Baskin Robbins 2013 Annual Report Download - page 101

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lawsuits and disputes, it is reasonably possible that the losses in connection with all matters could increase by up to an
additional $12.0 million based on the outcome of ongoing litigation or negotiations.
(e) Line of Credit to Distribution Facility
In May 2013, the Company provided a secured revolving line of credit to a distribution facility of franchisee products for an
aggregate maximum principal amount of up to $8.0 million plus interest. The entire principal balance and accrued and unpaid
interest is due June 1, 2014. The purpose of this line of credit is to provide funding for the purchase and storage of certain
inventory, which was pledged as collateral under a security agreement entered into in connection with the line of credit
agreement. Through December 28, 2013, no amounts have been drawn on this line of credit.
(18) Retirement plans
401(k) Plan
Employees of the Company, excluding employees of certain international subsidiaries, participate in a defined contribution
retirement plan, the Dunkin’ Brands, Inc. 401(k) Retirement Plan (“401(k) Plan”), under Section 401(k) of the Internal Revenue
Code. Under the 401(k) Plan, employees may contribute up to 80% of their pre-tax eligible compensation, not to exceed the
annual limits set by the IRS. The 401(k) Plan allows the Company to match participants’ contributions in an amount determined
in the sole discretion of the Company. The Company matched participants’ contributions during fiscal years 2013, 2012, and
2011, up to a maximum of 4% of the employee’s salary. Employer contributions for fiscal years 2013, 2012, and 2011,
amounted to $3.1 million, $2.9 million, and $2.7 million, respectively. The 401(k) Plan also provides for an additional
discretionary contribution of up to 2% of eligible wages for eligible participants based on the achievement of specified
performance targets. No such discretionary contributions were made during fiscal years 2013, 2012, and 2011.
NQDC Plan
The Company, excluding employees of certain international subsidiaries, also offers to a limited group of management and
highly compensated employees, as defined by the Employee Retirement Income Security Act (“ERISA”), the ability to
participate in the NQDC Plan. The NQDC Plan allows for pre-tax contributions of up to 50% of a participant’s base annual
salary and other forms of compensation, as defined. The Company credits the amounts deferred with earnings based on the
investment options selected by the participants and holds investments to partially offset the Company’s liabilities under the
NQDC Plan. The NQDC Plan liability, included in other long-term liabilities in the consolidated balance sheets, was $7.0
million and $7.4 million at December 28, 2013 and December 29, 2012, respectively. As of December 28, 2013 and
December 29, 2012, total investments held for the NQDC Plan were $338 thousand and $3.1 million, respectively, and have
been recorded in other assets in the consolidated balance sheets.
Canadian Pension Plan
The Company sponsors a contributory defined benefit pension plan in Canada, The Baskin-Robbins Employees’ Pension Plan
(“Canadian Pension Plan”), which provides retirement benefits for the majority of its Canadian employees.
During the second quarter of 2012, the Company’s board of directors approved a plan to close our Peterborough, Ontario,
Canada manufacturing plant, where the majority of the Canadian Pension Plan participants were employed (see note 20). As a
result of the closure, the Company terminated the Canadian Pension Plan as of December 29, 2012, and expects the Financial
Services Commission of Ontario ("FSCO") to approve the termination of the plan in 2014. Upon approval of the termination,
the Company will fund any deficit and the plan assets will be used to fund transfers to other retirement plans or for the purchase
of annuities to fund future retirement payments to participants. Also upon approval, the Company will recognize any unrealized
losses in accumulated other comprehensive income.