) or 410, the largest percentage of "compensation" that is allocated as an Employer Contribution, forfeiture, and/or 401(k) Contribution to the Account of any "key employee". Unless the Plan Sponsor has specified in the Adoption Agreement that the minimum benefit requirements will be met under the top-heavy defined benefit plan, in lieu of the minimum allocation described in the preceding sentence, the Employer Contributions allocated to the Account of each "non-key employee", and, if provided in the Adoption Agreement, each "key employee", who is employed by an Employer or a Related Employer on the last day of a top-heavy Plan Year and who is also covered under a top-heavy defined benefit plan maintained by an Employer or a Related Employer will be no less than 5% of his "compensation". Any minimum allocation to a "non-key employee", and, if provided in the Adoption Agreement, each "key employee", required by this Section shall be made without regard to any social security contribution made on behalf of the non-key employee, his number of hours of service, his level of "compensation", or whether he declined to make elective or mandatory contributions.

107

If provided in the Adoption Agreement, in lieu of the minimum top-heavy allocation otherwise required under this Section, each "non-key employee" who is an Eligible Employee and is employed by an Employer or a Related Employer on the last day of a top-heavy Plan Year and who is also covered under a top-heavy defined benefit plan or another top-heavy defined contribution plan or plans maintained by an Employer or a Related Employer will receive the top-heavy benefits provided under the defined benefit plan or the minimum top-heavy allocation provided under such other defined contribution plan or plans, as applicable.

Matching contributions shall be taken into account for purposes of satisfying the minimum contribution requirements of this Section. The preceding sentence shall apply with respect to Matching Contributions under the Plan or, if the Plan minimum contribution requirement shall be met in another plan, matching contributions under such other plan. Matching contributions that are used to satisfy the minimum contribution requirements shall be treated as "matching contributions" for purposes of the ACP test described in Section 7.7 and other requirements of Code Section 401(m).

Employer Contributions allocated to a Participant's Account in accordance with this Section shall be considered annual additions under Article VII for the limitation year for which they are made and shall be accounted for separately. Employer Contributions allocated to a Participant's Account shall be allocated upon receipt among the Investment Funds in accordance with the Participant's currently effective investment election.

22.4 Accelerated Vesting

If the Plan is determined to be a top-heavy plan and a top-heavy vesting schedule applies to prior employer contributions as specified in the Adoption Agreement, a Participant's vested interest in the Sub-Account attributable to such prior employer contributions shall be determined no less rapidly than in accordance with the vesting schedule specified in the Adoption Agreement.

22.5 Exclusion of Collectively-Bargained Employees

Notwithstanding any other provision of this Article, Employees who are covered by an agreement between employee representatives and one or more employers shall not be entitled to a minimum allocation or accelerated vesting under this Article, unless otherwise provided in the collective bargaining agreement.

*       *        *

The Adoption Agreement must contain the signature of an authorized representative of the Employer evidencing the Employer's agreement to be bound by the terms of the Basic Plan Document and the Adoption Agreement.

108

EX-10.36

Exhibit 10.36

TERMINATION AMENDMENT TO THE

LITTELFUSE, INC. RETIREMENT PLAN

THIS TERMINATION AMENDMENT to the Littelfuse, Inc. Retirement Plan, as amended and restated January 1, 2013, (the “Plan”) is made and entered into by Littelfuse, Inc. (the “Company”), effective as set forth below.

W I T N E S S E T H:

WHEREAS, the Company sponsors the frozen Plan under an amended and restated plan document, effective as of January 1, 2013;

WHEREAS, the Board of Directors (the “Board”) has determined it is in the best interests of the Company to terminate the Plan and has authorized the Company’s Senior Vice President, Chief Legal and Human Resources Officer (“Authorized Officer”) to specify such termination date (the “Termination Date”) and to take all actions he determines are necessary or advisable to terminate and wind-down the plan and obtain IRS and PBGC approval thereof, including adopting any amendments; and

WHEREAS, such Authorized Officer has specified July 31, 2014 as the Termination Date and wishes to amend the Plan to ensure compliance with guidance and applicable legal requirements issued to-date and to make certain design changes to the Plan to facilitate the termination process.

NOW, THEREFORE, BE IT RESOLVED, that the Company hereby amends the Plan as follows:

Plan Termination

1.     Effective July 31, 2014:

(a)     the Plan is terminated; and

(b)     the accrued benefits of all active Participants in the Plan are 100% vested.

Ancillary Benefit Changes

2.     Effective July 31, 2014:

(a)     Section 2.4(A)(3) of the Plan is amended in its entirety to read as follows:

“In the event that the terminated Participant dies prior to the date as of which his retirement income payments are to commence as described above without his having received, prior to his death, the actuarially equivalent value of the benefit provided on his behalf under Section 2.4(A)(1) above, his Beneficiary will receive the monthly retirement income, beginning on the first day of the month coincident with or next following the date of the terminated Participant’s death, which can be provided on an actuarially equivalent basis by the single-sum value of the benefit determined in accordance with Section 2.4(A)(1) above to which the terminated Participant was entitled as of the date of termination of his service, accumulated with interest from such date to the date of his death. The monthly retirement income payments under this Paragraph shall, subject to the provisions of Paragraph (4) hereof, be payable for the life of the Beneficiary designated or selected under Section 5.2 to receive such benefit. In the case of a Participant who terminated employment prior to January 1, 2008, the death benefit described herein shall be paid only if the Participant did not waive the death benefit in accordance with the provisions of Section 2.4(A) as in effect prior to the amendment and restatement of the Plan that became effective January 1, 2008, and the adjustment to the amount of the benefit of a Participant who did not waive the death benefit described therein shall continue to apply.”

(b)     Section 2.4(A)(4) of the Plan is amended in its entirety to read as follows:

“The provisions of Section 4 hereof are applicable to the benefits provided under this Section 2.4(A).”

(c)     Section 2.4(B)(2) of the Plan is amended in its entirety to read as follows:

“Subject to the provisions of Section 2.4(B)(4) below, the monthly retirement income payments under this Section 2.4(B) shall be payable in equal amounts for the life of the Beneficiary designated or selected under Section 5.2 to receive such benefit.”

(d)     Section 2.4(B)(3) shall be amended to add the following sentence to the end thereof:

“Notwithstanding the foregoing, the provisions of this Section 2.4(A)(3) shall not be applicable with respect to benefits payable on behalf of any Participant whose death occurs on or after July 31, 2014.”

(e)     6.2(C) of the Fifth Supplement, Merger of Cole Hersee Company Office Pension Plan, is amended in its entirety to read as follows:

“(C)     a joint and survivor annuity with a monthly benefit payable to and during the lifetime of the Cole Hersee Office Plan Member with the provision that after his death, a monthly benefit at the rate of 50%, 75% or 100% of his monthly benefit shall then be paid to and during the lifetime of his designated Beneficiary; or”

Increased Cash-Out Threshold

3.     Effective July 31, 2014:

(a)     Section 3.2(A) of the Plan is hereby amended in its entirety to read as follows:

“Involuntary Cash-Out. If the single-sum value of the benefit payable to or on behalf of the Participant does not exceed $5,000, the actuarial equivalent of such benefit shall be paid in a lump sum. If the single-sum value of the Participant’s benefit is greater than $1,000 but equal to or less than $5,000 and if the Participant does not elect to either have such distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover transaction in accordance with Section 4.1(I), Direct Rollover Options for Eligible Rollover Distributions or to directly receive the distribution, then an immediate lump sum payment shall automatically be made as a direct rollover to an individual retirement account on behalf of the Participant (or his Beneficiary, in the case of the Participant’s death) without the Participant’s consent (or the Beneficiary’s consent, as applicable).”

(b)     6.1(C) of the Fifth Supplement, Merger of Cole Hersee Company Office Pension Plan, is amended in its entirety to read as follows:

“(C)     Small Accrued Benefit. Notwithstanding subsections (A) and (B) above, if the benefit payable to a Cole Hersee Office Plan Member (including other amounts due, if any, under the Sixth Supplement) does not exceed $5,000, the Cole Hersee Office Plan Member’s vested Accrued Benefit, including other amounts due under the Sixth Supplement, shall be paid to him in a lump sum distribution as soon as practicable following the date he retires, dies or otherwise terminates.

2 

If the Actuarial Equivalent lump sum value of a Cole Hersee Office Plan Member’s vested Accrued Benefit is greater than $1,000 but equal to or less than $5,000 and if the Participant does not elect, in accordance with this Section 6, to either have such distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover transaction or to directly receive the distribution, then an immediate lump sum payment of such Accrued Benefit shall automatically be made as a direct rollover to an individual retirement account on behalf of the Participant (or his Beneficiary, in the case of the Participant’s death) without the Participant’s consent (or the Beneficiary’s consent, as applicable).

If (i) the Actuarial Equivalent lump-sum value is greater than $5,000, but not in excess of seven thousand five hundred dollars ($7,500) then the Cole Hersee Office Plan Member may elect, with the consent of his spouse in accordance with the requirements described in Section 6.1A, to have such benefit made, in the form of a single-lump sum payment or, to the extent required under Section 417 of the Code, the actuarial equivalent (determined using the interest and mortality assumptions that are being used as of the date of termination of the Participant’s service to determine actuarially equivalent non-decreasing annuities) of such benefit payable in the form of a Qualified Joint and 50% Survivor Annuity if he is married or in the form of a monthly retirement benefit payable for life if he is not married, to be paid or to commence, as applicable, as soon as administratively possible following the date the Cole Hersee Office Plan Member retires, dies or otherwise terminates.”

(c)     The second sentence of the first paragraph of Section 6.6 of the Fifth Supplement, Merger of Cole Hersee Company Office Pension Plan, is amended in its entirety to read as follows:

“However, if the Actuarial Equivalent lump-sum value of the Cole Hersee Office Plan Member’s vested Accrued Benefit exceeds $5,000, distribution of his benefit shall not commence prior to such Cole Hersee Office Plan Member’s Normal Retirement Date unless he otherwise elects in writing.”

(d)     The second paragraph of 7.1(A) of the Fifth Supplement, Merger of Cole Hersee Company Office Pension Plan, is amended in its entirety to read as follows:

“Payment of the Actuarial Equivalent of the death benefit shall normally be made over the life of the Beneficiary, beginning as soon as reasonably practicable following the Cole Hersee Office Plan Member’s death; provided, however, that if the Actuarial Equivalent lump-sum value of the Cole Hersee Office Plan Member’s Accrued Benefit does not exceed seven thousand five hundred dollars ($7,500), the Beneficiary may elect to have such death benefits paid in the form of a lump-sum payment; provided, further, that if the Actuarial Equivalent lump-sum value of the Cole Hersee Office Plan Member’s Accrued Benefit does not exceed five thousand dollars ($5,000), such death benefit shall automatically be distributed in the form of a lump-sum payment.”

(e)     6.1(C) of the Sixth Supplement, Merger of Cole Hersee Company Union Pension Plan, is amended in its entirety to read as follows:

“(C)     Small Accrued Benefit. Notwithstanding subsections (A) and (B) above, if the benefit payable to a Cole Hersee Union Plan Member (including other amounts due, if any, under the Fifth Supplement) does not exceed $5,000, the Cole Hersee Union Plan Member’s vested Account Benefit, including other amounts due under the Sixth Supplement, shall be paid to him in a lump sum distribution as soon as practicable following the date he retires, dies or otherwise terminates.

 3

If the Actuarial Equivalent lump sum value of a Cole Hersee Union Plan Member’s vested Accrued Benefit is greater than $1,000 but equal to or less than $5,000, and if the Participant does not elect, in accordance with this Section 6, to either have such distribution paid directly to an eligible retirement plan specified by the Participant in a direct rollover transaction or to directly receive the distribution, then an immediate lump sum payment of such Accrued Benefit shall automatically be made as a direct rollover to an individual retirement account on behalf of the Participant (or his Beneficiary, in the case of the Participant’s death) without the Participant’s consent (or the Beneficiary’s consent, as applicable).”

(f)     The second sentence of the first paragraph of 6.6 of the Sixth Supplement, Merger of Cole Hersee Company Union Pension Plan, is amended in its entirety to read as follows:

“However, if the Actuarial Equivalent lump-sum value of the Cole Hersee Union Plan Member’s vested Accrued Benefit exceeds $5,000, distribution of his benefit shall not commence prior to such Cole Hersee Union Plan Member’s Normal Retirement Date unless he otherwise elects in writing.”

(g)     The last paragraph of 7.1 of the Sixth Supplement, Merger of Cole Hersee Company Union Pension Plan, of the Plan is amended in its entirety to read as follows:

“Notwithstanding anything contained herein to the contrary, if the Actuarial Equivalent lump-sum value of the Qualified Preretirement Survivor Annuity does not exceed $5,000, then in lieu of receiving a monthly benefit, the surviving spouse shall receive a lump sum payment as soon as administratively possible following the Cole Hersee Union Plan Member’s death.”

Addition of Lump Sum Window

4.     Effective July 31, 2014:

(a)     The Plan is hereby amended by adding the following Section 3.7 to the Plan to read as follows:

“Section 3.7. OPTIONAL LUMP SUM PAYMENT DURING PLAN TERMINATION WINDOW PERIOD. A Participant or Beneficiary who has not begun receiving payment of his Plan benefit by the date on which the Internal Revenue Service issues a favorable determination letter with respect to the termination of the Plan (“FDL”), shall be permitted during the six (6) week period immediately following the date designated by the Senior Vice President, Chief Legal and Human Resources Officer of the Company, which date shall in no event be prior to the Company’s receipt of the FDL, (“Lump Sum Payment Window”) to elect to receive the actuarial equivalent of the Vested Percentage of the retirement income payable to him pursuant to the Plan in the form of a single lump sum payment with an Annuity Starting Date commencing 31 days after the last day of the Lump Sum Payment Window (“Lump Sum Annuity Starting Date”). Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent lump sum distributions as of the Lump Sum Annuity Starting Date, which is the date as of which the Participant's benefit is payable if he elects the lump sum option. The lump sum option shall be available to a Participant regardless of whether he has reached a date on or after which he could receive or begin to receive payment of the Vested Percentage of his Plan benefit (such as his Normal or Early Retirement Date).

To the extent required under Section 417 of the Code, a Participant who is not otherwise eligible to begin receiving a benefit under the Plan as of the Lump Sum Annuity Starting Date, but is eligible to elect the lump sum option described above, may instead elect to receive the actuarial equivalent of such benefit payable, if he is married, in the form of a Qualified Joint and 50% Survivor Annuity or a joint and 75% survivor annuity with the Participant's spouse as his joint pensioner, or if he is not married, in the form of an annuity for life. Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent non-decreasing annuities as of the Lump Sum Annuity Starting Date.

 4

An election by a Participant under this Section 3.7 must be made in writing with the consent of his spouse if he is married and must be received by the Company no later than the last day of the Lump Sum Payment Window. The options described in this Section 3.7 shall be subject to the provisions of Section 4.1 and shall be in addition to any other distribution option(s) to which the Participant may be entitled under Section 3.1 or 3.2, as applicable.”

(b)     The Fifth Supplement, Merger of Cole Hersee Company Office Pension Plan is hereby amended by adding the following Section 6.13 to read as follows:

“Section 6.13 Optional Lump Sum Payment During Plan Termination Window Period. A Cole Hersee Office Plan Member or Beneficiary who has not begun receiving payment of his vested Accrued Benefit by the date on which the Internal Revenue Service issues a favorable determination letter with respect to the termination of the Plan (“FDL”), shall be permitted during the six (6) week period immediately following the date designated by the Senior Vice President, Chief Legal and Human Resources Officer of the Company, which date shall in no event be prior to the Company’s receipt of the FDL, (“Lump Sum Payment Window”) to elect to receive the Actuarial Equivalent of his vested Accrued Benefit in the form of a single lump sum payment with an annuity starting date commencing 31 days after the last day of the Lump Sum Payment Window (“Lump Sum Annuity Starting Date”). Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent lump sum distributions as of the Lump Sum Annuity Starting Date, which is the date as of which the Cole Hersee Office Plan Member’s benefit is payable if he elects the lump sum option. The lump sum option shall be available to a Cole Hersee Office Plan Member regardless of whether he has reached a date on or after which he could receive or begin to receive payment of his vested Accrued Benefit (such as his Normal or Early Retirement Date).

To the extent required under Section 417 of the Code, a Cole Hersee Office Plan Member who is not otherwise eligible to begin receiving a benefit under the Plan as of the Lump Sum Annuity Starting Date, but is eligible to elect the lump sum option described above, may instead elect to receive the actuarial equivalent of such benefit payable, if he is married, in the form of a Qualified Joint and 50% Survivor Annuity or a joint and 75% survivor annuity with his spouse as his joint pensioner, or if he is not married, in the form of an annuity for life. Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent non-decreasing annuities as of the Lump Sum Annuity Starting Date.

An election by a Cole Hersee Office Plan Member under this Section 6.13 must be made in writing with the consent of his spouse if he is married and must be received by the Company no later than the last day of the Lump Sum Payment Window. The options described in this Section 6.13 shall be subject to the provisions of Section 6.1(A) and shall be in addition to any other distribution option(s) to which the Cole Hersee Office Plan Member may be entitled under Section 6.1(C) or 6.2, as applicable.”

5 

(c)     The Sixth Supplement, Merger of Cole Hersee Company Union Pension Plan is hereby amended by adding the following Section 6.11 to read as follows:

“Section 6.11 Optional Lump Sum Payment During Plan Termination Window Period. A Cole Hersee Union Plan Member or Beneficiary who has not begun receiving payment of his vested Accrued Benefit by the date on which the Internal Revenue Service issues a favorable determination letter with respect to the termination of the Plan (“FDL”), shall be permitted during the six (6) week period immediately following the date designated by the Senior Vice President, Chief Legal and Human Resources Officer of the Company, which date shall in no event be prior to the Company’s receipt of the FDL, (“Lump Sum Payment Window”) to elect to receive the Actuarial Equivalent of his vested Accrued Benefit in the form of a single lump sum payment with an annuity starting date commencing 31 days after the last day of the Lump Sum Payment Window (“Lump Sum Annuity Starting Date”). Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent lump sum distributions as of the Lump Sum Annuity Starting Date, which is the date as of which the Cole Hersee Union Plan Member’s benefit is payable if he elects the lump sum option. The lump sum option shall be available to a Cole Hersee Union Plan Member regardless of whether he has reached a date on or after which he could receive or begin to receive payment of his vested Accrued Benefit (such as his Normal or Early Retirement Date).

To the extent required under Section 417 of the Code, a Cole Hersee Union Plan Member who is not otherwise eligible to begin receiving a benefit under the Plan as of the Lump Sum Annuity Starting Date, but is eligible to elect the lump sum option described above, may instead elect to receive the actuarial equivalent of such benefit payable, if he is married, in the form of a Qualified Joint and 50% Survivor Annuity or a joint and 75% survivor annuity with his spouse as his joint pensioner, or if he is not married, in the form of an annuity for life. Actuarial equivalence shall be determined for this purpose using the interest and mortality assumptions for determining actuarially equivalent non-decreasing annuities as of the Lump Sum Annuity Starting Date.

An election by a Cole Hersee Union Plan Member under this Section 6.11 must be made in writing with the consent of his spouse if he is married and must be received by the Company no later than the last day of the Lump Sum Payment Window. The options described in this Section 6.11 shall be subject to the provisions of Section 6.1(A) and shall be in addition to any other distribution option(s) to which the Cole Hersee Union Plan Member may be entitled under Section 6.1.”

DOMA Amendment

5.     Effective June 26, 2013, the Plan shall be operated for all federal tax and qualification purposes in a manner consistent the outcome of the United States Supreme Court’s decision in United States v. Windsor, 570 U.S. ___, 133 S. Ct. 2675 (2013) striking down Section 3 of the Federal Defense of Marriage Act as unconstitutional and in compliance with the subsequent holdings by the Internal Revenue Service interpreting such ruling in Rev. Rul. 2013-17, 2013-38 I.R.B. 201 (Sept. 16, 2013) and Internal Revenue Service Notice 2014-19, 2014-10 I.R.B. (March 3, 2014). In accordance with such guidance, effective as of June 26, 2013, a Participant’s spouse under the Plan shall include a same-sex spouse legally married in any state or foreign jurisdiction that recognizes the marriage, even if the couple resides in a state that does not permit or recognize same-sex marriage.

 6

Substitution of IRS Model Language

6.     Effective July 31, 2014, the Plan is hereby amended by deleting the existing “Fourth Supplement, Special Funding-Based Benefit” in its entirety and by substituting in its place the “Fourth Supplement, Special Funding-Based Benefit Restrictions” attached to this First Amendment (and fully incorporated by this reference).

7.     Except as specifically set forth above, the terms of the Plan shall remain in full force and effect.

IN WITNESS WHEREOF, the Authorized Officer has executed this Termination Amendment on the ____ day of June, 2014 to be effective as of the dates set forth herein.

LITTELFUSE, INC.

            By:     /s/ Ryan K. Stafford
                  Ryan K. Stafford,

                                      Senior Vice President, Chief Legal and

                Human Resources Officer

 7

Fourth Supplement

Special Funding-Based Benefit Restrictions

Unless otherwise provided in this Fourth Supplement, capitalized terms have the meaning ascribed to such terms in the Plan and all section references are references to sections designated in this Fourth Supplement.

Section 1.     Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Percentage Is Less Than 80 Percent, But Not Less Than 60 Percent. Notwithstanding any other provisions of the Plan, if the Plan’s adjusted funding target attainment percentage for a Plan Year is less than 80 percent (or would be less than 80 percent to the extent described in Section 1(b) below) but is not less than 60 percent, then the limitations set forth in this Section 1 apply.

(a)     50 Percent Limitation on Single Sum Payments, Other Accelerated Forms of Distribution, and Other Prohibited Payments. A Participant or Beneficiary is not permitted to elect, and the Plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an Annuity Starting Date on or after the applicable Section 436 measurement date, and the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, unless the present value of the portion of the benefit that is being paid in a prohibited payment does not exceed the lesser of:

(1)     50 percent of the present value of the benefit payable in the optional form of benefit that includes the prohibited payment; or

(2)     100 percent of the PBGC maximum benefit guarantee amount (as defined in Section 1.436-1(d)(3)(iii)(C) of the Treasury Regulations).

The limitation set forth in this Section 1(a) does not apply to any payment of a benefit which under Section 411(a)(11) of the Code may be immediately distributed without the consent of the Participant. If an optional form of benefit that is otherwise available under the terms of the Plan is not available to a Participant or Beneficiary as of the Annuity Starting Date because of the application of the requirements of this Section 1(a), the Participant or Beneficiary is permitted to elect to bifurcate the benefit into unrestricted and restricted portions (as described in Section 1.436-1(d)(3)(iii)(D) of the Treasury Regulations). The Participant or Beneficiary may also elect any other optional form of benefit otherwise available under the Plan at that Annuity Starting Date that would satisfy the 50 percent/PBGC maximum benefit guarantee amount limitation described in this Section 1(a), or may elect to defer the benefit in accordance with any general right to defer commencement of benefits under the Plan. During a period when Section 1(a) applies to the Plan, Participants and beneficiaries are permitted to elect payment in any optional form of benefit otherwise available under the Plan that provides for the current payment of the unrestricted portion of the benefit (as described in Section 1.436-1(d)(3)(iii)(D) of the Treasury Regulations), with a delayed commencement for the restricted portion of the benefit (subject to other applicable qualification requirements, such as Sections 411(a)(11) and 401(a)(9) of the Code).

(b)     Plan Amendments Increasing Liability for Benefits. No amendment to the Plan that has the effect of increasing liabilities of the Plan by reason of increases in benefits, establishment of new benefits, changing the rate of benefit accrual, or changing the rate at which benefits become nonforfeitable shall take effect in a Plan Year if the adjusted funding target attainment percentage for the Plan Year is:

(1)     less than 80 percent; or

(2)     80 percent or more, but would be less than 80 percent if the benefits attributable to the amendment were taken into account in determining the adjusted funding target attainment percentage.

The limitation set forth in this Section 1(b) does not apply to any amendment to the Plan that provides a benefit increase under a Plan formula that is not based on compensation, provided that the rate of such increase does not exceed the contemporaneous rate of increase in the average wages of Participants covered by the amendment.

Section 2.     Limitations Applicable If the Plan’s Adjusted Funding Target Attainment Percentage Is Less Than 60 Percent. Notwithstanding any other provisions of the Plan, if the Plan’s adjusted funding target attainment percentage for a Plan Year is less than 60 percent (or would be less than 60 percent to the extent described in Section 2(b) below), then the limitations in this Section 2 apply.

(a)     Single Sums, Other Accelerated Forms of Distribution, and Other Prohibited Payments Not Permitted. A Participant or Beneficiary is not permitted to elect, and the Plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an Annuity Starting Date on or after the applicable Section 436 measurement date, and the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment. The limitation set forth in this Section 2(a) does not apply to any payment of a benefit which under Section 1(a)(11) of the Code may be immediately distributed without the consent of the Participant.

(b)     Shutdown Benefits and Other Unpredictable Contingent Event Benefits Not Permitted to Be Paid. An unpredictable contingent event benefit with respect to an unpredictable contingent event occurring during a Plan Year shall not be paid if the adjusted funding target attainment percentage for the Plan Year is:

(1)     less than 60 percent; or

(2)     60 percent or more, but would be less than 60 percent if the adjusted funding target attainment percentage were redetermined applying an actuarial assumption that the likelihood of occurrence of the unpredictable contingent event during the Plan Year is 100 percent.

(c)     Benefit Accruals Frozen. Benefit accruals under the Plan shall cease as of the applicable Section 436 measurement date. In addition, if the Plan is required to cease benefit accruals under this Section 2(c), then the Plan is not permitted to be amended in a manner that would increase the liabilities of the Plan by reason of an increase in benefits or establishment of new benefits.

Section 3.     Limitations Applicable If the Plan Sponsor Is In Bankruptcy. Notwithstanding any other provisions of the Plan, a Participant or Beneficiary is not permitted to elect, and the Plan shall not pay, a single sum payment or other optional form of benefit that includes a prohibited payment with an Annuity Starting Date that occurs during any period in which the Plan Sponsor is a debtor in a case under Title 11, United States Code, or similar Federal or State law, except for payments made within a Plan Year with an Annuity Starting Date that occurs on or after the date on which the Plan’s enrolled actuary certifies that the Plan’s adjusted funding target attainment percentage for that Plan Year is not less than 100 percent. In addition, during such period in which the Plan Sponsor is a debtor, the Plan shall not make any payment for the purchase of an irrevocable commitment from an insurer to pay benefits or any other payment or transfer that is a prohibited payment, except for payments that occur on a date within a Plan Year that is on or after the date on which the Plan’s enrolled actuary certifies that the Plan’s adjusted funding target attainment percentage for that Plan Year is not less than 100 percent. The limitation set forth in this Section 3 does not apply to any payment of a benefit which under Section 411(a)(11) of the Code may be immediately distributed without the consent of the Participant.

Section 4.     Provisions Applicable After Limitations Cease to Apply.

(a)     Resumption of Prohibited Payments. If a limitation on prohibited payments under Section 1(a), Section 2(a), or Section 3 applied to the Plan as of a Section 436 measurement date, but that limit no longer applies to the Plan as of a later Section 436 measurement date, then that limitation does not apply to benefits with Annuity Starting Dates that are on or after that later Section 436 measurement date. In addition, after the Section 436 measurement date on which the limitation on prohibited payments under Section 1(a) ceases to apply to the Plan, any Participant or Beneficiary who had an Annuity Starting Date within the period during which that limitation applied to the Plan is permitted to make a new election (within 90 days after the Section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new Annuity Starting Date to be changed to a single sum payment for the remaining value of the Participant or Beneficiary’s benefit under the Plan, subject to the other rules in this section of the Plan and applicable requirements of Section 401(a) of the Code, including spousal consent. In addition, after the Section 436 measurement date on which the limitation on prohibited payments under Section 2(a) ceases to apply to the Plan, any Participant or Beneficiary who had an Annuity Starting Date within the period during which that limitation applied to the Plan is permitted to make a new election (within 90 days after the section 436 measurement date on which the limit ceases to apply or, if later, 30 days after receiving notice of the right to make such election) under which the form of benefit previously elected is modified at a new Annuity Starting Date to be changed to a single sum payment for the remaining value of the Participant’s or Beneficiary’s benefit under the Plan, subject to the other rules in this Section of the Plan (including Section 1(a)) and applicable requirements of Section 401(a) of the Code, including spousal consent.

(b)     Resumption of Benefit Accruals. If a limitation on benefit accruals under Section 2(c) applied to the Plan as of a Section 436 measurement date, but that limitation no longer applies to the Plan as of a later Section 436 measurement date, then benefit accruals shall resume prospectively and that limitation does not apply to benefit accruals that are based on service on or after that later Section 436 measurement date, except as otherwise provided under the Plan. The Plan shall comply with the rules relating to partial years of participation and the prohibition on double proration under Department of Labor regulation 29 CFR Section 2530.204-2(c) and (d). In addition, benefit accruals that were not permitted to accrue because of the application of Section 2(c) shall be restored when that limitation ceases to apply if the continuous period of the limitation was 12 months or less and the Plan’s enrolled actuary certifies that the adjusted funding target attainment percentage for the Plan Year would not be less than 60 percent taking into account any restored benefit accruals for the prior Plan Year.

(c)     Shutdown and Other Unpredictable Contingent Event Benefits. If an unpredictable contingent event benefit with respect to an unpredictable contingent event that occurs during the Plan Year is not permitted to be paid after the occurrence of the event because of the limitation of Section 2(b), but is permitted to be paid later in the same Plan Year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the Plan Year that meets the requirements of Section 1.436-1(g)(5)(ii)(B) of the Treasury Regulations), then that unpredictable contingent event benefit shall be paid, retroactive to the period that benefit would have been payable under the terms of the Plan (determined without regard to Section 2(b)). If the unpredictable contingent event benefit does not become payable during the Plan Year in accordance with the preceding sentence, then the Plan is treated as if it does not provide for that benefit.

(d)     Treatment of Plan Amendments That Do Not Take Effect. If a Plan amendment does not take effect as of the effective date of the amendment because of the limitation of Section 1(b) or Section 2(c), but is permitted to take effect later in the same Plan Year (as a result of additional contributions or pursuant to the enrolled actuary’s certification of the adjusted funding target attainment percentage for the Plan Year that meets the requirements of Section 1.436-1(g)(5)(ii)(C) of the Treasury Regulations), then the Plan amendment must automatically take effect as of the first day of the Plan Year (or, if later, the original effective date of the amendment). If the Plan amendment cannot take effect during the same Plan Year, then it shall be treated as if it were never adopted, unless the Plan amendment provides otherwise.

Section 5.     Notice Requirement. The Plan Administrator shall provide a written notice in accordance with Section 101(j) of ERISA to Participants and beneficiaries within 30 days after certain specified dates if the Plan has become subject to a limitation described in Section 1(a), Section 2, or Section 3.

Section 6.     Methods to Avoid or Terminate Benefit Limitations. Section 436(b)(2), (c)(2), (e)(2), and (f) of the Code and Section 1.436-1(f) of the Treasury Regulations shall govern employer contributions and other methods to avoid or terminate the application of the limitations set forth in Sections 1 through 3 for a Plan Year. In general, the methods the Plan Sponsor may use to avoid or terminate one or more of the benefit limitations under Sections 1 through 3 for a Plan Year shall include employer contributions and elections to increase the amount of plan assets which are taken into account in determining the adjusted funding target attainment percentage, making an employer contribution that is specifically designated as a current year contribution that is made to avoid or terminate application of certain of the benefit limitations, or providing security to the Plan.

Section 7.     Special Rules.

(a) Rules of Operation for Periods Prior to and After Certification of Plan’s Adjusted Funding Target Attainment Percentage.

(1)     In General. Section 436(h) of the Code and Section 1.436-1(h) of the Treasury Regulations set forth a series of presumptions that shall apply (1) before the Plan’s enrolled actuary issues a certification of the Plan’s adjusted funding target attainment percentage for the Plan Year and (2) if the Plan’s enrolled actuary does not issue a certification of the Plan’s adjusted funding target attainment percentage for the Plan Year before the first day of the 10th month of the Plan Year (or if the Plan’s enrolled actuary issues a range certification for the Plan Year pursuant to Section 1.436-1(h)(4)(ii) of the Treasury Regulations but does not issue a certification of the specific adjusted funding target attainment percentage for the Plan by the last day of the Plan Year). For any period during which a presumption under Section 436(h) of the Code and Section 1.436-1(h) of the Treasury Regulations applies to the Plan, the limitations under Sections 1 through 3 shall apply to the Plan as if the adjusted funding target attainment percentage for the Plan Year were the presumed adjusted funding target attainment percentage determined under the rules of Section 436(h) of the Code and Section 1.436-1(h)(1), (2), or (3) of the Treasury Regulations. These presumptions are set forth in Section 7(a)(ii) though (iv).

(2)     Presumption of Continued Underfunding Beginning First Day of Plan Year. If a limitation under Section 1, 2, or 3 applied to the Plan on the last day of the preceding Plan Year, then, commencing on the first day of the current Plan Year and continuing until the Plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the Plan for the current Plan Year, or, if earlier, the date Section 7(a)(iii) or Section 7(a)(iv) applies to the Plan:

(i)     the adjusted funding target attainment percentage of the Plan for the current Plan Year is presumed to be the adjusted funding target attainment percentage in effect on the last day of the preceding Plan Year; and

(ii)     the first day of the current Plan Year is a Section 436 measurement date.

(3)     Presumption of Underfunding Beginning First Day of 4^th Month. If the Plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the Plan Year before the first day of the 4th month of the Plan Year and the Plan’s adjusted funding target attainment percentage for the preceding Plan Year was either at least 60 percent but less than 70 percent or at least 80 percent but less than 90 percent, or is described in Section 1.436-1(h)(2)(ii) of the Treasury Regulations, then, commencing on the first day of the 4^th month of the current Plan Year and continuing until the Plan’s enrolled actuary issues a certification of the adjusted funding target attainment percentage for the Plan for the current Plan Year, or, if earlier, the date Section 7(a)(iv) applies to the Plan:

(i)     the adjusted funding target attainment percentage of the Plan for the current Plan Year is presumed to be the Plan’s adjusted funding target attainment percentage for the preceding Plan Year reduced by 10 percentage points; and

(ii)     the first day of the 4^th month of the current Plan Year is a Section 436 measurement date.

(4)     Presumption of Underfunding On and After First Day of 10^th Month. If the Plan’s enrolled actuary has not issued a certification of the adjusted funding target attainment percentage for the Plan Year before the first day of the 10^th month of the Plan Year (or if the Plan’s enrolled actuary has issued a range certification for the Plan Year pursuant to Section 1.436-1(h)(4)(ii) of the Treasury Regulations but has not issued a certification of the specific adjusted funding target attainment percentage for the Plan by the last day of the Plan Year), then, commencing on the first day of the 10^th month of the current Plan Year and continuing through the end of the Plan Year:

(i)     the adjusted funding target attainment percentage of the Plan for the current Plan Year is presumed to be less than 60 percent; and

(ii)     the first day of the 10^th month of the current Plan Year is a Section 436 measurement date.

(b)     New Plans, Plan Termination, Certain Frozen Plans, and Other Rules.

(1)     First 5 Plan Years. The limitations in Section 1(b), Section 2(b), and Section 2(c) do not apply for the first 5 Plan Years of the Plan, determined under the rules of Section 436(i) of the Code and Section 1.436-1(a)(3)(i) of the Treasury Regulations.

(2)     Plan Termination. The limitations on prohibited payments in Section 1(a), Section 2(a), and Section 3 do not apply to prohibited payments that are made to carry out the termination of the Plan in accordance with applicable law. Any other limitations under this Section of the Plan do not cease to apply as a result of termination of the Plan.

(3)     Exception to Limitations on Prohibited Payments Under Certain Frozen Plans. The limitations on prohibited payments set forth in Sections 1(a), 2(a), and 3 do not apply for a Plan Year if the terms of the Plan, as in effect for the period beginning on September 1, 2005, and continuing through the end of the Plan Year, provide for no benefit accruals with respect to any Participants. This Section 7(b)(iii) shall cease to apply as of the date any benefits accrue under the Plan or the date on which a Plan amendment that increases benefits takes effect.

(4)     Special Rules Relating to Unpredictable Contingent Event Benefits and Plan Amendments Increasing Benefit Liability. During any period in which none of the presumptions under Section 7(a) apply to the Plan and the Plan’s enrolled actuary has not yet issued a certification of the Plan’s adjusted funding target attainment percentage for the Plan Year, the limitations under Section 1(b) and Section 2(b) shall be based on the inclusive presumed adjusted funding target attainment percentage for the Plan, calculated in accordance with the rules of Section 1.436-1(g)(2)(iii) of the Treasury Regulations.

(c)     Special Rules Under PRA 2010.

(1)     Payments Under Social Security Leveling Options. For purposes of determining whether the limitations under Section 1(a) or 2(a) apply to payments under a social security leveling option, within the meaning of Section 436(j)(3)(C)(i) of the Code, the adjusted funding target attainment percentage for a Plan Year shall be determined in accordance with the “Special Rule for Certain Years” under Section 436(j)(3) of the Code and any Treasury Regulations or other published guidance thereunder issued by the Internal Revenue Service.

(2)     Limitation on Benefit Accruals. For purposes of determining whether the accrual limitation under Section 2(c) applies to the Plan, the adjusted funding target attainment percentage for a Plan Year shall be determined in accordance with the “Special Rule for Certain Years” under Section 436(j)(3) of the Code (except as provided under Section 203(b) of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, if applicable).

(d)     Interpretation of Provisions. The limitations imposed by this Section of the Plan shall be interpreted and administered in accordance with Section 436 of the Code and Section 1.436-1 of the Treasury Regulations.

Section 8.     Definitions. The definitions in the following Treasury Regulations apply for purposes of Sections 1 through 7: Section 1.436-1(j)(1) defining “adjusted funding target attainment percentage”; Section 1.436-1(j)(2) defining “Annuity Starting Date”; Section 1.436-1(j)(6) defining “prohibited payment”; Section 1.436-1(j)(8) defining “Section 436 measurement date”; and Section 1.436-1(j)(9) defining an “unpredictable contingent event” and an “unpredictable contingent event benefit”.

Section 9.     Effective Date. The rules in Sections 1 through 8 are effective for Plan Years beginning after December 31, 2007.

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES

Littelfuse Commercial Vehicle LLC – Delaware

Littelfuse Mexico Holding LLC – Delaware

SymCom, Inc. – South Dakota

SSAC LLC – South Dakota

LFUS LLC - Delaware

Cole Hersee S. de R.L. de C.V. – Mexico

Littelfuse S. de R.L. de C.V. – Mexico

LF Consorcio S. de R.L. de C.V. – Mexico

Productos Electromecanicos BAC, S. de R.L. de C.V. – Mexico

Littelfuse Mexico Distribution S. de R.L. de C.V. – Mexico

Startco Engineering ULC - Canada

Startco Canada LP - Canada

Littelfuse da Amazonia, Ltda. – Brazil

Littelfuse Holding Ltd. - Ireland

Accel AB – Sweden

Accel Elektronika UAB – Lithuania

Hamlin RO S.r.l. - Romania

Selco A/S - Denmark

Littelfuse B.V. – Netherlands

Littelfuse Holding B.V. – Netherlands

Littelfuse Netherland C.V. - Netherlands

Littelfuse Holding II B.V. - Netherlands

Littelfuse Holding III B.V. - Netherlands

Littelfuse Holding IV B.V. – Netherlands

Littelfuse Mexico Manufacturing B.V. – Netherlands

Littelfuse Asia Holding B.V. – Netherlands

Littelfuse Asia Sales B.V. – Netherlands

Hamlin Electronics Europe Limited – United Kingdom

Littelfuse Italian Holdings S.r.l. – Italy

Littelfuse Italy S.r.l. – Italy

Littelfuse GmbH – Germany

Littelfuse Holding GmbH – Germany

LF Europe GmbH – Germany

H.I. Verwaltungs GmbH – Germany

Hamlin Electronics GmbH - Germany

Littelfuse Concord Semiconductor, Inc. – Taiwan

Littelfuse Semiconductor (Wuxi) Co., Ltd. – China

Dongguan Littelfuse Electronics Co., Ltd. – China

Suzhou Littelfuse OVS Ltd. – China

Hamlin Electronics (Suzhou) Co., Ltd. - China

Littelfuse Far East Pte. Ltd. – Singapore

Littelfuse HK Limited – Hong Kong

Hamlin Asia Pacific Limited – Hong Kong

Rapid Electronics Limited – Hong Kong

Littelfuse KK – Japan

Littelfuse Japan G.K. – Japan

Littelfuse Phils, Inc. – Philippines

Littelfuse Triad, Inc. – Korea

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our reports dated March 1, 2016, with respect to the consolidated financial statements, schedule, and internal control over financial reporting incorporated by reference in the Annual Report of Littelfuse, Inc. on Form 10-K for the year ended January 2, 2016. We consent to the incorporation by reference of said reports in the Registration Statements of Littelfuse, Inc. on Forms S-8 (File Nos. 333-166953, 333-64285, 333-134699, and 333-134700).

/s/ GRANT THORNTON LLP

Chicago, IL

March 1, 2016

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8, File No. 333-166953, Form S-8, File No. 333-64285, Form S-8, File No. 333-134699 and Form S-8, File No. 333-134700) pertaining to the Littelfuse, Inc. Long-Term Incentive Plan, the 1993 Stock Plan for Employees and Directors of Littelfuse, Inc., the Littelfuse, Inc. Outside Directors’ Equity Plan, and the Littelfuse, Inc. Equity Incentive Compensation Plan of our report dated February 25, 2014, with respect to the consolidated financial statements and schedule of Littelfuse, Inc., included in this Annual Report (Form 10-K) for the year ended January 2, 2016.

/s/ Ernst & Young LLP

Chicago, Illinois

March 1, 2016

EX-31.1

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Gordon Hunter, certify that:

1. I have reviewed this Annual Report on Form 10-K of Littelfuse Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 1, 2016

/s/ Gordon Hunter

Gordon Hunter

Chairman, President and

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Philip G. Franklin, certify that:

1. I have reviewed this Annual Report on Form 10-K of Littelfuse Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 1, 2016

/s/ Philip G. Franklin

Philip G. Franklin

Executive Vice President and

Chief Financial Officer 

EX-32.1

EXHIBIT 32.1

LITTELFUSE, INC.

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of title 18, United States Code), each of the undersigned officers of Littelfuse, Inc. (“the Company”) does hereby certify that to his knowledge:

The Annual Report of the Company on Form 10-K for the fiscal year ended January 2, 2016 (“the Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ GORDON HUNTER	/s/ PHILIP G. FRANKLIN
Gordon Hunter	Philip G. Franklin
Chairman, President and	Executive Vice President and
Chief Executive Officer	Chief Financial Officer
Dated: March 1, 2016	Dated: March 1, 2016

XML

Document And Entity Information - USD ($)	12 Months Ended
	Jan. 02, 2016	Feb. 19, 2016	Jun. 27, 2015
Entity Registrant Name	LITTELFUSE INC /DE
Entity Central Index Key	0000889331
Trading Symbol	lfus
Current Fiscal Year End Date	--01-02
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		22,342,813
Entity Public Float			$ 2,201,579,542
Document Type	10-K
Document Period End Date	Jan. 02, 2016
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	false

XML

Consolidated Balance Sheets - USD ($)	Jan. 02, 2016	Dec. 27, 2014
Current assets:
Cash and cash equivalents	$ 328,786,000	$ 297,571,000
Short-term investments	4,179,000	4,302,000
Accounts receivable, less allowances (2015 - $17,487; 2014 - $19,418)	142,882,000	135,356,000
Inventories	98,629,000	97,391,000
Prepaid expenses and other current assets	$ 8,959,000	13,904,000
Assets held for sale		5,500,000
Total current assets	$ 583,435,000	554,024,000
Property, plant, and equipment:
Land	5,236,000	5,697,000
Buildings	71,383,000	64,609,000
Equipment	382,429,000	370,179,000
Accumulated depreciation and amortization	(296,480,000)	(281,845,000)
Net property, plant and equipment	162,568,000	158,640,000
Intangible assets, net of amortization:
Patents, licenses and software	20,221,000	23,640,000
Distribution network	16,490,000	19,428,000
Customer lists, trademarks and tradenames	54,912,000	60,605,000
Goodwill	189,767,000	196,256,000
Investments	15,197,000	12,056,000
Deferred income taxes	8,333,000	22,874,000
Other assets	14,058,000	23,303,000
Total assets	1,064,981,000	1,070,826,000
LIABILITIES AND EQUITY
Accounts payable	51,658,000	50,793,000
Accrued payroll	32,611,000	30,511,000
Accrued expenses	24,145,000	13,059,000
Accrued severance	3,798,000	790,000
Accrued income taxes	$ 10,621,000	9,045,000
Current portion of accrued post-retirement benefits		11,768,000
Current portion of long-term debt	$ 87,000,000	88,500,000
Total current liabilities	209,833,000	204,466,000
Long-term debt, less current portion	84,474,000	106,658,000
Deferred income taxes	8,014,000	11,076,000
Accrued post-retirement benefits	5,653,000	5,147,000
Other long-term liabilities	$ 12,809,000	$ 15,814,000
Shareholders’ equity:
Preferred stock, par value $0.01 per share: 1,000,000 shares authorized; no shares issued and outstanding
Common stock, par value $0.01 per share: 34,000,000 shares authorized; shares issued, 2015 –22,420,785; 2014 – 22,585,529	$ 224,000	$ 226,000
Treasury stock, at cost: 362,748 and 199,266 shares, respectively	(32,766,000)	(18,724,000)
Additional paid-in capital	259,553,000	243,844,000
Accumulated other comprehensive income	(45,671,000)	(21,126,000)
Retained earnings	562,717,000	523,302,000
Littelfuse, Inc. shareholders’ equity	744,055,000	727,522,000
Non-controlling interest	143,000	143,000
Total equity	744,198,000	727,665,000
Total liabilities and equity	$ 1,064,981,000	$ 1,070,826,000

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
Accounts receivable, allowances	$ 17,487	$ 19,418
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	34,000,000	34,000,000
Common stock, shares issued (in shares)	22,420,785	22,585,529
Common stock, shares outstanding (in shares)	22,420,785	22,585,529
Treasury stock, at cost (in shares)	362,748	199,266

XML

Consolidated Statements of Net Income - USD ($) shares in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Net sales	$ 867,864,000	$ 851,995,000	$ 757,853,000
Cost of sales	537,365,000	527,567,000	461,621,000
Gross profit	330,499,000	324,428,000	296,232,000
Selling, general and administrative expenses	153,714,000	146,975,000	132,657,000
Research and development expenses	30,802,000	$ 31,122,000	$ 24,415,000
Pension settlement expenses	29,928,000
Amortization of intangibles	11,898,000	$ 12,501,000	$ 9,279,000
Total operating expenses	226,342,000	190,598,000	166,351,000
Operating income	104,157,000	133,830,000	129,881,000
Interest expense	$ 4,091,000	$ 4,903,000	2,917,000
Impairment and equity in net loss of unconsolidated affiliate			10,678,000
Foreign exchange (gain) loss	$ (1,465,000)	$ 3,925,000	(3,303,000)
Other expense (income), net	(5,417,000)	(6,644,000)	(4,646,000)
Income before income taxes	106,948,000	131,646,000	124,236,000
Income taxes	24,482,000	32,228,000	35,451,000
Net income	$ 82,466,000	$ 99,418,000	$ 88,784,000
Income per share:
Basic (in dollars per share)	$ 3.65	$ 4.41	$ 3.98
Diluted (in dollars per share)	$ 3.63	$ 4.37	$ 3.94
Weighted-average shares and equivalent shares outstanding:
Weighted-average shares (in shares)	22,565	22,543	22,315
Adjusted for weighted-average shares & assumed conversions (in shares)	22,719	22,727	22,537

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014		Dec. 28, 2013
Net income	$ 82,466	$ 99,418		$ 88,784
Other comprehensive income (loss):
Pension liability adjustments (net of tax of $106, $6,308 and ($5,270), respectively)	(1,761)	$ (12,475)	[1]	$ 3,739
Pension and postemployment reclassification adjustments, (net of tax of $746, $0 and $0, respectively)	1,530
Unrealized gain on investments	793	$ 1,398	[2]	$ 1,526
Reclassification of pension settlement costs to expense (net of tax of $11,742, $0 and $0, respectively)	21,124
Foreign currency translation adjustments	(46,231)	$ (30,466)		$ (1,396)
Comprehensive income	$ 57,921	$ 57,875		$ 92,653

[1] Net of tax of $661, $12,587, and $6,549 for 2015, 2014 and 2013, respectively.

[2] Net of tax of $0, $0 and $0 for 2015, 2014 and 2013, respectively.

XML

Consolidated Statements of Comprehensive Income (Parentheticals) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Pension liability adjustments, tax	$ 106,000	$ 6,308,000	$ (5,270,000)
Reclassification adjustment, tax	746,000	0	0
Pension settlement adjustment, tax	$ 11,742,000	$ 0	$ 0

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Operating activities
Net income	$ 82,466,000	$ 99,418,000	$ 88,784,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	29,701,000	29,374,000	25,201,000
Amortization of Intangible Assets	$ 11,898,000	12,501,000	$ 9,279,000
Impairment of assets		293,000
Provision for bad debts	$ 164,000	130,000	$ 289,000
Non-cash inventory charge		$ 2,769,000	$ 1,525,000
Net loss on pension settlement, net of tax	$ 19,308,000
Impairment And Equity In Net Loss Of Unconsolidated Affiliate			$ 10,678,000
Loss on sale of property, plant and equipment	$ 1,253,000	$ 1,042,000	92,000
Stock-based compensation	10,266,000	9,069,000	8,609,000
Excess tax benefit on share-based compensation	(1,891,000)	(2,843,000)	(4,054,000)
Deferred income taxes	11,479,000	(4,488,000)	6,640,000
Changes in operating assets and liabilities:
Accounts receivable	(14,377,000)	(13,062,000)	(16,683,000)
Inventories	(3,577,000)	(2,258,000)	(5,486,000)
Accounts payable	2,573,000	17,281,000	2,000,000
Accrued expenses (including post-retirement)	6,482,000	(1,577,000)	(8,906,000)
Accrued payroll and severance	5,883,000	2,360,000	8,032,000
Accrued taxes	(1,043,000)	(549,000)	(10,773,000)
Prepaid expenses and other	5,241,000	3,681,000	2,140,000
Net cash provided by operating activities	165,826,000	153,141,000	117,367,000
Investing activities
Acquisitions of businesses, net of cash acquired	$ (4,558,000)	(56,368,000)	(144,382,000)
Purchases of short-term investments		$ (4,331,000)	$ (8,478,000)
Purchase of cost method investment	$ (3,500,000)
Proceeds from maturities of short-term investments		$ 6,770,000	$ 2,044,000
Decrease (increase) in entrusted loan receivable (see note 7)	$ 7,811,000	(17,908,000)
Purchases of property, plant and equipment	(44,019,000)	(32,281,000)	$ (34,953,000)
Proceeds from sale of property, plant and equipment	102,000	125,000	176,000
Net cash used in investing activities	(44,164,000)	(103,993,000)	(185,593,000)
Financing activities:
Proceeds from debt	49,000,000	97,500,000	260,500,000
Payments of term debt	(8,750,000)	(5,000,000)	(1,250,000)
Payments of revolving credit facility	(55,500,000)	(135,000,000)	(123,500,000)
Proceeds from exercise of stock options	9,150,000	14,061,000	$ 21,959,000
(Payments) proceeds from entrusted loan (see note 7)	(7,811,000)	17,908,000
Debt issuance costs	(42,000)	(107,000)	$ (809,000)
Cash dividends paid	(24,341,000)	(21,175,000)	(18,722,000)
Excess tax benefit on share-based compensation	1,891,000	2,843,000	$ 4,054,000
Purchases of common stock	(31,252,000)	(14,283,000)
Net cash (used in) provided by financing activities	(67,655,000)	(43,253,000)	$ 142,232,000
Effect of exchange rate changes on cash and cash equivalents	(22,792,000)	(13,516,000)	(4,218,000)
Increase (decrease) in cash and cash equivalents	31,215,000	(7,621,000)	69,788,000
Cash and cash equivalents at beginning of year	297,571,000	305,192,000	235,404,000
Cash and cash equivalents at end of year	$ 328,786,000	$ 297,571,000	$ 305,192,000

XML

Consolidated Statements of Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 29, 2012	$ 220	$ 195,803	$ (60,496)	$ 16,548	$ 435,340	$ 143	$ 587,558
Comprehensive income:
Net income					88,784		88,784
2014 activity				3,739			3,739
2014 activity				1,526			1,526
2014 activity				(1,396)			(1,396)
Comprehensive income							92,653
Stock-based compensation		8,609					8,609
Withheld			(2,200)				$ (2,200)
Retirement of 1,576,757 shares of treasury stock			60,343		(60,343)
Stock options exercised	5	19,013					$ 19,018
Cash dividends paid					(18,722)		(18,722)
Balance at Dec. 28, 2013	225	223,425	(2,353)	20,417	445,059	143	$ 686,916
Comprehensive income:
Pension settlement, including tax impact of ($11,742)
Pension and postemployment reclassification adjustments, including tax impact of ($746)
Net income					99,418		$ 99,418
2014 activity				(12,475)			(12,475)	[1]
2014 activity				1,398			1,398	[2]
2014 activity				(30,466)			(30,466)
Comprehensive income							57,875
Stock-based compensation		6,926					6,926
Withheld			(2,655)				(2,655)
Stock options exercised	3	14,058					14,061
Cash dividends paid					(21,175)		(21,175)
Balance at Dec. 27, 2014	226	243,844	(18,724)	(21,126)	523,302	143	727,665
Comprehensive income:
Purchase of 161,751 shares of common stock	(2)	(565)	(13,716)				$ (14,283)
Pension settlement, including tax impact of ($11,742)
Pension and postemployment reclassification adjustments, including tax impact of ($746)
Net income					82,466		$ 82,466
2014 activity				(1,761)			20,893	[1]
2014 activity				793			793	[2]
2014 activity				(46,231)			(46,231)
Comprehensive income							57,921
Stock-based compensation		7,782					7,782
Withheld			(2,727)				$ (2,727)
Retirement of 1,576,757 shares of treasury stock			18,712		(18,712)
Stock options exercised	2	9,148					$ 9,150
Cash dividends paid					(24,341)		(24,341)
Balance at Jan. 02, 2016	224	259,553	(32,766)	(45,671)	$ 562,715	$ 143	744,198
Comprehensive income:
Purchase of 161,751 shares of common stock	$ (4)	$ (1,221)	$ (30,027)				(31,252)
Pension settlement, including tax impact of ($11,742)				21,124			21,124
Pension and postemployment reclassification adjustments, including tax impact of ($746)				$ 1,530			$ 1,530

[1] Net of tax of $661, $12,587, and $6,549 for 2015, 2014 and 2013, respectively.

[2] Net of tax of $0, $0 and $0 for 2015, 2014 and 2013, respectively.

XML

Consolidated Statements of Equity (Parentheticals) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Treasury Stock [Member]
Shares withheld on restricted stock grants for withholding taxes (in shares)	28,286	19,439	32,671
Treasury stock, retired (in shares)	214,609		1,576,757
Stock Repurchased During Period, Shares	350,000	161,751
Common Stock [Member]
Stock options exercised, tax impact	$ 2,485,000	$ 2,143,000	$ 2,940,000
Retained Earnings [Member]
Cash dividends paid, per share (in dollars per share)	$ 1.08	$ 0.94	$ 0.84
AOCI Attributable to Parent [Member]
Pension settlement adjustment, tax	$ 11,472
Reclassification adjustments, tax	$ 746,000
Stock Repurchased During Period, Shares	350,000
Pension settlement adjustment, tax		$ 0	$ 0
Reclassification adjustments, tax		$ 0	$ 0

XML

Note 1 - Summary of Significant Accounting Policies and Other Information

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies and Other Information

Nature of Operations

: Littelfuse, Inc. and subsidiaries (the “company”) design, manufacture and sell circuit protection devices for use in the automotive, electronics and industrial markets throughout the world. In addition to the broadest and deepest portfolio of circuit protection products and solutions, the company offers a comprehensive line of highly reliable electromechanical and electronic switch and control devices for commercial and specialty vehicles and sensors for automobile safety systems, as well as protection relays and power distribution centers for the safe control and distribution of electricity.

Fiscal Year

: The company’s fiscal years ended on January 2, 2016, December 27, 2014 and December 28, 2013. Fiscal year 2015 contained 53 weeks while fiscal years 2014 and 2013 each contained 52 weeks.

Basis of Presentation

:

The Consolidated Financial Statements include the accounts of Littelfuse, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The company’s Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America and include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the company exercises control.

Use of Estimates

: The process of preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses and the accompanying notes. The company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in its evaluation, as considered necessary. Actual results could differ from those estimates.

Cash Equivalents

: All highly liquid investments, with an original maturity of three months or less when purchased, are considered to be cash equivalents.

Short-Term and Long-Term Investments

: The company has determined that certain of its investment securities are to be classified as available-for-sale. Available-for-sale securities are carried at fair value with the unrealized gains and losses reported as a component of “Accumulated Other Comprehensive Income (Loss).” Realized gains and losses and declines in unrealized value judged to be other-than-temporary on available-for-sale securities are included in other expense (income), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Short-term investments, which are primarily certificates of deposits, are carried at cost which approximates fair value.

Fair Value of Financial Instruments

: The company’s financial instruments include cash and cash equivalents, accounts receivable, investments and long-term debt. The carrying values of such financial instruments approximate their estimated fair values.

Accounts Receivable

:

The company performs credit evaluations of customers’ financial condition and generally does not require collateral. Credit losses are provided for in the financial statements based upon specific knowledge of a customer’s inability to meet its financial obligations to the company. Historically, credit losses have consistently been within management’s expectations and have not been a material amount. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write-offs are recorded at the time a customer receivable is deemed uncollectible.

The company also maintains allowances against accounts receivable for the settlement of rebates and sales discounts to customers. These allowances are based upon specific customer sales and sales discounts as well as actual historical experience.

Inventories

: Inventories are stated at the lower of cost or market (first in, first out method), which approximates current replacement cost. The company maintains excess and obsolete allowances against inventory to reduce the carrying value to the expected net realizable value. These allowances are based upon a combination of factors including historical sales volume, market conditions, lower of cost or market analysis and expected realizable value of the inventory.

Investment in Unconsolidated Affiliate

:

Investments in unconsolidated affiliates over which the company has significant influence over the investees’ operating and financing activities are accounted for under the equity method of accounting. Investments in affiliates over which the company does not have the ability to exert significant influence over the investees’ operating and financing activities are accounted for under the cost method.

Property, Plant and Equipment

: Land, buildings and equipment are carried at cost. Depreciation is calculated using the straight-line method with useful lives of 21 years for buildings, seven to nine years for equipment, seven years for furniture and fixtures, five years for tooling and three years for computer equipment.

Goodwill and Indefinite-Lived Intangible Assets:

The company annually tests goodwill and indefinite-lived intangible assets for impairment on the first day of its fiscal fourth quarter or at other dates if there is an event or change in circumstances that indicates the asset may be impaired. The company has eight reporting units for testing purposes. Management determines the fair value of each of its reporting units by using a discounted cash flow model (which includes forecasted five-year income statement and working capital projections, a market-based weighted average cost of capital and terminal values after five years) to estimate market value. In addition, the company compares its derived enterprise value on a consolidated basis to the company’s market capitalization as of its test date to ensure its derived value approximates the market value of the company when taken as a whole.

As of the most recent annual test conducted on September 27, 2015, the company concluded the fair value of each of the reporting units exceeded its carrying value of invested capital and therefore, no potential goodwill impairment existed. Specifically, the company noted that its headroom, defined as the excess of fair value over the carrying value of invested capital, was 148%, 95%, 188%, 218%, 76%, 26%, 12% and 198% for its electronics (non-silicon), electronics (silicon), passenger car products, commercial vehicle products, automotive sensor products, relay, custom and power fuse reporting units, respectively, at September 27, 2015. Certain key assumptions used in the annual test included a discount rate of 11.7% and a long-term growth rate of 3.0% which were used for all reporting units except for automotive sensor and relay which had a discount rate of 13.7% as a result of a 2.0% premium factor and custom products which had a discount rate of 14.7% as a result of a 3.0% premium factor.

In addition, the company performed a sensitivity test at September 27, 2015 that showed a 100 basis point increase in its discount rate or a 100 basis point decrease in the long-term growth rate for each reporting unit would not have changed the company’s conclusion that no potential goodwill impairment existed at September 27, 2015.

The company will continue to perform a goodwill and indefinite-lived intangible asset impairment test as required on an annual basis and on an interim basis, if certain impairment conditions exist. Factors the company considers important, which could result in changes to its estimates, include underperformance relative to historical or projected future operating results and declines in acquisitions and trading multiples. Due to the diverse end user base and non-discretionary product demand, the company does not believe its future operating results will vary significantly relative to its historical and projected future operating results.

Other

Intangible Assets

: Trademarks and tradenames are amortized using the straight-line method over estimated useful lives that have a range of five to 20 years. Patents, licenses and software are amortized using the straight-line method or an accelerated method over estimated useful lives that have a range of seven to 17 years. The distribution networks are amortized on either a straight-line or accelerated basis over estimated useful lives that have a range of three to 20 years. Other intangible assets are also tested for impairment when there is a significant event that may cause the asset to be impaired.

Environmental Liabilities

: Environmental liabilities are accrued based on engineering studies estimating the cost of remediating sites. Expenses related to on-going maintenance of environmental sites are expensed as incurred. If actual or estimated probable future losses exceed the company’s recorded liability for such claims, the company would record additional charges during the period in which the actual loss or change in estimate occurred.

Pension and Other Post-retirement Benefits

: Accounting for pensions requires estimating the future benefit cost and recognizing the cost over the employee’s expected period of employment with the company. Certain assumptions are required in the calculation of pension costs and obligations. These assumptions include the discount rate, salary scales and the expected long-term rate of return on plan assets. The discount rate is intended to represent the rate at which pension benefit obligations could be settled by purchase of an annuity contract. These assumptions are subject to change based on stock and bond market returns and other economic factors. Actual results that differ from the company’s assumptions are accumulated and amortized over future periods and therefore generally affect its recognized expense and accrued liability in such future periods. While the company believes that its assumptions are appropriate given current economic conditions and its actual experience, significant differences in results or significant changes in the company’s assumptions may materially affect its pension obligations and related future expense. During 2015, the company terminated the U.S. defined benefit pension plan which resulted in a settlement of the plan’s liabilities resulting in a pre-tax charge of $29.9 million. See Note 12 for additional information.

Reclassifications:

Certain amounts presented in the 2014 financial statements have been reclassified to conform to the 2015 presentation - specifically a reclassification was made to the company’s current deferred tax assets from short-term to long-term. This reclassification resulted from the company’s early adoption of ASU 2015-17 “Balance Sheet Classification of Deferred Taxes (ASC 740, income taxes)” which requires all deferred taxes to be presented as long-term. The amount of current deferred tax assets that were reclassified to long-term deferred tax assets for the fiscal year 2014 was $17.5 million at December 27, 2014. This reclassification had no impact on net income, cash flows or shareholders’ equity.

Revenue Recognition

: The company recognizes revenue on product sales in the period in which the sales process is complete. This generally occurs when persuasive evidence of an arrangement exists, products are shipped (FOB origin) to the customer in accordance with the terms of the sale, the risk of loss has been transferred, collectability is reasonably assured and the pricing is fixed and determinable.

At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The company’s distribution channels are primarily through direct sales and independent third party distributors.

Revenue

and

Billing

: The company accepts orders from customers based on long term purchasing contracts and written sales agreements. Contract pricing and selling agreement terms are based on market factors, costs and competition. Pricing normally is negotiated as an adjustment (premium or discount) from the company’s published price lists. The customer is invoiced when the company’s products are shipped to them in accordance with the terms of the sales agreement.

Returns

and

Credits

: Some of the terms of the company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization to reduce its price to its buyer. If the company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The company establishes reserves for this program based on historic activity and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

Return to Stock:

The company has a return to stock policy whereby a customer with prior authorization from Littelfuse management can return previously purchased goods for full or partial credit. The company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.

Volume Rebates

:

The company offers incentives to certain customers to achieve specific quarterly or annual sales targets. If customers achieve their sales targets, they are entitled to rebates. The company estimates the future cost of these rebates and recognizes this estimated cost as a reduction to revenue as products are sold.

Allowance for Doubtful Accounts:

The company evaluates the collectability of its trade receivables based on a combination of factors. The company regularly analyzes its significant customer accounts and, when the company becomes aware of a specific customer’s inability to meet its financial obligations, the company records a specific reserve for bad debt to reduce the related receivable to the amount the

company reasonably believes is collectible. The company also records allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and past experience. Accounts receivable balances that are deemed to be uncollectible, are written off against the reserve on a case-by-case basis. Historically, the allowance for doubtful accounts has been adequate to cover bad debts. If circumstances related to specific customers change, the estimates of the recoverability of receivables could be further adjusted. However, due to the company’s diverse customer base and lack of credit concentration, the company does not believe its estimates would be materially impacted by changes in its assumptions.

Advertising Costs

: The company expenses advertising costs as incurred, which amounted to $2.3 million in 2015, $2.8 million in 2014 and $1.6 million in 2013, and are included as a component of selling, general and administrative expenses.

Shipping and Handling Fees and Costs

: Amounts billed to customers related to shipping and handling is classified as revenue. Costs incurred for shipping and handling of $7.0 million, $6.7 million and $6.5 million in 2015, 2014 and 2013, respectively, are classified in selling, general and administrative expenses.

Foreign Currency Translation

/Remeasurement

: The company’s foreign subsidiaries use the local currency or the U.S. dollar as their functional currency, as appropriate. Assets and liabilities are translated using exchange rates at the balance sheet date, and revenues and expenses are translated at weighted average rates. The amount of foreign currency gain or loss from remeasurement recognized in the income statement was a loss of $7.9 million in 2015, a loss of $4.6 million in 2014 and a gain of $5.2 million in 2013. Adjustments from the translation process are recognized in “Shareholders’ equity” as a component of “Accumulated other comprehensive income.”

Stock-based Compensation

: The company recognizes compensation expense for the cost of awards of equity compensation using a fair value method. Benefits of tax deductions in excess of recognized compensation expense are reported as both operating and financing cash flows. See Note 13 for additional information on stock-based compensation.

Other

E

xpense (

I

ncome),

N

et

:

Other expense (income), net consisting of interest income, royalties and non-operating income

, was ($5.4 million), ($6.6 million) and ($4.6 million) of income in 2015, 2014, and 2013, respectively.

Income Taxes:

The company accounts for income taxes using the liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using enacted tax rates in effect for the years in which the differences are expected to reverse. The company recognizes deferred taxes for temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Federal and state income taxes are provided on the portion of foreign income that is expected to be remitted to the U.S. and be taxable.

Accounting Pronouncements

: In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2015-17 – Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies the balance sheet classification of deferred taxes. The

new guidance requires that all deferred taxes be presented as noncurrent. The company has adopted the new guidance for the year ended January 2, 2016 with all prior periods presented retrospectively adjusted to conform to the new ASU.

In May 2014, the FASB amended prior authoritative guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements.

XML

Note 2 - Acquisition of Businesses

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

2. Acquisition of Business

es

The company accounts for acquisitions using the purchase method in accordance with ASC 805, “Business Combinations.” The results of operations of each acquisition have been included in the accompanying consolidated financial statements as of the dates of the acquisition. Acquisition-related costs associated with acquisition activity were $4.6 million, $0.5 million and $1.7 million for fiscal years 2015, 2014, and 2013, respectively and were recorded in Selling, general and administrative expenses.

Sigmar S.r.l

On October 1, 2015, the company acquired 100% of Sigmar S.r.l. (“Sigmar”). The total purchase price for Sigmar is $5.4 million, net of cash acquired, subject to post-closing adjustments. The purchase also includes an earn-out clause of an additional payment of up to $0.6 million, subject to the achievement of certain milestones.

Located in Ozegna, Italy, Sigmar is a leading global manufacturer of water-in-fuel and selective catalytic reduction (SCR) quality sensors, as well as diesel fuel heaters, solenoid valves and rotating oil filters for automotive and commercial vehicle applications. The acquisition further expands the company’s automotive sensor product line offerings within its Automotive business segment. The company funded the acquisition with available cash.

The following table sets forth the preliminary purchase price allocation for Sigmar acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values.

Sigmar preliminary purchase price allocation (in thousands):
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,060
Patents		2,845
Current liabilities		(1,704	)
Other non-current liabilities		(2,906	)
	$	5,633

All Sigmar goodwill and other assets and liabilities were recorded in the Automotive business unit segment and reflected in the Europe geographical area. The patents are being amortized over 10 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining Sigmar’s products with the company’s existing automotive product offerings. Goodwill for the above acquisition is not expected to be deductible for tax purposes.

Sym

C

om

On January 3, 2014, the company acquired 100% of SymCom, Inc. (“SymCom”) for $52.8 million net of cash acquired. Located in Rapid City, South Dakota, SymCom provides overload relays and pump controllers primarily to the industrial market. The acquisition allows the company to strengthen its position in the relay products market by adding new products and new customers within its Industrial business unit segment. The company funded the acquisition with available cash and proceeds from credit facilities

.

The following table sets forth the final purchase price allocation for SymCom acquisition-date net assets, in accordance with the purchase method of accounting with adjustments to record the acquired net assets at their estimated fair values.

SymCom final purchase price allocation (in thousands):
Cash	$	325
Current assets, net		9,154
Property, plant and equipment		11,193
Goodwill		15,018
Trademarks		17,020
Patents		1,500
Other non-current assets		20
Current liabilities		(1,137	)
	$	53,093

All SymCom goodwill and other assets and liabilities were recorded in the Industrial business segment and reflected in the Americas geographical area. The trademarks are being amortized over 15 to 20 years. The patents are being amortized over 16 to 17 years. The goodwill resulting from this acquisition consists largely of the company’s expected future product sales and synergies from combining SymCom’s products with the company’s existing electrical product offerings. Goodwill for the above acquisition is expected to be deductible for tax purposes.

As required by purchase accounting rules, the company initially recorded a $2.6 million step-up of inventory to its fair value as of the acquisition date based on the preliminary valuation. During the first quarter of 2014, as a portion of this inventory was sold, cost of goods sold included a $1.4 million non-cash charge for this step-up.

During the second quarter of 2014, the inventory step-up valuation was finalized at $2.8 million which resulted in an additional $1.4 million non-cash charge to cost of goods sold for the second quarter of 2014. Pro forma financial information is not presented for the above acquisitions due to amounts not being materially different than actual results.

XML

Note 3 - Inventories

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Inventory Disclosure [Text Block]

3. Inventories

The components of inventories at January 2, 2016 and December 27, 2014 are as follows (in thousands):

	201 5		201 4
Raw materials	$	33,599	$	29,756
Work in process		16,479		15,164
Finished goods		48,551		52,471
Total	$	98,629	$	97,391

XML

Note 4 - Goodwill and Other Intangible Assets

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

4.

Goodwill and Other

Intangible Assets

The amounts for goodwill and changes in the carrying value by business unit segment are as follows at January 2, 2016 and December 27, 2014 (in thousands):

	20 15		Additions (Reductions) (a)			Adjust ments ( c )			20 14		Additions (Reductions) ( b )		Adjust ments ( c )			20 13
Electronics	$	58,246	$	(524	)	$	(1,740	)	$	60,510	$	1,654	$	(1,590	)	$	60,446
Automotive		80,262		1,994			(3,449	)		81,717		—		(3,264	)		84,981
Industrial		51,259		—			(2,770	)		54,029		14,920		(1,928	)		41,037
Total	$	189,767	$	1,470		$	(7,959	)	$	196,256	$	16,574	$	(6,782	)	$	186,464

(a) Electronics reduction resulted from reclassification of goodwill to customer lists. Automotive addition of $2.0 million resulted from business acquisitions.

( b ) Electronics addition of $1.7 million and Industrial addition of $14.9 million in 2014 resulted from business acquisitions.

( c ) Adjustments reflect the impact of changes in foreign exchange rates.

There were no accumulated goodwill impairment losses at January 2, 2016, December 27, 2014 or December 28, 2013.

The company recorded amortization expense of $11.9 million in 2015, $12.5 million in 2014 and $9.3 million in 2013. The details of other intangible assets and related future amortization expense of existing intangible assets at January 2, 2016 and December 27, 2014 are as follows:

	201 5						2014
(in thousands)	Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization		Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization
Patents, licenses and software (a)		11.6	$	61,297	$	41,076		11.7	$	62,378	$	38,738
Distribution network ( a )		12.4		45,564		29,074		12.4		46,850		27,422
Customer lists, trademarks and tradenames ( a )		13.0		81,233		30,534		13.2		80,821		25,246
Tradenames ( b )		—		4,213		—		—		5,030		—
Total		12.4	$	192,307	$	100,684		12.5	$	195,079	$	91,406

(a) Decrease to gross carrying value in 2015 primarily due to the impact of foreign currency translation adjustments partially offset by the preliminary Sigmar acquisition purchase price allocation discussed in Note 2.

( b ) Tradenames with indefinite lives.

Estimated amortization expense related to intangible assets with definite lives at January 2, 2016 is as follows (in thousands):

2016	$	11,162
2017		10,745
2018		10,628
2019		10,582
2020		10,582
2021 and thereafter		33,711
	$	87,410

XML

Note 5 - Investments

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Cost and Equity Method Investments Disclosure [Text Block]

5.

Other I

nvestment

s

The company’s other investments represent shares of Polytronics Technology Corporation Ltd. (“Polytronics”), a Taiwanese company and shares of Monolith Semiconductor, Inc. (“Monolith”), a Texas-based startup company.

Polytronics

The Polytronics investment was acquired as part of the Littelfuse GmbH acquisition. The company’s Polytronics shares held at the end of fiscal 2015 and 2014 represent approximately 7.2% of total Polytronics shares outstanding. The fair value of the Polytronics investment was €10.7

million (approximately $11.7 million) at January 2, 2016 and €9.9

million (approximately $12.1 million) at December 27, 2014. Included in 2015 other comprehensive income is an unrealized gain of $0.9 million, due to the increase in fair market value of the Polytronics investment. The remaining movement year over year was due to the impact of changes in exchange rates.

Monolith

In December 2015, the company invested $3.5 million in the preferred stock of Monolith, a U.S. start-up company developing silicon carbide (SiC) technology, which represents approximately 12% of the common stock of Monolith on an as-converted basis. The company accounts for its investment in Monolith under the cost method with any changes in value recorded in other comprehensive income. The value of the Monolith investment was $3.5 million at January 2, 2016.

XML

Note 6 - Investment in Unconsolidated Affiliate

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Investments in and Advances to Affiliates, Schedule of Investments [Text Block]

6. Investment in Unconsolidated Affiliate

Investments in unconsolidated entities over which the company has significant influence over the investees’ operating and financing activities are accounted for under the equity method of accounting. Investments in affiliates in which the company does not have such ability are accounted for under the cost method of accounting.

In April 2012, the company invested an additional $10.0 million in certain common and preferred stock of Shocking Technologies, Inc. (“Shocking”) increasing its previous investment interest in Shocking to $16.0 million or approximately 18.4%. In addition, in late-November 2012, the company provided an

additional $2.0 million short-term secured loan to Shocking and determined that the company then had the ability to exert significant influence. As a result, the company began accounting for the investment in Shocking using the equity method. In accordance with ASC 323, the company retroactively recorded its proportional share of Shocking's operating losses, which amounted to approximately $4.0 million in 2012.

Impairment

During the first quarter of 2013, the company fully impaired its investment in a loan receivable from Shocking owing to their filing for Chapter 7 bankruptcy on March 12, 2013. The impairment charge of approximately $10.7 million consisted of the remaining equity method investment of $8.7 million and a $2.0 million loan receivable, and reduced the carrying value of both the investment and loan receivable to zero at March 30, 2013.

During the fourth quarter of 2013, the company incurred a $6.1 million charge to income tax expense related to the company’s investment in Shocking which had been fully impaired and written off as described above. $3.3 million of this charge was pushed back to the first quarter of 2013 with the remaining $2.8 million (which related to the fourth quarter of 2012) recorded in the fourth quarter of 2013 as the correction of an immaterial error under ASC 250. This charge was determined to be a capital loss for tax purposes, instead of an ordinary loss as the company had previously determined in consultation with a third party expert.

XML

Note 7 - Debt

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Debt Disclosure [Text Block]

7

. Debt

The carrying amounts of debt at January 2, 2016 and December 27, 2014 are as follows (in thousands):

	20 15		20 14
Term loan	$	85,000	$	93,750
Revolving credit facility		77,000		83,500
Entrusted loan		9,474		17,908
Total debt		171,474		195,158
Less: Current maturities		87,000		88,500
Total long-term debt	$	84,474	$	106,658

Term Loan

and Revolving Credit Facilities

On May 31, 2013, the company entered into a new credit agreement with J.P. Morgan Securities LLC for up to $325.0 million which consists of an unsecured revolving credit facility of $225.0 million and an unsecured term loan of $100.0 million. The credit agreement is for a five year period. At January 2, 2016, the company had available $197.9 million of borrowing capacity under the credit agreement at an interest rate of LIBOR plus 1.25%, or a total interest rate of 1.68% as of January 2, 2016.

The credit agreement replaced the company’s previous credit agreement dated June 13, 2011, which was terminated on May 31, 2013.

The company incurred debt issuance costs of $0.8 million which will be amortized over the life of the new credit agreement.

On January 30, 2014, the company increased the unsecured revolving credit facility entered into on May 31, 2013 by $50.0 million, thereby increasing the total revolver borrowing capacity from $225.0 million to $275.0 million. The company incurred debt issuance costs of $0.1 million which will be amortized over the life of the existing credit agreement.

This arrangement contains covenants that, among other matters, impose limitations on the incurrence of additional indebtedness, future mergers, sales of assets, payment of dividends and changes in control, as defined in the agreement. In addition, the company is required to satisfy certain financial covenants and tests relating to, among other matters, interest coverage and leverage. At January 2, 2016, the company was in compliance with all covenants under the revolving credit facility.

The company assumed three credit lines with the acquisition of Hamlin totaling RMB 41.0 million (approximately $6.6 million) as of June 29, 2013 with expiration dates from August 23, 2013 through April 22, 2014. Two of these credit lines expired during the third quarter of 2013 and the remaining credit line expired during the second  quarter of 2014.

For the fiscal years ended January 2, 2016, December 27, 2014 and December 28, 2013, the company had $0.1, $0.8 and $0.8 million outstanding in letters of credit, respectively. No amounts were drawn under these lines of credit at January 2, 2016.

Entrust

ed

Loan

During 2014, the company entered into an entrusted loan arrangement (“Entrusted Loan”) of RMB 110.0 million (approximately $17.9 million) between two of its China legal entities, Littelfuse Semiconductor (Wuxi) Company (the “

Lender

”) and Suzhou Littelfuse OVS Ltd. (the “

Borrower

”), utilizing Bank of America, N.A., Shanghai Branch as agent. Direct borrowing and lending between two commonly owned commercial entities was strictly forbidden at the time under China’s regulations requiring the use of a third party agent to enable loans between Chinese legal entities. As a result, the Entrusted Loan is reflected as both a long-term asset and long-term debt on the company’s Consolidated Balance Sheets and is reflected in the investing and financing activities in its Consolidated Statements of Cash Flows. Interest expense and interest income will be recorded between the lender and borrower with no net impact on the company’s Consolidated Statements of Income since the amounts will be offsetting. The loan interest rate per annum is 5.25%. The Entrusted Loan is used to finance the operation and working capital needs of the borrower and matures in November 2019. The balance of the Entrusted Loan was RMB 61.5 million (approximately $9.5 million) at January 2, 2016.

Interest paid on all company debt was approximately $4.1 million in 2015, $4.9 million in 2014 and $2.9 million in 2013.

XML

Note 8 - Financial Instruments and Risk Management

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

8

.

Financial Instruments and Risk Management

Occasionally, the company uses financial instruments to manage its exposures to movements in commodity prices, foreign exchange and interest rates. The use of these financial instruments modifies the company’s exposure to these risks with the goal of reducing the risk or cost to the company. The company does not use derivatives for trading purposes and is not a party to leveraged derivative contracts.

XML

Note 9 - Fair Value of Assets and Liabilities

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Fair Value Disclosures [Text Block]

9

. Fair Value of Assets and Liabilities

Applicable accounting literature establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Applicable accounting literature defines levels within the hierarchy based on the reliability of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices for identical assets or liabilities in active markets;

Level 2—Valuations based on quoted prices for similar assets or liabilities or identical assets or liabilities in less active markets, such as dealer or broker markets; and

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable, such as pricing models, discounted cash flow models and similar techniques not based on market, exchange, dealer or broker-traded transactions.

Following is a description of the valuation methodologies used for instruments measured at fair value and their classification in the valuation hierarchy.

Investment

s

Investments in equity securities listed on a national market or exchange are valued at the last sales price. Such securities are further detailed in Note 5 and classified within Level 1 of the valuation hierarchy.

The company has an investment in Monolith as described in Note 5 to the Notes to Consolidated Financial Statements for which the value of $3.5 million represents the cost of the investment.

There were no changes during the year ended January 2, 2016 to the company’s valuation techniques used to measure asset and liability fair values on a recurring basis. As of January 2, 2016 and December 27, 2014, the company held no non-financial assets or liabilities that are required to be measured at fair value on a recurring basis.

The following table presents assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

The following table presents assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	12,056	$	—	$	—	$	12,056
Total	$	12,056	$	—	$	—	$	12,056

The company’s other financial instruments include cash and cash equivalents, short-term investments, accounts receivable and long-term debt. Due to their short-term maturity, the carrying amounts of cash and cash equivalents, short-term investments and accounts receivable approximate their fair values. The company’s long-term debt fair value approximates book value at January 2, 2016 and December 27, 2014.

XML

Note 10 - Coal Mining Liability

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

10.

Coal Min

ing

Liability

Included in other long-term liabilities is an accrual related to former coal mining operations at Littelfuse GmbH (formerly known as Heinrich Industries, AG) for the amounts of €1.8 million ($2.0 million) and €1.9 million ($2.4 million) at January 2, 2016 and December 27, 2014, respectively.  Management, in conjunction with an independent third-party, performs an annual evaluation of the former coal mining operations in order to develop an estimate of the probable future obligations in regard to remediating the dangers (such as a shaft collapse) of abandoned coal mine shafts in the former coal mining operations. Management accrues for costs associated with such remediation efforts based on management's best estimate when such costs are probable and reasonably able to be estimated. The ultimate determination can only be done after respective investigations because the concrete conditions are mostly unknown at this time. The accrual is not discounted as management cannot reasonably estimate when such remediation efforts will take place.

XML

Note 11 - Asset Impairments

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Asset Impairment Charges [Text Block]

11. Asset Impairments

The company recorded no impairments of assets during the year ended January 2, 2016.

For the year ended December 27, 2014, the company recorded an asset impairment charge of approximately $0.3 million within selling, general and administrative expenses. This charge reflects the write-down of assets from project cancellations. The charge was recognized as an “other” charge for segment reporting purposes. The carrying values of the company’s assets held for sale were $0.0 million and $5.5 million for the previously closed manufacturing facility in Des Plaines, Illinois as of January 2, 2016 and December 27, 2014, respectively.

XML

Note 12 - Benefit Plans

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Pension and Other Postretirement Benefits Disclosure [Text Block]

12

. Benefit Plans

The company previously had a company-sponsored defined benefit pension plan, the Littelfuse Inc. Retirement Plan, which covered certain of its North American employees. The amount of the retirement benefit was based on years of service and final average pay. The plan also provided a temporary supplemental retirement income benefit to help retirees pay the cost of post-retirement medical coverage if the retiree has reached age 62 and has provided at least ten years of service prior to retirement. Such benefits generally cease once the retiree attains age 65. The plan was frozen in 2009 and terminated in 2015 as described below.

The company also has company-sponsored defined benefit pension plans covering employees in the U.K., Germany, Japan, Singapore and the Philippines. The amount of the retirement benefits provided under the plans is based on years of service and final average pay.

Littelfuse Inc. Retirement Plan Termination

The company received approval from the IRS on April 14, 2015 on its Application for Determination for Terminating Plan to terminate the U.S. defined benefit pension plan, the Littelfuse Inc. Retirement Plan, effective July 30, 2014. All plan liabilities were settled (either via lump sum payout or purchase of a group annuity contract) in the third quarter of 2015. A cash contribution of $9.1 million was made to the U.S. defined benefit plan’s trust in the third quarter of 2015 to fully fund the plan on a buyout basis, and the eventual settlement of the plan’s liabilities triggered a settlement charge of $30.2 million in the third quarter of 2015. In the fourth quarter of 2015 there was an adjustment to the price of the annuity contract which resulted in a refund of premium to the company of $0.3 million. This refund of premium, effectively a re-measurement gain, was recognized in the fourth quarter of 2015 as a dollar-for-dollar adjustment to the $30.2 million earnings charge recognized in the third quarter of 2015, resulting in a final settlement loss of $29.9 million for the fiscal year ended January 2, 2016.

Total pension expense was $32.4 million, $0.3 million and $0.8 million in 2015, 2014 and 2013, respectively. The increase in pension expense in 2015 primarily resulted from the termination and settlement of the U.S. plan. The decrease in pension expense in 2014 resulted from returns on assets exceeding interest and service costs.

Benefit plan related information is as follows:

	201 5									201 4
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	105,759		$	52,740		$	158,499		$	84,422		$	50,331		$	134,753
Service cost		750			824			1,574			600			925			1,525
Interest cost		3,093			1,735			4,828			3,884			2,060			5,944
Net actuarial loss (gain)		(9,127	)		648			(8,479	)		22,025			5,652			27,677
Benefits paid from the trust		(100,475	)		(1,732	)		(102,207	)		(5,172	)		(2,525	)		(7,697	)
Benefits paid directly by company		—			(410	)		(410	)		—			(155	)		(155	)
Curtailments and settlements		—			(294	)		(294	)		—			—			—
Effect of exchange rate movements		—			(3,229	)		(3,229	)		—			(3,548	)		(3,548	)
Benefit obligation at end of year	$	—		$	50,282		$	50,282		$	105,759		$	52,740		$	158,499
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	93,991		$	47,593		$	141,584		$	83,748		$	42,477		$	126,225
Actual return on plan assets		(2,375	)		389			(1,986	)		10,416			5,141			15,557
Employer contributions		8,859			1,072			9,931			5,000			5,596			10,596
Benefits paid		(100,475	)		(1,732	)		(102,207	)		(5,173	)		(2,525	)		(7,698	)
Effect of exchange rate movements		—			(2,693	)		(2,693	)		—			(3,096	)		(3,096	)
Fair value of plan assets at end of year		—			44,629			44,629			93,991			47,593			141,584
Net amount recognized/(unfunded status)	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability	$	—		$	—		$	—		$	(11,768	)	$	—		$	(11,768	)
Accrued benefit liability		—			(5,653	)		(5,653	)		—			(5,147	)		(5,147	)
Total liability recognized	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Accumulated other comprehensive loss	$	—		$	9,383		$	9,383		$	34,801		$	7,671		$	42,472

Amounts recognized in accumulated other comprehensive income (loss), pre-tax consist of:

	20 15						2 014
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472
Prior service (cost)		—		—		—		—		—		—
Net amount recognized /occurring, pre-tax	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472

The estimated net actuarial loss (gain) which will be amortized from accumulated other comprehensive income (loss) into benefit cost in 2016 is approximately $0.3 million.

	U.S.									Foreign
(In thousands)	20 15			20 14			20 13			20 15			20 14			20 13
Components of net periodic benefit cost:
Service cost	$	750		$	600		$	600		$	824		$	925		$	744
Interest cost		3,093			3,884			3,565			1,735			2,060			1,376
Expected return on plan assets		(2,749	)		(5,646	)		(5,360	)		(2,346	)		(2,292	)		(1,207	)
Amortization of prior service (credit)		—			—			—			—			—			—
Amortization of losses		870			549			942			221			216			130
Total cost (credit) of the plan for the year		1,964			(613	)		(253	)		434			909			1,043
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit cost (credit)		1,964			(613	)		(253	)		434			909			1,043
Settlement loss		29,928			—			—			—			—			—
Total expense (income) for the year	$	31,892		$	(613	)	$	(253	)	$	434		$	909		$	1,043

Weighted average assumptions used to determine net periodic benefit cost for the years 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	20 15			20 14			20 13			20 15			20 14			20 13
Discount rate		3.9	%		4.8	%		3.9	%		3.7	%		3.7	%		4.5	%
Expected return on plan assets		6.8	%		6.8	%		6.8	%		5.1	%		4.9	%		4.8	%
Compensation increase rate		—			—			—			5.3	%		3.8	%		3.6	%
Measurement dates	9/30/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

The accumulated benefit obligation for the U.S. defined benefit plan was $0.0 million and $105.8 million at January 2, 2016 and December 27, 2014, respectively. The accumulated benefit obligation for the foreign plans was $46.2 million and $48.9 million at January 2, 2016 and December 27, 2014, respectively.

Weighted average assumptions used to determine benefit obligations at year-end 2015, 2014 and 2013 are as follows:

	U.S.									Foreign
	201 5			201 4			20 13			201 5			201 4			20 13
Discount rate		3.9	%		3.9	%		4.8	%		3.8	%		3.7	%		4.5	%
Compensation increase rate		—			—			—			6.2	%		5.3	%		3.8	%
Measurement dates	12/31/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

Expected benefit payments to be paid to participants for the fiscal year ending are as follows (in thousands):

	Expected
	Benefit
	Payments
Year	(Foreign)
2016	1,964
2017	2,012
2018	2,032
2019	2,065
2020	2,101
2021-2025	11,831

Defined Benefit Plan Assets

Based upon analysis of the target asset allocation and historical returns by type of investment, the company has assumed that the expected long-term rate of return will be 5.1% on foreign plan assets. Assets are invested to maximize long-term return taking into consideration timing of settlement of the retirement liabilities and liquidity needs for benefits payments. Pension plan assets were invested as follows, and were not materially different from the target asset allocation:

	U.S. Asset Allocation					Foreign Asset Allocation
		2015*		2014			2015		2014
Equity securities		0	%	0	%		30	%	30	%
Debt securities		0	%	91	%		65	%	68	%
Cash		0	%	9	%		5	%	2	%
		0	%	100	%		100	%	100	%

* The U.S. pension plan was terminated during the third quarter of 2015 as described above.

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of January 2, 2016 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets f or Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	12,801	$	—	$	12,801
Philippine Stock		836		—		—		836
Fixed income:
Investment grade corporate bond funds		6,807		—		—		6,807
Over 15y Gilts Index Fund		—		3,428		—		3,428
Active Corp Bond – Over 10 Yr Fund		—		6,440		—		6,440
Over 5y Index-Linked Gilts Fund		—		10,248		—		10,248
Philippine Long Govt Securities		1,227		—		—		1,227
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		2,061		—		—		2,061
Total pension plan assets	$	11,712	$	32,917	$	—	$	44,629

The following table presents the company’s pension plan assets measured at fair value by classification within the fair value hierarchy as of December 27, 2014 (in thousands):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	13,168	$	—	$	13,168
Philippine Stock		1,069		—		—		1,069
Fixed income:
Long U.S. Credit Corp Index Fund		—		42,911		—		42,911
Long U.S. Govt Bond Index Fund		—		24,116		—		24,116
Intermediate U.S. Govt Bond Index Fund		—		18,884		—		18,884
Investment grade corporate bond funds		8,118		—		—		8,118
Over 15y Gilts Index Fund		—		3,814		—		3,814
Active Corp Bond – Over 10 Yr Fund		—		7,065		—		7,065
Over 5y Index-Linked Gilts Fund		—		11,352		—		11,352
Philippine Long Govt Securities		1,059		—		—		1,059
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		9,247		—		—		9,247
Total pension plan assets	$	20,274	$	121,310	$	—	$	141,584

Defined Contribution Plans

The company also maintains a 401(k) savings plan covering substantially all U.S. employees. The company matches 100% of the employee’s annual contributions for the first 4% of the employee’s eligible compensation. Employees are immediately vested in their contributions plus actual earnings thereon, as well as the company contributions. Company matching contributions amounted to $2.8 million, $2.1 million and $1.7 million in each of the years 2015, 2014 and 2013, respectively.

The company has a non-qualified Supplemental Retirement and Savings Plan. The company will provide additional retirement benefits for certain management employees and named executive officers by allowing participants to contribute up to 90% of their annual compensation with matching contributions of 4% and 5% of the participant’s annual compensation in excess of the IRS compensation limits.

The company previously provided additional retirement benefits for certain key executives through its unfunded defined contribution Supplemental Executive Retirement Plan (“SERP”). The company amended the SERP during 2009 to freeze contributions and set the annual interest rate credited to the accounts until distributed at the five-year Treasury constant maturity rate. The charge to expense for the SERP plan amounted to $0.1 million in 2015 and less than $0.1 million in each of 2014 and 2013.

XML

Note 13 - Shareholders' Equity

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

13. Shareholders’ Equity

Equity Plans

: The company has equity-based compensation plans authorizing the granting of stock options, restricted shares, restricted share units, performance shares and other stock rights of employees and directors. As of January 2, 2016, there were approximately 0.6 million shares available for issuance of future awards under the company’s equity-based compensation plans.

Stock options granted prior to 2002 vested over a five-year period and are exercisable over a ten-year period commencing from the date of vesting. The stock options granted in 2002 through February 2005 vested over a five-year period and are exercisable over a ten-year period commencing from the date of the grant. Stock options granted after February 2005 vest over a three, four or five-year period and are exercisable over either a seven or ten-year period commencing from the date of the grant. Restricted shares and share units granted by the company vest over three to four years.

The following table provides a reconciliation of outstanding stock options for the fiscal year ended January 2, 2016.

	Shares Under Option			Weighted Average Price		Weighted Average Remaining Contract Life (Years)		Aggregate Intrinsic Value (000’s)
Outstanding December 27, 2014		421,862		$	67.88
Granted		145,140			96.18
Exercised		(95,548	)		48.74
Forfeited		(550	)		29.68
Outstanding January 2, 2016		470,904			80.53		4.8	$	12,470
Exercisable January 2, 2016		199,472			66.23		3.6		8,135

The following table provides a reconciliation of non-vested restricted share and share unit awards for the fiscal year ended January 2, 2016.

	Shares			Weighted Average Grant-Date Fair Value
Nonvested December 27, 2014		188,998		$	78.91
Granted		103,002			94.10
Vested		(88,901	)		73.59
Forfeited		(8,638	)		80.40
Nonvested January 2, 2016		194,461			89.32

The total intrinsic value of options exercised during 2015, 2014 and 2013 was $5.0 million, $9.6 million, and $15.3 million, respectively. The total fair value of shares vested was $8.1 million, $7.6 million, and $6.5 million for 2015, 2014 and 2013, respectively. The total amount of share-based liabilities paid was $0.4 million, $0.3 million and $0.1 million for 2015, 2014 and 2013, respectively.

The company recognizes compensation cost of all share-based awards as an expense on a straight-line basis over the vesting period of the awards. At January 2, 2016, the unrecognized compensation cost for options, restricted shares and performance shares was $13.2 million before tax, and will be recognized over a weighted-average period of 1.9 years. Compensation cost included as a component of selling, general and administrative expense for all equity compensation plans discussed above was $10.7 million, $9.4 million and $8.9 million for 2015, 2014 and 2013, respectively. The total income tax benefit recognized in the Consolidated Statements of Net Income was $3.7 million, $3.3 million and $3.2 million for 2015, 2014 and 2013, respectively.

The company uses the Black-Scholes option valuation model to determine the fair value of awards granted. The weighted average fair value of and related assumptions for options granted are as follows:

	201 5			201 4			201 3
Weighted average fair value of options granted	$	21.99		$	26.25		$	23.90
Assumptions:
Risk-free interest rate		1.25	%		1.67	%		0.70	%
Expected dividend yield		1.04	%		0.93	%		1.20	%
Expected stock price volatility		28.0	%		33.0	%		45.0	%
Expected life of options (years)		4.6			4.6			5.1

Expected volatilities are based on the historical volatility of the company’s stock price. The expected life of options is based on historical data for options granted by the company

.

The risk-free rates are based on yields available at the time of grant on U.S. Treasury bonds with maturities consistent with the expected life assumption.

Accumulated Other Comprehensive Income (Loss)

(AOCI)

: The following table sets forth the changes in the components of AOCI by component for fiscal years 2015, 2014 and 2013 (in thousands):

	Pension liability adjustments (a)			Gain on investments (b)		Foreign currency translation adjustment			Accumulated other comprehensive income (loss)
Balance at December 28, 2013	$	(17,140	)	$	9,393	$	28,164		$	20,417
2014 activity		(12,475	)		1,398		(30,466	)		(41,543	)
Balance at December 27, 2014		(29,615	)		10,791		(2,302	)		(21,126	)
2015 activity		20,893			793		(46,231	)		(24,545	)
Balance at January 2, 2016	$	(8,722	)	$	11,584	$	(48,533	)	$	(45,671	)

(a) Net of tax of $661, $12,587, and $6,549 for 2015, 2014 and 2013, respectively.

(b) Net of tax of $0, $0 and $0 for 2015, 2014 and 2013, respectively.

Preferred Stock

: The Board of Directors may authorize the issuance of preferred stock from time to time in one or more series with such designations, preferences, qualifications, limitations, restrictions and optional or other special rights as the Board may fix by resolution.

The Board of Directors authorized the repurchase of up to 1,000,000 shares of the company’s common stock under a program for the period May 1, 2015 to April 30, 2016. The company repurchased 350,000 of its shares in fiscal 2015 and 650,000 shares remain available for purchase under the initial program as of January 2, 2016.

XML

Note 14 - Income Taxes

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Income Tax Disclosure [Text Block]

14

. Income Taxes

Domestic and foreign income (loss) before income taxes is as follows (in thousands):

	201 5		201 4		201 3
Domestic	$	1,313	$	35,264	$	20,254
Foreign		105,635		96,382		103,982
Income before income taxes	$	106,948	$	131,646	$	124,236

Federal, state and foreign income tax (benefit) expense consists of the following (in thousands):

Current:
Federal	$	(6,686	)	$	8,003		$	8,265
State		2,078			1,275			2,084
Foreign		17,611			27,438			18,462
Subtotal		13,003			36,716			28,811
Deferred:
Federal and State		11,330			(1,513	)		3,251
Foreign		149			(2,975	)		3,389
Subtotal		11,479			(4,488	)		6,640
Provision for income taxes	$	24,482		$	32,228		$	35,451

The current federal tax benefit for 2015 includes an $11.7 million benefit reclassified from AOCI as a result of the company’s termination of the U.S. defined benefit pension plan as described in Note 12 of the Notes to Consolidated Financial Statements included in this report.

A reconciliation between income taxes computed on income before income taxes at the federal statutory rate and the provision for income taxes is provided below (in thousands):

	201 5			201 4			201 3
Tax expense at statutory rate of 35%	$	37,432		$	46,076		$	43,481
State and local taxes, net of federal tax benefit		1,907			1,186			1,076
Foreign income tax rate differential		(19,853	)		(14,981	)		(15,497	)
Capital loss valuation allowance		—			—			6,085
Tax on unremitted earnings		—			—			(349	)
Mexico manufacturing operations restructuring		4,841			—			—
Nondeductible professional fees		1,011			—			—
Other, net		(856	)		(53	)		655
Provision for income taxes	$	24,482		$	32,228		$	35,451

Deferred income taxes are provided for the tax effects of temporary differences between the financial reporting bases and the tax bases of the company’s assets and liabilities. Significant components of the company’s deferred tax assets and liabilities at January 2, 2016 and December 27, 2014, are as follows (in thousands):

	20 15			20 14
Deferred tax assets:
Accrued expenses	$	19,738		$	27,088
Foreign tax credit carryforwards		1,529			5,299
AMT credit carryforwards		—			167
Accrued restructuring		1,115			124
Capital losses		4,557			4,557
Domestic and foreign net operating loss carryforwards		684			525
Gross deferred tax assets		27,623			37,760
Less: Valuation allowance		(4,557	)		(4,557	)
Total deferred tax assets		23,066			33,203
Deferred tax liabilities:
Tax depreciation and amortization in excess of book		22,747			21,405
Total deferred tax liabilities		22,747			21,405
Net deferred tax assets	$	319		$	11,798

The deferred tax asset valuation allowance is related to a U.S. capital loss carryover which is not expected to be realized. The remaining domestic and foreign net operating losses either have no expiration date or are expected to be utilized prior to expiration. The foreign tax credit carryforwards begin to expire in 2019. The company paid income taxes of approximately $23.3 million, $26.6 million and $30.4 million in 2015, 2014 and 2013, respectively.

U.S. income taxes were not provided on a cumulative total of approximately $367.9 million of undistributed earnings for certain non-U.S. subsidiaries as of January 2, 2016, and accordingly, no deferred tax liability has been established relative to these earnings. The determination of the deferred tax liability associated with the distribution of these earnings is not practicable. The company has three subsidiaries in China on “tax holidays.” The tax holidays begin to expire in 2017. The company expects to be granted extensions. Such tax holidays contributed approximately $2.6 million in tax benefits ($0.11 per diluted share) during 2015 with similar amounts expected in future years while tax holidays are in effect.

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of January 2, 2016, December 27, 2014 and December 28, 2013 is as follows (in thousands):

Balance at December 28, 2013	$	112
Balance at December 27, 2014		112
Increases/decreases for tax positions taken in the current year		—
Additions for tax positions taken in prior years		—
Settlements		—
Lapses of statute of limitations		—
Other		(10	)
Balance at January 2, 2016	$	102

The amount of unrecognized tax benefits at January 2, 2016 was approximately $0.1 million. Of this total, approximately $0.1 million represents the amount of tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The company expects a decrease in unrecognized tax benefits in the next 12 months of $0.1 million upon concluding a German tax examination. None of the positions included in unrecognized tax benefits are related to tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. The U.S. federal statute of limitations remains open for 2012 onward. Foreign and U.S. state statute of limitations generally range from three to seven years. During 2015, the company received an examination notice from the Illinois state taxing authority for the 2012 and 2013 tax years as well as the Ohio state taxing authority for the 2012 to 2014 tax years. In February 2016, the company received an examination notice from the Internal Revenue Service for the 2014 tax year. The company is currently under examination in Germany for tax years 2008 through 2010. The company does not expect to recognize a significant amount of additional tax expense as a result of concluding the state, U.S. federal or German tax examinations.

The company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense.

XML

Note 15 - Business Unit Segment Information

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

15

. Business Unit Segment Information

An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. The CODM is the company’s President and Chief Executive Officer (“CEO”).

The company reports its operations by the following business unit segments: Electronics, Automotive and Industrial.

● Electronics. Provides circuit protection components and expertise to leading global manufacturers of a wide range of electronic products including mobile phones, computers, LCD TVs, telecommunications equipment, medical devices, lighting products and white goods. The Electronics business segment has the broadest product offering in the industry including fuses and protectors, positive temperature coefficient (“PTC”) resettable fuses, varistors, polymer electrostatic discharge (“ESD”) suppressors, discrete transient voltage suppression (“TVS”) diodes, TVS diode arrays and protection thyristors, gas discharge tubes, power switching components and fuseholders, blocks and related accessories.

● Automotive. Provides circuit protection products to the worldwide automotive original equipment manufacturers (“OEM”) and parts distributors of passenger automobiles, trucks, buses and off-road equipment. The company also sells its fuses in the automotive replacement parts market. Products include blade fuses, high current fuses, battery cable protectors and varistors.

● Industrial (formerly Electrical). Provides circuit protection products for industrial and commercial customers. Products include power fuses and other circuit protection devices that are used in commercial and industrial buildings and large equipment such as HVAC systems, elevators and machine tools.

Each of the operating segments is directly responsible for sales, marketing and research and development. Manufacturing, purchasing, logistics, customer service, finance, information technology and human resources are shared functions that are allocated back to the three operating segments. The CEO allocates resources to and assesses the performance of each operating segment using information about its revenue and operating income (loss), but does not evaluate the operating segments using discrete balance sheet information.

Sales, marketing and research and development expenses are charged directly into each operating segment. All other functions are shared by the operating segments and expenses for these shared functions are allocated to the operating segments and included in the operating results reported below. The company does not report inter-segment revenue because the operating segments do not record it. The company does not allocate interest and other income, interest expense, equity in loss of unconsolidated affiliate, or taxes to operating segments. Although the CEO uses operating income to evaluate the segments, operating costs included in one segment may benefit other segments. Except as discussed above, the accounting policies for segment reporting are the same as for the company as a whole.

The company has provided this business unit segment information for all comparable prior periods.

Segment information is summarized as follows (in thousands):

	20 15		20 14		20 13
Net sales
Electronics	$	405,497	$	410,065	$	367,052
Automotive		339,957		325,415		267,207
Industrial		122,410		116,515		123,594
Total net sales	$	867,864	$	851,995	$	757,853
Depreciation and amortization
Electronics	$	22,936	$	22,177	$	20,735
Automotive		13,437		14,204		9,928
Industrial		5,268		5,494		3,817
Total depreciation and amortization	$	41,641	$	41,875	$	34,480

(Table continued from prior page.)
	20 15			20 14			201 3
Operating income (loss)
Electronics	$	78,194		$	86,981		$	69,559
Automotive		53,086			45,086			39,170
Industrial		18,094			10,674			24,363
Other (1)		(45,217	)		(8,911	)		(3,211	)
Total operating income		104,157			133,830			129,881
Interest expense		4,091			4,903			2,917
Impairment and equity in net loss of unconsolidated affiliate (2)		—			—			10,678
Foreign exchange loss (gain)		(1,465	)		3,925			(3,303	)
Other expense (income), net		(5,417	)		(6,644	)		(4,646	)
Income before income taxes	$	106,948		$	131,646		$	124,235

(1) Included in “Other” Operating income (loss) for 2015 are costs related to the transfer of the company’s reed switch manufacturing operations from its Lake Mills, Wisconsin and Suzhou, China locations to the Philippines ($5.2 million in Cost of sales (“COS”)), acquisition related fees ($4.6 million included in Selling, general and administrative expenses (“SG&A”)), pension settlement and other costs ($31.9 million in SG&A), internal legal restructuring costs ($3.6 million in SG&A) and (($0.2 million) of other in SG&A).

Included in “Other” Operating income (loss) for 2014 are acquisition related fees ($0.4 million included in SG&A), non-cash charges for the sale of inventory that had been stepped-up to fair value at the acquisition date of SymCom ($2.8 million included in COS (See Note 2)), severance charges ($2.7 million in COS and $0.5 million in SG&A), internal legal restructuring costs ($2.2 million in SG&A) and asset impairments ($0.2 million in Research and development and $0.1 million in SG&A). 

Included in “Other” Operating income (loss) for 2013 are acquisition related fees ($1.7 million included in SG&A) and non-cash charges for the sale of inventory that had been stepped-up to fair value at the acquisition date of Hamlin ($1.5 million included in COS). 

(2) During the first quarter of 2013, the company recorded approximately $10.7 million related to the impairment of Shocking Technologies. (See Note 6).  

The company’s significant net sales, long-lived assets and additions to long-lived assets by country for the fiscal years ended 2015, 2014 and 2013 are as follows (in thousands):

	201 5		201 4		201 3
Net sales
United States	$	344,305	$	313,762	$	274,666
China		193,792		189,191		158,494
Other countries		329,767		349,042		324,693
Total net sales	$	867,864	$	851,995	$	757,853
Long-lived assets
United States	$	23,965	$	34,179	$	27,294
China		37,241		40,981		45,843
Canada		10,488		12,899		14,429
Other countries		90,874		70,581		62,607
Total long-lived assets	$	162,568	$	158,640	$	150,173

	201 5		201 4		2013
Additions to long-lived assets
United States	$	8,609	$	9,134	$	4,644
China		9,710		7,265		7,864
Canada		506		555		2,280
Other countries		25,194		15,327		20,165
Total additions to long-lived assets	$	44,019	$	32,281	$	34,953

For the year ended January 2, 2016, approximately 60% of the company’s net sales were to customers outside the United States (exports and foreign operations) including 22% to China. No single customer accounted for more than 10% of net sales during the last three years.

XML

Note 16 - Lease Commitments

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Commitments Disclosure [Text Block]

16. Lease Commitments

The company leases certain office and warehouse space as well as certain machinery and equipment under non-cancellable operating leases. Rent expense under these leases was approximately $11.1 million in 2015, $8.9 million in 2014 and $8.9 million in 2013.

Rent expense is recognized on a straight-line basis over the term of the leases. The difference between straight-line basis rent and the amount paid has been recorded as accrued lease obligations. The company also has leases that have lease renewal provisions. As of January 2, 2016, all operating leases outstanding were with third parties. The company did not have any capital leases as of January 2, 2016

.

Future minimum payments for all non-cancellable operating leases with initial terms of one year or more at January 2, 2016 are as follows (in thousands):

2016	$	8,886
2017		5,227
2018		3,984
2019		3,358
2020		3,163
2021 and thereafter		10,021
	$	34,639

XML

Note 17 - Earnings Per Share

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Earnings Per Share [Text Block]

17. Earnings P

er Share

As of January 2014, the company no longer had “participating securities” as defined under ASC 260. As such, the company now calculates its earnings per share using the treasury method. All of the previous participating securities that resulted in the company using the two-class method have become fully vested or have otherwise expired.

In 2013, the company calculated its earnings per share using the two-class method which included an earnings allocation formula that determined earnings per share for each class of common stock according to dividends declared and undistributed earnings for the period. Previously, the company’s reported net earnings were reduced by the amount allocated to participating securities to arrive at the earnings

allocated to common stock shareholders for purposes of calculating earnings per share under the two-class method.

Under the previous two-class method calculation, the dilutive effect of participating securities was calculated using the more dilutive of the treasury stock or the two-class method. The company previously determined the two-class method to be the more dilutive. As such, the earnings allocated to common stock shareholders in the basic earnings per share calculation was adjusted for the reallocation of undistributed earnings to participating securities to arrive at the earnings allocated to common stock shareholders for calculating the diluted earnings per share.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method:

(In thousands, except per share amounts)	201 5		201 4		20 13
Net income as reported	$	82,466	$	99,418	$	88,784
Less: Distributed earnings available to participating securities		—		—		(35	)
Less: Undistributed earnings available to participating securities		—		—		(16	)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Add: Undistributed earnings allocated to participating securities		—		—		16
Less: Undistributed earnings reallocated to participating securities		—		—		(16	)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Denominator for basic earnings per share —
Weighted-average shares		22,565		22,543		22,315
Effect of dilutive securities:
Common stock equivalents		154		184		222
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions		22,719		22,727		22,537
Basic earnings per share	$	3.65	$	4.41	$	3.98
Diluted earnings per share	$	3.63	$	4.37	$	3.94

The following potential shares of common stock attributable to stock options were excluded from the earnings per share calculation because their effect would be anti-dilutive: 113,130 in 2015; 43,693 in 2014; and 96,401 in 2013.

XML

Note 18 - Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Quarterly Financial Information [Text Block]

18.

S

elected

Quarterly Financial Data (Unaudited)

The quarterly periods listed in the table below for 2015 are for the 14-weeks ended January 2, 2016 and the 13-weeks ended September 26, 2015, June 27, 2015 and March 28, 2015, respectively. The quarterly periods for 2014 are for the 13-weeks ended December 27, 2014, September 27, 2014, June 28, 2014 and March 29, 2014, respectively.

(In thousands, except per share data)

	20 15								20 14
	4Q a		3Q b		2Q c		1Q d		4Q e		3Q f		2Q g		1Q h
Net sales	$	220,020	$	215,510	$	222,021	$	210,313	$	206,620	$	217,608	$	220,908	$	206,859
Gross profit		82,706		86,182		85,281		76,330		75,559		87,380		82,995		78,494
Operating income		29,854		8,584		36,171		29,548		26,391		40,130		33,719		33,590
Net income		22,463		11,324		28,684		19,995		19,511		29,940		24,578		25,389
Net income per share:
Basic	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.33	$	1.09	$	1.13
Diluted	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.32	$	1.08	$	1.12

a – In the fourth quarter of 2015, the company recorded $2.1 million related to the company’s transfer of its reed switch manufacturing operations from the U.S. and China to the Philippines, ($0.1) million related to the reorganization of its internal legal structure, $4.0 million in acquisition costs, ($0.3) million in pension settlement refunds (See Note 12) and ($0.3) million in other.

b – In the third quarter of 2015, the company recorded $1.2 million related to the reed switch manufacturing transfer as noted above, $0.9 million related to the company’s reorganization of its internal legal structure as noted above, $0.3 million in acquisition costs, $30.8 million in pension settlement and wind-up costs (See Note 12) and $0.1 million in other.

c – In the second quarter of 2015, the company recorded $0.9 million related to the reed switch manufacturing transfer as noted above, $1.7 million related to the company’s reorganization of its internal legal structure as noted above, $0.2 million in acquisition costs, and $0.7 million in pension wind-up costs.

d – In the first quarter of 2015, the company recorded $1.0 million related to the reed switch manufacturing transfer as noted above, $1.2 million in charges related to the reorganization of its internal legal structure as noted above, $0.2 million in acquisition costs, and $0.7 million in pension wind-up costs.

e – In the fourth quarter of 2014, the company recorded $2.2 million in charges related to severance and to the company’s reorganization of its internal legal structure as noted above. The company also recorded $0.3 million in acquisition costs and $0.3 million in impairment costs.

f – In the third quarter of 2014, the company recorded $1.1 million in charges related to the company’s reorganization of its internal legal structure, as noted above.

g – In the second quarter of 2014, the company recorded a $1.4 million non-cash charge related to the step-up of inventory from the SymCom acquisition (See Note 2), $2.0 million in severance charges and $0.2 million in acquisition costs.

h – In the first quarter of 2014, the company recorded a $1.4 million non-cash charge related to the step-up of inventory from the SymCom acquisition (See Note 2).

XML

Note 19 - Subsequent Event

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Subsequent Events [Text Block]

19. Subsequent Event

On November 7, 2015, the company and TE Connectivity Ltd., a Swiss corporation, entered into a

stock and asset purchase agreement for $350.0 million, pursuant to which the company has agreed to acquire TE’s circuit protection business. The company expects to close the acquisition by the end of the first quarter of 2016. The company will fund the acquisition with available cash and proceeds from credit facilities.

XML

Schedule II

12 Months Ended

Jan. 02, 2016

Notes to Financial Statements

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

(In thousands of USD)

Description	Balance at Beginning o f Year		Charged to Costs and Expenses (1)		Deductions (2)		Other (3)			Balance at End of Year
Year ended January 2, 2016
Allowance for losses on accounts receivable	$	278	$	164	$	150	$	27		$	319
Reserves for sales discounts and allowances	$	19,140	$	81,335	$	82,997	$	(310	)	$	17,168
Deferred tax valuation allowance	$	4,557	$	—	$	—	$	—		$	4,557
Year ended December 27, 2014
Allowance for losses on accounts receivable	$	790	$	130	$	656	$	14		$	278
Reserves for sales discounts and allowances	$	16,117	$	85,825	$	82,568	$	(234	)	$	19,140
Deferred tax valuation allowance	$	6,250	$	—	$	1,693	$	—		$	4,557
Year ended December 28, 2013
Allowance for losses on accounts receivable	$	705	$	2,289	$	2,316	$	112		$	790
Reserves for sales discounts and allowances	$	12,803	$	77,659	$	74,432	$	87		$	16,117
Deferred tax valuation allowance	$	784	$	6,085	$	619	$	—		$	6,250

(1) Includes provision for doubtful accounts, sales returns and sales discounts granted to customers.

(2) Represents uncollectible accounts written off, net of recoveries and credits issued to customers and the write-off of certain deferred tax assets that previously had full valuation allowances.

(3) Represents business acquisitions and foreign currency translation adjustments.

XML

Significant Accounting Policies (Policies)

12 Months Ended

Jan. 02, 2016

Accounting Policies [Abstract]

Fiscal Period, Policy [Policy Text Block]

Fiscal Year

: The company’s fiscal years ended on January 2, 2016, December 27, 2014 and December 28, 2013. Fiscal year 2015 contained 53 weeks while fiscal years 2014 and 2013 each contained 52 weeks.

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

:

The Consolidated Financial Statements include the accounts of Littelfuse, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. The company’s Consolidated Financial Statements were prepared in accordance with generally accepted accounting principles in the United States of America and include the assets, liabilities, revenues and expenses of all wholly-owned subsidiaries and majority-owned subsidiaries over which the company exercises control.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

: The process of preparing financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses and the accompanying notes. The company evaluates and updates its assumptions and estimates on an ongoing basis and may employ outside experts to assist in its evaluation, as considered necessary. Actual results could differ from those estimates.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Equivalents

: All highly liquid investments, with an original maturity of three months or less when purchased, are considered to be cash equivalents.

Investment, Policy [Policy Text Block]

Short-Term and Long-Term Investments

: The company has determined that certain of its investment securities are to be classified as available-for-sale. Available-for-sale securities are carried at fair value with the unrealized gains and losses reported as a component of “Accumulated Other Comprehensive Income (Loss).” Realized gains and losses and declines in unrealized value judged to be other-than-temporary on available-for-sale securities are included in other expense (income), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income. Short-term investments, which are primarily certificates of deposits, are carried at cost which approximates fair value.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

: The company’s financial instruments include cash and cash equivalents, accounts receivable, investments and long-term debt. The carrying values of such financial instruments approximate their estimated fair values.

Receivables, Policy [Policy Text Block]

Accounts Receivable

:

The company performs credit evaluations of customers’ financial condition and generally does not require collateral. Credit losses are provided for in the financial statements based upon specific knowledge of a customer’s inability to meet its financial obligations to the company. Historically, credit losses have consistently been within management’s expectations and have not been a material amount. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Write-offs are recorded at the time a customer receivable is deemed uncollectible.

The company also maintains allowances against accounts receivable for the settlement of rebates and sales discounts to customers. These allowances are based upon specific customer sales and sales discounts as well as actual historical experience.

Inventory, Policy [Policy Text Block]

Inventories

: Inventories are stated at the lower of cost or market (first in, first out method), which approximates current replacement cost. The company maintains excess and obsolete allowances against inventory to reduce the carrying value to the expected net realizable value. These allowances are based upon a combination of factors including historical sales volume, market conditions, lower of cost or market analysis and expected realizable value of the inventory.

Equity and Cost Method Investments, Policy [Policy Text Block]

Investment in Unconsolidated Affiliate

:

Investments in unconsolidated affiliates over which the company has significant influence over the investees’ operating and financing activities are accounted for under the equity method of accounting. Investments in affiliates over which the company does not have the ability to exert significant influence over the investees’ operating and financing activities are accounted for under the cost method.

Property, Plant and Equipment, Policy [Policy Text Block]

Property, Plant and Equipment

: Land, buildings and equipment are carried at cost. Depreciation is calculated using the straight-line method with useful lives of 21 years for buildings, seven to nine years for equipment, seven years for furniture and fixtures, five years for tooling and three years for computer equipment.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill and Indefinite-Lived Intangible Assets:

The company annually tests goodwill and indefinite-lived intangible assets for impairment on the first day of its fiscal fourth quarter or at other dates if there is an event or change in circumstances that indicates the asset may be impaired. The company has eight reporting units for testing purposes. Management determines the fair value of each of its reporting units by using a discounted cash flow model (which includes forecasted five-year income statement and working capital projections, a market-based weighted average cost of capital and terminal values after five years) to estimate market value. In addition, the company compares its derived enterprise value on a consolidated basis to the company’s market capitalization as of its test date to ensure its derived value approximates the market value of the company when taken as a whole.

As of the most recent annual test conducted on September 27, 2015, the company concluded the fair value of each of the reporting units exceeded its carrying value of invested capital and therefore, no potential goodwill impairment existed. Specifically, the company noted that its headroom, defined as the excess of fair value over the carrying value of invested capital, was 148%, 95%, 188%, 218%, 76%, 26%, 12% and 198% for its electronics (non-silicon), electronics (silicon), passenger car products, commercial vehicle products, automotive sensor products, relay, custom and power fuse reporting units, respectively, at September 27, 2015. Certain key assumptions used in the annual test included a discount rate of 11.7% and a long-term growth rate of 3.0% which were used for all reporting units except for automotive sensor and relay which had a discount rate of 13.7% as a result of a 2.0% premium factor and custom products which had a discount rate of 14.7% as a result of a 3.0% premium factor.

In addition, the company performed a sensitivity test at September 27, 2015 that showed a 100 basis point increase in its discount rate or a 100 basis point decrease in the long-term growth rate for each reporting unit would not have changed the company’s conclusion that no potential goodwill impairment existed at September 27, 2015.

The company will continue to perform a goodwill and indefinite-lived intangible asset impairment test as required on an annual basis and on an interim basis, if certain impairment conditions exist. Factors the company considers important, which could result in changes to its estimates, include underperformance relative to historical or projected future operating results and declines in acquisitions and trading multiples. Due to the diverse end user base and non-discretionary product demand, the company does not believe its future operating results will vary significantly relative to its historical and projected future operating results.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Other

Intangible Assets

: Trademarks and tradenames are amortized using the straight-line method over estimated useful lives that have a range of five to 20 years. Patents, licenses and software are amortized using the straight-line method or an accelerated method over estimated useful lives that have a range of seven to 17 years. The distribution networks are amortized on either a straight-line or accelerated basis over estimated useful lives that have a range of three to 20 years. Other intangible assets are also tested for impairment when there is a significant event that may cause the asset to be impaired.

Environmental Costs, Policy [Policy Text Block]

Environmental Liabilities

: Environmental liabilities are accrued based on engineering studies estimating the cost of remediating sites. Expenses related to on-going maintenance of environmental sites are expensed as incurred. If actual or estimated probable future losses exceed the company’s recorded liability for such claims, the company would record additional charges during the period in which the actual loss or change in estimate occurred.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Pension and Other Post-retirement Benefits

: Accounting for pensions requires estimating the future benefit cost and recognizing the cost over the employee’s expected period of employment with the company. Certain assumptions are required in the calculation of pension costs and obligations. These assumptions include the discount rate, salary scales and the expected long-term rate of return on plan assets. The discount rate is intended to represent the rate at which pension benefit obligations could be settled by purchase of an annuity contract. These assumptions are subject to change based on stock and bond market returns and other economic factors. Actual results that differ from the company’s assumptions are accumulated and amortized over future periods and therefore generally affect its recognized expense and accrued liability in such future periods. While the company believes that its assumptions are appropriate given current economic conditions and its actual experience, significant differences in results or significant changes in the company’s assumptions may materially affect its pension obligations and related future expense. During 2015, the company terminated the U.S. defined benefit pension plan which resulted in a settlement of the plan’s liabilities resulting in a pre-tax charge of $29.9 million. See Note 12 for additional information.

Reclassification, Policy [Policy Text Block]

Reclassifications:

Certain amounts presented in the 2014 financial statements have been reclassified to conform to the 2015 presentation - specifically a reclassification was made to the company’s current deferred tax assets from short-term to long-term. This reclassification resulted from the company’s early adoption of ASU 2015-17 “Balance Sheet Classification of Deferred Taxes (ASC 740, income taxes)” which requires all deferred taxes to be presented as long-term. The amount of current deferred tax assets that were reclassified to long-term deferred tax assets for the fiscal year 2014 was $17.5 million at December 27, 2014. This reclassification had no impact on net income, cash flows or shareholders’ equity.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

: The company recognizes revenue on product sales in the period in which the sales process is complete. This generally occurs when persuasive evidence of an arrangement exists, products are shipped (FOB origin) to the customer in accordance with the terms of the sale, the risk of loss has been transferred, collectability is reasonably assured and the pricing is fixed and determinable.

At the end of each period, for those shipments where title to the products and the risk of loss and rewards of ownership do not transfer until the product has been received by the customer, the company adjusts revenues and cost of sales for the delay between the time that the products are shipped and when they are received by the customer. The company’s distribution channels are primarily through direct sales and independent third party distributors.

Revenue Recognition And Billing [Policy Text Block]

Revenue

and

Billing

: The company accepts orders from customers based on long term purchasing contracts and written sales agreements. Contract pricing and selling agreement terms are based on market factors, costs and competition. Pricing normally is negotiated as an adjustment (premium or discount) from the company’s published price lists. The customer is invoiced when the company’s products are shipped to them in accordance with the terms of the sales agreement.

Revenue Recognition, Sales Returns [Policy Text Block]

Returns

and

Credits

: Some of the terms of the company’s sales agreements and normal business conditions provide customers (distributors) the ability to receive price adjustments on products previously shipped and invoiced. This practice is common in the industry and is referred to as a “ship and debit” program. This program allows the distributor to debit the company for the difference between the distributors’ contracted price and a lower price for specific transactions. Under certain circumstances (usually in a competitive situation or large volume opportunity), a distributor will request authorization to reduce its price to its buyer. If the company approves such a reduction, the distributor is authorized to “debit” its account for the difference between the contracted price and the lower approved price. The company establishes reserves for this program based on historic activity and actual authorizations for the debit and recognizes these debits as a reduction of revenue.

Revenue Recognition Return to Stock [Policy Text Block]

Return to Stock:

The company has a return to stock policy whereby a customer with prior authorization from Littelfuse management can return previously purchased goods for full or partial credit. The company establishes an estimated allowance for these returns based on historic activity. Sales revenue and cost of sales are reduced to anticipate estimated returns.

Revenue Recognition, Rebates [Policy Text Block]

Volume Rebates

:

The company offers incentives to certain customers to achieve specific quarterly or annual sales targets. If customers achieve their sales targets, they are entitled to rebates. The company estimates the future cost of these rebates and recognizes this estimated cost as a reduction to revenue as products are sold.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Doubtful Accounts:

The company evaluates the collectability of its trade receivables based on a combination of factors. The company regularly analyzes its significant customer accounts and, when the company becomes aware of a specific customer’s inability to meet its financial obligations, the company records a specific reserve for bad debt to reduce the related receivable to the amount the

company reasonably believes is collectible. The company also records allowances for all other customers based on a variety of factors including the length of time the receivables are past due, the financial health of the customer, macroeconomic considerations and past experience. Accounts receivable balances that are deemed to be uncollectible, are written off against the reserve on a case-by-case basis. Historically, the allowance for doubtful accounts has been adequate to cover bad debts. If circumstances related to specific customers change, the estimates of the recoverability of receivables could be further adjusted. However, due to the company’s diverse customer base and lack of credit concentration, the company does not believe its estimates would be materially impacted by changes in its assumptions.

Advertising Costs, Policy [Policy Text Block]

Advertising Costs

: The company expenses advertising costs as incurred, which amounted to $2.3 million in 2015, $2.8 million in 2014 and $1.6 million in 2013, and are included as a component of selling, general and administrative expenses.

Shipping and Handling Cost, Policy [Policy Text Block]

Shipping and Handling Fees and Costs

: Amounts billed to customers related to shipping and handling is classified as revenue. Costs incurred for shipping and handling of $7.0 million, $6.7 million and $6.5 million in 2015, 2014 and 2013, respectively, are classified in selling, general and administrative expenses.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

/Remeasurement

: The company’s foreign subsidiaries use the local currency or the U.S. dollar as their functional currency, as appropriate. Assets and liabilities are translated using exchange rates at the balance sheet date, and revenues and expenses are translated at weighted average rates. The amount of foreign currency gain or loss from remeasurement recognized in the income statement was a loss of $7.9 million in 2015, a loss of $4.6 million in 2014 and a gain of $5.2 million in 2013. Adjustments from the translation process are recognized in “Shareholders’ equity” as a component of “Accumulated other comprehensive income.”

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-based Compensation

: The company recognizes compensation expense for the cost of awards of equity compensation using a fair value method. Benefits of tax deductions in excess of recognized compensation expense are reported as both operating and financing cash flows. See Note 13 for additional information on stock-based compensation.

Other Income Expense [Policy Text Block]

Other

E

xpense (

I

ncome),

N

et

:

Other expense (income), net consisting of interest income, royalties and non-operating income

, was ($5.4 million), ($6.6 million) and ($4.6 million) of income in 2015, 2014, and 2013, respectively.

Income Tax, Policy [Policy Text Block]

Income Taxes:

The company accounts for income taxes using the liability method. Deferred taxes are recognized for the future effects of temporary differences between financial and income tax reporting using enacted tax rates in effect for the years in which the differences are expected to reverse. The company recognizes deferred taxes for temporary differences, operating loss carryforwards and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Federal and state income taxes are provided on the portion of foreign income that is expected to be remitted to the U.S. and be taxable.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Pronouncements

: In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) No. 2015-17 – Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which simplifies the balance sheet classification of deferred taxes. The

new guidance requires that all deferred taxes be presented as noncurrent. The company has adopted the new guidance for the year ended January 2, 2016 with all prior periods presented retrospectively adjusted to conform to the new ASU.

In May 2014, the FASB amended prior authoritative guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most current revenue recognition guidance. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. The company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements.

XML

Note 2 - Acquisition of Businesses (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Sigmar preliminary purchase price allocation (in thousands):
Cash	$	230
Current assets, net		4,011
Property, plant and equipment		1,097
Goodwill		2,060
Patents		2,845
Current liabilities		(1,704	)
Other non-current liabilities		(2,906	)
	$	5,633

SymCom final purchase price allocation (in thousands):
Cash	$	325
Current assets, net		9,154
Property, plant and equipment		11,193
Goodwill		15,018
Trademarks		17,020
Patents		1,500
Other non-current assets		20
Current liabilities		(1,137	)
	$	53,093

XML

Note 3 - Inventories (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	201 5		201 4
Raw materials	$	33,599	$	29,756
Work in process		16,479		15,164
Finished goods		48,551		52,471
Total	$	98,629	$	97,391

XML

Note 4 - Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Goodwill [Table Text Block]

	20 15		Additions (Reductions) (a)			Adjust ments ( c )			20 14		Additions (Reductions) ( b )		Adjust ments ( c )			20 13
Electronics	$	58,246	$	(524	)	$	(1,740	)	$	60,510	$	1,654	$	(1,590	)	$	60,446
Automotive		80,262		1,994			(3,449	)		81,717		—		(3,264	)		84,981
Industrial		51,259		—			(2,770	)		54,029		14,920		(1,928	)		41,037
Total	$	189,767	$	1,470		$	(7,959	)	$	196,256	$	16,574	$	(6,782	)	$	186,464

Schedule of Finite-Lived Intangible Assets [Table Text Block]

	201 5						2014
(in thousands)	Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization		Weighted Average Useful Life		Gross Carrying Value		Accumulated Amortization
Patents, licenses and software (a)		11.6	$	61,297	$	41,076		11.7	$	62,378	$	38,738
Distribution network ( a )		12.4		45,564		29,074		12.4		46,850		27,422
Customer lists, trademarks and tradenames ( a )		13.0		81,233		30,534		13.2		80,821		25,246
Tradenames ( b )		—		4,213		—		—		5,030		—
Total		12.4	$	192,307	$	100,684		12.5	$	195,079	$	91,406

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2016	$	11,162
2017		10,745
2018		10,628
2019		10,582
2020		10,582
2021 and thereafter		33,711
	$	87,410

XML

Note 7 - Debt (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Long-term Debt Instruments [Table Text Block]

	20 15		20 14
Term loan	$	85,000	$	93,750
Revolving credit facility		77,000		83,500
Entrusted loan		9,474		17,908
Total debt		171,474		195,158
Less: Current maturities		87,000		88,500
Total long-term debt	$	84,474	$	106,658

XML

Note 9 - Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	11,697	$	—	$	—	$	11,697
Total	$	11,697	$	—	$	—	$	11,697

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Investment in Polytronics	$	12,056	$	—	$	—	$	12,056
Total	$	12,056	$	—	$	—	$	12,056

XML

Note 12 - Benefit Plans (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

	201 5									201 4
(In thousands)	U.S.			Foreign			Total			U.S.			Foreign			Total
Change in benefit obligation:
Benefit obligation at beginning of year	$	105,759		$	52,740		$	158,499		$	84,422		$	50,331		$	134,753
Service cost		750			824			1,574			600			925			1,525
Interest cost		3,093			1,735			4,828			3,884			2,060			5,944
Net actuarial loss (gain)		(9,127	)		648			(8,479	)		22,025			5,652			27,677
Benefits paid from the trust		(100,475	)		(1,732	)		(102,207	)		(5,172	)		(2,525	)		(7,697	)
Benefits paid directly by company		—			(410	)		(410	)		—			(155	)		(155	)
Curtailments and settlements		—			(294	)		(294	)		—			—			—
Effect of exchange rate movements		—			(3,229	)		(3,229	)		—			(3,548	)		(3,548	)
Benefit obligation at end of year	$	—		$	50,282		$	50,282		$	105,759		$	52,740		$	158,499
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$	93,991		$	47,593		$	141,584		$	83,748		$	42,477		$	126,225
Actual return on plan assets		(2,375	)		389			(1,986	)		10,416			5,141			15,557
Employer contributions		8,859			1,072			9,931			5,000			5,596			10,596
Benefits paid		(100,475	)		(1,732	)		(102,207	)		(5,173	)		(2,525	)		(7,698	)
Effect of exchange rate movements		—			(2,693	)		(2,693	)		—			(3,096	)		(3,096	)
Fair value of plan assets at end of year		—			44,629			44,629			93,991			47,593			141,584
Net amount recognized/(unfunded status)	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability	$	—		$	—		$	—		$	(11,768	)	$	—		$	(11,768	)
Accrued benefit liability		—			(5,653	)		(5,653	)		—			(5,147	)		(5,147	)
Total liability recognized	$	—		$	(5,653	)	$	(5,653	)	$	(11,768	)	$	(5,147	)	$	(16,915	)
Accumulated other comprehensive loss	$	—		$	9,383		$	9,383		$	34,801		$	7,671		$	42,472

Schedule of Defined Benefit Plan Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

	20 15						2 014
(In thousands)	U.S.		Foreign		Total		U.S.		Foreign		Total
Net actuarial loss	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472
Prior service (cost)		—		—		—		—		—		—
Net amount recognized /occurring, pre-tax	$	—	$	9,383	$	9,383	$	34,801	$	7,671	$	42,472

Schedule of Net Benefit Costs [Table Text Block]

	U.S.									Foreign
(In thousands)	20 15			20 14			20 13			20 15			20 14			20 13
Components of net periodic benefit cost:
Service cost	$	750		$	600		$	600		$	824		$	925		$	744
Interest cost		3,093			3,884			3,565			1,735			2,060			1,376
Expected return on plan assets		(2,749	)		(5,646	)		(5,360	)		(2,346	)		(2,292	)		(1,207	)
Amortization of prior service (credit)		—			—			—			—			—			—
Amortization of losses		870			549			942			221			216			130
Total cost (credit) of the plan for the year		1,964			(613	)		(253	)		434			909			1,043
Expected plan participants’ contributions		—			—			—			—			—			—
Net periodic benefit cost (credit)		1,964			(613	)		(253	)		434			909			1,043
Settlement loss		29,928			—			—			—			—			—
Total expense (income) for the year	$	31,892		$	(613	)	$	(253	)	$	434		$	909		$	1,043

Schedule of Assumptions Used [Table Text Block]

	U.S.									Foreign
	20 15			20 14			20 13			20 15			20 14			20 13
Discount rate		3.9	%		4.8	%		3.9	%		3.7	%		3.7	%		4.5	%
Expected return on plan assets		6.8	%		6.8	%		6.8	%		5.1	%		4.9	%		4.8	%
Compensation increase rate		—			—			—			5.3	%		3.8	%		3.6	%
Measurement dates	9/30/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

	U.S.									Foreign
	201 5			201 4			20 13			201 5			201 4			20 13
Discount rate		3.9	%		3.9	%		4.8	%		3.8	%		3.7	%		4.5	%
Compensation increase rate		—			—			—			6.2	%		5.3	%		3.8	%
Measurement dates	12/31/15			12/31/14			12/31/13			12/31/15			12/31/14			12/31/13

Schedule of Expected Benefit Payments [Table Text Block]

	Expected
	Benefit
	Payments
Year	(Foreign)
2016	1,964
2017	2,012
2018	2,032
2019	2,065
2020	2,101
2021-2025	11,831

Schedule of Allocation of Plan Assets [Table Text Block]

	U.S. Asset Allocation					Foreign Asset Allocation
		2015*		2014			2015		2014
Equity securities		0	%	0	%		30	%	30	%
Debt securities		0	%	91	%		65	%	68	%
Cash		0	%	9	%		5	%	2	%
		0	%	100	%		100	%	100	%

Pension Plan Assets Measured at Fair Value [Table Text Block]

	Fair Value Measurements Using
	Quoted Prices in Active Markets f or Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	12,801	$	—	$	12,801
Philippine Stock		836		—		—		836
Fixed income:
Investment grade corporate bond funds		6,807		—		—		6,807
Over 15y Gilts Index Fund		—		3,428		—		3,428
Active Corp Bond – Over 10 Yr Fund		—		6,440		—		6,440
Over 5y Index-Linked Gilts Fund		—		10,248		—		10,248
Philippine Long Govt Securities		1,227		—		—		1,227
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		2,061		—		—		2,061
Total pension plan assets	$	11,712	$	32,917	$	—	$	44,629

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equities:
Global Equity 50:50 Index Fund	$	—	$	13,168	$	—	$	13,168
Philippine Stock		1,069		—		—		1,069
Fixed income:
Long U.S. Credit Corp Index Fund		—		42,911		—		42,911
Long U.S. Govt Bond Index Fund		—		24,116		—		24,116
Intermediate U.S. Govt Bond Index Fund		—		18,884		—		18,884
Investment grade corporate bond funds		8,118		—		—		8,118
Over 15y Gilts Index Fund		—		3,814		—		3,814
Active Corp Bond – Over 10 Yr Fund		—		7,065		—		7,065
Over 5y Index-Linked Gilts Fund		—		11,352		—		11,352
Philippine Long Govt Securities		1,059		—		—		1,059
Philippine Long Corporate Bonds		781		—		—		781
Cash and equivalents		9,247		—		—		9,247
Total pension plan assets	$	20,274	$	121,310	$	—	$	141,584

XML

Note 13 - Shareholders' Equity (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Shares Under Option			Weighted Average Price		Weighted Average Remaining Contract Life (Years)		Aggregate Intrinsic Value (000’s)
Outstanding December 27, 2014		421,862		$	67.88
Granted		145,140			96.18
Exercised		(95,548	)		48.74
Forfeited		(550	)		29.68
Outstanding January 2, 2016		470,904			80.53		4.8	$	12,470
Exercisable January 2, 2016		199,472			66.23		3.6		8,135

Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]

	Shares			Weighted Average Grant-Date Fair Value
Nonvested December 27, 2014		188,998		$	78.91
Granted		103,002			94.10
Vested		(88,901	)		73.59
Forfeited		(8,638	)		80.40
Nonvested January 2, 2016		194,461			89.32

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	201 5			201 4			201 3
Weighted average fair value of options granted	$	21.99		$	26.25		$	23.90
Assumptions:
Risk-free interest rate		1.25	%		1.67	%		0.70	%
Expected dividend yield		1.04	%		0.93	%		1.20	%
Expected stock price volatility		28.0	%		33.0	%		45.0	%
Expected life of options (years)		4.6			4.6			5.1

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Pension liability adjustments (a)			Gain on investments (b)		Foreign currency translation adjustment			Accumulated other comprehensive income (loss)
Balance at December 28, 2013	$	(17,140	)	$	9,393	$	28,164		$	20,417
2014 activity		(12,475	)		1,398		(30,466	)		(41,543	)
Balance at December 27, 2014		(29,615	)		10,791		(2,302	)		(21,126	)
2015 activity		20,893			793		(46,231	)		(24,545	)
Balance at January 2, 2016	$	(8,722	)	$	11,584	$	(48,533	)	$	(45,671	)

XML

Note 14 - Income Taxes (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

	201 5		201 4		201 3
Domestic	$	1,313	$	35,264	$	20,254
Foreign		105,635		96,382		103,982
Income before income taxes	$	106,948	$	131,646	$	124,236

Current:
Federal	$	(6,686	)	$	8,003		$	8,265
State		2,078			1,275			2,084
Foreign		17,611			27,438			18,462
Subtotal		13,003			36,716			28,811
Deferred:
Federal and State		11,330			(1,513	)		3,251
Foreign		149			(2,975	)		3,389
Subtotal		11,479			(4,488	)		6,640
Provision for income taxes	$	24,482		$	32,228		$	35,451

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

	201 5			201 4			201 3
Tax expense at statutory rate of 35%	$	37,432		$	46,076		$	43,481
State and local taxes, net of federal tax benefit		1,907			1,186			1,076
Foreign income tax rate differential		(19,853	)		(14,981	)		(15,497	)
Capital loss valuation allowance		—			—			6,085
Tax on unremitted earnings		—			—			(349	)
Mexico manufacturing operations restructuring		4,841			—			—
Nondeductible professional fees		1,011			—			—
Other, net		(856	)		(53	)		655
Provision for income taxes	$	24,482		$	32,228		$	35,451

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

	20 15			20 14
Deferred tax assets:
Accrued expenses	$	19,738		$	27,088
Foreign tax credit carryforwards		1,529			5,299
AMT credit carryforwards		—			167
Accrued restructuring		1,115			124
Capital losses		4,557			4,557
Domestic and foreign net operating loss carryforwards		684			525
Gross deferred tax assets		27,623			37,760
Less: Valuation allowance		(4,557	)		(4,557	)
Total deferred tax assets		23,066			33,203
Deferred tax liabilities:
Tax depreciation and amortization in excess of book		22,747			21,405
Total deferred tax liabilities		22,747			21,405
Net deferred tax assets	$	319		$	11,798

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block]

Balance at December 28, 2013	$	112
Balance at December 27, 2014		112
Increases/decreases for tax positions taken in the current year		—
Additions for tax positions taken in prior years		—
Settlements		—
Lapses of statute of limitations		—
Other		(10	)
Balance at January 2, 2016	$	102

XML

Note 15 - Business Unit Segment Information (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	20 15		20 14		20 13
Net sales
Electronics	$	405,497	$	410,065	$	367,052
Automotive		339,957		325,415		267,207
Industrial		122,410		116,515		123,594
Total net sales	$	867,864	$	851,995	$	757,853
Depreciation and amortization
Electronics	$	22,936	$	22,177	$	20,735
Automotive		13,437		14,204		9,928
Industrial		5,268		5,494		3,817
Total depreciation and amortization	$	41,641	$	41,875	$	34,480

(Table continued from prior page.)
	20 15			20 14			201 3
Operating income (loss)
Electronics	$	78,194		$	86,981		$	69,559
Automotive		53,086			45,086			39,170
Industrial		18,094			10,674			24,363
Other (1)		(45,217	)		(8,911	)		(3,211	)
Total operating income		104,157			133,830			129,881
Interest expense		4,091			4,903			2,917
Impairment and equity in net loss of unconsolidated affiliate (2)		—			—			10,678
Foreign exchange loss (gain)		(1,465	)		3,925			(3,303	)
Other expense (income), net		(5,417	)		(6,644	)		(4,646	)
Income before income taxes	$	106,948		$	131,646		$	124,235

Schedule of Disclosure on Geographic Areas, Long-Lived Assets in Individual Foreign Countries by Country [Table Text Block]

	201 5		201 4		201 3
Net sales
United States	$	344,305	$	313,762	$	274,666
China		193,792		189,191		158,494
Other countries		329,767		349,042		324,693
Total net sales	$	867,864	$	851,995	$	757,853
Long-lived assets
United States	$	23,965	$	34,179	$	27,294
China		37,241		40,981		45,843
Canada		10,488		12,899		14,429
Other countries		90,874		70,581		62,607
Total long-lived assets	$	162,568	$	158,640	$	150,173

	201 5		201 4		2013
Additions to long-lived assets
United States	$	8,609	$	9,134	$	4,644
China		9,710		7,265		7,864
Canada		506		555		2,280
Other countries		25,194		15,327		20,165
Total additions to long-lived assets	$	44,019	$	32,281	$	34,953

XML

Note 16 - Lease Commitments (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

2016	$	8,886
2017		5,227
2018		3,984
2019		3,358
2020		3,163
2021 and thereafter		10,021
	$	34,639

XML

Note 17 - Earnings Per Share (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

(In thousands, except per share amounts)	201 5		201 4		20 13
Net income as reported	$	82,466	$	99,418	$	88,784
Less: Distributed earnings available to participating securities		—		—		(35	)
Less: Undistributed earnings available to participating securities		—		—		(16	)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Add: Undistributed earnings allocated to participating securities		—		—		16
Less: Undistributed earnings reallocated to participating securities		—		—		(16	)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$	82,466	$	99,418	$	88,733
Denominator for basic earnings per share —
Weighted-average shares		22,565		22,543		22,315
Effect of dilutive securities:
Common stock equivalents		154		184		222
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions		22,719		22,727		22,537
Basic earnings per share	$	3.65	$	4.41	$	3.98
Diluted earnings per share	$	3.63	$	4.37	$	3.94

XML

Note 18 - Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Schedule of Quarterly Financial Information [Table Text Block]

	20 15								20 14
	4Q a		3Q b		2Q c		1Q d		4Q e		3Q f		2Q g		1Q h
Net sales	$	220,020	$	215,510	$	222,021	$	210,313	$	206,620	$	217,608	$	220,908	$	206,859
Gross profit		82,706		86,182		85,281		76,330		75,559		87,380		82,995		78,494
Operating income		29,854		8,584		36,171		29,548		26,391		40,130		33,719		33,590
Net income		22,463		11,324		28,684		19,995		19,511		29,940		24,578		25,389
Net income per share:
Basic	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.33	$	1.09	$	1.13
Diluted	$	1.00	$	0.50	$	1.26	$	0.88	$	0.86	$	1.32	$	1.08	$	1.12

XML

Schedule II (Tables)

12 Months Ended

Jan. 02, 2016

Notes Tables

Summary of Valuation Allowance [Table Text Block]

Description	Balance at Beginning o f Year		Charged to Costs and Expenses (1)		Deductions (2)		Other (3)			Balance at End of Year
Year ended January 2, 2016
Allowance for losses on accounts receivable	$	278	$	164	$	150	$	27		$	319
Reserves for sales discounts and allowances	$	19,140	$	81,335	$	82,997	$	(310	)	$	17,168
Deferred tax valuation allowance	$	4,557	$	—	$	—	$	—		$	4,557
Year ended December 27, 2014
Allowance for losses on accounts receivable	$	790	$	130	$	656	$	14		$	278
Reserves for sales discounts and allowances	$	16,117	$	85,825	$	82,568	$	(234	)	$	19,140
Deferred tax valuation allowance	$	6,250	$	—	$	1,693	$	—		$	4,557
Year ended December 28, 2013
Allowance for losses on accounts receivable	$	705	$	2,289	$	2,316	$	112		$	790
Reserves for sales discounts and allowances	$	12,803	$	77,659	$	74,432	$	87		$	16,117
Deferred tax valuation allowance	$	784	$	6,085	$	619	$	—		$	6,250

XML

Note 1 - Summary of Significant Accounting Policies and Other Information (Details Textual) - USD ($)	12 Months Ended
	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013	Sep. 28, 2015	Sep. 27, 2015
Building [Member]
Property, Plant and Equipment, Useful Life		21 years
Equipment [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life		7 years
Equipment [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life		9 years
Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life		7 years
Tooling [Member]
Property, Plant and Equipment, Useful Life		5 years
Computer Equipment [Member]
Property, Plant and Equipment, Useful Life		3 years
Minimum [Member] | Trademarks and Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life		5 years
Minimum [Member] | Patents Licenses And Software [Member]
Finite-Lived Intangible Asset, Useful Life		7 years
Minimum [Member] | Distribution Rights [Member]
Finite-Lived Intangible Asset, Useful Life		3 years
Maximum [Member] | Trademarks and Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life		20 years
Maximum [Member] | Patents Licenses And Software [Member]
Finite-Lived Intangible Asset, Useful Life		17 years
Maximum [Member] | Distribution Rights [Member]
Finite-Lived Intangible Asset, Useful Life		20 years
Electronics Non Silicon Unit [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						148.00%
Electronics (Silicon) Unit [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						95.00%
Passenger Car [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						188.00%
Commercial Vehicle Products [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						218.00%
Sensors [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						76.00%
Relay Unit [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						26.00%
Custom Products Unit [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						12.00%
Fair Value Inputs, Discount Rate		14.70%
Fair Value Inputs, Control Premium		3.00%
Fuse Unit [Member]
Excess Of Fair Value Over Carrying Value Of Invested Capital						198.00%
All Reporting Units Other Than Sensor and Relay Unit [Member]
Fair Value Inputs, Discount Rate		11.70%
Fair Value Inputs, Long-term Revenue Growth Rate		3.00%
Sensor and Relay Unit [Member]
Fair Value Inputs, Discount Rate		13.70%
Fair Value Inputs, Control Premium		2.00%
Patents Licenses And Software [Member]
Finite-Lived Intangible Asset, Useful Life		11 years 219 days	11 years 255 days
Distribution Rights [Member]
Finite-Lived Intangible Asset, Useful Life		12 years 146 days	12 years 146 days
Reclassification of Deferred Tax Assets from Current to Noncurrent [Member] | Fiscal Year Ended 2014 [Member]
Prior Period Reclassification Adjustment		$ 17,500,000
Goodwill, Impaired, Accumulated Impairment Loss	$ 0	$ 0	$ 0	$ 0	$ 0
Number of Reportable Segments		8
Sensitivity Analysis Increase In Discount Rate					1.00%
Sensitivity Analysis Decrease In Long Term Growth Rate, Percent					1.00%
Finite-Lived Intangible Asset, Useful Life		12 years 146 days	12 years 182 days
Defined Benefit Plan, Purchases, Sales, and Settlements		$ 29,900,000
Advertising Expense		2,300,000	$ 2,800,000	1,600,000
Shipping, Handling and Transportation Costs		7,000,000	6,700,000	6,500,000
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax		7,900,000	4,600,000	5,200,000
Other Nonoperating Income (Expense)	$ 5,417,000	$ 5,417,000	$ 6,644,000	$ 4,646,000

XML

Note 2 - Acquisition of Businesses (Details Textual) - USD ($) $ in Thousands			3 Months Ended							6 Months Ended	12 Months Ended
	Oct. 01, 2015	Jan. 03, 2014	Jan. 02, 2016	Sep. 26, 2015	Jun. 27, 2015	Mar. 28, 2015	Dec. 27, 2014	Jun. 28, 2014	Mar. 29, 2014	Jun. 28, 2014	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Sigmar [Member] | Patents [Member]
Finite-Lived Intangible Asset, Useful Life	10 years
Sigmar [Member]
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Payments to Acquire Businesses, Net of Cash Acquired	$ 5,400
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	$ 600
Sym Com Inc [Member] | Patents [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life		16 years
Sym Com Inc [Member] | Patents [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life		17 years
Sym Com Inc [Member] | Trademarks [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life		15 years
Sym Com Inc [Member] | Trademarks [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life		20 years
Sym Com Inc [Member]
Business Combination, Acquisition Related Costs								$ 200
Business Acquisition, Percentage of Voting Interests Acquired		100.00%
Payments to Acquire Businesses, Net of Cash Acquired		$ 52,800
Business Acquisition Inventory Stepup		$ 2,600						2,800		$ 2,800
Noncash Charges Related To Inventory Stepup								$ 1,400	$ 1,400	$ 1,400
Business Combination, Acquisition Related Costs			$ 4,000	$ 300	$ 200	$ 200	$ 300					$ 4,600	$ 500	$ 1,700
Payments to Acquire Businesses, Net of Cash Acquired											$ 4,558		$ 56,368	$ 144,382
Finite-Lived Intangible Asset, Useful Life												12 years 146 days	12 years 182 days

XML

Note 2 - Acquisition of Businesses - Final Purchase Price Allocations (Details)	Jan. 02, 2016 USD ($)
Sigmar [Member] | Patents [Member]
Patents	$ 2,845,000
Sigmar [Member]
Cash	230,000
Current assets, net	4,011,000
Property, plant and equipment	1,097,000
Goodwill	2,060,000
Current liabilities	(1,704,000)
Other non-current liabilities	(2,906,000)
	5,633,000
Sym Com Inc [Member] | Patents [Member]
Patents	1,500,000
Sym Com Inc [Member] | Trademarks [Member]
Patents	17,020,000
Sym Com Inc [Member]
Cash	325,000
Current assets, net	9,154,000
Property, plant and equipment	11,193,000
Goodwill	15,018,000
Current liabilities	(1,137,000)
	53,093,000
Other non-current assets	20,000
Goodwill	$ 189,767,000

XML

Note 3 - Inventories - Components of Inventories (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
Raw materials	$ 33,599	$ 29,756
Work in process	16,479	15,164
Finished goods	48,551	52,471
Total	$ 98,629	$ 97,391

XML

Note 4 - Goodwill and Other Intangible Assets (Details Textual) - USD ($)	12 Months Ended
	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013	Sep. 28, 2015
Automotive [Member]
Goodwill, Acquired During Period		$ 1,994,000
Electronics [Member]
Goodwill, Acquired During Period			$ 1,654,000
Industrial [Member]
Goodwill, Acquired During Period			14,920,000
Goodwill, Impaired, Accumulated Impairment Loss	$ 0	$ 0	0	$ 0	$ 0
Goodwill, Acquired During Period		1,470,000	16,574,000
Amortization of Intangible Assets	$ 11,898,000	$ 11,900,000	$ 12,501,000	$ 9,279,000

XML

Note 4 - Amounts for Goodwill and Changes in Carrying Value by Operating Segment (Details) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Electronics [Member]
Goodwill	$ 58,246,000	$ 60,510,000	$ 60,446,000
Electronics	(524,000)
Electronics	(1,740,000)	(1,590,000)
Goodwill, Acquired During Period		1,654,000
Automotive [Member]
Goodwill	80,262,000	81,717,000	84,981,000
Electronics	(3,449)	$ (3,264)
Goodwill, Acquired During Period	1,994,000
Industrial [Member]
Goodwill	51,259,000	$ 54,029,000	41,037,000
Electronics	$ (2,770)	(1,928)
Goodwill, Acquired During Period		14,920,000
Goodwill	$ 189,767,000	196,256,000	$ 186,464,000
Electronics	(7,959)	(6,782)
Goodwill, Acquired During Period	$ 1,470,000	$ 16,574,000

XML

Note 4 - Details of Other Intangible Assets and Related Future Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014
Patents Licenses And Software [Member]
Finite-Lived Intangible Asset, Useful Life	11 years 219 days	11 years 255 days
Patents, licenses and software(a)	$ 61,297	$ 62,378
Patents, licenses and software(a)	$ 41,076	$ 38,738
Distribution Rights [Member]
Finite-Lived Intangible Asset, Useful Life	12 years 146 days	12 years 146 days
Patents, licenses and software(a)	$ 45,564	$ 46,850
Patents, licenses and software(a)	$ 29,074	$ 27,422
Customer Lists, Trademarks and Tradenames [Member]
Finite-Lived Intangible Asset, Useful Life	13 years	13 years 73 days
Patents, licenses and software(a)	$ 81,233	$ 80,821
Patents, licenses and software(a)	$ 30,534	$ 25,246
Trade Names [Member]
Finite-Lived Intangible Asset, Useful Life
Patents, licenses and software(a)	$ 4,213	$ 5,030
Patents, licenses and software(a)
Finite-Lived Intangible Asset, Useful Life	12 years 146 days	12 years 182 days
Patents, licenses and software(a)	$ 192,307	$ 195,079
Patents, licenses and software(a)	$ 100,684	$ 91,406

XML

Note 4 - Estimated Amortization Expense Related to Intangible Assets with Definite Lives (Details) $ in Thousands	Jan. 02, 2016 USD ($)
2016	$ 11,162
2017	10,745
2018	10,628
2019	10,582
2020	10,582
2021 and thereafter	33,711
	$ 87,410

XML

Note 5 - Investments (Details Textual) € in Millions, $ in Millions	12 Months Ended
	Jan. 02, 2016 USD ($)	Jan. 02, 2016 EUR (€)	Jan. 02, 2016 USD ($)	Dec. 27, 2014 EUR (€)	Dec. 27, 2014 USD ($)
Polytronics [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		7.20%	7.20%	7.20%	7.20%
Marketable Securities, Equity Securities		€ 10.7	$ 11.7	€ 9.9	$ 12.1
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax	$ 0.9
Monolith [Member]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		12.00%	12.00%
Cost Method Investments			$ 3.5
Cost Method Investments, Fair Value Disclosure			$ 3.5

XML

Note 6 - Investment in Unconsolidated Affiliate (Details Textual) - USD ($)	1 Months Ended		3 Months Ended											12 Months Ended
	Nov. 30, 2012	Apr. 30, 2012	Jan. 02, 2016	Sep. 26, 2015	Jun. 27, 2015	Mar. 28, 2015	Dec. 27, 2014	Sep. 27, 2014	Jun. 28, 2014	Mar. 29, 2014	Dec. 28, 2013	Mar. 30, 2013	Dec. 29, 2012	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013	Dec. 29, 2012
Shocking [Member] | Equity Method Investments [Member]
Operating Income (Loss)																		$ 4,000,000
Other than Temporary Impairment Losses, Investments												$ 8,700,000
Shocking [Member] | Loans Receivable [Member]
Other than Temporary Impairment Losses, Investments												2,000,000
Shocking [Member]
Investments in and Advances to Affiliates, at Fair Value, Gross Additions		$ 10,000,000
Investments in and Advances to Affiliates, at Fair Value		$ 16,000,000
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners		18.40%
Increase (Decrease) in Notes Receivables	$ 2,000,000
Other than Temporary Impairment Losses, Investments												10,700,000
Investments												$ 0
Income Taxes Paid, Net											$ 6,100,000
Income Tax Expense (Benefit)											$ 3,300,000		$ 2,800,000
Operating Income (Loss)			$ 29,854,000	$ 8,584,000	$ 36,171,000	$ 29,548,000	$ 26,391,000	$ 40,130,000	$ 33,719,000	$ 33,590,000				$ 104,157,000	$ 104,157,000	$ 133,830,000	$ 129,881,000
Income Tax Expense (Benefit)														$ 24,482,000	$ 24,482,000	$ 32,228,000	$ 35,451,000

XML

Note 7 - Debt (Details Textual) $ in Thousands, ¥ in Millions		1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 30, 2014 USD ($)	May. 31, 2013 USD ($)	Sep. 28, 2013	Jan. 02, 2016 USD ($)	Dec. 27, 2014 USD ($)	Dec. 28, 2013 USD ($)	Jan. 02, 2016 CNY (¥)	Dec. 27, 2014 CNY (¥)	Jun. 29, 2013 USD ($)	Jun. 29, 2013 CNY (¥)
JP Morgan Securities LLC [Member] | Unsecured Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 275,000	$ 225,000
Line of Credit Facility, Remaining Borrowing Capacity				$ 197,900
Debt Instrument, Basis Spread on Variable Rate				1.25%
Line of Credit Facility, Interest Rate at Period End				1.68%			1.68%
Debt Issuance Cost	100
Line Of Credit Facility Increase in Maximum Borrowing Capacity	$ 50,000
JP Morgan Securities LLC [Member]
Line of Credit Facility, Maximum Borrowing Capacity		325,000
Loans Payable to Bank		$ 100,000
Line of Credit Facility, Expiration Period		5 years
Hamlin Inc [Member]
Number of Credit Lines Assumed After Acquisition									3	3
Line of Credit Facility, Current Borrowing Capacity									$ 6,600	¥ 41.0
Number of Credit Lines Assumed After Acquisition That Expired During Period			2
Entrustment Loan Member
Debt Instrument, Interest Rate, Stated Percentage					5.25%			5.25%
Loans Payable to Bank				$ 85,000	$ 93,750
Debt Issuance Cost		$ 800
Letters of Credit Outstanding, Amount				100	800	$ 800
Entrusted Loan				9,474	17,908			¥ 110.0
Entrusted Loan, Total				9,500			¥ 61.5
Interest Paid				$ 4,100	$ 4,900	$ 2,900

XML

Note 7 - Debt - Carrying Amounts of Long-term Debt (Details) $ in Thousands, ¥ in Millions	Jan. 02, 2016 USD ($)	Dec. 27, 2014 USD ($)
Loans Payable to Bank	$ 85,000	$ 93,750
Revolving credit facility	77,000	83,500
Entrusted Loan	9,474	17,908
Total debt	171,474	195,158
Less: Current maturities	87,000	88,500
Total long-term debt	$ 84,474	$ 106,658

XML

Note 9 - Fair Value of Assets and Liabilities (Details Textual) $ in Millions	Jan. 02, 2016 USD ($)
Monolith [Member]
Cost Method Investments, Fair Value Disclosure	$ 3.5

XML

Note 9 - Fair Value of Assets and Liabilities - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
Fair Value, Inputs, Level 1 [Member] | Polytronics [Member]
Investment in Polytronics	$ 11,697	$ 12,056
Fair Value, Inputs, Level 1 [Member] | Monolith [Member]
Investment in Polytronics	11,697
Fair Value, Inputs, Level 1 [Member]
Total		12,056
Polytronics [Member]
Investment in Polytronics	11,697	12,056
Monolith [Member]
Investment in Polytronics	$ 11,697
Total		$ 12,056

XML

Note 10 - Coal Mining Liability (Details Textual) € in Millions, $ in Millions	Jan. 02, 2016 EUR (€)	Jan. 02, 2016 USD ($)	Dec. 27, 2014 EUR (€)	Dec. 27, 2014 USD ($)
Loss Contingency, Accrual, Noncurrent	€ 1.8	$ 2.0	€ 1.9	$ 2.4

XML

Note 11 - Asset Impairments (Details Textual) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 27, 2014	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Selling, General and Administrative Expenses [Member]
Asset Impairment Charges			$ 300,000
Manufacturing Facility in Des Plaines, Illinois [Member]
Disposal Group, Including Discontinued Operation, Assets	$ 5,500,000	$ 0	$ 5,500,000
Asset Impairment Charges	$ 300,000	$ 0		$ 0

XML

Note 12 - Benefit Plans (Details Textual) - USD ($)	3 Months Ended			12 Months Ended
	Jan. 02, 2016	Jan. 02, 2016	Oct. 03, 2015	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Supplemental Executive Retirement Plan (SERP) [Member]
Defined Contribution Plan, Cost Recognized					$ 100,000	$ 100,000	$ 100,000
United States Pension Plan of US Entity [Member]
Pension Contributions			$ 9,100,000
Define Benefit Plan, Pre-tax Settlement Charge			$ 30,200,000
Defined Benefit Plan Total Cost Credit Of The Plan					1,964,000	(613,000)	$ (253,000)
Defined Benefit Plan, Accumulated Benefit Obligation	$ 0	$ 0		$ 0	$ 0	$ 105,759,000
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets					6.80%	6.80%	6.80%
Foreign Pension Plan [Member]
Defined Benefit Plan Total Cost Credit Of The Plan					$ 434,000	$ 909,000	$ 1,043,000
Defined Benefit Plan, Accumulated Benefit Obligation	46,200,000	46,200,000		46,200,000	$ 46,200,000	$ 48,900,000
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets					5.10%	4.90%	4.80%
Minimum [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay					4.00%
Maximum [Member]
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay					5.00%
Define Benefit Plan, Pre-tax Settlement Charge				$ 29,928,000
Premium Refund of Annuity Contract	$ 300,000	$ (300,000)
Defined Benefit Plan, Recognized Net Gain (Loss) Due to Settlements					$ 29,900,000
Defined Benefit Plan Total Cost Credit Of The Plan					32,400,000	$ 300,000	$ 800,000
Defined Benefit Plan, Amount to be Amortized from Accumulated Other Comprehensive Income (Loss) Next Fiscal Year					$ 300,000
Defined Contribution Plan, Employer Matching Contribution, Percent of Employees' Gross Pay					4.00%
Defined Contribution Plan, Employer Discretionary Contribution Amount					$ 2,800,000	$ 2,100,000	$ 1,700,000
Defined Contribution Plan, Maximum Annual Contributions Per Employee, Percent					90.00%

XML

Note 12 - Benefit Plan Related Information (Details) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
United States Pension Plan of US Entity [Member]
Change in benefit obligation:
Benefit obligation at beginning of year	$ 105,759,000	$ 84,422,000
Service cost	750,000	600,000	$ 600,000
Interest cost	3,093,000	3,884,000	3,565,000
Net actuarial loss (gain)	(9,127,000)	22,025,000
Benefits paid from the trust	$ (100,475,000)	$ (5,172,000)
Benefits paid directly by company
Curtailments and settlements
Effect of exchange rate movements
Benefit obligation at end of year		$ 105,759,000	84,422,000
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	$ 93,991,000	83,748,000
Actual return on plan assets	(2,375,000)	10,416,000
Employer contributions	8,859,000	5,000,000
Benefits paid from the trust	$ (100,475,000)	$ (5,172,000)
Effect of exchange rate movements
Fair value of plan assets at end of year		$ 93,991,000	83,748,000
Net amount recognized/(unfunded status)		(11,768,000)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability		$ (11,768,000)
Accrued benefit liability
Total liability recognized		$ (11,768,000)
Accumulated other comprehensive loss		34,801,000
Foreign Pension Plan [Member]
Change in benefit obligation:
Benefit obligation at beginning of year	$ 52,740,000	50,331,000
Service cost	824,000	925,000	744,000
Interest cost	1,735,000	2,060,000	1,376,000
Net actuarial loss (gain)	648,000	5,652,000
Benefits paid from the trust	(1,732,000)	(2,525,000)
Benefits paid directly by company	(410,000)	$ (155,000)
Curtailments and settlements	(294,000)
Effect of exchange rate movements	(3,229,000)	$ (3,548,000)
Benefit obligation at end of year	50,282,000	52,740,000	50,331,000
Change in plan assets at fair value:
Fair value of plan assets at beginning of year	47,593,000	42,477,000
Actual return on plan assets	389,000	5,141,000
Employer contributions	1,072,000	5,596,000
Benefits paid from the trust	(1,732,000)	(2,525,000)
Effect of exchange rate movements	(2,693,000)	(3,096,000)
Fair value of plan assets at end of year	44,629,000	47,593,000	42,477,000
Net amount recognized/(unfunded status)	$ (5,653,000)	$ (5,147,000)
Amounts recognized in the Consolidated Balance Sheet consist of:
Current portion of accrued benefit liability
Accrued benefit liability	$ (5,653,000)	$ (5,147,000)
Total liability recognized	(5,653,000)	(5,147,000)
Accumulated other comprehensive loss	9,383,000	7,671,000
Benefit obligation at beginning of year	158,499,000	134,753,000
Service cost	1,574,000	1,525,000
Interest cost	4,828,000	5,944,000
Net actuarial loss (gain)	(8,479,000)	27,677,000
Benefits paid from the trust	(102,207,000)	(7,697,000)
Benefits paid directly by company	(410,000)	$ (155,000)
Curtailments and settlements	(294,000)
Effect of exchange rate movements	(3,229,000)	$ (3,548,000)
Benefit obligation at end of year	50,282,000	158,499,000	134,753,000
Fair value of plan assets at beginning of year	141,584,000	126,225,000
Actual return on plan assets	(1,986,000)	15,557,000
Employer contributions	9,931,000	10,596,000
Benefits paid from the trust	(102,207,000)	(7,697,000)
Effect of exchange rate movements	(2,693,000)	(3,096,000)
Fair value of plan assets at end of year	44,629,000	141,584,000	$ 126,225,000
Net amount recognized/(unfunded status)	$ (5,653,000)	(16,915,000)
Current portion of accrued benefit liability		(11,768,000)
Accrued benefit liability	$ (5,653,000)	(5,147,000)
Total liability recognized	(5,653,000)	(16,915,000)
Accumulated other comprehensive loss	$ 9,383,000	$ 42,472,000

XML

Note 12 - Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Pre-tax (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
United States Pension Plan of US Entity [Member]
Net actuarial loss		$ 34,801
Net amount recognized /occurring, pre-tax		34,801
Foreign Pension Plan [Member]
Net actuarial loss	$ 9,383	7,671
Net amount recognized /occurring, pre-tax	9,383	7,671
Net actuarial loss	9,383	42,472
Net amount recognized /occurring, pre-tax	$ 9,383	$ 42,472

XML

Note 12 - Components of Net Periodic Benefit Cost (Details) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
United States Pension Plan of US Entity [Member]
Components of net periodic benefit cost:
Service cost	$ 750,000	$ 600,000	$ 600,000
Interest cost	3,093,000	3,884,000	3,565,000
Expected return on plan assets	$ (2,749,000)	$ (5,646,000)	$ (5,360,000)
Amortization of prior service (credit)
Amortization of losses	$ 870,000	$ 549,000	$ 942,000
Total cost (credit) of the plan for the year	1,964,000	(613,000)	(253,000)
Expected plan participants’ contributions	0	0	0
Net periodic benefit cost (credit)	1,964,000	$ (613,000)	$ (253,000)
Settlement loss	29,928,000
Total expense (income) for the year	31,892,000	$ (613,000)	$ (253,000)
Foreign Pension Plan [Member]
Components of net periodic benefit cost:
Service cost	824,000	925,000	744,000
Interest cost	1,735,000	2,060,000	1,376,000
Expected return on plan assets	$ (2,346,000)	$ (2,292,000)	$ (1,207,000)
Amortization of prior service (credit)
Amortization of losses	$ 221,000	$ 216,000	$ 130,000
Total cost (credit) of the plan for the year	434,000	909,000	1,043,000
Expected plan participants’ contributions	0	0	0
Net periodic benefit cost (credit)	$ 434,000	$ 909,000	$ 1,043,000
Settlement loss
Total expense (income) for the year	$ 434,000	$ 909,000	$ 1,043,000
Service cost	1,574,000	1,525,000
Interest cost	4,828,000	5,944,000
Total cost (credit) of the plan for the year	$ 32,400,000	$ 300,000	$ 800,000

XML

Note 12 - Weighted Average Assumptions (Details)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
United States Pension Plan of US Entity [Member]
Discount rate	3.90%	4.80%	3.90%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	6.80%	6.80%	6.80%
Compensation increase rate
Measurement dates	9/30/15	12/31/14	12/31/13
Discount rate	3.90%	3.90%	4.80%
Compensation increase rate
Foreign Pension Plan [Member]
Discount rate	3.70%	3.70%	4.50%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets	5.10%	4.90%	4.80%
Compensation increase rate	5.30%	3.80%	3.60%
Measurement dates	12/31/15	12/31/14	12/31/13
Discount rate	3.80%	3.70%	4.50%
Compensation increase rate	6.20%	5.30%	3.80%

XML

Note 12 - Expected Benefit Payments to Be Paid to Participants (Details) - Foreign Pension Plan [Member] $ in Thousands	Jan. 02, 2016 USD ($)
2016	$ 1,964
2017	2,012
2018	2,032
2019	2,065
2020	2,101
2021-2025	$ 11,831

XML

Note 12 - Allocation of Plan Assets (Details)	Jan. 02, 2016	Dec. 27, 2014
Equity Securities [Member] | United States Pension Plan of US Entity [Member]
Equity securities	0.00%	0.00%
Equity Securities [Member] | Foreign Pension Plan [Member]
Equity securities	30.00%	30.00%
Debt Securities [Member] | United States Pension Plan of US Entity [Member]
Equity securities	0.00%	91.00%
Debt Securities [Member] | Foreign Pension Plan [Member]
Equity securities	65.00%	68.00%
Cash [Member] | United States Pension Plan of US Entity [Member]
Equity securities	0.00%	9.00%
Cash [Member] | Foreign Pension Plan [Member]
Equity securities	5.00%	2.00%
United States Pension Plan of US Entity [Member]
Equity securities	0.00%	100.00%
Foreign Pension Plan [Member]
Equity securities	100.00%	100.00%

XML

Note 12 - Company's U.S and German Pension Plan Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
Equity Securities [Member] | Global Equity Index Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments	$ 12,801	$ 13,168
Equity Securities [Member] | Global Equity Index Fund [Member]
Investments	12,801	$ 13,168
Equity Securities [Member] | Philippine Stock [Member] | Fair Value, Inputs, Level 2 [Member]
Investments
Equity Securities [Member] | Philippine Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Investments	836	$ 1,069
Equity Securities [Member] | Philippine Stock [Member]
Investments	836	1,069
Fixed Income Investments [Member] | Investment Grade Corporate Bond Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Investments	6,807	8,118
Fixed Income Investments [Member] | Investment Grade Corporate Bond Funds [Member]
Investments	6,807	8,118
Fixed Income Investments [Member] | Long U.S. Credit Corp Index Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments		42,911
Fixed Income Investments [Member] | Long U.S. Credit Corp Index Fund [Member]
Investments		42,911
Fixed Income Investments [Member] | Over 15y Gilts Index Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments	3,428	3,814
Fixed Income Investments [Member] | Over 15y Gilts Index Fund [Member]
Investments	3,428	3,814
Fixed Income Investments [Member] | Long U.S. Govt Bond Index Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments		24,116
Fixed Income Investments [Member] | Long U.S. Govt Bond Index Fund [Member]
Investments		24,116
Fixed Income Investments [Member] | Active Corp Bond Over 10 Yr Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments	6,440	7,065
Fixed Income Investments [Member] | Active Corp Bond Over 10 Yr Fund [Member]
Investments	6,440	7,065
Fixed Income Investments [Member] | Intermediate US Govt Bond Index Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments		18,884
Fixed Income Investments [Member] | Intermediate US Govt Bond Index Fund [Member]
Investments		18,884
Fixed Income Investments [Member] | Over 5y Index Linked Gilts Fund [Member] | Fair Value, Inputs, Level 2 [Member]
Investments	10,248	11,352
Fixed Income Investments [Member] | Over 5y Index Linked Gilts Fund [Member]
Investments	10,248	11,352
Fixed Income Investments [Member] | Philippine Long Govt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Investments	1,227	1,059
Fixed Income Investments [Member] | Philippine Long Govt Securities [Member]
Investments	1,227	1,059
Fixed Income Investments [Member] | Philippine Long Corporate Bonds [Member] | Fair Value, Inputs, Level 1 [Member]
Investments	781	781
Fixed Income Investments [Member] | Philippine Long Corporate Bonds [Member]
Investments	781	781
Fair Value, Inputs, Level 2 [Member]
Total pension plan assets	32,917	121,310
Fair Value, Inputs, Level 1 [Member]
Cash and equivalents	2,061	9,247
Total pension plan assets	11,712	20,274
Cash and equivalents	2,061	9,247
Total pension plan assets	$ 44,629	$ 141,584

XML

Note 13 - Shareholders' Equity (Details Textual) - USD ($)	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Employee Stock Option [Member] | Granted After February 2005 [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Exercise Period	7 years
Employee Stock Option [Member] | Granted After February 2005 [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Exercise Period	10 years
Employee Stock Option [Member] | Granted After February 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Employee Stock Option [Member] | Maximum [Member] | Granted After February 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Employee Stock Option [Member] | Granted Prior to 2002 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Exercise Period	10 years
Employee Stock Option [Member] | Granted in 2002 through February 2005 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Exercise Period	10 years
Restricted Stock [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Restricted Stock [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	600,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value	$ 5,000,000	$ 9,600,000	$ 15,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	8,100,000	7,600,000	6,500,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Share-based Liabilities Paid	400,000	300,000	100,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 13,200,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	1 year 328 days
Allocated Share-based Compensation Expense	$ 10,700,000	9,400,000	8,900,000
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	3,700,000	3,300,000	3,200,000
Accumulated Other Comprehensive Income (Loss), Pension and Other Post-retirement Benefit Plans, Liability Adjustment Tax	661,000	12,587,000	6,549,000
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax	$ 0	$ 0	$ 0
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	1,000,000
Stock Repurchased During Period, Shares	350,000
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased	650,000

XML

Note 13 - Reconciliation of Outstanding Stock Options (Details) $ in Thousands	12 Months Ended
	Jan. 02, 2016 USD ($) $ / shares shares
Outstanding (in shares) | shares	421,862
Outstanding (in dollars per share) | $ / shares	$ 67.88
Granted (in shares) | shares	145,140
Granted (in dollars per share) | $ / shares	$ 96.18
Exercised (in shares) | shares	(95,548)
Exercised (in dollars per share) | $ / shares	$ 48.74
Forfeited (in shares) | shares	(550)
Forfeited (in dollars per share) | $ / shares	$ 29.68
Outstanding (in shares) | shares	470,904
Outstanding (in dollars per share) | $ / shares	$ 80.53
Outstanding	4 years 292 days
Outstanding | $	$ 12,470
Exercisable (in shares) | shares	199,472
Exercisable (in dollars per share) | $ / shares	$ 66.23
Exercisable	3 years 219 days
Exercisable | $	$ 8,135

XML

Note 13 - Reconciliation of Nonvested Restricted Share and Share Unit Awards (Details) shares in Thousands	12 Months Ended
	Jan. 02, 2016 $ / shares shares
Nonvested (in shares) | shares	188,998
Nonvested (in dollars per share) | $ / shares	$ 78.91
Granted (in shares) | shares	103,002
Granted (in dollars per share) | $ / shares	$ 94.10
Vested (in shares) | shares	(88,901)
Vested (in dollars per share) | $ / shares	$ 73.59
Forfeited (in shares) | shares	(8,638)
Forfeited (in dollars per share) | $ / shares	$ 80.40
Nonvested (in shares) | shares	194,461
Nonvested (in dollars per share) | $ / shares	$ 89.32

XML

Note 13 - Weighted Average Fair Value of Options Granted and Black-Scholes Option Valuation Model Assumptions (Details) - $ / shares	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Weighted average fair value of options granted (in dollars per share)	$ 21.99	$ 26.25	$ 23.90
Risk-free interest rate	1.25%	1.67%	0.70%
Expected dividend yield	1.04%	0.93%	1.20%
Expected stock price volatility	28.00%	33.00%	45.00%
Expected life of options (years)	4 years 219 days	4 years 219 days	5 years 36 days

XML

Note 13 - Shareholders' Equity - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		12 Months Ended
		Jan. 02, 2016	Jan. 02, 2016		Dec. 27, 2014		Dec. 28, 2013
Balance at December 28, 2013	[1]	$ (8,722)	$ (8,722)		$ (29,615)		$ (17,140)
Balance at December 28, 2013	[2]	11,584	11,584		10,791		9,393
Balance at December 28, 2013		(48,533)	(48,533)		(2,302)		28,164
Balance at December 28, 2013		(45,671)	(45,671)		(21,126)		20,417
2014 activity		(1,761)	20,893	[1]	(12,475)	[1]	3,739
2014 activity		$ 793	793	[2]	1,398	[2]	1,526
2014 activity			(46,231)		(30,466)		$ (1,396)
2014 activity			$ (24,545)		$ (41,543)

[1] Net of tax of $661, $12,587, and $6,549 for 2015, 2014 and 2013, respectively.

[2] Net of tax of $0, $0 and $0 for 2015, 2014 and 2013, respectively.

XML

Note 14 - Income Taxes (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Accumulated Defined Benefit Plans Adjustment Attributable to Noncontrolling Interest [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Income Tax Expense (Benefit)		$ 11,700
CHINA
Income Tax Holiday, Aggregate Dollar Amount		$ 2,600
Income Tax Holiday Expense (Benefit) Amount Per Diluted Share		$ 0.11
Income Tax Expense (Benefit)	$ 24,482	$ 24,482	$ 32,228	$ 35,451
Income Taxes Paid		23,300	26,600	30,400
Undistributed Earnings of Foreign Subsidiaries	367,900	367,900
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	100	100
Unrecognized Tax Benefits	$ 102	$ 102	$ 112	$ 112

XML

Note 14 - Federal, State, and Foreign Income Tax (Benefit) Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Domestic	$ 1,313	$ 35,264	$ 20,254
Foreign	105,635	96,382	103,982
Income before income taxes	106,948	131,646	124,236
Current:
Federal	(6,686)	8,003	8,265
State	2,078	1,275	2,084
Foreign	17,611	27,438	18,462
Subtotal	13,003	36,716	28,811
Deferred:
Federal and State	11,330	(1,513)	3,251
Foreign	149	(2,975)	3,389
Subtotal	11,479	(4,488)	6,640
Provision for income taxes	$ 24,482	$ 32,228	$ 35,451

XML

Note 14 - Effective Income Tax Reconciliation and Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
MEXICO
Mexico manufacturing operations restructuring	$ 4,841
Tax expense at statutory rate of 35%	37,432	$ 46,076	$ 43,481
State and local taxes, net of federal tax benefit	1,907	1,186	1,076
Foreign income tax rate differential	$ (19,853)	$ (14,981)	(15,497)
Capital loss valuation allowance			6,085
Tax on unremitted earnings			$ (349)
Nondeductible professional fees	$ 1,011
Other, net	(856)	$ (53)	$ 655
Provision for income taxes	$ 24,482	$ 32,228	$ 35,451

XML

Note 14 - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jan. 02, 2016	Dec. 27, 2014
Deferred tax assets:
Accrued expenses	$ 19,738	$ 27,088
Foreign tax credit carryforwards	$ 1,529	5,299
AMT credit carryforwards		167
Accrued restructuring	$ 1,115	124
Capital losses	4,557	4,557
Domestic and foreign net operating loss carryforwards	684	525
Gross deferred tax assets	27,623	37,760
Less: Valuation allowance	(4,557)	(4,557)
Total deferred tax assets	23,066	33,203
Deferred tax liabilities:
Tax depreciation and amortization in excess of book	22,747	21,405
Total deferred tax liabilities	22,747	21,405
Net deferred tax assets	$ 319	$ 11,798

XML

Note 14 - Reconciliation of the Beginning and Ending Amount of Unrecognized Tax Benefits (Details) $ in Thousands	12 Months Ended
	Jan. 02, 2016 USD ($)
Unrecognized Tax Benefits	$ 102
Balance	112
Other	(10)
Balance	$ 102

XML

Note 15 - Business Unit Segment Information (Details Textual) - USD ($)	3 Months Ended								6 Months Ended	12 Months Ended
	Jan. 02, 2016	Sep. 26, 2015	Jun. 27, 2015	Mar. 28, 2015	Dec. 27, 2014	Sep. 27, 2014	Jun. 28, 2014	Mar. 29, 2014	Jun. 28, 2014	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Cost of Sales [Member] | Facility Relocation [Member]
Restructuring Charges											$ 5,200,000
Cost of Sales [Member] | Sym Com Inc [Member]
Noncash Charges Related To Inventory Stepup												$ 2,800,000
Cost of Sales [Member] | Hamlin Inc [Member]
Noncash Charges Related To Inventory Stepup													$ 1,500,000
Cost of Sales [Member]
Severance Costs												2,700,000
Selling, General and Administrative Expenses [Member] | Sym Com Inc [Member]
Business Combination, Acquisition Related Costs												400,000
Selling, General and Administrative Expenses [Member] | Hamlin Inc [Member]
Business Combination, Acquisition Related Costs													1,700,000
Selling, General and Administrative Expenses [Member] | Other Segments [Member]
Asset Impairment Charges												100,000
Selling, General and Administrative Expenses [Member]
Business Combination, Acquisition Related Costs											4,600,000
Pension and Other Postretirement Benefit Expense											31,900,000
Legal Fees											3,600,000	2,200,000
Other Nonrecurring (Income) Expense											200,000
Severance Costs											$ 500,000
Asset Impairment Charges												300,000
Research and Development Expense [Member] | Other Segments [Member]
Asset Impairment Charges												200,000
Facility Relocation [Member]
Restructuring Charges	$ 2,100,000	$ 1,200,000	$ 900,000	$ 1,000,000
Sym Com Inc [Member]
Business Combination, Acquisition Related Costs							$ 200,000
Noncash Charges Related To Inventory Stepup							1,400,000	$ 1,400,000	$ 1,400,000
Severance Costs							$ 2,000,000
Sales Revenue, Goods, Net [Member] | Geographic Concentration Risk [Member] | Outside the United States [Member]
Concentration Risk, Percentage											60.00%
Sales Revenue, Goods, Net [Member] | Geographic Concentration Risk [Member] | CHINA
Concentration Risk, Percentage											22.00%
Number of Operating Segments											3,000,000
Restructuring Charges					$ 2,200,000	$ 1,100,000
Business Combination, Acquisition Related Costs	4,000,000	300,000	200,000	200,000	300,000						$ 4,600,000	$ 500,000	1,700,000
Legal Fees	(100,000)	900,000	$ 1,700,000	$ 1,200,000
Other Nonrecurring (Income) Expense	$ (300,000)	$ 100,000
Asset Impairment Charges					$ 300,000						$ 0		0
Impairment And Equity In Net Loss Of Unconsolidated Affiliate													$ 10,678,000

XML

Note 15 - Business Unit Segment Information - Business Unit Segment Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Electronics [Member]
Net sales	$ 405,497	$ 410,065	$ 367,052
Depreciation and amortization	22,936	22,177	20,735
Operating income	78,194	86,981	69,559
Automotive [Member]
Net sales	339,957	325,415	267,207
Depreciation and amortization	13,437	14,204	9,928
Operating income	53,086	45,086	39,170
Industrial [Member]
Net sales	122,410	116,515	123,594
Depreciation and amortization	5,268	5,494	3,817
Operating income	18,094	10,674	24,363
Other Segments [Member]
Operating income	(45,217)	(8,911)	(3,211)
Net sales	867,864	851,995	757,853
Depreciation and amortization	41,641	41,875	34,480
Operating income	104,157	133,830	129,881
Interest expense	$ 4,091	$ 4,903	2,917
Impairment and equity in net loss of unconsolidated affiliate (2)			10,678
Foreign exchange loss (gain)	$ 1,465	$ (3,925)	3,303
Other expense (income), net	5,417	6,644	4,646
Income before income taxes	$ 106,948	$ 131,646	$ 124,236

XML

Note 15 - Business Unit Segment Information - Revenues and Long-lived Assets by Geographical Area (Details) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
		Jan. 02, 2016	Dec. 27, 2014	Jan. 02, 2016	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
UNITED STATES
Net sales
Net sales	[1]				$ 344,305	$ 313,762	$ 274,666
Long-lived assets:
Long-lived assets		$ 23,965	$ 34,179	$ 23,965	23,965	34,179	27,294
Additions to long-lived assets					8,609	9,134	4,644
CHINA
Net sales
Net sales	[1]				193,792	189,191	158,494
Long-lived assets:
Long-lived assets		37,241	40,981	37,241	37,241	40,981	45,843
Additions to long-lived assets					9,710	7,265	7,864
Other Countries [Member]
Net sales
Net sales	[1]				329,767	349,042	324,693
Long-lived assets:
Long-lived assets		90,874	70,581	90,874	90,874	70,581	62,607
Additions to long-lived assets					25,194	15,327	20,165
CANADA
Long-lived assets:
Long-lived assets		10,488	12,899	10,488	10,488	12,899	14,429
Additions to long-lived assets					506	555	2,280
Net sales		220,020	206,620	867,864	867,864	851,995	757,853
Long-lived assets		$ 162,568	$ 158,640	$ 162,568	162,568	158,640	150,173
Additions to long-lived assets					$ 44,019	$ 32,281	$ 34,953

[1] Sales by country represent sale to customer or distributor locations.

XML

Note 16 - Lease Commitments (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Operating Leases, Rent Expense	$ 11.1	$ 8.9	$ 8.9

XML

Note 16 - Future Minimum Payments for All Non-cancelable Operating Leases (Details) $ in Thousands	Jan. 02, 2016 USD ($)
2016	$ 8,886
2017	5,227
2018	3,984
2019	3,358
2020	3,163
2021 and thereafter	10,021
	$ 34,639

XML

Note 17 - Earnings Per Share (Details Textual) - shares	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	113,130	43,693	96,401

XML

Note 17 - Computation of Basic and Diluted Earnings Per Share under the Two-class Method (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Net income as reported	$ 82,466	$ 99,418	$ 88,784
Less: Distributed earnings available to participating securities			(35)
Less: Undistributed earnings available to participating securities			(16)
Numerator for basic earnings per share —
Undistributed and distributed earnings available to common shareholders	$ 82,466	$ 99,418	88,733
Add: Undistributed earnings allocated to participating securities			16
Less: Undistributed earnings reallocated to participating securities			(16)
Numerator for diluted earnings per share —
Undistributed and distributed earnings available to common shareholders	$ 82,466	$ 99,418	$ 88,733
Denominator for basic earnings per share —
Weighted-average shares (in shares)	22,565	22,543	22,315
Effect of dilutive securities:
Common stock equivalents (in shares)	154	184	222
Denominator for diluted earnings per share —
Adjusted for weighted-average shares & assumed conversions (in shares)	22,719	22,727	22,537
Basic earnings per share (in dollars per share)	$ 3.65	$ 4.41	$ 3.98
Diluted earnings per share (in dollars per share)	$ 3.63	$ 4.37	$ 3.94

XML

Note 18 - Selected Quarterly Financial Data (Unaudited) (Details Textual) - USD ($)	3 Months Ended									6 Months Ended	12 Months Ended
	Jan. 02, 2016	Jan. 02, 2016	Sep. 26, 2015	Jun. 27, 2015	Mar. 28, 2015	Dec. 27, 2014	Sep. 27, 2014	Jun. 28, 2014	Mar. 29, 2014	Jun. 28, 2014	Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Facility Relocation [Member]
Restructuring Charges		$ 2,100,000	$ 1,200,000	$ 900,000	$ 1,000,000
Sym Com Inc [Member]
Business Combination, Acquisition Related Costs								$ 200,000
Noncash Charges Related To Inventory Stepup								1,400,000	$ 1,400,000	$ 1,400,000
Severance Costs								$ 2,000,000
Restructuring Charges						$ 2,200,000	$ 1,100,000
Legal Fees		(100,000)	900,000	1,700,000	1,200,000
Business Combination, Acquisition Related Costs		4,000,000	300,000	200,000	200,000	300,000					$ 4,600,000	$ 500,000	$ 1,700,000
Premium Refund of Annuity Contract	$ 300,000	(300,000)
Other Nonrecurring (Income) Expense		$ (300,000)	100,000
Defined Benefit Plan, Settlements, Benefit Obligation			$ 30,800,000	$ 700,000	$ 700,000
Asset Impairment Charges						$ 300,000					$ 0		$ 0

XML

Note 18 - Quarterly Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 02, 2016	Sep. 26, 2015	Jun. 27, 2015	Mar. 28, 2015	Dec. 27, 2014	Sep. 27, 2014	Jun. 28, 2014	Mar. 29, 2014
Net sales	$ 220,020	$ 215,510	$ 222,021	$ 210,313	$ 206,620	$ 217,608	$ 220,908	$ 206,859
Gross profit	82,706	86,182	85,281	76,330	75,559	87,380	82,995	78,494
Operating Income (Loss)	29,854	8,584	36,171	29,548	26,391	40,130	33,719	33,590
Net income	$ 22,463	$ 11,324	$ 28,684	$ 19,995	$ 19,511	$ 29,940	$ 24,578	$ 25,389
Net income per share:
Basic (in dollars per share)	$ 1	$ 0.50	$ 1.26	$ 0.88	$ 0.86	$ 1.33	$ 1.09	$ 1.13
Diluted (in dollars per share)	$ 1	$ 0.50	$ 1.26	$ 0.88	$ 0.86	$ 1.32	$ 1.08	$ 1.12

XML

Note 19 - Subsequent Event (Details Textual) $ in Millions	3 Months Ended
	Apr. 02, 2016 USD ($)
TE Connectivity Ltd. [Member] | Scenario, Forecast [Member]
Business Combination, Consideration Transferred	$ 350

XML

Schedule II - Valuation and Qualifying Accounts and Reserve (Details) - USD ($)		12 Months Ended
		Jan. 02, 2016	Dec. 27, 2014	Dec. 28, 2013
Allowance for Doubtful Accounts [Member]
Balance at Beginning of Year		$ 278	$ 790	$ 705
Charged to Costs and Expenses	[1]	164	130	2,289
Deductions	[2]	150	656	2,316
Charge to other accounts	[3]	27	14	112
Balance at End of Year		319	278	790
Reserve for Cash Discount [Member]
Balance at Beginning of Year		19,140	16,117	12,803
Charged to Costs and Expenses	[1]	81,335	85,825	77,659
Deductions	[2]	82,997	82,568	74,432
Charge to other accounts	[3]	(310)	(234)	87
Balance at End of Year		17,168	19,140	16,117
Valuation Allowance of Deferred Tax Assets [Member]
Balance at Beginning of Year		$ 4,557	$ 6,250	784
Charged to Costs and Expenses	[1]			6,085
Deductions	[2]		$ 1,693	$ 619
Charge to other accounts	[3]
Balance at End of Year		$ 4,557	$ 4,557	$ 6,250

[1] Includes provision for doubtful accounts, sales returns and sales discounts granted to customers.

[2] Represents uncollectible accounts written off, net of recoveries and credits issued to customers and the write-off of certain deferred tax assets that previously had full valuation allowances.

[3] Represents business acquisitions and foreign currency translation adjustments.