Employee Benefits

Certain subsidiaries provide defined benefit pension plans for employees not covered by collective bargaining agreements (approximately 14 percent of total employees). The benefits are based on years of service and the employees’ final average earnings. The company’s funding policy is to contribute the minimum required tax deductible contribution for the year while taking into consideration any variable Pension Benefit Guarantee Corporation premium. Approximately 40 percent of the plans’ assets consist of fixed income securities and 50 percent are invested in U.S. equities. Approximately 10 percent is invested in international equities.

Effective January 1, 2000, the Board of Directors adopted an amendment to the pension plan that provides for the payment of unreduced benefits, at early retirement, for a participant whose combination of age and vested service equals 85 years or greater. The company adopted Financial Accounting Standards Board Statement No. 132 Employer’s Disclosure About Pensions and Other Post Retirement Benefits in 1998. The statement standardizes the disclosure requirements for pensions and other post retirement benefits.

The following tables set forth the plans’ funded status and components of net pension cost (in thousands):