Note 16: EMPLOYEE BENEFIT PLANS

The Company has a qualified, defined benefit, noncontributory pension plan for certain U.S. employees not covered by union pension plans. The Company's subsidiary in the Netherlands provides defined retirement benefits to its employees. The Company also provides health and life insurance to a limited number of eligible retirees and eligible survivors of retirees.

The Company's defined benefit pension and other postretirement benefit costs and obligations are dependent on assumptions used by actuaries in calculating such amounts. These assumptions, which are reviewed annually, include discount rates, long-term expected rates of return on plan assets and expected rates of increase in compensation. Assumed discount rates are used to calculate the present value of benefit payments which are projected to be made in the future, including projections of increases in employees annual compensation and health care costs. A decrease in the discount rate would increase the Company's obligation and expense. The long-term expected rate of return on plan assets is based principally on prior performance and future expectations for various types of investments as well as the expected long-term allocation of assets. Changes in the allocation of plan assets would impact the expected rate of return. The expected rate of increase in compensation is based upon movements in inflation rates as reflected by market interest rates. Benefits paid to participants are based upon age, years of credited service and average compensation or negotiated benefit rates.

Assets of the Company's U.S. defined benefit plan are invested in a directed trust. Assets in the trust are invested in domestic and foreign equity securities of corporations (including $7,521,000 of the Company's common stock at November 30, 2006), U.S. government obligations, derivative securities, corporate bonds and money market funds. The Dutch subsidiary contracts with a third-party insurance company to pay benefits to retirees.

Pension Benefits

The following sets forth the change in benefit obligation, change in plan assets, funded status and amounts recognized in the balance sheets as of November 30, 2006 and 2005 for the Company's U.S. and non-U.S. defined benefit retirement plans:

The Company contributed $21,599,000 to the U.S. pension plan and $1,049,000 to the non-U.S. pension plans in 2006. The Company expects to contribute approximately $3,000,000 to its U.S. pension plan and $600,000 to the non-U.S. pension plans in 2007.

Expected future pension benefit payments, which reflect expected future service, were as follows as of November 30, 2006:

Net periodic benefit costs for the Company's defined benefit retirement plans for 2006, 2005 and 2004 included the following components:

The following table provides the weighted-average assumptions used to compute the actuarial net periodic benefit cost:

The following table shows the Company's target allocation range for the U.S. defined benefit pension plan, along with the actual allocations:

The following shows the Company's accumulated benefit obligation in excess of plan assets at November 30:

The Company also has a defined benefit retirement plan in the United Kingdom related to the discontinued operations. The projected benefit obligation and plan assets at November 30, 2006 were $5,601,000 and $4,965,000, respectively. Net accrued pension liability at November 30, 2006 was $636,000. Annual pension expense related to this plan was not significant.

Approximately 21% of the Company's employees are covered by union-sponsored, collectively-bargained,multi-employer pension plans.Related to these plans, the Company contributed and charged to expense $3,000,000, $2,650,000 and $2,161,000 in 2006, 2005 and 2004, respectively. These contributions are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. The Company has no intention of withdrawing from any of these plans, nor is there any intention to terminate such plans.

Prior to June 2004, the Company had a supplemental retirement plan and an income deferral plan for certain U.S. executives. In June 2004, the Company terminated the two executive benefit plans in consideration of ongoing costs, anticipated legislative restrictions on such programs, and a preference for executive benefit plans having more predictable costs. The Company incurred a pretax expense of $12,817,000 due to the termination of the plans and distributions to plan participants. The Company recorded this expense in accordance with SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits". The Company had previously purchased life insurance policies to cover benefits under the plans.At the time of termination of the plans, the cash surrender value of such life insurance policies totaled approximately $26,900,000 and exceeded the amount that was required if immediate lump-sum payments were elected by all participants, which totaled $25,600,000. In addition to the termination and settlement costs, the Company expensed approximately $1,800,000 in 2004 under the plans.

As of June 28, 2006, due to the divestiture of the Coatings Business, the Company recorded curtailments and settlements as required by SFAS No. 88. The impact to the U.S. Plans was a curtailment cost of $57,000 and a special plan termination benefit cost of $268,000. The impact on the Non-U.S. Plans was a curtailment cost of $2,911,000.

The Company provides to certain employees a savings plan under Section 401(k) of the U.S. Internal Revenue Code. The savings plan allows for deferral of income up to a certain percentage through contributions to the plan,within certain restrictions.Company matching contributions are in the form of cash. In 2006, 2005 and 2004, the Company recorded expenses for matching contributions of $1,387,000, $422,000 and $436,000, respectively.

Post-Retirement Benefits

The following sets forth the change in benefit obligation, change in plan assets, funded status and amounts recognized in the balance sheets as of November 30, 2006 and 2005 for the Company's U.S. postretirement health care and life insurance benefits. The measurement date of plan assets and obligations is as of October 1 for each year presented.

Expected future benefit payments,which reflect expected future service,were as follows as of November 30, 2006:

Net periodic benefit costs for the Company's postretirement health care and life insurance benefits for 2006, 2005 and 2004 included the following components:

The following table provides the weighted-average assumptions used to compute the actuarial present value of projected benefit obligations:

The following table provides the weighted-average assumptions used to compute the actuarial net periodic benefit cost:

In 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 (the "Act") was signed into law. The Act introduces a Medicare prescription drug benefit beginning in 2006 as well as a federal subsidy to sponsors of retirement health care plans that provide a benefit at least actuarially equivalent to the Medicare benefit. The effect of the Act did not have a material impact on the Company's consolidated financial statements.

The assumed health care cost trend decreased from 10% to 9% in 2006, and it is assumed that the rate will decline gradually to 5% by 2011 and beyond. The effect of a one-percentage-point change in the assumed health care cost trend would have changed the amounts of the benefit obligation and the sum of the service cost and interest cost components of postretirement benefit expense for 2006, as follows:

The Company has a life insurance plan which provides eligible executives with life insurance protection equal to three times base salary. Upon retirement, the executive is provided with life insurance protection equal to final base salary. There were no expenses related to this plan in 2006, $66,800 in 2005 and $267,000 in 2004.

The Company has severance agreements with certain key employees that could provide benefits upon termination of up to 3.5 times total annual compensation of such employees.