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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>As filed with the Securities and Exchange Commission on May&nbsp;2, 2011  </B></FONT></P>

<P ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2><B> Registration No.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </B></FONT></P>


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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=5><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>  </B></FONT><FONT SIZE=2><B>WASHINGTON, D.C. 20549  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=5><B>FORM S-1<BR>  </B></FONT><FONT SIZE=2><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF&nbsp;1933  </B></FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=5><B>ESCO CORPORATION<BR>  </B></FONT><FONT SIZE=2>(Exact name of registrant as specified in its charter) </FONT></P>

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<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>Oregon</B></FONT><FONT SIZE=2><BR>
(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> 3532</B></FONT><FONT SIZE=2><BR>
(Primary Standard Industrial<BR>
Classification Code Number)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> 93-0989423</B></FONT><FONT SIZE=2><BR>
(I.R.S. Employer<BR>
Identification Number)</FONT></TD>
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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>2141 NW 25th&nbsp;Avenue<BR>
Portland, Oregon 97210<BR>
(503)&nbsp;228-2141<BR>  </B></FONT><FONT SIZE=2>(Address, including zip code and telephone number, including<BR>
area code, of registrant's principal executive offices) </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>Kevin S. Thomas<BR>
Vice President, General Counsel and Corporate Secretary<BR>
ESCO Corporation<BR>
2141 NW 25th&nbsp;Avenue<BR>
Portland, Oregon 97210<BR>
(503)&nbsp;228-2141<BR>  </B></FONT><FONT SIZE=2>(Name, address, including zip code and telephone number,<BR>
including area code, of agent for service) </FONT></P>

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<TD COLSPAN=3 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>Copies To:</B></FONT></TD>
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<TD ALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2><B> Robert J. Moorman<BR>
James M. Kearney<BR> </B></FONT><FONT SIZE=2>Stoel Rives&nbsp;LLP<BR>
900 SW Fifth Avenue, Ste. 2600<BR>
Portland, Oregon 97204<BR>
Tel: (503)&nbsp;224-3380<BR>
Fax: (503)&nbsp;220-2480</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2><B> Sarah K. Solum</B></FONT><FONT SIZE=2><BR>
Davis Polk&nbsp;&amp; Wardwell&nbsp;LLP<BR>
1600 El Camino Real<BR>
Menlo Park, California 94025<BR>
Tel: (650)&nbsp;752-2011<BR>
Fax: (650)&nbsp;752-3611<BR></FONT>
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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>Approximate date of commencement of proposed sale to the public:<BR>
As soon as practicable after this Registration Statement becomes effective.  </B></FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act of
1933, check the following box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is a post-effective amendment filed pursuant to Rule&nbsp;462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="WINGDINGS">&#111;</FONT> </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule&nbsp;12b-2 of the Exchange Act. (Check one): </FONT></P>
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<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Large accelerated filer <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Accelerated filer <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Non-accelerated filer <FONT FACE="WINGDINGS">&#253;</FONT><BR></FONT> <FONT  style="font-size:8pt;line-height:9pt;">(Do not check if a<BR>
smaller reporting company)</FONT></TD>
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<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Smaller reporting company <FONT FACE="WINGDINGS">&#111;</FONT></FONT></TD>
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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>CALCULATION OF REGISTRATION FEE  </B></FONT></P>

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<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:5pt;text-indent:-5pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TH ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Title of Each Class of<BR>
Securities to be Registered</B></FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Proposed Maximum<BR>
Aggregate Offering<BR>
Price(1)(2)</B></FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Amount of<BR>
Registration Fee</B></FONT><BR></TH>
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<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:4pt;text-indent:-4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B> </B></FONT><FONT SIZE=2>Class&nbsp;A Common Stock</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$175,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$20,317.50</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Includes
shares of Class&nbsp;A Common Stock that the underwriters have the option to purchase.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Estimated
solely for purposes of determining the registration fee in accordance with Rule&nbsp;457(o) under the Securities Act of 1933. </FONT></DD></DL>
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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall
file&nbsp;a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section&nbsp;8(a) of the Securities Act of 1933 or
until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section&nbsp;8(a), may determine.</B></FONT></P>


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</FONT> <FONT COLOR="#FF4040" SIZE=2><B>The information in this preliminary prospectus is not complete and may be changed. These securities may not
be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.</B></FONT></P>

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 </B></FONT><FONT COLOR="#FF4040" SIZE=2><B>Subject to Completion. Dated May&nbsp;2, 2011.  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares </FONT></P>

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<IMG SRC="g593995.jpg" ALT="GRAPHIC" WIDTH="328" HEIGHT="105">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=5><B>ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4>Class&nbsp;A Common Stock </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is an initial public offering of shares of Class&nbsp;A Common Stock of ESCO Corporation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ESCO
Corporation is offering&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the shares to be sold in the offering. The selling shareholders identified in this prospectus, who include some of our executive officers
and shareholders affiliated with some of our directors, are offering an additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares. ESCO Corporation will not receive any of the proceeds from the sale of the shares
by the
selling shareholders. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
this offering, there has been no public market for the Class&nbsp;A Common Stock. We estimate the initial public offering price per share will be between $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. We intend to apply to list our Class&nbsp;A Common Stock on the NASDAQ Global Market under the symbol "ESCO". </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>See "Risk Factors" on page 13 to read about factors you should consider before buying shares of the Class&nbsp;A Common Stock.</I></FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal offense.</B></FONT></P>

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<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial public offering price</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting discounts</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds, before expenses, to ESCO Corporation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds, before expenses, to the selling shareholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that the underwriters sell more than&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock, the underwriters have the option to purchase up to an additional
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares from us at the initial public offering price less the underwriting discount. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><I>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters expect to deliver the shares against payment in New York, New York on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. </FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=4><B>Goldman, Sachs&nbsp;&amp;&nbsp;Co.</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=4><B>Morgan Stanley</B></FONT></TD>
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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Prospectus
dated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011. </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="BG79101A_main_toc"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
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<BR></FONT><FONT SIZE=2><B>  TABLE OF CONTENTS    <BR>    </B></FONT></P>

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<A NAME="BG79101_TOC"></A> </FONT></P>
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<TD WIDTH="34pt" style="font-family:arial;"></TD>
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<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT SIZE=2><B>Page

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 </B></FONT></DIV></TH>
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<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ca79101_prospectus_summary"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prospectus Summary</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ca79101_prospectus_summary"><FONT SIZE=2>1</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#cc79101_explanatory_note_regar__cc702281"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Explanatory Note Regarding Changes in Our Capital Stock</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#cc79101_explanatory_note_regar__cc702281"><FONT SIZE=2>5</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#cc79101_the_offering"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>The Offering</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#cc79101_the_offering"><FONT SIZE=2>6</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ce79101_summary_consolidated_financial_and_other_data"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Summary Consolidated Financial and Other Data</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ce79101_summary_consolidated_financial_and_other_data"><FONT SIZE=2>8</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#de79101_risk_factors"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk Factors</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#de79101_risk_factors"><FONT SIZE=2>13</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#di79101_special_note_regarding_forward-looking_statements"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Special Note Regarding Forward-Looking Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#di79101_special_note_regarding_forward-looking_statements"><FONT SIZE=2>26</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#di79101_use_of_proceeds"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of Proceeds</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#di79101_use_of_proceeds"><FONT SIZE=2>28</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#di79101_dividend_policy"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividend Policy</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#di79101_dividend_policy"><FONT SIZE=2>29</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#dk79101_capitalization"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capitalization</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#dk79101_capitalization"><FONT SIZE=2>30</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#dk79101_dilution"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#dk79101_dilution"><FONT SIZE=2>32</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#dm79101_selected_consolidated_financial_and_other_data"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selected Consolidated Financial and Other Data</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#dm79101_selected_consolidated_financial_and_other_data"><FONT SIZE=2>34</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#do79101_management_s_discussion_and_an__man03466"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management's Discussion and Analysis of Financial Condition and Results of
Operations</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#do79101_management_s_discussion_and_an__man03466"><FONT SIZE=2>39</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#du79101_industries"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Industries</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#du79101_industries"><FONT SIZE=2>64</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#dw79101_business"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Business</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#dw79101_business"><FONT SIZE=2>69</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ec79101_management"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Management</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ec79101_management"><FONT SIZE=2>89</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ee79101_compensation_of_executive_officers"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Compensation of Executive Officers</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ee79101_compensation_of_executive_officers"><FONT SIZE=2>95</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ek79101_certain_relationships___ek702238"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Certain Relationships and Related Person Transactions</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ek79101_certain_relationships___ek702238"><FONT SIZE=2>115</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#ek79101_principal_and_selling_shareholders"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Principal and Selling Shareholders</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#ek79101_principal_and_selling_shareholders"><FONT SIZE=2>116</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#em79101_description_of_employee_stock_ownership_plan"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Employee Stock Ownership Plan</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#em79101_description_of_employee_stock_ownership_plan"><FONT SIZE=2>119</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#em79101_description_of_capital_stock"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Description of Capital Stock</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#em79101_description_of_capital_stock"><FONT SIZE=2>120</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eo79101_shares_eligible_for_future_sale"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares Eligible for Future Sale</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eo79101_shares_eligible_for_future_sale"><FONT SIZE=2>125</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eo79101_material_united_states_federal__mat02864"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Material United States Federal Income Tax Consequences to Non-U.S.
Holders</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eo79101_material_united_states_federal__mat02864"><FONT SIZE=2>128</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eq79101_underwriting"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriting</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eq79101_underwriting"><FONT SIZE=2>132</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eq79101_legal_matters"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal Matters</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eq79101_legal_matters"><FONT SIZE=2>137</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eq79101_experts"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Experts</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eq79101_experts"><FONT SIZE=2>137</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#eq79101_where_you_can_find_more_information"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Where You Can Find More Information</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#eq79101_where_you_can_find_more_information"><FONT SIZE=2>137</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#Financials"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Index to Financial Statements</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#Financials"><FONT SIZE=2>F-1</FONT></A></TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Through and including&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 (the 25th&nbsp;day after the date of this
prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with
respect to an unsold allotment or subscription.</B></FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
we, the selling shareholders, nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus
or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This
prospectus is an offer to sell only the shares offered hereby but only in circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only
as of its date. Our business, financial condition, results of operations and prospects may have changed since that date. </FONT></P>

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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ca79101_prospectus_summary"> </A>
<A NAME="toc_ca79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PROSPECTUS SUMMARY    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>This summary highlights information contained elsewhere in this prospectus and does not contain all of the
information you should consider in making your investment decision. Before investing in our Class&nbsp;A Common Stock, you should carefully read this entire prospectus, including our consolidated
financial statements and the related notes and the information under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". In this
prospectus, unless otherwise indicated or the context otherwise requires, references to "we", "us", "our", the "Company", and "ESCO" refer to ESCO Corporation and its subsidiaries on a consolidated
basis.</I></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ca79101_our_company"> </A>
<A NAME="toc_ca79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Company    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading independent designer, developer and manufacturer of highly engineered wear parts and replacement products used in
surface mining, infrastructure development, power generation, aerospace and industrial applications. Our products are often
essential to the performance of our customers' capital equipment, which frequently operates continuously in harsh environments and is subject to abrasion, impact, corrosion or extreme temperatures. We
have focused on product innovation throughout our nearly 100-year history and as of April&nbsp;11, 2011, we had 45 U.S. patents and 483 foreign patents (including foreign counterparts to
our U.S. patents). We believe our expertise in metallurgy, tribology (the science of wear), design engineering, manufacturing processes and distribution are our core competencies. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have two operating groups: </FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><BR><FONT SIZE=2><B><I>Engineered Products Group</I></B></FONT><FONT SIZE=2>, or EPG, designs, develops and manufactures wear parts and wear part carriers and provides wear solutions for mining, infrastructure development and other
challenging industrial wear applications. EPG wear parts include ground engaging tools, or GET, such as mechanically attached teeth on buckets for earth moving, crusher parts, scrap recycling hammers and dragline rigging. We believe we are the global
market leader in GET tooth systems used in surface mining and infrastructure development, with an extensive offering of patented GET products. Our wear parts, which typically are consumed in less than one year, represented 80% of EPG net sales in
2010. In addition to wear parts, we also design and manufacture wear part carriers, such as dragline buckets for coal mining where we believe we are the global market leader. We have a global network of 21 EPG manufacturing facilities and 35 EPG
sales and distribution offices in 18 countries. EPG represented $712.6&nbsp;million, or 84%, of our net sales in 2010.</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2><I> Sample EPG products, which include wear parts and wear part carriers:  </I></FONT></P>

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<TD style="font-family:arial;"><BR><FONT SIZE=2><B><I>Turbine Technologies Group</I></B></FONT><FONT SIZE=2>, or TTG, manufactures superalloy precision investment cast components used in the aerospace, power generation and other industrial markets, such as blades,
vanes and complex structural parts used in aircraft engines and industrial gas turbines. Broad manufacturing and metallurgical capabilities and extensive engineering expertise, backed by the strength of our brand, have enabled TTG to become an
important supplier in these markets. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of turbines and considered replacement parts. TTG represented $136.9&nbsp;million, or 16%, of our net sales in 2010.</FONT></TD>
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NAME="ca79101_our_industries"> </A>
<A NAME="toc_ca79101_3"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Industries    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Growth in demand for our EPG products is primarily driven by growing populations and urbanization in emerging
markets. These macro trends are
driving significant demand for a wide range of commodities. According to Bloomberg and FactSet, from March 2009 to March 2011 prices for iron ore, copper and crude oil were up 189%, 133% and 115%,
respectively. The capital expenditure budgets for the top five global mining companies by market capitalization have increased an average of 73% in 2011 over 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
EPG net sales are also driven by demand for new infrastructure in emerging markets and the need to replace aging infrastructure in developed markets. According to Business Monitor
International, infrastructure spending globally is expected to grow at a compound annual growth rate of 13% from 2010 to 2014. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Growth in the aerospace market is driven by new aircraft builds and airplane flight hours. With the recovery in
the global economy and growth
in airline traffic, aircraft OEMs&nbsp;are increasing production rates and consequently, according to Airline Monitor, engine deliveries are expected to grow 6.8% in 2011 and 13.0% in 2012. Economic
growth and increasing urbanization are expected to drive growth for components supporting the power OEM markets. According to Frost&nbsp;&amp; Sullivan, gas turbine sales are expected to increase at a
compound annual growth rate of 5.1% from 2010 through 2015. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ca79101_our_strengths"> </A>
<A NAME="toc_ca79101_4"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Strengths    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leading Position in Attractive, Diverse and Growing Markets.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe we are the global leader in GET tooth
systems in the surface mining and
infrastructure development markets and are positioned to benefit from positive secular trends in commodities markets and global infrastructure spending. We serve more than 1,000 customers in the
mining, infrastructure development, power generation, aerospace and industrial markets, including the 10 largest global mining companies. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broad Portfolio of Innovative, Mission-Critical Products.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We sell mission-critical wear parts essential to the
productivity of our customers'
capital equipment in mining and infrastructure development applications where downtime is expensive. Over the past five years, we have sold EPG products under more than 25,000 SKUs. As of
April&nbsp;11, 2011, we had 45 U.S. patents and 483 foreign patents, including foreign counterparts to our U.S. patents. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant and Growing Installed Base Generates Recurring Sales.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We estimate that our EPG products are installed on
approximately
one-third of the world's surface mining machines, and we believe there are opportunities to capture additional share of an increasing base of machines. Our consumable, often patented, wear
parts are generally an operating requirement for our customers and can require replacement as often as every few weeks, generating recurring sales as </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>2</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>parts
wear. The majority of TTG net sales are from products used in the "hot gas path" of aerospace and industrial gas turbines where they are subjected to extreme heat and operating stresses,
resulting in the need for periodic replacement as part of the turbine maintenance, repair and overhaul cycle. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Well-Established Brand with a Loyal, Diverse Customer Base.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For nearly a century, we have built our brand with
responsive service,
productivity improvement and customer-driven innovation. Today, the ESCO brand is globally recognized for quality, durability, reliability, safety and superior performance in the most demanding
operating conditions, from the high stress and impact of hard rock dredging and the severe abrasion of oil sands, to the extreme temperature ranges of a jet engine. We have served each of our top 10
customers in 2010 for at least 15&nbsp;years. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Global Operations with Local Presence.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We have an expansive network of 28 manufacturing facilities, including 16
foundries, and 35 sales and
distribution offices. We operate in 19 countries on six continents, which allows us to develop expertise in solving the world's most challenging mining and infrastructure development problems and
helps us maintain an advantage in developing new products and technologies that we can offer to customers around the world. Our local presence in most of the major mining regions we serve enables us
to develop deep customer relationships, enhance our logistical capabilities and cross-sell a wide range of products and solutions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Team and Organizational Capability.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our executive officers have an average of over 20&nbsp;years of
experience in our business. Our
management team has grown ESCO from a company with operations only in North America and Western Europe to a global business with operations in 19 countries on six continents and a broad, diverse and
growing product portfolio. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ca79101_our_strategies"> </A>
<A NAME="toc_ca79101_5"> </A>
<BR></FONT><FONT SIZE=2><B>  Our Strategies    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer-Driven Innovation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Through ongoing contact with our customers in the field, we will continue to develop
close relationships that allow us
to determine firsthand the new products and solutions our customers need. Through these relationships, we are able to solve customer problems using our design engineering, metallurgical and
manufacturing expertise to create new and, in many cases, patented products that can then be applied across multiple geographies. These products and solutions developed in close collaboration with
customers can deliver greater value and command higher prices and are not easily displaced because of the risk of productivity loss and high switching costs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expand Our Global Presence.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We will continue to grow our global operations by expanding alongside customers into key
regions. Our global expansion
strategy is driven by our desire to serve the fastest-growing mining and infrastructure development markets, expand our direct sales channel and expand our manufacturing in low-cost
regions. Consequently, over the past several years we have made investments in establishing our presence in Australia, Brazil, China, Indonesia, Peru, Russia and South Africa, to capture significant
growth in the mining and infrastructure development markets in these regions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expand Direct Distribution, Selling a Broader Range of Products and Solutions.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We employ a diversified distribution
model for product sales in the
aftermarket that includes direct sales, a network of independent dealers, licensees and OEMs.&nbsp;We will continue to focus on building a direct sales channel in markets where there is a high
concentration of mining activity. Our direct sales channel allows us to manage how our products are positioned with customers, provides us with significant opportunities to cross-sell
products and solutions and positions us to capture incremental growth and profitability. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>3</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase Our Installed Base.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;In EPG, we will continue to pursue a "push/pull" strategy to increase first fitments of
our branded products on capital
equipment. We work closely with OEMs&nbsp;to develop the next generation of products that match the requirements of their new machines. This creates a "push" for our parts and a recurring sales
stream as the end-user purchases our wear products that are attached to our proprietary fitments on machines on an ongoing basis in the aftermarket. In addition, our close customer
relationships have allowed us to provide products and solutions to address customers' critical problems, creating a "pull" through demand for our products. In TTG, our engineers work closely with
OEMs&nbsp;and their revenue sharing partners to manufacture new and modified products that provide high turbine efficiencies and performance. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursue Strategic Acquisitions.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We plan to continue our successful identification, acquisition and integration of
businesses that we believe will
provide us with some or all of the following: foundry capacity in strategic regions, proximity to key customers and enhanced distribution capabilities and complementary products or technologies. We
will continue to focus on expanding our presence in the top mining regions globally and in emerging markets and low-cost regions. We will continue to evaluate acquisitions based on synergy
potential, return on invested capital and earnings accretion. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Focus on Continuous Improvement and Lean Processes.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We will continue to focus on lean processes to drive continuous
improvements in all aspects of
our business. Our lean system, which we refer to as QVS, or "Quality, Value and Speed", has allowed us to improve process cycle times, improve safety, increase quality and customer service, and reduce
capital requirements, including working capital and capital deployed to increase foundry tonnage. As we continue to expand our global operations, we will continue to pursue opportunities to shorten
product development cycles, enhance margins and improve customer service. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Risk Factors  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See "Risk Factors" and other information included in this prospectus for disclosure of factors you should carefully consider before
investing in shares of our Class&nbsp;A Common Stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Corporate Information  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were founded in 1913 in Portland, Oregon and are an Oregon corporation. Our principal executive office is at 2141 NW
25th&nbsp;Avenue, Portland, Oregon 97210, and our telephone number is (503)&nbsp;228-2141. Our website address is </FONT><FONT SIZE=2><I>www.escocorp.com</I></FONT><FONT SIZE=2>.
Information contained on or accessible through our website is not incorporated by reference into this prospectus, and should not be considered part of this prospectus. Our website address included in
this prospectus is an inactive textual reference only. As of December&nbsp;31, 2010, we had more than 4,600 employees worldwide. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ESCO logos and other trademarks or service marks of ESCO appearing in this prospectus are the property of ESCO. Trade names, trademarks and service marks of other companies
appearing in this prospectus are the property of the holders. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>4</FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="cc79101_explanatory_note_regar__cc702281"> </A>
<A NAME="toc_cc79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  EXPLANATORY NOTE REGARDING CHANGES IN OUR CAPITAL STOCK    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with this offering, we will amend our articles of incorporation to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>rename our existing authorized Class&nbsp;A Common Stock "Legacy Class&nbsp;A Common Stock"; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>authorize the class of common stock, "Class&nbsp;A Common Stock", that is offered pursuant to this prospectus; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>authorize blank-check preferred stock;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>amend the terms of the Legacy Class&nbsp;A Common Stock to provide that each share (a)&nbsp;sold in an underwritten
public offering (including this offering) will automatically convert into one share of Class&nbsp;A Common Stock immediately upon the sale, (b)&nbsp;outstanding on the date that is 180&nbsp;days
after the date of this prospectus (the first "Automatic Conversion Date") will automatically convert on that date into one-half share of new Class&nbsp;A Common Stock and
one-half share of Legacy Class&nbsp;A Common Stock and (c)&nbsp;outstanding on the date that is 360&nbsp;days after the date of this prospectus (the second "Automatic Conversion
Date") will automatically convert on that date into one share of new Class&nbsp;A Common Stock (subject, in each case, to adjustment for stock splits, stock dividends, recapitalizations and similar
events occurring after the offering made pursuant to this prospectus); and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>amend the terms of the existing Class&nbsp;B Common Stock to provide that each share will automatically convert upon
transfer to a person other than those described below (a)&nbsp;if transferred before the first Automatic Conversion Date, into one share of Legacy Class&nbsp;A Common Stock; (b)&nbsp;if
transferred after the first but before the second Automatic Conversion Date, into one-half share of Legacy Class&nbsp;A Common Stock and one-half share of Class&nbsp;A
Common Stock; and (c)&nbsp;if transferred on or after the second Automatic Conversion Date, into one share of Class&nbsp;A Common Stock (subject, in each case, to adjustment for any stock splits,
stock dividends, recapitalizations and similar events occurring after the offering made pursuant to this prospectus). The shares of Class&nbsp;B Common Stock are owned by Henry T. Swigert as trustee
of the Swigert 2000 Trust and may be transferred without automatic conversion to Henry T. Swigert; any trustee, in the capacity of trustee, of the Swigert 2000 Trust; or any trustee, in the capacity
of trustee, of any trust created under the Swigert 2000 Trust. Mr.&nbsp;Swigert is a member of our board of directors. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
completing this offering, we will effect a&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split of Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock by
means of a stock dividend. Each share of these classes of stock converts automatically into shares of new Class&nbsp;A Common Stock on the conditions specified in our articles of incorporation and
described above. In addition, upon completion of the offering made by this prospectus, each share of our outstanding Class&nbsp;C Preferred Stock will convert automatically
into&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares of the new Class&nbsp;A Common Stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
giving pro forma effect to the automatic conversion of all shares of Class&nbsp;C Preferred Stock and Legacy Class&nbsp;A Common Stock into Class&nbsp;A Common Stock and the
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split of the Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock, as
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 we would have had outstanding
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of new Class&nbsp;A Common Stock,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;B Common Stock convertible
into&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of new Class&nbsp;A Common Stock and no
shares of preferred stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>5</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="cc79101_the_offering"> </A>
<A NAME="toc_cc79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  THE OFFERING    <BR>    </B></FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
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<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A Common Stock offered by us</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A Common Stock offered by selling shareholders</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A Common Stock outstanding after this offering</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares if the underwriters exercise their option to purchase additional shares in full</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;B Common Stock outstanding after this offering</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Class&nbsp;A Common Stock and Class&nbsp;B Common Stock outstanding after this offering</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares if the underwriters exercise their option to purchase additional shares in full</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Underwriters' option to purchase additional shares of Class&nbsp;A Common Stock</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares from us and no shares from
the selling shareholders</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Use of proceeds</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>We estimate that we will receive net proceeds from our sale of shares of Class&nbsp;A Common Stock of
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming an initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the price range set forth on the cover of this
prospectus, after deducting underwriting discounts and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares by selling shareholders. We intend to use the proceeds for general corporate and working
capital purposes, including possible acquisitions of businesses to complement or enhance our product offerings and manufacturing capacity.</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>See "Use of Proceeds" for additional information.</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proposed NASDAQ Global Market symbol</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ESCO</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk factors</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>See "Risk Factors" and the other information included in this prospectus for a discussion of factors you should
carefully consider before investing in shares of our Class&nbsp;A Common Stock.</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
number of shares of Class&nbsp;A Common Stock outstanding after this offering is based on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding as of December&nbsp;31, 2010 and
excludes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares issuable upon exercise of options outstanding as of December&nbsp;31, 2010 to purchase Legacy
Class&nbsp;A Common Stock at a weighted average exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class&nbsp;A Common Stock at the time of exercise </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>6</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_cc79101_1_7"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<UL>
<UL>

<P style="font-family:arial;"><FONT SIZE=2>(&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
assuming a fair value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the range set forth on the cover of this prospectus);  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class&nbsp;A Common Stock at the time of exercise (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares assuming a fair value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the mid-point of
the range set forth on the cover of
this prospectus); and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> additional shares of Class&nbsp;A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise indicated, all information in this prospectus reflects and assumes the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the amendment of our articles of incorporation described in "Explanatory Note Regarding Changes in Our Capital Stock"; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split of Legacy Class&nbsp;A Common Stock and Class&nbsp;B
Common Stock by means of a stock dividend before this offering;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the conversion of our Class&nbsp;C Preferred Stock and Legacy Class&nbsp;A Common Stock into Class&nbsp;A Common
Stock as described in "Explanatory Note Regarding Changes in Our Capital Stock";  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>no exercise of outstanding options, stock-settled stock appreciation rights or stock-settled performance units; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>no exercise of the put rights described in "Description of Capital Stock&nbsp;&#151; Shareholder Agreements"; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>no exercise by the underwriters of their option to purchase up to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional shares of Class&nbsp;A
Common Stock from us in this offering. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>7</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ce79101_summary_consolidated_financial_and_other_data"> </A>
<A NAME="toc_ce79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We derived the summary consolidated statement of earnings data for the years ended December&nbsp;26, 2008 and December&nbsp;31,
2009 and 2010 and the summary consolidated balance sheet data as of December&nbsp;31, 2009 and 2010 from our audited consolidated financial statements and related notes included in this prospectus.
Before 2009, we reported on a 52/53-week fiscal year consisting of four 13-week periods and ending on the last Friday of the calendar year. Effective December&nbsp;27, 2008,
we changed to a calendar year. Our fiscal year 2009, however, began on December&nbsp;27, 2008 and ended on December&nbsp;31, 2009, resulting in a 370-day year. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
results indicated below and elsewhere in this prospectus are not necessarily indicative of our future performance. You should read this information together with "Capitalization",
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
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<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:196pt;"><FONT SIZE=2><B>(dollars in thousands, except per share data)


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Statement of earnings data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>849,481</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>680,390</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>939,913</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>626,883</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>507,115</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>724,921</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>222,598</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>173,275</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>214,992</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating expenses</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative expenses(1), (2)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>147,881</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>112,535</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>132,719</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring and other(3)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>748</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6,332</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,792</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>73,969</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>54,408</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>80,481</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,710</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,226</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,736</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss on early extinguishment of debt(4)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,013</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other (income) expense(5)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(731</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,091</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,259</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>37,977</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29,273</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>49,486</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9,423</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8,487</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,297</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,554</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,786</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36,189</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from discontinued operations, net of tax(6)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>306</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>443</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,554</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21,092</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36,632</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4,634</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,537</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,073</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(141</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(343</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to ESCO shareholders from continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,920</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,249</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation adjustment of Class&nbsp;C Preferred Stock(7)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(16,521</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,933</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,287</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to ESCO common shareholders from continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,399</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,182</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44,403</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma earnings from continuing operations attributable to ESCO shareholders(8)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,920</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,249</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>8</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=11,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=870374,FOLIO='8',FILE='DISK105:[11ZBC1.11ZBC79101]CE79101A.;33',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:196pt;"><FONT SIZE=2><B>(dollars in thousands, except per share data)


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings per weighted average share outstanding(9)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic earnings per share from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.81</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24.18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>41.08</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted earnings per share from continuing operations allocated to ESCO common shareholders(10)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.62</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15.16</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.21</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average shares outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,086</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,083</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,081</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,118</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,204</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,187</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma earnings per share from continuing operations attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma weighted average shares outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash dividends declared per common share(11)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11.00</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.00</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11.00</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="91pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>As of </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:69pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010, pro forma

<!-- COMMAND=ADD_SCROPPEDRULE,69pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Balance sheet data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>114,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>114,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>168,487</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current assets, excluding cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>268,166</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>268,166</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>203,854</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property and equipment, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>167,446</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>167,446</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>161,919</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>723,622</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>723,622</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>675,745</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current liabilities, excluding the current portion of debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>133,854</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>133,854</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>101,162</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total debt, including current portion</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>273,314</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>273,314</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>306,498</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contingently redeemable equity securities(12)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>232,184</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>144,064</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total equity/(deficit)(12)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>227,562</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4,622</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44,699</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>December&nbsp;31, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>December&nbsp;31, 2009


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>December&nbsp;26, 2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Other data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted EBITDA(13)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>127,780</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>99,497</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>130,853</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted net earnings from continuing operations(14)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48,588</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,977</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44,108</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Non-cash
ESOP compensation costs are included in cost of goods sold and selling and administrative expenses. See "Description of Employee Stock
Ownership Plan."
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
mark to market on stock-appreciation rights (SARs), an expense of $7.7&nbsp;million and $0.0&nbsp;million and income of $0.3&nbsp;million in 2010,
2009 and 2008, respectively, are included in selling and administrative expenses.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Restructuring
costs included: in 2010, expenses related to the closure of our Saskatoon, Saskatchewan foundry; in 2009, personnel reductions and the closure
of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry; and in 2008, personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits
for our U.S. defined benefit plans.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Loss
on early extinguishment of debt primarily includes the write-off of $4.0&nbsp;million of unamortized loan costs and the early redemption
call premium of $8.6&nbsp;million paid upon redemption of $300.0&nbsp;million principal amount of senior unsecured notes in December 2010 as part of our debt refinancing. Debt </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>9</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=12,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=398375,FOLIO='9',FILE='DISK105:[11ZBC1.11ZBC79101]CE79101A.;33',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
<A NAME="page_ce79101_1_10"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT SIZE=2>extinguishment
costs also include $0.4&nbsp;million of unamortized costs associated with our asset-backed line of credit cancelled in November 2010 as part of our debt refinancing. </FONT></P>

</UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Other
(income) expense primarily includes foreign exchange losses and gains on settlement transactions of foreign denominated accounts receivable and
accounts payable. Other expense in each of 2009 and 2008 includes $0.3&nbsp;million of insurance retention expenses.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Discontinued
operations for 2009 and 2008 included earnings from ESCO Soldering Locacoes de Marquinas e Equipmentos&nbsp;Ltda, which we divested in June
2009 as part of the transaction that resulted in our acquisition of 100% ownership of ESCO Soldering, now known as ESCO Brazil.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(7)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Valuation
adjustment of Class&nbsp;C Preferred Stock is the mark to market change of the redemption value of the shares of Class&nbsp;C Preferred Stock
classified as contingently redeemable equity securities on our balance sheet. The corresponding offset is a change in our retained earnings. Upon the conversion of Class&nbsp;C Preferred Stock into
Class&nbsp;A Common Stock in connection with the offering made by this prospectus, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity and this
valuation adjustment will no longer be included in our financial statements.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(8)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Pro
forma earnings from continuing operations attributable to ESCO shareholders reflects the reclassification from contingently redeemable equity securities
to shareholders' equity of Class C Preferred Stock and Class A Common Stock subject to contingent repurchase obligations. See "Description of our Employee Stock Ownership Plan" and "Description of
Capital Stock."
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(9)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Pro
forma share data reflect the changes in our capital structure that will occur before we complete the offering described in this prospectus; other per
share data do not. See "Explanatory Note Regarding Changes in Our Capital Stock".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(10)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Diluted
earnings per share includes the weighted average number of Class&nbsp;C Preferred Stock outstanding and the incremental shares that would be
issued upon the assumed exercise of stock options for the period they were outstanding.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(11)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>See
"Dividend Policy".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(12)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Contingently
redeemable equity securities are redeemable upon the holder's retirement at age 65, death or disability. See "Description of Capital
Stock&nbsp;&#151; Shareholder Agreements" and "Description of Employee Stock Ownership Plan". The presentation reflects shares of Class&nbsp;C Preferred Stock and Legacy Class&nbsp;A
Common Stock at their redemption value. Shares of Class&nbsp;C Preferred Stock automatically convert on a one-for-one basis into shares of the Class&nbsp;A Common Stock
upon the completion of the offering made by this prospectus. Shares of Legacy Class&nbsp;A Common Stock automatically convert on a one-for-one basis into shares of the
Class&nbsp;A Common Stock over a period of up to 360&nbsp;days as described in "Explanatory Note Regarding Changes in Our Capital Stock". Upon the conversion of Class&nbsp;C Preferred Stock or
Legacy Class&nbsp;A Common Stock into Class&nbsp;A Common Stock, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(13)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Adjusted
EBITDA is earnings from continuing operations, net of tax, before interest, taxes, depreciation and amortization and non-operating
expense (income), adjusted to add back ESOP non-cash compensation expenses, mark to market on SARs expense, unrealized (gains) losses on long-term investments and certain
restructuring charges. Adjusted EBITDA has limitations as an analytical tool, and is not intended to represent net earnings, earnings from continuing operations, net of tax, or cash flow from
operations as these terms are defined by generally accepted accounting principles in the United States and should not be used as an alternative to net earnings as an indicator of operating performance
or to cash flow as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate those measures in the same
manner we do. We have included Adjusted EBITDA in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>10</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=13,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=511615,FOLIO='10',FILE='DISK105:[11ZBC1.11ZBC79101]CE79101A.;33',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
<A NAME="page_ce79101_1_11"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT SIZE=2>understanding
of the factors and trends affecting our business. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons: </FONT></P>

<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Our management uses Adjusted EBITDA in conjunction with GAAP financial measures as part of our assessment of our business
and in communications with our board of directors concerning our financial performance;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates
period-to-period comparisons of operations and facilitates comparisons with peer companies, many of which use similar non-GAAP financial measures to supplement
their GAAP results; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Adjusted EBITDA excludes non-cash charges, such as depreciation, amortization, ESOP compensation expense and
mark to market on SARs expense, and those non-cash charges in any specific period may not directly correlate to the underlying performance of our business operations and can vary
significantly between periods.  </FONT>
<BR>

<P style="font-family:arial;"><FONT SIZE=2>The
following table reconciles earnings from continuing operations, net of tax to Adjusted EBITDA for the periods indicated below. </FONT></P>

</DD></DL>
</UL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:96pt;"><FONT SIZE=2><B>(dollars in thousands)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,554</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,786</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36,189</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Add/(Subtract):</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest (net) and loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36,723</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,226</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,736</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9,423</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8,487</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,297</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization(a)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>27,479</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25,113</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24,187</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other (income) expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(731</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,091</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,259</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ESOP non-cash compensation expense(b)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>17,259</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,504</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,248</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mark to market on SARs expense(c)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,678</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(260</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrealized (gains) losses on long-term investments(d)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,953</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,860</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,405</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring and other(e)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>748</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6,332</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,792</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Port Hope reclamation(f)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,600</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted EBITDA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>127,780</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>99,497</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>130,853</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:20%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Depreciation
and amortization excludes the amortization of debt issuance, which is included in interest (net).
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>We
recognize non-cash compensation expense equal to the fair value of the Class&nbsp;C Preferred Stock released as security for the loan to
the ESOP and allocated to participant accounts. A portion of the non-cash ESOP compensation expense is allocated to cost of goods sold and a portion is allocated to selling and
administrative expenses, based on the number of shares allocated to the accounts of manufacturing employees and other employees. See "Description of Employee Stock Ownership Plan."
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Each
quarter, we record the mark to market change in the value of our SARs. Our determination of fair value includes, among other factors, the valuation
determined by the independent valuation firm used by the ESOP trustee. We add this back to derive Adjusted EBITDA because it is a non-cash expense that will end in 2011. In 2011, we
changed our SARs long-term incentive program to stock-settled grants. The awards' grant date fair value will be amortized over their required service period. We expect that all of our
existing cash-settled SARs will be converted to stock-settled SARs in 2011. Any impact to expense from this conversion will be amortized over the remaining service period for the unvested
awards. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>11</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=14,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=849964,FOLIO='11',FILE='DISK105:[11ZBC1.11ZBC79101]CE79101A.;33',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
<A NAME="page_ce79101_1_12"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:20%;">
<p style="font-family:arial;"></FONT></P>

<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Unrealized
(gains) and losses on long-term investments represent the mark to market on our investments held to fund our deferred compensation
and supplemental executive retirement programs.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(e)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Restructuring
and other activity in 2010 included restructuring expenses related to the closure of our Saskatoon, Saskatchewan foundry. Restructuring
activity in 2009 included restructuring expenses related to personnel reductions and the closure of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry. Restructuring activity in 2008
included restructuring expenses related to personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(f)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
expense in 2010 represents the estimated cost of removing an accumulation of solid waste at our Port Hope, Ontario, Canada facility. We plan to complete
the removal within a five-year period. This expense is included in selling and administrative expenses in our consolidated financial statements. </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(14)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>We
define adjusted net earnings from continuing operations as net earnings from continuing operations attributable to ESCO shareholders plus loss on early
extinguishment of debt, net of tax; mark to market on SARs expense, net of tax; and ESOP non-cash compensation expense, net of tax. The adjustments assume a 35% tax rate. We have included
adjusted net earnings from continuing operations in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business.  </FONT>
<BR>

<P style="font-family:arial;"><FONT SIZE=2>The
following table reconciles net earnings from continuing operations attributable to ESCO shareholders to adjusted net earnings from continuing operations. </FONT></P>

</DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:96pt;"><FONT SIZE=2><B>(dollars in thousands)

<!-- COMMAND=ADD_SCROPPEDRULE,96pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

<!-- COMMAND=ADD_SCROPPEDRULE,57pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings from continuing operations attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,920</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,249</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss on early extinguishment of debt, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8,458</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Mark to market on SARs expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,991</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(169</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ESOP non-cash compensation expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,219</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,728</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,161</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Adjusted net earnings from continuing operations</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48,588</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,977</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44,108</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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<BR></FONT><FONT SIZE=2><B>  RISK FACTORS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>Investing in our Class&nbsp;A Common Stock involves a high degree of risk. You should carefully consider the
risks described below and the other information in this prospectus, including our consolidated financial statements and the related notes, before making a decision to invest. If any of the events or
circumstances described below occurs, our business, operating results, financial condition or growth prospects could be materially and adversely affected. In those cases, the trading price of our
Class&nbsp;A Common Stock could decline and you may lose all or part of your investment.</I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Risks Related to Our Business  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our business is subject to changes in general economic conditions.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our results of operations are materially affected by the conditions in the global economy and in the global capital and credit
markets. Recessions, downturns and other negative economic conditions around the world may significantly affect our profits as a result of increases in costs of materials, reduced sales, restructuring
costs and challenges in receivables collections and other important elements of our business. The effect of changing economic conditions may not be immediate. For example, in 2009 our net sales
decreased by approximately $260&nbsp;million compared to 2008, which we believe resulted primarily from the economic downturn that began in 2008. Similarly, changes in a local economy's business
conditions, exchange rates or inflation can affect our customers and their decisions and ability to purchase products, which in turn affects our net sales. Further, market volatility, unpredictable
government interventions in various industries and financial markets, increased regulation and difficult economic conditions may also make it harder or impossible for us to access capital and credit
markets to fund operating needs on acceptable terms. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our business is affected by cyclicality in the end markets we serve.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We make significant decisions based on our outlook on business activity in the mining, infrastructure development, power generation,
aerospace and industrial markets we serve. These decisions include the levels of business that we seek and accept, production schedules, raw materials and other component commitments, personnel needs
and other resource requirements. Each of the principal end markets we serve is cyclical, and our outlook on business activity in our markets may fail to predict accurately the timing, nature and
extent of changing market conditions. Many factors affect these markets, including, for example, the level of production, levels and locations of mineral deposits, commodity prices, substitution of
new or competing inputs and methods, and government regulations and tax policies. As a result of cyclicality in the end markets we serve, we have experienced, and we will experience, significant
fluctuation in our net sales and operating profit. Further, the end markets for EPG and TTG vary substantially, and improvements in one may not be accompanied by similar changes in the other. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Inventory stocking decisions by our customers can exaggerate the effects of changing economic and market conditions on our financial results.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many of our customers maintain an inventory of our products for use or resale. Purchases of our products by these customers may differ
materially, at least for periods measured in months rather than years, from amounts required to maintain a steady level of inventory. As a result, their purchases from us may be at a lower rate than
the rate of their sale or use of the product as they "destock" in anticipation of a downturn in the economy generally or in their particular market. Conversely, when they purchase products from us to
build inventory levels, because they anticipate future increased net sales or for other reasons, the resulting growth in our net sales may be temporary and a misleading indicator of future results.
For example, we believe the decrease in net </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>13</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>sales
from 2008 to 2009 and subsequent increase from 2009 to 2010 were exaggerated by inventory destocking and restocking by our customers in response to significant changes in most commodity prices. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our production capacity may not be sufficient to meet customer demand.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many of the products we supply are mission-critical parts, the loss of which may result in lost productivity and significant costs for
our customers. If we are unable to anticipate production demand for these parts or adequately increase production if demand increases, our delivery times could be delayed. For example, current
customer demand has led to extended delivery times for some of our products. If we experience significant delays in product delivery, our customer relationships and reputation for reliability could
suffer, and current and potential end-user and OEM customers could purchase their parts from one of our competitors. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> A material disruption to one or more of our manufacturing plants could adversely affect our ability to generate revenue.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We produce our products at manufacturing plants around the world. If operations at one or more plants are disrupted as a result of
equipment failures, natural disasters, work stoppages, power outages, acts of terrorism or other reasons, our business and results of operations could be adversely affected. Acts of terrorism, for
example, have caused in the past and may in the future cause a decline in the airline industry, which is likely to affect our TTG business.
Interruptions in production would increase costs and reduce sales. Our facilities are also subject to the risk of catastrophic loss due to earthquakes, fires, explosions or adverse weather conditions,
including hurricanes and tornadoes. Any interruption in production capability could require us to make large capital expenditures to remedy the interruption, which could negatively affect our
profitability and cash flows. These events could affect our manufacturing and distribution capabilities and, because we specialize our manufacturing processes at our foundries and fabrication
facilities and often have limited backup operations, an event that affects one facility could have an exaggerated effect on our ability to meet production demands and our sales. In addition, these
events also could result in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of our products, which would adversely affect our business, financial
condition and results of operations. Lost sales may not be recoverable under our insurance policies and longer-term business disruptions could result in a loss of customers. If this
occurred, future sales could be adversely affected. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> We operate in highly competitive industries.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We compete on a variety of factors, including productivity, design and performance, technology, metallurgical expertise, reliability,
customer relationships, delivery lead times and price. Some of our competitors are larger, have greater financial resources and are less leveraged than we are or may develop products or services that
put us at a disadvantage. Our effectiveness in managing our manufacturing efficiency and our costs are key factors in determining our future profitability and competitiveness. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> OEM customers may develop their own product lines or work with our competitors to develop products that compete with ours.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of our products compete with products manufactured and sold by our OEM customers. This competition could damage our relationships
with those OEMs.&nbsp;OEMs&nbsp;may also develop new product lines or work with our competitors to develop product lines. If that occurs, our results of operations could suffer due to lost sales
to the OEMs&nbsp;and increased competition. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>14</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B><I> Our business could be adversely affected by our failure to effectively manage proprietary product life cycles and to develop new and innovative products.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many of our products are protected by patents in key regions around the world. We manage product life cycles by managing the patent
life of our products and by focusing research and development spending to develop proprietary products to replace those that will lose their patent protection. Our effectiveness in managing this
process is a key factor in determining our future profitability and competitiveness. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, to remain competitive, we must continue to develop new and innovative products that meet our customers' changing requirements. Our future growth will depend, in part, on
our ability to address the increasingly demanding needs of our customers by enhancing our products and timely developing and selling new products. If we are not successful in these efforts, if we
experience difficulties that delay or prevent these efforts, or if our new products or enhancements do not achieve market acceptance, our business could be adversely affected. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our continued success depends on our ability to protect our intellectual property rights.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We rely on a combination of nondisclosure, confidentiality, invention assignment and other types of agreements, and trade secret,
trademark, copyright and patent law to establish, maintain, protect and enforce our intellectual property rights. These measures may be inadequate to protect our intellectual property rights, and any
of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated by others. For example, some of our patent applications may not be approved, some issued patents
may not adequately protect our intellectual property or provide us with a competitive advantage, or may be challenged by others. Furthermore, our contracts may not effectively prevent disclosure or
use of our confidential information or provide an adequate remedy in the event of unauthorized disclosure or use of our confidential information. In addition, when terminated, these contracts provide
for continued protection of our confidential information and trade secrets only for a limited period of time. Others may independently discover our trade secrets and proprietary information or exploit
our trade secrets after the expiration of contractual protections for those trade secrets, and in those cases we could not assert any trade secret rights against those parties or others to whom those
parties disclose our trade secrets. To the extent our employees, contractors or other parties with whom we do business use intellectual property owned by others in their work for us, disputes may
arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to determine the scope of and enforce our
intellectual property rights, and even litigation we initiate could result in the narrowing or invalidation of the intellectual property rights we seek to enforce. In addition, the laws of some
countries do not protect intellectual property rights to the same extent as the laws in the United States. Our expansion into some emerging markets may increase the risk of intellectual property
infringement due to, among other things, the presence of independent firms called "will-fitters" that may produce copies of our products. Therefore, in some jurisdictions, we may be unable
to adequately protect our intellectual property, even if intellectual
property laws purport to offer adequate protection, against unauthorized copying or use, which could adversely affect our competitive position. The inability to protect our proprietary information and
enforce our intellectual property rights could have an adverse effect on our business, financial condition and results of operations. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, parties may claim that we, our customers, licensees or other parties indemnified by us are infringing upon their intellectual property rights. Even if we believe claims are
without merit, they can be time-consuming and costly to defend. Claims of intellectual property infringement also might require us to redesign affected products or technologies, enter into
costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from using certain of our technologies or marketing or selling certain
of our products. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>15</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>Even
if another party has agreed to indemnify us against these costs, it may not be able to do so. If we cannot or do not license the infringed technology on reasonable pricing terms or at all, or
substitute similar technology from another source, our business, financial condition and results of operations could be adversely affected. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Our continued global expansion efforts may not be successful.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to continue to pursue expansion of our international operations and international sales and marketing activities. Expansion
in international markets requires significant management attention and resources. We may form relationships with local partners in connection with our international expansion. Disputes with local
partners may adversely affect our business. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we may be unable to scale our infrastructure effectively in these markets, which would cause our results to suffer. We may not be able to hire, train, retain and manage
required personnel, which may limit our international growth. We will also face significant competition from multinational and local companies. Local companies may have a substantial competitive
advantage because of their greater understanding of, and focus on, local customers and more established local brand names. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have taken steps to expand our direct presence in Australia and in South Africa, where our relationships with licensees have recently expired or soon will expire. Our investments in
these areas, including investments in foundry capacity and in personnel, may not be sufficient to allow us to compete effectively in those markets or with our former licensees. In addition, if we are
not able to build our operations in these territories to meet customer demand, including customers that have
operations in other areas of the world, our reputation and results of operations in these areas and in other geographies may suffer. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> The expansion of our direct sales model may have negative consequences.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We employ a diversified distribution model that includes direct sales, a network of independent dealers, licensees and
OEMs.&nbsp;Our network of independent dealers and our licensees are important to our success. In recent years, however, we have grown our direct sales channel, particularly in markets where there is
a high concentration of mining activity. This increased direct sales effort may be unsuccessful or adversely affect our relationships with dealers and licensees, which could harm our business. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will begin competing with Bradken Resources Pty&nbsp;Ltd. in Australia, New Zealand and Papua New Guinea when our licensee relationship with Bradken ends on June&nbsp;30, 2011.
Royalty income from Bradken, which contributes directly to our net earnings, was $8.7&nbsp;million in 2010, $7.2&nbsp;million in 2009 and $7.4&nbsp;million in 2008. If we are not able to make
sales sufficient to replace the royalty income from Bradken, or if we fail to fulfill customer demands as we replace licensee sales with direct sales, our relationships with customers and our results
of operations will suffer. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our ability to recover increased costs resulting from price increases in raw materials may be limited.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Price increases for steel and other raw materials have occurred and will occur again. Prices for raw materials may be influenced by
competitors, trends in our markets, private or government cartels, world politics, natural disasters, unstable governments in exporting nations and inflation. We may not be able to adjust product
prices, especially in the short term, to recover the costs resulting from price increases. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>16</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B><I> Our operations may be affected by government policies and spending.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Government policies on taxes and spending affect our businesses. Throughout the world, government spending finances infrastructure
development, such as highways, airports, sewer and water systems and dams. Tax regulations determine depreciation lives and the amount of money potential customers can retain, both of which influence
spending decisions. Developments more unfavorable than anticipated, such as declines in government revenues, decisions to reduce public spending or increases in taxes, could negatively affect our
results. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
business plans typically reflect assumptions about the stability or strength of local economies and the interest rates, exchange rates and inflation in a number of countries. To the
extent government intervention is different than we anticipate, the fiscal and monetary mechanisms can cause market demand to change materially from our forecasts. For example, interest rates affect
the ability of customers to finance capital equipment purchases and can change the optimal time to keep capital equipment in operation. As a result, monetary policies, such as increases in interest
rates higher than those assumed by us, could result in lower net sales than anticipated. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> We may be adversely affected by government regulations.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to government regulations in the countries where we operate. We incur additional legal compliance costs associated with
our international operations and could become subject to penalties in foreign countries if we do not comply with local laws and regulations, which may be substantially different from those in the
United States. We are also subject to U.S. government laws and regulations affecting our international activities, including those relating to bribery of foreign government officials, import-export
control, trade sanctions and repatriation of earnings. Although we have policies and procedures designed to ensure compliance with these laws, our employees, contractors and agents could take actions
in violation of our policies, which could have an adverse effect on our business. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
many of our employees are located outside the United States, we are subject to changes in foreign laws governing our relationships with our employees, including wage and hour
laws and regulations, fair labor standards, unemployment tax rates, workers' compensation rates, citizenship requirements and payroll and other taxes. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
engage primarily in heavy industrial manufacturing. Our customers are engaged primarily in industrial activities, including mining, infrastructure development, power generation and
aerospace. As a result of the wide array of applicable regulations and laws, our and our customers' operations could be disrupted or curtailed. The high cost of compliance with environmental, health,
safety and
other regulations may also induce us or our customers to discontinue or limit operations. As a result of these factors, our ability to operate and our customers' demand for our products could be
substantially and adversely affected. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Our international operations are subject to many uncertainties.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our international operations are subject to political, economic, legal and other uncertainties that could adversely affect our
business. A key part of our long-term strategy is to increase our manufacturing, distribution and sales presence in international markets. In 2010, 55.7% of our sales were to customers
outside the United States. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to other general business risks, risks faced by our international operations include, among others, political, regulatory, judicial and business instability; less reliable
or nonexistent physical, financial and legal infrastructures; differing environmental standards; currency exchange fluctuations; and restrictive trade rules, such as tariffs and currency controls. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>17</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
take steps to monitor and respond to these risks. However, the fixed nature of the capital investments at many of our facilities and the fixed locations of many of our customers, in
particular those in the mining industry, limit our ability to quickly alter our sales, supply chain, operational and purchasing efforts in response to political, regulatory or economic changes. As a
result, we may suffer an impairment or loss of facilities or investment or we may find our ability to access and use our capital significantly restrained. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> We are exposed to foreign currency risks.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to fluctuations in foreign currencies for transactions denominated in other currencies. We conduct a significant number
of transactions in currencies other than the U.S. dollar. Changes in the value of major foreign currencies, particularly the Australian dollar, Brazilian Real, Canadian dollar, Chinese Renminbi, Euro
and South African Rand, relative to the U.S. dollar can significantly affect net sales and our operating results. Generally, our revenues and operating results are adversely affected when the U.S.
dollar strengthens relative to other currencies and are positively affected when the U.S. dollar weakens. In addition, we incur foreign currency transaction gains and losses, primarily related to
intercompany transactions with
and between our subsidiaries. If we increase our international sales, the percentage of our net sales denominated in local currencies will increase. To the extent our related costs are denominated in
other currencies, our margins may be affected by fluctuations in those currencies. Although we may engage in exchange rate hedging to mitigate exchange rate fluctuations, hedging transactions may not
be available or may be ineffective. In addition to the direct effect of changes in exchange rates, those changes also affect the volume of sales or the foreign currency sales price as competing
products become more or less attractive. Furthermore, currency controls, devaluations, trade restrictions and other disruptions in currency convertibility and in the market for currency exchange could
limit our ability to convert sales earned abroad into U.S. dollars in a timely way. This could adversely affect our ability to service our U.S. dollar indebtedness, fund our U.S. dollar costs, finance
capital expenditures and pay dividends on our capital stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> We are subject to environmental laws and regulations, and any violation of, litigation relating to or liabilities under these laws and regulations could adversely affect us.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to federal, state, provincial, regional, local and foreign laws and regulations relating to the protection of health,
safety and the environment, including those governing emissions and discharges to the ground, air and water; handling and disposal practices for solid and hazardous wastes; the cleaning of
contaminated sites; and the maintenance of a safe workplace. We are also required to obtain permits from governmental authorities for some of our operations. These permits are subject to renewal and
modification. We may be unable to comply with all permit terms or renew our permits on a timely basis or at all. Furthermore, we could incur substantial costs or suffer reduced production capacity as
a result of noncompliance with, or liability for cleanup or other costs or damages under, these permits or under environmental laws. We have in the past been required to pay fines in connection with
permit violations. We could also be held liable for any consequences arising out of human exposure to hazardous materials, including asbestos, or other environmental damage. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
U.S. Superfund law and similar state and foreign laws and regulations impose liability on entities that own or operate, or previously owned or operated, contaminated property; cause
or caused contamination; or send or sent wastes to disposal facilities that become contaminated. The cleanup of contaminated sites can be expensive, and these laws may impose liability for the entire
cost on any one party, particularly if other parties are unable to pay. As a result of our current and former ownership and operation of facilities and our disposal of wastes, we could incur
substantial liability even if we are unaware of, or are not responsible for, releases of hazardous materials at our </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>18</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>current
or former sites, or we could suffer reduced production capacity or other costs or damages. We may be required to expend amounts for investigation and cleanup of contamination, which amounts we
cannot determine at the present time but may ultimately prove to be significant. For example, in March 2010 we received a questionnaire from the Environmental Protection Agency, or the EPA, regarding
historical operational practices in connection with the Portland Harbor
Superfund site. The EPA sent the questionnaire to approximately 300 businesses located along the Willamette River in Oregon. The EPA also named us as one of more than 100 businesses to date that are
potentially responsible parties for this site. The current aggregate clean-up cost to be allocated among responsible parties is estimated to be approximately $1.0&nbsp;billion. We have
entered into a participation agreement with a group of named potentially responsible parties and other companies under which we admit to no liability. The agreement provides a framework to determine
how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party to pay its portion of assessed costs may result in increased costs to other
parties. We are also participating in a process with other potentially responsible parties to quantify and potentially allocate natural resource damages claims with respect to the site. We cannot
predict our ultimate liability with respect to the Portland Harbor Superfund site at this time, but it could be substantial if the EPA determines we are a responsible party for this site. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Environmental
laws are complex, change frequently and have tended to become more stringent over time. Our costs of complying with current and future environmental laws, and our
liabilities arising from past or future releases of, or exposure to, hazardous materials may adversely affect our business, financial condition or results of operations. In addition, increased
environmental regulation of the industries to which we market could increase our customers' costs and adversely affect our net sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Regulatory effects of climate change could adversely affect our business.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations emit carbon dioxide and other greenhouse gases (GHG). Laws and regulations have been, and may be, adopted at the
federal, state, provincial, regional and local levels in the United States and other countries where we operate with respect to GHG emissions. These laws, regulations and initiatives could result in
additional costs to us, in the form of taxes or emission allowances, or could otherwise adversely affect our operations. For example, the EPA is proceeding with regulation of GHG emissions under the
Clean Air Act. Under EPA regulations finalized in May 2010, the EPA began regulating GHG emissions from certain stationary sources in January 2011. Under these regulations, any source that emits at
least 75,000 tons per year of GHGs will be required to have a Title V operating permit under the Clean Air Act. Sources that already have a Title V permit, including our U.S. foundries, will have GHG
provisions added to their permits upon renewal. Additionally, construction permits for new major sources of GHG emissions and GHG sources that undergo major modifications require the implementation of
best available control technology for the control of GHG emissions. The effect of any current or future GHG regulation or initiatives on our global businesses and products could be significant, could
require us to incur substantial costs and could otherwise affect our business, financial condition and results of operations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Loss of or failure to recruit and develop skilled personnel could have an adverse effect on our business.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to provide high-quality products and services depends in part on our ability to recruit and retain skilled
personnel in the areas of management, product engineering and manufacturing, service and sales. The loss of the services of key personnel, or the failure to effectively implement succession plans,
could have a significant negative effect on our business, </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>particularly
if we are unable to retain the customer relationships and technical expertise provided by our management team and personnel. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Our operations and products expose us to potential liability.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We engage primarily in heavy industrial manufacturing. Some of our manufacturing processes involve high pressures, hot metal and other
materials and equipment that present safety risks to our employees. Although we employ safety procedures in the design and operation of our facilities, accidents involving death or serious injury
could occur. Any uninsured liability resulting from an accident could have an adverse effect on our business, financial condition or results of operations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
business exposes us to possible claims for personal injury or death and property damage resulting from the use of products we manufacture. We maintain product liability and other
insurance to cover claims of this nature. Our policies, however, are subject to deductible and recovery limitations and do not cover every contingency. Claims brought against us that our insurance
does not cover or that exceed our insurance coverage could have an adverse effect on our business, financial condition or results of operations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our business involves risks associated with complex manufacturing.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Few suppliers can provide the sophisticated and high-value equipment we use in our manufacturing plants. For example, at
our TTG facilities, some of our investment casting furnaces and spare parts can only be purchased from a limited number of suppliers. Moreover, the competitive nature of our businesses requires us to
periodically implement process changes to improve products and manufacturing efficiencies. These process changes may result in production delays, quality concerns and increased costs. Equipment
failures or disruption of operations at our facilities, particularly at facilities where we do not have redundant capacity, may result in production delays, sales loss and significant costs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our manufacturing operations rely on the continued supply of a number of raw materials and manufactured components.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To reduce costs and inventories, we sometimes rely on preferred vendors as a sole source for raw materials and manufactured
components. In addition, we use some raw materials that are only found in a few locations in the world, including metals such as cobalt, nickel, tantalum and molybdenum required for the alloys used in
some of our castings. In some cases, suppliers of critical raw materials to TTG are also competitors of TTG. While we regularly assess the ability of these vendors to deliver as contracted and their
viability as going concerns, because we maintain relatively low raw material inventories, even brief unanticipated delays in delivery by suppliers may adversely affect our ability to satisfy our
customers' demands and could thereby affect our business or our results of operations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Acquisitions present many risks, and we may not realize our financial and strategic goals for those transactions.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to continue to acquire businesses we believe will enhance our operations and profitability. We may not, however, be able to
find suitable businesses to purchase or to obtain the financing to complete future strategic transactions. Acquisitions may present financial, managerial and operational challenges, including
diversion of management attention from existing businesses, difficulty integrating personnel, acquired technologies or products and financial and other systems, increased expenses, failure to retain
customers, assumption of unknown liabilities and indemnities and potential disputes with the sellers. Our use of cash to pay for acquisitions may limit other potential uses of our cash, including
stock repurchases, dividend payments and retirement of </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>20</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>outstanding
indebtedness. If we are unable to complete these transactions, or successfully integrate and grow acquisitions and achieve contemplated synergies, net sales growth and cost savings, our
financial results could be adversely affected. We may significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition. To the
extent we issue equity securities in connection with future acquisitions, existing shareholders may be diluted and earnings per share may decrease. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> We are exposed to credit risk in our sales practices.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To remain competitive, we often offer customers short-term credit on sales. We extend credit based on an assessment of a
customer's financial condition, generally without requiring collateral beyond the products sold. A slowdown in applicable markets or a recession could have an adverse effect on the financial health of
our customers, which in turn could have an adverse effect on our results of operations. We monitor our customers' creditworthiness, but we bear the risk of a significant delay in payment or default if
a customer becomes insolvent or enters bankruptcy. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> The conditions of the U.S. and international capital markets may adversely affect supplier financial viability, customer demand and our ability to draw on our credit
facility.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent volatility in credit and capital markets caused a significant decline in and restricted access to liquidity and financing for
many businesses. If these conditions return or continue for extended periods, the liquidity of our suppliers and customers could be adversely affected. As a result, their ability to supply raw
materials to us or purchase products from us could be negatively affected, and our business could suffer. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, if financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S. and international capital markets, they may be
unable or unwilling to fund borrowings under their credit commitments to us, which could have an adverse effect on our ability to borrow additional funds for working capital, capital expenditures,
acquisitions, research and development and other corporate purposes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our indebtedness could adversely affect our financial condition and impair our ability to operate our business.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our senior secured credit agreement contains covenants that limit our ability to incur indebtedness and acquire other businesses and
impose other restrictions. These covenants could affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. In addition,
our credit agreement requires us to maintain financial ratios and satisfy financial conditions. Our ability to comply with the provisions of our credit agreement may be affected by changes in economic
or business conditions beyond our control. We may be unable to comply with the financial ratios or covenants and, if we fail to comply, we may be unable to obtain waivers from our lenders. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Labor disputes and increasing labor costs could adversely affect us.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Collective bargaining agreements or similar types of arrangements cover approximately 24% of our employees. When these collective
bargaining agreements expire, we may not be able to reach new agreements with our employees. New agreements may be on substantially different terms and may result in increased direct and indirect
labor costs. Disputes with our employees could adversely affect our business, financial condition or results of operations. </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B> Risks Related to This Offering  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Our stock price is likely to be volatile and could decline following this offering, resulting in a substantial loss on your investment.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before this offering, there has not been a public market for our Class&nbsp;A Common Stock. An active trading market for our
Class&nbsp;A Common Stock may never develop or be sustained, which could affect your ability to sell your shares and could depress the market price of your shares. In addition, the initial public
offering price has been determined through negotiations between us and the representatives of the underwriters and may not reflect the price at which our Class&nbsp;A Common Stock will trade after
the offering. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
stock market in general has been highly volatile. As a result, the market price of our Class&nbsp;A Common Stock is likely to be volatile, and investors in our Class&nbsp;A
Common Stock may experience
a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our Class&nbsp;A Common Stock could be subject to wide fluctuations in
response to a number of factors, including those described in this "Risk Factors" section and others, such as: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our operating performance and the performance of other similar companies;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the overall performance of the equity markets;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>publication of unfavorable research reports about us or our industry or withdrawal of research coverage by securities
analysts;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>speculation in the press or investment community; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>global economic, political, legal and regulatory factors unrelated to our performance. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fluctuations
or decreases in the trading price of our Class&nbsp;A Common Stock may adversely affect your ability to trade your shares. In the past, following periods of volatility in
the market price of a company's securities, securities class action litigation has often been instituted. A securities class action suit against us could result in substantial costs and divert
management's attention and resources that would otherwise be used to benefit the future performance of our operations. Securities class action costs may not be covered by insurance. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could
decline.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The trading market for our Class&nbsp;A Common Stock depends in part on the research and reports that securities or industry
analysts publish about us or our business. If no or few securities or industry analysts cover our business, the trading price for our Class&nbsp;A Common Stock would be negatively affected. If one
or more of the analysts who covers us downgrades our Class&nbsp;A Common Stock or publishes incorrect or unfavorable research about our business, our stock price could decline. If one or more of
these analysts stops covering our business or fails to publish reports on us regularly, demand for our Class&nbsp;A Common Stock could decrease, which could cause our stock price or trading volume
to decline. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our
operating results.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company,
including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section&nbsp;404 and </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>other
provisions of the Sarbanes-Oxley Act of 2002, and rules promulgated by the Securities and Exchange Commission, or SEC, and The NASDAQ Stock Market&nbsp;LLC. In addition, our management team
will have to adapt to the requirements of our public company status. We expect that complying with these rules and regulations will substantially increase our legal and financial compliance costs and
make some activities more time-consuming and costly. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
increased costs associated with operating as a public company will decrease our net earnings or increase our net loss and may require us to reduce costs in other areas of our
business or increase the prices of our products. Additionally, if these requirements divert management's attention from other business concerns, they could have an adverse effect on our business,
prospects, financial condition and operating results. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> There may be sales of a substantial number of shares of our Class&nbsp;A Common Stock after this offering, which could cause our Class&nbsp;A Common Stock price to
decline significantly.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional sales of our Class&nbsp;A Common Stock in the public market after this offering, or the expectation that sales may occur,
could cause the price of our Class&nbsp;A Common Stock to decline. Upon the completion of the offering, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock outstanding,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock, all of which will convert into Class&nbsp;A Common Stock no later than 360&nbsp;days after the date of this prospectus, and
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;B Common Stock outstanding, which are convertible into&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
Class&nbsp;A Common Stock or Legacy Class&nbsp;A Common Stock depending on
the date of transfer. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shares of Class&nbsp;A Common Stock sold in this offering will be freely tradable in the public market unless held by our affiliates. The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
Class&nbsp;A Common Stock held by our ESOP will be eligible for sale in the public market upon completion of our initial public offering, subject to the restrictions regarding distributions and
diversification under the terms of our ESOP, ERISA regulations and restrictions under securities laws. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock owned by our officers and directors and all of the shares of Class&nbsp;B Common Stock will be subject to
lock-up agreements with the underwriters of our public offering. We expect that the remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock outstanding will be freely
tradable following the offering, subject to any volume restrictions imposed by Rule&nbsp;144 on shares held by affiliates, although no public market for those shares exists and we do not plan to
list the Legacy Class&nbsp;A Common Stock on any exchange or create a market for those shares. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most
of the holders of Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock have owned shares of our stock for many years and have not had access to a public market in
which to sell their shares. Following conversion, a significant number of holders of our Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock may take advantage of the public market in
our Class&nbsp;A Common Stock and sell shares. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to our equity incentive plans, options to purchase approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock will be outstanding upon completion of this offering.
After the offering, we intend to file&nbsp;a registration statement under the Securities Act that will cover the shares available for issuance under our equity incentive plans (including shares
underlying the outstanding options) as well as shares held for resale by our existing shareholders that were previously issued under our equity incentive plans. See "Shares Eligible for Future Sale". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
of Class&nbsp;A Common Stock by existing shareholders in the public market, the availability of these shares for sale, our issuance of securities or the perception that any of
these events might occur could materially and adversely affect the market price of our Class&nbsp;A Common Stock. In </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>addition,
the sale of these shares by these shareholders could impair our ability to raise capital through the sale of additional stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> As a new investor, you will incur immediate and substantial dilution as a result of this offering.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investors purchasing shares of our Class&nbsp;A Common Stock in this offering will pay more for their shares than the amount paid by
shareholders who acquired shares before this offering. If you purchase Class&nbsp;A Common Stock in this offering, you will incur immediate dilution in pro forma net tangible book value of
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. In addition, the exercise of outstanding options and stock appreciation rights, the settlement of performance unit awards and grants of restricted
stock will,
and future equity issuances may, result in further dilution to investors. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> We may not pay dividends on the Class&nbsp;A Common Stock.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have paid dividends on our common stock in the past and expect to do so in the future. Any determination to pay dividends in the
future, however, will be at the discretion of our board of directors, will be subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our
results of operations, financial condition, capital requirements and other factors our board of directors deems relevant. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> The Class&nbsp;B Common Stock is held by a single shareholder, will have a significant number of votes and has separate approval rights for change in control transactions
presented to shareholders for approval.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Class&nbsp;B Common Stock will represent approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the voting securities outstanding after the offering
made by this prospectus, and will be able to influence the vote on matters requiring shareholder approval, may have interests and goals that differ from yours and may vote shares differently than you
would. In addition, the Class&nbsp;B Common Stock votes as a separate voting group on a company conversion, merger requiring shareholder approval or share exchange; a sale of all or substantially
all of our assets; and dissolution. Our
Class&nbsp;B Common Stock is held by Henry&nbsp;T. Swigert as sole trustee of the Swigert 2000 Trust. Upon Mr.&nbsp;Swigert's death, Robert&nbsp;C. Warren,&nbsp;Jr. and Peter&nbsp;F.
Adams, who are directors of ours, are designated to become co-trustees of the trust. If they do so, each must agree to vote the shares in trust in favor of a change in control transaction
for the transaction to be approved. These voting rights may delay or prevent a change in control or sale of our business, including a transaction approved by our board of directors, and discourage
tender offers for our shares. In the event of a change in control, the Class&nbsp;B Common Stock may have an opportunity to receive a premium for the Class&nbsp;B Common Stock that may not be
available to the Class&nbsp;A Common Stock, which may affect the market price of our Class&nbsp;A Common Stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> The trustee of our ESOP has the discretion to vote a large block of shares on matters presented to shareholders for approval.  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the closing of the offering made by this prospectus, each participant in our ESOP may direct the ESOP trustee how to vote the
shares of stock allocated to the participant's ESOP account. The trustee must vote any unallocated shares held by the ESOP or allocated shares for which no direction has been given by the participant.
Consequently, the trustee has the ability to vote a significant block of shares on important matters, which could delay or prevent a change in control or sale of our business, including a transaction
approved by our board of directors. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>24</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B><I> We have broad discretion to determine how to use the funds raised in this offering, and may use them in ways that do not enhance our operating results or the price of our
Class&nbsp;A Common Stock.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We could spend the proceeds from this offering in ways our shareholders may not agree with or that do not yield a favorable return. We
plan to use the net proceeds from this offering for general corporate purposes, which may include working capital, sales and marketing activities, general and administrative matters, capital
expenditures, repayment of indebtedness and potential acquisitions of or investments in complementary technologies, solutions or businesses. Until we use the proceeds of this offering, we plan to
invest the net proceeds in interest-bearing securities. If we do not invest or apply the proceeds of this offering in ways that enhance shareholder value, our stock price could decline. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Provisions in our articles of incorporation and bylaws, Oregon law, and our credit agreement may delay or prevent an acquisition of our business.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our articles of incorporation, bylaws and Oregon law contain provisions that may delay or prevent a change in control transaction or
changes in our management. Our articles of incorporation and bylaws, which will be amended before the completion of this offering, will include provisions that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>authorize "blank check" preferred stock, which could be issued without shareholder approval and could have voting,
liquidation, dividend and other rights superior to the Class&nbsp;A Common Stock;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>create a classified board of directors whose members serve staggered three-year terms, resulting in the
election of one-third of the directors in any year;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though
less than a quorum; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>require supermajority votes of the holders of our common stock, voting as a single group, to amend specified provisions of
our articles of incorporation and bylaws. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, the separate vote of the Class&nbsp;B Common Stock, as described above, is required for certain change in control transactions. These provisions, alone or together, could
delay or prevent hostile takeovers and changes in control or changes in our management. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
we are incorporated in Oregon, we are governed by the provisions of the Oregon Business Corporation Act, which, among other things, limits the ability of shareholders owning in
excess of 15% of our outstanding voting stock to merge or combine with us and regulates the process by which persons may acquire control of our business without the consent and cooperation of our
board of directors. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, under our credit agreement certain changes in the majority of our directors over a two-year period or specified changes or accumulations of ownership of our
voting stock could result in an event of default, which may delay or prevent a change in control or sale of our business. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
provision of our articles of incorporation or bylaws, Oregon law or our credit agreement that has the effect of delaying or deterring a change in control could limit the opportunity
for our shareholders to receive a premium for their shares of our Class&nbsp;A Common Stock, and could also affect the price that some investors are willing to pay for our Class&nbsp;A Common
Stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>25</FONT></P>

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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="di79101_special_note_regarding_forward-looking_statements"> </A>
<A NAME="toc_di79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms "believes", "estimates", "anticipates", "expects", "intends", "may",
"will", "would" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements appear in a number of places throughout this prospectus
and include statements regarding our plans, estimates, outlook, beliefs or expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth,
strategies and the industries in which we operate. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By
their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and the development of the industries in which we operate
may differ materially from those made in or suggested by the forward-looking statements in this prospectus. In addition, even if our historical or future results of operations, financial condition and
liquidity and the development of the industries in which we operate are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative
of
results or developments in other future periods. Important factors that could cause those differences include, but are not limited to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>general economic conditions, including any economic downturn in the markets in which we operate; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>fluctuations in worldwide or regional demand for (i)&nbsp;engineered metal parts and components,
(ii)&nbsp;commodities, energy and infrastructure and (iii)&nbsp;air travel and engineered replacement parts for jet engines;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>consolidation within our customer base and the resulting increased concentration of our net sales; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the effectiveness of our cost management and productivity measures and our continued utilization of our lean initiatives; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>changes in practices or policies of our customers related to their requirements for the products we manufacture and sell; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>changes in the sourcing and pricing practices of our customers, including demands for price concessions as a condition to
retaining current business or obtaining new business;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>fluctuations in foreign currency exchange rates;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>fluctuations in interest rates that may affect our borrowing costs;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>fluctuations in the cost and availability of raw materials, labor and energy, and our ability to pass those costs on to
our customers;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>fluctuations in shipping costs and our ability to pass those costs on to our customers;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>work stoppages or other labor disputes that could disrupt production at our facilities or those of our suppliers or
customers;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>factors or presently unknown circumstances that may affect the charges related to the impairment of our assets; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>changes in environmental laws and regulations (or the implementation thereof); </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>26</FONT></P>

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<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our ability to improve our products and manufacturing processes to meet customer demands and to successfully implement new
technologies and manufacturing processes when launching new products;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>constraints on our ability to shift production between our plants in response to customer needs; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our ability to attract and retain key employees;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>industry innovation and our own product development and engineering efforts and our ability to obtain patent protection on
our key products;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>changes in our exposure to product liability and warranty claims;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our ability to meet the financial covenants in our debt agreements;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>liabilities arising from litigation; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our ability to integrate acquired businesses and realize anticipated benefits. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
"Risk Factors" beginning on page&nbsp;13 for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These and other risk factors
described in this offering prospectus may not be all of the factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or
unpredictable factors could affect our results. Given these uncertainties and risks, readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim any obligation
to update any risk factors or to publicly announce the result of any revisions to any of the forward-looking statements contained in this prospectus to reflect future results, events or developments. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>27</FONT></P>

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<A NAME="toc_di79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  USE OF PROCEEDS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We estimate that we will receive net proceeds from the sale
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock in this offering
of approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million or approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million if the underwriters exercise
their option to purchase additional shares in full, assuming an initial
public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share (the midpoint of the price range set forth on the cover page of this prospectus) after deducting underwriting discounts and estimated
offering
expenses payable by us. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million,
assuming the
number of shares offered by us, as set forth on the cover of this prospectus, remains the same, and after deducting the underwriting discounts and estimated offering expenses payable by us. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to use the net proceeds for general corporate and working capital purposes, including possible acquisitions of businesses to complement or enhance our product offerings or
manufacturing capacity. We will not receive any proceeds from the sale of shares by the selling shareholders. See "Principal and Selling Shareholders". </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>28</FONT></P>

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<A NAME="toc_di79101_3"> </A>
<BR></FONT><FONT SIZE=2><B>  DIVIDEND POLICY    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We paid cash dividends of: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>$11.00 per share on Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock in December 2010; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>$10.00 per share on Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock in January 2010; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>$16,298,578 in the aggregate on Class&nbsp;C Preferred Stock in 2010;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>$11.00 per share on Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock in January 2009; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>$16,419,345 in the aggregate on Class&nbsp;C Preferred Stock in 2009. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have typically paid a single annual dividend on our Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock in January of each year. In 2010, in addition to a $10.00 per
share dividend paid in January, we declared and paid another dividend of $11.00 per share in December rather than in January 2011 due to uncertainty about the tax treatment of dividends in 2011. We
have not declared or paid a dividend to common shareholders in 2011. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have been required to pay quarterly dividends on the Class&nbsp;C Preferred Stock held by our employee stock ownership plan, or ESOP, at an annualized rate of 7.428% of the
original issue price of $1,161.36 per share of Class&nbsp;C Preferred Stock. The Class&nbsp;C Preferred Stock will convert into Class&nbsp;A Common Stock upon completion of the offering made by
this prospectus. See "Description of Employee Stock Ownership Plan". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
expect to pay quarterly cash dividends on all classes of our capital stock, subject to applicable law. However, any determination to pay dividends and the amount of any dividends
will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our results of operations,
financial condition, capital requirements and other factors that our board of directors deems relevant. Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock
will share equally and ratably in any dividends we pay or set aside. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
senior secured credit agreement contains covenants that limit our ability to pay dividends or make other distributions to our shareholders. We are permitted to pay dividends as long
as (i)&nbsp;no default exists under the agreement immediately before and after giving effect to the dividend and (ii)&nbsp;we would both (A)&nbsp;be in compliance with the financial covenants
set forth in our credit agreement on a pro forma basis and (B)&nbsp;maintain a consolidated net leverage ratio at least 0.25 less than the maximum net leverage ratio then permitted under the
agreement. See "Management's Discussion and Analysis of Financial Condition and Results of Operations&nbsp;&#151; Description of Indebtedness". Our credit agreement is filed as an exhibit to
the registration statement of which this prospectus is a part. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>29</FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="dk79101_capitalization"> </A>
<A NAME="toc_dk79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  CAPITALIZATION    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The table below sets forth our consolidated cash and cash equivalents and capitalization as of December&nbsp;31,
2010: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>on an actual basis;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>on a pro forma basis to give effect to
the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split, the authorization
of the Class&nbsp;A Common Stock and the conversion of Legacy Class&nbsp;A Common Stock and Class&nbsp;C Preferred Stock into Class&nbsp;A Common Stock, all as described under "Explanatory
Note Regarding Changes in Our Capital Stock"; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>on a pro forma as adjusted basis to give effect to the sale by us
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock
in this offering (at an estimated initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the price range set forth on the cover of this prospectus) less the
underwriting
discounts and estimated offering expenses payable by us, and the use of proceeds received by us from this offering as disclosed under "Use of Proceeds". </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
should read the table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the
related notes included elsewhere in this prospectus. </FONT></P>
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<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="47pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="70pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>As of December&nbsp;31, 2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT SIZE=2><B>Actual

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Pro forma


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:53pt;"><FONT SIZE=2><B>Pro forma as<BR>
adjusted(6)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B>(in thousands)</B></FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>114,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>114,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total debt, including current portion</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>273,314</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>273,314</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contingently redeemable equity securities(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;C Preferred Stock, 205,000 shares authorized, 188,354 outstanding, actual(2)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>107,691</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legacy Class&nbsp;A Common Stock, 5,000,000 shares authorized, 890,294 shares outstanding, actual(3)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>124,493</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shareholders' equity/(deficit)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;A Common Stock, no shares authorized or outstanding,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized, pro forma and pro forma as adjusted,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding, pro forma;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding, pro forma as adjusted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>232,184</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legacy Class&nbsp;A Common Stock, 5,000,000 shares authorized, 890,294 shares outstanding,
actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized, no shares outstanding, pro forma and pro forma as adjusted(4)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;B Common Stock, 243,737 shares authorized, 208,395 shares outstanding,
actual;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized, pro forma and pro forma as adjusted,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding, pro forma
and pro forma as adjusted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,343</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,343</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Class&nbsp;C Preferred Stock, 205,000 shares authorized, 188,354 outstanding, actual; 205,000 shares authorized, none outstanding, pro forma and pro forma as
adjusted(2)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Preferred stock, no shares authorized or outstanding, actual; 205,000 shares authorized, none outstanding, pro forma and pro forma as adjusted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated deficit(5)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(19,944</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(19,944</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(9,802</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(9,802</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Noncontrolling interests</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,781</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,781</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total stockholders' equity/(deficit)</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4,622</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>227,562</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total capitalization</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>500,876</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>500,876</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Contingently
redeemable equity securities are redeemable upon a shareholder's retirement at age 65, death or disability. See "Description of Capital
Stock&nbsp;&#151; Shareholder Agreements". </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>30</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_dk79101_1_31"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
actual presentation reflects shares of Class&nbsp;C Preferred Stock at their redemption value. Shares of Class&nbsp;C Preferred Stock automatically
convert on a one-for-one basis into shares of Class&nbsp;A Common Stock upon our initial public offering as described in "Explanatory Note Regarding Changes in Our Capital
Stock".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
actual presentation reflects&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock subject to repurchase obligations at their redemption value.
Shares of Legacy Class&nbsp;A Common Stock automatically convert on a one-for-one basis into shares of Class&nbsp;A Common Stock over a period of up to 360&nbsp;days as
described in "Explanatory Note Regarding Changes in Our Capital Stock". Until conversion, the holders of
approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock may require us to
purchase shares upon retirement at age 65, death or disability. Upon the conversion of Legacy Class&nbsp;A Common Stock into Class&nbsp;A Common Stock, the stock will be reclassified from
contingently redeemable equity securities to shareholders' equity. The pro forma presentation in the table reflects the conversion of all Legacy Class&nbsp;A Common Stock and, accordingly, no
remaining contingently redeemable equity securities balance. See "Description of Capital Stock&nbsp;&#151; Shareholders Agreements".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
actual presentation reflects&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock not subject to repurchase obligations. See note&nbsp;3.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Accumulated
deficit is caused by the periodic revaluation of our contingently redeemable equity securities to their current redemption value.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(6)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>A
$1.00 increase (decrease) in the assumed initial public offering price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share would increase (decrease) each of cash and cash
equivalents, total shareholders' equity and total capitalization by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, assuming the number of shares offered by us, as set forth on the cover of this
prospectus, remains
the same, and after deducting the underwriting discounts and estimated offering expenses payable by us. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares of Class&nbsp;A Common Stock to be outstanding after this offering is based
on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding as of
December&nbsp;31, 2010 and excludes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares issuable upon exercise of options outstanding as of December&nbsp;31, 2010 to purchase Legacy
Class&nbsp;A Common Stock at a weighted average exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class&nbsp;A Common Stock at the time of exercise (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares assuming a fair value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the range set forth on the cover of
this prospectus);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class&nbsp;A Common Stock at the time of exercise (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares assuming a fair value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the midpoint of the range set forth on the cover of this
prospectus); and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> additional shares of Class&nbsp;A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>31</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_dk79101_1_32"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="dk79101_dilution"> </A>
<A NAME="toc_dk79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  DILUTION    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you invest in our Class&nbsp;A Common Stock, your interest will be diluted to the extent of the difference between the public
offering price per share of our Class&nbsp;A Common Stock and the pro forma as adjusted net tangible book value per share of our Class&nbsp;A Common Stock immediately after this offering. Pro
forma historical net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the number of shares of our common
stock outstanding at December&nbsp;31, 2010, after giving effect to the pro forma adjustments referenced under "Capitalization". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
giving effect to the pro forma adjustments referenced under "Capitalization" and the sale by us
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock in this offering at a
price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the
price range set forth on the cover of this prospectus, and after deducting the underwriting discounts and estimated offering expenses payable by us, our pro forma net tangible book value as of
December&nbsp;31, 2010 would have been approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million, or $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. This
represents an immediate increase in net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to existing shareholders and an immediate dilution in net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share to new investors purchasing Class&nbsp;A Common Stock in the
offering. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table illustrates this dilution on a per share basis: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assumed initial public offering price per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net tangible book value per share as of December&nbsp;31, 2010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Increase in net tangible book value per share attributable to new investors</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma as adjusted net tangible book value per share after this offering</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilution per share to new investors</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
$1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) our pro forma as adjusted net tangible book value per share by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and
increase (decrease) the dilution per share to new investors by $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the
same, and after
deducting the underwriting discounts and estimated offering expenses payable by us. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the underwriters exercise their option to purchase additional shares of our Class&nbsp;A Common Stock in full, based upon a price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the
price range set forth on the cover of this prospectus, the pro forma as adjusted net tangible book value per share after this offering would be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, and the dilution
in pro
forma net tangible book value per share to new investors in this offering would be $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth, as of December&nbsp;31, 2010, on a pro forma as adjusted basis, the differences between existing shareholders and new investors with respect to the
total number of shares of Class&nbsp;A Common Stock purchased from us, the total consideration paid, and the average price per share paid before deducting the underwriting discounts and estimated
offering expenses payable by us, based upon a price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the price range set forth on the cover of this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="51pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="28pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="28pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="59pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Shares Purchased </B></FONT></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=3 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Total Consideration </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:44pt;"><FONT SIZE=2><B>Average<BR>
Price Per<BR>
Share

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 </B></FONT></DIV></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:38pt;"><FONT SIZE=2><B>Number

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:9pt;"><FONT SIZE=2><B>%

<!-- COMMAND=ADD_SCROPPEDRULE,9pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT SIZE=2><B>Amount

<!-- COMMAND=ADD_SCROPPEDRULE,37pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:9pt;"><FONT SIZE=2><B>%


<!-- COMMAND=ADD_SCROPPEDRULE,9pt -->

 </B></FONT></DIV></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Existing shareholders</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>New investors</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>32</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=35,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=939020,FOLIO='32',FILE='DISK105:[11ZBC1.11ZBC79101]DK79101A.;17',USER='DNICHOL',CD='26-APR-2011;14:35' -->
<A NAME="page_dk79101_1_33"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
by the selling shareholders in this offering will cause the number of shares held by existing shareholders to be reduced
to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total
number of shares of our Class&nbsp;A Common Stock outstanding after this offering. If the underwriters' option to purchase additional shares is exercised in full, the number of shares held by
existing shareholders after this offering would be reduced to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of the total number of shares of our Class&nbsp;A Common Stock outstanding after this offering. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
above discussion and tables are based on a pro forma as adjusted basis of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
Class&nbsp;A Common Stock issued and outstanding as of December&nbsp;31,
2010, and excludes: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares issuable upon exercise of options outstanding as of December&nbsp;31, 2010 to purchase Legacy
Class&nbsp;A Common Stock at a weighted average exercise price of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class&nbsp;A Common Stock at the time of exercise (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares assuming a fair value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the range set forth on the cover of
this prospectus);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class&nbsp;A Common Stock at the time of exercise (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares assuming a fair value of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the midpoint of the range set forth on the cover of this
prospectus); and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> additional shares of Class&nbsp;A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
the extent that any outstanding options are exercised, new investors will experience further dilution. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>33</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
NAME="page_dm79101_1_34"> </A> </FONT> <FONT SIZE=2>


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</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="dm79101_selected_consolidated_financial_and_other_data"> </A>
<A NAME="toc_dm79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We derived the selected consolidated statement of earnings data for the years ended December&nbsp;26, 2008 and December&nbsp;31,
2009 and 2010 and the selected consolidated balance sheet data as of December&nbsp;31, 2009 and 2010 from our audited consolidated financial statements and related notes included in this prospectus.
We derived the selected statement of earnings data for the years ended December&nbsp;29, 2006 and December&nbsp;28, 2007 and the balance sheet data as of December&nbsp;29, 2006,
December&nbsp;28, 2007 and December&nbsp;26, 2008 from our audited consolidated financial statements not included in this prospectus. Before 2009, we reported on a 52/53-week fiscal
year consisting of four 13-week periods and ending on the last Friday of the calendar year. Effective December&nbsp;27, 2008, we changed to a calendar year. Our fiscal year 2009,
however, began on December&nbsp;27, 2008 and ended on December&nbsp;31, 2009, resulting in a 370-day year. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
results indicated below and elsewhere in this prospectus are not necessarily indicative of our future performance. You should read this information together with "Capitalization",
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:87pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands,<BR>
except per share data)

<!-- COMMAND=ADD_SCROPPEDRULE,87pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Statement of earnings data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">849,481</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">680,390</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">939,913</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">790,514</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">690,919</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">626,883</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">507,115</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">724,921</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">608,028</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">544,432</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">222,598</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173,275</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">214,992</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">182,486</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">146,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating expenses</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses(1), (2)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">147,881</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">112,535</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">132,719</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">116,750</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">110,053</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Restructuring and other(3)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">748</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6,332</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,792</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">73,969</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">54,408</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">80,481</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">65,736</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,434</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,710</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,226</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,736</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,816</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,561</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt(4)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,013</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other (income) expense(5)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(731</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,091</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,610</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(450</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">37,977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29,273</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">49,486</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">40,530</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,423</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9,423</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,297</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,013</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11,416</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20,786</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,189</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,517</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17,007</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations, net of tax(6)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">306</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">443</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,368</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10,371</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21,092</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,632</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,885</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,378</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest-continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4,634</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,537</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(5,073</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,393</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(138</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest-discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(141</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(343</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(182</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO shareholders from continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,249</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,116</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,124</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,869</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Valuation adjustment of Class&nbsp;C Preferred Stock(7)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(16,521</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,933</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,287</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">803</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,461</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>34</FONT></P>

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<!-- ZEQ.=1,SEQ=37,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=704703,FOLIO='34',FILE='DISK105:[11ZBC1.11ZBC79101]DM79101A.;36',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:87pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands,<BR>
except per share data)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO common shareholders from continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,399</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,182</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,403</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,927</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,330</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Pro forma earnings from continuing operations attributable to ESCO shareholders(8)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,249</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,116</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,124</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,869</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earning per weighted average share outstanding(9)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Basic earnings per share from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.81</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.18</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">41.08</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.14</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">156.32</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Diluted earnings per share from continuing operations allocated to ESCO common shareholders(10)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.62</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.16</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.21</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20.74</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12.62</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Weighted average shares outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,086</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,083</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,081</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,077</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">106</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,118</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,204</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,187</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,163</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,337</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Pro forma earnings per share from continuing operations attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Pro forma weighted average shares outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared per common share(11)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.00</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10.00</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.00</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12.00</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10.52</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
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 <P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_TABLEWIDTH,"150%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=17 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>As of </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:85pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands)

<!-- COMMAND=ADD_SCROPPEDRULE,85pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010<BR>
pro forma

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance sheet data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">114,101</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">114,101</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">168,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">113,167</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">84,070</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">92,230</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Current assets, excluding cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">268,166</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">268,166</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">203,854</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">231,169</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">240,043</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">201,423</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Property and equipment, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">167,446</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">167,446</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">161,919</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">164,237</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">171,640</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">148,191</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total assets</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">723,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">723,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">675,745</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">646,111</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">619,489</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">538,711</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Current liabilities, excluding the current portion of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">133,854</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">133,854</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">101,162</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">121,767</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">115,831</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">95,391</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total debt, including current portion</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">273,314</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">273,314</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">306,498</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">304,096</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">305,753</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">309,529</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable equity securities(12)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">232,184</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">144,064</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">132,038</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">135,653</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">97,471</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total equity/(deficit)(12)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">227,562</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,699</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,563</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10,262</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:85pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Other data:</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Adjusted EBITDA(13)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">127,780</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">99,497</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">130,853</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">105,903</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">90,182</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Adjusted net earnings from continuing operations(14)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">48,588</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,108</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">37,090</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,639</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Non-cash
ESOP compensation costs are included in cost of goods sold and selling and administrative expenses. See "Description of Employee Stock
Ownership Plan."
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
mark to market on SARs, an expense of $7.7&nbsp;million and $0.0&nbsp;million, income of $0.3&nbsp;million and an expense of $0.3&nbsp;million
in 2010, 2009, 2008 and 2007, respectively, are included in selling and administrative expenses. No SARs were outstanding in 2006.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(3)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restructuring
costs included: in 2010, expenses related to the closure of our Saskatoon, Saskatchewan foundry; in 2009, personnel reductions and the closure
of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry; and in 2008, personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits
for our U.S. defined benefit plans.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(4)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Loss
on early extinguishment of debt primarily includes the write-off of $4.0&nbsp;million of unamortized loan costs and the early redemption
call premium of $8.6&nbsp;million paid upon redemption of $300.0&nbsp;million principal amount of senior unsecured notes in December 2010 as part of our debt refinancing. Debt extinguishment costs
also include $0.4&nbsp;million of unamortized debt costs associated with our asset-backed line of credit cancelled in November 2010 as part of our debt refinancing.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(5)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Other
(income) expense primarily includes foreign exchange losses and gains on settlement transactions of foreign denominated accounts receivable and
accounts payable. Other expense in each of 2009 and 2008 includes $0.3&nbsp;million of insurance retention expenses.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(6)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Discontinued
operations for 2009, 2008 and 2007 included earnings from ESCO Soldering Locacoes de Marquinas e Equipmentos&nbsp;Ltda, which we divested in
June 2009 as part of the transaction that resulted in our acquisition of 100% ownership of ESCO Soldering, now known as ESCO Brazil. Discontinued operations for the periods ended December&nbsp;28,
2007 and December&nbsp;29, 2006 included earnings from our Integrated Manufacturing (IMG) and Engineered Metals (EMG) groups, which were divested in the fourth quarter of 2006, except certain assets
and the related income stream that we retained.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(7)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Valuation
adjustment of Class&nbsp;C Preferred Stock is the mark to market change of the redemption value of the shares of Class&nbsp;C Preferred Stock
classified as contingently redeemable equity securities on our balance sheet. The corresponding offset is a change in our retained earnings. Upon the conversion of Class&nbsp;C Preferred Stock into
Class&nbsp;A Common Stock in connection with the offering made by this prospectus, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity and this
valuation adjustment will no longer be included in our financial statements.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(8)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Pro
forma earnings from continuing operations attributable to ESCO shareholders reflects the reclassification from contingently redeemable equity securities
to shareholders' equity of Class C Preferred Stock and Class A Common Stock subject to contingent repurchase obligations. See "Description of our Employee Stock Ownership Plan" and "Description of
Capital Stock."
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(9)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Pro
forma per share data reflect the changes in our capital structure that will occur before we complete the offering described in this prospectus; other
per share data do not. See "Explanatory Note Regarding Changes in Our Capital Stock". Per share data in 2006 reflect our 2006 ESOP transaction. The Legacy Class&nbsp;A Common Stock and the
Class&nbsp;B Common Stock were converted from preferred stock when we implemented our ESOP, which occurred on December&nbsp;27, 2006. The weighted average common shares outstanding in 2006 was
minimal due to the short time the Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock existed in 2006.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(10)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Diluted
earnings per share includes the weighted average number of Class&nbsp;C Preferred Stock outstanding and the incremental shares that would be
issued upon the assumed exercise of stock options for the period they were outstanding.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(11)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">See
"Dividend Policy".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(12)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Contingently
redeemable equity securities are redeemable upon the holder's retirement at age 65, death or disability. See "Description of Capital
Stock&nbsp;&#151; Shareholder Agreements" and "Description of Employee Stock Ownership Plan". The presentation reflects shares of Class&nbsp;C Preferred Stock and Legacy Class&nbsp;A
Common Stock at their redemption value. Shares of Class&nbsp;C Preferred Stock automatically convert on a one-for-one basis into shares of the Class&nbsp;A Common Stock
upon the completion of the offering made by this prospectus. Shares of Legacy Class&nbsp;A Common </FONT></DD></DL>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
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<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Stock
automatically convert on a one-for-one basis into shares of the Class&nbsp;A Common Stock over a period of up to 360&nbsp;days as described in "Explanatory Note
Regarding Changes in Our Capital Stock". Upon the conversion of Class&nbsp;C Preferred Stock or Legacy Class&nbsp;A Common Stock into Class&nbsp;A Common Stock, the stock will be reclassified
from contingently redeemable equity securities to shareholders' equity.  </FONT></P>

</UL>
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<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(13)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Adjusted
EBITDA is earnings from continuing operations, net of tax, before interest, taxes, depreciation and amortization and non-operating
expense (income) adjusted to add back ESOP non-cash compensation expenses, mark to market on SARs expense, unrealized (gains) losses on long-term investments and certain
restructuring charges. Adjusted EBITDA has limitations as an analytical tool, and is not intended to represent net earnings, earnings from continuing operations, net of tax, or cash flow from
operations as these terms are defined by generally accepted accounting principles in the United States and should not be used as an alternative to net earnings as an indicator of operating performance
or to cash flow as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate those measures in the same
manner we do. We have included Adjusted EBITDA in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons: </FONT> <FONT SIZE=2>
<BR><BR></FONT>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Our management uses Adjusted EBITDA in conjunction with GAAP financial measures as
part of our assessment of our business and in communications with our board of directors concerning our financial performance;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Adjusted EBITDA provides consistency and comparability with our past financial
performance, facilitates period-to-period comparisons of operations and facilitates comparisons with peer companies, many of which use similar non-GAAP financial
measures to supplement their GAAP results; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Adjusted EBITDA excludes non-cash charges, such as depreciation,
amortization, ESOP compensation expense and mark to market on SARs expense, and those non-cash charges in any specific period may not directly correlate to the underlying performance of
our business operations and can vary significantly between periods.  </FONT>
<BR>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
following table reconciles earnings from continuing operations, net of tax to Adjusted EBITDA for the periods indicated below. </FONT></P>

</DD></DL>
</DD></DL>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:85pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20,786</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,189</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,517</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17,007</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Add/(Subtract):</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Interest (net) and loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,723</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,226</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,736</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,816</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,561</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9,423</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,297</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,013</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11,416</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization(a)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,479</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25,113</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,187</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">22,661</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">19,191</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Other (income) expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(731</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,091</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,610</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">450</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;ESOP non-cash compensation expense(b)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,504</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20,248</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">19,682</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">34,315</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Mark to market on SARs expense(c)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,678</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(260</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">266</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gains) losses on long-term investments(d)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,953</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,860</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,405</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,142</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,758</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Restructuring and other(e)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">748</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6,332</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,792</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,300</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,000</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:16pt;text-indent:-16pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Port Hope reclamation(f)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,600</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;Adjusted EBITDA</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">127,780</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">99,497</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">130,853</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">105,903</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">90,182</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(a)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Depreciation
and amortization excludes the amortization of debt issuance, which is included in interest (net).
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(b)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">We
recognize non-cash compensation expense equal to the fair value of the Class&nbsp;C Preferred Stock released as security for the loan to
the ESOP and allocated to participant accounts. A portion of the non-cash ESOP compensation expense is allocated to cost of goods sold and a portion is allocated to selling and </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>37</FONT></P>

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<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=40,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=309024,FOLIO='37',FILE='DISK105:[11ZBC1.11ZBC79101]DM79101A.;36',USER='JMCGUAN',CD='27-APR-2011;20:20' -->
<A NAME="page_dm79101_1_38"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:20%;">
<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">administrative
expenses, based on the number of shares allocated to the accounts of manufacturing employees and other employees. See "Description of Employee Stock Ownership Plan". ESOP
non-cash compensation expense in 2006 includes $3.9&nbsp;million of ESOP-related expenses.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(c)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Each
quarter, we record the mark to market change in the value of our SARs. Our determination of fair value includes, among other factors, the valuation
determined by the independent valuation firm used by the ESOP trustee. We add this back to derive Adjusted EBITDA because it is a non-cash expense that will end in 2011. In 2011, we
changed our SARs long-term incentive program to stock-settled grants. The awards' grant date fair value will be amortized over their required service period. We expect that all of our
existing cash-settled SARs will be converted to stock-settled SARs in 2011. Any impact to expense from this conversion will be amortized over the remaining service period for the unvested
awards.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(d)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Unrealized
(gains) and losses on long-term investments represent the mark to market on our investments held to fund our deferred compensation
and supplemental executive retirement programs.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(e)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restructuring
and other activity in 2010 included restructuring expenses related to the closure of our Saskatoon, Saskatchewan foundry. Restructuring
activity in 2009 included restructuring expenses related to personnel reductions and the closure of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry. Restructuring activity in 2008
included restructuring expenses related to personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans. Other
activity in 2007 included insurance recovery from a fire in our U.K. facility in 2006 and estimated lost earnings before interest and taxes due to a work stoppage at our Herstal, Belgium facility.
Other activity in 2006 included estimated costs and business interruption expenses associated with a fire in our U.K. facility, net of partial insurance recovery received in 2006.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(f)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
expense in 2010 represents the estimated cost of removing an accumulation of solid waste at our Port Hope, Ontario, Canada facility. We plan to complete
the removal within a five-year period. This expense is included in selling and administrative expenses in our consolidated financial statements. </FONT></DD></DL>
 </DIV>
 <DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(14)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">We
define adjusted net earnings from continuing operations as net earnings from continuing operations attributable to ESCO shareholders plus loss on early
extinguishment of debt, net of tax; mark to market on SARs expense, net of tax; and ESOP non-cash compensation expense, net of tax. The adjustments assume a 35% tax rate. We have included
adjusted net earnings from continuing operations in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business.  </FONT>
<BR>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
following table reconciles net earnings from continuing operations attributable to ESCO shareholders to adjusted net earnings from continuing operations. </FONT></P>

</DD></DL>
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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:85pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in thousands)

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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;28,<BR>
2007

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;29,<BR>
2006

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings from continuing operations attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,249</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,116</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,124</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,869</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8,458</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Mark to market on SARs expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,991</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(169</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ESOP non-cash compensation expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11,219</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10,728</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,161</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12,793</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">19,770</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Adjusted net earnings from continuing operations</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">48,588</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,108</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">37,090</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,639</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>38</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="do79101_management_s_discussion_and_an__man03466"> </A>
<A NAME="toc_do79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION<BR>  AND RESULTS OF OPERATIONS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><I>You should read the following discussion and analysis of our financial condition and results of operations
together with our financial statements and the related notes included in this prospectus. In addition to historical financial information, this discussion contains forward-looking statements
reflecting our plans, estimates, outlook, beliefs and expectations that involve risks and uncertainties. As a result of many factors, particularly those under "Risk Factors" and "Special Note
Regarding Forward-Looking Statements" in this prospectus, our actual results and the timing of events may differ materially from those anticipated in these forward-looking
statements.</I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Overview  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We design, develop and manufacture highly engineered wear and replacement parts and related products used in mining, infrastructure
development, industrial,
power generation and aerospace applications. Our consumable wear and replacement products, which accounted for more than 75% of our 2010 net sales, generate recurring sales for us as these items wear
and are required to be replaced. We employ a diversified distribution model for product sales that includes direct sales, a network of independent dealers, licensees and OEMs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have two operating groups: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Engineered Products Group, or EPG,</I></FONT><FONT SIZE=2> designs, develops and manufactures wear
parts and wear part carriers and attachments and provides solutions for mining, infrastructure development and other challenging industrial wear applications. EPG accounted for $712.6&nbsp;million,
or 84%, of our net sales in 2010.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Turbine Technologies Group, or TTG,</I></FONT><FONT SIZE=2> manufactures superalloy precision
investment cast components used in the power generation and aerospace markets. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of turbines and considered replacement parts.
TTG represented $136.9&nbsp;million, or 16%, of our net sales in 2010. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
were founded in 1913 in Portland, Oregon. Through nearly a century of operations, we have focused on product innovation and on growing our business to serve customer needs. Our
business has been built on creating solutions to customer problems through metallurgy, foundry casting capabilities and innovative product design that emphasizes value, durability and safety. We were
an early innovator in earthmoving wear parts, producing the industry's first two-piece ground engaging tool, or GET, tooth system. Since then we have introduced new generations of
two- and three-piece tooth systems, making us the global leader in GET tooth systems used in surface mining and infrastructure development, and expanded our EPG product portfolio to over
25,000 SKUs. Over time we also diversified our business to include the production of superalloy precision investment castings for gas turbine engines used in aerospace and power generation
applications. We have expanded geographically and grown our business, and are now a global company with more than 1,000 customers and 4,600 employees and operations in 19 countries on six continents. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
net sales were $849.5&nbsp;million, $680.4&nbsp;million and $939.9&nbsp;million in 2010, 2009 and 2008, respectively. More than half of our net sales were from outside of the
United States in each of these years. We generated net earnings attributable to ESCO shareholders of $23.9&nbsp;million, $18.4&nbsp;million and $31.2&nbsp;million and Adjusted EBITDA (as defined
in "Selected Consolidated Financial and Other Data") of $127.8&nbsp;million, $99.5&nbsp;million and $130.9&nbsp;million in 2010, 2009 and 2008, respectively. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>39</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B> Trends, Opportunities and Challenges  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Recent Activity  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our customers maintain inventories of our parts to use or resell in the short term based on their expectations of market activity. As
a result, their purchases from us may be at a higher or lower rate than the rate of their use or sale of our products as they "stock up" or "destock" in anticipation of upswings or downturns in the
economy generally or in their particular market. Throughout much of 2008, customers built elevated inventory levels in anticipation of continuing strong market conditions. In late 2008, however,
activity in our customers' end markets decreased significantly, which resulted in some customers holding excess levels of inventory of our products and led to destocking of our parts. In 2009, the
recession further decreased activity in the mining, infrastructure development and industrial markets served by EPG and in the power generation and aerospace markets served by TTG. This resulted in
further supply chain destocking and lower demand for our products. In late 2009, our bookings and net sales began to increase, which we believe was driven by increased market activity in our
customers' end markets and a need to replenish inventory of our parts. In TTG, we believe there was a similar destocking that started later and continued in 2010 because of the order lead time and the
length of the supply chain in the power generation market, mitigated by recovery in the aerospace market. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2010, we saw a return to the secular growth trends in mining and infrastructure development due to the continued urbanization and infrastructure development in emerging markets, and
resulting increased demand for commodities. We believe these market dynamics, as well as some customer inventory restocking, led to increased demand for our EPG wear parts and attachments. In 2010, we
focused on: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>efficiently managing the rapid turnaround in EPG from the recession in 2009 and supply chain restocking; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>executing our geographic expansion and direct distribution strategies through strategic acquisitions of Swift Engineering
and Austcast in Australia, which added foundry and fabrication capabilities and additional products, including a patented truck body, to our EPG product portfolio; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>expanding manufacturing and distribution in Brazil, Canada, China, Indonesia, South Africa and the United States. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of the economic turnaround and our expansion initiatives, we increased our global workforce to more than 4,600 employees in 2010 from fewer than 3,800 employees in 2009. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Market Outlook  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We believe we are well positioned to capitalize on our investments in foundry capacity, direct distribution and global
expansion as the mining
and infrastructure development markets grow. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand
for mined commodities is expected to increase as the global economy grows and consumption of raw materials in connection with urbanization and development in emerging markets
increases. These dynamics can be expected to drive increased demand for mining capital equipment on which we expect to have first fitment opportunities; increased restocking of inventories of our
products; and increased use of wear parts, particularly as ore grades decline and shallow ore deposits are depleted, requiring more earth excavation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a result of market activity levels and expected trends, we plan to continue to invest in our geographic expansion in key mining regions in countries such as Australia, Brazil,
Canada, Indonesia, South Africa and the United States. We also plan to continue to build our direct </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>40</FONT></P>

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<BR>

<P style="font-family:arial;"><FONT SIZE=2>distribution
model and grow our product offering in markets where there is a high concentration of mining activity. These investments in our growth may negatively impact our operating margin in the
short term. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Continued growth in global air traffic, which began in 2010, can be expected to cause OEMs&nbsp;to increase production
and increase demand
for aerospace components. We expect improved sales of components for new OEM equipment driven by increased production in aircraft programs such as Boeing's 787 and 747-8 and the Airbus
A380. While visibility remains limited, we also believe our industrial gas turbine, or IGT, markets may begin to improve in late 2011, but at a lower rate than in past recoveries. We expect growth in
orders for power turbine components, including in the aftermarket, to be driven by new turbine builds, restocking in the supply chain, and shorter maintenance cycles as energy consumption grows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Key Metrics  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We regularly review a number of metrics, including the following, to evaluate our business, measure our performance, indentify trends
affecting our business, formulate financial projections and make strategic decisions. </FONT></P>
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<TD WIDTH="88pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="88pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="88pt" style="font-family:arial;"></TD>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:93pt;"><FONT SIZE=2><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:63pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:63pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:63pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>849.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>680.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>939.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>74.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>54.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>80.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit margin</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.7%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.0%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.6%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted net earnings from continuing operations*</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted EBITDA*</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>127.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>99.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>130.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjusted EBITDA Margin*</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15.0%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14.6%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13.9%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash from operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>78.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>These
measures are non-GAAP financial measures. See "Selected Consolidated Financial and Other Data" where these measures are discussed and where
non-GAAP financial measures are reconciled to the most comparable GAAP measure. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition to the measures above, we review monthly key raw material costs and pricing trends. We generally seek to pass raw material cost increases to our customers through EPG
product price increases and through surcharges or escalator provisions in our long-term agreements with TTG customers. Historically, there is a delay of several months between raw material
cost increases and our realization of price increases. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Basis of Presentation of Our Results of Operations  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Net Sales  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG net sales primarily consist of sales of wear parts and attachments serving as wear part carriers for mining, infrastructure
development and other industrial markets and royalties from a limited number of licensees from sales of our products in some geographies. EPG sales are made to OEMs&nbsp;and end-users
directly and indirectly through a network of independent dealers. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>41</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG
net sales primarily consist of sales of replacement parts and structural components for turbines used in the aerospace and power generation markets. TTG net sales are derived from
products that are developed by our customers, and almost all TTG net sales are direct. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Cost of Goods Sold  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of goods sold includes raw materials; employee compensation and benefits, including ESOP non-cash compensation
expense; and other costs, including distribution expenses, depreciation, product development costs, insurance, taxes, operating supplies, utilities and warranty costs. Manufacturing development
expense and a portion of foundry pattern amortization, which we consider part of our product development cost, are included in cost of goods sold rather than in research and development. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Selling and Administrative Expenses  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses include employee compensation and benefits, including ESOP non-cash compensation
expense and long-term incentive accruals; research and development costs; product optimization costs; outbound freight not invoiced to the customer; professional fees; insurance; mark to
market gains or losses on our long-term investments held to fund our deferred compensation and supplemental executive retirement programs and certain facility costs. All
long-term incentive performance awards and SARs expenses are recorded in selling and administrative expenses. See "&#151;&nbsp;Critical Accounting Policies and
Estimates&nbsp;&#151; Share-Based Compensation". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Product
optimization, part of which we consider part of our product development cost, is included in selling and administrative expenses in addition to research and development expense. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Restructuring and Other  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring and other represents costs associated with plant shutdowns and reduction in force programs initiated in 2008 and 2009
and other non-routine expenses. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>42</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B> Operating Results  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Year Ended December&nbsp;31, 2010 Compared to Year Ended December&nbsp;31, 2009  </I></B></FONT></P>
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<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:183pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Statement of Earnings Data (dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Year ended<BR>
December&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Year ended<BR>
December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">849.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">680.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">626.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">73.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">507.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">74.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">222.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses(1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">147.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">112.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">74.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">54.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other income, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (0.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (0.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">38.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (0.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (0.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP
non-cash compensation expense included in these line items is as follows: </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="24pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>43</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=46,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=566303,FOLIO='43',FILE='DISK105:[11ZBC1.11ZBC79101]DO79101A.;28',USER='JMAHER',CD=';1-MAY-2011;20:25' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">

 </DIV>
 <P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:183pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Statement of Earnings Data (dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,183pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,37pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">849.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">680.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">169.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">626.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">507.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">119.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">222.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">49.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses(1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">147.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">112.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">35.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(5.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (89.1)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">74.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">54.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">19.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (9.5)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">n/m</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other income, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (36.4)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">38.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">37.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (100.0)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">35.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">88.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (100.0)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO shareholders.&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP
non-cash compensation expense included in these line items is as follows: </FONT></DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="24pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">

 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><I> Net sales  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:75pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$ Change

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% Change


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net Sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">849.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">680.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">169.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">712.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">530.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">182.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">34.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">136.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">149.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2010, net sales were $849.5&nbsp;million, an increase of $169.1&nbsp;million, or 24.9%, from $680.4&nbsp;million for 2009. The combined
net sales of EPG and TTG wear parts and replacement components represented more than 75% of our net sales for both 2010 and 2009. Net sales directly or indirectly outside of the United States made up
55.7% of our 2010 net sales and 52% of our 2009 net sales. Our top 10 customers generated 26% of our net sales in 2010 and 23% of our net sales in 2009. No single customer accounted for 10% or more of
our net sales in 2010 or 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net sales increased $182.1&nbsp;million, or 34.3%, to $712.6&nbsp;million for 2010 from $530.5&nbsp;million for 2009.
The
$182.1&nbsp;million increase was composed of a $130.2&nbsp;million, or 40.9%, increase in mining product sales across all geographies, including $30.5&nbsp;million contributed by the two
Australian businesses acquired in 2010; a $41.3&nbsp;million, or 24.3%, increase in infrastructure development product sales driven by customer inventory restocking and market growth; and a
$10.6&nbsp;million, or 25.0%, increase in industrial products sales. Included in these increases is the net effect of a $14.0&nbsp;million benefit in 2010 compared to 2009 due to favorable foreign
exchange rates. In 2010, 48% of our EPG net sales were sales directly to end-users, 36% were generated through our EPG global dealer distribution network and 16% were sales to
OEMs.&nbsp;In 2009, 44% of our EPG net sales were sales directly to end customers, 43% were generated through our EPG global dealer </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>44</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=47,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=871726,FOLIO='44',FILE='DISK105:[11ZBC1.11ZBC79101]DO79101A.;28',USER='JMAHER',CD=';1-MAY-2011;20:25' -->
<A NAME="page_do79101_1_45"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>distribution
network and 13% were sales to OEMs.&nbsp;The increase in net sales generated through our direct channel in 2010 was primarily driven by the acquisition of two Australian businesses and
the secular recovery of global mining markets. The increase in net sales generated by our OEMs&nbsp;was primarily driven by supply chain restocking. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net sales were $136.9&nbsp;million for 2010, a decrease of $13.0&nbsp;million, or 8.7%, from $149.9&nbsp;million for
2009. The decrease
was primarily composed of a $19.6&nbsp;million decrease in IGT sales driven by late cycle destocking, particularly with our maintenance, repair and overhaul ("MRO") customers, and a
$2.5&nbsp;million decrease in industrial/other sales. The IGT decrease was mitigated by a $9.1&nbsp;million increase in our aerospace engine component sales, which we believe was driven by
increased airline traffic. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Gross profit  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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 </FONT></P>

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<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:75pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$ Change

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">222.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">49.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">209.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">154.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">55.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(5.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (18.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(12.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(11.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit was $222.6&nbsp;million for 2010, an increase of $49.3&nbsp;million from $173.3&nbsp;million for 2009 driven primarily by EPG
sales volume impact of $55.6&nbsp;million and increased utilization efficiencies of the EPG manufacturing cost base of $14.4&nbsp;million, partially offset by EPG sales volume-related
costs, such as increased distribution and other expenses of $12.2&nbsp;million, lower TTG sales volume and lower TTG capacity utilization of $5.6 million and a $2.9&nbsp;million LIFO decrement.
This decrement was the effect of reduced inventories in 2009, resulting in a liquidation of LIFO inventory carried at the lower costs prevailing in prior years than the cost of 2009 purchases. Gross
profit as a percentage of net sales increased to 26.2% for 2010 from 25.5% for 2009. Excluding ESOP non-cash compensation expense of $11.9&nbsp;million for 2010 and $11.1&nbsp;million
for 2009, gross profit as a percentage of net sales increased for 2010 to 27.6% from 27.1% for 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit increased $55.7&nbsp;million, or 36.1%, to $209.8&nbsp;million in 2010 from $154.1&nbsp;million in 2009,
primarily due to an
increase in net sales volumes and increased utilization efficiencies of EPG manufacturing cost base. EPG gross profit margin increased to 29.4% for 2010 from 29.0% for 2009, primarily as the result of
higher production volumes, which better leveraged manufacturing capacities, and manufacturing cost reductions that focused on utilities and operating supplies. Partially offsetting the increase in
gross profit percentage were increased raw material costs in 2010. We did not initiate pricing increases to pass on raw material costs until the second half of 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit decreased $5.6&nbsp;million, or 18.4%, to $24.8&nbsp;million in 2010 from $30.4&nbsp;million in 2009 due
to lower sales
volumes, lower manufacturing capacity utilization and manufacturing development and product trial expenses associated with new parts and a higher aerospace product mix, which generally have lower
margins than IGT, as a result of the late cycle destocking in the IGT markets. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Other represents principally the ESOP non-cash compensation expense of $11.9&nbsp;million in 2010 and
$11.1&nbsp;million in
2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>45</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=48,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=351142,FOLIO='45',FILE='DISK105:[11ZBC1.11ZBC79101]DO79101A.;28',USER='JMAHER',CD=';1-MAY-2011;20:25' -->
<A NAME="page_do79101_1_46"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Selling and administrative expenses  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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 </FONT></P>

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<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:75pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,19pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,19pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,37pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">147.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">112.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">35.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">101.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">81.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses were $147.9&nbsp;million for 2010, an increase of $35.4&nbsp;million, or 31.5%, over 2009. Selling and
administrative expenses as a percentage of net sales increased to 17.4% for 2010 from 16.5% for 2009. Excluding ESOP non-cash compensation expense, selling and administrative expenses
increased $35.4&nbsp;million, or 32.9%, for 2010 compared to 2009 and, as a percentage of net sales, selling and administrative expenses increased to 16.8% for 2010 from 15.8% for 2009. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Increased selling and administrative expenses for 2010 resulted from increased sales volume activity due to improved
market conditions,
growth-related hiring and our entry into Australia in anticipation of the expiration of our Australian license agreement on June&nbsp;30, 2011, expansion of our global direct distribution model and
recovery in our markets. Our entry into Australia in the second half of 2010 increased selling and administrative expenses by $6.6&nbsp;million, which primarily consisted of operational and
acquisition related costs. EPG selling and administrative expenses as a percentage of net sales decreased to 14.3% in 2010 from 15.4% in 2009. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Increased selling and administrative expenses was due to customer-related travel expenses. Selling and administrative
expenses as a percentage
of net sales increased to 11.8% in 2010 from 10.5% in 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Increased selling and administrative expenses for 2010 resulted primarily from a $10.1&nbsp;million increase in our
long-term
incentive compensation cash awards accrual due to a mark to market change on our cash-settled SARs, a $2.6&nbsp;million charge to remove accumulation of solid waste at a Canadian plant
and a $0.9&nbsp;million increase from a less favorable unrealized gain on our long-term investment assets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Restructuring and other  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2010 we incurred $0.7&nbsp;million of restructuring costs associated with a restructuring plan initiated in prior years for the
shutdown of our West Jordan, Utah blades facility in 2008 and our Saskatoon, Saskatchewan foundry in 2009. These restructuring costs were primarily composed of impairment losses and
on-going facility costs. In 2009, we incurred $6.3&nbsp;million of restructuring costs associated with the shutdown of these facilities and severance and other costs as a result of our
global workforce reduction of 17.6% in 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Operating profit  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="50pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:75pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,19pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,19pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,37pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating Profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">74.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">54.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">19.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">108.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">72.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">35.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">49.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(5.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"> (40.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(42.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(32.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(10.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Operating profit increased 49.2% to $108.2&nbsp;million, or 15.2% of net sales, for 2010 from $72.5&nbsp;million, or
13.7% of net sales,
for 2009. The increase in operating profit was caused by increased sales volumes in 2010. Operating profit margin increased in 2010 to 15.2% from 13.7% in </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>46</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>2009
as the result of the leveraging of manufacturing expenses and selling and administrative expenses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Operating profit decreased to $8.7&nbsp;million, or 6.4% of net sales, for 2010 compared to $14.6&nbsp;million, or
9.7% of net sales, for
2009. The decrease in operating profit was caused by lower IGT sales volumes and the associated reduced capacity utilization as that market recovered more slowly from the global economic downturn and
its supply chain destocking experienced over the past two years. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Interest expense, net  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net was $23.7&nbsp;million for 2010 compared to $26.2&nbsp;million for 2009. The decrease in interest expense,
net reflects lower average effective interest rates on our floating rate notes during 2010, a two-week benefit of the refinancing of our fixed and floating rate notes at lower interest
rates, a net reduction in debt of $35.3&nbsp;million and higher interest income of $0.3&nbsp;million, resulting from improved yields on our invested cash funds. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Loss on early extinguishment of debt  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fourth quarter of 2010, we refinanced $300&nbsp;million of fixed and floating rate notes that we issued in 2006 through a
five-year term loan and a revolving credit facility. As a result, we incurred $8.6&nbsp;million in prepayment fees on the notes and a write-off of $4.0&nbsp;million
unamortized loan costs for the remaining 2006 transaction fees. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the fourth quarter of 2010, we terminated our U.S. asset-backed line of credit agreement and recorded a $0.4&nbsp;million loss on an early extinguishment of debt for the
unamortized loan costs on the line of credit. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Income tax expense  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effective tax rate from continuing operations for 2010 was 24.8% compared to 29.0% for 2009. The effective tax rate decreased in
2010 due to the reversal of uncertain tax provisions from prior years and lower state income tax. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I> Noncontrolling interest  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest reflects the net after tax profits in our three less than 100%-owned subsidiary companies allocable to the
non-ESCO shareholders. Noncontrolling interest was $4.7&nbsp;million for 2010 compared to $2.5&nbsp;million for 2009. The increase in 2010 reflects increased sales for those entities. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>47</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Year Ended December&nbsp;31, 2009 Compared to Year Ended December&nbsp;26, 2008  </I></B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:194pt;"><FONT SIZE=2><B>Statement of Earnings Data (dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,194pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>Year ended<BR>
December&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:61pt;"><FONT SIZE=2><B>% of Net Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>Year ended<BR>
December&nbsp;26,<BR>
2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:61pt;"><FONT SIZE=2><B>% of Net Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>680.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>100.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>939.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>100.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>507.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>74.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>724.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>77.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>173.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>215.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>22.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative expense(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>112.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>132.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>54.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>80.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other (income) expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>49.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (0.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (0.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>(1)&nbsp;&nbsp;&nbsp;ESOP non-cash compensation expense included in these line items is as follows:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Cost of goods sold</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative expenses</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Total</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>48</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">

 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Year Ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:194pt;"><FONT SIZE=2><B>Statement of Earnings Data (dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,194pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>December&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,54pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>December&nbsp;26,<BR>
2008

<!-- COMMAND=ADD_SCROPPEDRULE,54pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,42pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>680.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>939.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(259.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (27.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>507.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>724.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(217.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (30.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>173.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>215.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(41.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (19.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative expenses(1)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>112.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>132.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(20.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (15.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>255.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>54.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>80.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(26.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (32.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (1.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other (income) expense, net</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (125.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>49.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(20.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (40.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (36.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(15.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (42.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (25.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(15.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (42.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (51.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less: net earnings attributable to the noncontrolling interest&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (33.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(12.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (41.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >
 </DIV>
<DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="74pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="74pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:17pt;text-indent:-17pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>(1)&nbsp;&nbsp;&nbsp;ESOP non-cash compensation expense included in these line items is as follows:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Cost of goods sold</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (20.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative expenses</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (14.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Total</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(3.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2> (18.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">

 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><I> Net sales  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:80pt;"><FONT SIZE=2><B>(dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,80pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,20pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,20pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>% Change


<!-- COMMAND=ADD_SCROPPEDRULE,42pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net Sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>680.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>939.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(259.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (27.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>530.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>752.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(221.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (29.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>149.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>187.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(38.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (20.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2009, net sales decreased $259.5&nbsp;million, or 27.6%, to $680.4&nbsp;million from $939.9&nbsp;million for 2008. The decrease in net
sales was principally driven by the recession and the supply chain destocking that began in the third quarter of 2008. EPG and TTG respectively represented 78% and 22% of our net sales in 2009 and 80%
and 20% of our net sales for 2008. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net sales decreased $221.5&nbsp;million, or 29.5%, to $530.5&nbsp;million for 2009 from $752.0&nbsp;million for 2008.
The decrease in net
sales was due to the global economic crisis that began in the third quarter of 2008 and continued throughout 2009 that reduced demand for EPG products. The $221.5&nbsp;million decrease was composed
of a $110.3&nbsp;million, or 25.7%, decrease in mining sales
across all geographies; a $85.6&nbsp;million, or 33.5%, decrease in infrastructure development product sales; and a $25.6&nbsp;million, or 37.7%, decrease in industrial product sales. Included in
these decreases is the net effect of unfavorable foreign exchange of $17.0&nbsp;million on net sales and pricing increases of $14.2&nbsp;million. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Net sales decreased $38.0&nbsp;million, or 20.2%, to $149.9&nbsp;million for 2009 from $187.9&nbsp;million for 2008.
The decrease was
composed of decreases of $12.8&nbsp;million in IGT sales, </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>49</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=52,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=52429,FOLIO='49',FILE='DISK105:[11ZBC1.11ZBC79101]DQ79101A.;49',USER='JMAHER',CD=';1-MAY-2011;20:31' -->
<A NAME="page_dq79101_1_50"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>$7.3&nbsp;million
in industrial/other and $17.9&nbsp;million in aerospace. The decreases were the result of the recession and late cycle destocking. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Gross profit  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:80pt;"><FONT SIZE=2><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>$ Change

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>% Change

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross Profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>173.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>25.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>215.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>22.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(41.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (19.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>154.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>196.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>26.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(42.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (21.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>32.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(2.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (6.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(11.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(14.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit decreased $41.7&nbsp;million, or 19.4%, to $173.3&nbsp;million in 2009 from $215.0&nbsp;million for 2008. Gross profit as a
percentage of net sales increased to 25.5% for 2009 from 22.9% for 2008. Excluding ESOP non-cash compensation expense of $11.1&nbsp;million in 2009 and $14.0&nbsp;million in 2008,
gross profit as a percentage of net sales also increased to 27.1% for 2009 from 24.4% for 2008. The increase in gross profit as a percentage of net sales was primarily a result of cost reduction and
containment measures taken early in the year in response to the global reduction in demand caused by the economic crisis, firm market pricing, lower raw material costs and a $2.9&nbsp;million LIFO
decrement. This decrement was the effect of reduced inventories in 2009, resulting in a liquidation of LIFO inventory carried at the lower costs prevailing in prior years than the cost of 2009
purchases. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit decreased $42.4&nbsp;million, or 21.6%, to $154.1&nbsp;million in 2009 from $196.5&nbsp;million in 2008,
primarily as a
result of reduced volumes that negatively impacted our manufacturing cost base. EPG's gross profit margin increased to 29.0% from 26.1% as a result of lower input commodity costs during the year and
pricing increases of $14.2&nbsp;million. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Gross profit decreased $2.1&nbsp;million, or 6.5%, to $30.4&nbsp;million in 2009 from $32.5&nbsp;million in 2008. The
primary driver was
sales volume reduction. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Selling and administrative expenses  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:80pt;"><FONT SIZE=2><B>(dollars in millions)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,42pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and Administrative</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>112.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>132.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(20.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (15.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>81.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>92.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(10.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (11.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(2.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (14.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(6.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (30.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses decreased $20.2&nbsp;million, or 15.2%, to $112.5&nbsp;million in 2009 from $132.7&nbsp;million in
2008. Selling and administrative expenses as a percentage of net sales increased to 16.5% for 2009 from 14.1% for 2008. ESOP non-cash compensation expense contributed $5.4&nbsp;million
and $6.3&nbsp;million to selling and administrative expenses for 2009 and 2008, respectively. Excluding these charges, selling and administrative expenses decreased $19.2&nbsp;million, or 15.2%,
for 2009 over 2008 and, as a percentage of net sales, selling and administrative expenses increased to 15.8% for 2009 from 13.4% in 2008. The compensation expense effect of SARs on selling and
administrative expenses during 2009 was negligible due to then-current market conditions and results that negatively affected the fair value of the Legacy Class&nbsp;A Common Stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses decreased $10.8&nbsp;million, or 11.7%, to $81.6&nbsp;million in 2009 from
$92.4&nbsp;million in
2008. The decrease in selling and administrative expenses in EPG for 2009 was due to cost reductions, including workforce reductions, undertaken as part of our response to the global economic crisis
and generally less favorable market conditions. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>50</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=53,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=797825,FOLIO='50',FILE='DISK105:[11ZBC1.11ZBC79101]DQ79101A.;49',USER='JMAHER',CD=';1-MAY-2011;20:31' -->
<A NAME="page_dq79101_1_51"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses decreased $2.7&nbsp;million, or 14.6%, to $15.8&nbsp;million in 2009 from
$18.5&nbsp;million in 2008.
The decrease in selling and administrative expenses in TTG for 2009 was due to cost reductions, including workforce reductions, undertaken as part of our response to the global economic crisis and
generally less favorable market conditions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Selling and administrative expenses decreased $6.7&nbsp;million, or 30.7%, to $15.1&nbsp;million in 2009
from $21.8&nbsp;million in 2008 primarily due to favorable swings in unrealized gain in our long-term investment assets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Restructuring and other  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2009, we incurred $6.3&nbsp;million of restructuring costs associated with the shutdown of our West Jordan, Utah blades facility
and our Saskatoon, Saskatchewan foundry, and layoff and severance costs. Restructuring activity in 2008 included $1.8&nbsp;million of restructuring costs associated with severance costs resulting
from our reduction in force due to economic conditions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Operating profit  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="9pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="34pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:80pt;"><FONT SIZE=2><B>(dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,80pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,20pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,36pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,20pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:36pt;"><FONT SIZE=2><B>% of Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,36pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>$ Change

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>% Change

<!-- COMMAND=ADD_SCROPPEDRULE,42pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating Profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>54.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>80.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(26.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (32.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>72.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>104.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(31.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> (30.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>0.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(32.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(37.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Operating profit decreased 30.4% to $72.5&nbsp;million, or 13.7% of net sales, for 2009 from $104.1&nbsp;million, or
13.8% of net sales,
for 2008. The lower operating profit was driven by decreased sales volumes in 2009 and was partially offset by lower raw material costs, market pricing discipline and cost reduction and containment
measures taken in the year. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Operating profit increased to $14.6&nbsp;million, or 9.7% of net sales, for 2009 from $14.0&nbsp;million, or 7.5% of
net sales, for 2008.
The increase in operating profit in actual dollars and as a percentage of net sales was driven by cost reduction measures, lower alloy costs and pricing increases. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Interest expense, net  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net was $26.2&nbsp;million for 2009 compared to $26.7&nbsp;million for 2008. The lower net interest expense was
due to the lower average variable rate of 4.8% in 2009 compared to 7.1% in 2008 on then outstanding floating rate senior notes, partially offset by $1.7&nbsp;million lower interest income on our
invested cash funds due to lower interest rates. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Income tax expense  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The effective tax rate from continuing operations was 29.0% for 2009 compared to 26.9% for 2008. The effective tax rate was higher for
2009 due primarily to a higher percentage of income earned in the United States than in 2008, which is taxed at a higher rate than income earned in foreign jurisdictions, and reduced foreign tax
credits earned during the year. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Other expense (income)  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For 2009, we had other income due to foreign exchange gains on settlement of our foreign currency denominated accounts receivable and
accounts payable partially offset by a $0.3&nbsp;million </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>51</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=54,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=238824,FOLIO='51',FILE='DISK105:[11ZBC1.11ZBC79101]DQ79101A.;49',USER='JMAHER',CD=';1-MAY-2011;20:31' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>insurance
claim retention expense. For 2008, we had other expense due to foreign exchange losses on settlement of our foreign currency denominated accounts receivable and accounts payable partially
offset by a $0.3&nbsp;million insurance claim retention expense. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Noncontrolling interest  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest reflects the net after tax profits in our less than 100%-owned subsidiary companies allocable to the
non-ESCO shareholders. Noncontrolling interest was $2.5&nbsp;million in 2009 compared to $5.1&nbsp;million in 2008 due to our purchase in May 2009 of the remaining 40% interest in
Soldering. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Quarterly Operating Results  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following unaudited quarterly financial data for the quarters in 2009 and 2010 have been prepared on a basis consistent with our
audited consolidated annual financial statements, and in management's opinion, include all normal recurring adjustments necessary for the fair statement of the financial information contained in those
statements. The period-to-period comparison of financial results is not necessarily indicative of future results. You should read this data together with our consolidated
financial statements and the related notes included elsewhere in this prospectus. </FONT></P>
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<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="34pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="22pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="34pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="22pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="22pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="34pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=47 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Quarter ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September&nbsp;30,<BR>
2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December&nbsp;31,<BR>
2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September&nbsp;30,<BR>
2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:56pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

<!-- COMMAND=ADD_SCROPPEDRULE,56pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales


<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:4pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$

<!-- COMMAND=ADD_SCROPPEDRULE,4pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>% of net<BR>
sales

<!-- COMMAND=ADD_SCROPPEDRULE,24pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">234.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">228.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">201.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">185.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">177.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">159.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">161.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">181.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
59.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
25.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
59.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
25.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
55.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
49.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
26.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
48.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
38.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
24.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
42.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
26.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
44.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
24.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses (including restructuring)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
49.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
20.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
32.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
35.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
17.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
31.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
17.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
35.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
20.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
26.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
29.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
10.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
26.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
11.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
20.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
10.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
17.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
9.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
12.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
12.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
7.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
15.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
9.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
7.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings (loss) attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(2.4)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>(a),(b)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(1.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
11.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
8.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
3.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
3.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Adjusted net earnings from continuing operations(c)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
13.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
11.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
8.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
3.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
7.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
4.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
9.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
5.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
7.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
3.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Adjusted EBITDA(d)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
31.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
13.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
35.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
15.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
32.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
15.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
22.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
12.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
22.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
26.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
15.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
</TR>
</TABLE></DIV>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(a)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
net loss in the fourth quarter is attributable to our debt refinancing expense of $13.0&nbsp;million, a mark to market on our SARs expense of
$6.9&nbsp;million and a $2.6&nbsp;million provision to remove an accumulation of solid waste at a Canadian facility. The debt refinancing expense was $13.0&nbsp;million, which consisted of
$8.6&nbsp;million call premium and $4.4&nbsp;million acceleration of our unamortized expenses associated with our 2006 bond offering and asset-backed line of credit.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(b)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">This
reflects a mark to market adjustment on our cash settlement SARs awards due to improved markets and forecasts. In 2011, we changed our SARs
long-term incentive program to feature a stock settlement grant rather than a cash settlement grant. Our existing cash settled SARs will be converted to stock settled SARs in 2011. The
mark to market liability accounting will not occur after the first quarter of 2011. Additional expense on our long-term cash incentives awards also affected fourth quarter results.
Combined, the net impact was $9.2&nbsp;million in the fourth quarter of 2010. Our 2011 long-term incentive awards incentive program is an equity awards program.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(c)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Adjusted
net earnings from continuing operations is a non-GAAP measure. We have included adjusted net earnings in this prospectus because it
represents a basis upon which our management assesses financial performance and may provide a more complete understanding of the factors and trends affecting our business. See "Selected Consolidated
Financial and Other Data" and the reconciliation to net earnings (loss) from continuing operations attributable to ESCO shareholders below.  </FONT>
<BR>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B><I>Adjusted Net Earnings Reconciliation</I></B></FONT></P>

</DD></DL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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<TD WIDTH="41pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="44pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="40pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="41pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="44pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=23 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Quarter ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:56pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:30pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December<BR>
31, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:32pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September<BR>
30, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:30pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December<BR>
31, 2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:32pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September<BR>
30, 2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2009

<!-- COMMAND=ADD_SCROPPEDRULE,27pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings (loss) from continuing operations attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Mark to market on SARs expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ESOP non-cash compensation expense, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Adjusted net earnings from continuing operations</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>13.9</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>14.7</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>11.6</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>8.5</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>5.7</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>7.0</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>9.3</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>7.1</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(d)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Adjusted
EBITDA is a non-GAAP measure. See "Selected Consolidated Financial and Other Data" and the reconciliation to earnings from continuing
operations, net of tax below. </FONT></DD></DL>
 </DIV>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>52</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B><I>Adjusted EBITDA Reconciliation</I></B></FONT></P>

</UL>
 </DIV>
<DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="41pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="44pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="40pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="41pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="44pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="40pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=23 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Quarter ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:56pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(dollars in millions)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:30pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December<BR>
31, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:32pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September<BR>
30, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:30pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>December<BR>
31, 2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:32pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>September<BR>
30, 2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>June&nbsp;30,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>March&nbsp;31,<BR>
2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Add/(Subtract):</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest (net) and loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
17.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
6.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Income tax expense (benefit)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(5.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Depreciation and amortization</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Non-operating expense (income)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ESOP non-cash compensation expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.4</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Mark to market on SARs expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Unrealized (gains) losses on long term investments</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.2</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(0.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1.5</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:7pt;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
0.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
0.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
0.9</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.7</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.8</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.0</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:6pt;text-indent:-6pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Adjusted EBITDA</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>31.5</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>35.8</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>32.7</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>27.8</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>22.9</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>22.8</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>26.1</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>27.8</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">

 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations are not significantly affected by seasonality. For a discussion of trends affecting our results of operations, see
"&#151;&nbsp;Trends, Opportunities and Challenges&nbsp;&#151; Recent Activity". </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Liquidity and Capital Resources  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal sources of liquidity include cash provided by operations, existing cash and cash equivalents, and our revolving credit
facility. At December&nbsp;31, 2010, we had $114.1&nbsp;million of cash and cash equivalents and $272.0&nbsp;million available under our revolving credit facility. Based upon our current and
planned level of operations, we believe these sources of liquidity are sufficient to fund our operations and contractual obligations for at least the next 12&nbsp;months. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Both
our liquidity and access to additional capital improved in 2010. We internally funded $35.3&nbsp;million in debt reduction, $13.7&nbsp;million in debt issuance costs and
premium paid on early debt extinguishment, $33.8&nbsp;million (net of cash acquired) in acquisition consideration and $26.9&nbsp;million in shareholder dividends while our cash balance remained
strong at $114.1&nbsp;million at December&nbsp;31, 2010. We refinanced our senior notes with a new credit facility, which, had it been in place during 2010, would have reduced our annual interest
expense by approximately $11.0&nbsp;million in 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="100pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="100pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="100pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fiscal year ended </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:77pt;"><FONT SIZE=2><B>(dollars in millions)


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:73pt;"><FONT SIZE=2><B>December&nbsp;31, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:73pt;"><FONT SIZE=2><B>December&nbsp;31, 2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:73pt;"><FONT SIZE=2><B>December&nbsp;26, 2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>ESOP non-cash compensation and SARs expense</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Changes in operating assets and liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(13.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>78.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capital expenditures</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(20.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(14.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(29.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Business acquisitions</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(33.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(6.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in investing activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(56.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(37.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from debt issuance</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>271.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments on debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(306.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(6.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividends paid</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(26.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(26.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(14.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(14.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(0.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in financing activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(76.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(32.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(17.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>53</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B><I> Working Capital and Cash Flow  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> 2010 Compared to 2009  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Provided by Operating Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by operating activities for 2010 was $78.3&nbsp;million
compared to $88.8&nbsp;million for
2009. The decrease was primarily due to increased use of working capital in 2010 to support the increased sales and production levels in EPG. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
year-over-year change of $42.5&nbsp;million in our operating assets and liabilities is due to an increase of $13.6&nbsp;million in 2010 due to an
increased need for working capital caused by increased sales and production levels in EPG compared to a decrease of $28.9 million in 2009 that was the result of decreased sales. The year-over-year
change of $8.4&nbsp;million in non-cash ESOP compensation and SARs expense was due to improvement in our operating performance, which increased the fair value of our Class&nbsp;C Preferred Stock
and Class&nbsp;A Common Stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
year-over-year change of $13.6&nbsp;million in "other" category in the net cash provided by operating activities is due primarily to the loss on early
extinguishment of debt in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Used in Investing Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash used in investing activities increased $51.5&nbsp;million in 2010 to
$56.7&nbsp;million compared to
$5.2&nbsp;million in 2009. This increase was driven by our 2010 acquisitions of the Engineering and Mining Products divisions of Swift Group Holdings Pty&nbsp;Ltd and Austcast Pty&nbsp;Ltd. for
an aggregate purchase price of $33.8&nbsp;million (net of cash acquired). $2.4&nbsp;million of other net cash used in investing activities in 2010 related to investments in our Chilean joint
venture. No investment was made in the joint venture in 2009. Capital expenditures in 2010 increased to $20.5&nbsp;million from $14.1&nbsp;million in 2009 as we returned to normal capital
expenditure levels. In 2009, we made only those capital expenditures we believed were critical for maintaining our facilities. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Used in Financing Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash used in financing activities increased $44.5&nbsp;million in 2010 compared
to 2009. The increase was
primarily a result of net pay down of debt of $35.3&nbsp;million in 2010 compared to $3.8&nbsp;million in 2009, and refinancing costs of $13.7&nbsp;million in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> 2009 Compared to 2008  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Provided by Operating Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash provided by operating activities for 2009 was $88.8&nbsp;million
compared to $88.5&nbsp;million for
2008. The slight increase was due to lower working capital requirements required to support lower sales and production in 2008, which was partially offset by the decline in net earnings from
continuing operations in 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Used in Investing Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash used in investing activities was $5.2&nbsp;million in 2009 compared to
$37.5&nbsp;million in 2008. Other
net cash used in investing activities in 2009 was the beginning cash balance of a previously unconsolidated affiliate that we included in our consolidated accounts. Other net cash used in investing
activities in 2008 was $6.2&nbsp;million and related to investment in our Chilean joint venture. No investment was made in the joint venture in 2009. In addition, during 2009, we reduced our capital
expenditures to a maintenance level in line with our focus on protecting margin, liquidity and cash flow. Capital expenditures totaled $14.1&nbsp;million during 2009 and $29.7&nbsp;million during
2008. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash Used in Financing Activities.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Cash used for financing activities, which is primarily cash dividends paid and
payments on long-term
debt for 2009, was $32.0&nbsp;million compared to $17.8&nbsp;million for 2008. The majority of the increase was due to a $10.4&nbsp;million dividend paid to the noncontrolling shareholder of
ESCO Soldering prior to our purchase of the shareholder's 40% equity interest in May 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>54</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Capital expenditure commitments  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;13, 2007, we entered into a 50/50 joint venture (JV) agreement with our Chilean licensee,
Compa&ntilde;&iacute;a Electro Metalurgica&nbsp;S.A. (Elecmetal), to build an EPG foundry in Chile scheduled to be operational in 2012. The JV will supply wear parts exclusively to
Elecmetal for sale in Chile and to us for sales into other countries in South America and elsewhere. We delayed the foundry's construction during the 2009 economic downturn and restarted construction
in 2010. As a result of the delay, the increased demand for construction resources in Chile and new building codes following the 2009 Chilean earthquake, the foundry's construction costs have
increased an estimated 40% from the 2007 start of the project. Construction of the foundry is estimated to cost approximately $76&nbsp;million, $48.0&nbsp;million of which will be funded equally
by us and Elecmetal ($24.0&nbsp;million each). The remaining 40% will be financed by a construction loan that will convert to a seven-year term loan at completion of the foundry. The
loan is secured by property, equipment and standby letters of credit in the amount at December&nbsp;31, 2010 of $7.6&nbsp;million from each of us and Elecmetal. We have funded $8.8&nbsp;million
through December&nbsp;31, 2010 and will fund the remaining $15.2&nbsp;million of the estimated costs in 2011. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Description of Indebtedness  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Credit Agreement  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On November&nbsp;18, 2010, we entered into a credit agreement with a bank syndicate led by Bank of America, N.A., which includes a
$200&nbsp;million term loan facility and a revolving credit facility of up to $350&nbsp;million. It also permits letters of credit with sublimits of up to $50&nbsp;million and swing line loans
with sublimits of up to $25&nbsp;million. Subject to the terms of the credit agreement, we may request an increase in the revolving credit facility of up to $100&nbsp;million on the same terms. If
we request an increase, the increase must be a minimum of $10&nbsp;million. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
used the proceeds from the credit agreement to pay off our floating rate senior notes and 8.625% senior notes, which we issued in 2006. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
interest rate on our loans is calculated based on LIBOR or a base rate, plus a margin rate depending on our consolidated net leverage ratio. The base rate is the highest of
(a)&nbsp;the federal funds rate plus 0.50%, (b)&nbsp;the publicly announced Bank of America "prime rate" and (c)&nbsp;the rate for the LIBOR-based rate loans plus 1%. Consolidated net leverage
ratio is the ratio of (a)&nbsp;funded debt less the sum of our unencumbered cash and cash equivalents greater than $20&nbsp;million to (b)&nbsp;consolidated Adjusted EBITDA for the most recently
completed four quarters. In addition, we pay a quarterly unused commitment fee equal to 0.375% of the unused portion of the revolving credit facility. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2010, we had availability under our credit facility of $272.0&nbsp;million, net of $13.0&nbsp;million in outstanding letters of credit and
$65.0&nbsp;million drawn under the facility. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
obligations under the credit agreement are secured by a lien on substantially all of our assets and by a pledge of the stock in our directly held subsidiaries. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2010, we were in compliance with our covenants under the facility. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>55</FONT></P>

<HR NOSHADE>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Contractual Obligations  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are obligated to make future payments under various contracts such as debt agreements and leases. The following table sets forth
our long-term contractual cash obligations as of December&nbsp;31, 2010. </FONT></P>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Payments Due </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=2><B>(in millions)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT SIZE=2><B>Total

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=2><B>Less than<BR>
1 Year

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:76pt;"><FONT SIZE=2><B>1-3<BR>
Years

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:76pt;"><FONT SIZE=2><B>3-5<BR>
Years

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=2><B>More Than<BR>
5 Years

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long-term debt obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>200.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>170.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest on long-term debt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating lease obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capital lease obligations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:9pt;text-indent:-9pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>235.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>177.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For additional potential payments, see the following notes to our consolidated audited financial statements: Note&nbsp;17&nbsp;&#151;
Income Taxes, Note&nbsp;20&nbsp;&#151; Contingently Redeemable Equity Securities, and Note&nbsp;28&nbsp;&#151; Business Acquisitions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Off-Balance Sheet Arrangements  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2010, we had outstanding a $7.6&nbsp;million standby letter of credit to secure construction loan obligations
of our unconsolidated Chilean joint venture entity. See "&#151;&nbsp;Liquidity and Capital Resources&nbsp;&#151; Capital expenditure commitments". Other than this, we have no
off-balance sheet arrangements as that term is defined by SEC regulations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Critical Accounting Policies and Estimates  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of our consolidated financial statements in accordance with generally accepted accounting principles is based on the
selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain. This requires that we make
estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and their related disclosures. Our estimates and judgments are based on historical experience
and various assumptions that we believe to be reasonable. Actual results could differ from our estimates and assumptions, and any differences could be material to our consolidated financial
statements. We consider the accounting policies discussed below to be critical to the understanding of our financial statements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Revenue Recognition  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We recognize net sales on customer and distributor sales when persuasive evidence of an arrangement exists, delivery has occurred or
the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to the customer at the
time product is transferred to a common carrier. We have allowances for product returns and cash discounts which are calculated based on historical experience. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have certain licensee agreements in which we receive royalty revenue. Royalty revenue is accounted for based on royalty percentages of actual sales by licensees. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Trade Receivables  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade receivables, reduced by an allowance for doubtful accounts, are recorded at the invoiced amount less discounts and do not bear
interest. The collectability of trade receivable </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>56</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>balances
is regularly evaluated based on a combination of factors such as customer credit-worthiness, past transaction history with the customer, economic industry trends and changes in customer
payment terms. If we become aware of circumstances that may impair a specific customer's ability to meet its financial obligations, a specific reserve is recorded to reduce the related receivable to
the amount expected to be recovered. For all other trade receivable balances we maintain a reserve that is based on our historical uncollectible accounts as a percentage of net sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Inventories  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method
(LIFO) at ESCO Corporation and one of its U.S. subsidiaries. Cost is determined using the first-in, first-out method (FIFO) or average cost method for all other subsidiaries of
ESCO.
Cost of inventory includes raw materials, employee compensation and benefits, outside processing, depreciation of manufacturing machinery and equipment, operating supplies and manufacturing overhead
directly attributable to the manufacturing of goods. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories
with quantities on hand that have not been sold during the prior 12&nbsp;months or are in excess of forecasted usage are reviewed quarterly for obsolescence by operations
personnel. We evaluate the value of our inventory quarterly based on a combination of factors including, but not limited to, the following: forecasted sales or usage, historical usage rates, future
selling prices, product end-of-life dates, estimated current and future market values and new product introductions. If we determine we have obsolete inventory in excess of our
reserve for obsolete inventory, a charge equal to the book value of this excess inventory would increase our cost of goods sold and decrease our operating profit. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Goodwill and Long-Lived Assets  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill is tested for impairment annually (in the second quarter) or more frequently if an indicator of impairment exists. Such
indicators may include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition or slower growth rates, among others. It is
important to note that fair values that could be realized in an actual transaction may differ from those used to evaluate the potential impairment of goodwill. Goodwill is allocated among and
evaluated for impairment at the reporting unit level. For our company, a reporting unit is defined as an operating segment. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
evaluation of impairment involves the comparison of the fair value of each reporting unit to its carrying value, including goodwill. We use a discounted cash flow ("DCF") model as
well as a comparison to peer company multiples to estimate the fair value of our reporting units when testing for impairment, as management believes these methods are the best indicators of such fair
value. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and
prices, costs to produce, tax rates, capital spending, discount rate and working capital changes. Our reporting units' fair value has historically been significantly above their carrying values. In
the event the estimated fair value of a reporting unit is less than the carrying value, additional analysis would be required. The additional analysis would compare the carrying amount of the
reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwill is the excess of the fair value of the reporting unit over the fair value amounts assigned to
all of the assets and liabilities of that unit as if the reporting unit was acquired in a business combination and the fair value of the reporting unit represented the purchase price. If the value of
goodwill exceeds its implied fair value, an impairment loss equal to such excess would be recognized, which could significantly and adversely impact reported results of operations and stockholders'
equity. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>57</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-lived
assets, principally property, equipment and identifiable definite-lived intangibles, are reviewed for impairment whenever events or circumstances indicate that
the carrying amount of the assets may not be recoverable. We evaluate recoverability of assets by comparing the carrying amount of the asset to estimated future net undiscounted cash flows generated
by the asset. If such assets are considered not to be recoverable, the impairment recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Income Taxes  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Significant judgment is required in determining income tax provisions as well as deferred tax asset and liability balances, including
the estimation of valuation allowances and the evaluation of uncertain tax positions. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. In determining the need for valuation allowances, we have considered and made judgments and estimates regarding estimated future taxable
income and ongoing prudent and feasible tax planning strategies. These estimates and judgments include some degree of uncertainty, and changes in these estimates and assumptions could require us to
adjust the valuation allowances for our deferred tax assets. Historically, changes to valuation allowances have been caused by major changes in the business cycle in certain countries, and the
associated profitability in our business, and changes in local country law. The ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income in the applicable
taxing jurisdictions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
income tax provision is determined using the asset and liability approach of accounting for incomes taxes. Under this approach, deferred income taxes are recognized for the tax
consequences of temporary differences by applying enacted statutory tax rates expected to apply in future years to differences between the financial statement carrying amounts and the tax bases of
assets and liabilities. The provision for income taxes represents income taxes paid or payable for the year plus the change in deferred taxes during the year. Valuation allowances based on our
judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized based on expected future operating results and available tax alternatives.
Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are subject to income taxes in the United States and numerous foreign jurisdictions and as a result, we are subject to the jurisdiction of numerous domestic and foreign tax
authorities. Determination of taxable income in any jurisdiction requires the interpretation of the related tax laws and regulations and the use of estimates and assumptions regarding significant
future events such as the amount, timing and character of deductions; permissible revenue recognition methods under the tax law; and the sources and character of income and tax credits. Changes in tax
laws, regulations, agreements and treaties; foreign currency exchange restrictions; or our level of operations or profitability in each taxing jurisdiction could have an impact on the amount of income
taxes that we incur during any given year. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Share-Based Compensation, Accounting Effects of Our SARs and ESOP, and Share Valuation  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Grants of equity awards  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have adopted the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic
718, Compensation-Stock Compensation. This guidance generally requires that compensation expense be determined based on the grant date fair value of the share-based compensation awards and that the
expense be recognized over the required service period of the award. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>58</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
no stock options have been granted after December&nbsp;30, 2005, we have continued to apply the intrinsic value method in accounting for stock options. Under the intrinsic
value method, compensation expense for employee stock options is not recognized if the exercise price of the option equals or exceeds the fair value of the stock on the date of grant. As a result, no
compensation expense has been recorded for options vesting during the reporting periods presented in the consolidated financial statements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
classify our awards of cash-settled stock appreciation rights ("SARs") as liabilities. SARs are settled in cash for the difference between fair value of our Legacy
Class&nbsp;A Common Stock on the date of grant and its fair value on the date of exercise. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
the third quarter of 2010, we used the current-value method described below to estimate the fair value of SARs awards on the date of grant and recognize expense on a
straight-line basis over the required service period. At December&nbsp;31, 2010, and for the quarter then ended, we changed our valuation method to a Black-Scholes option pricing method
as described below. At each period end after grant, the related liability balance is adjusted to reflect any changes in our stock value and our payout liability. Any impact to expense from these
period end adjustments is recognized as incurred for fully vested awards and amortized over the remaining service period for unvested awards. Fluctuations in the value of our Class&nbsp;A Common
Stock have significantly affected our financial results. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the first quarter of 2011 we changed our SARs long-term incentive program to feature a stock settlement grant rather than the previous cash settlement grant. The award's
grant date fair value will be amortized over the required service period. Our board of directors has approved an amendment to our existing cash-settled SARs that will convert them to
stock-settled SARs in 2011 if the holders execute the amendment. The final revaluation of cash-settled SARs upon this conversion will be amortized over the remaining service period for the unvested
awards and recognized immediately for vested awards. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Accounting effects of SARs and ESOP  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quarterly changes in the fair value of our Class&nbsp;A Common Stock and our Class&nbsp;C Preferred Stock affects our financial
statements, including a quarterly non-cash compensation expense related to (1)&nbsp;a "mark to market" compensation expense from the adjustment of the value of the shares of
Class&nbsp;A Common Stock underlying our SARs and (2)&nbsp;the fair value of the shares of Class&nbsp;C Preferred Stock released each quarter as collateral securing the ESOP's indebtedness to
us, which is allocated to cost of goods sold, based on the number of ESOP shares allocated to the accounts of manufacturing employees, or to selling and administrative expense, based on the number of
ESOP shares allocated to the accounts of other employees. Because of the contingent redemption feature of the Class&nbsp;C Preferred Stock, changes in the fair value of these shares are reflected in
adjustments to contingently redeemable equity securities and corresponding changes to retained earnings, which affects our earnings per share calculation. Differences in the fair value of the
Class&nbsp;C Preferred Stock upon allocation to employees compared to the fair value at inception of the ESOP Trust are credited or debited to additional paid-in capital. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Valuation of shares  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In determining the fair value of the Class&nbsp;C Preferred Stock, we consider a number of factors, including the valuation
performed by the independent financial adviser to the ESOP trustee to establish the contractual repurchase price under the terms of the ESOP Trust. As bases for determining the fair value of our
Class&nbsp;A Common Stock and Class&nbsp;C Preferred Stock, we value the enterprise at the arithmetic average of the values derived through a guideline company method and a discounted cash flow
method. We select public companies comparable to ESCO in respect to </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>59</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>investment
risk and return and derive an estimated enterprise value after making adjustments for size, growth, profitability, global structure and risk considerations. Under the discounted cash flow
method, we assume a weighted average cost of capital and determine an enterprise value based on a detailed cash flow forecast for the next five years and a terminal value discounted to present value.
At December&nbsp;31, 2010, our assumptions for this method were a weighted average cost of capital of 12.5% based on required return on equity of 17.1% (70% weight), a cost of debt after tax of 2%
(30% weight) and a termination value after the sixth year assuming an exit EBITDA multiple of 7.0x, based on observations of pricing multiples from the guideline company method, discounted to present
value. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Through
the third quarter of fiscal 2010, we determined the fair value of our Class&nbsp;C Preferred Stock using the current method. This method allocates the enterprise value to the
Class&nbsp;A Common Stock and Class&nbsp;C Preferred Stock based on their conversion values, which differs between these classes of stock primarily due to the value of the future dividend streams
of the Class&nbsp;C Preferred Stock. Also, we included a 5% marketability discount when valuing the Class&nbsp;C Preferred Stock, but no such discount when valuing the Class&nbsp;A Common Stock.
At December&nbsp;31, 2010 and for the quarter then ended, we changed our valuation method to a Black-Scholes option pricing method because we believed this method was more appropriate given the
increased likelihood of completing an initial public offering. The option pricing method of allocating enterprise value among common stock and preferred stock treats each class of stock as a call
option on all or part of the enterprise's value. At December&nbsp;31, 2010, we believed the probability of completing a public offering was 20%, and therefore we believed the Black-Scholes option
pricing method, rather than a probability-weighted expected return method, was the appropriate valuation method. Under the Black-Scholes method, we used the enterprise value derived as described above
and made assumptions for volatility, expected life and likely risk-free interest rates. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applying
the Black-Scholes method, we determined that, before taking into consideration the stock split described in "Explanatory Note Regarding Changes in Our Capital Stock", at
December&nbsp;31, 2010 the value of the Class&nbsp;C Preferred Stock was $891.65 per share and the value of the Class&nbsp;A Common Stock was $688.20 per share. We used these amounts for
financial reporting purposes, including to calculate the compensation expense recognized for the fourth quarter of fiscal 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Employee Benefit Plans  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have an employee savings plan under the provisions of Section&nbsp;401(k) of the Internal Revenue Code. We also have defined
benefit plans in the U.S. and certain foreign subsidiaries. In accordance with accounting guidance, we use actuarial valuations that are based on assumptions, including discount rates,
long-term rates of return on plan assets and rates of change in participant compensation levels. We evaluate funded status of each plan using these assumptions and consider applicable
regulatory requirements, tax deductibility, reporting consideration and other relevant factors, and thereby determine the appropriate funding level for each period. The discount rate used to calculate
the present value of the pension and post-retirement benefit obligations is assessed at least annually. The discount rate represents the rate inherent in the price at which the plans'
obligations are intended to be settled at the measurement date. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>60</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted-average assumptions used to determine benefit obligations at December&nbsp;31, 2010 and 2009 were as follows: </FONT></P>
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<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted-average assumptions used to determine net periodic cost for fiscal years ending December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008 were as
follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008


<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
used the following health care cost inflation rate assumptions in measuring the accumulated post-retirement benefit obligations as of December&nbsp;31, 2010,
December&nbsp;31, 2009 and December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="35pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate assumed for next year</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ultimate rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year in which ultimate rate is reached</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
1% increase in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the post-retirement benefit
obligation. A 1% decrease in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the post-retirement benefit
obligation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Newly Adopted Accounting Standards  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2009, new guidance was issued on the accounting for transfers of financial assets, which is intended to improve the relevance
and comparability of information about transfers of financial assets. We adopted this guidance as of the beginning of fiscal year 2010, and it did not have a material impact on our consolidated
financial position results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 2009, new guidance was issued on variable interest entities. This guidance modifies the definition of a primary beneficiary in a variable interest entity. We adopted this
guidance as of the beginning of fiscal year 2010. This guidance did not have a material impact on our consolidated financial position results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
January 2010, new guidance was issued that clarifies existing disclosures and requires new disclosures for fair value measurements. The clarifications relate to the level of
disaggregation a company uses for the disclosure and calls for further details in the valuation techniques used to measure fair value for fair value measurements that fall into Level&nbsp;2 and 3
categories. Disclosure of significant transfers in and out of Levels&nbsp;2 and 3 and a description of the reason for the transfers are required. Our adoption of this guidance at the beginning of
2010 did not have a material impact on our consolidated financial position, results of operations or cash flows. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>61</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ds79101_1_62"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
January 2010, new guidance was issued that requires new disclosures for fair value measurements. In the reconciliation for Level&nbsp;3 fair value measurements, the disclosures
should present separately information about purchases, sales, issuances and settlements (gross rather than net amounts). This guidance is effective for reporting periods beginning after
December&nbsp;15, 2010. Our adoption of this guidance at the beginning of 2011 did not have a material impact on our consolidated financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December 2010, new guidance was issued that clarified required additional disclosures for business combinations. This guidance requires supplemental pro forma information to disclose
net sales and earnings of the combined entities for all periods presented. This guidance is effective for fiscal years beginning after December&nbsp;15, 2010. We will adopt these additional
disclosure requirements for all material acquisitions beginning in fiscal 2011. See Note&nbsp;3 to our Consolidated Financial Statements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Recently Issued Accounting Standards  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Quantitative and Qualitative Disclosure Regarding Market Risk  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to market risk from changes in interest rates, foreign currency exchange rates and commodity prices. We manage our
exposure to these market risks through our regular operating and financing activities, and, when deemed appropriate, through the use of derivatives. When utilized, derivatives are used as risk
management tools and not for trading purposes. See "Interest Rate Risk" and "Commodity Price Risk" below for discussion of expectations regarding future use of interest rate and commodity price
derivatives. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Interest Rate Risk  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We monitor our ratio of fixed-rate debt to variable-rate debt with the objective of achieving a mix that
management believes is appropriate. Historically, we have, on occasion, entered into interest rate swap agreements to exchange fixed and variable interest rates based on agreed upon notional amounts.
In December 2010, we entered into interest rate swaps to manage a portion of our exposure to changes in LIBOR-based interest rates on our variable rate debt, effectively fixing the interest payments
on $200.0&nbsp;million and subsequent amortization value of our term loan. All of the swaps in place at December&nbsp;31, 2010 have been designated as cash flow hedges of LIBOR-based interest
payments. At December&nbsp;31, 2009 and December&nbsp;26, 2008 we did not have any outstanding interest rate derivatives. Historically, if market interest rates had averaged 10% higher than actual
levels for 2010, 2009 or 2008, the effect on our interest expense and net earnings would not have been material. We have fixed the rate on our term loan at 2.04% plus our credit risk spread for the
duration of the loan. A variance of 0.125% in the rate on our variable rate line of credit at December&nbsp;31, 2010 borrowing levels would impact interest expense by approximately $82,000 per year
and would not be material. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Concentration of Credit Risk  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial instruments that potentially subject us to significant concentration of credit risk consist primarily of cash and cash
equivalents, accounts receivable and derivative financial instruments used in hedging activities. A majority of cash and cash equivalents are maintained with major financial institutions in the United
States, Canada and Europe. Balances in these institutions exceeded the regions' respective insurance amounts as of December&nbsp;31, 2010 and 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>62</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concentration
of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up our customer base. We control credit risk
through credit approvals, credit limits and monitoring processes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are also exposed to credit loss in the event of non-performance by counterparties on the derivative financial instruments used in hedging activities. These counterparties
are large international financial institutions domiciled in the United States and to date, no such counterparty has failed to meet its financial obligations to us, and we do not anticipate
non-performance by these counterparties. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Foreign Currency Risk  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are exposed to fluctuations in foreign currency for transactions denominated in other currencies. We had foreign currency
derivatives in place at December&nbsp;31, 2010 to reduce such exposure. The potential loss in fair value on such financial instruments from a hypothetical 10% adverse change in quoted foreign
currency exchange rates would not have been material to our financial position as of December&nbsp;31, 2010 or as of December&nbsp;31, 2009. In addition to the direct effects of changes in
exchange rates, such changes also affect the volume of sales or the foreign currency sales price as competitors' products become more or less attractive. Our sensitivity analysis of the effects of
changes in foreign currency exchange rates does not factor in potential changes in net sales levels or local currency prices. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Commodity Price Risk  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We secure raw materials through purchasing functions at each operating division. These functions are staffed by professionals who
determine the sourcing of materials by assessing quality, availability, price and service of potential vendors. When possible, multiple vendors are utilized to ensure competitive prices and to
minimize risk of lack of availability of materials. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
purchase scrap, various grades of steel and nickel at market prices, which are subject to price volatility over time. Generally, we have been able to pass any increases through price
increases on our products or the assessment of surcharges or escalator provisions in our long-term agreements with customers; however, typically there has been a historical time lag of
several months between the time a price increase is effective and our ability to realize a price increase in the market. This historical time lag could increase in more volatile time periods. As a
result, our gross margin percentage may decline, and we may not be able to implement other price increases for our products. Both operating segments review raw material cost to pricing relationships
on a regular basis. We have not hedged against the price volatility of any raw materials within our operating segments with any derivative instruments. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
suppliers and sources of raw materials are based in the United States, Asia, Latin America, Australia and Europe. We believe that our sources are adequate for our needs in the
foreseeable future, that there exist alternative suppliers for our raw materials and that in most cases those materials are readily available. We have not experienced any work stoppage or supply
stoppage due to raw material availability. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>63</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  INDUSTRIES    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Our Industries  </B></FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2><BR>
<BR></FONT> <FONT SIZE=2><B><I>Engineered Products Group</I></B></FONT><FONT SIZE=2><BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG provides wear parts and wear part carriers to the mining and infrastructure development markets, as well as the industrial market.<BR>
<BR></FONT> <FONT SIZE=2><I>Mining</I></FONT><FONT SIZE=2><BR>
<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The mining industry consists of a series of closely linked operating activities that begins with identifying possible ore reserves and ends with delivering a refined product. These activities consist of
exploration, mine development, extraction, materials handling, crushing and grinding, concentration and refining into usable product. Extraction, the activity most relevant to our business, is divided into surface mining and underground
mining.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2><BR><BR>&nbsp;</FONT></TD>
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<TD COLSPAN=3 VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>Surface mining involves the excavation of commodities such as copper, iron ore, oil sands and coal. Underground mining involves the extraction of commodities, predominantly coal, that are deep below the
surface. Surface mining requires the use of numerous types of heavy equipment, which require wear parts and wear part carriers. Sales of new surface mining equipment are closely tied to fluctuations in the prices of their related commodities and
global macroeconomic conditions. The aftermarket for parts and services for mining equipment, in contrast, tends to be less volatile and is linked to mining production. Once a mine is opened, it is unlikely to be shut down due to the high fixed costs
associated with its operation. There are also high switching costs, including lost revenues, to replace aftermarket parts and their related fitments installed on mining capital equipment.</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mining
products include ground engaging tools, or GET, products such as tooth systems and cutting edges; crusher wear parts; dragline rigging; and wear part carriers such as dragline
buckets, cable shovel buckets, excavator buckets and wheel loaders. Wear parts typically generate recurring sales as the parts are used in mining and regular replacement is required. In most market
conditions, this recurring business provides a base level of demand because wear parts are generally required to operate mining equipment and are not discretionary capital expenditures. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand Drivers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The demand for wear parts in the mining industry is driven by the demand for mined commodities. As
commodity demand rises and
commodity prices increase, it becomes economical for mining companies to extract lower grade ores in more challenging extraction environments, which typically requires greater use of wear parts. We
estimate that in 2010 the mining commodities below represented over 90% of our mining net sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copper.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Copper is a basic material used in residential and commercial construction, electrical equipment, transportation,
industrial machinery and
durable consumer goods. Demand for copper is driven by accelerating economic growth in the developing world and continued consumption in the developed world. According to AME Mineral Economics,
worldwide mine production of copper was 16.0&nbsp;million tons in 2010 and is projected to be 18.9&nbsp;million tons by 2012. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Iron Ore.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Iron ore is one of the few sources of primary iron used to make steel and is mined in more than 50 countries. The
market for iron ore is
largely a function of the demand for steel. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>64</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>According
to AME Mineral Economics, worldwide production of iron ore in 2010 was 2.58&nbsp;billion tons and is estimated to be 3.03&nbsp;billion tons in 2012. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Oil Sands.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Oil sands are a viscous mixture of sand, bitumen, clay and water. According to the Canadian Association of
Petroleum Producers, oil
production from oil sands in Canada was estimated at 1.6&nbsp;million barrels per day in 2010 and is projected to be 2.0&nbsp;million barrels per day in 2012. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Coal.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Coal is the world's most abundant low-cost energy source and is responsible for over 40% of the world's power
generation. We
believe the large amount of coal reserves and significant coal infrastructure present difficulties for transition from coal to other energy sources. Additionally, new clean coal technologies, flue gas
desulphurization and carbon capture and storage may help to mitigate environmental and regulatory concerns with the use of coal for power generation. New technologies, such as gasification and
liquefaction, create opportunities for future growth in the use of coal. According to the 2010 International Energy Outlook of the U.S. Energy Information Administration, worldwide production of coal
in 2010 was 130.4 quadrillion Btu; this is forecasted to increase to 139.4 quadrillion Btu in 2015. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gold.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The price of gold is determined through trading in the gold and derivatives markets and is affected by factors such
as consumer sentiment,
interest rates and inflation expectations. Production of gold in 2010 was 2,653 tons and is expected to grow to 2,693 tons in 2012, according to the Australian Bureau of Agricultural and Resource
Economics and Sciences. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Growth
in demand for these commodities is a function of economic activity, population growth and continuing improvements in living standards in many areas of the world. China and India,
which together accounted for 37% of the world's population as of December&nbsp;15, 2009, have fast-growing economies and rapidly urbanizing populations and have had a significant
positive impact on secular trends in commodity production. One of the key drivers of the demand for commodity ore has been growth in construction in China, which experienced a 15%
compound annual growth rate from 1998 to 2010, according to IHS Global Insight. This increased demand has created a corresponding increase in mining activity in resource-rich areas of the
world, especially the United States, Brazil, Australia and Russia. For example, the capital expenditure budgets for the top five global mining companies by market capitalization have increased an
average of 73% in 2011 over 2010. The chart below illustrates the movement in certain commodity prices over the two years ended March&nbsp;31, 2011. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  Commodity Prices    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>(Indexed Price Movement, 3/31/2009 = 100)</I></FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
 style="font-size:8pt;line-height:9pt;"><I>Source: Bloomberg, FactSet.</I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The major participants in the mining industry are mine operators, mining OEMs, parts manufacturers and independent distributors. Most mine
operators, which are the end-users of mining products, are state-owned enterprises or large multinational corporations with operations in the major mining markets throughout the world.
Increasingly, large multinational mine operators </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>have
reduced operating costs by employing larger, costlier and more efficient and sophisticated machines. These mine operators generally have high-throughput operating processes, with high
fixed costs and high costs of downtime in the form of lost revenues and costs of storage. As a result, these mining companies generally operate 24&nbsp;hours a day, seven days a week, under
demanding conditions. To maximize profits under these conditions, these companies require high quality wear parts that they can quickly and safely replace, and frequently purchase wear parts and
replacement products for their capital equipment in the aftermarket. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Infrastructure Development  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The global infrastructure development industry, as it relates to EPG, consists primarily of heavy construction and underwater hard
rock dredging activities. Like the mining sector, infrastructure development involves the use of numerous types of heavy equipment that require wear parts and wear part carriers. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Heavy Construction.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Heavy construction involves the development and repair of buildings, sewers, pipelines, highways, dams,
harbors and other
manmade structures. Many EPG products for heavy construction are the same as those used in mining, but typically are smaller. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Underwater Hard Rock Dredging.</B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Underwater hard rock dredging includes harbor expansion and deepening projects. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
chart below illustrates the infrastructure industry growth rate from 2010 through 2014 for Brazil, Russia, India and China (BRIC countries) and non-BRIC countries. </FONT></P>

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<BR></FONT><FONT SIZE=2><B>  Infrastructure Industry Outlook    <BR>    </B></FONT></P>

<UL>
<UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><I>(Value, $ Billions)</I></FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT  style="font-size:8pt;line-height:9pt;"><I>Source: Business Monitor International.</I></FONT></P>

</UL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Demand Drivers.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The demand for infrastructure products is tied to maintenance activities in developed nations and
infrastructure development in
developing countries. In developed countries, drivers of demand include the required maintenance and rebuilding of aging infrastructure. For example, the American Society of Civil Engineers estimates
the United States needs to spend $2.2 trillion over the next five years to return the country's infrastructure to "good condition". There is significant government support for infrastructure build in
the United States. For example, the American Recovery and Reinvestment Act of 2009 set aside $120.0&nbsp;billion for infrastructure construction in the United States. Urbanizing populations are one
of the key drivers of the growth in construction in developing countries such as China, which experienced a 15% compound annual growth rate in construction activity from 1998 to 2010 (according to IHS
Global Insight), and other emerging economies such as India and Brazil. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>66</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unlike
mining, heavy construction is fragmented across a large number of local and regional firms. Other major participants in the global infrastructure development industry are OEMs,
parts manufacturers and independent distributors. Underwater hard rock dredging is concentrated among a small number of dredging companies. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I> Industrial  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG industrial products include specialty castings for scrap metal recycling, locomotive engines and track work, offshore oil platform
moorings, wire rope rigging, structural sockets, aircraft forming dies and conveying chain systems. The primary market drivers in these areas are the global economy, North American industrial
production and the demand for lumber, aluminum, recycled scrap steel and pulp and paper products. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Turbine Technologies Group  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG manufactures precision investment cast components for the aerospace and power generation (or industrial gas turbine, or IGT) and
other industrial markets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Aerospace  </I></FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The demand for aerospace castings is driven by new aircraft build rates and global airline traffic. Aircraft manufacturers experienced a record increase in backlog from 2006
through 2008, but during the recession airlines canceled some aircraft deliveries and pushed out orders. With the recovery in the global economy and growth in airline traffic, aircraft OEMs&nbsp;are increasing production rates and consequently,
according to Airline Monitor, engine deliveries are expected to grow 6.8% in 2011 and 13.0% in 2012. This long-term positive trend is also supported by the launch and ramp of programs such as Boeing's 787 and 747-8 and Airbus' A350XWB and
A380.</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Replacement
castings demand is primarily driven by aircraft engine maintenance cycles, which depend on miles flown. As the global economy has recovered, air traffic has rebounded and,
according to Airline Monitor, airline passenger miles surpassed 2008 levels in 2010, rising 5.5% from 2009. According to Airline Monitor, revenue passenger miles are forecast to increase at a 6.1%
compound annual growth rate from 2010 through 2015, as airlines add new aircraft and increase flight hours to satisfy passenger demand. This should drive growth in the market for aircraft engine
replacement parts. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
market participants in the aeroengine business are OEMs, including General Electric, Pratt&nbsp;&amp; Whitney and Rolls Royce; OEM revenue sharing partners, or RSPs; and numerous
tiers of suppliers, like TTG, to OEMs&nbsp;and RSPs. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>67</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
chart below illustrates the forecast for engine delivery and revenue passenger miles from 2010 through 2015. </FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2><B>Engine Delivery Forecast<BR> </B></FONT><FONT  style="font-size:8pt;line-height:9pt;"><BR>
Number of Engines</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2><B> World Airline Traffic<BR> </B></FONT><FONT  style="font-size:8pt;line-height:9pt;">Revenue Passenger Miles<BR>
Billion</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><BR><FONT  style="font-size:8pt;line-height:9pt;"><B>
<IMG SRC="g382718.jpg" ALT="GRAPHIC" WIDTH="321" HEIGHT="169">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><BR><FONT  style="font-size:8pt;line-height:9pt;"><B>
<IMG SRC="g700004.jpg" ALT="GRAPHIC" WIDTH="312" HEIGHT="169">
 </B></FONT></TD>
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<TD style="font-family:arial;"><BR><FONT  style="font-size:8pt;line-height:9pt;"><I>Source: Airline Monitor</I></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><I><BR>&nbsp;</I></FONT></TD>
<TD style="font-family:arial;"><BR><FONT  style="font-size:8pt;line-height:9pt;"><I>Source: Airline Monitor</I></FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2><I> Industrial Gas Turbine  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The IGT casting market is driven by the demand for new gas turbines and maintenance requirements for the existing installed base of
turbines. According to Frost&nbsp;&amp; Sullivan, gas turbine sales are expected to increase at a compound annual growth rate of 5.1% from 2010 through 2015. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gas
turbines are generally designed for a useful life of over 30&nbsp;years, which contributes to a resilient industrial gas turbine maintenance, repair and overhaul (MRO) market. The
typical replacement cycle for "hot gas path" turbine parts is between three and seven years. The large installed base of IGT castings provides a platform for considerable aftermarket opportunities. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
market participants for industrial gas turbines are OEMs, parts manufacturers and aftermarket suppliers of MRO parts and services. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>68</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  BUSINESS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Overview  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading, independent designer, developer and manufacturer of highly engineered wear parts and replacement products used in
surface mining, infrastructure development, power generation, aerospace and industrial applications. Our products are often essential to the performance of our customers' capital equipment, which
often operates continuously in harsh environments and is subject to abrasion, impact, corrosion or extreme temperatures. We have two operating groups: </FONT></P>
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<TD style="font-family:arial;"><BR><FONT SIZE=2><I> Engineered Products Group, or EPG,</I></FONT><FONT SIZE=2> designs, develops and manufactures wear parts and wear part carriers, and provides solutions for mining, infrastructure development and other challenging
industrial wear applications. We believe we are the global market leader in ground engaging tools, or GET tooth systems, used in surface mining and infrastructure development, with an extensive offering of patented GET products. EPG represented
$712.6&nbsp;million, or 84%, of our net sales in 2010.<BR>
</FONT><FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><I>Turbine Technologies Group, or TTG,</I></FONT><FONT SIZE=2> manufactures superalloy precision investment cast components used in the power generation and aerospace markets. TTG represented
$136.9&nbsp;million, or 16%, of our net sales in 2010.</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have focused on product innovation throughout our nearly 100-year history and, as of April&nbsp;11, 2011, we had 45 U.S. patents and 483 foreign patents worldwide
(including foreign counterparts to our U.S. patents). We believe our expertise in metallurgy, tribology (the science of wear), design engineering, manufacturing processes and distribution are our core
competencies. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Engineered Products Group  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG focuses primarily on wear products and solutions for mining, infrastructure development and other challenging industrial
applications. EPG wear parts include GET such as mechanically attached teeth on buckets for earth moving, crusher parts, scrap recycling hammers and dragline rigging. We believe we are the global
market leader in GET tooth systems used in surface mining and infrastructure development, with an extensive offering of patented GET products. Our wear parts, which typically are consumed in less than
a year, represented 80% of EPG net sales in 2010. In addition to wear parts, we also design and manufacture capital equipment attachments that serve as wear part carriers, such as dragline buckets for
coal mining where we believe we are the global market leader. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have a global network of 21 manufacturing facilities and 35 sales and distribution offices in 18 countries, with a presence in nearly every major mining region around the globe. We
employ a diversified distribution model that includes direct sales, a network of independent dealers, licensees and OEMs.&nbsp;We increasingly focus on building our direct sales channel in markets
with a high concentration of mining activity. Our on-site field technical experts and sales representatives work directly with end-users to develop first-hand
knowledge of their needs. Drawing on our extensive expertise in solving wear problems at mining and infrastructure projects around the world, these local teams deliver our customers
best-in-class solutions from our broad portfolio of products. Once our products are installed on a customer's equipment, the customer can access our global multi-channel
distribution network to purchase replacement wear parts. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>69</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe we have a differentiated business model in EPG, focused on developing close relationships with both OEMs&nbsp;and the end-users of our products. We "push" first
fitment of our products on new machines by working closely with mining OEMs&nbsp;to develop products that meet their requirements. For example, when mining OEMs&nbsp;adopt our products as first
fitment for the buckets on their capital equipment, such as hydraulic excavators, electric cable shovels and wheel loaders, our wear parts are typically used for the life of the bucket. In addition,
our close customer relationships allow us to provide products and solutions to address a customer's critical wear problems, increase productivity, reduce total cost of ownership and improve safety,
creating a "pull" as our customers request that OEMs&nbsp;fit our products on their equipment. As a result, our EPG business is characterized by a significant installed base&nbsp;&#151; we
estimate that our products are on approximately one-third of the surface mining machines worldwide. This, in conjunction with the high cost of switching to other suppliers and the
consumable nature of our wear products, creates recurring sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG's
success is grounded in its core competencies: innovative product design; metallurgy; tribology; manufacturing; a global sales, distribution and service network; and a culture of
continuous improvement. Leveraging these core competencies, EPG has become an innovation leader in the design and manufacture of wear parts, which we provide to diverse customers around the world.
Although EPG has large customers, including the 10 largest mining companies in the world, no single customer accounted for 10% or more of our EPG net sales in any of the last five years. In addition,
EPG benefits from diversity in the industries and geographies where we operate and from the diversity in commodities that our customers mine. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Turbine Technologies Group  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG manufactures superalloy precision investment cast components used in the aerospace and power generation markets such as blades,
vanes and complex structural parts used in aircraft engines and industrial gas turbines. Broad manufacturing and metallurgical capabilities, responsiveness and extensive engineering expertise, backed
by the strength of our brand, have enabled TTG to become an important supplier in these markets. Our engineers work closely with OEMs&nbsp;and their revenue sharing partners to manufacture new and
modified products that provide high turbine efficiencies and component performance. Our rapid product development process aligns us closely with our customers to bring new products to market faster. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment
casting is a technical, multi-step process that uses ceramic molds in the manufacture of metal components with more complex shapes, tighter tolerances and finer
surface finishes than parts manufactured using other casting methods. TTG's engineering expertise and manufacturing know-how are critical to the production of parts to the exacting
tolerances and high metallurgical standards necessary to withstand extreme heat and other severe operating stresses. TTG employs conventional casting processes to produce fine grain castings; equiaxed
castings, in which metal grains are oriented randomly throughout the casting; directionally solidified ("DS") castings, in which metal grains are aligned longitudinally; and single crystal ("SX")
castings, which consist of one large superalloy crystal without grain boundaries. Grain boundaries and alignment affect the strength and performance characteristics of metal castings. TTG also offers
value-added services to its customers including precision machining, stem drilling and vacuum heat treating services. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of
turbines and considered replacement parts. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Competitive Strengths  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe we are well-positioned to benefit from positive secular trends in the industries we serve, and that the
following competitive strengths will enable us to maintain our leadership position, grow our market share and generate returns for our shareholders. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>70</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B><I> Leading Position in Attractive, Diverse and Growing Markets  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading and independent global provider of highly engineered wear products and solutions in the surface mining and
infrastructure development markets. Within these markets, we believe we are the global market leader in GET tooth systems used in surface mining and infrastructure development projects, with an
extensive offering of patented GET products; dragline buckets for coal mining; and first fitment for mining hydraulic excavators. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are positioned to benefit from positive secular trends in commodities markets and global infrastructure spending. Production of copper, iron ore and oil sands is expected to grow at
compound annual growth rates of 8.8%, 8.4% and 10.1%, respectively, over the next two years (AME Mineral Economics, the Canadian Association of Petroleum Producers); global infrastructure build
activity is expected to grow at a compound annual growth rate of 13.0% through 2014 (Business Monitor International). Similarly, we expect our TTG business to benefit from expected aerospace compound
annual growth rates of 6.1% in global passenger and cargo traffic (The Airline Monitor) and 5.1% for industrial gas turbines over the next five years (Frost&nbsp;&amp; Sullivan). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
business benefits from diversity in: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Industries.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We serve customers in the mining,
infrastructure development, industrial, power generation and aerospace markets.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Commodities.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our products are used in mining copper, iron,
coal, oil sands and gold.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Geographies.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We operate in 19 countries on six continents,
creating an expansive operating network through which we sell our products and solutions worldwide.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Customers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We have over 1,000 customers, including the 10
largest global mining companies, with no single customer representing 10% or more of our net sales in any of the last five years. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe we are well-positioned to maintain or improve our leading market position in these markets given the strength and breadth of our product portfolio, proprietary
technologies, strong brand, broad manufacturing presence, extensive distribution platform and long-term relationships with industry-leading customers. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Broad Portfolio of Innovative, Mission-Critical Products  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sell mission-critical wear parts essential to the productivity of our customers' capital equipment. This equipment operates in
harsh conditions, often continuously, where downtime is expensive due to lost production time. For example, we estimate that lost revenue from downtime for a large mining cable shovel in a U.S. copper
mine can be as high as $300,000 per hour. As a result, our customers highly value our product innovation, quality and performance, as well as the breadth of our product offerings. </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Customer-Driven Innovation.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We have a long history of
working with our customers to innovate and improve our products. We have extensive expertise in tribology, design engineering, metallurgy and manufacturing, allowing us to produce innovative
high-quality products for the most demanding applications. As of April&nbsp;11, 2011, we had 45 U.S. patents, with an average remaining life of approximately 11&nbsp;years, and 483
foreign patents worldwide (including foreign counterparts to our U.S. patents).  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Quality and Performance.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We have a reputation for
offering high performing products. We believe our customers enjoy a lower total cost of ownership because of the superior wear life, reliability and quick change time of our parts, which results in
reduced downtime, enabling us to price commensurate with value. One of our U.S. mining customers, for </FONT></DD></DL>
</UL>
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<UL>

<P style="font-family:arial;"><FONT SIZE=2>example,
estimated that switching to our SV2 tooth system from a competitor's product more than tripled tooth wear life, from 45,000 tons per tooth to 149,000 tons per tooth, and significantly reduced
operating costs. These qualities are becoming increasingly important in mining applications as ore grades decline and extraction becomes more difficult.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Breadth of Product Offering.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We are an independent
manufacturer of wear parts and wear part carriers for multiple OEM machines. Our broad portfolio of products includes both high-value products, with many covered by patents, and other
complementary products such as universal wear solutions, cutting edges and scrap recycling hammers. Over the past five years we have sold EPG products under more than 25,000 SKUs. Our leadership
position in GET is usually a customer's first introduction to our brand; our broad portfolio of products allows us to cross-sell our products once we have a customer relationship. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Significant and Growing Installed Base Generates Recurring Sales  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The installed base of equipment that uses our wear parts has grown significantly in recent years&nbsp;&#151; we estimate our
products are installed on approximately one-third of the world's surface mining machines, which includes draglines, excavators, cable shovels and wheel loaders. We believe we are
well-positioned to benefit from aftermarket wear parts sales as growth in mining and growth in infrastructure development in emerging markets outpace global economic growth generally, and
as the demand for mined commodities makes it profitable for our customers to extract lower grade ore, which typically requires greater use of wear parts. Our consumable wear parts generate recurring
sales for us as the parts wear and are required to be replaced. For example, in the mining industry, GET teeth can last for tens of thousands of tons of production before requiring replacement, which
can occur as often as every week depending on the product and the application. This recurring business provides a base level of demand because our parts are generally an operating requirement for our
customers and not a discretionary capital expenditure. In addition, many of our wear parts attach to our proprietary fitments, such as lip systems, installed on our customers' capital equipment.
Replacing these fitments is time consuming and expensive. As a result, there is a natural, recurring demand associated with EPG wear parts that is generally more stable than the underlying demand for
the related capital-intensive equipment to which our parts attach. Our large portfolio of EPG products provides significant recurring sales from aftermarket sales of wear parts to service the large
installed base of capital equipment that uses our products. In 2010, wear parts represented 80% of EPG net sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2010, 70% of TTG net sales were from products used in the "hot gas path" of aerospace and industrial gas turbines where they are subjected to extreme heat and operating stresses.
This results in the need for periodic replacement as part of the turbine maintenance, repair and overhaul cycle and generates recurring sales for us. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wear
and replacement parts constituted more than 75% of our net sales in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Well-Established Brand with a Loyal, Diverse Customer Base  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For nearly a century we have built our brand with responsive service, productivity improvement and customer-driven innovation. Today,
the ESCO brand is globally recognized for quality, durability, reliability, safety and superior performance in the most demanding operating conditions, from the high stress and impact of hard rock
dredging and the severe abrasion of oil sands, to the extreme temperature ranges of a jet engine. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
reputation has earned brand loyalty from over 1,000 customers across more than a dozen industries. We have served each of our top 10 customers in 2010 for at least 15&nbsp;years.
Our customers, which include the 10 largest mining companies as well as major aircraft engine and IGT manufacturers, operate in circumstances where the failure of a component can expose them to </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>72</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>significant
costs. Many customers rely on us as their primary source for mission-critical products. Many of our relationships with OEM customers and dealers in North America and Europe have lasted for
decades. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Global Operations with Local Presence  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have an expansive network of 28 manufacturing facilities, including 16 foundries, and 35 sales and distribution offices. We operate
in 19 countries on six continents, which allows us to develop strong expertise in solving the world's most challenging mining and infrastructure problems and helps us maintain an advantage in
developing new products and technologies that we can offer to customers. Our worldwide reach allows us to efficiently leverage common manufacturing systems and processes across our business. In
addition, our local presence in many key mining regions benefits our business in the following ways.  </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Deep Customer Relationships.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Our global distribution
platform increases our feet in the field at mining and infrastructure project sites around the world, and our ability to tailor solutions to immediate customer concerns. We believe this enhances the
value of our solutions to customers.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Global Supply Chain Capability.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;We believe our network of
foundries, fabrication and distribution facilities located near major surface mining regions around the globe allows us to manufacture GET and other products for specific local markets and locate
inventory close to customers wherever they operate, which allows us to enhance our logistical capabilities.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2><I>Cross-Selling.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;Once we've established a customer
relationship, the combination of our extensive product portfolio with our local supply and service distribution channel near customer locations enables us to cross-sell other products and
solutions for a diverse array of customer needs. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Management Team and Organizational Capability  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our executive officers have an average of over 20&nbsp;years of experience in our business. Over the last 20&nbsp;years, our team
has grown ESCO from a company with operations only in North America and Western Europe to a global business with operations in 19 countries on six continents and a broad, diverse and growing product
portfolio. Our operations across the world are managed by regional executives and operated by local personnel following standard policies and procedures. Our highly skilled team of engineers with
expertise in metallurgy, tribology, design engineering, and manufacturing processes helps us maintain our leading market position by improving the wear life and ease of use of our products. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Competitive Strategies  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are focused on the following strategic and operational initiatives. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Customer-Driven Innovation  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer-driven innovation is a critical aspect of our growth strategy, and has resulted in, as of April&nbsp;11, 2011, 45 U.S.
patents, with an average remaining life of approximately 11&nbsp;years, and 483 foreign patents worldwide (including foreign counterparts to our U.S. patents). Through ongoing contact with our
customers in the field, we will continue to develop close relationships that allow us to determine firsthand the new products and wear solutions our customers need. In many cases we are the first
point of contact when unique and challenging problems arise, even at remote customer locations. In addition, we employ a global Voice of the Customer program, through which we obtain a detailed
understanding of our customers' requirements and gain key inputs for </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>73</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>designing
new products and services. Through these relationships, we are able to solve our customers' problems using our design engineering, metallurgical and manufacturing expertise to create new
and, in many cases, proprietary products that can then be applied across multiple geographies. These products and services developed in close collaboration with customers can deliver greater value and
command higher prices, and are not easily displaced because of the risk of productivity loss and prohibitive switching costs. We continue to invest heavily in new product development. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Expand Our Global Presence  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will continue to grow our global operations by expanding alongside customers into key regions. In 2004 we had 6 manufacturing
facilities and 4 sales and distribution offices outside of North America. We now have a presence in nearly every major surface mining region around the globe with 13 manufacturing facilities and 20
sales and distribution offices outside of North America. This reflects our investment in establishing or expanding our presence in Australia, Brazil, China, Indonesia, South Africa, Peru and Russia as
each of these regions experiences significant growth in the mining and infrastructure development markets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
global expansion strategy is driven by our desire to serve the fastest growing mining and infrastructure development markets and to expand our direct sales channel. For example, we
entered China 12&nbsp;years ago through a joint venture company, Shanxi Changfeng Wearparts, or SCW, that we formed with Taiyuan Heavy Machinery Group in Taiyuan, China, to develop a local presence
in China's fast growing infrastructure development and mining market and a low-cost manufacturing base close to important customers in the Asia Pacific region. Having gained insight into
operating in China through SCW, in 2006 we built a wholly owned,
low-cost, state of the art foundry in China, which helps us serve our customers in that region. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Expand Direct Distribution, Selling a Broader Range of Products and Solutions  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We employ a diversified distribution model for product sales in the aftermarket that includes direct sales, a network of independent
dealers, licensees and OEMs.&nbsp;We focus on building a direct sales channel in markets where there is a high concentration of mining activity. Our direct sales channel allows us to manage how our
products are positioned with customers, provides us with significant opportunities to cross-sell products and solutions and positions us to capture incremental growth and profitability.
Our assessment of whether to build direct sales in a particular region is based on the ability of a dealer or licensee to serve customer requirements, potential profit margins and return on invested
capital and competitive dynamics. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will continue to expand and transition to direct sales distribution in some large mining regions especially in North America, Australia, Indonesia, South America and South Africa. We
have established direct sales channels in the Canadian oil sands, Wyoming Powder River Basin and Brazil. Additionally, we recently decided to pursue a direct sales channel in Australia and South
Africa, rather than renew licensing arrangements there. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Increase Our Installed Base  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In EPG, we will continue to pursue a "push/pull" strategy to increase first fitments of our branded products. Our product development
and engineering staff work closely with OEMs&nbsp;to develop products that match the requirements of their new machines. For example, when mining OEMs&nbsp;adopt our products as first fitment on
their buckets, our wear parts are typically used for the life of the bucket. This strong "push" for our parts creates a recurring sales stream as the end-user purchases our wear products
that are attached to our proprietary fitments on machines on an ongoing basis in the aftermarket. Our wear products are not easily displaced, as doing so would </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>74</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>require
significant investment in the installation of an alternative fitment, as well as lengthy downtime of critical equipment and lost productivity. In addition, our close customer relationships
have allowed us to provide products and solutions to address customers' critical problems,
increase productivity, reduce total cost of ownership and improve safety, creating a "pull" through demand for our products. Customers often request that OEMs&nbsp;deliver their new equipment fitted
with our products. We plan to use this combined push/pull dynamic to grow our installed base at the OEM level, providing us a solid base for long-term net sales growth. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
TTG, we are focused on strengthening our existing relationships with key OEMs&nbsp;in aerospace and IGT markets and with aerospace OEM revenue sharing partners. Our engineers work
closely with OEMs&nbsp;and revenue sharing partners to manufacture new and modified products that provide high turbine efficiencies and component performance. Our rapid product development process
aligns us closely with our customers to quickly bring new products to market. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Pursue Strategic Acquisitions  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 2005 we have acquired five companies to build our EPG business for an aggregate consideration of approximately
$100&nbsp;million. We plan to continue our successful identification, acquisition and integration of businesses that we believe will provide us with some or all of the following: foundry capacity in
strategic regions, proximity to key customers and enhanced distribution capabilities and complementary products or technologies. We will continue to focus on expanding our presence in the top mining
regions globally as well as emerging markets and low-cost regions where we expect to benefit from significant growth in the mining and infrastructure development markets and increasing
adoption of sophisticated machinery and operating practices. For example, our 2010 acquisitions of Swift Engineering and Austcast in Australia have provided foundry capacity, improved access to
customers and distribution and new, innovative products that can be distributed to customers in other geographies. We will continue to evaluate acquisitions based on synergy potential, return on
invested capital and earnings accretion. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Focus on Continuous Improvement and Lean Processes  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We focus on lean processes to drive continuous improvements in all aspects of our business. Our lean system, which we refer to as QVS,
or "Quality, Value and Speed", has allowed us to improve process cycle times, increase quality and customer service and reduce capital requirements, including working capital and capital deployed to
increase foundry tonnage. By continually improving productivity and our cost structure, we have created a more nimble organization that can more rapidly respond to market and customer needs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe our enterprise-wide QVS initiative has improved our operating efficiency through standardized processes and increased accountability. In addition, QVS initiatives
have
allowed us to reduce manufacturing cycle times in some of our key foundries. For example, at one of our key foundries, we reduced cycle times by 39% from 2007 to 2010. In addition, we have improved
our net working capital as a percentage of net sales from 30% in 2000 to 21% in 2010. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
we continue to expand our global operations, we believe ample opportunities continue to exist to shorten product development cycles, enhance margins and improve customer service. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Our Segments  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Engineered Products Group  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG focuses primarily on wear products and solutions for global mining, infrastructure development and other challenging industrial
applications. EPG's longstanding presence in these markets has resulted in an extensive proprietary knowledge base, which we utilize to design, </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>75</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>engineer
and manufacture innovative proprietary products. We believe we are the global market leader in GET tooth systems used in surface mining and infrastructure development projects, with an
extensive offering of patented GET products. We believe we are well-positioned to maintain or improve our leading market position in these markets given the strength and breadth of our
product portfolio, proprietary technologies, strong brand, broad manufacturing presence, extensive distribution platform and long-term relationships with industry-leading customers. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
installed base of equipment that uses our wear parts has grown significantly in recent years&nbsp;&#151; we estimate our products are installed on approximately
one-third of the world's surface mining machines, including draglines, cable shovels, excavators and wheel loaders. We believe we are well-positioned to benefit from
aftermarket wear parts sales as growth in mining and infrastructure development in emerging markets outpaces global economic growth generally, and as the demand for mined commodities makes it
economical for our customers to extract lower grade ore, which typically requires greater use of wear parts. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
believe we are the leading provider of first fitment lip systems to mining OEMs&nbsp;for hydraulic excavators that serve as wear part carriers, which has allowed us to build a
significant installed base. Many of our lip systems and GET products include patented fit relationships and locking systems that require the use of our replacement wear parts, generating recurring
sales for us once our lip systems are installed. OEMs&nbsp;choose to install our systems because of the value our solutions bring to their machines and their customers. Compared to competing
products, we believe the advantages of our wear products that improve economics for our customers include superior wear life, increased productivity and performance and quick change times for
replacement parts. One of our U.S. mining customers, for example, estimated that switching to our SV2 tooth system from a competitor's product more than tripled productivity, from 45,000 tons per
tooth to 149,000 tons per tooth, and significantly reduced operating costs. There are high switching costs associated with retrofitting a machine after our wear part carriers and adapters have been
installed, which can include removal time and costs and decreased productivity and performance. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Operations and Manufacturing  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We own and operate 21 manufacturing facilities and 35 sales and distribution offices in 18 countries across six continents, with a
foundry near most of the major markets we serve. We use capital-intensive manufacturing equipment and specialized manufacturing processes in the casting, welding and assembly of our wear parts and
wear part carriers. Our diverse, efficient and experienced manufacturing operations are core to our global footprint with local presence. This global manufacturing platform allows us to leverage our
considerable resources and common manufacturing processes to provide products and solutions to our multinational clients wherever they operate. Local manufacturing presence near most of the world's
major mining regions provides us with significant operating benefits, including reduced transit times, lower shipping costs and improved feedback between manufacturing and wear parts technicians and
the customers they serve. On-site wear part expertise is a fundamental component of our service to our customers. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>76</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Many of our locations' quality management systems are ISO&nbsp;9001 certified. Our continuous improvement initiative allows us to improve process cycle times,
improve safety, increase quality and customer service, and reduce capital requirements, including working capital and capital deployed to increase foundry tonnage. The success of our continuous
improvement culture has shown itself through increased incremental capacity with minimal capital cost, shorter cycle times to better serve our customers' needs and a more nimble cost structure. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Products and Services  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG provides thousands of innovative and reliable wear products designed specifically to perform in the harsh environments where our
customers' machines operate. EPG sales over the past five years included over 25,000 SKUs. We provide an extensive offering of
GET, complete cast and plate lip systems and other wear parts for mining equipment and crushing applications. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
of mining products represented 63% of EPG net sales in 2010, infrastructure development products 30% and industrial products 7%. Mining, infrastructure development and industrial
wear parts represented approximately 80% of EPG's net sales in 2010; wear part carriers represented approximately 10%; and industrial and other components represented approximately 10%. Over 45% of
our EPG net sales in 2010 were from our patented products. </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Wear and replacement parts.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Most of EPG's net sales are from sales of consumable wear products, which we define as products
with a typical wear life
of less than one year. Wear cycles vary widely. The teeth on dredge cutterheads used to cut through hard rock, for example, can be replaced as often as every few hours. Consumable EPG wear parts
include the following: </FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2>GET<BR>
Tooth Systems<BR></FONT> <FONT SIZE=2>&nbsp;<BR></FONT> <FONT SIZE=2><B>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2> Used on most earth moving equipment primarily to improve bucket penetration for improved productivity and to protect the bucket lip for longer service life.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Excavators  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Cable shovels  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Draglines  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Wheel loaders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Skid steer loaders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Tractor loader backhoes  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $10 to $6,000</FONT></TD>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>GET<BR>
Cutting Edges<BR></FONT> <FONT SIZE=2>&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g200731.jpg" ALT="GRAPHIC" WIDTH="100" HEIGHT="82">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used to push earth, rock and snow and protect the moldboard of the machines.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Dozers  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Graders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Snow plows  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $50 to $1,250</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Crusher Wear Parts<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g964233.jpg" ALT="GRAPHIC" WIDTH="117" HEIGHT="73">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used to crush and size rock (aggregate) in quarry operations and to crush ore in mining operations.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Jaw crushers  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Gyratory crushers  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Cone crushers  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Impact crushers  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $1,600 to $32,000</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dragline Rigging<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g994955.jpg" ALT="GRAPHIC" WIDTH="127" HEIGHT="136">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used for hoisting and loading dragline buckets that are typically used in coal mining operations to remove overburden (rock and
dirt) to uncover coal seams.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Draglines  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $250 to $75,000</FONT></TD>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Universal Wear Solutions<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g236938.jpg" ALT="GRAPHIC" WIDTH="120" HEIGHT="144">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used to protect high wear areas in a variety of mining and infrastructure development applications.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Processing plants  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Cable shovels  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Draglines  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Excavators  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Wheel loaders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Dozers  </FONT><FONT SIZE=2> <p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;">
</FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Graders  </FONT><FONT SIZE=2> <p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT
SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Scrapers  </FONT><FONT SIZE=2> <p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT
SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Truck bodies  </FONT><FONT SIZE=2> <p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT
SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $10 to $850</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Scrap Recycling Hammers<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g467945.jpg" ALT="GRAPHIC" WIDTH="135" HEIGHT="117">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used to shred metal products during the recycling process.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Metal recycling machines  </FONT><FONT SIZE=2> <p
align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $200 to $1,350</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attachments and wear part carriers.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;EPG manufactures attachments and wear part carriers used in mining and infrastructure
development, including lip
systems, dragline buckets, cable shovel buckets, hydraulic excavator buckets and face shovels, wheel loader buckets, truck bodies </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>79</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<P style="font-family:arial;"><FONT SIZE=2>and
dredge cutterheads. These products typically have a wear life of five to 20&nbsp;years, with regular maintenance cycles to replace wear components. </FONT></P>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TD style="font-family:arial;"><FONT SIZE=2>Lip Systems<BR></FONT> <FONT SIZE=2>&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g446539.jpg" ALT="GRAPHIC" WIDTH="136" HEIGHT="58">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2> Installed on buckets that are used to excavate and move earth and cut through rock.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Excavators  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Wheel loaders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Cable shovels  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Draglines  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $5,000 to $350,000</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buckets<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g18521.jpg" ALT="GRAPHIC" WIDTH="136" HEIGHT="175">

</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used in construction sites, pipeline and other general construction, aggregate quarries and mining applications.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Excavators  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Cable shovels  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Wheel loaders  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Draglines  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $2,400 to $1,200,000</FONT></TD>
</TR>
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<TD style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:-0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dredge Cutterheads<BR></FONT> <FONT SIZE=2>&nbsp;&nbsp;<BR></FONT> <FONT SIZE=2><B>
<IMG SRC="g659212.jpg" ALT="GRAPHIC" WIDTH="135" HEIGHT="103">
 </B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:6pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2> Used to deepen ports and shipping lanes in hard rock dredging and sand and clay dredging operations.</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p align=left style="font-family:arial;margin-top:12pt;margin-left:20pt;text-indent:-20pt;"><FONT SIZE=2>  </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Dredger  </FONT><FONT SIZE=2> <p align=left
style="font-family:arial;margin-top:0pt;margin-left:20pt;text-indent:-20pt;"> </FONT><FONT SIZE=2>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2>Price ranges from $80,000 to $675,000</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial and other components and services.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;EPG manufactures and supplies a variety of industrial products and services
including castings for
locomotive engines and track work, offshore oil platform moorings, wire rope rigging, structural sockets, aircraft forming dies and conveying chain systems. EPG also provides services, including
specialty casting and bucket repair services. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Sales and Distribution  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We employ a diversified distribution model for EPG product sales in the aftermarket that includes direct sales, a network of
independent dealers, licensees and OEMs.&nbsp;In 2010, 36% of EPG's net sales were generated through our EPG global dealer distribution network, 48% sold directly to end customers and 16% to OEMs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
use a "push/pull" strategy to increase first fitments of EPG products globally. We work closely with OEMs&nbsp;to develop new products that meet evolving requirements. In addition,
our technical specialists and sales representatives work directly with the end-users of our products, and we use formal surveys to develop first-hand knowledge of users' needs.
As a result, OEMs&nbsp;often use our wear parts as first fitment on their capital equipment and customers often prefer our wear parts on the capital equipment they purchase. OEM adoption of our
products as first fitment on their capital equipment creates a "push" for our products, and customer requests for our products on the capital equipment create a "pull" for our products. Once our
products are installed on the </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>80</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>end-users'
equipment, end-users can access our global multi-channel distribution network to purchase wear parts and other replacement parts. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
authorized dealer and expanding direct supply and service network allow us to strategically expand our reach into new regional markets and establish close contact with key
customers. These distribution channels allow us to leverage our common manufacturing systems and business processes on a local distribution, sales and service network, which provides us with deep
customer relationships, opportunities to develop better solutions and a reputation as a local product solution specialist. We believe our global distribution, sales and service network is a
competitive advantage that strengthens our ability to benefit from strong positive trends in global resource demand, infrastructure development in emerging markets, as well as infrastructure
development projects in North America and Western Europe. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
licensees play a strategic role in maintaining relationships with regional customers, providing localized availability of parts and service, and work in partnership with us to serve
the needs of global customers. Our licensing relationships with manufacturers Compa&ntilde;&iacute;a Electro Metal&uacute;rgica&nbsp;S.A., in Chile, and Mitsubishi Steel
Mfg.&nbsp;Co.,&nbsp;Ltd., in Japan were established approximately 50&nbsp;years ago. Each of our licensees manufactures and sells a range of our products using our designs, patents, alloys,
manufacturing and metallurgical know-how and brand name, and pays us a royalty from sales. Through design and manufacturing controls and the use of standard gauging tools provided by us,
we assure interchangeability of wear parts to customers around the world. For example, a mining customer in Chile can, for its European OEM machine, obtain aftermarket wear parts from our Chilean
licensee to replace worn teeth on a lip system we built in the United States.
Our products' global interchangeability allows our customers to purchase reliable products directly from us, the OEMs&nbsp;we serve, our licensees and our authorized dealers. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
some regions, we have moved from licensee relationships to direct manufacture and sale. For example, we will not renew our license in Australia with Bradken Resources Pty&nbsp;Ltd.
when it expires on June&nbsp;30, 2011. In anticipation of the license termination, we have taken steps to expand our direct presence in the attractive Australian market. During 2010, we acquired
Swift Engineering, a provider of mining site services and fabrication in Australia with facilities in Mackay and Kingaroy, Queensland, and Austcast, with foundries in Northgate, Queensland and
Dunedin, New Zealand primarily serving the mining markets. The Swift acquisition also expanded our product offering through an innovative line of mining haul truck bodies. Beginning in 2010, we
introduced and expanded our direct supply and service capability in key Australian mining regions. The combination of these two acquisitions, the establishment of independent dealers and the
development and deployment of other resources position us to serve the Australian market with products and services when the license expires. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are also a partner in three joint ventures. We jointly own our Taiyuan, China manufacturing facility with a minority owner, Taiyuan Heavy Machinery Group. We also have a joint
venture with Elecmetal, our Chilean licensee, to build and operate a foundry in Chile to produce wear parts for the Chilean market and for our global distribution outside Chile. Finally, we have a
sales and distribution joint venture with ESS Holdings, Inc. to serve our oil sands customers in Fort McMurray, Alberta, Canada. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG
customers consist of OEMs&nbsp;and dealers of capital equipment in the mining, infrastructure development and industrial markets, as well as the end-users of that
capital equipment. Although EPG has large customers, including the 10 largest mining companies in the world, no single customer accounted for 10% or more of its net sales in any of the last five
years. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>81</FONT></P>

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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Competition  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG operates in the mining, infrastructure development and industrial wear parts markets. EPG competes on a variety of factors,
including equipment productivity, design and performance, technology, metallurgical expertise, reliability, customer relationships, delivery lead times and price. EPG's competitors range from some of
the world's largest multi-national equipment manufacturers to small single-product niche manufacturers. Competitors include Hensley Industries,&nbsp;Inc., a division of Komatsu,&nbsp;Ltd.;
Berkeley Forge&nbsp;&amp; Tool&nbsp;Inc.; Columbia Steel Castings; Metalogenia&nbsp;S.A.; CQMS Pty&nbsp;Ltd.; and Van Reenen Steel&nbsp;Ltd. When our licensee relationship with Bradken Resources
Pty&nbsp;Ltd. expires on June&nbsp;30, 2011, it may also compete with EPG. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
mining and infrastructure development wear parts market has substantial barriers to entry. We believe that successful participation in the industry requires (i)&nbsp;extensive
experience in metallurgy, tribology and advanced manufacturing processes; (ii)&nbsp;a broad portfolio of products; (iii)&nbsp;significant capital expenditures to establish the necessary global
operations and the local distribution infrastructure; and (iv)&nbsp;brand recognition, which is generally promoted by a long-term track record of innovation, quality, client
relationships and an active installed base. We have developed these capabilities over a nearly 100-year history and believe we are well-positioned in the wear parts industry. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Turbine Technologies Group  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG operates in the aerospace and power generation markets. TTG serves customers that require superalloy precision investment castings
for gas turbines that generate power for cities and jet engines that keep airliners flying. Due to the highly complex nature of the investment casting process for turbine components and structures,
and the exacting standards required so that products can withstand intense heat and operating stresses, few manufacturers can compete in this space. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Operations and Manufacturing  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG's metallurgical castings include fine grain castings; equiaxed castings; directionally solidified ("DS") castings; and single
crystal ("SX") castings. TTG employs conventional casting processes to produce equiaxed castings, in which the metal grains are oriented randomly throughout the casting. A more advanced process
enables us to produce DS castings, in which the metal grains are aligned longitudinally. This alignment decreases the internal stress on the weakest portion of a metal part where the various grains
adjoin, thereby providing increased strength and improved efficiencies in engine performance over equiaxed parts. An even more advanced process enables us to produce SX castings, which consist of one
large superalloy crystal without grain boundaries. SX castings provide greater strength and performance characteristics than either equiaxed or DS castings, as well as longer engine life. We believe
our ability to manufacture a broad range of part sizes and configurations, using DS/SX and equiax manufacturing processes, makes TTG one of the few investment castings suppliers to the aerospace and
IGT markets capable of meeting a wide range of customer needs with facilities in the United States, Mexico and Europe. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><I> Products and Services  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG's aerospace offerings include blades, vanes and complex structural parts used in commercial and military aircraft engines. In
2010, approximately 71% of our aerospace engine component net sales were from products for commercial usage. Over 55% of our aerospace engine products net sales in 2010 were from products used in the
"hot gas path" of aircraft turbines and, </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>82</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>as
a result, are considered replacement parts, while the balance are high-specification structural castings typically associated with new engine builds. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
power generation products are similar to the products we produce for aerospace engines, but are much larger. While a vane casting for an aircraft engine may weigh as little as 0.5
pounds, a vane casting for a large IGT turbine can weigh as much as 200 pounds. In the power generation market, TTG produces a range of "hot gas path" components, including blades, vanes and
multi-vanes. Over 90% of our IGT net sales in 2010 were from products used in the "hot gas path" of turbines and, as a result, are considered replacement parts. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG
is also an important supplier of superalloy precision investment castings sold to the locomotive and marine turbocharger markets, and participates in other niche industrial markets.
In addition, TTG provides and manages post-cast value-added processes such as precision machining, grinding and stem drilling. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG
produces complex superalloy castings used in civil and military aircraft engines and IGT at facilities in the United States, Mexico and Europe. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Sales and Distribution  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG's core customers are IGT OEMs&nbsp;and MRO replacement part providers, and aerospace engine manufacturers and their revenue
share partners. All sales are generated through our highly technical direct sales force. Due to the sophisticated nature of the TTG products, sales efforts require both sales and engineering personnel
to work closely with customers to identify and assist in the development of new and modified products. TTG customers frequently visit manufacturing sites to work with TTG product and process engineers
in developing
new programs or to audit quality systems and production capabilities. Our sales staff works with our customers to identify and develop growth opportunities that will develop over three to five years
with our strategic customers. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> Competition  </I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG's largest competitors by sales are Precision Castparts Corp., Howmet Corporation, a wholly owned subsidiary of Alcoa&nbsp;Inc.,
and Doncasters Group Limited. TTG typically focuses on niche opportunities with its aerospace and IGT customers while its three largest competitors typically focus on the highest volume and highest
technology opportunities. TTG also has numerous smaller competitors. TTG can produce metallurgical structures ranging from equiax to fine grain to DS/SX and can manufacture small simple blades to
large complex cored IGT blades, large IGT multi-vanes and medium-size aero engine structural components. As a result, other than TTG's three largest competitors, to our knowledge, none of
the other superalloy investment casting suppliers have the range of technical, metallurgical and manufacturing capabilities offered by TTG combined with its manufacturing footprint in the United
States and Europe, including lower-cost sites in Mexico and Slovakia. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>83</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B> Principal Properties  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table lists our principal properties, the segment that uses each property and related information. </FONT></P>
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<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:71pt;"><FONT SIZE=2><B>Owned/Leased

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<TD style="font-family:arial;"><FONT SIZE=2>Portland, OR, USA:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Headquarters</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Executive Offices</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Main Plant</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry/EPG HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Portland Plant 3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=2>Newton, MS, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>Covington, KY, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Fabrication</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Phoenix, AZ, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Fabrication</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>Bucyrus, OH, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Blade production</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Nisku, Alberta, Canada</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Port Hope, Ontario, Canada</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Port Coquitlam, BC, Canada</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>Edmonton, Alberta, Canada</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Casting overlays</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Steinbach, Manitoba, Canada</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Blade production</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Altacomulco, Mexico</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Blade production</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
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<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Guisborough, England, UK</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
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<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Brisbane, Queensland, Australia</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Asia Pacific HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Kingaroy, Queensland, Australia</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Fabrication</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Mackay, Queensland, Australia</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Fabrication</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Northgate, Queensland, Australia</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Dunedin, New Zealand</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>Taiyuan, Peoples' Republic of China</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Xuzhou, Peoples' Republic of China</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Land&nbsp;&#151; Leased<BR>
Building&nbsp;&#151; Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Frameries, Belgium</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Distribution/Europe HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Betim, Minas Gerais, Brazil</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>EPG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Fabrication/Latin America HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Chittenango, NY, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry/TTG HQ</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Eastlake, OH, USA</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Guaymas, Mexico</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Leased</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Herstal, Belgium</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>TTG</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>Povaszska Bystrica, Slovak Republic</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>TTG</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>Foundry</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>Owned</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Research and Development  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A core team of our product engineers works to improve the value of our products to customers, focusing on features such as ease of
use, installation and removal, safety, reliability, productivity and increased wear life in field applications. Often, these engineers work directly with customers and end-users in the
field to gain a first-hand understanding of wear and productivity improvement opportunities. Before field testing any new designs, our engineers analyze product prototypes using
computer-aided design technology and rapid prototype systems for design, pre-manufacture and field testing processes. Much of this work is not reflected in research and development in our
financial statements, which includes only new product development and applied research expenses. Our research and development costs in 2010 were $5.9&nbsp;million. Not included in that amount are
product optimization expenses, annual new pattern spending, manufacturing development and trial lot expenses, which are allocated to the cost of goods sold and selling and administrative expenses. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>84</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ea79101_1_85"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Intellectual Property  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We often seek U.S. and foreign patent protection on innovations in our EPG business. As of April&nbsp;11, 2011, we held 45 U.S.
patents, with an average remaining life of approximately 11&nbsp;years, and 18 U.S. patent applications. Worldwide, including the United States, we held 528 patents and had 533 patent applications,
which includes foreign counterparts to our U.S. patents and patent applications, as of the same date. We have federal registrations for many of our trademarks in the United States and other foreign
jurisdictions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
also have entered into exclusive licensing arrangements in certain jurisdictions pursuant to which licensees may use our intellectual property in the manufacture and sale of products
in those jurisdictions. We receive royalties for licensees' use of our intellectual property, but they are not otherwise permitted to exploit our intellectual property during the terms of the license
agreements. See "Business&nbsp;&#151; Our Segments&nbsp;&#151; Engineered Products Group&nbsp;&#151; Sales and Distribution". </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Employees  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2010, we had 4,679 employees, consisting of 3,633 employees in EPG and corporate and 1,046 employees in TTG.
As of December&nbsp;31, 2010, unions or workers counsels represented 116 employees in Belgium, 349 employees in Brazil, 292 employees in Canada and 311 employees in China. In addition, we estimate
unions represented 50 employees in Australia and New Zealand as of December&nbsp;31, 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Backlog  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Backlog in EPG is composed of bookings derived from orders received from our customers. Most EPG orders are not cancellable, and when
we allow cancellations we typically charge a restocking fee. We believe EPG backlog is useful to project sales for two to four months, but does not provide a reliable long-term forecast of
sales. In addition, EPG backlog can be affected by changes to customer lead-times and our ability to meet production demands, which can limit the usefulness of backlog as a projection of
sales even in the short term. EPG backlog at March&nbsp;31, 2011 reflects longer lead-times resulting from increased mining activity and approximately $40.0&nbsp;million contributed by
Swift and Austcast in Australia, which we acquired in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Backlog
in TTG is composed of orders received under long-term agreements or purchase orders. TTG orders are cancellable with the customer typically obligated to pay for any
costs incurred by us on the associated orders. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
backlog of unfilled orders believed to be firm at March&nbsp;31, 2011, compared to the prior year, is listed below. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="97pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="97pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:106pt;"><FONT SIZE=2><B>(dollars in thousands)

<!-- COMMAND=ADD_SCROPPEDRULE,106pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:71pt;"><FONT SIZE=2><B>March&nbsp;31, 2010

<!-- COMMAND=ADD_SCROPPEDRULE,71pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:71pt;"><FONT SIZE=2><B>March&nbsp;31, 2011

<!-- COMMAND=ADD_SCROPPEDRULE,71pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Total</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>218,747</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>350,506</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B><I>EPG</I></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>123,211</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>253,232</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mining</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>67,694</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>163,090</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Infrastructure development</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>41,982</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>68,951</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Industrial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,535</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,191</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT SIZE=2><B><I>TTG</I></B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>95,536</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>97,274</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Raw Materials and Suppliers  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We purchase plate and scrap steel, alloys such as nickel, cobalt, molybdenum, tantalum and titanium and other materials from numerous
suppliers with no single source being dominant. Each of our EPG and TTG businesses secures raw materials through its own purchasing function, where </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>85</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>the
quality, availability, pricing and service from potential vendors is assessed. We generally seek to pass raw material cost increases to our customers through EPG product price increases and
through surcharges or escalator provisions in our long-term agreements with TTG customers. Historically, there is a delay of several months between raw material cost increases and our
realization of price increases. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Government Regulation  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some of our products are manufactured and sold under U.S. government contracts or subcontracts. Consequently, we are directly and
indirectly subject to various U.S. federal rules, regulations and orders applicable to government contractors. Violation of applicable government rules and regulations could result in civil liability,
cancellation or suspension of existing contracts or ineligibility for future contracts or subcontracts funded in whole or in part with federal funds. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Internationally,
we are subject to U.S. government laws and regulations, local government laws and regulations, and procurement policies and practices (including laws and regulations
relating to bribery of foreign government officials, import-export control, investments, exchange controls and repatriation of earnings) and varying currency, political and economic risks. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Environmental Matters  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to federal, state, local, provincial, regional and foreign environmental laws and regulations concerning, among other
things, ground water discharges, air emissions, waste management, toxic use reduction and environmental clean-up.
Environmental laws and regulations continue to evolve. As a result, it is likely we will be subject to increasingly stringent environmental standards in the future, particularly with respect to air
and water quality, and we may be required to make additional expenditures, which could be significant, relating to environmental matters on an ongoing basis. If we violate or fail to comply with these
laws and regulations, we could be fined or otherwise sanctioned by regulators. These environmental laws also require us to obtain permits for some of our operations from governmental authorities.
These authorities can deny, modify or revoke our permits and can enforce compliance through fines and injunctions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
could also be held liable for any consequences arising out of human exposure to hazardous materials or other environmental damage. We own, lease and operate properties, and have
owned, leased and operated properties, or conduct or have conducted operations at properties, where hazardous materials have been used for many years, including during periods before management
standards for these materials were required or generally believed to be necessary. Consequently, we are subject to environmental laws that impose liability for historical releases of hazardous
materials. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See
"Legal Proceedings&nbsp;&#151; Portland Harbor Superfund Site" below and "Risk Factors&nbsp;&#151; We are subject to environmental laws, and any violation of,
litigation relating to or liabilities under these laws could adversely affect us" above for a discussion of our potential liability with respect to the Portland Harbor Superfund site and "Risk
Factors&nbsp;&#151; Regulatory effects of climate change could adversely affect our business" for more details. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2010, we committed to remove an accumulation of solid waste at our Port Hope, Ontario plant. We estimate the removal will cost $2.6&nbsp;million and we plan to perform this removal
within five years. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
financial statements include reserves for estimated costs for resolving claims that have been asserted with respect to environmental issues relating to our properties and
operations. At December&nbsp;31, 2010, we had accrued aggregate environmental reserves of approximately </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>86</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>$3.1&nbsp;million.
Our actual future expenditures, however, relating to compliance matters and clean-up of environmental conditions cannot be conclusively determined. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Legal Proceedings  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to claims and litigation arising in the ordinary course of business, including those relating to exposure to hazardous
materials, and regularly assert our patent rights against parties that may be infringing those rights. Although we cannot predict the final outcome of pending legal proceedings with certainty, we do
not expect the ultimate disposition of these matters will have a material adverse effect on our financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Bradken Resources Pty&nbsp;Ltd.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2008, we began an arbitration proceeding against our Australian licensee, Bradken Resources Pty&nbsp;Ltd. In the
arbitration, we sought a declaration of our rights and obligations under our 1999 agreement, as amended, with Bradken, under which we granted Bradken the exclusive right to distribute and manufacture
some of our products in Australia, New Zealand and Papua New Guinea. In the arbitration, we sought to resolve disputes regarding (i)&nbsp;whether Bradken was obliged to use our trademarks in
connection with the manufacture and sale of our products, (ii)&nbsp;whether Bradken could use customer field trials to promote its competing products, (iii)&nbsp;whether the agreement's
prohibition on Bradken selling products similar to or in competition with our products was enforceable and (iv)&nbsp;whether the agreement's prohibition on Bradken from using our
know-how, product designs and special alloys for a three-year period following termination of our agreement with Bradken was enforceable. In addition, we sought termination of
the agreement prior to its scheduled expiration on June&nbsp;30, 2011. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bradken
filed counterclaims against us alleging, among other things, that we (i)&nbsp;violated U.S. antitrust laws, (ii)&nbsp;breached the agreement with Bradken and
(iii)&nbsp;misused certain patent rights, and seeking a large damage award. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June&nbsp;17, 2010, an International Chamber of Commerce arbitrator issued a final award in our favor on all issues presented to the arbitrator with the exception of our request
that the agreement be terminated before June&nbsp;30, 2011. Bradken was awarded nothing. The arbitrator affirmed our contract positions, including that Bradken must continue to apply our trademarks
as we direct during the term of the license, Bradken cannot sell parts that compete with our licensed products anywhere in the world during the term of the license, and Bradken cannot use our
know-how or alloys nor make any of our patented or non-patented products for a period of three years after the end of the license. Finally, the arbitrator awarded us our share
of the ICC administrative expenses and arbitrator's remuneration and substantially all of our legal expenses. In the proceeding we began in United States District Court to confirm the final
award and secure a judgment so that we may collect the amount awarded to us, Bradken has challenged the award of legal expenses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Portland Harbor Superfund Site  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We received a questionnaire dated March&nbsp;12, 2010 from the EPA regarding historical operational practices in connection with the
Portland Harbor Superfund site. The EPA also named us as one of more than 100 businesses to date that are potentially responsible parties for this site. Consequently, we may be responsible for
clean-up or other costs related to the site under the Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or the Superfund law. The current
aggregate clean-up costs to be allocated among responsible parties is estimated to be approximately $1.0&nbsp;billion. We have entered into a participation agreement with a group of
named potentially responsible parties and other companies under which </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>87</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>we
admit to no liability. The agreement provides a framework to determine how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party
to pay its portion of assessed costs may result in increased costs to other parties. We are also participating in a process with other potentially responsible parties to quantify and potentially
allocate natural resource damages claims with respect to the site. We cannot predict our ultimate liability with respect to the Portland Harbor Superfund Site at this time, but it could be substantial
if the EPA determines that we are a responsible party for this site. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>88</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  MANAGEMENT    <BR>    </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Directors and Executive Officers  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table is a list of our executive officers, key employees and directors (ages are as of March&nbsp;31, 2011). </FONT></P>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:39pt;"><FONT SIZE=2><B>Position


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 </B></FONT></DIV></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Steven D. Pratt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>64</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Chief Executive Officer and Chairman of the Board of Directors</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>52</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>President and Chief Operating Officer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Ray Verlinich</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Vice President&nbsp;&#151; Finance and Chief Financial Officer</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Gene K. Huey</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>62</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Vice President and Treasurer</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Nicholas L. Blauwiekel</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Vice President of Human Resources</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Kevin S. Thomas</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>37</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Vice President, General Counsel and Corporate Secretary</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Fran&ccedil;ois Baril</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>45</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>President, Turbine Technologies Group</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>F. Patrick Fonner</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>61</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Group Vice President, Engineered Products Group</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Peter F. Adams</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>67</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Frank Alvarez</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>65</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Stephen E. Babson</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>60</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Peter F. Bechen</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>63</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Frank Jungers</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>84</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Henry T. Swigert</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>80</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>Robert C. Warren, Jr.&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>62</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>John W. Wood, Jr.&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>67</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Steven D. Pratt</B></FONT><FONT SIZE=2> is our Chief Executive Officer and Chairman of the ESCO board of directors. Mr.&nbsp;Pratt has been employed with us
for his entire career, beginning in 1972. His 39&nbsp;years of service includes plant management roles, President of the Engineered Products Group, and Executive Vice President and Chief Operating
Officer. He became President and Chief Executive Officer in 1995 and Chairman of the board of directors in 2003, and has been a member of our board of directors since 1993. Mr.&nbsp;Pratt is a
director of Stimson Lumber Company,&nbsp;Inc., where he serves as chairman of the compensation committee and as a member of the nominating and governance committee and the executive committee. Our
board of directors believes Mr.&nbsp;Pratt's long history with the company, extensive experience in our industry and business knowledge enable him to provide meaningful input and guidance to the
board. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Calvin W. Collins</B></FONT><FONT SIZE=2> is our President and Chief Operating Officer and he continues to serve as President of our Engineered Products Group, a
position he has held since September 2009. Mr.&nbsp;Collins joined us in November 2000 as Assistant General Counsel. In October 2001, he became Vice President, General Counsel and Corporate
Secretary. In 2003, he became Vice President of Administration with responsibilities for human resources, tax and risk management. In his role as Vice President of Administration, General Counsel and
Corporate Secretary, he was involved in our significant financing, acquisition and divestiture transactions and our corporate strategy. Mr.&nbsp;Collins was named Group Vice
President&nbsp;&#151; Engineered Products, North American Operations in April 2007 and in September 2009 he was named President&nbsp;&#151; Engineered Products. In January 2011, he
was named the Company's President and Chief Operating Officer. Before joining us, Mr.&nbsp;Collins was an attorney in private practice focusing on general business and corporate matters. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Ray Verlinich</B></FONT><FONT SIZE=2> was appointed Vice President&nbsp;&#151; Finance and Chief Financial Officer in April 2011. Mr.&nbsp;Verlinich
joined us in February 1996, beginning as Finance Director and Finance Project Manager for our global Oracle ERP implementation. He became Corporate Controller in July 1997, Assistant Treasurer in May
2010 and Vice President, Finance in February 2011. In those roles, he had responsibility for global tax and treasury management. Before joining us Mr.&nbsp;Verlinich served in </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>89</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>various
financial management positions, including expatriate assignments at PPG Industries Inc, a coatings and specialty products supplier. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Gene K. Huey</B></FONT><FONT SIZE=2> began his career with us in 1970 and held a series of positions that included responsibilities for financial accounting,
taxes, administration services, information systems, treasury, and financial analysis and planning. Mr.&nbsp;Huey has been involved in our strategic planning and our significant financing,
acquisition and divestiture transactions. He served as Chief Financial Officer from 1984 until his resignation from that position in April 2011 and now serves as our Vice President and Treasurer.
Mr.&nbsp;Huey expects to retire in December 2011. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Nicholas L. Blauwiekel</B></FONT><FONT SIZE=2> was appointed Vice President of Human Resources in June 2005. Mr.&nbsp;Blauwiekel has over 30&nbsp;years of
human resources experience. Prior to joining us, Mr.&nbsp;Blauwiekel worked for Ingersoll Rand as the vice president of human resources for the infrastructure sector and for Teledyne Technologies
Incorporated and Shiloh Industries,&nbsp;Inc. as a senior human resources executive. He also worked for Cooper Industries,&nbsp;Inc. in a senior human resources role. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Kevin S. Thomas</B></FONT><FONT SIZE=2> joined us in February 2003 as corporate counsel. In April 2007, he was named General Counsel and Corporate Secretary. In
May 2009, he also became a Vice President. Mr.&nbsp;Thomas oversees our legal affairs, as well as fulfilling additional responsibilities and obligations as assigned by our board of directors. Before
joining us, Mr.&nbsp;Thomas was in private practice focusing on mergers, acquisitions and public and private securities offerings. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Fran&ccedil;ois Baril</B></FONT><FONT SIZE=2> joined us in February 1997, beginning as District Manager for our Industrial Casting Division. He also
served as Business Unit Leader for the Industrial Casting Division, Site Manager for ESCO&nbsp;Ltd. in Port Hope, Ontario, and Managing Director for ESCO Engineered Products Europe. In October 2005,
Mr.&nbsp;Baril was named Vice President of ESCO Turbine Technologies Group and in January 2007, he was promoted to President of the Group. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>F. Patrick Fonner</B></FONT><FONT SIZE=2> joined us in June 1976 and held sales positions throughout the United States in the early years of his tenure.
Mr.&nbsp;Fonner has served as General Manager for a variety of our products and markets, including expendables, attachments, sales, marketing and product development. Mr.&nbsp;Fonner also served
as General Manager of our construction business unit from
June 2000 through December 2004. He became Group Vice President, Engineered Product Group in January 2005. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Peter F. Adams</B></FONT><FONT SIZE=2> became a director in 1983. Mr.&nbsp;Adams is the president and an owner of Farmington Landfill&nbsp;Inc., a quarry
reclamation and construction materials recycling company. As a private investor, Mr.&nbsp;Adams is an owner of companies in a variety of fields, including wine-grape growing and vineyard
management, wine production and marketing, and emergency vehicle manufacturing. Mr.&nbsp;Adams is also a director of several private companies. Our board of directors believes Mr.&nbsp;Adams'
experience as a director and executive of diverse corporations enables him to provide meaningful input and guidance to the board and our management. Upon Henry T. Swigert's death or resignation as
trustee, Mr.&nbsp;Adams and Robert C. Warren, Jr. will become co-trustees of the Swigert 2000 Trust. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Frank Alvarez</B></FONT><FONT SIZE=2> became a director in 2001. Mr.&nbsp;Alvarez joined Intel Corporation in 1979 and served as Vice President of the
Technology and Manufacturing Group until his retirement in 2000. Our board of directors believes Mr.&nbsp;Alvarez's experience in the semiconductor manufacturing industry provides valuable expertise
to the board and his extensive experience in a capital-intensive global industry enables him to make important contributions to our growth strategy. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Stephen E. Babson</B></FONT><FONT SIZE=2> became a director in 2003 and is chairman of the nominating and governance committee of the board of directors.
Mr.&nbsp;Babson is a managing director of Endeavour Capital, a private equity firm in the Pacific Northwest. Before joining Endeavour Capital, Mr.&nbsp;Babson was a partner focusing on mergers,
acquisitions and public and private securities offerings and the chairman of Stoel Rives&nbsp;LLP. He also serves on the boards of Columbia Sportswear Company, New </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>90</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>Seasons
Market&nbsp;LLC, Bristol Farms&nbsp;LLC, Northland Transportation Company, Tidewater Holdings,&nbsp;Inc., Columbus Foods,&nbsp;LLC, Little Red Services&nbsp;Inc. and National Frozen
Foods Corporation. Our board of directors believes that Mr.&nbsp;Babson's experience in mergers and acquisitions and with private equity matters and his role as an investment professional provide
important insight for our growth strategy. His significant financial expertise and experience contribute to our board of directors' understanding and ability to analyze complex issues. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Peter F. Bechen</B></FONT><FONT SIZE=2> became a director in 2000 and is chairman of the audit committee of the board of directors. Mr.&nbsp;Bechen has served
as the president and chief executive officer of Pacific Realty Associates since 1983 and was president of its predecessor from 1975 until 1983. Mr.&nbsp;Bechen has served as a director of Capmark
Financial Group&nbsp;Inc. since March 2006 and is a member of the Industrial and Office Park Development Council of the Urban Land Institute. Our board of directors believes Mr.&nbsp;Bechen's
experience as a chief executive officer enables him to provide meaningful advice and guidance to management and the board. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Frank Jungers</B></FONT><FONT SIZE=2> became a director in 1984 and is chairman of the compensation committee of the board of directors. Mr.&nbsp;Jungers
retired as Chief Executive Officer and Chairman of Arabian American Oil Company (ARAMCO) in 1978. Mr.&nbsp;Jungers has been an independent investor, consultant and director since that time.
Mr.&nbsp;Jungers serves on the board of directors for Vero Corporation and Pacific Star Communications and served as a director of Horizon Lines,&nbsp;Inc. until 2008. He is also a trustee of the
board of trustees of Oregon Health and Science University Foundation. Our board of directors believes that Mr.&nbsp;Jungers' extensive executive experience in a large international company positions
him to advise management and the board on a wide range of strategic and financial matters. Mr.&nbsp;Jungers' knowledge of our business and its operations, gained through serving on our board of
directors for more than 25&nbsp;years, enables him to provide valuable guidance to management and the board. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Henry T. Swigert</B></FONT><FONT SIZE=2> became a director in 1958. He began working at ESCO in 1955 as a molder's helper and later moved on to be a sales
representative before being promoted to Vice President of Finance. Mr.&nbsp;Swigert served as Chairman of the board from 1979 until 2003 when he retired. Mr.&nbsp;Swigert has been a member of our
board of directors for over 50&nbsp;years and is familiar with our business and strategy. Mr.&nbsp;Swigert is the uncle of Robert C. Warren, Jr., a director. Our board of directors believes that
Mr.&nbsp;Swigert's extensive experience and knowledge of our business allow him to provide valuable guidance to the board. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Robert C. Warren, Jr.</B></FONT><FONT SIZE=2> became a director in 1986. Mr.&nbsp;Warren is the president and chief executive officer of Cascade Corporation, a
manufacturer of material handling equipment for lift trucks, where he has worked for more than 35&nbsp;years. Prior to that, Mr.&nbsp;Warren was Vice President-Marketing at Cascade Corporation.
Mr.&nbsp;Warren is also a member of the board of directors of Cascade Corporation. Mr.&nbsp;Warren is the nephew of Henry T. Swigert, a director. Our board of directors believes that
Mr.&nbsp;Warren's experience as the chief executive officer of a publicly traded corporation enables him to provide meaningful input and guidance to the board. Upon Henry T. Swigert's death or
resignation as trustee, Peter F. Adams and Mr.&nbsp;Warren will become co-trustees of the Swigert 2000 Trust. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>John W. Wood, Jr.</B></FONT><FONT SIZE=2> became a director in 2001. Mr.&nbsp;Wood was formerly the president and chief executive officer of Analogic
Corporation, a maker of medical imaging and airport security products, from 2003 to 2006. Prior to joining Analogic Corporation, Mr.&nbsp;Wood held senior executive positions over a
22-year career at Thermo Electron Corporation. Mr.&nbsp;Wood served as president of Peek&nbsp;Ltd., a division of Thermo Electron Corporation, and as a senior vice president of the
parent company. He previously served as president and chief executive officer of Thermedics, a subsidiary of Thermo Electron Corporation. Mr.&nbsp;Wood is a member of the board of directors of
American Semiconductor Corporation, a provider of electric power infrastructure, and FLIR Systems,&nbsp;Inc., a provider of thermal imaging equipment. Our board of directors believes that
Mr.&nbsp;Wood's experience as a </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>91</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>director
and executive of large, diverse corporations enables him to provide meaningful input and guidance to the board and our management. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Composition of the Board of Directors  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors consists of nine members. After completion of the offering made by this prospectus, our articles of
incorporation will provide that directors will be elected by the Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock, voting together as a single class. Our
board of directors has determined, after taking into consideration each director's direct and indirect relationships,
that&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of our directors will qualify as "independent" under NASDAQ
rules and regulations. Our bylaws permit our board of directors to establish by resolution the authorized number of directors; and 10 directors are authorized. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
completion of the offering made by this prospectus, our articles of incorporation will provide that our board of directors is divided into three classes with staggered
three-year terms. Only one class of directors will be elected at each annual meeting of shareholders, with the other classes continuing for the remainder of their three-year
terms. Our directors will be divided among the three classes as follows: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the Class&nbsp;1 directors will be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and their terms will expire at
the annual meeting of shareholders in 2012;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the Class&nbsp;2 directors will
be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and their terms will expire at
the annual meeting of shareholders in 2013; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the Class&nbsp;3 directors will
be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, and their terms will expire at
the annual meeting of shareholders in 2014. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that each class will be as nearly equal in number of
directors as possible. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Committees of the Board of Directors  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has an audit committee, a compensation committee and a nominating and governance committee, each of which has
the composition and responsibilities described below. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Audit Committee  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our audit committee is composed of Messrs.&nbsp;Bechen, Adams, Babson and Swigert. Our board of directors has determined that each
of Messrs.&nbsp;Bechen, Adams and Babson is an "independent" director according to the rules and regulations of the SEC and of NASDAQ. Our board of directors has also determined that each of these
directors is financially literate as required by the rules and regulations of NASDAQ and that Mr.&nbsp;Bechen is an audit committee "financial expert" as defined by SEC rules. Mr.&nbsp;Bechen is
the chairman of our audit committee. The audit committee operates under a written charter that satisfies the applicable SEC and NASDAQ standards. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
audit committee is responsible for, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed
by our independent auditors;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>evaluating the qualifications, performance and independence of our independent auditors;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they
relate to financial statements or accounting matters; and </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>92</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>reviewing the adequacy and effectiveness of our internal control policies and procedures. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Compensation Committee  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our compensation committee is composed of Messrs.&nbsp;Jungers, Alvarez, Warren and Wood. Our board of directors has determined that
each of these directors is an "independent" director according to the rules and regulations of NASDAQ, a "non-employee director" as defined under the Securities Exchange Act of 1934, and
an "outside director" as defined in Internal Revenue Code regulations. Mr.&nbsp;Jungers is the chairman of our compensation committee. The compensation committee is responsible for, among other
things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>reviewing and recommending our chief executive officer's annual base salary and annual incentive bonus, including the
specific goals and amount, equity compensation, employment agreements, severance arrangements and change in control agreements/provisions, and any other benefits, compensation or arrangements; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>reviewing and approving our other executive officers' annual base salaries and annual incentive bonuses, including the
specific goals and amount, equity compensation, employment agreements, severance arrangements and change in control agreements/provisions, and any other benefits, compensation or arrangements; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>evaluating and recommending to the board incentive compensation plans; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>administering, reviewing and making recommendations with respect to our incentive compensation plans. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Nominating and Governance Committee  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our nominating and governance committee is composed of Messrs.&nbsp;Babson, Bechen and Wood. Our board of directors has determined
that each of these directors is an "independent" director according to the rules and regulations of the SEC and of NASDAQ. Mr.&nbsp;Babson is the chairman of our nominating and governance committee.
The nominating and governance committee is responsible for, among other things: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>assisting the board in identifying prospective director nominees and recommending to the board director nominees for each
annual meeting of shareholders;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>developing and recommending to the board governance principles applicable to us;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>overseeing the evaluation of the board of directors and management;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>recommending members for each board committee; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>reviewing and making recommendations with respect to related-person transactions. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B> Compensation Committee Interlocks and Insider Participation  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of the members of our compensation committee are, or have been at any time during the past year, our officers or employees. None
of our executive officers serve, or in the past year have served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our
board of directors or compensation committee. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Code of Business Conduct  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have adopted a code of business conduct that applies to all of our employees, officers and directors, including those officers
responsible for financial reporting. The code of business conduct and ethics will be available on our website at </FONT><FONT SIZE=2><I>www.escocorp.com</I></FONT><FONT SIZE=2> after we complete this
offering. We plan to disclose any amendments to the code, or any waivers of its requirements, on </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>93</FONT></P>

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<BR>

<P style="font-family:arial;"><FONT SIZE=2>our
website or in a filing with the SEC to the extent required by applicable SEC or NASDAQ standards. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Director Compensation  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-employee directors receive the following fees in cash: (i)&nbsp;an annual retainer of $30,000 for board service;
(ii)&nbsp;$1,500 for each board meeting attended; (iii)&nbsp;$1,000 for each committee meeting attended, except that the attendance fees for the chairs of the audit, compensation and nominating
and governance committees are $2,000 per meeting; and (iv)&nbsp;a $7,500 annual fee for service as chair of the audit committee and a $5,000 annual fee for service as chair of the compensation
committee and of the nominating and governance committee. In addition, each non-employee director who was a director on May&nbsp;8, 2010 received stock appreciation rights for 311 shares
of Legacy Class&nbsp;A Common Stock. For 2011, we expect directors will receive stock grants instead of stock appreciation rights. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
information in the following table reflects compensation we paid to non-employee directors for 2010: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="97pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TD WIDTH="111pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:74pt;"><FONT SIZE=2><B>Fees Earned or<BR>
Paid in Cash

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Peter F. Adams</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>40,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>101,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Frank Alvarez</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>37,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>98,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Stephen E. Babson</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>48,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>109,503</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Peter F. Bechen</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>56,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>117,503</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Frank Jungers</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>45,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>106,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Henry T. Swigert</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>39,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Robert C. Warren, Jr.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>37,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>98,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>John W. Wood, Jr.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>38,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>61,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>99,503</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Amounts
represent the grant date fair value of stock appreciation rights based on a value of $196.15 per share for stock appreciation rights granted on
May&nbsp;8, 2010 calculated using the Black-Scholes option pricing method. Assumptions made in determining this grant date fair value are disclosed in footnote 3 to the Summary Stock Compensation
Table below, except that the risk-free interest rate was 3.57%. Each non-employee director received stock appreciation rights for 311 shares with a base value of $438.55 per
share, representing the fair market value of a share of Legacy Class&nbsp;A Common Stock on the grant date as determined by the board of directors. The stock appreciation rights vest in full on
May&nbsp;8, 2013. The compensation committee approved amendments to the stock appreciation rights reflected in this table in March 2011 to provide for settlement in shares of Legacy Class&nbsp;A
Common Stock rather than cash to qualify the awards for equity accounting treatment. If the holders of the stock appreciation rights agree to the amendments, the amendments will be effective as of
March&nbsp;25, 2011. At December&nbsp;31, 2010, each non-employee director held outstanding stock appreciation rights with respect to 1,007 shares of Legacy Class&nbsp;A Common
Stock, including SARs granted in prior years at a weighted average base value of $238.97. </FONT></DD></DL>
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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ee79101_compensation_of_executive_officers"> </A>
<A NAME="toc_ee79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  COMPENSATION OF EXECUTIVE OFFICERS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Compensation Discussion and Analysis  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Compensation Discussion and Analysis presents information about the compensation of our executive officers, including the Chief
Executive Officer, the Chief Financial Officer in 2010 and the three other most highly compensated executive officers who were serving as executive officers on December&nbsp;31, 2010 as listed in
the Summary Compensation Table below (the "NEOs"). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Objectives and Elements of Our Executive Compensation Program  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our executive compensation program is designed to: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>provide incentives for our executive officers to achieve high levels of job performance and to enhance shareholder value;
and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>attract and retain key executives who are important to our long-term success. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
achieve these objectives, the compensation committee (the "Committee") selected the following elements to be included in the compensation program for our executive
officers: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>base salary;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>annual performance-based cash bonuses;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>long-term incentives in the form of stock appreciation rights and performance units; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>retirement plans, the ESOP, deferred compensation plans and perquisites. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
executive compensation program implements our performance objective by rewarding executive officers for achieving annual performance targets and long-term performance
targets and for long-term increases in the value of our stock. The program implements our retention objective by offering base pay, incentives and benefits that are competitive with those
provided to executive officers of companies with which we compete for executive talent. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Executive Compensation Process  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to authority delegated by the board of directors, the Committee develops our executive compensation policies and programs and
determines the compensation of each of our executive officers. In 2010, the board of directors determined the compensation of our Chief Executive Officer based on the Committee's recommendation. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee directly retains the services of a compensation consulting firm. The Committee retained Towers Watson in this capacity from 2006 through 2010. The compensation consulting
firm provides information and data to the Committee from its surveys, proprietary databases and other sources, which the Committee uses along with information provided by management and obtained from
other sources. For 2010, Towers Watson provided the Committee with survey data from the Watson Wyatt 2009/2010 Top Management Survey, the 2009 Mercer Executive Survey and the Watson Wyatt 2009/2010
Report on Long Term Incentives, Policies and Practices, as well as data on executive compensation from proxy statements for the following peer companies: Agco Corporation, Alamo Group&nbsp;Inc.,
Astec Industries&nbsp;Inc., Barnes Group&nbsp;Inc., Bucyrus International&nbsp;Inc., Cascade Corporation, Joy Global&nbsp;Inc., Kennametal&nbsp;Inc., Ladish&nbsp;Co.&nbsp;Inc., LMI
Aerospace&nbsp;Inc., Northwest Pipe Company, Precision Castparts Corp., Sifco Industries&nbsp;Inc., Triumph Group,&nbsp;Inc. and Woodward Governor Company. The Committee used these companies
because they are publicly held and similar to us in terms of markets served or business model. The Committee reviews the survey data and publicly reported information and results for our peer
companies to assist in its determination of individual compensation plans for our NEOs where applicable. Towers Watson did </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>95</FONT></P>

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<BR>

<P style="font-family:arial;"><FONT SIZE=2>not
make any recommendations to the Committee in 2010 regarding the form or amount of executive compensation. The Chief Executive Officer makes recommendations to the Committee regarding the
compensation of all executive officers other than himself and attended each Committee meeting in 2010 except for portions of meetings in which his compensation was discussed. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Direct Compensation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;For each executive officer, the Committee sets target total direct compensation consisting
of base salary and an annual
performance-based cash bonus. The Committee generally targets the total direct compensation to be at approximately the median of the total direct compensation for similarly situated executive officers
at the companies in the peer group and survey data, but it also takes into account the experience level and performance of each executive officer. In arriving at the median target, for those executive
officers for whom there are at least three comparable positions (including Messrs.&nbsp;Pratt, Huey, Collins and Fonner), the survey data is weighted at 75% and peer company data from proxy
statements is weighted at 25%, while for all other executives (including Mr.&nbsp;Huget) the survey data is weighted at 100%. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Base Salaries.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee generally targets base salaries to be near the median for comparable positions at the peer and
survey companies. The
Committee establishes base salaries for executive officers at various times during the year so that an executive officer's change in base salary is effective approximately one year after the executive
officer's prior change in base salary. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Committee recommended the 2010 base salary for the Chief Executive Officer following its review of Mr.&nbsp;Pratt's performance, the compensation information from the peer
companies and the survey data. The board established a base salary for Mr.&nbsp;Pratt for 2010 that represented a 3.9% increase above his prior base salary and was near the median of the combined
survey group and peer company data. Mr.&nbsp;Pratt was awarded this raise for his effort and performance during a difficult recessionary year. For the other executive officers, the Committee
established, taking into account compensation information for the peer companies and survey data and Mr.&nbsp;Pratt's recommendations, base salaries for 2010 that were near the median of the survey
and peer group companies. Salary increases for the other NEOs for 2010 were: 3.6% for Mr.&nbsp;Huey, 3.2% for Mr.&nbsp;Fonner and 0% for Messrs.&nbsp;Huget and Collins. Messrs.&nbsp;Huey and
Fonner were awarded raises on the same basis as for Mr.&nbsp;Pratt. Messrs.&nbsp;Huget and Collins were subject to a salary freeze initiated in 2009 that remained in effect for them throughout
2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance-Based Cash Bonuses.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;We use annual performance-based cash bonuses under our Annual Bonus Plan to motivate and
reward executive officers
for achieving corporate and operating unit annual performance targets (80% of the incentive) and individual objectives (20% of the incentive). The performance criteria applicable to each executive
differ based on the portion of our
operations for which the executive is responsible. Target bonus levels as a percentage of base salary are determined based on the executive's position. For there to be any payout under the Annual
Bonus Plan, performance under at least one financial measure must be at the threshold level or above, and bonuses are subject to a maximum amount. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
target Annual Bonus Plan payouts for 2010 as a percentage of salary were 85% for Mr.&nbsp;Pratt, 60% for Mr.&nbsp;Huget, 55% for Messrs.&nbsp;Huey and Collins and 50% for
Mr.&nbsp;Fonner. All bonus targets were set at approximately the median for comparable positions in the peer and survey companies. The financial objectives for Messrs.&nbsp;Pratt, Huget and Huey
were based on Company EBIT and Company Net Working Capital Turnover, each as defined in the table below, and for Messrs.&nbsp;Collins and Fonner were based on EPG EBIT and EPG Net Working Capital
Turnover, each as defined in the table below. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>96</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table indicates the performance level for each financial metric required to achieve payouts at the threshold, target and maximum levels. </FONT></P>
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<TD WIDTH="112pt" style="font-family:arial;"></TD>
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<TD WIDTH="112pt" style="font-family:arial;"></TD>
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<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:80pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Performance Criteria

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Weighting (% of target<BR>
bonus subject to<BR>
each criteria)(3)

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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Performance for 70%<BR>
Threshold Bonus<BR>
Payout

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 </B></FONT></DIV></TH>
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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Performance for 100%<BR>
Target Bonus<BR>
Payout

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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Performance for 200%<BR>
Maximum Bonus<BR>
Payout

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<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Company EBIT(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">70-75%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">73,700,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">81,300,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">92,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Company Net Working Capital Turnover(2)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25-30%</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.1</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.3</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.6</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG EBIT(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">70%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">79,100,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">85,300,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">94,000,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">EPG Net Working Capital Turnover(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4.4<BR></FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">We
define Company EBIT as operating profit as reflected in our audited financial statements or the related notes, subject to adjustments approved by the
Committee. We define EPG EBIT as EPG operating profit, subject to adjustments approved by the Committee.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">"Company
Net Working Capital Turnover" and "EPG Net Working Capital Turnover" are calculated for each quarter during the year as of the end of the quarter
based on our financial statements, subject to certain adjustments, as follows: total net sales for the quarter divided by (trade receivables at the end of the quarter plus inventory on the basis of
FIFO at the end of the quarter minus trade payables at the end of the quarter). The average of these quarterly amounts is the net working capital turnover for the year.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(3)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">For
Mr.&nbsp;Pratt and Mr.&nbsp;Huey, the Company EBIT measure was weighted at 75% and the Company Net Working Capital Turnover measure was weighted at
25%. For Mr.&nbsp;Huget, the Company EBIT measure was weighted at 70% and the Company Net Working Capital Turnover measure was weighted at 30%. For Mr.&nbsp;Collins and Mr.&nbsp;Fonner, the EPG
EBIT measure was weighted at 70% and the EPG Net Working Capital Turnover measure was weighted at 30%. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2010 we achieved Company EBIT of $94.8&nbsp;million, Company Net Working Capital Turnover of 4.1%, EPG EBIT of $109&nbsp;million and EPG
Net Working Capital Turnover of 3.9%, in each case with adjustments made by the Committee. Company EBIT reflects adjustments to operating profit to eliminate the effects of non-cash
compensation expenses relating to the ESOP, transaction costs and operating profits relating to the Swift Engineering and Austcast acquisitions and the environmental reserve accrued in 2010. EPG EBIT
reflects similar adjustments to operating profit except that no adjustment was made for the environmental reserve. This performance resulted in Annual Cash Bonuses relating to financial performance
for 2010 equal to 169% of target bonuses for Messrs.&nbsp;Pratt and Huey and 162% of target bonuses for Messrs.&nbsp;Huget, Collins and Fonner. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
each NEO, 20% of the target Annual Cash Bonus was based on individual performance objectives. The possible payout percentage for achieving individual goals ranged from 0 to 100%.
However, if both financial measures are satisfied at the target level or above and the individual goals are achieved at the 100% level, a multiplier is applied to the payout for achieving the
individual goals. In that event, the target amount for achieving individual goals is multiplied by the payout percentage for achieving the EBIT goal. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
each NEO, the Committee approved three individual objectives supportive of key corporate strategies and assigned a weight to each objective. For each individual objective, the
Committee approved more specific objectives and measures. The specific individual objectives and measures were based on objective criteria, subjective criteria or a combination of objective and
subjective criteria. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
individual objectives for Mr.&nbsp;Pratt were to (i)&nbsp;grow sales and market share (weighted at 40%), with specific objectives and measures to increase sales of
non-licensed products and sales of acquired products, open or acquire new ESCO supply and service locations and capture new tool orders for TTG; (ii)&nbsp;drive operational performance
(weighted at 30%), with specific objectives and measures to reduce manufacturing costs as a percent of casting sales for TTG, reduce TTG scrap and reduce EPG unfavorable manufacturing variance; and
(iii)&nbsp;build personnel depth in </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>97</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ee79101_1_98"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>positions
critical to strategy (weighted at 30%), with specific objectives and measures relating to management succession planning. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
individual objectives for Mr.&nbsp;Huget were to (i)&nbsp;grow sales and market share (weighted at 35%), with specific objectives and measures to increase the capabilities of
the TTG sales team, secure new TTG tool orders, satisfy EPG customer demand in Australia and increase capability to open and run ESCO supply and service locations globally; (ii)&nbsp;drive
operational performance (weighted at 35%), with specific objectives and measures to reduce key controllable TTG manufacturing costs, reduce TTG scrap, deploy the QVS Process Management System across
identified TTG manufacturing areas and reduce unfavorable EPG manufacturing variance; and (iii)&nbsp;build organizational capability (weighted at 30%), with specific objectives and measures to
identify personnel positions critical to strategy and management succession planning. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
individual objectives for Mr.&nbsp;Huey were to (i)&nbsp;support focused growth (weighted at 40%), with specific objectives and measures relating to assessment of capital
structure and risk tolerance and preparation for access to debt and equity capital markets, as appropriate; (ii)&nbsp;support an Australia growth strategy (weighted at 30%), with specific objectives
and measures relating to acquisitions, integration of corporate financial and accounting systems and the development of an Australia growth plan model and its integration into the corporate strategic
plan; and (iii)&nbsp;provide investment analysis for strategic plans (weighted at 30%), with specific objectives and measures relating to our ESCO supply and service strategy and reduction of
manufacturing cost variance. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
individual objectives for Messrs.&nbsp;Collins and Fonner were to (i)&nbsp;grow sales and market share (weighted at 40%), with specific objectives and measures to open and run
ESCO supply and service locations globally and improve the EPG proprietary product portfolio; (ii)&nbsp;drive operational performance (weighted at 30%), with specific objectives and measures
relating to various aspects of EPG's business; and (iii)&nbsp;ensure that EPG has the people to execute on business objectives and strategies (weighted at 30%), with specific objectives and measures
relating to succession planning and people development. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>98</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ee79101_1_99"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table indicates the extent to which the financial and individual measures described above were achieved and the amounts received by the NEOs under the Annual Bonus Plan
for 2010. </FONT></P>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="58pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="87pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="60pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="96pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>Measure

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2><B>Target Payout


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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:45pt;"><FONT SIZE=2><B>Payout %

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:73pt;"><FONT SIZE=2><B>Payout Amount

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Financial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>460,360</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>169</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>776,282</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Individual</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>115,090</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>75</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>85,742</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>575,450</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>862,024</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Larry Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Financial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
186,833</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
162</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
303,323</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Individual</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>46,708</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>91</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>42,575</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>233,541</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>148</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>345,898</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Financial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
163,959</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
169</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
276,475</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Individual</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>40,990</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>90</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>36,686</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>204,949</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>153</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>313,161</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Financial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
127,600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
162</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
207,159</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Individual</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>31,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>31,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>159,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>239,059</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Financial</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
110,881</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
162</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
180,016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Individual</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>27,720</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>27,720</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>138,601</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>150</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>207,736</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-Term Incentive Compensation.</I></B></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our long-term incentive compensation for executive officers consists of two
components:
stock appreciation rights and performance units. Annual long-term award values are split equally between the two components. Target total long-term compensation amounts, as a
percentage of base salary, were determined by the Committee for each executive officer based on a review of the prior year grant levels; market-based long-term incentive plan grant levels,
as assessed by Towers Watson; the relative scope of the business responsibilities and the individual performance and experience of each executive officer; and, in the case of executive officers other
than the Chief Executive Officer, the recommendations by the Chief Executive Officer. Our target levels, as a percentage of base salary, were established in 2006 and have not changed substantially in
subsequent years. In 2011 the Committee will review the target levels, as a percentage of base salary, and determine if adjustments are appropriate. Target total long-term compensation
amounts, as a percentage of base salary, for the NEOs for 2010 were: 175% for Mr.&nbsp;Pratt, 150% for Mr.&nbsp;Huget, 140% for Mr.&nbsp;Huey and 120% for Messrs.&nbsp;Collins and Fonner. Half
of the target total long-term compensation was established as the cash amount to be paid at target performance under the performance units. The other half was awarded in stock appreciation
rights. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock Appreciation Rights.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;The Committee believes stock appreciation rights strongly and directly align the interests of
our executive officers with
those of our shareholders because stock appreciation rights only have realizable value if the value of our stock increases after the stock appreciation rights are granted, and the Committee believes
stock appreciation rights are an effective mechanism for optimizing executive officers' long-term performance incentives given the cyclical nature of our industry. All stock appreciation
rights vest in full three years after grant, contingent upon continued employment, with vesting subject to acceleration in the limited circumstances described below under "Potential Payments upon
Change in Control". The board of directors has historically determined the base value of all stock appreciation rights granted to </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>99</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ee79101_1_100"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>executive
officers on the date of grant. For stock appreciation rights granted after the offering made pursuant to this prospectus, the base value will be the closing market price of our
Class&nbsp;A Common Stock on the date of grant. See "Grants of Plan-Based Awards in 2010" below for information regarding SARs granted to each NEO in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><I> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Performance Units.</I></FONT><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;Our performance units are designed to focus executive officers on the achievement of long-term objective
performance
goals established by the Committee and vest only to the extent those performance goals are met. The Committee makes annual awards of performance units covering three-year performance
periods. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the awards granted in 2010, the Committee established performance targets based on cash flow and sales growth over 2010, 2011 and 2012. The following table indicates the performance
level for each criterion required to achieve payouts at the end of the three-year period at the threshold, target and maximum levels. </FONT></P>
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<TD WIDTH="112pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TD WIDTH="106pt" style="font-family:arial;"></TD>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Weighting (% of target<BR>
bonus subject to<BR>
each criteria)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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Threshold Bonus<BR>
Payout

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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Target Bonus<BR>
Payout

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Performance for 300%<BR>
Maximum Bonus<BR>
Payout

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash Flow(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">40</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">216,210,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">254,670,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">321,960,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net Sales Growth(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">%</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">130,700,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">193,810,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">290,720,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Cash
flow for the performance period is equal to the sum of our operating profit for each year in the performance period less the change in net working
capital over the performance period. Net working capital is trade accounts receivables plus inventories minus accounts payables.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Net
Sales growth for the performance period is equal to the net sales for the year ending December&nbsp;31, 2012 minus net sales for the year ended
December&nbsp;31, 2009. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See "Grants of Plan-Based Awards in 2010" below for information regarding performance units granted to each NEO in 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
2011, the Committee granted performance units based on a target number of shares of Legacy Class&nbsp;A Common Stock rather than a target dollar amount. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
three-year performance period for the performance units granted in 2008 ended on December&nbsp;31, 2010. These awards used cash flow (weighted at 40%) and net sales
growth (weighted at 60%) as performance measures. The aggregate cash flow performance goals were approximately $324&nbsp;million for a 60% (threshold) payout, $336&nbsp;million for a 100% (target)
payout and $360&nbsp;million for a 300% (maximum) payout. The aggregate net sales growth performance goals were approximately $150&nbsp;million for a 60% (threshold) payout, $213&nbsp;million
for a 100% (target) payout and $413&nbsp;million for a 300% (maximum) payout. Our aggregate cash flow for 2008, 2009 and 2010 was approximately $261&nbsp;million, resulting in no payout under the
cash flow performance measure, and our aggregate net sales growth for 2008, 2009 and 2010 was approximately $61&nbsp;million, resulting in no payout under the net sales growth performance measure. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Retirement Plans, ESOP, Deferred Compensation and Perquisites  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our standard benefit package for executive officers includes ERISA-qualified retirement benefits, our ESOP, nonqualified supplemental
retirement benefits, compensation deferral opportunities and perquisites the Committee believes are reasonable and competitive with benefits provided to executive officers of companies we compete with
for executive talent. For more information about our ESOP, see "Description of Employee Stock Ownership Plan". </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
sponsor a retirement pension plan covering a majority of our employees, including all of our executive officers. In December 2008, the pension plan was frozen to new participants and
no benefits were earned for current participants, including the NEOs, after that date. Supplemental retirement benefits are provided to each NEO under supplemental executive retirement plans. In </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>100</FONT></P>

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<BR>

<P style="font-family:arial;"><FONT SIZE=2>December
2008, the supplemental retirement plan was frozen and no new benefits were earned following that date for any NEO. For details regarding the determination and payment of benefits
under our pension plan and supplemental executive retirement plans and the present value of accumulated benefits for each NEO, see "Pension Benefits at December&nbsp;31, 2010" below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
maintain a tax-qualified retirement savings plan ("401(k) Plan") under which all U.S.-based employees, including the NEOs, are able to make pre-tax
contributions from their cash compensation, subject to limitations imposed by the Internal Revenue Code. We make specified matching contributions. Our executive officers participate in our ESOP on the
same basis as other employees. Our contributions for the benefit of the NEOs under the 401(k) Plan and the ESOP are included under the "All Other Compensation" column in the Summary Compensation Table
below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
further help our executive officers save for retirement, we make available deferred compensation plans that allow executive officers to voluntarily defer the receipt of salary and
earned cash bonuses. In addition, the executive officers participate in a 401(k) restoration plan and ESOP restoration plan on the same basis as any other eligible employee whose salary level, under
IRS regulations, limits our contributions to the qualified plans. See "Nonqualified Deferred Compensation at December&nbsp;31, 2010" below for details about the deferred compensation and restoration
plans and accumulated balances for each NEO. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2010, we provided perquisites to the NEOs and selected other executive officers. Total perquisite costs for the NEOs for 2010 are included under the "All Other Compensation" column
in the Summary Compensation Table below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Change in Control Provisions  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the stock appreciation rights granted before 2011, any unvested awards would vest upon a change in control of the
Company as described below under "Potential Payments upon Change in Control". This provision recognized that a change in control has the potential to cause a significant disruption or change in
employment relationships and thus treated all participants the same regardless of their employment status after the transaction. In addition it provided our executives with the same opportunities as
our other shareholders to participate in any transaction resulting in a change in control. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock
appreciation rights granted in 2011 will be subject to accelerated vesting only when two events (a "double trigger") occur. Vesting of these grants will generally be accelerated
(and the exercise period extended for up to one year) only if there is a change in control of the Company and either the acquiring entity fails to assume the awards or the executive's employment is
terminated by the acquirer without cause or by the executive for good reason within two years following a change in control. This double trigger was adopted to encourage executive retention through a
period of uncertainty and a subsequent integration with an acquirer. The Committee
believes that this approach is appropriate for a publicly held company, will enhance shareholder value in the context of an acquisition and will align executives with the interests of investors. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
award agreements relating to performance units provide for an accelerated payout upon a change in control prior to the end of the three-year performance period as
described below under "Potential Payments upon Change in Control". The Committee believes that it is appropriate to terminate the performance period at the time of the change in control and calculate
the benefits based on the shorter period because the financial performance measures used in the grants may not be appropriate in the context of the Company's business or the acquirer's business
following a change in control. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>101</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<P style="font-family:arial;"><FONT SIZE=2><B> Tax Deductibility of Executive Compensation  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the closing of the offering made pursuant to this prospectus, Section&nbsp;162(m) of the Internal Revenue Code will generally
limit our federal income tax deduction to $1&nbsp;million per person for compensation paid to our Chief Executive Officer and certain other highly compensated executive officers in any year.
Qualifying performance-based compensation is not subject to this limit on deductibility. The Committee will consider the impact of Section&nbsp;162(m) when developing and implementing our executive
compensation program. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Summary Compensation Table  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table shows 2010 compensation earned by our NEOs. </FONT></P>
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Principal Position(1)

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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:17pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Year

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Salary<BR>
($)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:25pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Bonus<BR>
($)(2)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:29pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Option<BR>
Awards<BR>
($)(3)

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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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Incentive<BR>
Plan<BR>
Compensation<BR>
($)(4)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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Pension<BR>
Value and<BR>
Nonqualified<BR>
Deferred<BR>
Compensation<BR>
Earnings<BR>
($)(5)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:56pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>All Other<BR>
Compensation<BR>
($)(6)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
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($)

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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Steven D. Pratt<BR>
Chief Executive Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">677,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">85,742</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">860,703</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">776,282</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">656,583</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">297,125</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,353,435</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Larry R. Huget<BR>
Chief Operating Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
389,235</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
42,575</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
418,839</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
303,323</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
452,862</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
230,413</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1,837,247</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gene K. Huey<BR>
Vice President&nbsp;&amp; Chief Financial Officer</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
372,633</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
36,686</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
383,803</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
276,475</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
472,533</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
160,960</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1,703,090</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Calvin W. Collins<BR>
President, Engineered Products Group</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
290,000</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
31,900</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
266,880</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
207,159</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
55,423</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
120,945</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
972,307</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">F. Patrick Fonner<BR>
Vice President, Engineered Products Group</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
276,836</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27,720</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
236,848</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
180,016</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
186,382</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
116,208</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1,024,010</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">On
January&nbsp;1, 2011, Mr.&nbsp;Huget retired and Mr.&nbsp;Collins became President and Chief Operating Officer. On April&nbsp;15, 2011,
Mr.&nbsp;Huey resigned as Chief Financial Officer and became Vice President and Treasurer in anticipation of his retirement scheduled to begin on January&nbsp;1, 2012.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Amounts
paid under the Annual Bonus Plan based on subjectively evaluated management objectives and individual performance measures. See
"&#151;&nbsp;Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(3)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Represents
the aggregate grant date fair value of stock appreciation right awards computed in accordance with Accounting Standards Codification ("ASC")
Topic 718. The fair value of stock appreciation rights is estimated using the Black-Scholes option pricing method, using the following assumptions: risk-free interest
rate&nbsp;&#151; 3.67%, expected dividend yield&nbsp;&#151; 0, term&nbsp;&#151; 10&nbsp;years and expected volatility&nbsp;&#151; 30%. See
"&#151;&nbsp;Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives". The stock appreciation rights reflected in this table were modified in March 2011 to
provide for settlement in shares of Class&nbsp;A Common Stock rather than cash in order to qualify the awards for equity accounting treatment.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(4)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Consists
of amounts paid under the Annual Bonus Plan based on achieving objective Company performance criteria. See "&#151;&nbsp;Base Salaries,
Annual Performance-Based Cash Bonuses, Long-Term Incentives".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(5)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Represents
changes in the actuarial present value of accumulated benefits under the Pension Plan and Supplemental Executive Retirement Plans
(Mr.&nbsp;Pratt&nbsp;&#151; $509,134; Mr.&nbsp;Huget&nbsp;&#151; $286,551; Mr.&nbsp;Huey&nbsp;&#151; $222,612; Mr.&nbsp;Collins&nbsp;&#151; $19,335 and
Mr.&nbsp;Fonner&nbsp;&#151; $145,847) and interest under the Deferred Compensation Plans (Mr.&nbsp;Pratt&nbsp;&#151; $147,449; Mr.&nbsp;Huget&nbsp;&#151; $166,311;
Mr.&nbsp;Huey&nbsp;&#151; $249,921; Mr.&nbsp;Collins&nbsp;&#151; $36,088 and Mr.&nbsp;Fonner&nbsp;&#151; $40,535). </FONT></DD></DL>
 </DIV>
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<!-- ZEQ.=8,SEQ=105,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=137683,FOLIO='102',FILE='DISK105:[11ZBC1.11ZBC79101]EE79101A.;16',USER='JJORGE',CD='26-APR-2011;18:59' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(6)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes
(i)&nbsp;tax preparation services, (ii)&nbsp;club dues and memberships, (iii)&nbsp;automobile allowance and fuel purchase benefits,
(iv)&nbsp;physicals and (v)&nbsp;Company contributions to the NEO accounts under the 401(k) Plan, the 401(k) Restoration Plan, the ESOP and the ESOP Restoration Plan, including the following
amounts: </FONT></DD></DL>
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<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>401(k)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:44pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>401(k)<BR>
Restoration

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>ESOP

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:44pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>ESOP<BR>
Restoration

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Steve D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">68,730</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">39,369</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">142,104</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">47,361</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">39,368</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">91,817</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,276</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">39,368</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">55,192</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,960</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">39,368</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,365</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,988</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">39,388</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,056</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>103</FONT></P>

<HR NOSHADE>
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NAME="page_eg79101_1_104"> </A> </FONT> <FONT SIZE=2>


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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Grants of Plan-Based Awards in 2010  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table contains information concerning cash bonus opportunities and stock appreciation rights and performance units
granted in 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="64pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="61pt" style="font-family:arial;"></TD>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="75pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=4 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=4 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:57pt;"><FONT SIZE=2><B>All Other<BR>
Option<BR>
Awards<BR>
Number of<BR>
Securities<BR>
Underlying<BR>
Options (#)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Estimated Future Payouts<BR>
Under Non-Equity Incentive<BR>
Plan Awards </B></FONT></TH>
<TH ROWSPAN=3 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=3 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Exercise<BR>
or Base<BR>
Price of<BR>
Option<BR>
Awards<BR>
($/Sh)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:62pt;"><FONT SIZE=2><B>Grant Date<BR>
Fair Value of<BR>
Option<BR>
Awards($)(4)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=2><B>Grant Date

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:48pt;"><FONT SIZE=2><B>Threshold<BR>
($)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:30pt;"><FONT SIZE=2><B>Target<BR>
($)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:46pt;"><FONT SIZE=2><B>Maximum<BR>
($)

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
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 Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>322,252</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>460,360</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>920,720</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>359,880</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>599,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,799,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>860,703</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
2/2/2010(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
130,783</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
186,833</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
373,666</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>175,140</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>291,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>875,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,092</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>418,839</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
2/2/2010(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
114,771</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
163,959</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
327,918</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>158,340</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>267,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>791,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,917</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>383,803</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
2/2/2010(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
89,320</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
127,600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
255,200</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>109,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>186,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>549,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>266,880</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
2/2/2010(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
77,616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
110,881</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
221,762</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>102,180</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>165,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>510,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,183</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>236,848</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Amounts
reported for these awards represent a portion of the potential bonuses payable for performance in 2010 under the Annual Bonus Plan. Only the portion
of the bonus based on performance against financial or other objective measures is an incentive plan award reportable in this table. The Committee annually approves target bonus levels as a percentage
of base salary paid during the year. The total target bonus under the Annual Bonus Plan, as a percentage of base salary, were as follows: Mr.&nbsp;Pratt&nbsp;&#151; 85%,
Mr.&nbsp;Huget&nbsp;&#151; 60%, Mr.&nbsp;Huey&nbsp;&#151; 55%, Mr.&nbsp;Collins&nbsp;&#151; 55% and Mr.&nbsp;Fonner&nbsp;&#151; 50%. The portion based on
performance against financial or other objective measures, and therefore reflected in the above table, was 80% of the total target bonus for each NEO. See "&#151;&nbsp;Base Salaries, Annual
Performance-Based Cash Bonuses, Long-Term Incentives". Actual bonus amounts paid for 2010 are included in the "Summary Compensation Table".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Amounts
reported for these awards represent performance units granted in 2010 and are based on performance during years 2010-2012. See
"&#151;&nbsp;Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives".
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Amounts
reported for these awards represent grants of stock appreciation rights. The base value of all stock appreciation rights reflected in this table was
equal to the fair market value of the Legacy Class&nbsp;A Common Stock on the grant date as determined by the board of directors. The stock appreciation rights become 100% vested three years after
the grant date, based on continued employment. Vesting may also be accelerated in the circumstances described below under "Potential Payments upon Change in Control". Each stock appreciation right has
a maximum term of 10&nbsp;years, subject to earlier termination upon the </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>104</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=107,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=569705,FOLIO='104',FILE='DISK105:[11ZBC1.11ZBC79101]EG79101A.;11',USER='DNICHOL',CD='26-APR-2011;14:35' -->
<A NAME="page_eg79101_1_105"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT SIZE=2>employee's
termination of employment. The Committee approved amendments to the stock appreciation rights reflected in this table in March 2011 to provide for settlement in shares of Legacy
Class&nbsp;A Common Stock rather than cash in order to qualify the awards for equity accounting treatment. If the holders of the stock appreciation rights agree to the amendments, the amendments
will be effective as of March&nbsp;25, 2011.  </FONT></P>

</UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
the grant date fair value of stock appreciation rights granted in 2010 based on a value of $200.21 per share, calculated using the Black-Scholes
option pricing method. Assumptions made in determining the grant date fair value are disclosed in footnote 3 to the Summary Compensation Table. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>105</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_eg79101_1_106"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>
 </DIV>


<P style="font-family:arial;"><FONT SIZE=2><B> Outstanding Equity Awards at December&nbsp;31, 2010  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning outstanding equity awards of the NEOs as of December&nbsp;31, 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"150%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="83pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="89pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="91pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="67pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=14 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Option Awards </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,28pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=2><B>Grant Date

<!-- COMMAND=ADD_SCROPPEDRULE,52pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:60pt;"><FONT SIZE=2><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options (#)<BR>
Exercisable

<!-- COMMAND=ADD_SCROPPEDRULE,60pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:68pt;"><FONT SIZE=2><B>Number of<BR>
Securities<BR>
Underlying<BR>
Unexercised<BR>
Options (#)<BR>
Unexercisable

<!-- COMMAND=ADD_SCROPPEDRULE,68pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:69pt;"><FONT SIZE=2><B>Option<BR>
Exercise Price<BR>
($)

<!-- COMMAND=ADD_SCROPPEDRULE,69pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:48pt;"><FONT SIZE=2><B>Option<BR>
Expiration<BR>
Date

<!-- COMMAND=ADD_SCROPPEDRULE,48pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3/7/2007(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,490</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>439.55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3/7/2017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2008(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>477.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2009(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,381</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>517.60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2019</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,299</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2007(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
1,319</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
439.55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2008(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,620</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>477.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2009(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,710</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>517.60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2019</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,092</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2007(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
1,267</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
439.55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2008(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>477.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2009(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,492</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>517.60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2019</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,917</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2007(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
745</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
439.55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2008(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>940</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>477.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2009(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>931</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>517.60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2019</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10/23/2001(5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>187</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.68</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10/23/2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/4/2003(5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>385</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.87</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/4/2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2004(5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>387</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13.34</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8/9/2005(5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,566</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>65.51</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8/9/2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2007(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
750</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
439.55</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3/7/2017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2008(2)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>477.05</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/5/2018</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2009(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>517.60</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/3/2019</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2010(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,183</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2/2/2020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8/9/2005(5)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>684</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>65.51</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8/9/2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
stock appreciation rights. Amount in the "option exercise price" column represents the fair market value of the Legacy Class&nbsp;A Common
Stock at grant as determined by the board of directors.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
stock appreciation rights that vest 100% on February&nbsp;5, 2011. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class&nbsp;A Common Stock at grant as determined by the board of directors.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
stock appreciation rights that vest 100% on February&nbsp;3, 2012. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class&nbsp;A Common Stock at grant as determined by the board of directors. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>106</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=109,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=854431,FOLIO='106',FILE='DISK105:[11ZBC1.11ZBC79101]EG79101A.;11',USER='DNICHOL',CD='26-APR-2011;14:35' -->
<A NAME="page_eg79101_1_107"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>

<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(4)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
stock appreciation rights that vest 100% on February&nbsp;2, 2013. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class&nbsp;A Common Stock at grant as determined by the board of directors.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(5)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
stock options. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Option Exercises in 2010  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information concerning the exercise of stock options by the NEOs in 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="173pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="190pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Option Awards(1) </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,28pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:134pt;"><FONT SIZE=2><B>Number of Shares Acquired<BR>
on Exercise (#)

<!-- COMMAND=ADD_SCROPPEDRULE,134pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:147pt;"><FONT SIZE=2><B>Value Realized on Exercise ($)

<!-- COMMAND=ADD_SCROPPEDRULE,147pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,156</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,179,347</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
3,078</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
1,089,674</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
2,770</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
980,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
"value realized on exercise" is based on the spread between the fair market value of the Legacy Class&nbsp;A Common Stock, as determined by the board
of directors, on the exercise date and the exercise price. Shares acquired on exercise of the options were not sold by the NEOs. No stock appreciation rights were exercised by the NEOs in 2010. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Pension Benefits at December&nbsp;31, 2010  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the NEOs participates in the ESCO Corporation Pension Plan, our qualified pension plan, and in the ESCO Corporation 2005
Supplemental Executive Retirement Plan (the "2005 SERP") and the ESCO Corporation Supplemental Executive Retirement Plan (the "SERP"). </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>107</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=110,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=237920,FOLIO='107',FILE='DISK105:[11ZBC1.11ZBC79101]EG79101A.;11',USER='DNICHOL',CD='26-APR-2011;14:35' -->
<A NAME="page_eg79101_1_108"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information regarding accumulated benefits under these plans at December&nbsp;31, 2010. No payments were made to NEOs under these plans in 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="129pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="130pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,28pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:53pt;"><FONT SIZE=2><B>Plan Name

<!-- COMMAND=ADD_SCROPPEDRULE,53pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:99pt;"><FONT SIZE=2><B>Number of Years<BR>
Credited Service (#)

<!-- COMMAND=ADD_SCROPPEDRULE,99pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:100pt;"><FONT SIZE=2><B>Present Value of<BR>
Accumulated Benefit<BR>
($)(1)

<!-- COMMAND=ADD_SCROPPEDRULE,100pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>Pension Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>36.95</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>900,157</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2005 SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,081,964</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>32.95</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,108,666</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pension Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
36.39</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
987,677</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2005 SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,334,611</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>32.39</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,163,675</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pension Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
38.06</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
827,520</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2005 SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>879,812</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>34.06</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>859,201</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pension Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
8.16</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
126,035</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2005 SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>54,794</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.16</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:12pt;margin-left:0pt;text-indent:0pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pension Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
32.53</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2><BR>
760,997</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2005 SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>720,807</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>SERP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>28.53</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>159,003</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Represents
the actuarial present value as of December&nbsp;31, 2010 of the NEO's pension benefits under the Pension Plan, the 2005 SERP and the SERP based
on credited years of service and average annual compensation as of that date but assuming retirement at the earliest age at which benefits under the plans are unreduced (age 65 under all plans). The
actuarial present values were calculated using a discount rate of 6% and the RP-2000 Mortality Table, the same assumptions used in the pension benefit calculations reflected in our audited
balance sheet as of December&nbsp;31, 2010. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Qualified Pension Plan  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain the Pension Plan, a tax-qualified defined benefit retirement plan, to provide income for retirees. The Pension
Plan includes five different benefit schedules that provide varying benefits to different employee groups. The NEOs participate in the National Benefit Schedule under the Pension Plan on the same
terms as all other participating employees in the National Benefit Schedule. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participation
in and benefit accruals under the Pension Plan were generally frozen as of December&nbsp;31, 2008. However, participants in the National Benefit Schedule who were at
least 45&nbsp;years old and who had at least 10&nbsp;years of credited service as of December&nbsp;31, 2008 continued to accrue benefits under special terms of the Pension Plan. All of the NEOs
except Mr.&nbsp;Collins qualified for these benefits. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits
become 100% vested after five years of service. The National Benefit Schedule in effect on and before December&nbsp;31, 2008 provided a monthly benefit following retirement
based on a final average pay formula that takes into account years of credited service, average annual compensation and estimated Social Security benefits. Average annual compensation for purposes of
calculating benefits under the National Benefit Schedule generally consists of a participant's highest average compensation for the five consecutive calendar years in the last 10 calendar years </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>108</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>during
which the participant rendered any service to us or any of our subsidiaries, but not including calendar years after 2008. The amount of annual compensation taken into account is limited to
$230,000 in 2008, under the Internal Revenue Code ("Code"). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the terms of the National Benefit Schedule in effect on and before December&nbsp;31, 2008, a monthly normal retirement benefit is payable upon retirement at age 65 and is equal
to one-twelfth of the greater of (i)&nbsp;1% of the participant's average annual compensation multiplied by the participant's years of credited service (up to 30)&nbsp;plus $60 for
each year of credited service in excess of 30; and (ii)&nbsp;45% of the participant's average annual compensation less 50% of the participant's annual primary insurance amount determined under the
Social Security Act on the date of retirement, multiplied by a fraction, the numerator of which is the number of years (including partial years) of credited service (not to exceed 30&nbsp;years) and
the denominator of which is 30; provided that the annual retirement benefit payable to any retired participant not exceed 40% of the participant's average annual compensation. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Participants
in the National Benefit Schedule who were at least 45&nbsp;years old and who had at least 10&nbsp;years of credited service as of December&nbsp;31, 2008 and continued
as employees after December&nbsp;31, 2008 are entitled to an additional monthly normal retirement benefit equal to one-twelfth of 0.9% times the participant's compensation paid prior to
attaining a maximum of 30&nbsp;years of credited service. This benefit accrues at the end of each pay period with respect to compensation paid during the pay period. The amount of annual
compensation taken into account is limited to $245,000 in 2010 under the Code. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
basic benefit form for normal and early retirement under the National Benefit Schedule is a monthly annuity for life. A participant may choose among different annuity forms that are
the actuarial equivalent of the basic benefit form, but a lump sum is not available. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the National Benefit Schedule, a participant who is age 55 or older with at least 10&nbsp;years of service is eligible to elect an early retirement benefit, which is the normal
retirement benefit after reduction for early commencement of benefits. Under the National Benefit Schedule, for each month that a participant's early retirement benefits start prior to the
participant's 65th&nbsp;birthday, the participant's monthly retirement benefit is reduced by 0.5%. Mr.&nbsp;Huget retired on January&nbsp;1, 2011. All of the NEOs other than Mr.&nbsp;Collins
are eligible for early retirement. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Pension Plan: (i)&nbsp;if a participant becomes totally and permanently disabled after attaining age 55 and completing five years of service, and before attaining age 65,
the participant is entitled to a monthly disability benefit for the rest of the participant's life equal to the normal retirement benefit that would have been payable at age 65 based on actual years
of credited service (adjusted actuarially for form of payment); and (ii)&nbsp;if a participant becomes totally and permanently disabled before attaining age 55, but after completing five years of
service, the participant is entitled to an ancillary monthly disability benefit payable until attaining age 55, equal to the normal retirement benefit that would have been payable at age 65 based on
actual years of credited service, and upon attaining age 55 shall be entitled to a monthly disability benefit for the rest of his or her life equal to the normal retirement benefit that would have
been payable at age 65 based on actual years of credited service (adjusted actuarially for form of payment). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Supplemental Executive Retirement Plans  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We maintain the 2005 SERP and the SERP to provide for retirement benefits above amounts available under the Pension Plan. All NEOs are
eligible to participate in the SERPs. Participants are 100% vested in their SERP benefits. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
calculate normal retirement benefits under the SERPs, a target monthly retirement benefit in the form of a single life annuity is determined for each participant based on final
average pay and </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>109</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>years
of service, which is then reduced by (i)&nbsp;the participant's estimated monthly primary Social Security benefit assuming commencement at age 65, (ii)&nbsp;the participant's monthly single
life annuity benefit under the Pension Plan, assuming commencement at age 65 and (iii)&nbsp;the monthly single life annuity amount that is actuarially equivalent to the balances or distributions
under any defined contribution plan, which the Committee has determined to take into consideration and which are deemed to be employer-provided. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
target retirement benefit under the SERPs upon retirement at age 65 is equal to 60% of the participant's monthly final average compensation (without the limitation applied to
compensation in the Pension Plan, and including any compensation deferred by the participant but disregarding compensation after December&nbsp;31, 2008), multiplied by a fraction, the numerator of
which is the participant's years of service ending on or before December&nbsp;31, 2008, not to exceed 30, and the denominator of which is 30. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
participant who has attained age 55 and who has at least 10&nbsp;years of service at separation from service is eligible for early retirement benefits under the SERPs. For each
month that the benefit
commencement date is prior to age 65, the normal retirement benefit is reduced by 0.5% under the SERPs. For purposes of calculating an early retirement benefit, the primary Social Security benefit
offset is the monthly benefit payable at age 62, or the benefit commencement date if later (determined as if the participant terminated no later than December&nbsp;31, 2008) and determined as if the
participant has zero earnings between the early retirement date and age 62. Mr.&nbsp;Huget retired on January&nbsp;1, 2011. All of the NEOs except Mr.&nbsp;Collins are eligible for early
retirement. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
normal or early retirement benefit under the SERPs is paid as a monthly annuity for life if the participant is not married, and is paid as an actuarially equivalent 100% joint and
survivor annuity if the participant is married. A participant may elect an alternative actuarially equivalent annuity form of payment. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the SERP (but not under the 2005 SERP) a participant or beneficiary is entitled to an immediate distribution of a lump sum actuarially equivalent to 90% of his or her vested
accrued benefit within 24&nbsp;months following a change in control or any time following termination of employment, forfeiting the remaining 10%. Under the SERP change in control is generally
defined to include certain mergers, the sale of substantially all of our assets and transactions whereby a person acquires 50% of our voting stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the SERPs, if a participant separates from service as a result of disability, the participant is entitled to an unreduced monthly benefit equal to the benefit that would have been
payable at age 65, calculated using the estimated Social Security benefit payable to the participant at age 65 (calculated under current law at time benefits commence and assuming zero earnings to age
65), and calculated using the Pension Plan benefit and defined contribution plan benefits payable on the date the SERP benefits commence. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>110</FONT></P>

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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Nonqualified Deferred Compensation at December&nbsp;31, 2010  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


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<TD WIDTH="" style="font-family:arial;"></TD>
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<TD WIDTH="79pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="59pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="67pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="64pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:38pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Plan(1)(2)

<!-- COMMAND=ADD_SCROPPEDRULE,38pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Executive<BR>
Contributions<BR>
in Last FY ($)

<!-- COMMAND=ADD_SCROPPEDRULE,52pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Registrant<BR>
Contributions<BR>
in Last FY ($)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:44pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Aggregate<BR>
Earnings in<BR>
Last FY ($)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Aggregate<BR>
Withdrawals/<BR>
Distributions<BR>
($)

<!-- COMMAND=ADD_SCROPPEDRULE,50pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:48pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Aggregate<BR>
Balance at<BR>
Last FYE ($)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">



<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


 Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP II</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">38,054</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">528,296</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">109,395</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,518,699</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">401(k)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">68,730</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,764</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">155,010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">



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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">142,104</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">168,105</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">287,902</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Larry R. Huget</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">DCP II</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
319,978</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>(3)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
75,582</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1,252,715</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">90,729</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,259,567</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">401(k)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">47,361</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,392</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">81,273</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">91,817</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">103,538</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">157,594</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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 Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">DCP II</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
72,440</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1,005,660</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">177,481</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,463,914</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">401(k)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,276</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,698</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">55,491</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">



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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">55,192</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">64,878</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">109,506</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">DCP II</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
21,870</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
303,620</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,218</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">197,382</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">401(k)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,965</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,240</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,997</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,364</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,403</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">64,220</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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 F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><p align=center style="font-family:arial;margin-top:10pt;margin-left:0pt;text-indent:0pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">DCP II</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
65,396</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>(4)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
38,420</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
16,605</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
560,804</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">DCP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,115</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29,367</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">401(k)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,110</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">33,320</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">



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</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">ESOP</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,056</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,322</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">65,194</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR bgcolor="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_ROWSHADECOLOR,"#CCEEFF" -->


</FONT>
</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Restoration Plan</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">See
"Deferred Compensation Plans" below for information regarding the Deferred Compensation Plan ("DCP") and Deferred Compensation Plan II ("DCP II"). See
"Other Deferred Compensation Plans&nbsp;&#151; Restoration Plans" below for information regarding the 401(k) Restoration Plan and the ESOP Restoration Plan.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Amounts
for the ESOP Restoration Plan represent the value, and increases in value, of the Class&nbsp;C Preferred Stock credited under this plan for the
NEOs. As of December&nbsp;31, 2010, the following amounts of Class&nbsp;C Preferred Stock were credited under this plan for the accounts of the NEOs: Mr.&nbsp;Pratt&nbsp;&#151; 330
shares, Mr.&nbsp;Huget&nbsp;&#151; 179 shares, Mr.&nbsp;Huey&nbsp;&#151; 125 shares, Mr.&nbsp;Collins&nbsp;&#151; 74 shares and Mr.&nbsp;Fonner&nbsp;&#151;
75 shares. The fair market value of the Class&nbsp;C Preferred Stock as of December&nbsp;31, 2010 was determined to be $873.50 per share.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(3)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">This
amount is reported in the Summary Compensation Table, with $42,666 reported in the "Salary" column and $277,312 reported in the "Bonus" column.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(4)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">This
amount is reported in the Summary Compensation Table, with $41,581 reported in the "Salary" column and $23,815 reported in the "Bonus" column. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Deferred Compensation Plans  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All NEOs are eligible to participate in the DCP and the DCP II, which are unfunded plans for management or highly compensated
employees who are designated for participation by the board. The DCP and DCP II enable participants to defer receipt of compensation. The DCP provides for deferrals prior to January&nbsp;1, 2005,
and the DCP II provides for deferrals on and after January&nbsp;1, </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>111</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>2005.
The DCP allowed and the DCP II allows participants to elect in advance of earning salary and bonuses to defer a percentage of salary and bonuses and have the deferred amount credited to a plan
account. Each plan account is credited with earnings each month at a rate equal to the nominal annual yield of Moody's Average Corporate Bond Yield for the preceding month or any substantially similar
index selected by the board, plus 2%. The maximum allowed deferral percentage under the DCP II is 25% of salary and 50% of bonuses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Benefits
accrued after January&nbsp;1, 2005, are generally paid pursuant to election made by the participant prior to earning the compensation. The form of payment is specified in the
participant's deferral election and is either a cash lump sum, monthly installments not to exceed 180 or any combination of the two. A participant may withdraw amounts deferred under the DCP
(including earnings) at any time, subject to forfeiture of 10% of the balance. If elected prior to earning the compensation, participants may withdraw amounts deferred under the DCP II (but not the
earnings thereon) prior to separation from service. The DCP and DCP II provide for distribution upon retirement, termination of employment, death, disability or financial hardship. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Other Deferred Compensation Plans&nbsp;&#151; Restoration Plans  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The NEOs participate in two additional nonqualified deferred compensation plans: the 401(k) Restoration Plan and the ESOP Restoration
Plan. These unfunded plans are designed to provide benefits that would have been provided in our tax-qualified 401(k) Plan and ESOP, had the compensation of the participant not been
limited under the Code, and had the participant not made elective deferrals under the DCP. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the 401(k) Restoration Plan, participants receive quarterly notional account credits equal to the nonelective employer contributions that would have been allocated to their accounts
in the 401(k) Plan had their compensation not been limited or deferred. Nonelective contributions vest after a three-year period of employment. Accounts are credited with earnings based on
participant election among various investment options. Account balances are distributed on termination of employment or death. Account balances of $5,000 or more are paid in 60&nbsp;monthly
installments. Account balances of less than $5,000 are paid in a lump sum. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the ESOP Restoration Plan, a participant's account is credited with notional phantom Class&nbsp;C Preferred Stock units for each quarter, which are equal in value to (i)&nbsp;the
number of shares of Class&nbsp;C Preferred Stock that would have been allocated to the participant's account in the ESOP had the participant's compensation not been limited or deferred and
(ii)&nbsp;the amount that would have been allocated to the participant's account in the ESOP from dividends if those shares had been allocated to the participant's account in the ESOP. Accounts vest
according to a six-year graded schedule. Account balances are distributed on termination or death in five annual installments. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Potential Payments upon Change in Control  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have agreed, in connection with a change in control of the Company, to (i)&nbsp;accelerate the vesting of stock appreciation
rights granted in 2008, 2009 and 2010 and (ii)&nbsp;provide for an accelerated payout of performance units. A change in control would occur if any person or group acquires stock possessing the right
to elect a majority of the board of directors. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the terms of the stock appreciation rights granted to the NEOs in 2008, 2009 and 2010, any unvested awards would become exercisable in the event of a change in control of the
Company. This acceleration of vesting will occur whether or not the officer's employment is terminated. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>112</FONT></P>

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<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_ei79101_1_113"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
granted performance units to the NEOs in fiscal 2009 and 2010 pursuant to which cash payments will be made based on the Company's performance during the applicable
three-year performance periods relating to the awards. The award agreements relating to the performance units provide for an accelerated payout upon a change in control. An accelerated
payout of performance units would occur even if the named executive officer's employment was not terminated in connection with the change in control. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the estimated change in control benefits that would have been payable to each NEO if a change in control had occurred on December&nbsp;31, 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="67pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

<!-- COMMAND=ADD_SCROPPEDRULE,28pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:61pt;"><FONT SIZE=2><B>Acceleration<BR>
of Stock<BR>
Appreciation<BR>
Rights(1)

<!-- COMMAND=ADD_SCROPPEDRULE,61pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:61pt;"><FONT SIZE=2><B>Accelerated<BR>
Payout of<BR>
Performance<BR>
Units(2)

<!-- COMMAND=ADD_SCROPPEDRULE,61pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,224,035</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,283,498</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,507,533</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>986,270</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>571,444</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,557,714</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>649,891</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>390,927</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,040,818</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>610,718</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>355,280</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>965,998</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>See
"Outstanding Equity Awards at December&nbsp;31, 2010" for information regarding outstanding unexercisable stock appreciation rights held by each NEO.
The amounts in the table above represent the spread between $669.10 (the value of the Legacy Class&nbsp;A Common Stock on December&nbsp;31, 2010 as determined by the board of directors) and the
value of the Legacy Class&nbsp;A Common Stock at the date of grant of the stock appreciation right as determined by the board of directors for each outstanding stock appreciation right granted in
2008, 2009 and 2010 and held by the applicable NEO on December&nbsp;31, 2010.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Under
the terms of the performance unit award agreements granted to the NEOs in 2009 and 2010, upon a change in control an NEO would receive a payout in an
amount equal to the payout calculated as if the performance period had ended on the last day of our most recently completed fiscal quarter prior to the date of the change in control, taking into
account provisions in the award agreements for calculating performance for a shorter performance period. The amounts in the table above represent the estimated value of outstanding performance unit
awards that would vest and be paid out pursuant to the terms of the award agreements. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> Potential Payments upon Retirement, Disability or Death  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The performance unit award agreements provide for the payment of awards in the event of the retirement, death or disability of an NEO
prior to end of the three-year performance period. The following table sets forth the estimated benefits that would have been payable to the NEOs under the performance units if each
officer's employment had been terminated on December&nbsp;31, 2010 because of retirement, disability or death. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="206pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:28pt;"><FONT SIZE=2><B>Name

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:160pt;"><FONT SIZE=2><B>Payment of Performance Units(1)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Steven D. Pratt</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,052,744</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gene K. Huey</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>466,213</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Calvin W. Collins</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>302,370</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>F. Patrick Fonner</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>297,357</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Under
the terms of the performance unit awards granted to the NEOs in 2009 and 2010, if an NEO's employment is terminated due to total disability or
retirement (at age 65 or earlier at </FONT></DD></DL>
 </DIV>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>113</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
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<p style="font-family:arial;"></FONT></P>

<UL>

<P style="font-family:arial;"><FONT SIZE=2>our
discretion) prior to the end of the three-year performance period, the NEO would be entitled to receive a prorated award to be paid following completion of the performance period,
taking into account the cash amount that would otherwise have been paid based on the actual performance through the entire performance period and the portion of the performance period the officer had
worked. Under the terms of the performance unit awards, if an NEO's employment is terminated due to death prior to the end of the three-year performance period, the NEO would be entitled
to receive a prorated portion of the target cash amount taking into account the portion of the performance period the officer had worked. Amounts in the table are based on the estimated payout based
on actual results through December&nbsp;31, 2010 applicable in the event of retirement or total disability. </FONT></P>

</UL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>114</FONT></P>

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</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ek79101_certain_relationships___ek702238"> </A>
<A NAME="toc_ek79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This section describes relationships between the company and our directors, executive officers, beneficial holders of 5% or more of
our Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common Stock or Class&nbsp;B Common Stock, or any member of their immediate family or entities affiliated with them("Insiders"). Other than as
described below, since January&nbsp;1, 2008, none of the Insiders has had or will have a direct or an indirect material interest in any transaction or series of similar transactions in which we were
a party or will be a party in which: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the amount involved exceeded or will exceed $120,000; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the Insider had or will have a direct or indirect material interest. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B> Shareholder Agreements  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shareholders who hold an aggregate
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock are parties to
agreements with us that give the shareholder the right to require to us to purchase the shareholder's shares upon disability or death. In addition, with respect to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares,
those
agreements include a repurchase obligation upon retirement. The agreements do not apply to Class&nbsp;A Common Stock issuable upon conversion of Legacy Class&nbsp;A Common Stock. As a result, all
of the agreements will terminate 360&nbsp;days after the date of this prospectus. See "Description of Capital Stock&nbsp;&#151; Shareholder Agreements". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Employee Stock Ownership Plan  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sponsor an employee stock ownership plan, or ESOP, that holds all of our Class&nbsp;C Preferred Stock, representing 14.4% of our
Class&nbsp;A Common Stock on a pro forma basis before the offering and after giving effect to the events described in "Explanatory Note Regarding Changes in Our Capital Stock". The ESOP covers all
U.S. employees who meet service requirements, including our executive officers. See "Description of Employee Stock Ownership Plan" for a description of our arrangements with the ESOP and "Principal
and Selling Shareholders" for a description of voting provisions under the ESOP. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Policies and Procedures for Related Party Transactions  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our nominating and governance committee will review any transactions with related persons, as defined in Item&nbsp;404 of
Regulation&nbsp;S-K, or in which a related person has a direct or an indirect interest, and determine whether to ratify or approve the transaction. A transaction may only be ratified or
approved if the committee determines that it is fair to us or otherwise in our interest. The committee has pre-approved some types of transactions under our pre-approval
policy. These pre-approved transactions include: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>compensation arrangements approved by the compensation committee or entered into in the ordinary course of business,
including compensation arrangement with relatives of related persons provided that the related persons were not involved in the hiring decisions;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>transactions in the ordinary course of business where the related person's interest arises only (a)&nbsp;from his or her
position as a director of another entity that is party to the transaction, and (b)&nbsp;from an equity interest of less than 5% in another entity that is party to the transaction; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>transactions in the ordinary course of business where the interest of the related party arises solely from the ownership
of a class of our equity securities where all holders of the class of equity securities will receive the same benefit on a pro rata basis. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
director may participate in the approval of a transaction for which he or she is a related party. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>115</FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ek79101_principal_and_selling_shareholders"> </A>
<A NAME="toc_ek79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  PRINCIPAL AND SELLING SHAREHOLDERS    <BR>    </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth information regarding beneficial ownership of our capital stock as of March&nbsp;31, 2011 for </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>each person who we know beneficially owns more than 5% of our Class&nbsp;A Common Stock;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>each of our directors;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>each of our named executive officers;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>all of our directors and executive officers as a group; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>each other selling shareholder. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
determined beneficial ownership according to the SEC rules. Generally, a person has beneficial ownership of a security if the person possesses sole or shared voting or investment
power of the securities. The table below includes shares issuable upon exercise of options and stock-settled stock appreciation rights held by the person exercisable within 60&nbsp;days of
March&nbsp;31, 2011 and shares allocated to the person's account under our ESOP that vest within 60&nbsp;days of March&nbsp;31, 2011. To calculate the shares issuable upon the exercise of
stock-settled stock appreciation rights, we have used $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, the midpoint of the price range set forth on the cover of this prospectus. Except as indicated in the
footnotes below,
based on the information furnished to us, each of the shareholders listed below has sole voting and investment power with respect to all shares of common stock shown are beneficially owned, subject to
community property laws where applicable. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
table lists beneficial ownership before the offering on a pro forma basis after giving effect to the events described under "Explanatory Note Regarding Changes in Our Capital
Stock", including the conversion of shares of Legacy Class&nbsp;A Common Stock and Class&nbsp;C Preferred Stock into Class&nbsp;A Common Stock. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
for shares held under the ESOP, which convert from Class&nbsp;C Preferred Stock into Class&nbsp;A Common Stock upon completion of the offering made by this prospectus but are
distributed to the beneficial owner only upon specified events (See "Description of Employee Stock Ownership Plan"), all shares owned before the offering and after the offering are shares of Legacy
Class&nbsp;A Common Stock that convert into Class&nbsp;A Common Stock 180&nbsp;days and 360&nbsp;days after the date of the final prospectus used in the offering. See "Description of Capital
Stock." No public market exists for the Legacy Class&nbsp;A Common Stock and we do not intend to list those shares on a securities exchange. All shares of Class&nbsp;B Common Stock outstanding are
owned by Henry T. Swigert as Trustee of the Swigert 2000 Trust. Shares of Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock will be convertible one-for-one
into Class&nbsp;A Common Stock. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>116</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
otherwise noted below, the address for each of the shareholders in the table below is c/o ESCO Corporation, 2141 NW 25th&nbsp;Avenue, Portland, Oregon 97210. </FONT></P>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=4 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ROWSPAN=4 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Percentage of<BR>
Common Stock<BR>
Beneficially Owned<BR>
After the Offering<BR>
If Underwriters<BR>
Exercise Option in<BR>
Full </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
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<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=12 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Shares of Common<BR>
Stock Beneficially<BR>
Owned Before<BR>
the Offering </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=12 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Shares of Common<BR>
Stock Beneficially<BR>
Owned After<BR>
the Offering </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=3 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=3 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:49pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Number<BR>
of<BR>
shares offered

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ROWSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:88pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Name of Beneficial Owner

<!-- COMMAND=ADD_SCROPPEDRULE,88pt -->

 </B></FONT></DIV></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Number

<!-- COMMAND=ADD_SCROPPEDRULE,27pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;B<BR>
Number

<!-- COMMAND=ADD_SCROPPEDRULE,27pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:16pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Total<BR>
%

<!-- COMMAND=ADD_SCROPPEDRULE,16pt -->

 </B></FONT></DIV></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Number

<!-- COMMAND=ADD_SCROPPEDRULE,27pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;B<BR>
Number

<!-- COMMAND=ADD_SCROPPEDRULE,27pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:16pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Total<BR>
%

<!-- COMMAND=ADD_SCROPPEDRULE,16pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:7pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>%

<!-- COMMAND=ADD_SCROPPEDRULE,7pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:7pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>%

<!-- COMMAND=ADD_SCROPPEDRULE,7pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:7pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>%

<!-- COMMAND=ADD_SCROPPEDRULE,7pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:7pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>%


<!-- COMMAND=ADD_SCROPPEDRULE,7pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:7pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>%

<!-- COMMAND=ADD_SCROPPEDRULE,7pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>5 Percent Shareholders</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Charles F. Snow(1)<BR>
P.O.&nbsp;Box&nbsp;871178<BR>
Vancouver, WA 98687</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
9.38</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
7.86</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ESCO Corporation<BR>
Employee Stock Ownership Plan&nbsp;Trust(2)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
17.48</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14.65</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Directors and Executive Officers</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Steven D. Pratt(3)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.15</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.80</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Calvin W. Collins(4)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">F. Patrick Fonner(5)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gene K. Huey(6)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.88</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.58</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Larry R. Huget(7)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
1.17</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Henry T. Swigert(8)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.27</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
100</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
18.10</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Peter F. Adams(9)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Frank Alvarez</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stephen E. Babson(10)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Peter F. Bechen</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Frank Jungers(11)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Robert C. Warren, Jr.(12)</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.53</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
2.12</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">John W. Wood, Jr.&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
*</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>All directors and executive officers as a group (16&nbsp;persons)(8)</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
13.77</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
27.74</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>%</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Other Selling Shareholders</B></FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">*</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Less
than 1%
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(1)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
owned by Charles&nbsp;F. Snow as Trustee of the Elizabeth&nbsp;S. Snow Generation Skipping Trust FBO Charles&nbsp;F.
Snow and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock beneficially owned by Charles&nbsp;F. Snow as president of 'Nchiawana Enterprises,&nbsp;L.P.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(2)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">The
ESOP holds Class&nbsp;C Preferred Stock, which generally does not have the right to vote except as required by law. At the completion of the offering
made by this prospectus, the shares will convert into Class&nbsp;A Common Stock. The trustee of the ESOP will vote shares that are held by the ESOP and not allocated to any participant's account. An
ESOP participant may direct the trustee how to vote shares allocated to the participant's account. Undirected shares are voted by the ESOP trustee in the trustee's discretion. As
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2011,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of the shares held by the ESOP trustee had been allocated to participant accounts
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares were unallocated. Each ESOP participant is entitled to receive a
distribution of vested shares allocated to the participant's account upon death, disability, retirement at age 65 or other termination of employment, subject to the restrictions specified in the ESOP.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(3)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned under the ESOP. </FONT></DD></DL>
 </DIV>
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<p style="font-family:arial;"></FONT></P>

<DL compact>
<DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(4)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;exercisable
options to purchase Class&nbsp;A Common Stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares beneficially owned under the ESOP.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(5)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned by F. Patrick Fonner as Trustee of the F. Patrick Fonner and B. Lynne Fonner Trust U/A dated
August&nbsp;6, 2009. Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;exercisable options to purchase Class&nbsp;A Common Stock.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(6)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned under the ESOP.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(7)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned under the ESOP.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(8)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">All&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;B Common Stock are held by Henry T. Swigert as Trustee of the Swigert 2000 Trust.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(9)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned by Peter F. Adams as Trustee of the Peter F. Adams Family Trust.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(10)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned by Stephen E. Babson as an officer of Babson EC&nbsp;LLC.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(11)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned by Frank Jungers as Trustee of the Francis Jungers Trust U/A dtd 11/13/03.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-9pt;'><FONT  style="font-size:8pt;line-height:9pt;">(12)</FONT></DT><DD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">Includes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
beneficially owned by Robert C. Warren Jr. as Trustee of the Lucy Christenson Warren Trust. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>118</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="em79101_description_of_employee_stock_ownership_plan"> </A>
<A NAME="toc_em79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  DESCRIPTION OF EMPLOYEE STOCK OWNERSHIP PLAN    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We sponsor an employee stock ownership plan, or ESOP, that covers all of our U.S. employees who meet service requirements. We
implemented the ESOP on December&nbsp;27, 2006 by borrowing money which we loaned to the ESOP. The ESOP used that money to buy Class&nbsp;C Preferred Stock from us and from our shareholders in
proportion to their shareholdings. The ESOP transaction provided a one-time, tax-efficient payment to our shareholders and an ownership stake in the company to our employees,
and it continues to generate tax savings for us. Each quarter, we pay dividends on the Class&nbsp;C Preferred Stock and make contributions to the ESOP in an aggregate amount of $7.4&nbsp;million,
and the ESOP pays that amount back to us to service the loan. The loan is secured by a pledge of the Class&nbsp;C Preferred Stock purchased by the ESOP. As a portion of the loan is paid each
quarter: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>5,630 pledged shares of Class&nbsp;C Preferred Stock are released and allocated to ESOP participant accounts; and </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>we recognize a non-cash compensation expense equal to the fair value of the allocated shares determined by an
independent financial adviser to the ESOP trustee. A portion of the expense is allocated to cost of goods sold and a portion is allocated to selling and administrative expense, based on the number of
shares allocated to the accounts of manufacturing employees and other employees. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
ESOP participant is entitled to an account balance distribution upon termination of employment, retirement at age 65 or because of death or disability, and we have been obligated to
offer to repurchase the shares allocated to that former ESOP participant at the fair value determined by an independent financial adviser to the ESOP trustee. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
completion of the offering made by this prospectus: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>all of the shares of Class&nbsp;C Preferred Stock will convert to Class&nbsp;A Common Stock; </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>our obligation to purchase shares from former ESOP participants will terminate;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the shares held by the ESOP and its participants will be included in shareholders' equity in our financial statements,
rather than accounted for as contingently redeemable equity securities;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>we will make quarterly contributions to the ESOP, net of any dividends paid on the Class&nbsp;A Common Stock held by the
ESOP, in an amount sufficient for it to service its debt to us, which will continue to have no effect on our cash position; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>we will continue to recognize a non-cash compensation expense each quarter until the ESOP repays its debt to
us, and all shares pledged as security for the debt are released, which will occur on or before December&nbsp;31, 2013. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
add the ESOP compensation expense back to the financial measures we monitor, including operating profit and EBITDA, because it is a non-cash charge that can significantly
affect our reported financial results and, because it depends on quarterly fair value appraisals, can fluctuate significantly between quarters. The ESOP compensation expense is not ongoing share-based
compensation and we believe our employees receive competitive compensation excluding the shares allocated to them under the ESOP. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>119</FONT></P>

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NAME="em79101_description_of_capital_stock"> </A>
<A NAME="toc_em79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  DESCRIPTION OF CAPITAL STOCK    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our articles of incorporation, as in effect upon the completion of the offering made by this prospectus, authorize us to issue up to
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
Class&nbsp;B Common Stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of
"blank check" preferred stock, which could be issued by the board without shareholder approval and could have voting, liquidation, dividend and other rights superior to the Class&nbsp;A Common
Stock. The Class&nbsp;C Preferred Stock, all of which is held by our ESOP, will convert automatically into Class&nbsp;A Common Stock upon completion of this offering and will no longer be
outstanding. Upon the completion of this offering, the outstanding shares of capital stock will be: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares of Class&nbsp;A Common Stock.  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares of Legacy Class&nbsp;A Common Stock, excluding shares we expect will be converted to
Class&nbsp;A Common Stock and sold in this offering. Each share of Legacy Class&nbsp;A Common Stock (a)&nbsp;that is sold in an underwritten public offering (including this offering) will
automatically convert into one share of Class&nbsp;A Common Stock immediately upon such sale, (b)&nbsp;outstanding on the date that is 180&nbsp;days following the date of this prospectus (the
first "Automatic Conversion Date") will automatically convert on that date into one-half of a share of new Class&nbsp;A Common Stock and one-half share of Legacy
Class&nbsp;A Common Stock, (c)&nbsp;outstanding on the date that is 360&nbsp;days after the date of this prospectus (the second "Automatic Conversion Date") will automatically convert on that
date into one share of new Class&nbsp;A Common Stock (subject, in each case, to adjustment for stock splits, stock dividends, recapitalizations and similar events occurring after the offering made
pursuant to this prospectus).  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2> shares of Class&nbsp;B Common Stock. Henry&nbsp;T. Swigert, as Trustee of the Swigert 2000 Trust,
beneficially holds all of the shares of our outstanding Class&nbsp;B Common Stock. Each share of Class&nbsp;B Common Stock will automatically convert upon transfer to a person other than those
described below or if fewer than&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;B Common Stock are outstanding (a)&nbsp;if transferred before the first Automatic Conversion Date, into one share of Legacy
Class&nbsp;A Common Stock; (b)&nbsp;if transferred after the first but before the second Automatic Conversion Date, into one-half share of Legacy Class&nbsp;A Common Stock and
one-half share of Class&nbsp;A Common Stock; and (c)&nbsp;if transferred on or after the second Automatic Conversion Date, into one share of Class&nbsp;A Common Stock (subject, in
each case, to adjustment for any stock splits, stock dividends, recapitalizations and similar events occurring after the offering made pursuant to this prospectus). The shares of Class&nbsp;B Common
Stock may be transferred without automatic conversion to Henry&nbsp;T. Swigert; any trustee, in the capacity of trustee, of the Swigert 2000 Trust; or any trustee, in the capacity of trustee, of any
trust created under the Swigert 2000 Trust. Mr.&nbsp;Swigert is a member of our board of directors. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of March&nbsp;31, 2011, we had 246 holders of record of our Legacy Class&nbsp;A Common Stock, one holder of record of our Class&nbsp;B Common Stock and one holder of record of
our Class&nbsp;C Preferred Stock. No shares of Class&nbsp;A Common Stock will be outstanding until issued in connection with the sale of stock in the offering made by this prospectus. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Common Stock Voting  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each holder of our Class&nbsp;A Common Stock is entitled to one vote per share. Each holder of Legacy Class&nbsp;A Common Stock
and Class&nbsp;B Common Stock is entitled to the number of votes per share equal to the number of shares of Class&nbsp;A Common Stock into which the holder's shares are convertible; the conversion
ratio will be one-for-one upon completion of the offering. Except as required by law and as described below, holders of Class&nbsp;A Common Stock, Legacy Class&nbsp;A
Common Stock and Class&nbsp;B Common Stock vote together as a single voting group on all matters </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>120</FONT></P>

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<BR>

<P style="font-family:arial;"><FONT SIZE=2>submitted
to shareholders for a vote. In addition to any class vote required by law, the Legacy Class&nbsp;A Common Stock and the Class&nbsp;A Common Stock, as a single voting group, and the
Class&nbsp;B Common Stock vote separately on the following matters: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>conversion, merger or share exchange, as described in Oregon Business Corporation Act Sections&nbsp;60.470 through
60.501, except for transactions that do not require shareholder approval under Oregon Business Corporation Act Section&nbsp;60.487(7);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>any sale of assets other than in the ordinary course of business, as described in Oregon Business Corporation Act
Section&nbsp;60.534; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>any dissolution, as described in Oregon Business Corporation Act Sections&nbsp;60.621 through 60.645. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
shares of Class&nbsp;B Common Stock will convert automatically into shares of Class&nbsp;A Common Stock or Legacy Class&nbsp;A Common Stock, depending on the conversion date,
when the number of shares of Class&nbsp;B Common Stock outstanding is less than&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(subject to adjustment for any stock split or dividend). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Dividend Rights  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock share equally and ratably, on an
as-converted basis, in any dividends we pay or set aside on our common stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Liquidation Rights  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock share ratably, on an
as-converted basis, in all assets we distribute as a result of our liquidation, dissolution or winding up. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Preferred Stock  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our articles of incorporation, as in effect upon the completion of the offering made by this prospectus, authorize&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shares of "blank check" preferred stock, with respect to which our board of directors can, without shareholder approval, (1)&nbsp;fix the rights, preferences, privileges and restrictions, including
voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, subscription rights and the number of shares constituting any series, and (2)&nbsp;cause the company
to issue preferred stock in one or more series. Our board of directors may designate preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of
common stock. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Shareholder Agreements  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shareholders who hold an aggregate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A
Common Stock are parties to
restated stock transfer restriction agreements ("RSTRA") and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shareholders who hold an aggregate&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy Class&nbsp;A Common Stock are
parties to stock purchase
agreements ("SPA"). Each RSTRA and SPA gives a shareholder the right to require us to purchase the shareholder's shares upon retirement or death. In addition, the RSTRA also gives a shareholder the
right to require us to purchase the shares upon disability and the SPA requires us to repurchase shares upon the termination of the shareholder's employment with us. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
RSTRA and SPA only apply to shares of Legacy Class&nbsp;A Common Stock. As a result, all of the agreements will terminate when the underlying Legacy Class&nbsp;A Common Stock
converts to Class&nbsp;A Common Stock, which will occur no later than 360&nbsp;days after the date of this prospectus. In 2009 and 2010, we repurchased shares under the RSTRA for aggregate
consideration of $1.0&nbsp;million and $0.7&nbsp;million, respectively. We repurchased no shares under the SPA in those years. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>121</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>We
cannot predict with certainty the extent to which repurchase obligations will occur or the future fair market value of our stock. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Restated Stock Transfer Restriction Agreement  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each shareholder subject to a RSTRA has the right to sell all or some shares to us upon retirement or disability. If that right is
exercised, the sale will take place in three installments over a two-year period: up to one-third of the shares on the first on the date of the retirement or disability;
between one-third and two-thirds of the shares on the second on the first anniversary of the retirement or disability; and any remaining shares on the third on the second
anniversary of the retirement or disability. If a shareholder sells more than $1.0&nbsp;million of shares back to us at any of those installments, we may, at our option, pay $1.0&nbsp;million on
that closing date and half of the remaining amount on each of the first and second anniversaries of the closing date. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, successors in interest to shareholders subject to the RSTRA may, upon the death of a shareholder, sell up to half of the shares held by the shareholder at death to us and
any remaining shares on the first anniversary of the shareholder's death. When a repurchase right is exercised after a shareholder's death, we have the option of paying the purchase price in two equal
annual installments. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
repurchase obligation under the RSTRA is based on the fair market value of the shares subject to the RSTRA at the time of exercise, which is measured as of the last day of the
fiscal quarter immediately preceding the quarter in which the retirement, death or disability occurred or in which the applicable anniversary of the retirement, death or disability occurs. After
completion of the offering made by this prospectus, we expect to measure the fair market value of the shares by the trading value of the Class&nbsp;A Common Stock. Our obligation to repurchase
shares under the RSTRA is subject to restrictions under Oregon corporate law and our credit facility, which may also impact the priority in which we purchase shares if multiple shareholders exercise
their put options at once. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have a right of first refusal to purchase the shares subject to the RSTRA on the same terms, including price, as those on which a shareholder subject to the RSTRA attempts to sell
his or her shares to a bona fide purchaser. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Stock Purchase Agreement  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares subject to a SPA may only be sold or transferred in accordance with that SPA. Each shareholder subject to a SPA must sell his
or her shares back to us upon death or termination of the shareholder's employment or service as a director. The repurchase price is based on the book value of the shares, as adjusted based on our
consolidated
earnings on the last day of each fiscal year. Unless otherwise agreed, we must pay the repurchase price for the shares within 30&nbsp;days of death or termination. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Anti-Takeover Provisions  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Articles of Incorporation and Bylaws  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our articles of incorporation and bylaws, as in effect upon the completion of this offering, contain provisions that may delay or
prevent a change in control of our company or changes in our management, including provisions that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>authorize "blank check" preferred stock, which could be issued without shareholder approval and could have voting,
liquidation, dividend and other rights superior to our common stock;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>create a classified board of directors whose members serve staggered three-year terms; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>122</FONT></P>

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<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though
less than a quorum; and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>require a two-thirds vote of the holders of our Class&nbsp;A Common Stock, Legacy Class&nbsp;A Common
Stock, and Class&nbsp;B Common Stock, voting as a single group, to amend specified provisions of our articles of incorporation and bylaws. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These
provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Oregon Business Combination Act  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the Oregon Business Combination Act, which prohibits an Oregon corporation from engaging in any business combination
with any interested shareholder for three years after the date the shareholder became an interested shareholder, with the following exceptions: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>before the combination or transaction date, the board of directors of the corporation approved either the business
combination or the transaction that resulted in the shareholder becoming an interested shareholder;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>upon completion of the transaction that resulted in the shareholder becoming an interested shareholder, the interested
shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested shareholder) (i)&nbsp;those shares owned by persons who are directors and also officers and (ii)&nbsp;employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or an exchange offer; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>on or after that date, the business combination is approved by the board of directors and authorized at an annual or a
special meeting of the shareholders, and not by written consent, by the affirmative vote of at least 66&nbsp;<SUP>2</SUP>/<SMALL>3</SMALL>% of the outstanding voting stock that is not owned by the interested
shareholder. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, the Oregon Business Combination Act defines "business combination" to include the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>any merger or consolidation involving the corporation or any direct or indirect majority owned subsidiary of the
corporation and the interested shareholder or any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested shareholder and
as a result of such merger or consolidation the transaction is not excepted as described above;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>any sale, transfer, pledge or other disposition (in one transaction or a series) of 10% or more of the assets of the
corporation involving the interested shareholder;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested shareholder;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any
class or series of the corporation beneficially owned by the interested shareholder; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the receipt by the interested shareholder of the benefit of any losses, advances, guarantees, pledges or other financial
benefits by or through the corporation. </FONT></DD></DL>
</UL>
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<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, the Oregon Business Combination Act defines an "interested shareholder" as an entity or a person who, together with the person's affiliates and associates, beneficially
owns, or within three years prior to the time of determination of interested shareholder status owned, 15% or more of the outstanding voting stock of the corporation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Oregon Control Share Act  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are subject to the Oregon Control Share Act, which regulates the process by which a person may acquire control of certain
Oregon-based corporations without the consent and cooperation of the corporation's board of directors. Under the Oregon Control Share Act a person who acquires voting stock in a transaction that
results in the person holding more than 20%, 33&nbsp;<SUP>1</SUP>/<SMALL>3</SMALL>% or 50% of the total voting power cannot vote the shares it acquires in the acquisition. This restriction does not apply if
voting rights are given to the control shares by: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the holders of a majority of the outstanding voting shares, excluding the control shares held by the acquirer and shares
held by our officers and employee directors, and  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the holders of a majority of the outstanding voting shares, including the control shares held by such person and shares
held by our officers and employee directors. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
retain the voting rights attached to acquired shares, these approvals are required at the time an acquirer's holdings first exceed 20% of the total voting power, and again at the
times the acquiring person's holdings first exceed 33&nbsp;<SUP>1</SUP>/<SMALL>3</SMALL>% and 50%. An acquiring person includes persons acting as a group. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
acquirer may, but is not required to, submit to the target company an "acquiring person statement" including specific information about the acquirer and its plans for the
corporation. The acquiring person statement may also request that the corporation call a special meeting of shareholders to determine whether the control shares will be allowed to have voting rights.
If the acquirer does not request a special meeting of shareholders, the issue of voting rights of control shares will be considered at the next annual or special meeting of shareholders that is held
more than 60&nbsp;days after the date of the acquisition of control shares. If the acquirer's control shares are allowed to have voting rights and represent a majority or more of all voting power,
shareholders who do not vote in favor of voting rights for the control shares will have the right to receive the appraised fair value of their shares, which may not be less than the highest price paid
per share by the acquirer for the control shares. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
are not deemed to be acquired in a control share acquisition if, among other things, they are acquired from the issuing corporation, or are issued pursuant to a plan of merger or
exchange effected in compliance with the Oregon Business Corporation Act and the issuing corporation is a party to the merger or exchange agreement. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Listing  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to apply to list our common stock on The NASDAQ Global Market under the symbol "ESCO". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Transfer Agent and Registrar  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our Class&nbsp;A Common Stock is American Stock Transfer&nbsp;&amp; Trust Company,&nbsp;LLC.
The transfer agent's address is Operations Center, 6201&nbsp;15th&nbsp;Avenue, Brooklyn, NY&nbsp;11219. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>124</FONT></P>

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<BR></FONT><FONT SIZE=2><B>  SHARES ELIGIBLE FOR FUTURE SALE    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Class&nbsp;A Common Stock to be sold in the offering made by this prospectus is a new class of common stock, none of which will
be outstanding until issuance in connection with the offering made by this prospectus. There has not been a public market for our Class&nbsp;A Common Stock. Nevertheless, future sales of substantial
amounts of our Class&nbsp;A Common Stock, including shares issued upon exercise of options of stock appreciation rights or conversion of our Legacy Class&nbsp;A Common Stock or Class&nbsp;B
Common Stock, or the possibility of these sales, in the public market, could cause the market price of our Class&nbsp;A Common Stock to fall or impair our ability to raise equity capital. In
addition, future sales of shares of substantial amounts of our Legacy Class&nbsp;A Common Stock could also cause the market price of our Class&nbsp;A Common Stock to fall or impair our ability to
raise equity capital, although there is no public market for our Legacy Class&nbsp;A Common Stock and we do not plan to list the shares of Legacy Class&nbsp;A on any exchange or otherwise
facilitate the creation of a public market. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
on the number of shares of Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock outstanding as of December&nbsp;31, 2010, upon completion of this offering and
assuming no exercise by the underwriters of their option to purchase additional shares, we will have&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy
Class&nbsp;A Common Stock and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;B Common Stock outstanding. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our Class&nbsp;A Common Stock sold in this offering will be freely tradable in the public market without restriction or further registration under
the Securities Act, unless these shares are held by our affiliates, as that term is defined in Rule&nbsp;144 under the Securities Act. The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A
Common Stock not sold in this offering, the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our Legacy Class&nbsp;A Common Stock and the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our Class&nbsp;B Common Stock held by our
existing holders will be "restricted securities", as that term is defined in Rule&nbsp;144, and will only be available for public sale if they are registered under the Securities Act or if they
qualify for an exemption from registration under Rule&nbsp;144 or Rule&nbsp;701 of the Securities Act, which are summarized below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of Class&nbsp;A Common Stock will be held by our ESOP as a result of the conversion of each share of the outstanding Class&nbsp;C Preferred Stock into shares
of Class&nbsp;A Common Stock in connection with the offering and the amendment of our articles of incorporation. Shares allocated to an ESOP participant's account are not distributed to ESOP
participants before death, disability, retirement at age 65 or other termination of employment. Of these shares,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have been allocated to persons that have entered into lockup
agreements
described below. The remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares will be immediately eligible for sale following this offering in the public market under Rule&nbsp;144 or Rule&nbsp;701 upon the
distribution of the shares to an ESOP participant pursuant to the terms of the ESOP. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
of the Legacy Class&nbsp;A Common Stock outstanding after this offering will automatically convert on a one-for-one basis into shares of the Class&nbsp;A
Common Stock in equal installments on a pro rata basis at dates that are 180&nbsp;days and 360&nbsp;days after the date of this prospectus. Only the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Legacy
Class&nbsp;A Common Stock owned by our executive officers and directors and all of the shares of Class&nbsp;B Common Stock will be subject to lock-up agreements described below. We
expect the remaining&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;A Common Stock issuable upon the conversion of the Legacy Class&nbsp;A Common Stock, will be eligible for sale in the public market
pursuant to Rule&nbsp;144 or Rule&nbsp;701, subject to some limitations on the shares held by our affiliates. There is, however, no public market for our Legacy Class&nbsp;A Common Stock and we
do not plan to list the shares of Legacy Class&nbsp;A on any exchange or otherwise facilitate the creation of a public market. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, upon transfer to a person other than those specified in the articles of incorporation,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of Class&nbsp;B Common Stock outstanding will convert
on a one-for-one </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>125</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>basis
into shares of Legacy Class&nbsp;A Common Stock or Class&nbsp;A Common Stock depending on the date of transfer. The shares of Class&nbsp;B Common Stock, and any shares of Class&nbsp;A
Common Stock or Legacy Class&nbsp;A Common Stock issuable upon conversion of the Class&nbsp;B Common Stock, will be eligible for sale pursuant to Rule&nbsp;144 upon the expiration of lockup
agreements entered into with the holders of all of the shares of our Class&nbsp;B Common Stock, subject to limitations on the shares held by our affiliates. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Lockup Agreements  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of our officers and directors who, following this offering, together will beneficially own&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, of our Class&nbsp;A Common Stock,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%, of our Legacy Class&nbsp;A Common Stock
and&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares, or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%,
of our Class&nbsp;B Common Stock (or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our total Class&nbsp;A Common Stock, assuming the conversion of the Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock) have
agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their Class&nbsp;A Common Stock or securities convertible into or exchangeable for shares of
Class&nbsp;A Common Stock (including Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock) during the period from the date of this prospectus continuing through the date
180&nbsp;days after the date of this prospectus, except with the prior written consent of each of the representatives of the underwriters. This agreement is subject to certain exceptions, and is
also subject to extension for up to an additional 34&nbsp;days, as described in "Underwriting". </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Rule&nbsp;144  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, a person who beneficially owns restricted shares of any class of our common stock (shares other than those purchased in a
registered public offering) for at least six months is entitled to sell those restricted securities, if that person is not an affiliate of ours at the time of, or at any time during the 90&nbsp;days
preceding, the sale. A person who beneficially owns restricted shares of our common stock for at least six months and who is our affiliate at the time of, or was our affiliate any time during the
90&nbsp;days preceding, a sale is subject to additional restrictions on the sale of securities. Those additional restrictions limit the number of securities the person may sell within any
three-month period to the number of securities that do not exceed the greater of the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>1% of the number of shares of the applicable class of common stock then outstanding, which, in the case of our
Class&nbsp;A Common Stock, equals approximately&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares based on the number of shares of Class&nbsp;A Common Stock outstanding as of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011; or </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>with respect to Class&nbsp;A Common Stock, the average weekly trading volume of the Class&nbsp;A Common Stock on The
NASDAQ Global Market during the four calendar weeks before the filing of a notice on Form&nbsp;144 with respect to the sale. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
by or on behalf of affiliates under Rule&nbsp;144 must also comply with the manner of sale, current public information, and notice provisions of Rule&nbsp;144. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Rule&nbsp;701  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In general, Rule&nbsp;701 allows a shareholder who purchased shares of our common stock pursuant to a written compensatory plan or
contract and who is not an affiliate of ours during the immediately preceding 90&nbsp;days to sell these shares under Rule&nbsp;144, but without compliance with the public information, holding
period, volume limitation or notice provisions of Rule&nbsp;144. Rule&nbsp;701 also permits our affiliates to sell Rule&nbsp;701 shares under Rule&nbsp;144 without complying with the holding
period requirements of Rule&nbsp;144. All holders of Rule&nbsp;701 shares, however, are required to wait until 90&nbsp;days after the date of this prospectus before selling shares pursuant to
Rule&nbsp;701. The shares that may be sold in compliance with Rule&nbsp;701 that are subject to lock-up agreements described </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>126</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>above
and under "Underwriting" below will not be eligible for sale until expiration or waiver of the restrictions set forth in those agreements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Stock Plans  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We plan to file&nbsp;a registration statement on Form&nbsp;S-8 to cover shares of Class&nbsp;A Common Stock under
our 2000 Stock Incentive Plan, our 2010 Stock Incentive Plan and our ESOP. Resale of these registered shares may occur only after conversion of the shares underlying plan awards into Class&nbsp;A
Common Stock and the expiration of any contractual lock-up periods. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>127</FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="eo79101_material_united_states_federal__mat02864"> </A>
<A NAME="toc_eo79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES<BR>  TO NON-U.S. HOLDERS    <BR>    </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the material United States federal income tax consequences to non-U.S. holders (as defined
below) of the acquisition, ownership and disposition of our Class&nbsp;A Common Stock issued pursuant to this offering. This discussion is not a complete analysis of all the potential United States
federal income tax consequences relating thereto, nor does it address any estate and gift tax consequences or any tax consequences arising under any state, local or foreign tax laws, or any other
United States federal tax laws. This discussion is based on the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, judicial decisions and published rulings and
administrative pronouncements of the Internal Revenue Service ("IRS"), all as in effect as of the date of this offering. These authorities may change, possibly retroactively, resulting in United
States federal income tax consequences different from those discussed below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
discussion is limited to non-U.S. holders who purchase our Class&nbsp;A Common Stock issued pursuant to this offering and who hold our Class&nbsp;A Common Stock as
a "capital asset" within the meaning of the Internal Revenue Code (generally, property held for investment). This discussion does not address all of the United States federal income tax consequences
that may be relevant to a particular holder in light of such holder's particular circumstances. This discussion also does not consider any specific facts or circumstances that may be relevant to
holders subject to special rules under the United States federal income tax laws, including, without limitation, shareholders, partners, beneficiaries or other owners of a person holding our
Class&nbsp;A Common Stock; former citizens or residents of the United States subject to tax as expatriates; partnerships or other entities treated as partnerships for U.S. federal income tax
purposes; corporations that accumulate earnings to avoid United States federal income tax; financial institutions; insurance companies; brokers, dealers or traders in securities, commodities or
currencies; tax-exempt organizations; tax-qualified retirement plans; persons that own, or have owned, actually or constructively, more than 5% of our Class&nbsp;A Common
Stock; and persons holding our Class&nbsp;A Common Stock as part of a hedging or conversion transaction or straddle, or a constructive sale, or other risk reduction strategy. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROSPECTIVE
INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF
OUR CLASS A COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR FOREIGN TAX LAWS OR ANY OTHER UNITED STATES FEDERAL TAX LAWS OR UNDER ANY APPLICABLE TAX TREATY. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Definition of Non-U.S. Holder  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this discussion, a non-U.S. holder is a person that is not a "U.S. person" for United States federal
income tax purposes. A U.S. person is any of the following: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>an individual citizen or resident of the United States;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>a corporation or partnership (including any entity treated as such for United States federal income tax purposes) created
or organized under the laws of the United States, any state thereof, or the District of Columbia;  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>an estate the income of which is subject to United States federal income tax regardless of its source; or </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>a trust (1)&nbsp;the administration of which is subject to the primary supervision of a United States court and which
has one or more U.S. persons who have the authority to control all </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>128</FONT></P>

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<UL>
<UL>

<P style="font-family:arial;"><FONT SIZE=2>substantial
decisions of the trust, or (2)&nbsp;that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. </FONT></P>

</UL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
individual may be treated as a resident of the United States in any calendar year by being present in the United States for at least 31&nbsp;days in that calendar year and for an
aggregate of at least 183&nbsp;days during the three-year period ending in that calendar year. For purposes of determining days present in the United States, certain days that an
individual is actually present in the United States are not taken into account. In addition, the 183-day test is determined by counting all of the days the individual is treated as being
present in the current year, one-third of such days in the immediately preceding year and one-sixth of such days in the second preceding year. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Distributions on Our Class&nbsp;A Common Stock  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we make distributions of cash or other property on our Class&nbsp;A Common Stock, such distributions will constitute dividends
for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in
excess of our current and accumulated earnings and profits generally will constitute a return of capital and will first be applied against and reduce a non-U.S. holder's tax basis in the
Class&nbsp;A Common Stock, but not below zero. Any excess will be treated as gain realized on the sale or other disposition of the Class&nbsp;A Common Stock and will be treated as described under
"Gain on Disposition of Our Class&nbsp;A Common Stock" below. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
paid to a non-U.S. holder of our Class&nbsp;A Common Stock, except as provided below with respect to dividends that are treated as effectively connected with the
non-U.S. holder's conduct of a trade or business in the United States, will be subject to United States federal withholding tax at a rate of 30% of the gross amount of the dividends, or
such lower rate specified by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish to us or our paying agent a valid IRS
Form&nbsp;W-8BEN (or applicable successor form) certifying such holder's qualification for the reduced rate. This certification must be provided to us or our paying agent prior to the
payment of dividends and must be updated periodically. Non-U.S. holders that do not timely provide us or our paying agent with the required certification, but that qualify for a reduced
treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
we pay to a non-U.S. holder that are treated as effectively connected with such holder's United States trade or business (and, if required by an applicable income
tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States) are not subject to United States federal withholding tax. Instead, such
dividends generally will be subject to United States federal income tax on a net income basis at regular graduated United States federal income tax rates in much the same manner as if such holder were
a resident of the United States. To inform us that dividends are not subject to United States federal withholding tax, the non-U.S. holder generally must furnish to us or our paying agent
a properly executed IRS Form&nbsp;W-8ECI (or applicable successor form). This certification must be provided to us or our paying agent prior to the payment of dividends and must be
updated periodically. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable
income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders are encouraged to consult their tax advisors
regarding any applicable income tax treaties that may provide for different rules. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
non-U.S. holder who claims the benefit of an income tax treaty generally will be required to satisfy applicable certification and other requirements prior to the
distribution date. Non-U.S. holders </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>129</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>are
encouraged to consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Gain on Disposition of Our Class&nbsp;A Common Stock  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to the discussion below regarding backup withholding, a non-U.S. holder generally will not be subject to United
States federal income tax on any gain realized upon the sale or other disposition of our Class&nbsp;A Common Stock, unless: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the non-U.S. holder is a nonresident alien individual who is present in the United States for 183&nbsp;days
or more during the taxable year of the disposition (but nevertheless is treated as a nonresident alien because some or all of those days were not taken into account for purposes of determining whether
the individual is a U.S. resident under the 183-day test described in the definition of "non-U.S. holder" above);  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the United
States and, if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or  </FONT> <FONT SIZE=2>
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>&#149;</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>we are, or have been, a United States real property holding corporation (USRPHC) for United States federal income tax
purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder's holding period for our Class&nbsp;A Common Stock and our
Class&nbsp;A Common Stock has ceased to be traded on an established securities market prior to the beginning of the calendar year in which the sale or other disposition occurs. Generally, we will be
a USRPHC if the fair market value of our United States real property interests equals or exceeds 50% of the sum of the fair market value of our other trade or business assets, our United States real
property interests, and our foreign real property interests, all as determined under applicable Treasury Regulations. Although we believe we are not and do not anticipate becoming a USRPHC for United
States federal income tax purposes, no assurances can be made in this regard. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain
realized on a sale of our Class&nbsp;A Common Stock by a non-U.S. holder described in the first bullet point above will be subject to United States federal income tax
at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by United States source capital losses (even though the individual is not considered a resident
of the United States), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain
described in the second and third bullet points above will be subject to United States federal income tax on a net income basis at regular graduated United States federal income
tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation that realizes gain described in the second bullet point
above also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the
taxable year, as adjusted for certain items. In addition, if we are determined to be a USRPHC and our Class&nbsp;A Common Stock has ceased to be traded on an established securities market, as
described in the third bullet point above, then a purchaser may be required to withhold 10% of the proceeds payable to a non-U.S. holder from a sale or other taxable disposition of our
Class&nbsp;A Common Stock. This 10% withholding, if applicable, is not an additional tax, and amounts withheld may be credited against the non-U.S. holder's federal income tax liability.
Non-U.S. holders are encouraged to consult their tax advisors regarding any applicable income tax treaties that may provide for different rules. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>130</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><B> Information Reporting and Backup Withholding  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generally must report annually to the IRS and to each non-U.S. holder the amount of distributions on our Class&nbsp;A
Common Stock paid to such holder and the amount of any tax withheld with respect to those distributions. These information reporting requirements apply even if no withholding was required. This
information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
gross amount of dividends paid to a non-U.S. holder subject to information reporting that fails to certify its non-U.S. holder status in accordance with
applicable Treasury Regulations may be subject to backup withholding, currently at a 28% rate. In addition, information reporting and backup withholding may apply to the proceeds from a sale or other
disposition of our Class&nbsp;A Common Stock, if the non-U.S. holder fails to certify its non-U.S. status. Generally, a non-U.S. holder furnishes the required
certification by providing a valid IRS Form&nbsp;W-8BEN or IRS Form&nbsp;W-8ECI, as applicable. Notwithstanding the foregoing, backup withholding may apply if the payor has
actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's
United States federal income tax liability, provided the required information is timely furnished to the IRS. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Recent Legislation Imposing Withholding Tax on Foreign Entities That Do Not Comply with New Disclosure Requirements.  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recently enacted U.S. legislation generally will impose a 30% withholding tax on certain payments to non-U.S. financial
institutions and certain other non-U.S. nonfinancial entities after December&nbsp;31, 2012. The types of payments subject to the new tax will include dividends in respect of our
Class&nbsp;A Common Stock and gross proceeds from the sale or other disposition of our Class&nbsp;A Common Stock. The tax will not apply, however, if the applicable non-U.S. entity
satisfies certain due diligence and disclosure requirements (generally relating to ownership by U.S. persons in or accounts with the non-U.S. entity). Other exceptions also may apply. </FONT> <FONT SIZE=2><B>Non-U.S. holders are encouraged to consult
their own tax advisors regarding the potential application of the new withholding tax based upon their particular
circumstances.</B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>131</FONT></P>

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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
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<A NAME="toc_eq79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  UNDERWRITING    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We, the selling shareholders and the underwriters named below, have entered into an underwriting agreement with respect to the shares
of Class&nbsp;A Common Stock being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman,
Sachs&nbsp;&amp;&nbsp;Co. and Morgan Stanley&nbsp;&amp;&nbsp;Co. Incorporated are the representatives of the underwriters. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><I>Underwriters  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="115pt" style="font-family:arial;"></TD>
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<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:88pt;"><FONT SIZE=2><B>Number of Shares

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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goldman, Sachs&nbsp;&amp;&nbsp;Co.&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Morgan Stanley&nbsp;&amp;&nbsp;Co. Incorporated</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this
option is exercised. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an
additional&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares from us. They
may exercise that option for 30&nbsp;days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in
the table above. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following tables show the per share and total underwriting discounts to be paid to the underwriters by us and the selling shareholders. Such amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional shares.
</FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><I>Paid by Us  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="82pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>No Exercise

<!-- COMMAND=ADD_SCROPPEDRULE,58pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:62pt;"><FONT SIZE=2><B>Full Exercise

<!-- COMMAND=ADD_SCROPPEDRULE,62pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Per Share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><I>Paid by the Selling Shareholders  </I></FONT></P>
 <DIV style="padding:0pt;position:relative;width:70%;margin-left:15%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="82pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>No Exercise

<!-- COMMAND=ADD_SCROPPEDRULE,58pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:62pt;"><FONT SIZE=2><B>Full Exercise

<!-- COMMAND=ADD_SCROPPEDRULE,62pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Per Share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the
underwriters to securities dealers may be sold at a discount of up to $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share from the initial public offering price. If all the shares are not sold at the initial
public offering
price, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance, and subject to the
underwriters' right to reject any order in whole or in part. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
officers, directors and the holder of our Class&nbsp;B Common Stock have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their
Class&nbsp;A Common Stock or securities convertible into or exchangeable for shares of Class&nbsp;A Common Stock </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>132</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>(including
shares of Legacy Class&nbsp;A Common Stock and Class&nbsp;B Common Stock), and we have agreed not to issue shares of Class&nbsp;A Common Stock, during the period from the date of this
prospectus through 180&nbsp;days after the date of this prospectus, except with the prior written consent of each of the representatives. These agreements are subject to exceptions, including
issuances of securities under existing stock incentive plans or as consideration in acquisitions, provided that the aggregate number of shares of Class&nbsp;A Common Stock issued or issuable in
acquisitions may not exceed&nbsp;&nbsp;&nbsp;&nbsp;% of the shares offered by this prospectus and that the recipient of those securities must agree to be bound by the lock-up restrictions described
in this paragraph. See "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
180-day restricted period described in the preceding paragraph will be automatically extended if (1)&nbsp;during the last 17&nbsp;days of the 180-day
restricted period the Company issues an earnings release or announces material news or a material event; or
(2)&nbsp;prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 15-day period following the last day
of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the announcement of the material news or material event. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among us and the representatives. Among the factors to be
considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and
earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
intend to apply to have our Class&nbsp;A Common Stock listed on The NASDAQ Global Market under the symbol "ESCO". </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the offering, the underwriters may purchase and sell shares of Class&nbsp;A Common Stock in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering.
"Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from us in the offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the
underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the
option granted to them. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class&nbsp;A Common Stock in the open market after pricing that could
adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of Class&nbsp;A Common Stock made by the underwriters in the open market
prior to the completion of the offering. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the
representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases
to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a
decline in </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>133</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>the
market price of our Class&nbsp;A Common Stock and, together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our Class&nbsp;A Common
Stock. As a result, the price of our Class&nbsp;A Common Stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued
at any time. These transactions may be effected on The NASDAQ Global Market, in the over-the-counter market or otherwise. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters do not expect sales to discretionary accounts to exceed 5% of the total number of shares offered. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
estimate that the total expenses of the offering that we expect to pay, excluding underwriting discounts, but including certain expenses of the selling shareholders, will be
approximately $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
and the selling shareholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and
investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective
affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees
and expenses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and
equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities
activities may involve our securities and/or instruments. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views
in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> European Economic Area  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant
Member State"), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant
Implementation Date") it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been
approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant
Member State at any time: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>to
legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>to
any legal entity which has two or more of (1)&nbsp;an average of at least 250 employees during the last financial year; (2)&nbsp;a total balance
sheet of more than &euro;43,000,000; and (3)&nbsp;an annual net turnover of more than &euro;50,000,000, as shown in its last annual or consolidated accounts; </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>134</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of
the representatives for any such offer; or
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>in
any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article&nbsp;3 of the Prospectus Directive. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the purposes of this provision, the expression an "offer of shares to the public" in relation to any shares in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the same may be varied in
that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> United Kingdom  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each underwriter has represented and agreed that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>it
has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section&nbsp;21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of the shares in
circumstances in which Section&nbsp;21(1) of the FSMA does not apply to us; and
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>it
has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or
otherwise involving the United Kingdom. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2><B> Hong Kong  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares may not be offered or sold by means of any document other than (i)&nbsp;in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii)&nbsp;to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii)&nbsp;in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32,
Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued to or may be in the possession of any person for the purpose of issue (in each case whether in
Hong Kong or
elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with
respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> Singapore  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any
other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold,
or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i)&nbsp;to an institutional investor under
Section&nbsp;274 of the Securities and Futures Act, Chapter&nbsp;289 of Singapore (the "SFA"); (ii)&nbsp;to a relevant person, or any person pursuant to Section&nbsp;275(1A), and in </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>135</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<BR>

<P style="font-family:arial;"><FONT SIZE=2>accordance
with the conditions specified in Section&nbsp;275 of the SFA; or (iii)&nbsp;otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where
the shares are subscribed or purchased under Section&nbsp;275 by a relevant person which is (a)&nbsp;a corporation (which is not an accredited investor) the sole business of
which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b)&nbsp;a trust (where the trustee is not an
accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section&nbsp;275 except (1)&nbsp;to an
institutional investor under Section&nbsp;274 of the SFA or a relevant person, or to any person pursuant to Section&nbsp;275(1A), and in accordance with the conditions specified in
Section&nbsp;275 of the SFA; (2)&nbsp;where no consideration is given for the transfer; or (3)&nbsp;by operation of law. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> Japan  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the "Financial
Instruments and Exchange
Law"), and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan
or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable
laws, regulations and ministerial guidelines of Japan. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>136</FONT></P>

<HR NOSHADE>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="eq79101_legal_matters"> </A>
<A NAME="toc_eq79101_2"> </A>
<BR></FONT><FONT SIZE=2><B>  LEGAL MATTERS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain legal matters with respect to the legality of the shares of Class&nbsp;A Common Stock offered in this prospectus will be
passed upon for us by Stoel Rives&nbsp;LLP, Portland, Oregon. The underwriters are being represented by Davis Polk&nbsp;&amp; Wardwell&nbsp;LLP, Menlo Park, California, in connection with the
offering. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="eq79101_experts"> </A>
<A NAME="toc_eq79101_3"> </A>
<BR></FONT><FONT SIZE=2><B>  EXPERTS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements as of December&nbsp;31, 2009 and 2010 and for each of the three years in the period ended
December&nbsp;31, 2010 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers&nbsp;LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="eq79101_where_you_can_find_more_information"> </A>
<A NAME="toc_eq79101_4"> </A>
<BR></FONT><FONT SIZE=2><B>  WHERE YOU CAN FIND MORE INFORMATION    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form&nbsp;S-1 under the Securities Act with respect to the shares
of our Class&nbsp;A Common Stock offered by this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration statement or the exhibits to the registration statement as permitted by the rules and regulations of the SEC. For
further information with respect to us and our Class&nbsp;A Common Stock, we refer you to the registration statement, including the exhibits and the financial statements and notes filed as a part of
the registration statement. Statements contained in this prospectus concerning the contents of any contract (or other document) are not necessarily complete. If a contract or document has been filed
as an exhibit to the registration statement, see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is
qualified in all respects by the filed exhibit. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may obtain copies of this information by mail from the Public Reference Section of the SEC, 100&nbsp;F Street, N.E., Room&nbsp;1580, Washington, D.C. 20549, at prescribed rates.
You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that
contains reports, proxy statements and other information about issuers that file electronically with the SEC. The address of that website is </FONT> <FONT SIZE=2><I>www.sec.gov</I></FONT><FONT SIZE=2>. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After
this offering, we will file with the SEC periodic reports, proxy statements and other information required by the Securities Exchange Act of 1934. We also maintain a website at </FONT> <FONT SIZE=2><I>www.escocorp.com</I></FONT><FONT SIZE=2> at which,
 following the completion of this offering, you may access these materials after they are electronically filed with, or
furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>137</FONT></P>

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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="Financials"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> INDEX TO FINANCIAL STATEMENTS  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> CONTENTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="FA79101_TOC"></A> </FONT></P>
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<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:24pt;"><FONT SIZE=2><B>Page

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</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:arial;"><A HREF="#report"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#report"><FONT SIZE=2>F-2</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD COLSPAN=2 VALIGN="TOP" style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>CONSOLIDATED FINANCIAL STATEMENTS:</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#earnings"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STATEMENTS OF EARNINGS</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#earnings"><FONT SIZE=2><BR>
F-3</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#balance"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>BALANCE SHEETS</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#balance"><FONT SIZE=2><BR>
F-4</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#cash"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STATEMENTS OF CASH FLOWS</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#cash"><FONT SIZE=2><BR>
F-5</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#equity"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>STATEMENT OF CHANGES IN CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#equity"><FONT SIZE=2><BR>
F-7</FONT></A></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="TOP" style="font-family:arial;"><A HREF="#notes"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</FONT></A></TD>
<TD VALIGN="TOP" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><A HREF="#notes"><FONT SIZE=2><BR>
F-10</FONT></A></TD>
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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="report"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fb79101_report_of_independent___fb702281"> </A>
<A NAME="toc_fb79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Report of Independent Registered Public Accounting Firm    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>To
the Board of Directors and Shareholders of ESCO Corporation: </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, cash flows, and contingently redeemable equity securities and
shareholders' equity present fairly, in all material respects, the financial position of ESCO Corporation and its subsidiaries at December&nbsp;31, 2010 and December&nbsp;31, 2009, and the results
of their operations and their cash flows for each of the three years in the period ended December&nbsp;31, 2010 in conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits of these statements 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, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>PricewaterhouseCoopers&nbsp;LLP </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>Portland,
Oregon<BR>
May&nbsp;2, 2011 </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-2</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="earnings"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fc79101_esco_corporation_consolidated___esc04183"> </A>
<A NAME="toc_fc79101_1"> </A></FONT> <FONT SIZE=2><B><BR>  ESCO Corporation    <BR>    <BR>    CONSOLIDATED STATEMENTS OF EARNINGS    <BR>    <BR>    For the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008
   <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="45pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:137pt;"><FONT  style="font-size:8pt;line-height:9pt;">(in thousands, except per share data)</FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:19pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net sales</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">849,481</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">680,390</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">939,913</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cost of goods sold</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">626,883</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">507,115</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">724,921</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Gross profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">222,598</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">173,275</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">214,992</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating expenses</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Selling and administrative expenses</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">147,881</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">112,535</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">132,719</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Restructuring and other</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">748</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6,332</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,792</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Operating profit</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">73,969</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">54,408</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">80,481</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(704</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(420</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(2,068</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Interest expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24,414</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,646</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,804</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,013</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other (income) expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(731</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,091</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations before income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">37,977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">29,273</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">49,486</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Income tax expense</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9,423</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,297</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20,786</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,189</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">306</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">443</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21,092</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,632</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-top:10pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interests&nbsp;&#151; continuing operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(4,634</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(2,537</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
(5,073</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Less: net earnings attributable to the noncontrolling interests&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(141</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(343</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,414</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,216</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Valuation adjustment on Class&nbsp;C preferred shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(16,521</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,933</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,287</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,399</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,347</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,503</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings per weighted average share outstanding (Note&nbsp;26)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Basic:</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.81</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.18</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">41.08</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.15</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.09</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.81</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">24.33</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">41.17</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Diluted:</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.62</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.16</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.21</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.14</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">0.08</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6.62</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15.30</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26.29</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Weighted average shares outstanding (Note&nbsp;26)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,086</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,083</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,081</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,118</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,204</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,187</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amounts attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,399</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,182</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,403</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Earnings from discontinued operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">165</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">100</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,399</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,347</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,503</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Pro forma earnings per share from continuing operations allocated to ESCO shareholders (unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Pro forma weighted average shares outstanding (unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Basic</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Diluted</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Pro forma earnings from continuing operations attributable to ESCO shareholders (unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,249</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,116</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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The accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-3</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="balance"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fe79101_esco_corporation_consolidated___esc02710"> </A>
<A NAME="toc_fe79101_1"> </A></FONT> <FONT SIZE=2><B><BR>  ESCO Corporation    <BR>    <BR>    CONSOLIDATED BALANCE SHEETS    <BR>    <BR>    As of December&nbsp;31, 2010 and December&nbsp;31, 2009    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=4 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:49pt;"><FONT  style="font-size:8pt;line-height:9pt;">(in thousands)</FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:18pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:18pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>2010<BR>
Pro&nbsp;forma<BR>
Shareholders'<BR>
Equity

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=4 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(unaudited)</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 ALIGN="CENTER" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ASSETS</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Current assets</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">114,101</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">168,487</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Trade accounts receivable, net of reserves of $1,232 and $1,238</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">140,000</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">106,478</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Inventories</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">105,435</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">77,054</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Deferred income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,631</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,081</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Prepaid expenses and other current assets</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">15,100</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,241</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total current assets</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">382,267</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">372,341</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Property and equipment, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
167,446</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
161,919</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Intangibles, net</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,379</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6,558</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Goodwill</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">57,608</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">40,072</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Deferred income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">55,875</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">51,688</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Long-term investments</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,749</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">27,518</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other noncurrent assets</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">14,181</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12,974</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Assets held for sale</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,117</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,675</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TOTAL ASSETS</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">723,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">675,745</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 ALIGN="CENTER" style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">LIABILITIES AND SHAREHOLDERS' EQUITY</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Current liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Accounts payable</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">65,693</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">47,133</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Accrued payroll, payroll taxes and benefits</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,908</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,163</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other accrued liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">30,227</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13,511</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Dividends payable</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,026</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12,355</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Short-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">70,338</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,541</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Current portion of long-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">11,502</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">965</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total current liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">215,694</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">103,668</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Long-term debt, net of current portion</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
191,474</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
303,992</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Accrued pension and other retirement costs</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">76,192</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">75,968</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Other long-term liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">12,700</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,354</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TOTAL LIABILITIES</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">496,060</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">486,982</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Commitments and contingencies&nbsp;&#151; See Note&nbsp;19</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable equity securities:</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Preferred Stock-Class&nbsp;C, 205,000 authorized, 188,354 and 189,325 outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">107,691</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">71,211</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Common Stock-Class&nbsp;A, 5,000,000 authorized, 890,294 and 875,516 outstanding</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">124,493</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">72,853</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Equity:</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">ESCO shareholders' equity (deficit)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">New Common Stock-Class&nbsp;A, no shares authorized and outstanding actual,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding pro&nbsp;forma (unaudited)
</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Preferred Stock-Class&nbsp;C unallocated ESOP shares, 67,577 and 90,104 actual, no shares authorized or outstanding pro&nbsp;forma (unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">78,482</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">104,643</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Common Stock-Class&nbsp;A, 5,000,000 authorized, 890,294 and 875,516 outstanding actual,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares outstanding pro&nbsp;forma
(unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Common Stock-Class&nbsp;B, 243,737 authorized, 208,395 and 208,395 outstanding actual,
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares authorized or&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;outstanding pro&nbsp;forma (unaudited)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10,343</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">10,343</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Preferred Stock-Class&nbsp;C unallocated ESOP shares, 67,577 and 90,104</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(78,482</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(104,643</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">(Accumulated deficit)/retained earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(19,944</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,222</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Accumulated other comprehensive loss</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(9,802</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(15,133</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total ESCO shareholders' equity (deficit)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(19,403</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,432</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-top:9pt;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Noncontrolling interests</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
14,781</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><BR>
13,267</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Total equity (deficit)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">44,699</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">723,622</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">675,745</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>
The accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-4</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="cash"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fg79101_esco_corporation_consolidated___esc04263"> </A>
<A NAME="toc_fg79101_1"> </A></FONT> <FONT SIZE=2><B><BR>  ESCO Corporation    <BR>    <BR>    CONSOLIDATED STATEMENTS OF CASH FLOWS    <BR>    <BR>    For the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26,
2008    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=4 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Cash flows from operating activities</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings from continuing operations, net of tax</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,554</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,786</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>36,189</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Adjustments to reconcile earnings from continuing operations, net of tax, to net cash provided by operating activities:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation and amortization</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29,204</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,817</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25,892</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss on early extinguishment of debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>13,013</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-cash compensation</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24,937</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,504</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,248</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loss on asset dispositions</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>787</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,778</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,084</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrealized (gains) losses on long term investments</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,953</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,860</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,405</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax benefit on stock compensation plans</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,440</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,718</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,227</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(6,090</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,898</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,897</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest in earnings (loss) of unconsolidated affiliates, net of distributions</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>57</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,110</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,482</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in operating assets and liabilities:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trade accounts receivable</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(18,840</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>37,203</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(22,766</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Inventories</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(19,438</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,633</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid expenses and other assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,557</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>949</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(11,927</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounts payable, accrued expenses and other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,100</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(33,329</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>38,846</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by operating activities&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>166</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,008</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash provided by operating activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>78,328</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88,825</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>88,460</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Cash flows from investing activities</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Capital expenditures</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(20,516</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(14,114</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(29,691</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from sale of property and equipment</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,349</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,408</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>403</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Business acquisitions, net of cash acquired</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(33,770</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(165</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Investment in unconsolidated affiliates</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,255</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9,383</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(6,170</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Insurance proceeds received</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>481</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Investment in other assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,528</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,481</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,416</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in investing activities&nbsp;&#151; discontinued operations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(271</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,060</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in investing activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(56,720</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,240</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(37,453</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>The
accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-5</FONT></P>

<HR NOSHADE>
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> For the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="60pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=4 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><B>Cash flows from financing activities</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from short-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>70,775</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,135</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>834</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments on short-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,553</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4,344</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proceeds from long-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>200,575</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>529</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>658</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Payments on long-term debt</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(301,114</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,189</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(3,989</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Debt issuance costs</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Bond premium paid on debt extinguishment</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,626</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dividends paid</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(26,873</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(26,097</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(14,571</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock issued</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>857</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>129</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>133</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Common stock retired</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(710</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Preferred stock retired</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(727</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,105</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(857</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net cash used in financing activities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(76,512</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(31,952</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(17,792</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effect of exchange rate changes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>518</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,687</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4,118</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net increase (decrease) in cash and cash equivalents</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(54,386</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>55,320</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>29,097</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents at beginning of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2><BR>
168,487</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2><BR>
113,167</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2><BR>
84,070</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents at end of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>114,101</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>168,487</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>113,167</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=4 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Cash paid during the year for</I></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21,876</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>22,206</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,177</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income taxes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,258</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15,393</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21,601</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=4 style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Non-cash activities</I></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash dividends declared, not yet paid</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,026</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,355</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,123</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>The
accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-6</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=146,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=22468,FOLIO='F-6',FILE='DISK105:[11ZBC1.11ZBC79101]FI79101A.;6',USER='DNICHOL',CD='26-APR-2011;14:36' -->
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NAME="page_fk79101_1_7"> </A> </FONT> <FONT SIZE=2>


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 </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="equity"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fk79101_esco_corporation_consolidated___esc06517"> </A>
<A NAME="toc_fk79101_1"> </A></FONT> <FONT SIZE=2><B><BR>  ESCO Corporation    <BR>    <BR>    CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY    <BR>    <BR>    For the fiscal years ended December&nbsp;31,
 2010, December&nbsp;31, 2009, and December&nbsp;26, 2008    <BR>    </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT  style="font-size:8pt;line-height:9pt;">


<!-- COMMAND=ADD_TABLEWIDTH,"110%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="110%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="70pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=11 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>CONTINGENTLY REDEEMABLE EQUITY SECURITIES </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Number of Shares </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Preferred Stock </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Common Stock </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:107pt;"><FONT  style="font-size:8pt;line-height:9pt;">(in thousands, except share data)</FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>

<!-- COMMAND=ADD_SCROPPEDRULE,107pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;C<BR>
Preferred<BR>
Allocated&nbsp;ESOP<BR>
shares

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Common&nbsp;Stock<BR>
shares

<!-- COMMAND=ADD_SCROPPEDRULE,50pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;C<BR>
Preferred&nbsp;Stock<BR>
ESOP

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Common&nbsp;Stock

<!-- COMMAND=ADD_SCROPPEDRULE,50pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;28, 2007</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 56,723</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>161,129</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>51,697</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>83,956</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $9,252</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($280)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in measurement date for pension plans, net of tax of $372</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,805</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">133</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,025</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(857</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,287</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(12,104</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">22,524</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20,248</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,227</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;26, 2008</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 78,222</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>164,934</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>60,028</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>72,010</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $2,075</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($265)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $10.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,415</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">129</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,526</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,230</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,105</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(34</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Acquisition of non-controlling interest in Soldering</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Non-controlling interest of previously unconsolidated subsidiary</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">20</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(7,933</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">728</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">22,525</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,504</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,717</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2009</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 99,221</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>166,119</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>71,211</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>72,853</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $1,062</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($503)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Derivatives, net of tax of $237</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,575</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">857</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(971</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,797</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(727</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(37</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">13</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">16,521</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">50,807</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">22,527</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">17,259</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">3,427</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2010</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 120,777</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>180,897</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>107,691</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>124,493</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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The accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-7</FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=1,SEQ=147,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=123779,FOLIO='F-7',FILE='DISK105:[11ZBC1.11ZBC79101]FK79101A.;16',USER='DNICHOL',CD='26-APR-2011;14:36' -->
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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY (Continued)  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> For the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
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<TD WIDTH="36pt" style="font-family:arial;"></TD>
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<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="6pt" style="font-family:arial;"></TD>
<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="4pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=29 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>ESCO SHAREHOLDERS' EQUITY </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Number of Shares </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Preferred Stock </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Common Stock </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:92pt;"><FONT  style="font-size:8pt;line-height:9pt;">(in thousands, except share data)</FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:34pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;C<BR>
Preferred<BR>
Unallocated<BR>
ESOP<BR>
shares

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Common<BR>
Stock<BR>
shares

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;B<BR>
Common<BR>
Stock<BR>
Shares

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:27pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;C<BR>
Preferred<BR>
Allocated<BR>
ESOP

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:34pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;C<BR>
Preferred<BR>
Unallocated<BR>
ESOP

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;A<BR>
Common<BR>
Stock

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Class&nbsp;B<BR>
Common<BR>
Stock

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:26pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Retained<BR>
Earnings

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:45pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Accumulated<BR>
Other<BR>
Comprehensive<BR>
Income<BR>
(Loss)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Total<BR>
Shareholders'<BR>
Equity

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;28, 2007</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 135,153</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>709,397</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>208,395</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>156,961</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(156,961</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>&#151;</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>11,814</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(13,524</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>7,362</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>5,652</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,216</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">31,216</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(28,583</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(28,583</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $9,252</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(14,641</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(14,641</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($280)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">501</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">501</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in measurement date for pension plans, net of tax of $372</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(712</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(712</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive loss</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> (12,219</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,780</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,780</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25,391</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25,391</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(22,524</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(26,158</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,158</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;26, 2008</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 112,629</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>709,397</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>208,395</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>130,803</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(130,803</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>&#151;</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>11,814</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>28,591</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(35,361</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>5,044</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,414</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">18,414</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21,313</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21,313</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $2,075</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(3,330</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(3,330</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($265)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">691</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">691</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 37,088</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $10.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(10,839</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(10,839</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Acquisition of non-controlling interest in Soldering</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(6,172</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,471</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(6,089</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Non-controlling interest of previously unconsolidated subsidiary</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">6,172</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,033</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,205</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(22,525</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(26,160</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,160</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2009</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 90,104</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>709,397</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>208,395</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>104,643</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(104,643</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>&#151;</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>10,343</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>36,222</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(15,133</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>31,432</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,920</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,073</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,073</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $1,062</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,437</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,437</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($503)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,074</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,074</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Derivatives, net of tax of $237</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(379</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(379</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 29,251</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(12,085</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(12,085</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(673</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(673</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Contingently redeemable shares valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(67,328</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(67,328</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(22,527</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(26,161</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">26,161</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:7pt;text-indent:-7pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2010</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 67,577</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>709,397</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>208,395</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>78,482</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(78,482</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>&#151;</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>10,343</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(19,944</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(9,802</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(19,403</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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The accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-8</FONT></P>

<HR NOSHADE>
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<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY (Continued)  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> For the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008  </B></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
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<TD WIDTH="8pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
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<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="67pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TD WIDTH="6pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>NONCONTROLLING INTERESTS </B></FONT></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:46pt;"><FONT  style="font-size:8pt;line-height:9pt;">(in thousands)</FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Noncontrolling<BR>
Interests

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:53pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Other<BR>
Comprehensive<BR>
Income&nbsp;(Loss)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:50pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Total<BR>
Allocated<BR>
to<BR>
Noncontrolling<BR>
Interests

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT  style="font-size:8pt;line-height:9pt;"><B>Total<BR>
Equity

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;28, 2007</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>9,124</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>1,787</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>10,911</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>16,563</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5,416</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">5,416</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">36,632</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4,112</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(4,112</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(32,695</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $9,252</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(14,641</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($280)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">501</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in measurement date for pension plans, net of tax of $372</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(712</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 1,304</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(10,915</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,780</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Class&nbsp;A share valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">25,391</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;26, 2008</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>14,540</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(2,325</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>12,215</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>17,259</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,678</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">2,678</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">21,092</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,967</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,967</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">23,280</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $2,075</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(3,330</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($265)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">691</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 4,645</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>41,733</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $10.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,263</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(13,263</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(24,102</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(977</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Acquisition of non-controlling interest in Soldering</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,269</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(1,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(285</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(6,374</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Non-controlling interest of previously unconsolidated subsidiary</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">8,746</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,209</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9,955</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">9,955</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Class&nbsp;A share valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,205</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2009</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>13,970</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(703</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>13,267</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>44,699</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Net earnings</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,634</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">4,634</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">28,554</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Foreign currency translation</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">351</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">351</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">7,424</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Change in employee benefit plan liability, net of tax of $1,062</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(2,437</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Amortization of employee benefit plan liability, net of tax of ($503)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">1,074</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Derivatives, net of tax of $237</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(379</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Comprehensive income</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> 4,985</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>34,236</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Cash dividends declared $11.00 per common share</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(3,471</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(3,471</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(15,556</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock issued upon exercise of options</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Stock retired for cash</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(673</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit on stock incentive awards</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Class&nbsp;A share valuation adjustment</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">(67,328</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Release of ESOP shares</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;">Tax benefit of allocation of ESOP stock</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:8pt;text-indent:-8pt;"><FONT  style="font-size:8pt;line-height:9pt;"> </FONT><FONT  style="font-size:8pt;line-height:9pt;"><B>Balance, December&nbsp;31, 2010</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B> $</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>15,133</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(352</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>14,781</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;">&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>$</B></FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>(4,622</B></FONT></TD>
<TD style="font-family:arial;"><FONT  style="font-size:8pt;line-height:9pt;"><B>)</B></FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>
The accompanying notes are an integral part of these financial statements. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-9</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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NAME="page_fq79101_1_10"> </A> </FONT> <FONT SIZE=2>


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</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
<A NAME="notes"></A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="fq79101_esco_corporation_notes__fq702491"> </A>
<A NAME="toc_fq79101_1"> </A></FONT> <FONT SIZE=2><B><BR>  ESCO Corporation    <BR>    <BR>    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 1&nbsp;&#151; NATURE OF OPERATIONS  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ESCO Corporation (ESCO or the Company) is a global provider of highly engineered metal wear parts and replacement products used in mining, infrastructure development, power generation,
aerospace and specialized industrial markets. The Company uses its expertise in metallurgy and foundry operations to design, engineer, manufacture and deliver solutions to its customers. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company operates in two reporting segments: the Engineered Products Group (EPG) and the Turbine Technologies Group (TTG). The Chief Executive Officer has been identified as the
chief operating decision-maker. See </FONT><FONT SIZE=2><I>Note&nbsp;27&nbsp;&#151; Segment Reporting.</I></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company was founded in 1913 and is headquartered in Portland, Oregon. The Company has subsidiaries in the United States, Canada, the United Kingdom, Belgium, Germany, France,
Slovakia, Hong Kong, Indonesia, Australia, South Africa, Argentina, Brazil, Peru, Chile, Mexico, Russia and China. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Basis of Presentation  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The accompanying consolidated financial statements include the accounts of ESCO Corporation and its majority owned and wholly owned
subsidiaries. Investments in affiliates in which ESCO has a non-controlling ownership interest are accounted for under the equity method. All intercompany accounts and transactions have
been eliminated. Management also evaluates whether an ESCO entity or interest is a variable interest entity and whether ESCO is the primary beneficiary. Consolidation is required if both of these
criteria are met. The Company does not have any variable interest entities requiring consolidation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
to fiscal year 2009, the Company reported on a 52 or 53-week fiscal year consisting of four thirteen-week periods and ending on the last Friday of the
calendar year. Fiscal 2008, which ended on December&nbsp;26, 2008, was a 52-week fiscal year which included 364&nbsp;days. Effective December&nbsp;27, 2008, the Company changed to a
calendar year. The Company's fiscal year 2009 began on December&nbsp;27, 2008 and ended on December&nbsp;31, 2009, resulting in a 370-day year. The Company's fiscal year 2010 began on
January&nbsp;1, 2010 and ended on December&nbsp;31, 2010, resulting in a 365-day year. All references to years are references to fiscal years unless otherwise noted. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Reclassifications  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company made certain reclassifications to the prior years' financial statements to conform them to the presentation as of and for
the year ended December&nbsp;31, 2010. These reclassifications had no effect on consolidated net earnings, shareholders' equity or net cash flows for any of the periods presented. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Use of Estimates  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting
period. Examples include revenue recognition, inventory valuation, product warranty reserves, allowance for doubtful accounts, fair </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-10</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_fq79101_1_11"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>value
measurements, goodwill valuation, estimates of contingencies, intangible asset valuations, pension plan and share-based compensation assumptions, and the assessment of the valuation
of deferred income taxes and income tax contingencies. Management believes the estimates used are reasonable. Actual results may differ from those estimates. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Pro Forma Shareholders' Equity (Unaudited)  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The pro forma shareholders' equity column (unaudited) reflects the conversion of the Class&nbsp;C preferred stock to the new
Class&nbsp;A common stock upon the Company's initial public offering (IPO), the conversion of the historical Class&nbsp;A common stock to new Class&nbsp;A common stock upon such IPO and through
the first 360&nbsp;days thereafter, as well as the&nbsp;&nbsp;&nbsp;&nbsp;-to-one stock split to be effected prior to the Company's IPO. Upon conversion, the put feature associated
with the Class&nbsp;C preferred stock and historical Class&nbsp;A common stock will expire and the respective shares reclassified to permanent equity. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Cash and Cash Equivalents  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The carrying
value of these investments approximates fair value. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Trade Accounts Receivables, net  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivables, net of reserves for doubtful accounts, are recorded at the invoiced amount less discounts and do not bear
interest. The collectability of trade accounts receivable is regularly evaluated based on a combination of factors such as customer credit-worthiness, past transaction history with the
customer, current industry economic trends and changes in customer payment terms. If the Company becomes aware of circumstances that may impair a customer's ability to meet its financial obligations,
a specific reserve is recorded to reduce the related receivable to the amount expected to be recovered. For all other trade accounts receivable, the Company maintains a reserve based on the Company's
historical uncollectible accounts as a percentage of sales. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Inventories  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method
(LIFO) for the majority of inventories in the U.S.&nbsp;Cost is determined using the first-in, first-out method (FIFO) or average cost method for all subsidiaries outside of
the U.S.&nbsp;Cost of inventory includes raw materials, employee compensation and benefits, outside processing, depreciation of manufacturing machinery and equipment, operating supplies and
manufacturing overhead directly attributable to the manufacturing of goods. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Property and Equipment  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment are recorded at historical cost. Depreciation is calculated using the straight-line method over the
estimated useful lives of the
assets. Expenditures for repairs and maintenance are expensed as incurred. When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts and the
resulting gain or loss is included as a component of operating expenses. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-11</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Long-Lived Assets  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-lived assets, principally property, equipment and identifiable definite-lived intangibles, are reviewed
for impairment when events or circumstances indicate that the carrying amount of the assets may not be recoverable. The Company evaluates recoverability of assets by comparing the carrying amount of
the asset to estimated future net undiscounted cash flows generated by the asset. If such assets are considered not to be fully recoverable, the impairment recognized is measured as the amount by
which the carrying amount of the assets exceeds the fair value of the assets. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible
assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, with a weighted average useful life of 11&nbsp;years
at December&nbsp;31, 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Goodwill  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill is not amortized; it is tested for impairment annually (in the second quarter) or more frequently if indicators of impairment
exist or if a decision is made to sell a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in
expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, slower growth rates, and others. Fair values that could be realized in an
actual transaction may differ from those used to evaluate the potential impairment of goodwill. Goodwill is allocated to and evaluated for impairment at the reporting unit level (also defined as the
operating segment). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
evaluation of impairment involves the comparison of the current fair value of each reporting unit to its carrying value, including goodwill. The Company uses a discounted cash flow
(DCF) model as well as a comparison to peer company multiples to estimate the current fair value of its reporting
units when testing for impairment because management believes these methods are the best indicators of such fair value. A number of significant assumptions and estimates are involved in the
application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, and working
capital changes. If the estimated fair value of a reporting unit is less than the carrying value, additional analysis would be required. The additional analysis would compare the carrying amount of
the reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwill is the excess of the fair value of the reporting unit over the fair value amounts
assigned to all of the assets and liabilities of that unit as if the reporting unit was acquired in a business combination and the fair value of the reporting unit represented the purchase price. If
the current value of goodwill exceeds its implied fair value, an impairment loss equal to the excess would be recognized, which could significantly and adversely impact reported results of operations
and shareholders' equity. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Allocation of Acquisition Purchase Price  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company accounts for business combinations under the acquisition accounting method. The Company allocates the purchase price of
acquisitions to identified tangible and intangible assets acquired and liabilities assumed based on their fair values at the acquisition date, with any residual amounts allocated to goodwill. The
determination of fair values of assets and liabilities acquired requires the Company to make estimates and use valuation techniques when the market </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-12</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>value
is not readily available. The transaction costs associated with business combinations are expensed as incurred. Operating results of all acquisitions are included in the consolidated statement
of earnings from the date of acquisition. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Fair Value of Financial Instruments  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The carrying amounts reflected in the balance sheet for cash and cash equivalents, receivables and payables approximate, in all
material respects, their fair values due to the short-term nature of these items. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current
and non-current marketable securities are recorded at fair market value. When developing fair value measurements, the Company uses quoted market prices when
available and when not available, the Company seeks to maximize the use of observable inputs and
minimize the use of unobservable inputs. The Company did not choose the fair value option for financial liabilities; therefore, its long-term debt is not reported at fair value. See </FONT> <FONT SIZE=2><I>Note&nbsp;12&nbsp;&#151; Fair Value
Measurements</I></FONT><FONT SIZE=2> for additional information. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Derivative Financial Instruments  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's primary objectives for holding derivative financial instruments are to manage foreign currency risk and variable
interest rate risk. The Company's accounting policies for these instruments are based on whether the instruments are designated as a hedge or non-hedge instrument. The criteria for
designating a derivative as a hedge include the instrument's effectiveness in risk reduction and, in most cases, a one-to-one matching of the derivative instrument to its
underlying transaction. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
derivatives are recorded at fair value on the balance sheet and changes in the fair value of derivative financial instruments are either recognized in other comprehensive income (a
component of shareholders' equity), or net earnings depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge, and, if designated, the extent to
which the hedge is effective. The changes in fair value of the Company's undesignated foreign currency derivatives are marked to market through earnings in foreign currency gains/losses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company classifies the cash flows from settlement of derivatives in the same category as the cash flows from the related hedged items. For undesignated hedges and designated cash
flow hedges, this is within the cash provided by operations component of the consolidated statement of cash flows. The cash flows associated with these derivative instruments are periodic interest
payments while the swaps are outstanding, which are reflected in net earnings within the cash provided by operations component of the cash flow statement. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Foreign Currency  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets and liabilities of foreign operations are translated into U.S.&nbsp;dollars at the period-end rate of exchange.
Related revenues and expenses are translated at average monthly exchange rates. Translation adjustments are recorded in accumulated other comprehensive income, a separate component of shareholders'
equity. Foreign currency transactions gains and losses are generated from the effect of exchange rate changes on transactions denominated in a currency other than the functional currency of the
entity. Gains and losses on foreign currency transactions </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-13</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>are
generally recognized in the determination of net earnings or loss for the period. The Company records these gains and losses in other (income) expense. Foreign exchange transaction gains (losses)
were $0.7&nbsp;million, $1.3&nbsp;million and ($4.0) million for the years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Share Repurchases  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company accounts for the repurchase of shares by recording the difference between the amount paid for the shares and the amount
recorded upon issuance as an adjustment to retained earnings. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Comprehensive Income/Loss  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive income/loss includes net earnings or loss and "other comprehensive income," which includes charges or credits to equity
that are not the result of transactions with shareholders. Comprehensive loss within these consolidated financial statements includes cumulative foreign currency translation adjustments, certain gains
and losses on derivatives used for hedging forecasted transactions and net periodic benefit cost not yet recognized in earnings. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Earnings per Share  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic earnings per share (EPS) is computed based on earnings attributable to ESCO common shareholders and utilizing the weighted
average number of shares outstanding during the period. Diluted EPS also considers common stock equivalents, such as stock options, stock-settled stock appreciation rights (SARs) and
shares of Class&nbsp;C Preferred Stock allocated to the employee stock ownership plan, to the extent that they are not antidilutive. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Revenue Recognition  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or the services have been
rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to the customer at the time product is
transferred to a common carrier. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has licensee agreements under which the Company receives royalty revenue. Royalty revenue is accounted for based on royalty percentages of actual sales by licensees. The
Company has an allowance for product returns and cash discounts. These reserves are calculated based on historical returns and cash discounts. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Research and Development Costs  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Research and development costs are expensed as incurred. These costs include personnel and project-related expenses
related to developing new products and improving existing products or processes. The Company recognized $5.9&nbsp;million, $5.4&nbsp;million and $6.5&nbsp;million of research and development
costs classified in selling and administrative expenses in fiscal 2010, 2009 and 2008, respectively. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-14</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Advertising  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company expenses advertising costs as incurred. Advertising expenses were not material for any of the periods presented. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Shipping and Handling  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shipping and handling expenses incurred for customer sales are often billed to customers, which are included in sales and cost of
sales. Amounts not billed to customers are included in selling and administrative expenses and were not material for fiscal 2010, 2009 and 2008. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Product Warranty  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship over
various time periods. A standard one-year warranty from the date of acceptance is provided on most products. The Company evaluates obligations related to product warranties quarterly.
Warranty charges are comprised of costs to service the warranty, including labor to repair the product and replacement parts for defective items, as well as other costs incidental to the repairs. The
Company estimates average warranty cost per product or part type based on historical experience and records the provision for such charges as an element of cost of goods sold upon recognition of the
related revenue. Accrued product warranty is included on the consolidated balance sheets as a component of accrued liabilities. The warranty program as of December&nbsp;31, 2010, December&nbsp;31,
2009 and December&nbsp;26, 2008 was not material to the Company's consolidated financial position, results of operations or cash flows. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Leases  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain leases contain payment escalation clauses which provide stated increases in the payments over the term of the lease. Rent
expense is recorded on a straight-line basis over the lease term. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Share-Based Compensation  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has adopted the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
Topic&nbsp;718&#151;</FONT><FONT SIZE=2><I>Compensation-Stock Compensation</I></FONT><FONT SIZE=2> (ASC Topic&nbsp;718). This guidance generally requires that compensation
expense be determined based on the grant-date fair value of the share-based compensation awards and that the expense be recognized over the requisite service period of the
award. The guidance was effective for the Company's fiscal year 2006, which began on December&nbsp;31, 2005. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has granted no stock options since the effective date of the guidance; therefore, the Company has continued to apply the intrinsic value method of accounting for options
granted before that date. Under the intrinsic value method, compensation expense for employee stock options is not recognized if the exercise price of the option equals or exceeds the fair value of
the stock on the date of grant. As a result, no compensation expense has been recorded for options vesting during the reporting periods presented. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company classifies its awards of cash-settled stock appreciation rights (SARs) as liabilities. SARs are settled in cash for the difference between fair value of the
Company's Class&nbsp;A </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-15</FONT></P>

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<A NAME="page_fq79101_1_16"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>common
stock on the date of grant and its fair value on the date of exercise. The Company uses the Black-Scholes model to estimate the fair value of SAR awards on the date of grant and
recognizes expense on a straight-line basis over the requisite service period. At each period end after grant, the related liability balance is adjusted to reflect changes in the Company's
stock value and its actual payout liability. Any impact to expense from these period-end adjustments is recognized as incurred for fully vested awards and amortized over the remaining
service period for unvested awards. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Employee Stock Ownership Plan  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company sponsors an employee stock ownership plan (ESOP) that covers all U.S.&nbsp;employees who meet service requirements. The
Company makes annual contributions to the ESOP equal to the ESOP's debt service to the Company less dividends received by the ESOP on unallocated shares. All dividends and contributions received by
the ESOP are used to pay debt service. The ESOP shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees. The Company
accounts for its ESOP in accordance with the guidance on stock compensation. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are
released from collateral, the Company reports compensation expense equal to the current fair value of the shares. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Income Taxes  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's income tax provision is determined using the asset and liability approach of accounting for income taxes. Under this
approach, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates expected to apply in future years to differences between the
financial statement carrying amounts and the tax bases of assets and liabilities. The provision for income taxes represents income taxes paid or payable for the current year plus the change in
deferred taxes during the year. Valuation allowances based on the Company's judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized
based on expected future operating results and available tax alternatives. The Company's estimates are based on facts and circumstances in existence as well as interpretations of tax regulations and
laws applied to the facts and circumstances. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Employee Benefit Plans  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has an employee savings plan under the provisions of Section&nbsp;401(k) of the Internal Revenue Code. The Company also
has defined benefit plans in the U.S. and certain non-U.S.&nbsp;jurisdictions. The Company accounts for these plans based on the provisions of ASC Topic&nbsp;715&nbsp;&#151; </FONT> <FONT SIZE=2><I>Compensation-Retirement Benefits</I></FONT><FONT
SIZE=2> and accordingly uses actuarial valuations that are based on assumptions, including discount rates,
long-term rates of return on plan assets, and rates of change in participant compensation levels. The Company evaluates the funded status of each plan using these assumptions and considers
applicable regulatory requirements, tax deductibility, reporting consideration and other relevant factors to determine the appropriate funding level for each period. The discount rate used to
calculate the present value of the pension and post-retirement benefit obligations is assessed at least annually. The discount rate represents the </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-16</FONT></P>

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<A NAME="page_fq79101_1_17"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 2&nbsp;&#151; SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>rate
inherent in the price at which the plans' obligations are intended to be settled at the measurement date. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Concentration of Credit Risk  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and
cash equivalents, accounts receivable and derivative financial instruments used in hedging activities. A majority of cash and cash equivalents is maintained with major financial institutions in the
United States, Canada and Europe. Balances in these institutions exceeded the regions' respective insurance amounts as of December&nbsp;31, 2010 and 2009. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Concentration
of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company's customer base. The Company
controls credit risk through credit approvals, credit limits and monitoring processes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company is also exposed to credit loss in the event of non-performance by counterparties on the derivative financial instruments used in hedging activities. These
counterparties are large international financial institutions domiciled in the United States and to date no such counterparty has failed to meet its financial obligations to the Company, and the
Company does not anticipate non-performance by these counterparties. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 3&nbsp;&#151; RECENT ACCOUNTING PRONOUNCEMENTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June 2009, new guidance was issued on the accounting for transfers of financial assets, which is intended to improve the relevance and comparability of information about transfers of
financial assets. The Company adopted this guidance as of the beginning of fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or
cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
June 2009, new guidance was issued on variable interest entities. This guidance modifies the definition of a primary beneficiary in a variable interest entity. The Company adopted
this guidance as of the beginning of its fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
January 2010, new guidance was issued that clarifies existing disclosures and requires new disclosures for fair value measurements. The clarifications relate to the level of
disaggregation a company uses for the disclosure and calls for further details in the valuation techniques used to measure fair value for fair value measurements that fall into Level&nbsp;2 and 3
categories. Disclosure of significant transfers in and out of Levels&nbsp;2 and 3 and a description of the reason for the transfers are required. The Company adopted this guidance at the beginning
of fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December 2010, new guidance was issued that clarified required disclosures for business combinations. This guidance requires supplemental pro-forma information to
disclose revenue and earnings of the combined entities for all periods presented. This guidance is effective for fiscal years beginning after December&nbsp;15, 2010. The Company will adopt these
additional disclosure requirements for all material acquisitions beginning in 2011. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-17</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 3&nbsp;&#151; RECENT ACCOUNTING PRONOUNCEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
January 2010, new guidance was issued that requires new disclosures for fair value measurements. In the reconciliation for Level&nbsp;3 fair value measurements, disclosures should
present separately information about purchases, sales, issuances and settlements (gross rather than net amounts). This guidance is effective for reporting periods beginning after December&nbsp;15,
2010. The Company's adoption of this guidance at the beginning of 2011 did not have a material impact on its consolidated financial position, results of operations or cash flows. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 4&nbsp;&#151; INVENTORIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories consist of the following as of December&nbsp;31: </FONT></P>
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<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Raw materials</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>36,768</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>31,748</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Work-in-process</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30,390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,004</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Finished goods</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>66,648</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>54,202</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total FIFO cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>133,806</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>102,954</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less excess of FIFO cost over LIFO cost</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>28,371</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>25,900</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total inventories</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>105,435</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>77,054</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories
of $30.8&nbsp;million and $19.1&nbsp;million are stated at LIFO cost at December&nbsp;31, 2010 and 2009, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the fiscal year ended December&nbsp;31, 2009, certain inventory quantities were reduced, resulting in a liquidation of LIFO inventory quantities carried at lower costs
prevailing in prior years. The effects of this decrease are presented in the table below. </FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:171pt;"><FONT SIZE=2>(in thousands, except per share data)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cost of goods sold decrease</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,944</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,072</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted earnings per share increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1.72</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the year ended December&nbsp;31, 2010 and the fiscal year ended December&nbsp;26, 2008, there were no LIFO liquidations. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 5&nbsp;&#151; PREPAID EXPENSES AND OTHER CURRENT ASSETS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets consisted of the following as of December&nbsp;31: </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prepaid expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,021</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,513</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income taxes receivable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,079</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,728</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total prepaid expenses and other current assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,241</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-18</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 6&nbsp;&#151; PROPERTY AND EQUIPMENT  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment consist of the following as of December&nbsp;31: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="100pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="60pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="60pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:76pt;"><FONT SIZE=2><B>Estimated Lives

<!-- COMMAND=ADD_SCROPPEDRULE,76pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Buildings and improvements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10&nbsp;-&nbsp;40&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>87,699</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>83,134</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Machinery and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3&nbsp;-&nbsp;15&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>368,292</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>346,479</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>455,991</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>429,613</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less accumulated depreciation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(297,795</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(276,027</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>158,196</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>153,586</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Land</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,250</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,333</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total property and equipment, net</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>167,446</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>161,919</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation
expense for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008 was $25.9&nbsp;million, $24.2&nbsp;million and
$23.3&nbsp;million, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 7&nbsp;&#151; INTANGIBLES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The carrying amounts of intangible assets as of December&nbsp;31, 2010 and 2009 were as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:54%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"150%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="150%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="82pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="82pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="55pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Gross<BR>
Carrying<BR>
Amount

<!-- COMMAND=ADD_SCROPPEDRULE,41pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:62pt;"><FONT SIZE=2><B>Accumulated<BR>
Amortization

<!-- COMMAND=ADD_SCROPPEDRULE,62pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Net<BR>
Carrying<BR>
Amount

<!-- COMMAND=ADD_SCROPPEDRULE,41pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Gross<BR>
Carrying<BR>
Amount

<!-- COMMAND=ADD_SCROPPEDRULE,41pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:62pt;"><FONT SIZE=2><B>Accumulated<BR>
Amortization

<!-- COMMAND=ADD_SCROPPEDRULE,62pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:41pt;"><FONT SIZE=2><B>Net<BR>
Carrying<BR>
Amount

<!-- COMMAND=ADD_SCROPPEDRULE,41pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Proprietary technology</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15,468</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,604</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,864</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,961</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,104</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,857</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Trademarks</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,005</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,164</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>841</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,754</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,053</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>701</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-compete</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>407</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>68</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>339</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer relationships</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,557</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>222</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,335</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,437</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,058</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,379</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,715</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,157</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,558</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization
expense for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008 was $1.5&nbsp;million, $0.9&nbsp;million and
$0.9&nbsp;million, respectively. Of these amounts, $0.7&nbsp;million, $0.1&nbsp;million and $0.1&nbsp;million, respectively, were included in selling and administrative expenses and
$0.8&nbsp;million, $0.8&nbsp;million and $0.8&nbsp;million, respectively, were included in cost of goods sold for those years. Estimated amortization expense for the years ending
December&nbsp;31, 2011 through December&nbsp;31, 2015 is as follows: 2011&nbsp;&#151; $2.2&nbsp;million, 2012&nbsp;&#151; $2.2&nbsp;million, 2013&nbsp;&#151;
$2.1&nbsp;million, 2014&nbsp;&#151; $1.9&nbsp;million, and 2015&nbsp;&#151; $1.5&nbsp;million. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-19</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 8&nbsp;&#151; GOODWILL  </B></FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>December&nbsp;31, 2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>December&nbsp;31, 2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT SIZE=2><B>EPG

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>TTG

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT SIZE=2><B>EPG

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:20pt;"><FONT SIZE=2><B>TTG

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at beginning of year</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,764</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18,308</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,906</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18,113</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additions during the year(1)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,115</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Currency translation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,086</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(665</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,858</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>195</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at end of year</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>39,965</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,643</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,764</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18,308</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Additions
and purchase price adjustments relating to Swift Group Holdings Pty&nbsp;Ltd and Austcast Pty&nbsp;Ltd goodwill acquired. The Company is
finalizing certain valuations of assets acquired and liabilities assumed; therefore, the additions to goodwill are preliminary and subject to refinement. </FONT></DD></DL>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 9&nbsp;&#151; JOINT VENTURES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company entered into joint ventures to take advantage of strategic business opportunities. As of December&nbsp;31, 2010 and 2009, the Company was participating in the following
joint ventures: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>A
50% joint venture with its licensee, Compa&ntilde;&iacute;a Electro Metalurgica&nbsp;S.A. (Elecmetal), to build a foundry in Chile for
its EPG&nbsp;segment, scheduled to be operational in 2012.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>A
50% joint venture with its dealer, ESS Holdings,&nbsp;Inc., to operate an industrial service and supply location in Ft. McMurray, Alberta, Canada for its
EPG segment.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>A
joint venture with Taiyuan Heavy Machinery in China. The joint venture manufactures EPG&nbsp;products for mining, infrastructure development and
industrial applications. ESCO's equity share in the joint venture is 54.43%, which is also consistent with its rights to profits and losses. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ASC
Topic 810&nbsp;&#151; </FONT><FONT SIZE=2><I>Consolidation</I></FONT><FONT SIZE=2> requires companies to evaluate the qualitative nature of joint ventures to determine (1)
whether they represent variable interest entities, (2)&nbsp;whether the Company is the primary beneficiary of the joint venture and (3)&nbsp;whether the entities should be consolidated into the
Company's financial statements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
variable interest entity (VIE) is an entity that either (1)&nbsp;has insufficient equity to permit the entity to finance its activities without additional subordinated financial
support or (2)&nbsp;has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the
power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could be
significant to the VIE. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has evaluated its joint ventures and determined that its joint ventures in China and Canada do not meet the criteria of a VIE; however, these joint ventures should be
consolidated based on the Company's ability to control the entities' operations. The Company has consolidated the results of these joint ventures into its financial statements as of
December&nbsp;31, 2010 and 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-20</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=160,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=54362,FOLIO='F-20',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fs79101_1_21"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 9&nbsp;&#151; JOINT VENTURES (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has determined the Elecmetal joint venture did not have sufficient capital to permit the entity to finance its activities without additional financial support from the
equity holders and therefore is a VIE. Also, because the Company does not have the power to direct the entity's economic performance or the obligation to absorb losses or the right to receive benefits
from the entity that would be significant to that entity, the Company has determined that it is not the primary beneficiary of this VIE. Because the results of the VIE are not consolidated into the
Company's consolidated financial statements, the Company uses the equity method to account for the joint venture. Under the equity method, a proportionate share of the net earnings or loss of the
joint venture is recognized in the Company's consolidated statement of earnings. For the years ended December&nbsp;31, 2010 and 2009, these amounts were insignificant. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's maximum exposure to loss from the VIE of which it is not the primary beneficiary at December&nbsp;31 is presented below. </FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Investment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,825</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,627</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash collateralized letters of credit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total maximum exposure</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,425</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,627</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 10&nbsp;&#151; OTHER NONCURRENT ASSETS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other noncurrent assets consisted of the following as of December&nbsp;31. </FONT></P>
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<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Investment in ESCO Elecmetal Fundicion Limitada</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,825</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,627</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Loan costs</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,993</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,987</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other noncurrent assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>363</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>360</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total other noncurrent assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,181</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12,974</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 11&nbsp;&#151; ASSETS HELD FOR SALE  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assets held for sale were $1.1&nbsp;million and $2.7&nbsp;million at December&nbsp;31, 2010 and 2009, respectively. These amounts represent the land and building of the Company's
Saskatoon, Saskatchewan facility, which was closed in May 2009 as part of the Company's restructuring activity ($1.0&nbsp;million and $2.6&nbsp;million at December&nbsp;31, 2010 and 2009,
respectively), and three apartments in Taiyuan, China ($0.1&nbsp;million at December&nbsp;31, 2010 and 2009). See </FONT><FONT SIZE=2><I>Note&nbsp;29&nbsp;&#151;
Restructuring</I></FONT><FONT SIZE=2>. All assets
classified as held for sale are in the EPG segment. These assets are listed for sale and the Company expects to receive net proceeds approximately equal to the carrying value. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 12&nbsp;&#151; FAIR VALUE MEASUREMENTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company applied the guidance in ASC Topic 820&#151;</FONT><FONT SIZE=2><I>Fair Value Measurements and Disclosures</I></FONT><FONT SIZE=2> (ASC Topic 820) which defines fair
value as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-21</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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<A NAME="page_fs79101_1_22"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 12&nbsp;&#151; FAIR VALUE MEASUREMENTS (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>measurement
date. This guidance also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as
follows: </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;1&nbsp;&nbsp;&nbsp;&nbsp;Quoted
prices in active markets for identical assets or liabilities. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;2&nbsp;&nbsp;&nbsp;&nbsp;Observable
inputs other than Level&nbsp;1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Level&nbsp;3&nbsp;&nbsp;&nbsp;&nbsp;Unobservable
inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, which
requires the reporting entity to develop its own assumptions. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents the Company's financial assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of
the fair value hierarchy as of December&nbsp;31, 2010. </FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="47pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="47pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="106pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fair Value Measurements </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>Assets/Liabilities<BR>
at Fair Value

<!-- COMMAND=ADD_SCROPPEDRULE,81pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;1

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;2

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;3

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency forward contracts</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Marketable securities intended to fund non-qualified retirement and deferred compensation plans</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,257</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,257</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets held for sale</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,117</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,117</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,301</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,117</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15,418</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>635</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>635</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Utilities futures contracts</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>63</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>63</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>698</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>698</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's Level&nbsp;3 assets (assets held for sale with a carrying value of $1.3&nbsp;million) were written down to their fair value of $1.2&nbsp;million (less
$0.1&nbsp;million in selling costs) resulting in a loss of $0.2&nbsp;million, which was included in selling and administrative expenses for the year ended December&nbsp;31, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-22</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=162,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=350814,FOLIO='F-22',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fs79101_1_23"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 12&nbsp;&#151; FAIR VALUE MEASUREMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents the Company's financial assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of
the fair value hierarchy as of December&nbsp;31, 2009. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="47pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="47pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="106pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Fair Value Measurements </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH ROWSPAN=2 style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ROWSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>Assets/Liabilities<BR>
at Fair Value

<!-- COMMAND=ADD_SCROPPEDRULE,81pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;1

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;2

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:31pt;"><FONT SIZE=2><B>Level&nbsp;3

<!-- COMMAND=ADD_SCROPPEDRULE,31pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Marketable securities intended to fund non-qualified retirement and deferred compensation plans</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,501</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,501</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets held for sale</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,675</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,675</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,501</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,675</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,176</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency forward contracts</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Utilities futures contracts</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>104</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>104</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>152</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>152</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's Level&nbsp;3 assets (assets held for sale with a carrying value of $3.1&nbsp;million) were written down to their fair value of $2.8&nbsp;million (less
$0.1&nbsp;million in selling costs) resulting in a loss of $0.4&nbsp;million, which was included in selling and administrative expenses for the year ended December&nbsp;31, 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's assessment of the significance of an input to the fair value measurement requires judgment and involves consideration of factors specific to the asset or liability. The
Company's financial assets and liabilities are classified in their entirety based on the most significant level of input into the fair value measurement. Marketable securities are valued based on the
net asset value from active to less active markets and the reliability of available financial information. The fair value for foreign currency forward contracts and utilities futures contracts is
determined using observable market inputs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company did not choose the fair value option for financial liabilities; therefore, its long-term debt is not reported at fair value. There were no transfers between
Level&nbsp;1, Level&nbsp;2 and Level&nbsp;3 categories during 2010 and 2009. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-23</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=163,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=43620,FOLIO='F-23',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fs79101_1_24"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 13&nbsp;&#151; ACCRUED LIABILITIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities as of December&nbsp;31 included: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unearned revenues</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,557</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,131</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taxes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,213</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,491</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued warranty reserve</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,601</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,973</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued workers' compensation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,020</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,933</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued rebate reserve</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,828</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,407</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accrued retirement liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>724</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>569</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Derivative liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>48</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other accrued liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,649</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,959</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total other accrued liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30,227</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,511</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 14&nbsp;&#151; SHORT-TERM AND LONG-TERM DEBT  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At December&nbsp;31, 2009, the Company had a secured $110.0&nbsp;million U.S.-based line of credit and a $5.5&nbsp;million foreign-based line of credit,
none of which was drawn down. At December&nbsp;31, 2009, the interest rate on the U.S.-based line of credit (set at LIBOR) was 3.3% per annum, and the line of credit was reduced by the
collateral base to $51.7&nbsp;million. The fixed interest rate on the foreign-based line of credit was 11.9%. The weighted-average interest rate on short-term
borrowings in 2009 was 11.1%. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2009, the Company had $200.0&nbsp;million principal amount of 8.625% secured senior notes and $100.0&nbsp;million principal amount of floating rate senior
notes outstanding. The Company issued these notes in 2006 in a private transaction. The interest rate on the floating rate notes was reset quarterly equal to LIBOR plus 3.875%. At December&nbsp;31,
2009, the interest rate on the floating rate notes was 4.129%. At December&nbsp;31, 2009, the carrying value of these notes was $300.0&nbsp;million and the fair value was $283.0&nbsp;million,
based on the most recently quoted market prices in the PORTAL Alliance. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
November 2010, the Company terminated its U.S.-based line of credit agreement and recorded a $0.4&nbsp;million loss on early extinguishment of debt for the remaining
unamortized loan costs. The Company entered into a $550.0&nbsp;million Senior Secured Syndicated Credit Facility, which consists of a five-year $200.0&nbsp;million term loan and a
$350.0&nbsp;million line of credit. The term loan and line of credit have a floating LIBOR interest rate that is set quarterly based upon a consolidated net leverage ratio matrix. The Company's
credit risk spread ranges from 1.75% to 2.50% depending on the consolidated net leverage ratio matrix. In 2010, the Company capitalized $5.1&nbsp;million in loan costs related to its debt
restructuring. Deferred loan costs are amortized on a straight-line basis over the term of the loan, which approximates the effective interest rate method. The debt balance recorded on the
Company's balance sheet as of December&nbsp;31, 2010 represents fair value. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December&nbsp;17, 2010, the Company called its senior notes. The Company paid a premium of $8.6&nbsp;million related to the early extinguishment and also recorded a
$4.0&nbsp;million loss for the remaining unamortized loan costs related to the notes. These amounts were recorded in loss on early extinguishment of debt in the consolidated statement of earnings
for the year ended December&nbsp;31, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-24</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=164,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=837476,FOLIO='F-24',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fs79101_1_25"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 14&nbsp;&#151; SHORT-TERM AND LONG-TERM DEBT (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2010, the Company had total authorized lines of credit in the amount of $359.0&nbsp;million. At December&nbsp;31, 2010, the interest rate on the
U.S.-based line of credit, which had $350.0&nbsp;million authorized of which $65.0&nbsp;million drawn down and outstanding, was 2.51% (credit risk spread of 2.25% plus LIBOR of .26%)
and the interest rate on the foreign-based line of credit, which had $9.0&nbsp;million authorized of which $2.1&nbsp;million drawn down and outstanding, was 15.03%. During the second
quarter of 2010, the authorized amount of the foreign-based line of credit was increased by $4.0&nbsp;million. The weighted average interest rate on short-term borrowings in
2010 was 4.46%. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Scheduled
maturities of debt as of December&nbsp;31, 2010 are as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,502</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,088</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10,335</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,051</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>150,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>202,976</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 15&nbsp;&#151; DERIVATIVE FINANCIAL INSTRUMENTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company enters into derivative financial instruments in order to manage foreign currency risk and variable interest rate risk. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company hedges material non-functional currency monetary asset and liability balances. The gains and losses from foreign exchange contracts are recognized at the end of
each fiscal period in the Company's results of operations. Such gains and losses are typically offset by
the corresponding changes to the related underlying hedged item. Cash flows from derivative financial instruments are classified in the same category as the cash flows from the items being hedged. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
December 2010, the Company entered into interest rate swaps to manage a portion of its exposure to changes in LIBOR-based interest rates on the Company's variable rate
debt, effectively fixing the interest payments on $200.0&nbsp;million of the Company's term loan. All of the swaps in place at December&nbsp;31, 2010 have been designated as cash flow hedges of
LIBOR-based interest payments. Accordingly, the change in fair value was included in accumulated other comprehensive loss as of December&nbsp;31, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-25</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=165,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=643163,FOLIO='F-25',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fs79101_1_26"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 15&nbsp;&#151; DERIVATIVE FINANCIAL INSTRUMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
rate swaps in place at December&nbsp;31, 2010 were as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="24pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="92pt" style="font-family:arial;"></TD>
<TD WIDTH="24pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="114pt" style="font-family:arial;"></TD>
<TD WIDTH="24pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="121pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:37pt;"><FONT SIZE=2><B>Amount

<!-- COMMAND=ADD_SCROPPEDRULE,37pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:87pt;"><FONT SIZE=2><B>Weighted-Average<BR>
Interest Rate

<!-- COMMAND=ADD_SCROPPEDRULE,87pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:64pt;"><FONT SIZE=2><B>Maturity Date

<!-- COMMAND=ADD_SCROPPEDRULE,64pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>March&nbsp;31, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>June&nbsp;30, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>September&nbsp;30, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>December&nbsp;31, 2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>March&nbsp;31, 2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>June&nbsp;30, 2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>September&nbsp;30, 2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>December&nbsp;31, 2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>March&nbsp;31, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>June&nbsp;30, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>September&nbsp;30, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>December&nbsp;31, 2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>March&nbsp;31, 2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>June&nbsp;30, 2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>September&nbsp;30, 2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>December&nbsp;31, 2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>March&nbsp;31, 2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>June&nbsp;30, 2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>September&nbsp;30, 2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>135,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.039</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>November&nbsp;18, 2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2> $200,000</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
net losses on interest rate swaps included in accumulated other comprehensive loss were $0.6&nbsp;million for the year ended December&nbsp;31, 2010. The accumulated other
comprehensive loss, net of tax benefit, related to interest rate swaps was $0.4&nbsp;million at December&nbsp;31, 2010. For derivatives that are designated in a cash flow hedging relationship, the
effective portion of the change in fair value of the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same classification as the
earnings effect of the hedged transaction. There were no amounts of gain (loss) reclassified from accumulated other comprehensive income into income for the year ended December&nbsp;31, 2010. The
Company had no interest rate swaps in effect during the fiscal years ended December&nbsp;31, 2009 and December&nbsp;26, 2008. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-26</FONT></P>

<HR NOSHADE>
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<!-- ZEQ.=8,SEQ=166,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=833862,FOLIO='F-26',FILE='DISK105:[11ZBC1.11ZBC79101]FS79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 15&nbsp;&#151; DERIVATIVE FINANCIAL INSTRUMENTS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
pre-tax fair value of the Company's interest rate swaps and foreign currency forward contracts and the accounts in the consolidated balance sheets in which the gross
amounts are included as of December&nbsp;31, 2010 and December&nbsp;31, 2009 were as follows: </FONT></P>
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<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="64pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="61pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="64pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="61pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2010 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2009 </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=2><B>Prepaid<BR>
Expenses<BR>
and&nbsp;Other<BR>
Current<BR>
Assets

<!-- COMMAND=ADD_SCROPPEDRULE,47pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:46pt;"><FONT SIZE=2><B>Other<BR>
Accrued<BR>
Liabilities

<!-- COMMAND=ADD_SCROPPEDRULE,46pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:47pt;"><FONT SIZE=2><B>Prepaid<BR>
Expenses<BR>
and&nbsp;Other<BR>
Current<BR>
Assets

<!-- COMMAND=ADD_SCROPPEDRULE,47pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:46pt;"><FONT SIZE=2><B>Other<BR>
Accrued<BR>
Liabilities

<!-- COMMAND=ADD_SCROPPEDRULE,46pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Derivatives formally designated as hedging instruments:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest rate swaps</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>635</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-top:12pt;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Derivatives not designated as hedging instruments:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign currency forward contracts</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Derivatives</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>635</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
amount of gain (loss) recognized in other income (expense) on foreign currency forward contracts during the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and
December&nbsp;26, 2008 was $0.3&nbsp;million, $(0.1) million and $(2.5) million, respectively. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 16&nbsp;&#151; OTHER LONG-TERM LIABILITIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other long-term liabilities consisted of the following at December&nbsp;31: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred compensation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,875</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>733</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Environmental liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,734</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Taxes payable</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>376</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,815</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other long-term liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>715</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>806</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total other long-term liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12,700</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,354</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 17&nbsp;&#151; INCOME TAXES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income before income taxes for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009, and December&nbsp;26, 2008 was: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income (loss) before income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,886</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,918</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(4,486</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>36,091</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>22,355</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>53,972</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>37,977</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29,273</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>49,486</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-27</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=167,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=612536,FOLIO='F-27',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_28"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 17&nbsp;&#151; INCOME TAXES (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
tax expense from continuing operations consisted of the following for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009, and December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Current</I></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,132</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>516</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,737</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>508</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,021</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>619</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,417</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,445</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,897</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12,057</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,982</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>23,253</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Deferred</I></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Federal</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>865</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(961</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(6,302</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>State</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>312</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>147</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(343</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,811</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(681</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,311</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(2,634</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(1,495</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(9,956</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total tax expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,423</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,487</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,297</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
federal rate reconciles to the effective rate as follows: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Federal statutory rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>State income taxes, net of federal benefit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>0.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Nondeductible expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(6.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effect of foreign tax rates</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(5.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized tax benefits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.2</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax credits and other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(0.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(1.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(0.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Effective rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>24.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>26.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-28</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=168,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=547678,FOLIO='F-28',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_29"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 17&nbsp;&#151; INCOME TAXES (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
deferred tax assets (liabilities) were comprised of the following as of December&nbsp;31: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Deferred tax assets</I></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred compensation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,583</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,874</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Warranty reserves</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,070</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>718</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Employee benefits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,893</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax credits</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>27,803</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>26,008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net operating losses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,141</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,695</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Reserves and accrued liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,400</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,970</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>75,613</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>66,158</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation allowance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,461</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(1,695</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax assets after valuation allowance</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>72,152</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>64,463</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2><I>Deferred tax liabilities</I></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Depreciation</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(8,646</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(8,694</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total deferred tax liability</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(8,646</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(8,694</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net deferred tax asset</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>63,506</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>55,769</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December&nbsp;31, 2010, the Company had approximately $27.8&nbsp;million of tax credit carryforwards for federal income tax purposes. These credits primarily consist of
foreign tax credits of $16.7&nbsp;million that will expire beginning in 2017 if not used and alternative minimum tax credits of $10.3&nbsp;million that have an indefinite carryforward. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred
tax assets as of December&nbsp;31, 2010 and December&nbsp;31, 2009 were reduced by a valuation allowance related to tax benefits of certain subsidiaries with operating
losses where it is more likely than not that the deferred tax asset will not be recognized. The net change in the valuation allowance was an increase of $1.8&nbsp;million for the year ended
December&nbsp;31, 2010, which consisted of a decrease of approximately $0.2&nbsp;million reflected in the tax rate and an increase of $2.0&nbsp;million recorded as a portion of purchase price
accounting. Increases of $0.3&nbsp;million and $0.2&nbsp;million were recorded for the fiscal years ended December&nbsp;31, 2009 and December&nbsp;26, 2008, respectively, which affected the
tax rate. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December&nbsp;31, 2010, the cumulative unremitted earnings of the Company's foreign subsidiaries were approximately $114.0&nbsp;million. The Company has concluded that
predominantly all of these unremitted earnings have been and will be indefinitely reinvested in its foreign operations and, therefore, the recording of deferred tax liabilities for these unremitted
earnings is not required. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these permanently reinvested earnings; however, foreign tax credits would be
available to partially reduce U.S.&nbsp;income taxes in the event of a distribution. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company and its subsidiaries file federal U.S., state and foreign income tax returns. With a few minor exceptions, the Company is no longer subject to income tax examinations by tax
authorities for tax years prior to 2006. All U.S.&nbsp;tax years prior to 2009 have been audited by the U.S.&nbsp;Internal Revenue Service or are closed by statute except 2007. Various state and
foreign jurisdictions are
examining the Company's tax returns for various years through 2009. The Company is not aware of any material adjustments that could arise from these examinations. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-29</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=169,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=891186,FOLIO='F-29',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_30"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 17&nbsp;&#151; INCOME TAXES (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company completed a Canadian federal tax audit and related administrative review for the tax years prior to 2006. Issues related to provincial allocation and reassessments resulting
from the conclusion of the federal audit are still outstanding; however, the Company does not anticipate any material adjustments. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
reconciliation of the beginning and ending amount of unrecognized tax benefits is shown below as of December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at beginning of fiscal year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,132</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,241</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,509</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additions for tax positions of prior years</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>317</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Reductions for tax positions of prior years</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,405</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,464</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Additions based on tax positions related to the current year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>56</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>847</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>55</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Settlements of prior tax authority audits</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(234</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,176</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Balance at end of fiscal year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>779</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,132</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,241</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2010, the Company decreased its reserve related to state and local taxes. This overall net decrease in the reserve for state and local taxes resulted from decreases related to
the expiration of
statutes and settlements offset by increases related to new positions. The Company's policy is to accrue interest and penalties related to potential underpayment of income and withholding taxes within
the provision for income taxes. In fiscal year 2010, there was $0.1&nbsp;million reduction of amounts accrued in the income tax provision for interest and penalties. The liability for accrued
interest and penalties as of December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008 was $0.5&nbsp;million, $0.6&nbsp;million and $0.3&nbsp;million, respectively.
Interest and penalties are computed on the difference between the Company's uncertain tax benefit positions and the amount provided on the Company's tax returns. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has various pension and other post-retirement plans, including defined benefit and defined contribution plans that cover most employees worldwide. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
defined benefit pension plans for most salaried employees provide pension benefits that are based on years of service and the average of the employee's earnings as defined. Plans
for hourly employees generally provide benefits of stated amounts based on years of service. The Company's funding policy is to make contributions necessary to maintain funding of the plans during the
participants' working lifetimes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's defined benefit post-retirement plan provides medical coverage for certain employees. The Company does not fund retiree health care benefits in advance, and it
has the right to modify this plan in the future. For employees retiring before 1993, the Company's contribution toward the cost of coverage will increase to reflect plan experience, but will not
increase more than 5% per year. For employees retiring after 1992, the Company's contribution is fixed in the year of retirement and does not change over the life of the participant. The amount of
employer contribution, however, depends on the year of retirement. For retirements in 2000 and after, there is no employer contribution toward the program. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-30</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=170,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=800463,FOLIO='F-30',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_31"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company froze its U.S. defined benefit pension plan effective December&nbsp;31, 2008. The freeze was communicated to all employees in the fourth quarter of 2008. As a result of
the freeze, the Company incurred costs related to termination benefits in 2008. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
difference between the plans' funded status and the balance sheet position is recognized, net of tax, as a component of Accumulated Other Comprehensive Income as of the measurement
date. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New
accounting guidance was effective for the Company's fiscal year ended December&nbsp;26, 2008 that requires measurement of plan assets and benefit obligations as of the date of an
employer's fiscal year-end. The Company previously had used a measurement date of September&nbsp;30. The net periodic benefit cost for the fiscal year ended December&nbsp;26, 2008 was
prepared using the simplified 15-month transition option. The following table reflects the impact of the adoption of this change in measurement date. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="101pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="86pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="100pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:77pt;"><FONT SIZE=2><B>Before Change<BR>
in Measurement<BR>
Date

<!-- COMMAND=ADD_SCROPPEDRULE,77pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:65pt;"><FONT SIZE=2><B>Change in<BR>
Measurement<BR>
Date<BR>
Adjustment

<!-- COMMAND=ADD_SCROPPEDRULE,65pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:76pt;"><FONT SIZE=2><B>After Change in<BR>
Measurement<BR>
Date

<!-- COMMAND=ADD_SCROPPEDRULE,76pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,273</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(372</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,901</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>647,100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(372</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>646,728</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Retained earnings</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>38,532</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(712</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>37,820</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total shareholders' equity</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>140,184</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(712</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>139,472</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
U.S. pension plans and the Supplemental Executive Retirement Plan were frozen effective December&nbsp;31, 2008, and a transition benefit was added for certain participants under
the U.S.&nbsp;pension plans. The transition benefit is prospective and did not increase the December&nbsp;31, 2008 projected benefit obligation. The curtailment resulted in a curtailment gain of
$12.5&nbsp;million for the fiscal year ended December&nbsp;26, 2008. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table is a summary of the curtailment accounting as of December&nbsp;26, 2008. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="74pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>Immediately<BR>
before<BR>
Curtailment

<!-- COMMAND=ADD_SCROPPEDRULE,58pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:56pt;"><FONT SIZE=2><B>Effect&nbsp;of<BR>
Curtailment

<!-- COMMAND=ADD_SCROPPEDRULE,56pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>Immediately<BR>
after<BR>
Curtailment

<!-- COMMAND=ADD_SCROPPEDRULE,58pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets and obligations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Projected benefit obligation</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(150,182</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,067</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(138,115</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>94,843</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>94,843</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(55,339</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,067</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(43,272</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Reconciliation of net amount recognized in accumulated other comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized prior service credit (cost)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(390</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>390</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized net gain (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(50,623</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,067</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(38,556</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(51,013</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,457</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(38,556</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Post-retirement Benefit Plan reflects a curtailment event which resulted from a plan amendment that eliminates life insurance coverage for future retirees. The plan
amendment resulted </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-31</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=171,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=399038,FOLIO='F-31',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_32"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>in
a decrease to the December&nbsp;31, 2009 accumulated post-retirement benefit obligation of $0.3&nbsp;million. This also resulted in a curtailment gain of $0.3&nbsp;million for the
fiscal year ended December&nbsp;31, 2009. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table is a summary of the curtailment accounting as of December&nbsp;31, 2009. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="70pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="68pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="72pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:60pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>


<!-- COMMAND=ADD_SCROPPEDRULE,60pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>Immediately<BR>
before<BR>
Amendment

<!-- COMMAND=ADD_SCROPPEDRULE,54pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:53pt;"><FONT SIZE=2><B>Effect&nbsp;of<BR>
Amendment

<!-- COMMAND=ADD_SCROPPEDRULE,53pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>Immediately<BR>
after<BR>
Amendment

<!-- COMMAND=ADD_SCROPPEDRULE,54pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT SIZE=2><B>Effect&nbsp;of<BR>
Curtailment

<!-- COMMAND=ADD_SCROPPEDRULE,51pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:54pt;"><FONT SIZE=2><B>Immediately<BR>
after<BR>
Curtailment

<!-- COMMAND=ADD_SCROPPEDRULE,54pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Assets and obligations</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Projected benefit obligation</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,518</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status&nbsp;&#151; net amount recognized</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,518</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Reconciliation of net amount recognized</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized prior service credit (cost)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>298</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>586</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(292</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>294</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrecognized net gain (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(340</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(340</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(340</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amounts recognized in accumulated other comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(42</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>246</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(292</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(46</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated contributions less net periodic benefit cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,476</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,476</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>292</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,184</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized in statement of financial position</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,518</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,230</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-32</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=172,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=550033,FOLIO='F-32',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_33"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following tables provide information on the status of the plans as of December&nbsp;31. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009


<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in benefit obligation</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit obligation&nbsp;&#151; beginning of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>179,853</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>157,936</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,373</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15,616</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,078</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,817</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,854</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,205</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>964</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>963</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Employee contributions</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>300</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>262</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange rate changes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,566</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,976</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Plan amendments and curtailments</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>398</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(288</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actuarial (gain) loss</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,721</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,828</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>286</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>435</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefits paid</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,936</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,171</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(381</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(365</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefit obligation&nbsp;&#151; end of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>195,834</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>179,853</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>17,242</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,373</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Change in plan assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets&nbsp;&#151; beginning of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>142,115</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>125,209</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Actual return on plan assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,009</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>17,377</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Foreign exchange rate changes</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,402</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,421</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Contributions</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,021</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,279</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>381</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>365</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Benefits paid</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,936</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(8,171</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(381</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(365</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of plan assets&nbsp;&#151; end of year</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>161,611</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>142,115</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Funded status</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(34,223</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(37,738</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(17,242</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(16,373</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amounts recognized in the consolidated balance sheets consist of:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(724</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(569</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-current liabilities</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(34,223</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(37,738</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(16,518</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(15,804</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net amount recognized</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(34,223</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(37,738</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(17,242</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(16,373</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension<BR>
Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other<BR>
Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other changes recognized in other comprehensive income:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of prior service (credit) cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>185</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(28</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(52</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of accumulated (gain) loss</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,504</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>812</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>83</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prior service credit (cost) arising during the period</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(398</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net gain (loss) arising during the period</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,815</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(5,063</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(286</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(435</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-33</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=173,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=60057,FOLIO='F-33',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_34"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>2011 Expected </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>Pension<BR>
Benefits

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:40pt;"><FONT SIZE=2><B>Other<BR>
Benefits

<!-- COMMAND=ADD_SCROPPEDRULE,40pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amounts expected to be recognized as components of net periodic costs for fiscal 2011:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of prior service credit (cost)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(64</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of accumulated gain (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,411</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(125</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Components of net periodic benefit cost:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Service cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,078</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,817</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,213</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>368</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Interest cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,854</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,205</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,653</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>964</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>963</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>982</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return on plan assets</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(11,033</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(10,579</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(12,564</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of prior service (credit) cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>185</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>367</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(28</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(52</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(32</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Amortization of (gain) loss</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,504</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>812</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,257</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>83</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>319</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Curtailment (gain) loss</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>238</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(292</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>152</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net periodic post-retirement benefit cost</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,421</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,440</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,164</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,019</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>642</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,789</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table represents amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income at December&nbsp;31. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Prior service credit (cost)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(497</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(104</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>267</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>295</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated gain (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(57,891</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(56,573</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,311</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,108</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accumulated other comprehensive income (loss)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(58,388</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(56,677</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(2,044</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,813</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
accumulated benefit obligations for the plans at December&nbsp;31, 2010, and 2009, were as follows. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="106pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="92pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>Pension Benefits

<!-- COMMAND=ADD_SCROPPEDRULE,81pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:70pt;"><FONT SIZE=2><B>Other Benefits

<!-- COMMAND=ADD_SCROPPEDRULE,70pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>189,301</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,242</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>174,270</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,373</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted-average assumptions used to determine benefit obligation at December&nbsp;31, 2010 and 2009 were as follows. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="18pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="18pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="18pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension<BR>
Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=5 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other<BR>
Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009


<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-34</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=8,SEQ=174,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=797562,FOLIO='F-34',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fu79101_1_35"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
weighted-average assumptions used to determine net periodic cost for fiscal years ending December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008 were as
follows. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Pension Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Other Benefits </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008


<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Discount rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.6</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6.3</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected return in plan assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.1</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7.8</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate of compensation increase</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.9</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
discount rate is based on settling the pension obligation with high-grade, high-yield corporate bonds, and the rate of compensation increase is based on
actual experience and future expectations. The expected return on plan assets is based on historical performance as well as expected future rates of return on plan assets considering the current
investment portfolio and investment strategy. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company used the following health care cost inflation rate assumptions in measuring the accumulated post-retirement benefit obligations as of December&nbsp;31, 2010,
December&nbsp;31, 2009 and December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Rate assumed for next year</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.4</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8.7</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9.0</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ultimate rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4.5</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>%</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year in which ultimate rate is reached</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2028</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
one percentage-point increase in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the
post-retirement benefit obligation. A one percentage-point decrease in assumed health care cost trend rates would have a minimal impact on total service and interest cost
components as well as the post-retirement benefit obligation. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
plans have been designed and adopted by the Company and certain of its affiliates as plan sponsor to provide qualifying employees with a meaningful foundation of retirement income.
Benefits are defined by the plan terms with reference to employment-related factors including length of service. Employer contributions fund benefits and pay plan expenses. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
primary objectives for investment of plan funds are to preserve and to grow the assets as the foundation for the long-term payment of benefits the plan is designed to
provide. The objectives include achieving consistency of investment returns through both capital appreciation and current income. Diversification is intended to reduce the risk of large losses and to
enhance opportunities for appropriate appreciation along with current income. Appropriate liquidity is designed to meet the plan's foreseeable benefit payment and administrative obligations. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's overall investment strategy is to achieve a mix of approximately 70% of investments for long-term growth and 30% for near-term benefit payments,
with wide diversification of asset types, fund strategies, and fund managers. The target allocations for plan assets are 36% equity securities, 57%&nbsp;fixed income securities, and 7% to all other
types of investments. Equity securities include investments in large-cap and small-cap companies located in the U.S. and internationally. Fixed income securities include
corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S.&nbsp;treasuries. Other types of investments include investments in private real estate
funds and absolute return funds that follow several different strategies. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-35</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=175,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=1002768,FOLIO='F-35',FILE='DISK105:[11ZBC1.11ZBC79101]FU79101A.;22',USER='DNICHOL',CD='26-APR-2011;14:36' -->
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<P style="font-family:arial;"><FONT SIZE=2><A
NAME="page_fw79101_1_36"> </A> </FONT> <FONT SIZE=2>


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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information on the fair value measurements of the plan assets as of December&nbsp;31, 2010. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:67%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"120%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="120%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="106pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="73pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="87pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:74pt;"><FONT SIZE=2><B>Quoted&nbsp;prices&nbsp;in<BR>
Active&nbsp;Markets<BR>
for&nbsp;Identical<BR>
Assets<BR>
(Level&nbsp;1)

<!-- COMMAND=ADD_SCROPPEDRULE,74pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:55pt;"><FONT SIZE=2><B>Significant<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2)

<!-- COMMAND=ADD_SCROPPEDRULE,55pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3)

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>735</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>735</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Equity securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Domestic small cap(a)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,712</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,712</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Domestic large cap(b)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>28,247</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,792</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>16,455</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International equity(c)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,243</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,810</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,433</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fixed income securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long duration fixed income(d)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>56,193</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>56,193</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other types of investments:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International balanced(e)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>33,830</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>33,830</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Real estate(f)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,635</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Absolute return(g)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10,016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10,016</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>161,611</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>112,360</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>33,600</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>15,651</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest primarily in domestic common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents mutual funds invested in broadly diversified common stock and commingled funds that invest primarily in domestic common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest primarily in international common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents mutual funds that invest primarily in investment-grade fixed income securities.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(e)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest primarily in international equity and fixed income securities.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(f)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that hold direct investments in real estate that are diversified by geography and type of property.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(g)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest in a wide range of instruments and markets, including domestic and international equities and
equity-related instruments, fixed income and other debt-related instruments, currencies, commodities and derivative instruments. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-36</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=176,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=636276,FOLIO='F-36',FILE='DISK105:[11ZBC1.11ZBC79101]FW79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fw79101_1_37"> </A>


<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table provides information on the fair value measurements of the plan assets as of December&nbsp;31, 2009. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="115pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="73pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="87pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:81pt;"><FONT SIZE=2><B>Quoted&nbsp;prices&nbsp;in<BR>
Active&nbsp;Markets&nbsp;for<BR>
Identical<BR>
Assets<BR>
(Level&nbsp;1)

<!-- COMMAND=ADD_SCROPPEDRULE,81pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:55pt;"><FONT SIZE=2><B>Significant<BR>
Observable<BR>
Inputs<BR>
(Level&nbsp;2)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2><B>Significant<BR>
Unobservable<BR>
Inputs<BR>
(Level&nbsp;3)

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cash and cash equivalents</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>643</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>643</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Equity securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Domestic small cap(a)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,229</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,229</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Domestic large cap(b)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29,355</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,800</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,555</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>International equity(c)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>33,291</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,402</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,889</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fixed income securities:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Long duration fixed income(d)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>59,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>59,967</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other types of investments:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Real estate(e)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,130</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,130</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Absolute return(f)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,500</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>499</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,001</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>142,115</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>96,812</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>31,172</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,131</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
<DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
 <!-- COMMAND=ADD_LINERULETXT,NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" -->
<HR NOSHADE  COLOR="#000000" SIZE="1.0PT" WIDTH="10%" ALIGN="LEFT" >


<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(a)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest primarily in domestic common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(b)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents mutual funds invested in broadly diversified common stock and commingled funds that invest primarily in domestic common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(c)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest primarily in international common stocks.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(d)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents mutual funds that invest primarily in investment-grade fixed income securities.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(e)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that hold direct investments in real estate that are diversified by geography and type of property.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(f)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>This
category represents funds that invest in a wide range of instruments and markets, including domestic and international equities and
equity-related instruments, fixed income and other debt-related instruments, currencies, commodities and derivative instruments. </FONT></DD></DL>
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-37</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=177,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=568091,FOLIO='F-37',FILE='DISK105:[11ZBC1.11ZBC79101]FW79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fw79101_1_38"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>
 <DIV style="padding:0pt;position:relative;text-align:left;margin-left:10%;">
<p style="font-family:arial;"></FONT></P>
 </DIV>

 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="73pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="58pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Changes in Fair Value<BR>
Measurements of Level&nbsp;3<BR>
Plan Assets </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:55pt;"><FONT SIZE=2><B>Real Estate

<!-- COMMAND=ADD_SCROPPEDRULE,55pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:43pt;"><FONT SIZE=2><B>Absolute<BR>
Return

<!-- COMMAND=ADD_SCROPPEDRULE,43pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Beginning balance, December&nbsp;26, 2008</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8,095</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>4,783</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>12,878</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Realized (losses)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(134</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(134</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrealized gains (losses) relating to instruments still held in the reporting period</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,967</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>716</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(1,251</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases, sales, issuances and settlements (net)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(864</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>3,502</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,638</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ending balance, December&nbsp;31, 2009</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,130</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9,001</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>14,131</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Realized (losses)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(60</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(60</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unrealized gains relating to instruments still held in the reporting period</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>509</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>515</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,024</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Purchases, sales, issuances and settlements (net)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>56</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>500</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>556</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Ending balance, December&nbsp;31, 2010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>5,635</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10,016</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15,651</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company expects to contribute $14.1&nbsp;million to its pension plans in 2011. Cash contributions in subsequent years will depend on a number of factors, including performance of
plan assets and legislative changes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative
expenses of the plans were $1.0&nbsp;million, $0.8&nbsp;million, and $1.0&nbsp;million in 2010, 2009, and 2008, respectively. Future benefit payments expected to be
paid to participants for years ending December&nbsp;31 are shown below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10,347</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>11,648</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12,398</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,017</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,507</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2016+</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>73,643</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>134,560</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company has 12 defined contribution retirement savings plans (Savings Plans) which provide for pension, disability and death benefits. Eligible employees are permitted to defer a
portion of their compensation up to a maximum amount. The Company may match, at its discretion, a portion of each employee's contribution, subject to the Savings Plans' limitations. In addition, the
Company may make annual discretionary contributions to the Savings Plans approved by the Board of Directors. The Company contributed $6.1&nbsp;million, $5.9&nbsp;million, and $2.6&nbsp;million
to the Savings Plans in 2010, 2009, and 2008, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
2009, the Company began providing a 401(k) restoration and/or an ESOP restoration plan to selected participants. Both plans are non-qualified benefit plans. The Company
recorded </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-38</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=178,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=301069,FOLIO='F-38',FILE='DISK105:[11ZBC1.11ZBC79101]FW79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fw79101_1_39"> </A>


<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 18&nbsp;&#151; PENSION PLANS (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>expense
of $0.2&nbsp;million and $0.2&nbsp;million for the 401(k) plan and $0.2&nbsp;million and $0.5&nbsp;million for the ESOP plan in 2010 and 2009, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term
investments at December&nbsp;31, 2010 and 2009 were $30.7&nbsp;million and $27.5&nbsp;million, respectively. These investments included assets held by the
Company to fund its non-qualified benefit plans (Supplemental Employee Retirement Plan and defined compensation plans). The Company funds its plans through insurance policies which are in
turn funded by equity and fixed income mutual funds. The Company recognized unrealized gains/losses related to these investments for the fiscal years ended December&nbsp;31, 2010,
December&nbsp;31, 2009 and December&nbsp;26, 2008 of $1.5&nbsp;million, $2.4&nbsp;million, and $(4.9) million, respectively, in selling and administrative expenses. The associated liability
included in accrued pension and other retirement costs was $23.8&nbsp;million and $21.3&nbsp;million as of December&nbsp;31, 2010 and 2009, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 19&nbsp;&#151; COMMITMENTS AND CONTINGENCIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Leases  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has operating leases that contain renewal options. Minimum rental commitments on non-cancellable operating
leases for years ending December&nbsp;31 are shown below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2011</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,084</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2012</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,977</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2013</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,034</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2014</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,359</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>2015</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,524</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Thereafter</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,688</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18,666</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's rent expense in 2010, 2009, and 2008, was $7.3&nbsp;million, $6.3&nbsp;million, and $5.9&nbsp;million, respectively. The Company also has capital lease obligations
related to computer equipment, vehicles and equipment that are not material to these consolidated financial statements. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Letters of Credit  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has a contingent liability for letters of credit outstanding in the amount of $13.0&nbsp;million at December&nbsp;31,
2010 and $6.5&nbsp;million at December&nbsp;31, 2009. These letters of credit primarily relate to the guarantee of a loan to the Company's Chilean joint venture and letters of credit required for
various state workers' compensation programs. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Capital Expenditure Commitment  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;13, 2007, the Company entered into a 50/50 joint venture with its Chilean licensee,
Compa&ntilde;&iacute;a Electro Metalurgica&nbsp;S.A. (Elecmetal), to build an EPG foundry in Chile. The foundry's construction was delayed during the 2009 economic downturn; however,
construction resumed during 2010 and the foundry is expected to be operational in 2012. As a result of the delay, the increased demand for construction resources in Chile and new building codes
following the Chilean </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-39</FONT></P>

<HR NOSHADE>
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<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 19&nbsp;&#151; COMMITMENTS AND CONTINGENCIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>earthquake,
the foundry's construction costs have increased an estimated 40% from the 2007 start of the project. Construction of the foundry is estimated to cost approximately $76&nbsp;million,
$48&nbsp;million of which will be funded equally by the Company and its joint venture partner ($24&nbsp;million each). The remaining balance will be financed by a construction loan that will
convert to a seven-year term loan upon completion of the foundry. The loan is secured by property, equipment and standby letters of credit in the amounts of $7.6&nbsp;million from each
partner at December&nbsp;31, 2010. The Company has funded $8.8&nbsp;million through December&nbsp;31, 2010 and will fund the remaining $15.2&nbsp;million of the estimated costs in 2011. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Legal Proceedings  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is subject to claims and litigation arising in the ordinary course of business, including those relating to exposure to
hazardous materials, and regularly asserts its patent rights against parties that may be infringing those rights. Although the Company cannot predict the final outcome of pending legal proceedings
with certainty, it does not expect the ultimate disposition of these matters to have a material adverse effect on its financial position, results of operations or cash flows. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Bradken Resources Pty&nbsp;Ltd.  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In March 2008, the Company began an arbitration proceeding against its Australian licensee, Bradken Resources Pty&nbsp;Ltd. In the
arbitration, the Company sought a declaration of its rights and obligations under its 1999 agreement, as amended, with Bradken, under which the Company granted Bradken the exclusive right to
distribute and manufacture some of its products in Australia, New Zealand and Papua New Guinea. In the arbitration, the Company
sought to resolve disputes regarding (i)&nbsp;whether Bradken was obliged to use the Company's trademarks in connection with the manufacture and sale of the Company's products, (ii)&nbsp;whether
Bradken could use customer field trials to promote its competing products, (iii)&nbsp;whether the agreement's prohibition on Bradken selling products similar to or in competition with the Company's
products was enforceable and (iv)&nbsp;whether the agreement's prohibition on Bradken using the Company's know-how, product designs and special alloys for a three-year period
following termination of its agreement with Bradken was enforceable. In addition, the Company sought termination of the agreement prior to its scheduled expiration on June&nbsp;30, 2011. Bradken
filed counterclaims against the Company alleging, among other things, that the Company had (i)&nbsp;violated U.S.&nbsp;antitrust laws, (ii)&nbsp;breached the agreement with Bradken and
(iii)&nbsp;misused certain patent rights, and seeking a damage award. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
June&nbsp;17, 2010, an International Chamber of Commerce arbitrator issued a final award in the Company's favor on all issues presented to the arbitrator with the exception of the
Company's request that the agreement be terminated before June&nbsp;30, 2011. Bradken was awarded no damages. The arbitrator affirmed our contract positions, including that Bradken must continue to
apply the Company's trademarks as the Company directed during the term of the license, Bradken cannot sell parts that compete with the Company's licensed products anywhere in the world during the term
of the license, and Bradken cannot use the Company's know-how or alloys nor make any of the Company's patented or non-patented products for a period of three years after the
end of the license. Finally, the arbitrator awarded the Company its share of the ICC administrative expenses, and arbitrator's remuneration and substantially all of the Company's legal expenses. In
the proceeding the Company began in United States District Court to confirm the final award and </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-40</FONT></P>

<HR NOSHADE>
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HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 19&nbsp;&#151; COMMITMENTS AND CONTINGENCIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>secure
a judgment to collect the amount awarded to us, Bradken has challenged the award of legal expenses. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Portland Harbor Superfund Site  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company received a questionnaire dated March&nbsp;12, 2010 from the Environmental Protection Agency (EPA) regarding historical
operational practices in connection with the Portland Harbor Superfund site. The EPA also named the Company as one of more than 100 businesses to date that are potentially responsible parties for this
site. Consequently, the Company may be responsible for clean-up or other costs related to the site under the Comprehensive Environmental Response, Compensation, and Liability Act, also
known as CERCLA or the Superfund law. The current aggregate clean-up costs to be allocated among responsible parties is estimated to be approximately $1.0&nbsp;billion. The Company has
entered into a participation agreement with a group of named potentially responsible parties and other companies under which the Company admits to no liability. The agreement provides a framework to
determine how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party to pay its portion of assessed costs may result in increased
costs to other parties. The Company is also participating in a process with other potentially responsible parties to quantify and potentially allocate natural resource damages claims with respect to
the site. The Company cannot predict its ultimate liability with respect to the Portland Harbor Superfund site at this time, but it could be substantial if the EPA determines that the Company is a
responsible party for this site. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 20&nbsp;&#151; CONTINGENTLY REDEEMABLE EQUITY SECURITIES  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Class&nbsp;A Common Stock  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain employee and director holders of Class&nbsp;A common stock are party to Restricted Stock Transfer Restriction Agreements
(RSTRA) or a Stock Purchase Agreement (SPA) and have the right to sell back shares to the Company upon death or retirement (for employees), subject to restrictions contained within credit facilities
and relevant state laws, as applicable. In addition, the RSTRA also gives a shareholder the right to require the Company to purchase the shares upon disability and the SPA requires the Company to
repurchase shares upon the termination of the shareholder's employment. The price for any shares purchased by the Company is (1)&nbsp;if purchased under the RSTRA, the fair value of the shares as of
the last day of the fiscal quarter immediately preceding the quarter in which the death, disability or retirement occurs or (2)&nbsp;if purchased under the SPA, an amount based on an adjusted book
value calculation. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Put
options under the RSTRA may be exercised by written notice to the Company within 90&nbsp;days of the date of the death, disability or retirement. The price for any shares
purchased by the Company is the fair value of the shares as of the last day of the fiscal quarter immediately preceding the quarter in which the death, disability or retirement (Triggering Event)
occurs or in which the applicable anniversary of the Triggering Event occurs. Accordingly, the Company classifies shares subject to the RSTRA as contingently redeemable equity securities and revalues
them each quarter. Put options may be exercised by written notice to the Company in specified periods. Notice must
be given to the Company within 90&nbsp;days of the Triggering Event and the purchase must be completed between 45 and 60&nbsp;days after the end of the 90-day notice period. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-41</FONT></P>

<HR NOSHADE>
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HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 20&nbsp;&#151; CONTINGENTLY REDEEMABLE EQUITY SECURITIES (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
2009, upon retirement or disability, each shareholder with a RSTRA has had a right to sell to the Company a portion or all shares held by that shareholder in three installments
over a two-year period. Upon retirement or disability, the shareholder may exercise a put option for up to 1/3 of the shares held by the shareholder as of retirement or disability. On the
first anniversary of the retirement or disability, the shareholder may exercise a put option for between 1/3 and 2/3 of the shares held by the shareholder as of retirement or disability. On the second
anniversary of the date of the retirement or disability, shareholder may exercise a put option for any remaining shares. For put option exercises by a shareholder with an aggregate purchase price not
exceeding $1&nbsp;million, the Company must pay the total purchase price on the exercise closing date. For put option exercises by a shareholder with an aggregate purchase price exceeding
$1&nbsp;million, the Company may pay $1&nbsp;million on the closing date for the exercise of the put option and 1/2 of the remaining amount on each of the first and second anniversaries of the
Triggering Event. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since
2009, upon the death of a shareholder, the shareholder's successor may exercise the put option for up to 1/2 of the shares held by the shareholder on the date of death. On the
first anniversary of that date, the shareholder's successor may exercise the put option for any remaining shares. For put option exercises within one year for more than 1/2 of the shares subject to
the option as of the date of death, the Company may pay the repurchase price in two equal annual installments, with the first installment payable on the exercise closing date and the remaining amount
payable on the first anniversary of that date. For put option exercises with respect to up to 1/2 of the shares held by a shareholder as of the date of death, the Company must pay the total purchase
price at the applicable closing date. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
subject to the Stock Purchase Agreement (SPA) may only be sold or transferred in accordance with the SPA. Each shareholder subject to the SPA must sell his or her shares back to
us upon death or termination of employment or service as a director. Unless otherwise agreed, the Company must repurchase the shares within 30&nbsp;days of the date of death or separation from
service. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Class&nbsp;C Preferred Stock  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized number of shares of Class&nbsp;C preferred stock is 205,000. The ESOP owns all of the Class&nbsp;C preferred stock.
The Class&nbsp;C preferred stock is nonvoting, except for certain protective voting rights and except where required by law. Each share of the Class&nbsp;C preferred stock is convertible into one
share of Class&nbsp;A common stock at the discretion of the holder of the Class&nbsp;C preferred stock. The Class&nbsp;C preferred stock will automatically convert into Class&nbsp;A common
stock when the ESOP has fully repaid its loan to the Company or upon an initial public offering of the Company's stock. See </FONT><FONT SIZE=2><I>Note&nbsp;22&nbsp;&#151;
ESOP</I></FONT><FONT SIZE=2>. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
holders of Class&nbsp;C preferred stock have the right to sell back shares to the Company upon death, disability or separation (for employees) pursuant to a distribution schedule
that is determined by the reason for separation and the value of shares in an account. The price for any shares purchased by the Company is the fair value of the shares as of the last day of the
fiscal quarter immediately preceding the quarter in which the shares are repurchased. Accordingly, the Company classifies shares as contingently redeemable equity securities and revalues them each
quarter. The repurchase obligation terminates upon an initial public offering of the Company's stock when the </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-42</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 20&nbsp;&#151; CONTINGENTLY REDEEMABLE EQUITY SECURITIES (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>Class&nbsp;C
preferred stock converts to publicly tradable stock. At that time, the Class&nbsp;C preferred stock will be included in shareholders' equity. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Valuation of Class&nbsp;A Common Stock and Class&nbsp;C Preferred Stock  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To determine the fair value of the Class&nbsp;A common stock and the Class&nbsp;C preferred stock, the Company values the
enterprise at the arithmetic average of the values derived through a guideline company method and a discounted cash flow method. The Company selects public companies comparable to the Company in
respect to investment risk and return perspective and derives an estimated enterprise value after making adjustments for size, growth, profitability, global structure and risk considerations. Under
the discounted cash flow method, assumptions included a weighted average cost of capital of 12.5% based on required return on equity of 17.1% (70% weight), a cost of debt after tax of 2% (30% weight)
and a termination value after the sixth year assuming an exit EBITDA multiple of 7.0x, based on observations of pricing multiples from the guideline company method, discounted to present value. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
fiscal periods 2008, 2009 and through the third quarter of fiscal 2010, the Company determined the fair value of its Class&nbsp;C preferred stock using the Current Method. This
method allocates the
enterprise value to the Class&nbsp;A common stock and Class&nbsp;C preferred stock based on their conversion values, which differ between these two classes of stock primarily due to the value of
the future dividend streams of the Class&nbsp;C preferred stock attributed to such class. Furthermore, the Company included a discount for lack of marketability of 5% in valuing the Class&nbsp;C
preferred stock, but applies no discount in valuing the Class&nbsp;A common stock. At December&nbsp;31, 2010 and for the quarter then ended, the Company changed its valuation method to a
Black-Scholes option pricing model because this method was more appropriate given the increased likelihood of completing an initial public offering. The option pricing model of allocating
enterprise value among common stock and preferred stock treats each class of stock as a call option on all or part of the enterprise's value. The Black-Scholes model uses the enterprise
value derived as described above and made assumptions for volatility (20%), expected life (.75&nbsp;years) and risk-free interest rate (.29%). </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applying
the Black-Scholes model at December&nbsp;31, 2010 and the Current Method at December&nbsp;31, 2009, the value of the Class&nbsp;C preferred stock was $891.65
and $717.70 per share and the value of the Class&nbsp;A common stock was $688.20 and $438.56 per share, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Reclassification of Contingently Redeemable Equity Securities as Shareholders' Equity  </I></B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the Company's repurchase obligation terminates, which will occur upon the conversion of the subject class of stock into publicly
tradable securities, the subject stock is reclassified as shareholders' equity. This will occur, with respect to the Class&nbsp;C preferred stock, when the Company completes an underwritten public
offering and, with respect to the Class&nbsp;A common stock, (1)&nbsp;immediately prior to the sale of those shares in the offering, (2)&nbsp;with respect to 1/2 of any remaining shares,
180&nbsp;days after the completion of the offering, and (3)&nbsp;with respect to the remaining shares, 360&nbsp;days after the completion of the offering. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-43</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 21&nbsp;&#151; SHARE-BASED COMPENSATION  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's share-based compensation awards include options and cash-settled stock appreciation rights (SARs). The Company also sponsors an employee stock
ownership plan (ESOP) that is discussed in more detail in </FONT><FONT SIZE=2><I>Note&nbsp;22&nbsp;&#151; ESOP.</I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Stock Incentive Plans  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of December&nbsp;31, 2010, the Company had 2000 and 2010 Stock Incentive Plans (the "Plans") under which there were 175,000 and
162,500 shares of common stock reserved for issuance, respectively. The Plans were adopted by the Board of Directors and approved by the shareholders and provide for the grant of incentive options,
non-qualified options and other stock-based compensation grants. The 2000 Stock Incentive Plan expired in 2010 and all remaining shares available rolled into the 2010 plan. At
December&nbsp;31, 2010, there were 180,336 shares available for grant in the 2010 Stock Incentive Plan and no shares available for grant in the 2000 Stock Incentive Plan. As of December&nbsp;31,
2010, all outstanding options were granted under the 2000 Stock Incentive Plan and no options had been granted under the 2010 Stock Incentive Plan. Unless terminated earlier, the 2010 Incentive Award
Plan will continue in effect until all shares available for issuance under the plan have been issued and all restrictions on the shares have lapsed. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Stock Options  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective December&nbsp;31, 2005, the Company adopted the fair value method of recognizing expense for stock based compensation
prescribed by ASC Topic 718. The
Company applied the modified prospective approach to adoption in which expense is recognized prospectively for previously granted but unvested options and new option grants. Under this transition
method, options granted prior to adoption continue to be reported under the intrinsic value method of expense recognition, under which compensation expense for employee stock options was not
recognized if the exercise price of the option equaled or exceeded the fair value of the stock on the date of grant. Because the Company has granted no stock options since adoption of this method, no
compensation expense has been recorded for options vesting during the reporting periods presented. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
summary of option activity for the year ended December&nbsp;31, 2010 is presented below. </FONT></P>
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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="68pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="91pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:48pt;"><FONT SIZE=2><B>Number&nbsp;of<BR>
shares

<!-- COMMAND=ADD_SCROPPEDRULE,48pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2><B>Weighted<BR>
Average<BR>
Exercise&nbsp;Price

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options outstanding December&nbsp;31, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>37,887</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>54.61</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Granted</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Exercised</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(16,575</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>51.69</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forfeited</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(34</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35.38</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expired</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(1,175</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35.38</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Options outstanding December&nbsp;31, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,103</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>58.17</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
2010, 3,595 options became exercisable and, as of December&nbsp;31, 2010, all outstanding options were fully exercisable. The intrinsic value of options exercised during 2010
was </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-44</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=9,SEQ=184,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=610594,FOLIO='F-44',FILE='DISK105:[11ZBC1.11ZBC79101]FW79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
<A NAME="page_fw79101_1_45"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 21&nbsp;&#151; SHARE-BASED COMPENSATION (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>$10.6&nbsp;million.
As of December&nbsp;31, 2010, the aggregate intrinsic value of outstanding options was $12.7&nbsp;million and the weighted average remaining contractual term was
4.3&nbsp;years. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008, the Company granted no options. There was no share-based
compensation expense recognized or capitalized for stock options in fiscal years 2010, 2009 and 2008. Cash received for option exercises during 2010 was $0.9&nbsp;million. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Stock Appreciation Rights  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Plans also permit stock appreciation rights (SARs) to be granted to employees and directors. The Company's SARs vest at the end of
a three-year period and expire no more than ten years after the grant date. SARs are settled in cash for the difference between the exercise price (which reflects fair value of the
Company's Class&nbsp;A common stock on the date of the grant) and the fair value of such stock upon exercise. As a result, SARs are recorded in the Company's consolidated balance sheet as a
liability until exercise. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
summary of SARs activity for the fiscal year ended December&nbsp;31, 2010 is presented below. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:62%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"130%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="130%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="91pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="101pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="92pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:34pt;"><FONT SIZE=2><B>Shares

<!-- COMMAND=ADD_SCROPPEDRULE,34pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2><B>Weighted<BR>
Average<BR>
Exercise&nbsp;Price

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:73pt;"><FONT SIZE=2><B>Weighted<BR>
Average<BR>
Remaining<BR>
Contractual&nbsp;Life<BR>
(years)

<!-- COMMAND=ADD_SCROPPEDRULE,73pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:67pt;"><FONT SIZE=2><B>Aggregate<BR>
Intrinsic&nbsp;Value<BR>
(in&nbsp;thousands)

<!-- COMMAND=ADD_SCROPPEDRULE,67pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Outstanding at December&nbsp;31, 2009</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>33,917</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>481.59</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Granted</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15,617</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>422.80</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Exercised</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Forfeited or expired</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Outstanding at December&nbsp;31, 2010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>49,534</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>463.06</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>8.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>11,152</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Exercisable, December&nbsp;31, 2010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>9,411</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>439.55</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7.0</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,340</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Black-Scholes option pricing model is utilized to determine the fair value of SARs granted. The following weighted average assumptions were used in calculating the fair
value during the periods presented: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="53pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="53pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="53pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

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 </B></FONT></DIV></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Risk-free interest rate</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.65%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2.89%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3.61%</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected dividend yield</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected lives</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>10&nbsp;years</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Expected volatility</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30%</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>30%</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-45</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=10,SEQ=185,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=35942,FOLIO='F-45',FILE='DISK105:[11ZBC1.11ZBC79101]FW79101A.;18',USER='DNICHOL',CD='26-APR-2011;14:36' -->
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NAME="page_fy79101_1_46"> </A> </FONT> <FONT SIZE=2>


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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 21&nbsp;&#151; SHARE-BASED COMPENSATION (Continued)  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
pertaining to SARs awards for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009, and December&nbsp;26, 2008 is presented below: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:171pt;"><FONT SIZE=2>(in thousands, except per share data)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,171pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Grant date fair value per share</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>199.56</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>173.39</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>257.50</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total weighted-average fair value of grants</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,117</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,168</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,091</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total intrinsic value of exercises</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total fair value of SARs vested</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,524</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total share-based liabilities paid</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2010, the aggregate intrinsic value of exercisable awards was $2.3&nbsp;million and the weighted average remaining contractual term was 7.0&nbsp;years. At
December&nbsp;31, 2010, the Company
had $3.5&nbsp;million of unrecognized SARs-related compensation expense yet to recognize for unvested awards, net of immaterial estimated forfeitures. This expense is expected to be
recognized over a weighted-average period of two years. The impact of any change in the payout liability for vested awards will be recognized as incurred. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
SARs compensation expense recognized in fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009, and December&nbsp;26, 2008 is presented below. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="36pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Selling and administrative (income) expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,678</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(260</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Tax (benefit) expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(2,956</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net (income) expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,722</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(160</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
December&nbsp;31, 2010, the Company had accrued $7.7&nbsp;million in other long-term liabilities for SARs payout liability. No share-based compensation
expense related to SARs was capitalized during fiscal 2010, 2009 and 2008. Because no SARs were exercised in 2010, no cash was used to settle these awards during 2010. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March&nbsp;25, 2011, the Compensation Committee of the Company's Board of Directors approved the conversion of previously awarded SARs from cash settlement to equity settlement.
The Company has sent conversion consent forms to award recipients and expects all affected employees to consent to the conversion. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 22&nbsp;&#151; ESOP  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company sponsors an employee stock ownership plan (ESOP) that covers all U.S.&nbsp;employees who meet service requirements. The Company makes annual contributions to the ESOP
equal to the ESOP's debt service to the Company less dividends received by the ESOP on unallocated shares. All dividends and contributions received by the ESOP are used to pay debt service. The ESOP
shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees. The Company accounts for its ESOP in accordance with the
guidance on stock compensation. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are released from collateral, the Company reports
compensation expense equal to the current fair value of the shares. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-46</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=186,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=763222,FOLIO='F-46',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_47"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 22&nbsp;&#151; ESOP (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ESOP
non-cash compensation expense was $17.3&nbsp;million, $16.5&nbsp;million and $20.2&nbsp;million for 2010, 2009, and 2008, respectively. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:153pt;"><FONT SIZE=2>(in thousands, except share data)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,153pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Allocated shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>124,394</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>101,867</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares repurchased from former employees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,617</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(2,646</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Unreleased shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>67,577</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>90,104</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total ESOP shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>188,354</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>189,325</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fair value of unreleased shares</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>60,255</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>65,010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 23&nbsp;&#151; NONCONTROLLING INTERESTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The noncontrolling interest for three subsidiaries classified as a separate component of equity was $14.8&nbsp;million and $13.3&nbsp;million as of December&nbsp;31, 2010 and
2009, respectively. Net earnings attributable to the noncontrolling interests from continuing operations were $4.6&nbsp;million, $2.5&nbsp;million, and $5.1&nbsp;million for 2010, 2009, and
2008, respectively. These amounts are net of income tax of $1.2&nbsp;million, $0.6&nbsp;million, and $1.4&nbsp;million for 2010, 2009, and 2008, respectively. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 24&nbsp;&#151; SHAREHOLDERS' EQUITY  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Class&nbsp;A and Class&nbsp;B Common Stock  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized number of shares of Class&nbsp;A common stock and Class&nbsp;B common stock are 5,000,000 and 243,737,
respectively. The Company's Class&nbsp;A and Class&nbsp;B
common stock have one vote per share. Each share of Class&nbsp;B common stock automatically converts into one share of Class&nbsp;A common stock if transferred to other than specified persons. The
Class&nbsp;A common stock and Class&nbsp;B common stock share equally and ratably with identical rights and preferences in any dividends, except those paid to Class&nbsp;C preferred stock
shareholders. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
liquidation, holders of Class&nbsp;A common stock and Class&nbsp;B common stock are entitled to receive ratably any distribution of assets after payment of a certain
preferential amounts to holders of Class&nbsp;C preferred stock. Each class votes separately on any amendment to the Company's Articles of Incorporation if the action would (1)&nbsp;adversely
affect the rights, preferences and privileges of that class or (2)&nbsp;increase the number of authorized shares of that class. In addition, holders of Class&nbsp;A common stock and Class&nbsp;B
common stock vote separately on a change in control or sale of the Company as long as a minimum number of shares of Class&nbsp;B common stock are outstanding. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
holders of Class&nbsp;A common stock are party to the Restated Stock Transfer Restriction Agreement (RSTRA) or the Stock Purchase Agreement (SPA). See </FONT> <FONT SIZE=2><I>Note&nbsp;20&nbsp;&#151; Contingently Redeemable Equity
Securities.</I></FONT><FONT SIZE=2> When the shares subject to those agreements convert to publicly tradable
stock, those shares will be included in shareholders' equity. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2><B><I> Class&nbsp;C Preferred Stock  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The authorized number of shares of Class&nbsp;C preferred stock is 205,000. The ESOP owns all of the Class&nbsp;C preferred stock.
The Class&nbsp;C preferred stock is nonvoting, except for certain protective </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-47</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=2,SEQ=187,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=918507,FOLIO='F-47',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_48"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 24&nbsp;&#151; SHAREHOLDERS' EQUITY (Continued) </B></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>voting
rights and except where required by law. Each share of the Class&nbsp;C preferred stock is convertible into one share of Class&nbsp;A common stock at the discretion of the holder of the
Class&nbsp;C preferred stock. The Class&nbsp;C preferred stock will automatically convert into Class&nbsp;A common stock when the ESOP has fully repaid its loan to the Company or upon an initial
public offering of the Company's stock. See </FONT><FONT SIZE=2><I>Note&nbsp;22&nbsp;&#151; ESOP</I></FONT><FONT SIZE=2>. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
holders of Class&nbsp;C preferred stock have the right to sell back shares to the Company upon death, disability or separation (for employees) pursuant to a distribution schedule
that is determined by the reason for separation and the value of shares in an account. The price for any shares purchased by the Company is the fair value of the shares as of the last day of the
fiscal quarter immediately preceding the quarter in which the shares are repurchased. Accordingly, the Company classifies shares as contingently redeemable equity securities and revalues them each
quarter. The repurchase obligation terminates upon an initial public offering of the Company's stock when the Class&nbsp;C preferred stock converts to publicly tradable stock. At that time, the
Class&nbsp;C preferred stock
will be included in shareholders' equity. See </FONT><FONT SIZE=2><I>Note&nbsp;20&nbsp;&#151; Contingently Redeemable Equity Securities.</I></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 25&nbsp;&#151; ACCUMULATED OTHER COMPREHENSIVE LOSS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated other comprehensive income (loss) represents primarily unrealized foreign currency translation gains and losses. These gains and losses are excluded from net earnings and
exclude income tax expense or benefit because the Company has reinvested the associated earnings of its non-U.S.&nbsp;subsidiaries for an indefinite period of time. These foreign
currency gains and losses will be realized when a foreign subsidiary is liquidated or sold. Other amounts recorded in other comprehensive income (loss) include adjustments related to pension and other
retirement plans and derivative gains and losses related to interest rate hedges. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following reflects the balances included in other comprehensive income (loss), net of tax, for the fiscal years presented. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Cumulative translation adjustment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>28,561</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>21,489</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(1,378</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Defined benefit plans</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(38,115</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(36,753</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(34,114</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Derivatives and other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(248</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>131</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>131</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total accumulated other comprehensive loss</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(9,802</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(15,133</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(35,361</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 26&nbsp;&#151; EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic earnings per share is computed by dividing the net earnings available to common shareholders by the weighted average number of shares of common stock outstanding. The net earnings
available to common shareholders includes an adjustment to revalue Class&nbsp;C preferred shares to the current redemption value. For purposes of calculating diluted earnings per share, the
denominator includes the weighted average number of shares of common stock outstanding, the weighted average number of preferred shares outstanding, and the number of dilutive common stock
equivalents, such as stock options and Class&nbsp;C preferred stock, as determined using the treasury stock method and "as-if-converted," respectively. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-48</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=3,SEQ=188,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=144350,FOLIO='F-48',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_49"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 26&nbsp;&#151; EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic
and diluted net earnings per share were as follows for the years ended: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:171pt;"><FONT SIZE=2>(in thousands, except per share data)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,171pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic weighted average shares outstanding&nbsp;&#151; common</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,086</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,083</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,081</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Dilutive effect of employee stock options</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>32</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>35</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>41</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average shares outstanding&nbsp;&#151; Class&nbsp;C preferred shares</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>86</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>65</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Weighted average shares outstanding assuming dilution</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,118</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,204</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,187</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings from continuing operations attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,399</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26,182</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>44,403</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Valuation adjustment on Class&nbsp;C preferred shares</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(7,933</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(13,287</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings from continuing operations attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>7,399</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,249</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Basic earnings per share from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.81</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>24.18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>41.08</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Diluted earnings per share from continuing operations allocated to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>6.62</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>15.16</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>26.21</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of calculating earnings per share, the Company uses the "if converted" method. As both classes of common stock share the same rights in dividends, basic and diluted
earnings per share are the same for both classes under both the "if converted" method and the "two-class" method. For 2010, the Class&nbsp;C preferred stock is anti-dilutive
and excluded from dilutive EPS. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pro
forma basic and diluted net earnings per share of common stock (unaudited) has been computed to give effect to the assumed conversion of the Class&nbsp;C preferred stock into
common stock, the expiration of the put options associated with the Class&nbsp;A common stock and the Class&nbsp;C preferred stock that will occur in connection with the IPO and through the first
360&nbsp;days thereafter, and the&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-for-one stock split. Also, the numerator in the pro forma basic and diluted net earnings per share calculation has been
adjusted to remove changes resulting from re-measurements of the outstanding Class&nbsp;C preferred stock through December&nbsp;31, 2010. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-49</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=4,SEQ=189,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=71868,FOLIO='F-49',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_50"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 26&nbsp;&#151; EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE (Continued) </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth the computation of our pro forma basic and diluted net earnings per share of common stock (unaudited): </FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="49pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="54pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
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<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma net earnings attributable to ESCO common shareholders</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,920</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,249</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>31,116</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares used in computing basic net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments to reflect assumed conversion of Class&nbsp;C preferred stock</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares used in computing pro forma basic net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares used in computing diluted net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma adjustments to reflect assumed conversion of Class&nbsp;C preferred stock</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Shares used in computing pro forma diluted net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma basic net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Pro forma diluted net earnings per share</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 27&nbsp;&#151; SEGMENT REPORTING  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company's reporting segments are based on the nature of business activities (types of products and production processes) from which each earns net sales and incurs expenses,
financial information reviewed by the chief operating decision maker (the Company's CEO), capital allocation and performance assessment process, organizational structure and financial information
presented to the Board of Directors and investors. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Company's reporting segments are as follows: </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EPG:
This segment designs, develops and manufactures wear parts, wear part carriers and attachments for capital equipment primarily used in the mining, infrastructure development, and
industrial markets. EPG's products are comprised of wear parts (including ground engagement tools (GET) and lip systems, crusher wear parts, dragline rigging and cutting edges), wear parts carrier
systems (including dragline buckets, cable shovel buckets, hydraulic excavator buckets and shovel fronts, wheel loader buckets, truck bodies and dredge cutterheads) and industrial components
(including wear parts for waste and metal recycling hammers, conveying systems). </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;TTG:
This segment manufactures superalloy precision investment cast components for the aerospace and power generation markets. TTG's products include complex superalloy metal components
and products for airplane engines and industrial gas turbines. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B><I> Segment measurement and reconciliations  </I></B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following list presents the more significant items related to segment measurement and reconciliation between the Company's segment
reporting and its external reporting: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
Company uses operating income (loss) to measure segment performance. </FONT></DD></DL>
</UL>
<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-50</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=5,SEQ=190,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=492909,FOLIO='F-50',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_51"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 27&nbsp;&#151; SEGMENT REPORTING (Continued) </B></FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>The
Company does not allocate general corporate administrative income/expense such as interest income and expense, income taxes, currency exposures, other
income and expenses or management and administrative expenses that are not specifically identifiable to a segment, including ESOP compensation expense. Corporate administrative income/expense is
reflected as a reconciling item between the results of the two reporting segments above and the total consolidated results reported in the Company's external reporting. Because of these unallocated
income and expenses, the operating income of each reporting segment does not reflect the operating income or loss the reporting segment would have as a stand-alone business.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>3)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>There
are no inter-segment sales between EPG and TTG.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>4)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Segment-related
assets include inventories (primarily stated at FIFO cost), trade receivables and property, plant and equipment.
Segment-related liabilities primarily include trade payables, warranty and inventory reserves, and workers compensations accruals. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents information regarding operations and assets by segment for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26,
2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:73%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="58pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="64pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="83pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:39pt;"><FONT SIZE=2><B>Total&nbsp;Net<BR>
Sales

<!-- COMMAND=ADD_SCROPPEDRULE,39pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:61pt;"><FONT SIZE=2><B>Depreciation<BR>
and<BR>
Amortization

<!-- COMMAND=ADD_SCROPPEDRULE,61pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:48pt;"><FONT SIZE=2><B>Operating<BR>
Income<BR>
(Loss)

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:63pt;"><FONT SIZE=2><B>Capital<BR>
Expenditures

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year ended December&nbsp;31, 2010:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>712,625</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>23,086</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>108,183</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>18,603</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>136,856</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,244</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>8,695</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,913</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Operating Segments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>849,481</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>27,330</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>116,878</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,516</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,874</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(42,909</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>849,481</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29,204</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>73,969</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,516</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year ended December&nbsp;31, 2009:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>530,517</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>20,484</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>72,452</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,379</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>149,873</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,407</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,604</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>735</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Operating Segments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>680,390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>24,891</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>87,056</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,114</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,926</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(32,648</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>680,390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>26,817</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>54,408</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>14,114</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year ended December&nbsp;26, 2008:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>752,006</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>19,588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>104,051</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>24,701</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>187,907</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,383</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>13,986</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,990</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Operating Segments</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>939,913</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>23,971</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>118,037</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29,691</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,921</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(37,556</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>939,913</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>25,892</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>80,481</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>29,691</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-51</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=6,SEQ=191,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=755811,FOLIO='F-51',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_52"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 27&nbsp;&#151; SEGMENT REPORTING (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents segment accountable asset information for the fiscal years ended, December&nbsp;31, 2010, December&nbsp;31, 2009 and December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="70pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="59pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="69pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=3 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>Trade<BR>
Receivables

<!-- COMMAND=ADD_SCROPPEDRULE,58pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:53pt;"><FONT SIZE=2><B>Inventories

<!-- COMMAND=ADD_SCROPPEDRULE,53pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:44pt;"><FONT SIZE=2><B>Trade<BR>
Payables

<!-- COMMAND=ADD_SCROPPEDRULE,44pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:52pt;"><FONT SIZE=2><B>Property<BR>
and<BR>
Equipment

<!-- COMMAND=ADD_SCROPPEDRULE,52pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT SIZE=2><B>Total<BR>
Assets

<!-- COMMAND=ADD_SCROPPEDRULE,33pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Year ended December&nbsp;31, 2010:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>121,186</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>87,266</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>48,966</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>135,588</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>408,689</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,795</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>18,169</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>17,115</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>32,010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>86,617</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating segments</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>139,981</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>105,435</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>66,081</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>167,598</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>495,306</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(388</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(152</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>228,316</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>140,000</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>105,435</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>65,693</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>167,446</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>723,622</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;31, 2009:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>86,404</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>59,456</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>28,806</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>126,029</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>309,281</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>20,055</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>17,598</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>16,417</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>35,477</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>91,438</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating segments</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>106,459</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>77,054</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>45,223</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>161,506</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>400,719</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>1,910</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>413</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>275,026</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>106,478</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>77,054</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>47,133</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>161,919</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>675,745</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD COLSPAN=3 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Fiscal year ended December&nbsp;26, 2008:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Engineered Products</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>107,064</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>62,964</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>35,010</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>124,632</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>336,427</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Turbine Technologies</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>25,069</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,466</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23,053</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>38,868</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>105,516</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total operating segments</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>132,133</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>86,430</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>58,063</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>163,500</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>441,943</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD COLSPAN=2 style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Other</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>(55</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>2,717</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>737</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>204,168</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="BOTTOM">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total Company</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>132,078</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>86,430</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>60,780</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>164,237</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>646,111</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=3 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents segment net sales and long-lived assets by geographic area for the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and
December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:57%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"140%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="140%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="56pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Net Sales by Ship to Address </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=8 ALIGN="CENTER" style="font-family:arial;border-bottom:solid #000000 1.0pt;"><FONT SIZE=2><B>Long-lived Assets </B></FONT></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2010

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008


<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>United States</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>376,387</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>325,933</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>447,191</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>91,358</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>93,826</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100,729</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Canada</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>101,668</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>89,893</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>103,357</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>38,856</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>38,006</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>35,134</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>All Others</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>371,426</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>264,564</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>389,365</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>109,218</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>76,717</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>71,303</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>849,481</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>680,390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>939,913</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>239,432</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>208,549</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>207,166</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
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 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
single customer accounts for 10% of more of the Company's net sales or accounts receivable in the fiscal years ended December&nbsp;31, 2010, December&nbsp;31, 2009 and
December&nbsp;26, 2008. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-52</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=7,SEQ=192,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=50870,FOLIO='F-52',FILE='DISK105:[11ZBC1.11ZBC79101]FY79101A.;19',USER='BKYNARD',CD=';2-MAY-2011;12:35' -->
<A NAME="page_fy79101_1_53"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 28&nbsp;&#151; BUSINESS ACQUISITIONS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;1, 2010, the Company acquired 100% of the Engineering and Mining Products divisions of Swift Group Holdings Pty&nbsp;Ltd, an Australian company. These divisions (Swift)
provide equipment,
truck and wear part fabrication and refurbishment services, including on-site maintenance services, in the Bowen and Surat Basins of Australia. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
results of Swift's operations have been included in the consolidated financial statements since the acquisition date. The Company paid $17.5&nbsp;million ($17.8&nbsp;million
cash less $0.3&nbsp;million receivable from the former owners related to purchase price adjustments) net of $2.1&nbsp;million cash acquired, which resulted in goodwill in the EPG reporting unit of
$3.9&nbsp;million. This goodwill is deductible for income tax purposes. The Swift acquisition expands our footprint to provide a more direct presence throughout Australia's mining regions and
enhances our product offering through its fabrication facilities and its patented mining truck body offering. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents a summary of the results of the Swift operations since the acquisition date: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="121pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT SIZE=2><B>Six&nbsp;Months&nbsp;Ended<BR>
December&nbsp;31,&nbsp;2010

<!-- COMMAND=ADD_SCROPPEDRULE,86pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>(Unaudited)</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>28,767</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,616</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>133</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,343</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="77pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:55pt;"><FONT SIZE=2><B>As of<BR>
July&nbsp;1, 2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net consideration</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,526</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,809</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>5,418</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Patents</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>4,283</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Customer relationships</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,998</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Non-compete agreements</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>343</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deferred tax assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,129</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Add:</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>9,769</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>610</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill&nbsp;&#151; Preliminary</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,925</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-53</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 28&nbsp;&#151; BUSINESS ACQUISITIONS (Continued)  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
December&nbsp;1, 2010, the Company acquired 100% of the issued and outstanding shares of Austcast Pty&nbsp;Ltd in Brisbane, Australia, and its subsidiary Newlcast in Dunedin, New
Zealand (collectively, Austcast). Austcast manufactures certain industrial products and the Company plans to adjust its operations in 2011 to include ESCO's Ground Engaging Tools (GET) and other
mining and infrastructure wear parts. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
results of Austcast's operations have been included in the consolidated financial statements since the acquisition date. The total acquisition price was $17.4&nbsp;million
($15.9&nbsp;million cash and $1.5&nbsp;million of contingent consideration) less $1.0&nbsp;million cash acquired, which resulted in goodwill in the EPG reporting unit of $12.2&nbsp;million.
This goodwill is deductible for income tax purposes. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent
consideration of up to $1.5&nbsp;million is payable October&nbsp;15, 2011, provided certain tooling builds are completed during the measurement period of April&nbsp;1,
2011 through September&nbsp;30, 2011. The Company expects to pay out $1.5&nbsp;million. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table presents a summary of the results of operation of the Austcast operations since the acquisition date. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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</FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="121pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:86pt;"><FONT SIZE=2><B>One&nbsp;Month&nbsp;Ended<BR>
December&nbsp;31,&nbsp;2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR VALIGN="BOTTOM">
<TH ALIGN="LEFT" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>(Unaudited)</FONT><BR></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,787</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Gross profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(67</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Operating profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>46</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net profit</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>509</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition, December&nbsp;1, 2010. The Company is finalizing
certain valuations of assets purchased and liabilities assumed; therefore, the allocation shown below is preliminary and subject to refinement. </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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</FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="81pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:58pt;"><FONT SIZE=2><B>As&nbsp;of<BR>
December&nbsp;1,<BR>
2010

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net consideration</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>17,366</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Less</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>7,498</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Property, plant and equipment</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,334</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other assets</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>166</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Add</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Current liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,335</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Other liabilities</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>487</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Goodwill&nbsp;&#151; Preliminary</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>12,190</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-54</FONT></P>

<HR NOSHADE>
<P style='font-family:arial;page-break-before:always'></p>
<!-- ZEQ.=1,SEQ=194,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=615284,FOLIO='F-54',FILE='DISK105:[11ZBC1.11ZBC79101]GA79101A.;15',USER='JMAHER',CD=';1-MAY-2011;20:43' -->
<A NAME="page_ga79101_1_55"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 29&nbsp;&#151; RESTRUCTURING AND OTHER  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table is a summary of the restructuring activities during the fiscal years presented: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
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 </FONT></P>

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<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="10pt" style="font-family:arial;"></TD>
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="68pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="82pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="46pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

</FONT>
</DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:51pt;"><FONT SIZE=2><B>Employee<BR>
Severance

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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:59pt;"><FONT SIZE=2><B>Curtailment<BR>
Expense&nbsp;and<BR>
Other&nbsp;Costs

<!-- COMMAND=ADD_SCROPPEDRULE,59pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>Total

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Provisions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,062</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>730</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,792</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deductions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(523</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(390</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(913</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;26, 2008</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>539</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>340</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>879</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Provisions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>2,856</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>3,476</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>6,332</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deductions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,361</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(3,816</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(7,177</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2009</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>34</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>34</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Provisions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>68</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>680</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>748</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Deductions</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(102</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(680</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>(782</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>)</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>December&nbsp;31, 2010</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&#151;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD COLSPAN=2 ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;border-bottom:double #000000 2.25pt;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
align cost structures with lower capacity utilization, the Company closed its West Jordan, Utah plant in 2008 and its Saskatoon, Saskatchewan foundry in 2009. Both of these
facilities were part of the EPG&nbsp;segment. In 2009 the Company reduced its overall workforce by 17.6%, which resulted in employee severance costs. In 2010 the Company incurred additional shutdown
costs and fair value adjustments related to the Saskatoon foundry, a portion of which is still held for sale. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><B> NOTE 30&nbsp;&#151; DISCONTINUED OPERATIONS  </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the periods presented in the consolidated financial statements, businesses classified as discontinued operations included the Integrated Manufacturing (IMG) and Engineered Metals
(EMG) groups, which were divested in the fourth quarter of 2006, and included a portion of Soldering Rental, which was divested in the second quarter of 2009 as part of the transaction which resulted
in the Company's acquisition of 100% of Soldering. The IMG and EMG groups were each reported in their own segments, which were discontinued. Soldering Rental was in the EPG segment. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
were no discontinued operations for 2010. The following table shows selected financial information for the businesses included in discontinued operations as of December&nbsp;31,
2009 and December&nbsp;26, 2008: </FONT></P>
 <DIV style="padding:0pt;position:relative;width:60%;margin-left:20%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


<!-- COMMAND=ADD_TABLEWIDTH,"100%" -->


 </FONT></P>

<!-- User-specified TAGGED TABLE -->
<DIV ALIGN="CENTER"><TABLE width="100%"  BORDER=0 CELLSPACING=0 CELLPADDING=0>
<TR><!-- TABLE COLUMN WIDTHS SET -->
<TD WIDTH="" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="32pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<TD WIDTH="7pt" ALIGN="RIGHT" style="font-family:arial;"></TD>
<TD WIDTH="42pt" style="font-family:arial;"></TD>
<TD WIDTH="12pt" style="font-family:arial;"></TD>
<!-- TABLE COLUMN WIDTHS END --></TR>

<TR VALIGN="BOTTOM">
<TH NOWRAP  ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:66pt;"><FONT SIZE=2>(in thousands)</FONT><FONT SIZE=2><B>

<!-- COMMAND=ADD_SCROPPEDRULE,66pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2009

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:23pt;"><FONT SIZE=2><B>2008

<!-- COMMAND=ADD_SCROPPEDRULE,23pt -->

 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net sales</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>506</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>1,099</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Earnings before income taxes</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>433</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>588</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Income tax expense</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>127</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>145</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings attributable to noncontrolling interests</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>141</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>343</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Net earnings from discontinued operations</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>165</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>100</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
</TABLE></DIV>
<!-- end of user-specified TAGGED TABLE -->
 </DIV>
 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-55</FONT></P>

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<!-- ZEQ.=2,SEQ=195,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=428141,FOLIO='F-55',FILE='DISK105:[11ZBC1.11ZBC79101]GA79101A.;15',USER='JMAHER',CD=';1-MAY-2011;20:43' -->
<A NAME="page_ga79101_1_56"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B><BR>
ESCO Corporation </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><B> NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) </B></FONT></P>
 </DIV>
 <P style="font-family:arial;"><FONT SIZE=2><B> NOTE 31&nbsp;&#151; SUBSEQUENT EVENTS  </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In preparing the audited financial statements, the Company has reviewed events that occurred after December&nbsp;31, 2010, the balance sheet date, up until May&nbsp;2, 2011, the
date the accompanying audited financial statements were available to be issued. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
February&nbsp;1, 2011, the Company acquired the assets of Trans Equipment for $6.7&nbsp;million. Trans Equipment has operated as a full-line equipment and supply
company for the mining, infrastructure development and industrial markets. This acquisition will offer direct supply and service capabilities to key mining and infrastructure customers in Wyoming. The
acquisition's operating results will be integrated into the EPG&nbsp;reporting segment. The Company is finalizing certain valuations included in the purchase agreement. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
March&nbsp;25, 2011, the Compensation Committee of the Company's Board of Directors approved the conversion of previously awarded long-term incentive stock appreciation
rights from cash settlement to equity settlement. The Company has sent conversion consent forms to award recipients and expects all affected employees to consent to the conversion. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
other material events were noted during the Company's review. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>F-56</FONT></P>

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<!-- ZEQ.=3,SEQ=196,EFW="2203402",CP="ESCO CORPORATION",DN="1",CHK=218936,FOLIO='F-56',FILE='DISK105:[11ZBC1.11ZBC79101]GA79101A.;15',USER='JMAHER',CD=';1-MAY-2011;20:43' -->
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</FONT> <FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><div
style="width:100%;border-top:solid #000000 3.0pt;padding:0in 0in 0in 0in;font-size:3.0pt;"></div>
<div style="width:100%;border-top:solid #000000 1.0pt;padding:0in 0in 0in 0in;font-size:4.0pt;"></div> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=5><B>ESCO Corporation  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4>Class&nbsp;A Common Stock </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4><I>

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<BR></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4><B>
<IMG SRC="g593995.jpg" ALT="GRAPHIC" WIDTH="328" HEIGHT="105">
  </B></FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=4><I>

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<BR></FONT></P>
 <DIV style="padding:0pt;position:relative;width:80%;margin-left:10%;">
<p style="font-family:arial;"><font  style="font-size:8pt;line-height:9pt;"></FONT><FONT SIZE=2>


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 </FONT></P>

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<TR VALIGN="TOP">
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=4><B>Goldman, Sachs&nbsp;&amp;&nbsp;Co.</B></FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=4>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=4><B>Morgan Stanley</B></FONT></TD>
</TR>
</TABLE></DIV>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><I>

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<BR></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT
SIZE=2><B>Through and including&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2011 (the 25th&nbsp;day after the date of this
prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with
respect to an unsold allotment or subscription.</B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><div
style="width:100%;border-top:solid #000000 1.0pt;padding:0in 0in 0in 0in;font-size:3.0pt;"></div>
<div style="width:100%;border-top:solid #000000 3.0pt;padding:0in 0in 0in 0in;font-size:4.0pt;"></div> </FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_part_ii_information_not_required_in_prospectus"> </A>
<A NAME="toc_ja79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  PART II<BR>  INFORMATION NOT REQUIRED IN PROSPECTUS    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_item_13._other_expenses_of_issuance_and_distribution"> </A>
<A NAME="toc_ja79101_2"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;Other Expenses of Issuance and Distribution    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the costs and expenses, other than underwriting discounts, payable by us in connection with the sale
and distribution of the securities being registered. All amounts are estimated except the SEC registration fee and the FINRA filing fee. </FONT></P>
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<TH NOWRAP  COLSPAN=2 ALIGN="LEFT" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:21pt;"><FONT SIZE=2><B>Item

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:42pt;"><FONT SIZE=2><B>Amount*

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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>SEC registration fee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>FINRA filing fee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="#CCEEFF" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Initial NASDAQ Global Market listing fee</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR BGCOLOR="White" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Legal fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Accounting fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Printing and engraving expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Transfer agent and registrar fees</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Blue sky fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
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<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Miscellaneous fees and expenses</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
</TR>
<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;border-bottom:solid #000000 1.0pt;">&nbsp;</TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=0>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><p style="font-family:arial;margin-left:10pt;text-indent:-10pt;"><FONT SIZE=2> </FONT><FONT SIZE=2>Total</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT"  VALIGN="BOTTOM" style="font-family:arial;"><FONT SIZE=2>$</FONT></TD>
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<TR style="font-size:1.5pt;" VALIGN="TOP">
<TD COLSPAN=2 VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
<TD VALIGN="BOTTOM" style="font-family:arial;">&nbsp;</TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>To
be provided by amendment. </FONT></DD></DL>
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 <P style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_item_14._indemnification_of_directors_and_officers"> </A>
<A NAME="toc_ja79101_3"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;Indemnification of Directors and Officers    <BR>    </B></FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Section&nbsp;60.047(2)(d) of the Oregon Business Corporation Act, a corporation's articles of incorporation may limit the
personal liability of directors under some circumstances. In accordance with Oregon law, our 2011 Restated Articles of Incorporation filed as an exhibit to this registration statement, to be in effect
upon the completion of this offering, limit a director's personal liability to us and our shareholders for monetary damages for conduct as a director, except for liability arising from any act or
omission for which elimination of liability is not permitted under the Oregon Business Corporation Act. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Section&nbsp;60.391 of the Oregon Business Corporation Act, a corporation may indemnify a person who is made a party to a proceeding because the person is or was a director
against liability incurred in the proceeding if (i)&nbsp;the person acted in good faith; (ii)&nbsp;the person reasonably believed the conduct was in the corporation's best interests, or at least
was not opposed to its best interests; and (iii)&nbsp;in the case of a criminal proceeding, the person had no reasonable cause to believe the conduct was unlawful. In addition, a person who is
wholly successful, on the merits or otherwise, in the defense of a proceeding in which the person was a party because the person was a director, is entitled to indemnification for expenses actually
and reasonably incurred by the person in connection with the proceeding. Our 2011 Restated Articles of Incorporation, to be in effect upon the completion of this offering, requires us to indemnify, to
the fullest extent permitted by the Oregon Business Corporation Act, any current or former officer or director made, or threatened to be made, a party to or a witness or other participant in, any
proceeding, by reason of the fact that the person is or was our director or officer, against liability and expenses of a type indemnified against under the Oregon Business Corporation Act. We must
also advance expenses to or for any current or former director in advance of the final disposition of an indemnifiable proceeding upon the person's compliance with the advancement provisions of the
Oregon Business Corporation Act. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, we have entered into indemnification agreements, a form of which is filed as an exhibit to this registration statement, with our directors, officers and some employees,
which contain provisions that are in some respects broader than the specific indemnification provisions contained </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>II-1</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>

<BR>

<P style="font-family:arial;"><FONT SIZE=2>in
the Oregon Business Corporation Act. The indemnification agreements may require us, among other things, to indemnify our directors against certain liabilities that may arise by reason of their
status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified. </FONT></P>


<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference
is also made to the underwriting agreement filed as an exhibit to this registration statement, which, under certain conditions, provides for indemnification by the
underwriters of our officers and directors against certain liabilities.  </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_item_15._recent_sales_of_unregistered_securities"> </A>
<A NAME="toc_ja79101_4"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;Recent Sales of Unregistered Securities    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following sets forth all securities issued by us within the past three years without registration under the Securities Act. No
underwriters were involved in any of the stock issuances and, unless otherwise noted, no commissions were paid in connection therewith. In each of the following transactions, we relied on the
exemption from registration under the Securities Act set forth in Rule&nbsp;701. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
of our employees have participated in a deferred compensation plan which allows participants to elect in advance of earning salary and bonuses to defer a percentage of salary
and bonuses and have the deferred amount credited to a plan account. Employees elected to defer $1.3&nbsp;million, $1.7&nbsp;million and $2.1&nbsp;million in 2010, 2009 and 2008, respectively,
into the deferred compensation plan. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the last three years, our employees and directors have exercised options to purchase an aggregate of 32,614 shares of Legacy Class&nbsp;A Common Stock, with exercise prices ranging
from $2.37 to $65.51 per share, depending upon the date of grant.  </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_item_16._exhibits_and_financial_statements"> </A>
<A NAME="toc_ja79101_5"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;Exhibits and Financial Statements    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits </FONT></P>
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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT SIZE=2><B>Exhibit<BR>
No.

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*1.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Underwriting Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*3.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of 2011 Articles of Incorporation of ESCO Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*3.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of 2011 Bylaws of ESCO Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*5.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Opinion of Stoel Rives&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Credit Agreement Between ESCO Corporation, subsidiaries of ESCO Corporation named therein, as guarantors, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National
Association, as Syndication Agent, Union Bank, N.A., as Documentation Agent, U.S. Bank National Association, as Co-Agent, and the Other Lenders named therein, dated November&nbsp;18, 2010. Portions of this exhibit have been redacted and filed
separately with the SEC pursuant to a confidential treatment request.</FONT></TD>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Indemnification Agreement between ESCO Corporation and each of its directors and executive officers**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>2010 Stock Incentive Plan**</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>2000 Stock Incentive Plan, as amended**</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Restated Stock Transfer Restriction Agreement**</FONT></TD>
</TR>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Purchase Agreement**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Option Agreement**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Appreciation Rights Agreement for grants after 2010**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Appreciation Rights Agreement and form of amendment for grants prior to 2011**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.10</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Performance Unit Award Agreement for grants after 2010**</FONT></TD>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>II-2</FONT></P>

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<A NAME="page_ja79101_1_3"> </A>

<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT SIZE=2><B>Exhibit<BR>
No.

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:104pt;"><FONT SIZE=2><B>Description of Exhibit

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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.11</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Performance Unit Award Agreement for grants prior to 2011**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.12</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Deferred Compensation Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.13</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Deferred Compensation Plan II, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.14</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation 401(k) Restoration Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.15</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Supplemental Executive Retirement Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.16</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation 2005 Supplemental Executive Retirement Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.17</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Annual Cash Bonus Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation ESOP Restoration Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Amended and Restated ESCO Corporation Employee Stock Ownership Plan dated May&nbsp;5, 2007, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.20</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Letter Agreement with Gene K. Huey**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Subsidiaries of the registrant.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Consent of PricewaterhouseCoopers&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*23.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Consent of Stoel Rives&nbsp;LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
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<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>To
be filed by amendment.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>**</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Management
contract or compensatory plan or arrangement. </FONT></DD></DL>
 </DIV>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Statement Schedules. Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the consolidated
financial statements or notes thereto.  </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2><A
NAME="ja79101_item_17._undertakings"> </A>
<A NAME="toc_ja79101_6"> </A></FONT> <FONT SIZE=2><B>  Item&nbsp;17.&nbsp;&nbsp;&nbsp;&nbsp;Undertakings    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act may be permitted as to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item&nbsp;14, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned registrant hereby undertakes that: </FONT></P>

<UL>
<DL compact>
<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(1)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus as filed as part of this
registration statement in reliance upon Rule&nbsp;430A and contained in a form of prospectus filed by the registrant pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time it was declared effective.
<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>(2)</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. </FONT></DD></DL>
</UL>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned registrant hereby undertakes to provide the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each purchaser. </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>II-3</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2>
<A HREF="#bg79101a_main_toc">Table of Contents</A> </FONT></P>

<P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><A
NAME="jc79101_signatures"> </A>
<A NAME="toc_jc79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  SIGNATURES    <BR>    </B></FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, we have duly caused this Registration Statement on
Form&nbsp;S-1 to be signed on our behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on the 2nd day of May, 2011. </FONT></P>
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<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD COLSPAN=3 style="font-family:arial;"><FONT SIZE=2><B> ESCO CORPORATION</B></FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2><B><BR>
&nbsp;</B></FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2><B><BR>&nbsp;</B></FONT></TD>
<TD style="font-family:arial;"><BR><FONT SIZE=2>  By:</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="BOTTOM" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;STEVEN D. PRATT<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Steven D. Pratt, </FONT><FONT SIZE=2><I>Chief Executive Officer</I></FONT></TD>
</TR>
</TABLE></DIV>
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 <P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW
ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Steven D. Pratt, Ray Verlinich, and Kevin S.
Thomas and each of them, attorneys-in-fact for the undersigned, each with the power of substitution, for the undersigned in any and all capacities to sign any and all
amendments to this Registration Statement (including post-effective amendments and any registration statement relating to the same offering as this Registration Statement that is to be
effective upon filing pursuant to Rule&nbsp;462(b) under the Securities Act of 1933), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. </FONT></P>

<P style="font-family:arial;"><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. </FONT></P>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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 </B></FONT></DIV></TH>
<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:22pt;"><FONT SIZE=2><B>Date

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 </B></FONT></DIV></TH>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>/s/&nbsp;STEVEN D. PRATT<BR>



<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Steven D. Pratt</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Chief Executive Officer, Chairman of<BR>
the Board and Director (principal<BR>
executive officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;RAY VERLINICH<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Ray Verlinich</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Chief Financial Officer (principal<BR>
financial and accounting officer)</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;PETER F. ADAMS<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Peter F. Adams</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;FRANK ALVAREZ<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Frank Alvarez</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;STEPHEN E. BABSON<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Stephen E. Babson</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
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 <P ALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>II-4</FONT></P>

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<P style="font-family:arial;"><FONT SIZE=2><A
HREF="#bg79101a_main_toc">Table of Contents</A></FONT></P>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
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<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>
&nbsp;</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>/s/&nbsp;PETER F. BECHEN<BR>



<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Peter F. Bechen</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;FRANK JUNGERS<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Frank Jungers</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;HENRY T. SWIGERT<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Henry T. Swigert</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;ROBERT C. WARREN, JR.<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> Robert C. Warren, Jr.</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
<TR VALIGN="BOTTOM">
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>/s/&nbsp;JOHN W. WOODS, JR.<BR>


<HR NOSHADE SIZE="1.0pt" WIDTH="100%" COLOR="#000000">

</FONT> <FONT SIZE=2> John W. Wood, Jr.</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>Director</FONT></TD>
<TD VALIGN="CENTER" style="font-family:arial;"><FONT SIZE=2><BR>&nbsp;</FONT></TD>
<TD ALIGN="CENTER" VALIGN="CENTER" style="font-family:arial;"><BR><FONT SIZE=2>May&nbsp;2, 2011</FONT></TD>
</TR>
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<A NAME="toc_ka79101_1"> </A>
<BR></FONT><FONT SIZE=2><B>  Exhibit Index    <BR>    </B></FONT></P>
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<TH NOWRAP  COLSPAN=2 ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:33pt;"><FONT SIZE=2><B>Exhibit<BR>
No.

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<TH style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TH>
<TH NOWRAP  ALIGN="CENTER" style="font-family:arial;"><DIV style="border-bottom:solid #000000 1.0pt;margin-bottom:0pt;width:104pt;"><FONT SIZE=2><B>Description of Exhibit

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 </B></FONT></DIV></TH>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*1.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Underwriting Agreement</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*3.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Restated 2011 Articles of Incorporation of ESCO Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*3.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Restated 2011 Bylaws of ESCO Corporation</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*5.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Opinion of Stoel Rives&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Credit Agreement Between ESCO Corporation, subsidiaries of ESCO Corporation named therein, as guarantors, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National
Association, as Syndication Agent, Union Bank, N.A., as Documentation Agent, U.S. Bank National Association, as Co-Agent, and the Other Lenders named therein, dated November&nbsp;18, 2010. Portions of this exhibit have been redacted and filed
separately with the SEC pursuant to a confidential treatment request.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Indemnification Agreement between ESCO Corporation and each of its directors and executive officers**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.3</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>2010 Stock Incentive Plan**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.4</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>2000 Stock Incentive Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.5</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Restated Stock Transfer Restriction Agreement**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.6</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Purchase Agreement**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.7</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Option Agreement**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.8</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Appreciation Rights Agreement for grants after 2010**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.9</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Stock Appreciation Rights Agreement and form of amendment for grants prior to 2011**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.10</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Performance Unit Award Agreement for grants after 2010**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.11</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Form of Performance Unit Award Agreement for grants prior to 2011**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.12</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Deferred Compensation Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.13</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Deferred Compensation Plan II, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.14</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation 401(k) Restoration Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.15</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation Supplemental Executive Retirement Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.16</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation 2005 Supplemental Executive Retirement Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.17</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Annual Cash Bonus Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.18</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>ESCO Corporation ESOP Restoration Plan, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*10.19</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Amended and Restated ESCO Corporation Employee Stock Ownership Plan dated May&nbsp;5, 2007, as amended**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>10.20</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Letter Agreement with Gene K. Huey**</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>21.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Subsidiaries of the registrant.</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>23.1</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Consent of PricewaterhouseCoopers&nbsp;LLP</FONT></TD>
</TR>
<TR VALIGN="TOP">
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD ALIGN="RIGHT" style="font-family:arial;"><FONT SIZE=2>*23.2</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>&nbsp;</FONT></TD>
<TD style="font-family:arial;"><FONT SIZE=2>Consent of Stoel Rives&nbsp;LLP (included in Exhibit&nbsp;5.1)</FONT></TD>
</TR>
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<DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>*</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>To
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<BR><BR></FONT></DD><DT style='font-family:arial;margin-bottom:-11pt;'><FONT SIZE=2>**</FONT></DT><DD style="font-family:arial;"><FONT SIZE=2>Management
contract or compensatory plan or arrangement. </FONT></DD></DL>
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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
As filed with the Securities and Exchange Commission on May 2, 2011
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ESCO CORPORATION
(Exact name of registrant as specified in its charter)
Oregon
(State or other jurisdiction of
incorporation or organization)
3532
(Primary Standard Industrial
Classification Code Number)
93-0989423
(I.R.S. Employer
Identification Number)
2141 NW 25th Avenue
Portland, Oregon 97210
(503) 228-2141
(Address, including zip code and telephone number, including
area code, of registrant's principal executive offices)
Kevin S. Thomas
Vice President, General Counsel and Corporate Secretary
ESCO Corporation
2141 NW 25th Avenue
Portland, Oregon 97210
(503) 228-2141
(Name, address, including zip code and telephone number,
including area code, of agent for service)
Copies To:
Robert J. Moorman
James M. Kearney
Stoel Rives LLP
900 SW Fifth Avenue, Ste. 2600
Portland, Oregon 97204
Tel: (503) 224-3380
Fax: (503) 220-2480
Sarah K. Solum
Davis Polk & Wardwell LLP
1600 El Camino Real
Menlo Park, California 94025
Tel: (650) 752-2011
Fax: (650) 752-3611
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box.
o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
o
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 definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
ý
(Do not check if a
smaller reporting company)
Smaller reporting company
o
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
Proposed Maximum
Aggregate Offering
Price(1)(2)
Amount of
Registration Fee
Class A Common Stock
$175,000,000
$20,317.50
(1)
Includes
shares of Class A Common Stock that the underwriters have the option to purchase.
(2)
Estimated
solely for purposes of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or
until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
Table of Contents
The information in this preliminary prospectus is not complete and may be changed. These securities may not
be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion. Dated May 2, 2011.
Shares
ESCO Corporation
Class A Common Stock
This is an initial public offering of shares of Class A Common Stock of ESCO Corporation.
ESCO
Corporation is offering             of the shares to be sold in the offering. The selling shareholders identified in this prospectus, who include some of our executive officers
and shareholders affiliated with some of our directors, are offering an additional             shares. ESCO Corporation will not receive any of the proceeds from the sale of the shares
by the
selling shareholders.
Before
this offering, there has been no public market for the Class A Common Stock. We estimate the initial public offering price per share will be between $             and
$             . We intend to apply to list our Class A Common Stock on the NASDAQ Global Market under the symbol "ESCO".
See "Risk Factors" on page 13 to read about factors you should consider before buying shares of the Class A Common Stock.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Per Share
Total
Initial public offering price
$
$
Underwriting discounts
$
$
Proceeds, before expenses, to ESCO Corporation
$
$
Proceeds, before expenses, to the selling shareholders
$
$
To
the extent that the underwriters sell more than             shares of Class A Common Stock, the underwriters have the option to purchase up to an additional
             shares from us at the initial public offering price less the underwriting discount.
The
underwriters expect to deliver the shares against payment in New York, New York on                    , 2011.
Goldman, Sachs & Co.
Morgan Stanley
Prospectus
dated                    , 2011.
Table of Contents
TABLE OF CONTENTS
Page
Prospectus Summary
1
Explanatory Note Regarding Changes in Our Capital Stock
5
The Offering
6
Summary Consolidated Financial and Other Data
8
Risk Factors
13
Special Note Regarding Forward-Looking Statements
26
Use of Proceeds
28
Dividend Policy
29
Capitalization
30
Dilution
32
Selected Consolidated Financial and Other Data
34
Management's Discussion and Analysis of Financial Condition and Results of
Operations
39
Industries
64
Business
69
Management
89
Compensation of Executive Officers
95
Certain Relationships and Related Person Transactions
115
Principal and Selling Shareholders
116
Description of Employee Stock Ownership Plan
119
Description of Capital Stock
120
Shares Eligible for Future Sale
125
Material United States Federal Income Tax Consequences to Non-U.S.
Holders
128
Underwriting
132
Legal Matters
137
Experts
137
Where You Can Find More Information
137
Index to Financial Statements
F-1
Through and including                           , 2011 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with
respect to an unsold allotment or subscription.
Neither
we, the selling shareholders, nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus
or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This
prospectus is an offer to sell only the shares offered hereby but only in circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only
as of its date. Our business, financial condition, results of operations and prospects may have changed since that date.
Table of Contents
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus and does not contain all of the
information you should consider in making your investment decision. Before investing in our Class A Common Stock, you should carefully read this entire prospectus, including our consolidated
financial statements and the related notes and the information under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations". In this
prospectus, unless otherwise indicated or the context otherwise requires, references to "we", "us", "our", the "Company", and "ESCO" refer to ESCO Corporation and its subsidiaries on a consolidated
basis.
Our Company
We are a leading independent designer, developer and manufacturer of highly engineered wear parts and replacement products used in
surface mining, infrastructure development, power generation, aerospace and industrial applications. Our products are often
essential to the performance of our customers' capital equipment, which frequently operates continuously in harsh environments and is subject to abrasion, impact, corrosion or extreme temperatures. We
have focused on product innovation throughout our nearly 100-year history and as of April 11, 2011, we had 45 U.S. patents and 483 foreign patents (including foreign counterparts to
our U.S. patents). We believe our expertise in metallurgy, tribology (the science of wear), design engineering, manufacturing processes and distribution are our core competencies.
We
have two operating groups:
Engineered Products Group
, or EPG, designs, develops and manufactures wear parts and wear part carriers and provides wear solutions for mining, infrastructure development and other
challenging industrial wear applications. EPG wear parts include ground engaging tools, or GET, such as mechanically attached teeth on buckets for earth moving, crusher parts, scrap recycling hammers and dragline rigging. We believe we are the global
market leader in GET tooth systems used in surface mining and infrastructure development, with an extensive offering of patented GET products. Our wear parts, which typically are consumed in less than one year, represented 80% of EPG net sales in
2010. In addition to wear parts, we also design and manufacture wear part carriers, such as dragline buckets for coal mining where we believe we are the global market leader. We have a global network of 21 EPG manufacturing facilities and 35 EPG
sales and distribution offices in 18 countries. EPG represented $712.6 million, or 84%, of our net sales in 2010.
Sample EPG products, which include wear parts and wear part carriers:
1
Table of Contents
Turbine Technologies Group
, or TTG, manufactures superalloy precision investment cast components used in the aerospace, power generation and other industrial markets, such as blades,
vanes and complex structural parts used in aircraft engines and industrial gas turbines. Broad manufacturing and metallurgical capabilities and extensive engineering expertise, backed by the strength of our brand, have enabled TTG to become an
important supplier in these markets. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of turbines and considered replacement parts. TTG represented $136.9 million, or 16%, of our net sales in 2010.
Our Industries
EPG.
Growth in demand for our EPG products is primarily driven by growing populations and urbanization in emerging
markets. These macro trends are
driving significant demand for a wide range of commodities. According to Bloomberg and FactSet, from March 2009 to March 2011 prices for iron ore, copper and crude oil were up 189%, 133% and 115%,
respectively. The capital expenditure budgets for the top five global mining companies by market capitalization have increased an average of 73% in 2011 over 2010.
Our
EPG net sales are also driven by demand for new infrastructure in emerging markets and the need to replace aging infrastructure in developed markets. According to Business Monitor
International, infrastructure spending globally is expected to grow at a compound annual growth rate of 13% from 2010 to 2014.
TTG.
Growth in the aerospace market is driven by new aircraft builds and airplane flight hours. With the recovery in
the global economy and growth
in airline traffic, aircraft OEMs are increasing production rates and consequently, according to Airline Monitor, engine deliveries are expected to grow 6.8% in 2011 and 13.0% in 2012. Economic
growth and increasing urbanization are expected to drive growth for components supporting the power OEM markets. According to Frost & Sullivan, gas turbine sales are expected to increase at a
compound annual growth rate of 5.1% from 2010 through 2015.
Our Strengths
Leading Position in Attractive, Diverse and Growing Markets.
We believe we are the global leader in GET tooth
systems in the surface mining and
infrastructure development markets and are positioned to benefit from positive secular trends in commodities markets and global infrastructure spending. We serve more than 1,000 customers in the
mining, infrastructure development, power generation, aerospace and industrial markets, including the 10 largest global mining companies.
Broad Portfolio of Innovative, Mission-Critical Products.
We sell mission-critical wear parts essential to the
productivity of our customers'
capital equipment in mining and infrastructure development applications where downtime is expensive. Over the past five years, we have sold EPG products under more than 25,000 SKUs. As of
April 11, 2011, we had 45 U.S. patents and 483 foreign patents, including foreign counterparts to our U.S. patents.
Significant and Growing Installed Base Generates Recurring Sales.
We estimate that our EPG products are installed on
approximately
one-third of the world's surface mining machines, and we believe there are opportunities to capture additional share of an increasing base of machines. Our consumable, often patented, wear
parts are generally an operating requirement for our customers and can require replacement as often as every few weeks, generating recurring sales as
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parts
wear. The majority of TTG net sales are from products used in the "hot gas path" of aerospace and industrial gas turbines where they are subjected to extreme heat and operating stresses,
resulting in the need for periodic replacement as part of the turbine maintenance, repair and overhaul cycle.
Well-Established Brand with a Loyal, Diverse Customer Base.
For nearly a century, we have built our brand with
responsive service,
productivity improvement and customer-driven innovation. Today, the ESCO brand is globally recognized for quality, durability, reliability, safety and superior performance in the most demanding
operating conditions, from the high stress and impact of hard rock dredging and the severe abrasion of oil sands, to the extreme temperature ranges of a jet engine. We have served each of our top 10
customers in 2010 for at least 15 years.
Global Operations with Local Presence.
We have an expansive network of 28 manufacturing facilities, including 16
foundries, and 35 sales and
distribution offices. We operate in 19 countries on six continents, which allows us to develop expertise in solving the world's most challenging mining and infrastructure development problems and
helps us maintain an advantage in developing new products and technologies that we can offer to customers around the world. Our local presence in most of the major mining regions we serve enables us
to develop deep customer relationships, enhance our logistical capabilities and cross-sell a wide range of products and solutions.
Management Team and Organizational Capability.
Our executive officers have an average of over 20 years of
experience in our business. Our
management team has grown ESCO from a company with operations only in North America and Western Europe to a global business with operations in 19 countries on six continents and a broad, diverse and
growing product portfolio.
Our Strategies
Customer-Driven Innovation.
Through ongoing contact with our customers in the field, we will continue to develop
close relationships that allow us
to determine firsthand the new products and solutions our customers need. Through these relationships, we are able to solve customer problems using our design engineering, metallurgical and
manufacturing expertise to create new and, in many cases, patented products that can then be applied across multiple geographies. These products and solutions developed in close collaboration with
customers can deliver greater value and command higher prices and are not easily displaced because of the risk of productivity loss and high switching costs.
Expand Our Global Presence.
We will continue to grow our global operations by expanding alongside customers into key
regions. Our global expansion
strategy is driven by our desire to serve the fastest-growing mining and infrastructure development markets, expand our direct sales channel and expand our manufacturing in low-cost
regions. Consequently, over the past several years we have made investments in establishing our presence in Australia, Brazil, China, Indonesia, Peru, Russia and South Africa, to capture significant
growth in the mining and infrastructure development markets in these regions.
Expand Direct Distribution, Selling a Broader Range of Products and Solutions.
We employ a diversified distribution
model for product sales in the
aftermarket that includes direct sales, a network of independent dealers, licensees and OEMs. We will continue to focus on building a direct sales channel in markets where there is a high
concentration of mining activity. Our direct sales channel allows us to manage how our products are positioned with customers, provides us with significant opportunities to cross-sell
products and solutions and positions us to capture incremental growth and profitability.
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Increase Our Installed Base.
In EPG, we will continue to pursue a "push/pull" strategy to increase first fitments of
our branded products on capital
equipment. We work closely with OEMs to develop the next generation of products that match the requirements of their new machines. This creates a "push" for our parts and a recurring sales
stream as the end-user purchases our wear products that are attached to our proprietary fitments on machines on an ongoing basis in the aftermarket. In addition, our close customer
relationships have allowed us to provide products and solutions to address customers' critical problems, creating a "pull" through demand for our products. In TTG, our engineers work closely with
OEMs and their revenue sharing partners to manufacture new and modified products that provide high turbine efficiencies and performance.
Pursue Strategic Acquisitions.
We plan to continue our successful identification, acquisition and integration of
businesses that we believe will
provide us with some or all of the following: foundry capacity in strategic regions, proximity to key customers and enhanced distribution capabilities and complementary products or technologies. We
will continue to focus on expanding our presence in the top mining regions globally and in emerging markets and low-cost regions. We will continue to evaluate acquisitions based on synergy
potential, return on invested capital and earnings accretion.
Focus on Continuous Improvement and Lean Processes.
We will continue to focus on lean processes to drive continuous
improvements in all aspects of
our business. Our lean system, which we refer to as QVS, or "Quality, Value and Speed", has allowed us to improve process cycle times, improve safety, increase quality and customer service, and reduce
capital requirements, including working capital and capital deployed to increase foundry tonnage. As we continue to expand our global operations, we will continue to pursue opportunities to shorten
product development cycles, enhance margins and improve customer service.
Risk Factors
See "Risk Factors" and other information included in this prospectus for disclosure of factors you should carefully consider before
investing in shares of our Class A Common Stock.
Corporate Information
We were founded in 1913 in Portland, Oregon and are an Oregon corporation. Our principal executive office is at 2141 NW
25th Avenue, Portland, Oregon 97210, and our telephone number is (503) 228-2141. Our website address is
www.escocorp.com
.
Information contained on or accessible through our website is not incorporated by reference into this prospectus, and should not be considered part of this prospectus. Our website address included in
this prospectus is an inactive textual reference only. As of December 31, 2010, we had more than 4,600 employees worldwide.
The
ESCO logos and other trademarks or service marks of ESCO appearing in this prospectus are the property of ESCO. Trade names, trademarks and service marks of other companies
appearing in this prospectus are the property of the holders.
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EXPLANATORY NOTE REGARDING CHANGES IN OUR CAPITAL STOCK
In connection with this offering, we will amend our articles of incorporation to:
•
rename our existing authorized Class A Common Stock "Legacy Class A Common Stock";
•
authorize the class of common stock, "Class A Common Stock", that is offered pursuant to this prospectus;
•
authorize blank-check preferred stock;
•
amend the terms of the Legacy Class A Common Stock to provide that each share (a) sold in an underwritten
public offering (including this offering) will automatically convert into one share of Class A Common Stock immediately upon the sale, (b) outstanding on the date that is 180 days
after the date of this prospectus (the first "Automatic Conversion Date") will automatically convert on that date into one-half share of new Class A Common Stock and
one-half share of Legacy Class A Common Stock and (c) outstanding on the date that is 360 days after the date of this prospectus (the second "Automatic Conversion
Date") will automatically convert on that date into one share of new Class A Common Stock (subject, in each case, to adjustment for stock splits, stock dividends, recapitalizations and similar
events occurring after the offering made pursuant to this prospectus); and
•
amend the terms of the existing Class B Common Stock to provide that each share will automatically convert upon
transfer to a person other than those described below (a) if transferred before the first Automatic Conversion Date, into one share of Legacy Class A Common Stock; (b) if
transferred after the first but before the second Automatic Conversion Date, into one-half share of Legacy Class A Common Stock and one-half share of Class A
Common Stock; and (c) if transferred on or after the second Automatic Conversion Date, into one share of Class A Common Stock (subject, in each case, to adjustment for any stock splits,
stock dividends, recapitalizations and similar events occurring after the offering made pursuant to this prospectus). The shares of Class B Common Stock are owned by Henry T. Swigert as trustee
of the Swigert 2000 Trust and may be transferred without automatic conversion to Henry T. Swigert; any trustee, in the capacity of trustee, of the Swigert 2000 Trust; or any trustee, in the capacity
of trustee, of any trust created under the Swigert 2000 Trust. Mr. Swigert is a member of our board of directors.
Before
completing this offering, we will effect a         -for-one stock split of Legacy Class A Common Stock and Class B Common Stock by
means of a stock dividend. Each share of these classes of stock converts automatically into shares of new Class A Common Stock on the conditions specified in our articles of incorporation and
described above. In addition, upon completion of the offering made by this prospectus, each share of our outstanding Class C Preferred Stock will convert automatically
into             
shares of the new Class A Common Stock.
After
giving pro forma effect to the automatic conversion of all shares of Class C Preferred Stock and Legacy Class A Common Stock into Class A Common Stock and the
         -for-one stock split of the Legacy Class A Common Stock and Class B Common Stock, as
of                          , 2011 we would have had outstanding
             shares of new Class A Common Stock,             shares of Class B Common Stock convertible
into             shares of new Class A Common Stock and no
shares of preferred stock.
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THE OFFERING
Class A Common Stock offered by us
shares
Class A Common Stock offered by selling shareholders
shares
Class A Common Stock outstanding after this offering
shares
or             shares if the underwriters exercise their option to purchase additional shares in full
Class B Common Stock outstanding after this offering
shares
Total Class A Common Stock and Class B Common Stock outstanding after this offering
shares
or             shares if the underwriters exercise their option to purchase additional shares in full
Underwriters' option to purchase additional shares of Class A Common Stock
shares from us and no shares from
the selling shareholders
Use of proceeds
We estimate that we will receive net proceeds from our sale of shares of Class A Common Stock of
approximately $        million, assuming an initial public offering price of $         per share, the midpoint of the price range set forth on the cover of this
prospectus, after deducting underwriting discounts and estimated offering expenses payable by us. We will not receive any of the proceeds from the sale of shares by selling shareholders. We intend to use the proceeds for general corporate and working
capital purposes, including possible acquisitions of businesses to complement or enhance our product offerings and manufacturing capacity.
See "Use of Proceeds" for additional information.
Proposed NASDAQ Global Market symbol
ESCO
Risk factors
See "Risk Factors" and the other information included in this prospectus for a discussion of factors you should
carefully consider before investing in shares of our Class A Common Stock.
The
number of shares of Class A Common Stock outstanding after this offering is based on             shares outstanding as of December 31, 2010 and
excludes:
•
shares issuable upon exercise of options outstanding as of December 31, 2010 to purchase Legacy
Class A Common Stock at a weighted average exercise price of $         per share;
•
shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class A Common Stock at the time of exercise
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(             shares
assuming a fair value of $         per share, the midpoint of the range set forth on the cover of this prospectus);
•
shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class A Common Stock at the time of exercise (             shares assuming a fair value of $         per share, the mid-point of
the range set forth on the cover of
this prospectus); and
•
additional shares of Class A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan.
Unless
otherwise indicated, all information in this prospectus reflects and assumes the following:
•
the amendment of our articles of incorporation described in "Explanatory Note Regarding Changes in Our Capital Stock";
•
the         -for-one stock split of Legacy Class A Common Stock and Class B
Common Stock by means of a stock dividend before this offering;
•
the conversion of our Class C Preferred Stock and Legacy Class A Common Stock into Class A Common
Stock as described in "Explanatory Note Regarding Changes in Our Capital Stock";
•
no exercise of outstanding options, stock-settled stock appreciation rights or stock-settled performance units;
•
no exercise of the put rights described in "Description of Capital Stock — Shareholder Agreements"; and
•
no exercise by the underwriters of their option to purchase up to             additional shares of Class A
Common Stock from us in this offering.
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SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
We derived the summary consolidated statement of earnings data for the years ended December 26, 2008 and December 31,
2009 and 2010 and the summary consolidated balance sheet data as of December 31, 2009 and 2010 from our audited consolidated financial statements and related notes included in this prospectus.
Before 2009, we reported on a 52/53-week fiscal year consisting of four 13-week periods and ending on the last Friday of the calendar year. Effective December 27, 2008,
we changed to a calendar year. Our fiscal year 2009, however, began on December 27, 2008 and ended on December 31, 2009, resulting in a 370-day year.
The
results indicated below and elsewhere in this prospectus are not necessarily indicative of our future performance. You should read this information together with "Capitalization",
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.
Fiscal year ended
(dollars in thousands, except per share data)
December 31,
2010
December 31,
2009
December 26,
2008
Statement of earnings data:
Net sales
$
849,481
$
680,390
$
939,913
Cost of goods sold(1)
626,883
507,115
724,921
Gross profit
222,598
173,275
214,992
Operating expenses
Selling and administrative expenses(1), (2)
147,881
112,535
132,719
Restructuring and other(3)
748
6,332
1,792
Operating profit
73,969
54,408
80,481
Interest expense, net
23,710
26,226
26,736
Loss on early extinguishment of debt(4)
13,013
—
—
Other (income) expense(5)
(731
)
(1,091
)
4,259
Earnings from continuing operations before income taxes
37,977
29,273
49,486
Income tax expense
9,423
8,487
13,297
Earnings from continuing operations, net of tax
28,554
20,786
36,189
Earnings from discontinued operations, net of tax(6)
—
306
443
Net earnings
28,554
21,092
36,632
Less: net earnings attributable to the noncontrolling interest — continuing operations
(4,634
)
(2,537
)
(5,073
)
Less: net earnings attributable to the noncontrolling interest — discontinued operations
—
(141
)
(343
)
Net earnings attributable to ESCO shareholders from continuing operations
23,920
18,249
31,116
Valuation adjustment of Class C Preferred Stock(7)
(16,521
)
7,933
13,287
Net earnings attributable to ESCO common shareholders from continuing operations
7,399
26,182
44,403
Pro forma earnings from continuing operations attributable to ESCO shareholders(8)
23,920
18,249
31,116
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Fiscal year ended
(dollars in thousands, except per share data)
December 31,
2010
December 31,
2009
December 26,
2008
Earnings per weighted average share outstanding(9)
Basic earnings per share from continuing operations allocated to ESCO common shareholders
$
6.81
$
24.18
$
41.08
Diluted earnings per share from continuing operations allocated to ESCO common shareholders(10)
$
6.62
$
15.16
$
26.21
Weighted average shares outstanding
Basic
1,086
1,083
1,081
Diluted
1,118
1,204
1,187
Pro forma earnings per share from continuing operations attributable to ESCO shareholders
Basic
$
$
$
Diluted
Pro forma weighted average shares outstanding
Basic
Diluted
Cash dividends declared per common share(11)
$
11.00
$
10.00
$
11.00
As of
December 31,
2010, pro forma
December 31,
2010
December 31,
2009
Balance sheet data:
Cash and cash equivalents
$
114,101
$
114,101
$
168,487
Current assets, excluding cash and cash equivalents
268,166
268,166
203,854
Property and equipment, net
167,446
167,446
161,919
Total assets
723,622
723,622
675,745
Current liabilities, excluding the current portion of debt
133,854
133,854
101,162
Total debt, including current portion
273,314
273,314
306,498
Contingently redeemable equity securities(12)
—
232,184
144,064
Total equity/(deficit)(12)
227,562
(4,622
)
44,699
Fiscal year ended
December 31, 2010
December 31, 2009
December 26, 2008
Other data:
Adjusted EBITDA(13)
$
127,780
$
99,497
$
130,853
Adjusted net earnings from continuing operations(14)
$
48,588
$
28,977
$
44,108
(1)
Non-cash
ESOP compensation costs are included in cost of goods sold and selling and administrative expenses. See "Description of Employee Stock
Ownership Plan."
(2)
The
mark to market on stock-appreciation rights (SARs), an expense of $7.7 million and $0.0 million and income of $0.3 million in 2010,
2009 and 2008, respectively, are included in selling and administrative expenses.
(3)
Restructuring
costs included: in 2010, expenses related to the closure of our Saskatoon, Saskatchewan foundry; in 2009, personnel reductions and the closure
of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry; and in 2008, personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits
for our U.S. defined benefit plans.
(4)
Loss
on early extinguishment of debt primarily includes the write-off of $4.0 million of unamortized loan costs and the early redemption
call premium of $8.6 million paid upon redemption of $300.0 million principal amount of senior unsecured notes in December 2010 as part of our debt refinancing. Debt
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extinguishment
costs also include $0.4 million of unamortized costs associated with our asset-backed line of credit cancelled in November 2010 as part of our debt refinancing.
(5)
Other
(income) expense primarily includes foreign exchange losses and gains on settlement transactions of foreign denominated accounts receivable and
accounts payable. Other expense in each of 2009 and 2008 includes $0.3 million of insurance retention expenses.
(6)
Discontinued
operations for 2009 and 2008 included earnings from ESCO Soldering Locacoes de Marquinas e Equipmentos Ltda, which we divested in June
2009 as part of the transaction that resulted in our acquisition of 100% ownership of ESCO Soldering, now known as ESCO Brazil.
(7)
Valuation
adjustment of Class C Preferred Stock is the mark to market change of the redemption value of the shares of Class C Preferred Stock
classified as contingently redeemable equity securities on our balance sheet. The corresponding offset is a change in our retained earnings. Upon the conversion of Class C Preferred Stock into
Class A Common Stock in connection with the offering made by this prospectus, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity and this
valuation adjustment will no longer be included in our financial statements.
(8)
Pro
forma earnings from continuing operations attributable to ESCO shareholders reflects the reclassification from contingently redeemable equity securities
to shareholders' equity of Class C Preferred Stock and Class A Common Stock subject to contingent repurchase obligations. See "Description of our Employee Stock Ownership Plan" and "Description of
Capital Stock."
(9)
Pro
forma share data reflect the changes in our capital structure that will occur before we complete the offering described in this prospectus; other per
share data do not. See "Explanatory Note Regarding Changes in Our Capital Stock".
(10)
Diluted
earnings per share includes the weighted average number of Class C Preferred Stock outstanding and the incremental shares that would be
issued upon the assumed exercise of stock options for the period they were outstanding.
(11)
See
"Dividend Policy".
(12)
Contingently
redeemable equity securities are redeemable upon the holder's retirement at age 65, death or disability. See "Description of Capital
Stock — Shareholder Agreements" and "Description of Employee Stock Ownership Plan". The presentation reflects shares of Class C Preferred Stock and Legacy Class A
Common Stock at their redemption value. Shares of Class C Preferred Stock automatically convert on a one-for-one basis into shares of the Class A Common Stock
upon the completion of the offering made by this prospectus. Shares of Legacy Class A Common Stock automatically convert on a one-for-one basis into shares of the
Class A Common Stock over a period of up to 360 days as described in "Explanatory Note Regarding Changes in Our Capital Stock". Upon the conversion of Class C Preferred Stock or
Legacy Class A Common Stock into Class A Common Stock, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity.
(13)
Adjusted
EBITDA is earnings from continuing operations, net of tax, before interest, taxes, depreciation and amortization and non-operating
expense (income), adjusted to add back ESOP non-cash compensation expenses, mark to market on SARs expense, unrealized (gains) losses on long-term investments and certain
restructuring charges. Adjusted EBITDA has limitations as an analytical tool, and is not intended to represent net earnings, earnings from continuing operations, net of tax, or cash flow from
operations as these terms are defined by generally accepted accounting principles in the United States and should not be used as an alternative to net earnings as an indicator of operating performance
or to cash flow as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate those measures in the same
manner we do. We have included Adjusted EBITDA in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete
10
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understanding
of the factors and trends affecting our business. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons:
•
Our management uses Adjusted EBITDA in conjunction with GAAP financial measures as part of our assessment of our business
and in communications with our board of directors concerning our financial performance;
•
Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates
period-to-period comparisons of operations and facilitates comparisons with peer companies, many of which use similar non-GAAP financial measures to supplement
their GAAP results; and
•
Adjusted EBITDA excludes non-cash charges, such as depreciation, amortization, ESOP compensation expense and
mark to market on SARs expense, and those non-cash charges in any specific period may not directly correlate to the underlying performance of our business operations and can vary
significantly between periods.
The
following table reconciles earnings from continuing operations, net of tax to Adjusted EBITDA for the periods indicated below.
Fiscal year ended
(dollars in thousands)
December 31,
2010
December 31,
2009
December 26,
2008
Earnings from continuing operations, net of tax
$
28,554
$
20,786
$
36,189
Add/(Subtract):
Interest (net) and loss on early extinguishment of debt
36,723
26,226
26,736
Income tax expense
9,423
8,487
13,297
Depreciation and amortization(a)
27,479
25,113
24,187
Other (income) expense
(731
)
(1,091
)
4,259
ESOP non-cash compensation expense(b)
17,259
16,504
20,248
Mark to market on SARs expense(c)
7,678
—
(260
)
Unrealized (gains) losses on long-term investments(d)
(1,953
)
(2,860
)
4,405
Restructuring and other(e)
748
6,332
1,792
Port Hope reclamation(f)
$
2,600
—
—
Adjusted EBITDA
$
127,780
$
99,497
$
130,853
(a)
Depreciation
and amortization excludes the amortization of debt issuance, which is included in interest (net).
(b)
We
recognize non-cash compensation expense equal to the fair value of the Class C Preferred Stock released as security for the loan to
the ESOP and allocated to participant accounts. A portion of the non-cash ESOP compensation expense is allocated to cost of goods sold and a portion is allocated to selling and
administrative expenses, based on the number of shares allocated to the accounts of manufacturing employees and other employees. See "Description of Employee Stock Ownership Plan."
(c)
Each
quarter, we record the mark to market change in the value of our SARs. Our determination of fair value includes, among other factors, the valuation
determined by the independent valuation firm used by the ESOP trustee. We add this back to derive Adjusted EBITDA because it is a non-cash expense that will end in 2011. In 2011, we
changed our SARs long-term incentive program to stock-settled grants. The awards' grant date fair value will be amortized over their required service period. We expect that all of our
existing cash-settled SARs will be converted to stock-settled SARs in 2011. Any impact to expense from this conversion will be amortized over the remaining service period for the unvested
awards.
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(d)
Unrealized
(gains) and losses on long-term investments represent the mark to market on our investments held to fund our deferred compensation
and supplemental executive retirement programs.
(e)
Restructuring
and other activity in 2010 included restructuring expenses related to the closure of our Saskatoon, Saskatchewan foundry. Restructuring
activity in 2009 included restructuring expenses related to personnel reductions and the closure of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry. Restructuring activity in 2008
included restructuring expenses related to personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans.
(f)
The
expense in 2010 represents the estimated cost of removing an accumulation of solid waste at our Port Hope, Ontario, Canada facility. We plan to complete
the removal within a five-year period. This expense is included in selling and administrative expenses in our consolidated financial statements.
(14)
We
define adjusted net earnings from continuing operations as net earnings from continuing operations attributable to ESCO shareholders plus loss on early
extinguishment of debt, net of tax; mark to market on SARs expense, net of tax; and ESOP non-cash compensation expense, net of tax. The adjustments assume a 35% tax rate. We have included
adjusted net earnings from continuing operations in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business.
The
following table reconciles net earnings from continuing operations attributable to ESCO shareholders to adjusted net earnings from continuing operations.
Fiscal year ended
(dollars in thousands)
December 31,
2010
December 31,
2009
December 26,
2008
Net earnings from continuing operations attributable to ESCO shareholders
$
23,920
$
18,249
$
31,116
Loss on early extinguishment of debt, net of tax
8,458
—
—
Mark to market on SARs expense, net of tax
4,991
—
(169
)
ESOP non-cash compensation expense, net of tax
11,219
10,728
13,161
Adjusted net earnings from continuing operations
$
48,588
$
28,977
$
44,108
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RISK FACTORS
Investing in our Class A Common Stock involves a high degree of risk. You should carefully consider the
risks described below and the other information in this prospectus, including our consolidated financial statements and the related notes, before making a decision to invest. If any of the events or
circumstances described below occurs, our business, operating results, financial condition or growth prospects could be materially and adversely affected. In those cases, the trading price of our
Class A Common Stock could decline and you may lose all or part of your investment.
Risks Related to Our Business
Our business is subject to changes in general economic conditions.
Our results of operations are materially affected by the conditions in the global economy and in the global capital and credit
markets. Recessions, downturns and other negative economic conditions around the world may significantly affect our profits as a result of increases in costs of materials, reduced sales, restructuring
costs and challenges in receivables collections and other important elements of our business. The effect of changing economic conditions may not be immediate. For example, in 2009 our net sales
decreased by approximately $260 million compared to 2008, which we believe resulted primarily from the economic downturn that began in 2008. Similarly, changes in a local economy's business
conditions, exchange rates or inflation can affect our customers and their decisions and ability to purchase products, which in turn affects our net sales. Further, market volatility, unpredictable
government interventions in various industries and financial markets, increased regulation and difficult economic conditions may also make it harder or impossible for us to access capital and credit
markets to fund operating needs on acceptable terms.
Our business is affected by cyclicality in the end markets we serve.
We make significant decisions based on our outlook on business activity in the mining, infrastructure development, power generation,
aerospace and industrial markets we serve. These decisions include the levels of business that we seek and accept, production schedules, raw materials and other component commitments, personnel needs
and other resource requirements. Each of the principal end markets we serve is cyclical, and our outlook on business activity in our markets may fail to predict accurately the timing, nature and
extent of changing market conditions. Many factors affect these markets, including, for example, the level of production, levels and locations of mineral deposits, commodity prices, substitution of
new or competing inputs and methods, and government regulations and tax policies. As a result of cyclicality in the end markets we serve, we have experienced, and we will experience, significant
fluctuation in our net sales and operating profit. Further, the end markets for EPG and TTG vary substantially, and improvements in one may not be accompanied by similar changes in the other.
Inventory stocking decisions by our customers can exaggerate the effects of changing economic and market conditions on our financial results.
Many of our customers maintain an inventory of our products for use or resale. Purchases of our products by these customers may differ
materially, at least for periods measured in months rather than years, from amounts required to maintain a steady level of inventory. As a result, their purchases from us may be at a lower rate than
the rate of their sale or use of the product as they "destock" in anticipation of a downturn in the economy generally or in their particular market. Conversely, when they purchase products from us to
build inventory levels, because they anticipate future increased net sales or for other reasons, the resulting growth in our net sales may be temporary and a misleading indicator of future results.
For example, we believe the decrease in net
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sales
from 2008 to 2009 and subsequent increase from 2009 to 2010 were exaggerated by inventory destocking and restocking by our customers in response to significant changes in most commodity prices.
Our production capacity may not be sufficient to meet customer demand.
Many of the products we supply are mission-critical parts, the loss of which may result in lost productivity and significant costs for
our customers. If we are unable to anticipate production demand for these parts or adequately increase production if demand increases, our delivery times could be delayed. For example, current
customer demand has led to extended delivery times for some of our products. If we experience significant delays in product delivery, our customer relationships and reputation for reliability could
suffer, and current and potential end-user and OEM customers could purchase their parts from one of our competitors.
A material disruption to one or more of our manufacturing plants could adversely affect our ability to generate revenue.
We produce our products at manufacturing plants around the world. If operations at one or more plants are disrupted as a result of
equipment failures, natural disasters, work stoppages, power outages, acts of terrorism or other reasons, our business and results of operations could be adversely affected. Acts of terrorism, for
example, have caused in the past and may in the future cause a decline in the airline industry, which is likely to affect our TTG business.
Interruptions in production would increase costs and reduce sales. Our facilities are also subject to the risk of catastrophic loss due to earthquakes, fires, explosions or adverse weather conditions,
including hurricanes and tornadoes. Any interruption in production capability could require us to make large capital expenditures to remedy the interruption, which could negatively affect our
profitability and cash flows. These events could affect our manufacturing and distribution capabilities and, because we specialize our manufacturing processes at our foundries and fabrication
facilities and often have limited backup operations, an event that affects one facility could have an exaggerated effect on our ability to meet production demands and our sales. In addition, these
events also could result in delays or cancellations of customer orders, or the delay in the manufacture, deployment or shipment of our products, which would adversely affect our business, financial
condition and results of operations. Lost sales may not be recoverable under our insurance policies and longer-term business disruptions could result in a loss of customers. If this
occurred, future sales could be adversely affected.
We operate in highly competitive industries.
We compete on a variety of factors, including productivity, design and performance, technology, metallurgical expertise, reliability,
customer relationships, delivery lead times and price. Some of our competitors are larger, have greater financial resources and are less leveraged than we are or may develop products or services that
put us at a disadvantage. Our effectiveness in managing our manufacturing efficiency and our costs are key factors in determining our future profitability and competitiveness.
OEM customers may develop their own product lines or work with our competitors to develop products that compete with ours.
Some of our products compete with products manufactured and sold by our OEM customers. This competition could damage our relationships
with those OEMs. OEMs may also develop new product lines or work with our competitors to develop product lines. If that occurs, our results of operations could suffer due to lost sales
to the OEMs and increased competition.
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Our business could be adversely affected by our failure to effectively manage proprietary product life cycles and to develop new and innovative products.
Many of our products are protected by patents in key regions around the world. We manage product life cycles by managing the patent
life of our products and by focusing research and development spending to develop proprietary products to replace those that will lose their patent protection. Our effectiveness in managing this
process is a key factor in determining our future profitability and competitiveness.
In
addition, to remain competitive, we must continue to develop new and innovative products that meet our customers' changing requirements. Our future growth will depend, in part, on
our ability to address the increasingly demanding needs of our customers by enhancing our products and timely developing and selling new products. If we are not successful in these efforts, if we
experience difficulties that delay or prevent these efforts, or if our new products or enhancements do not achieve market acceptance, our business could be adversely affected.
Our continued success depends on our ability to protect our intellectual property rights.
We rely on a combination of nondisclosure, confidentiality, invention assignment and other types of agreements, and trade secret,
trademark, copyright and patent law to establish, maintain, protect and enforce our intellectual property rights. These measures may be inadequate to protect our intellectual property rights, and any
of our intellectual property rights could be challenged, invalidated, circumvented or misappropriated by others. For example, some of our patent applications may not be approved, some issued patents
may not adequately protect our intellectual property or provide us with a competitive advantage, or may be challenged by others. Furthermore, our contracts may not effectively prevent disclosure or
use of our confidential information or provide an adequate remedy in the event of unauthorized disclosure or use of our confidential information. In addition, when terminated, these contracts provide
for continued protection of our confidential information and trade secrets only for a limited period of time. Others may independently discover our trade secrets and proprietary information or exploit
our trade secrets after the expiration of contractual protections for those trade secrets, and in those cases we could not assert any trade secret rights against those parties or others to whom those
parties disclose our trade secrets. To the extent our employees, contractors or other parties with whom we do business use intellectual property owned by others in their work for us, disputes may
arise as to the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to determine the scope of and enforce our
intellectual property rights, and even litigation we initiate could result in the narrowing or invalidation of the intellectual property rights we seek to enforce. In addition, the laws of some
countries do not protect intellectual property rights to the same extent as the laws in the United States. Our expansion into some emerging markets may increase the risk of intellectual property
infringement due to, among other things, the presence of independent firms called "will-fitters" that may produce copies of our products. Therefore, in some jurisdictions, we may be unable
to adequately protect our intellectual property, even if intellectual
property laws purport to offer adequate protection, against unauthorized copying or use, which could adversely affect our competitive position. The inability to protect our proprietary information and
enforce our intellectual property rights could have an adverse effect on our business, financial condition and results of operations.
In
addition, parties may claim that we, our customers, licensees or other parties indemnified by us are infringing upon their intellectual property rights. Even if we believe claims are
without merit, they can be time-consuming and costly to defend. Claims of intellectual property infringement also might require us to redesign affected products or technologies, enter into
costly settlement or license agreements or pay costly damage awards, or face a temporary or permanent injunction prohibiting us from using certain of our technologies or marketing or selling certain
of our products.
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Even
if another party has agreed to indemnify us against these costs, it may not be able to do so. If we cannot or do not license the infringed technology on reasonable pricing terms or at all, or
substitute similar technology from another source, our business, financial condition and results of operations could be adversely affected.
Our continued global expansion efforts may not be successful.
We intend to continue to pursue expansion of our international operations and international sales and marketing activities. Expansion
in international markets requires significant management attention and resources. We may form relationships with local partners in connection with our international expansion. Disputes with local
partners may adversely affect our business.
In
addition, we may be unable to scale our infrastructure effectively in these markets, which would cause our results to suffer. We may not be able to hire, train, retain and manage
required personnel, which may limit our international growth. We will also face significant competition from multinational and local companies. Local companies may have a substantial competitive
advantage because of their greater understanding of, and focus on, local customers and more established local brand names.
We
have taken steps to expand our direct presence in Australia and in South Africa, where our relationships with licensees have recently expired or soon will expire. Our investments in
these areas, including investments in foundry capacity and in personnel, may not be sufficient to allow us to compete effectively in those markets or with our former licensees. In addition, if we are
not able to build our operations in these territories to meet customer demand, including customers that have
operations in other areas of the world, our reputation and results of operations in these areas and in other geographies may suffer.
The expansion of our direct sales model may have negative consequences.
We employ a diversified distribution model that includes direct sales, a network of independent dealers, licensees and
OEMs. Our network of independent dealers and our licensees are important to our success. In recent years, however, we have grown our direct sales channel, particularly in markets where there is
a high concentration of mining activity. This increased direct sales effort may be unsuccessful or adversely affect our relationships with dealers and licensees, which could harm our business.
We
will begin competing with Bradken Resources Pty Ltd. in Australia, New Zealand and Papua New Guinea when our licensee relationship with Bradken ends on June 30, 2011.
Royalty income from Bradken, which contributes directly to our net earnings, was $8.7 million in 2010, $7.2 million in 2009 and $7.4 million in 2008. If we are not able to make
sales sufficient to replace the royalty income from Bradken, or if we fail to fulfill customer demands as we replace licensee sales with direct sales, our relationships with customers and our results
of operations will suffer.
Our ability to recover increased costs resulting from price increases in raw materials may be limited.
Price increases for steel and other raw materials have occurred and will occur again. Prices for raw materials may be influenced by
competitors, trends in our markets, private or government cartels, world politics, natural disasters, unstable governments in exporting nations and inflation. We may not be able to adjust product
prices, especially in the short term, to recover the costs resulting from price increases.
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Our operations may be affected by government policies and spending.
Government policies on taxes and spending affect our businesses. Throughout the world, government spending finances infrastructure
development, such as highways, airports, sewer and water systems and dams. Tax regulations determine depreciation lives and the amount of money potential customers can retain, both of which influence
spending decisions. Developments more unfavorable than anticipated, such as declines in government revenues, decisions to reduce public spending or increases in taxes, could negatively affect our
results.
Our
business plans typically reflect assumptions about the stability or strength of local economies and the interest rates, exchange rates and inflation in a number of countries. To the
extent government intervention is different than we anticipate, the fiscal and monetary mechanisms can cause market demand to change materially from our forecasts. For example, interest rates affect
the ability of customers to finance capital equipment purchases and can change the optimal time to keep capital equipment in operation. As a result, monetary policies, such as increases in interest
rates higher than those assumed by us, could result in lower net sales than anticipated.
We may be adversely affected by government regulations.
We are subject to government regulations in the countries where we operate. We incur additional legal compliance costs associated with
our international operations and could become subject to penalties in foreign countries if we do not comply with local laws and regulations, which may be substantially different from those in the
United States. We are also subject to U.S. government laws and regulations affecting our international activities, including those relating to bribery of foreign government officials, import-export
control, trade sanctions and repatriation of earnings. Although we have policies and procedures designed to ensure compliance with these laws, our employees, contractors and agents could take actions
in violation of our policies, which could have an adverse effect on our business.
Because
many of our employees are located outside the United States, we are subject to changes in foreign laws governing our relationships with our employees, including wage and hour
laws and regulations, fair labor standards, unemployment tax rates, workers' compensation rates, citizenship requirements and payroll and other taxes.
We
engage primarily in heavy industrial manufacturing. Our customers are engaged primarily in industrial activities, including mining, infrastructure development, power generation and
aerospace. As a result of the wide array of applicable regulations and laws, our and our customers' operations could be disrupted or curtailed. The high cost of compliance with environmental, health,
safety and
other regulations may also induce us or our customers to discontinue or limit operations. As a result of these factors, our ability to operate and our customers' demand for our products could be
substantially and adversely affected.
Our international operations are subject to many uncertainties.
Our international operations are subject to political, economic, legal and other uncertainties that could adversely affect our
business. A key part of our long-term strategy is to increase our manufacturing, distribution and sales presence in international markets. In 2010, 55.7% of our sales were to customers
outside the United States.
In
addition to other general business risks, risks faced by our international operations include, among others, political, regulatory, judicial and business instability; less reliable
or nonexistent physical, financial and legal infrastructures; differing environmental standards; currency exchange fluctuations; and restrictive trade rules, such as tariffs and currency controls.
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We
take steps to monitor and respond to these risks. However, the fixed nature of the capital investments at many of our facilities and the fixed locations of many of our customers, in
particular those in the mining industry, limit our ability to quickly alter our sales, supply chain, operational and purchasing efforts in response to political, regulatory or economic changes. As a
result, we may suffer an impairment or loss of facilities or investment or we may find our ability to access and use our capital significantly restrained.
We are exposed to foreign currency risks.
We are exposed to fluctuations in foreign currencies for transactions denominated in other currencies. We conduct a significant number
of transactions in currencies other than the U.S. dollar. Changes in the value of major foreign currencies, particularly the Australian dollar, Brazilian Real, Canadian dollar, Chinese Renminbi, Euro
and South African Rand, relative to the U.S. dollar can significantly affect net sales and our operating results. Generally, our revenues and operating results are adversely affected when the U.S.
dollar strengthens relative to other currencies and are positively affected when the U.S. dollar weakens. In addition, we incur foreign currency transaction gains and losses, primarily related to
intercompany transactions with
and between our subsidiaries. If we increase our international sales, the percentage of our net sales denominated in local currencies will increase. To the extent our related costs are denominated in
other currencies, our margins may be affected by fluctuations in those currencies. Although we may engage in exchange rate hedging to mitigate exchange rate fluctuations, hedging transactions may not
be available or may be ineffective. In addition to the direct effect of changes in exchange rates, those changes also affect the volume of sales or the foreign currency sales price as competing
products become more or less attractive. Furthermore, currency controls, devaluations, trade restrictions and other disruptions in currency convertibility and in the market for currency exchange could
limit our ability to convert sales earned abroad into U.S. dollars in a timely way. This could adversely affect our ability to service our U.S. dollar indebtedness, fund our U.S. dollar costs, finance
capital expenditures and pay dividends on our capital stock.
We are subject to environmental laws and regulations, and any violation of, litigation relating to or liabilities under these laws and regulations could adversely affect us.
We are subject to federal, state, provincial, regional, local and foreign laws and regulations relating to the protection of health,
safety and the environment, including those governing emissions and discharges to the ground, air and water; handling and disposal practices for solid and hazardous wastes; the cleaning of
contaminated sites; and the maintenance of a safe workplace. We are also required to obtain permits from governmental authorities for some of our operations. These permits are subject to renewal and
modification. We may be unable to comply with all permit terms or renew our permits on a timely basis or at all. Furthermore, we could incur substantial costs or suffer reduced production capacity as
a result of noncompliance with, or liability for cleanup or other costs or damages under, these permits or under environmental laws. We have in the past been required to pay fines in connection with
permit violations. We could also be held liable for any consequences arising out of human exposure to hazardous materials, including asbestos, or other environmental damage.
The
U.S. Superfund law and similar state and foreign laws and regulations impose liability on entities that own or operate, or previously owned or operated, contaminated property; cause
or caused contamination; or send or sent wastes to disposal facilities that become contaminated. The cleanup of contaminated sites can be expensive, and these laws may impose liability for the entire
cost on any one party, particularly if other parties are unable to pay. As a result of our current and former ownership and operation of facilities and our disposal of wastes, we could incur
substantial liability even if we are unaware of, or are not responsible for, releases of hazardous materials at our
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current
or former sites, or we could suffer reduced production capacity or other costs or damages. We may be required to expend amounts for investigation and cleanup of contamination, which amounts we
cannot determine at the present time but may ultimately prove to be significant. For example, in March 2010 we received a questionnaire from the Environmental Protection Agency, or the EPA, regarding
historical operational practices in connection with the Portland Harbor
Superfund site. The EPA sent the questionnaire to approximately 300 businesses located along the Willamette River in Oregon. The EPA also named us as one of more than 100 businesses to date that are
potentially responsible parties for this site. The current aggregate clean-up cost to be allocated among responsible parties is estimated to be approximately $1.0 billion. We have
entered into a participation agreement with a group of named potentially responsible parties and other companies under which we admit to no liability. The agreement provides a framework to determine
how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party to pay its portion of assessed costs may result in increased costs to other
parties. We are also participating in a process with other potentially responsible parties to quantify and potentially allocate natural resource damages claims with respect to the site. We cannot
predict our ultimate liability with respect to the Portland Harbor Superfund site at this time, but it could be substantial if the EPA determines we are a responsible party for this site.
Environmental
laws are complex, change frequently and have tended to become more stringent over time. Our costs of complying with current and future environmental laws, and our
liabilities arising from past or future releases of, or exposure to, hazardous materials may adversely affect our business, financial condition or results of operations. In addition, increased
environmental regulation of the industries to which we market could increase our customers' costs and adversely affect our net sales.
Regulatory effects of climate change could adversely affect our business.
Our operations emit carbon dioxide and other greenhouse gases (GHG). Laws and regulations have been, and may be, adopted at the
federal, state, provincial, regional and local levels in the United States and other countries where we operate with respect to GHG emissions. These laws, regulations and initiatives could result in
additional costs to us, in the form of taxes or emission allowances, or could otherwise adversely affect our operations. For example, the EPA is proceeding with regulation of GHG emissions under the
Clean Air Act. Under EPA regulations finalized in May 2010, the EPA began regulating GHG emissions from certain stationary sources in January 2011. Under these regulations, any source that emits at
least 75,000 tons per year of GHGs will be required to have a Title V operating permit under the Clean Air Act. Sources that already have a Title V permit, including our U.S. foundries, will have GHG
provisions added to their permits upon renewal. Additionally, construction permits for new major sources of GHG emissions and GHG sources that undergo major modifications require the implementation of
best available control technology for the control of GHG emissions. The effect of any current or future GHG regulation or initiatives on our global businesses and products could be significant, could
require us to incur substantial costs and could otherwise affect our business, financial condition and results of operations.
Loss of or failure to recruit and develop skilled personnel could have an adverse effect on our business.
Our ability to provide high-quality products and services depends in part on our ability to recruit and retain skilled
personnel in the areas of management, product engineering and manufacturing, service and sales. The loss of the services of key personnel, or the failure to effectively implement succession plans,
could have a significant negative effect on our business,
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particularly
if we are unable to retain the customer relationships and technical expertise provided by our management team and personnel.
Our operations and products expose us to potential liability.
We engage primarily in heavy industrial manufacturing. Some of our manufacturing processes involve high pressures, hot metal and other
materials and equipment that present safety risks to our employees. Although we employ safety procedures in the design and operation of our facilities, accidents involving death or serious injury
could occur. Any uninsured liability resulting from an accident could have an adverse effect on our business, financial condition or results of operations.
Our
business exposes us to possible claims for personal injury or death and property damage resulting from the use of products we manufacture. We maintain product liability and other
insurance to cover claims of this nature. Our policies, however, are subject to deductible and recovery limitations and do not cover every contingency. Claims brought against us that our insurance
does not cover or that exceed our insurance coverage could have an adverse effect on our business, financial condition or results of operations.
Our business involves risks associated with complex manufacturing.
Few suppliers can provide the sophisticated and high-value equipment we use in our manufacturing plants. For example, at
our TTG facilities, some of our investment casting furnaces and spare parts can only be purchased from a limited number of suppliers. Moreover, the competitive nature of our businesses requires us to
periodically implement process changes to improve products and manufacturing efficiencies. These process changes may result in production delays, quality concerns and increased costs. Equipment
failures or disruption of operations at our facilities, particularly at facilities where we do not have redundant capacity, may result in production delays, sales loss and significant costs.
Our manufacturing operations rely on the continued supply of a number of raw materials and manufactured components.
To reduce costs and inventories, we sometimes rely on preferred vendors as a sole source for raw materials and manufactured
components. In addition, we use some raw materials that are only found in a few locations in the world, including metals such as cobalt, nickel, tantalum and molybdenum required for the alloys used in
some of our castings. In some cases, suppliers of critical raw materials to TTG are also competitors of TTG. While we regularly assess the ability of these vendors to deliver as contracted and their
viability as going concerns, because we maintain relatively low raw material inventories, even brief unanticipated delays in delivery by suppliers may adversely affect our ability to satisfy our
customers' demands and could thereby affect our business or our results of operations.
Acquisitions present many risks, and we may not realize our financial and strategic goals for those transactions.
We intend to continue to acquire businesses we believe will enhance our operations and profitability. We may not, however, be able to
find suitable businesses to purchase or to obtain the financing to complete future strategic transactions. Acquisitions may present financial, managerial and operational challenges, including
diversion of management attention from existing businesses, difficulty integrating personnel, acquired technologies or products and financial and other systems, increased expenses, failure to retain
customers, assumption of unknown liabilities and indemnities and potential disputes with the sellers. Our use of cash to pay for acquisitions may limit other potential uses of our cash, including
stock repurchases, dividend payments and retirement of
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outstanding
indebtedness. If we are unable to complete these transactions, or successfully integrate and grow acquisitions and achieve contemplated synergies, net sales growth and cost savings, our
financial results could be adversely affected. We may significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition. To the
extent we issue equity securities in connection with future acquisitions, existing shareholders may be diluted and earnings per share may decrease.
We are exposed to credit risk in our sales practices.
To remain competitive, we often offer customers short-term credit on sales. We extend credit based on an assessment of a
customer's financial condition, generally without requiring collateral beyond the products sold. A slowdown in applicable markets or a recession could have an adverse effect on the financial health of
our customers, which in turn could have an adverse effect on our results of operations. We monitor our customers' creditworthiness, but we bear the risk of a significant delay in payment or default if
a customer becomes insolvent or enters bankruptcy.
The conditions of the U.S. and international capital markets may adversely affect supplier financial viability, customer demand and our ability to draw on our credit
facility.
Recent volatility in credit and capital markets caused a significant decline in and restricted access to liquidity and financing for
many businesses. If these conditions return or continue for extended periods, the liquidity of our suppliers and customers could be adversely affected. As a result, their ability to supply raw
materials to us or purchase products from us could be negatively affected, and our business could suffer.
In
addition, if financial institutions that have extended credit commitments to us are adversely affected by the conditions of the U.S. and international capital markets, they may be
unable or unwilling to fund borrowings under their credit commitments to us, which could have an adverse effect on our ability to borrow additional funds for working capital, capital expenditures,
acquisitions, research and development and other corporate purposes.
Our indebtedness could adversely affect our financial condition and impair our ability to operate our business.
Our senior secured credit agreement contains covenants that limit our ability to incur indebtedness and acquire other businesses and
impose other restrictions. These covenants could affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. In addition,
our credit agreement requires us to maintain financial ratios and satisfy financial conditions. Our ability to comply with the provisions of our credit agreement may be affected by changes in economic
or business conditions beyond our control. We may be unable to comply with the financial ratios or covenants and, if we fail to comply, we may be unable to obtain waivers from our lenders.
Labor disputes and increasing labor costs could adversely affect us.
Collective bargaining agreements or similar types of arrangements cover approximately 24% of our employees. When these collective
bargaining agreements expire, we may not be able to reach new agreements with our employees. New agreements may be on substantially different terms and may result in increased direct and indirect
labor costs. Disputes with our employees could adversely affect our business, financial condition or results of operations.
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Risks Related to This Offering
Our stock price is likely to be volatile and could decline following this offering, resulting in a substantial loss on your investment.
Before this offering, there has not been a public market for our Class A Common Stock. An active trading market for our
Class A Common Stock may never develop or be sustained, which could affect your ability to sell your shares and could depress the market price of your shares. In addition, the initial public
offering price has been determined through negotiations between us and the representatives of the underwriters and may not reflect the price at which our Class A Common Stock will trade after
the offering.
The
stock market in general has been highly volatile. As a result, the market price of our Class A Common Stock is likely to be volatile, and investors in our Class A
Common Stock may experience
a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our Class A Common Stock could be subject to wide fluctuations in
response to a number of factors, including those described in this "Risk Factors" section and others, such as:
•
our operating performance and the performance of other similar companies;
•
the overall performance of the equity markets;
•
publication of unfavorable research reports about us or our industry or withdrawal of research coverage by securities
analysts;
•
speculation in the press or investment community; and
•
global economic, political, legal and regulatory factors unrelated to our performance.
Fluctuations
or decreases in the trading price of our Class A Common Stock may adversely affect your ability to trade your shares. In the past, following periods of volatility in
the market price of a company's securities, securities class action litigation has often been instituted. A securities class action suit against us could result in substantial costs and divert
management's attention and resources that would otherwise be used to benefit the future performance of our operations. Securities class action costs may not be covered by insurance.
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could
decline.
The trading market for our Class A Common Stock depends in part on the research and reports that securities or industry
analysts publish about us or our business. If no or few securities or industry analysts cover our business, the trading price for our Class A Common Stock would be negatively affected. If one
or more of the analysts who covers us downgrades our Class A Common Stock or publishes incorrect or unfavorable research about our business, our stock price could decline. If one or more of
these analysts stops covering our business or fails to publish reports on us regularly, demand for our Class A Common Stock could decrease, which could cause our stock price or trading volume
to decline.
We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our
operating results.
As a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company,
including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and
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other
provisions of the Sarbanes-Oxley Act of 2002, and rules promulgated by the Securities and Exchange Commission, or SEC, and The NASDAQ Stock Market LLC. In addition, our management team
will have to adapt to the requirements of our public company status. We expect that complying with these rules and regulations will substantially increase our legal and financial compliance costs and
make some activities more time-consuming and costly.
The
increased costs associated with operating as a public company will decrease our net earnings or increase our net loss and may require us to reduce costs in other areas of our
business or increase the prices of our products. Additionally, if these requirements divert management's attention from other business concerns, they could have an adverse effect on our business,
prospects, financial condition and operating results.
There may be sales of a substantial number of shares of our Class A Common Stock after this offering, which could cause our Class A Common Stock price to
decline significantly.
Additional sales of our Class A Common Stock in the public market after this offering, or the expectation that sales may occur,
could cause the price of our Class A Common Stock to decline. Upon the completion of the offering, we will have             shares of Class A Common Stock outstanding,
             shares of Legacy Class A Common Stock, all of which will convert into Class A Common Stock no later than 360 days after the date of this prospectus, and
             shares of Class B Common Stock outstanding, which are convertible into             shares of
Class A Common Stock or Legacy Class A Common Stock depending on
the date of transfer.
The
shares of Class A Common Stock sold in this offering will be freely tradable in the public market unless held by our affiliates. The remaining             shares of
Class A Common Stock held by our ESOP will be eligible for sale in the public market upon completion of our initial public offering, subject to the restrictions regarding distributions and
diversification under the terms of our ESOP, ERISA regulations and restrictions under securities laws.
Only
the             shares of Legacy Class A Common Stock owned by our officers and directors and all of the shares of Class B Common Stock will be subject to
lock-up agreements with the underwriters of our public offering. We expect that the remaining             shares of Legacy Class A Common Stock outstanding will be freely
tradable following the offering, subject to any volume restrictions imposed by Rule 144 on shares held by affiliates, although no public market for those shares exists and we do not plan to
list the Legacy Class A Common Stock on any exchange or create a market for those shares.
Most
of the holders of Legacy Class A Common Stock and Class B Common Stock have owned shares of our stock for many years and have not had access to a public market in
which to sell their shares. Following conversion, a significant number of holders of our Legacy Class A Common Stock and Class B Common Stock may take advantage of the public market in
our Class A Common Stock and sell shares.
Pursuant
to our equity incentive plans, options to purchase approximately             shares of Class A Common Stock will be outstanding upon completion of this offering.
After the offering, we intend to file a registration statement under the Securities Act that will cover the shares available for issuance under our equity incentive plans (including shares
underlying the outstanding options) as well as shares held for resale by our existing shareholders that were previously issued under our equity incentive plans. See "Shares Eligible for Future Sale".
Sales
of Class A Common Stock by existing shareholders in the public market, the availability of these shares for sale, our issuance of securities or the perception that any of
these events might occur could materially and adversely affect the market price of our Class A Common Stock. In
23
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addition,
the sale of these shares by these shareholders could impair our ability to raise capital through the sale of additional stock.
As a new investor, you will incur immediate and substantial dilution as a result of this offering.
Investors purchasing shares of our Class A Common Stock in this offering will pay more for their shares than the amount paid by
shareholders who acquired shares before this offering. If you purchase Class A Common Stock in this offering, you will incur immediate dilution in pro forma net tangible book value of
approximately $             per share. In addition, the exercise of outstanding options and stock appreciation rights, the settlement of performance unit awards and grants of restricted
stock will,
and future equity issuances may, result in further dilution to investors.
We may not pay dividends on the Class A Common Stock.
We have paid dividends on our common stock in the past and expect to do so in the future. Any determination to pay dividends in the
future, however, will be at the discretion of our board of directors, will be subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our
results of operations, financial condition, capital requirements and other factors our board of directors deems relevant.
The Class B Common Stock is held by a single shareholder, will have a significant number of votes and has separate approval rights for change in control transactions
presented to shareholders for approval.
The Class B Common Stock will represent approximately         % of the voting securities outstanding after the offering
made by this prospectus, and will be able to influence the vote on matters requiring shareholder approval, may have interests and goals that differ from yours and may vote shares differently than you
would. In addition, the Class B Common Stock votes as a separate voting group on a company conversion, merger requiring shareholder approval or share exchange; a sale of all or substantially
all of our assets; and dissolution. Our
Class B Common Stock is held by Henry T. Swigert as sole trustee of the Swigert 2000 Trust. Upon Mr. Swigert's death, Robert C. Warren, Jr. and Peter F.
Adams, who are directors of ours, are designated to become co-trustees of the trust. If they do so, each must agree to vote the shares in trust in favor of a change in control transaction
for the transaction to be approved. These voting rights may delay or prevent a change in control or sale of our business, including a transaction approved by our board of directors, and discourage
tender offers for our shares. In the event of a change in control, the Class B Common Stock may have an opportunity to receive a premium for the Class B Common Stock that may not be
available to the Class A Common Stock, which may affect the market price of our Class A Common Stock.
The trustee of our ESOP has the discretion to vote a large block of shares on matters presented to shareholders for approval.
Upon the closing of the offering made by this prospectus, each participant in our ESOP may direct the ESOP trustee how to vote the
shares of stock allocated to the participant's ESOP account. The trustee must vote any unallocated shares held by the ESOP or allocated shares for which no direction has been given by the participant.
Consequently, the trustee has the ability to vote a significant block of shares on important matters, which could delay or prevent a change in control or sale of our business, including a transaction
approved by our board of directors.
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We have broad discretion to determine how to use the funds raised in this offering, and may use them in ways that do not enhance our operating results or the price of our
Class A Common Stock.
We could spend the proceeds from this offering in ways our shareholders may not agree with or that do not yield a favorable return. We
plan to use the net proceeds from this offering for general corporate purposes, which may include working capital, sales and marketing activities, general and administrative matters, capital
expenditures, repayment of indebtedness and potential acquisitions of or investments in complementary technologies, solutions or businesses. Until we use the proceeds of this offering, we plan to
invest the net proceeds in interest-bearing securities. If we do not invest or apply the proceeds of this offering in ways that enhance shareholder value, our stock price could decline.
Provisions in our articles of incorporation and bylaws, Oregon law, and our credit agreement may delay or prevent an acquisition of our business.
Our articles of incorporation, bylaws and Oregon law contain provisions that may delay or prevent a change in control transaction or
changes in our management. Our articles of incorporation and bylaws, which will be amended before the completion of this offering, will include provisions that:
•
authorize "blank check" preferred stock, which could be issued without shareholder approval and could have voting,
liquidation, dividend and other rights superior to the Class A Common Stock;
•
create a classified board of directors whose members serve staggered three-year terms, resulting in the
election of one-third of the directors in any year;
•
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though
less than a quorum; and
•
require supermajority votes of the holders of our common stock, voting as a single group, to amend specified provisions of
our articles of incorporation and bylaws.
In
addition, the separate vote of the Class B Common Stock, as described above, is required for certain change in control transactions. These provisions, alone or together, could
delay or prevent hostile takeovers and changes in control or changes in our management.
Because
we are incorporated in Oregon, we are governed by the provisions of the Oregon Business Corporation Act, which, among other things, limits the ability of shareholders owning in
excess of 15% of our outstanding voting stock to merge or combine with us and regulates the process by which persons may acquire control of our business without the consent and cooperation of our
board of directors.
In
addition, under our credit agreement certain changes in the majority of our directors over a two-year period or specified changes or accumulations of ownership of our
voting stock could result in an event of default, which may delay or prevent a change in control or sale of our business.
Any
provision of our articles of incorporation or bylaws, Oregon law or our credit agreement that has the effect of delaying or deterring a change in control could limit the opportunity
for our shareholders to receive a premium for their shares of our Class A Common Stock, and could also affect the price that some investors are willing to pay for our Class A Common
Stock.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by the use of forward-looking terminology, including, but not limited to, the terms "believes", "estimates", "anticipates", "expects", "intends", "may",
"will", "would" or "should" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements appear in a number of places throughout this prospectus
and include statements regarding our plans, estimates, outlook, beliefs or expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth,
strategies and the industries in which we operate.
By
their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and the development of the industries in which we operate
may differ materially from those made in or suggested by the forward-looking statements in this prospectus. In addition, even if our historical or future results of operations, financial condition and
liquidity and the development of the industries in which we operate are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative
of
results or developments in other future periods. Important factors that could cause those differences include, but are not limited to:
•
general economic conditions, including any economic downturn in the markets in which we operate;
•
fluctuations in worldwide or regional demand for (i) engineered metal parts and components,
(ii) commodities, energy and infrastructure and (iii) air travel and engineered replacement parts for jet engines;
•
consolidation within our customer base and the resulting increased concentration of our net sales;
•
the effectiveness of our cost management and productivity measures and our continued utilization of our lean initiatives;
•
changes in practices or policies of our customers related to their requirements for the products we manufacture and sell;
•
changes in the sourcing and pricing practices of our customers, including demands for price concessions as a condition to
retaining current business or obtaining new business;
•
fluctuations in foreign currency exchange rates;
•
fluctuations in interest rates that may affect our borrowing costs;
•
fluctuations in the cost and availability of raw materials, labor and energy, and our ability to pass those costs on to
our customers;
•
fluctuations in shipping costs and our ability to pass those costs on to our customers;
•
work stoppages or other labor disputes that could disrupt production at our facilities or those of our suppliers or
customers;
•
factors or presently unknown circumstances that may affect the charges related to the impairment of our assets;
•
changes in environmental laws and regulations (or the implementation thereof);
26
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•
our ability to improve our products and manufacturing processes to meet customer demands and to successfully implement new
technologies and manufacturing processes when launching new products;
•
constraints on our ability to shift production between our plants in response to customer needs;
•
our ability to attract and retain key employees;
•
industry innovation and our own product development and engineering efforts and our ability to obtain patent protection on
our key products;
•
changes in our exposure to product liability and warranty claims;
•
our ability to meet the financial covenants in our debt agreements;
•
liabilities arising from litigation; and
•
our ability to integrate acquired businesses and realize anticipated benefits.
See
"Risk Factors" beginning on page 13 for a more complete discussion of these risks and uncertainties and for other risks and uncertainties. These and other risk factors
described in this offering prospectus may not be all of the factors that could cause actual results to differ materially from those expressed in any of our forward-looking statements. Other unknown or
unpredictable factors could affect our results. Given these uncertainties and risks, readers are cautioned not to place undue reliance on these forward-looking statements. We disclaim any obligation
to update any risk factors or to publicly announce the result of any revisions to any of the forward-looking statements contained in this prospectus to reflect future results, events or developments.
27
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USE OF PROCEEDS
We estimate that we will receive net proceeds from the sale
of                          shares of Class A Common Stock in this offering
of approximately $              million or approximately $              million if the underwriters exercise
their option to purchase additional shares in full, assuming an initial
public offering price of $             per share (the midpoint of the price range set forth on the cover page of this prospectus) after deducting underwriting discounts and estimated
offering
expenses payable by us. A $1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) the net proceeds to us by $              million,
assuming the
number of shares offered by us, as set forth on the cover of this prospectus, remains the same, and after deducting the underwriting discounts and estimated offering expenses payable by us.
We
intend to use the net proceeds for general corporate and working capital purposes, including possible acquisitions of businesses to complement or enhance our product offerings or
manufacturing capacity. We will not receive any proceeds from the sale of shares by the selling shareholders. See "Principal and Selling Shareholders".
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DIVIDEND POLICY
We paid cash dividends of:
•
$11.00 per share on Legacy Class A Common Stock and Class B Common Stock in December 2010;
•
$10.00 per share on Legacy Class A Common Stock and Class B Common Stock in January 2010;
•
$16,298,578 in the aggregate on Class C Preferred Stock in 2010;
•
$11.00 per share on Legacy Class A Common Stock and Class B Common Stock in January 2009; and
•
$16,419,345 in the aggregate on Class C Preferred Stock in 2009.
We
have typically paid a single annual dividend on our Legacy Class A Common Stock and Class B Common Stock in January of each year. In 2010, in addition to a $10.00 per
share dividend paid in January, we declared and paid another dividend of $11.00 per share in December rather than in January 2011 due to uncertainty about the tax treatment of dividends in 2011. We
have not declared or paid a dividend to common shareholders in 2011.
We
have been required to pay quarterly dividends on the Class C Preferred Stock held by our employee stock ownership plan, or ESOP, at an annualized rate of 7.428% of the
original issue price of $1,161.36 per share of Class C Preferred Stock. The Class C Preferred Stock will convert into Class A Common Stock upon completion of the offering made by
this prospectus. See "Description of Employee Stock Ownership Plan".
We
expect to pay quarterly cash dividends on all classes of our capital stock, subject to applicable law. However, any determination to pay dividends and the amount of any dividends
will be at the discretion of our board of directors, subject to compliance with covenants in current and future agreements governing our indebtedness, and will depend upon our results of operations,
financial condition, capital requirements and other factors that our board of directors deems relevant. Class A Common Stock, Legacy Class A Common Stock and Class B Common Stock
will share equally and ratably in any dividends we pay or set aside.
Our
senior secured credit agreement contains covenants that limit our ability to pay dividends or make other distributions to our shareholders. We are permitted to pay dividends as long
as (i) no default exists under the agreement immediately before and after giving effect to the dividend and (ii) we would both (A) be in compliance with the financial covenants
set forth in our credit agreement on a pro forma basis and (B) maintain a consolidated net leverage ratio at least 0.25 less than the maximum net leverage ratio then permitted under the
agreement. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Description of Indebtedness". Our credit agreement is filed as an exhibit to
the registration statement of which this prospectus is a part.
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CAPITALIZATION
The table below sets forth our consolidated cash and cash equivalents and capitalization as of December 31,
2010:
•
on an actual basis;
•
on a pro forma basis to give effect to
the                          -for-one stock split, the authorization
of the Class A Common Stock and the conversion of Legacy Class A Common Stock and Class C Preferred Stock into Class A Common Stock, all as described under "Explanatory
Note Regarding Changes in Our Capital Stock"; and
•
on a pro forma as adjusted basis to give effect to the sale by us
of                          shares of Class A Common Stock
in this offering (at an estimated initial public offering price of $             per share, the midpoint of the price range set forth on the cover of this prospectus) less the
underwriting
discounts and estimated offering expenses payable by us, and the use of proceeds received by us from this offering as disclosed under "Use of Proceeds".
You
should read the table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the
related notes included elsewhere in this prospectus.
As of December 31, 2010
Actual
Pro forma
Pro forma as
adjusted(6)
(in thousands)
Cash and cash equivalents
$
114,101
$
114,101
$
Total debt, including current portion
$
273,314
$
273,314
$
Contingently redeemable equity securities(1)
Class C Preferred Stock, 205,000 shares authorized, 188,354 outstanding, actual(2)
107,691
—
Legacy Class A Common Stock, 5,000,000 shares authorized, 890,294 shares outstanding, actual(3)
124,493
—
Shareholders' equity/(deficit)
Class A Common Stock, no shares authorized or outstanding,
             actual;             shares authorized, pro forma and pro forma as adjusted,
             shares outstanding, pro forma;             shares outstanding, pro forma as adjusted
—
232,184
Legacy Class A Common Stock, 5,000,000 shares authorized, 890,294 shares outstanding,
actual;             shares authorized, no shares outstanding, pro forma and pro forma as adjusted(4)
—
—
Class B Common Stock, 243,737 shares authorized, 208,395 shares outstanding,
actual;             shares authorized, pro forma and pro forma as adjusted,             shares outstanding, pro forma
and pro forma as adjusted
10,343
10,343
Class C Preferred Stock, 205,000 shares authorized, 188,354 outstanding, actual; 205,000 shares authorized, none outstanding, pro forma and pro forma as
adjusted(2)
—
—
Preferred stock, no shares authorized or outstanding, actual; 205,000 shares authorized, none outstanding, pro forma and pro forma as adjusted
Accumulated deficit(5)
(19,944
)
(19,944
)
Accumulated other comprehensive loss
(9,802
)
(9,802
)
Noncontrolling interests
14,781
14,781
Total stockholders' equity/(deficit)
$
(4,622
)
$
227,562
$
Total capitalization
$
500,876
$
500,876
$
(1)
Contingently
redeemable equity securities are redeemable upon a shareholder's retirement at age 65, death or disability. See "Description of Capital
Stock — Shareholder Agreements".
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(2)
The
actual presentation reflects shares of Class C Preferred Stock at their redemption value. Shares of Class C Preferred Stock automatically
convert on a one-for-one basis into shares of Class A Common Stock upon our initial public offering as described in "Explanatory Note Regarding Changes in Our Capital
Stock".
(3)
The
actual presentation reflects             shares of Legacy Class A Common Stock subject to repurchase obligations at their redemption value.
Shares of Legacy Class A Common Stock automatically convert on a one-for-one basis into shares of Class A Common Stock over a period of up to 360 days as
described in "Explanatory Note Regarding Changes in Our Capital Stock". Until conversion, the holders of
approximately                          shares of Legacy Class A Common Stock may require us to
purchase shares upon retirement at age 65, death or disability. Upon the conversion of Legacy Class A Common Stock into Class A Common Stock, the stock will be reclassified from
contingently redeemable equity securities to shareholders' equity. The pro forma presentation in the table reflects the conversion of all Legacy Class A Common Stock and, accordingly, no
remaining contingently redeemable equity securities balance. See "Description of Capital Stock — Shareholders Agreements".
(4)
The
actual presentation reflects             shares of Legacy Class A Common Stock not subject to repurchase obligations. See note 3.
(5)
Accumulated
deficit is caused by the periodic revaluation of our contingently redeemable equity securities to their current redemption value.
(6)
A
$1.00 increase (decrease) in the assumed initial public offering price of $             per share would increase (decrease) each of cash and cash
equivalents, total shareholders' equity and total capitalization by $              million, assuming the number of shares offered by us, as set forth on the cover of this
prospectus, remains
the same, and after deducting the underwriting discounts and estimated offering expenses payable by us.
The number of shares of Class A Common Stock to be outstanding after this offering is based
on                          shares outstanding as of
December 31, 2010 and excludes:
•
shares issuable upon exercise of options outstanding as of December 31, 2010 to purchase Legacy
Class A Common Stock at a weighted average exercise price of $             per share;
•
shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class A Common Stock at the time of exercise (             shares assuming a fair value of
$             per share, the midpoint of the range set forth on the cover of
this prospectus);
•
shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class A Common Stock at the time of exercise (             shares assuming a fair value of $             per
share, the midpoint of the range set forth on the cover of this
prospectus); and
•
additional shares of Class A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan.
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DILUTION
If you invest in our Class A Common Stock, your interest will be diluted to the extent of the difference between the public
offering price per share of our Class A Common Stock and the pro forma as adjusted net tangible book value per share of our Class A Common Stock immediately after this offering. Pro
forma historical net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and divided by the number of shares of our common
stock outstanding at December 31, 2010, after giving effect to the pro forma adjustments referenced under "Capitalization".
After
giving effect to the pro forma adjustments referenced under "Capitalization" and the sale by us
of                          shares of Class A Common Stock in this offering at a
price of $             per share, the midpoint of the
price range set forth on the cover of this prospectus, and after deducting the underwriting discounts and estimated offering expenses payable by us, our pro forma net tangible book value as of
December 31, 2010 would have been approximately $              million, or $             per share. This
represents an immediate increase in net tangible book value of
$             per share to existing shareholders and an immediate dilution in net tangible book value of
$             per share to new investors purchasing Class A Common Stock in the
offering.
The
following table illustrates this dilution on a per share basis:
Assumed initial public offering price per share
$
Pro forma net tangible book value per share as of December 31, 2010
$
Increase in net tangible book value per share attributable to new investors
$
Pro forma as adjusted net tangible book value per share after this offering
$
Dilution per share to new investors
$
A
$1.00 increase (decrease) in the assumed initial public offering price would increase (decrease) our pro forma as adjusted net tangible book value per share by $             , and
increase (decrease) the dilution per share to new investors by $             , assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the
same, and after
deducting the underwriting discounts and estimated offering expenses payable by us.
If
the underwriters exercise their option to purchase additional shares of our Class A Common Stock in full, based upon a price of $             per share, the midpoint of the
price range set forth on the cover of this prospectus, the pro forma as adjusted net tangible book value per share after this offering would be $             per share, and the dilution
in pro
forma net tangible book value per share to new investors in this offering would be $             per share.
The
following table sets forth, as of December 31, 2010, on a pro forma as adjusted basis, the differences between existing shareholders and new investors with respect to the
total number of shares of Class A Common Stock purchased from us, the total consideration paid, and the average price per share paid before deducting the underwriting discounts and estimated
offering expenses payable by us, based upon a price of $             per share, the midpoint of the price range set forth on the cover of this prospectus.
Shares Purchased
Total Consideration
Average
Price Per
Share
Number
%
Amount
%
Existing shareholders
New investors
Total
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Sales
by the selling shareholders in this offering will cause the number of shares held by existing shareholders to be reduced
to                          shares, or         % of the total
number of shares of our Class A Common Stock outstanding after this offering. If the underwriters' option to purchase additional shares is exercised in full, the number of shares held by
existing shareholders after this offering would be reduced to         % of the total number of shares of our Class A Common Stock outstanding after this offering.
The
above discussion and tables are based on a pro forma as adjusted basis of                          shares of
Class A Common Stock issued and outstanding as of December 31,
2010, and excludes:
•
shares issuable upon exercise of options outstanding as of December 31, 2010 to purchase Legacy
Class A Common Stock at a weighted average exercise price of $             per share;
•
shares issuable upon the exercise of stock-settled stock appreciation rights, the number of which will depend upon the
fair value of our Class A Common Stock at the time of exercise (             shares assuming a fair value of
$             per share, the midpoint of the range set forth on the cover of
this prospectus);
•
shares issuable upon the exercise of stock-settled performance units, the number of which will depend upon the fair value
of our Class A Common Stock at the time of exercise (             shares assuming a fair value of $             per
share, the midpoint of the range set forth on the cover of this
prospectus); and
•
additional shares of Class A Common Stock reserved for issuance under our 2000 Stock Incentive Plan
and 2010 Stock Incentive Plan.
To
the extent that any outstanding options are exercised, new investors will experience further dilution.
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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
We derived the selected consolidated statement of earnings data for the years ended December 26, 2008 and December 31,
2009 and 2010 and the selected consolidated balance sheet data as of December 31, 2009 and 2010 from our audited consolidated financial statements and related notes included in this prospectus.
We derived the selected statement of earnings data for the years ended December 29, 2006 and December 28, 2007 and the balance sheet data as of December 29, 2006,
December 28, 2007 and December 26, 2008 from our audited consolidated financial statements not included in this prospectus. Before 2009, we reported on a 52/53-week fiscal
year consisting of four 13-week periods and ending on the last Friday of the calendar year. Effective December 27, 2008, we changed to a calendar year. Our fiscal year 2009,
however, began on December 27, 2008 and ended on December 31, 2009, resulting in a 370-day year.
The
results indicated below and elsewhere in this prospectus are not necessarily indicative of our future performance. You should read this information together with "Capitalization",
"Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.
Fiscal year ended
(dollars in thousands,
except per share data)
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Statement of earnings data:
Net sales
$
849,481
$
680,390
$
939,913
$
790,514
$
690,919
Cost of goods sold(1)
626,883
507,115
724,921
608,028
544,432
Gross profit
222,598
173,275
214,992
182,486
146,487
Operating expenses
Selling and administrative expenses(1), (2)
147,881
112,535
132,719
116,750
110,053
Restructuring and other(3)
748
6,332
1,792
—
—
Operating profit
73,969
54,408
80,481
65,736
36,434
Interest expense, net
23,710
26,226
26,736
27,816
7,561
Loss on early extinguishment of debt(4)
13,013
—
—
—
—
Other (income) expense(5)
(731
)
(1,091
)
4,259
(2,610
)
(450
)
Earnings from continuing operations before income taxes
37,977
29,273
49,486
40,530
28,423
Income tax expense
9,423
8,487
13,297
14,013
11,416
Earnings from continuing operations, net of tax
28,554
20,786
36,189
26,517
17,007
Earnings from discontinued operations, net of tax(6)
—
306
443
1,368
10,371
Net earnings
28,554
21,092
36,632
27,885
27,378
Less: net earnings attributable to the noncontrolling interest-continuing operations
(4,634
)
(2,537
)
(5,073
)
(2,393
)
(138
)
Less: net earnings attributable to the noncontrolling interest-discontinued operations
—
(141
)
(343
)
(182
)
—
Net earnings attributable to ESCO shareholders from continuing operations
23,920
18,249
31,116
24,124
16,869
Valuation adjustment of Class C Preferred Stock(7)
(16,521
)
7,933
13,287
803
7,461
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Fiscal year ended
(dollars in thousands,
except per share data)
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Net earnings attributable to ESCO common shareholders from continuing operations
$
7,399
$
26,182
$
44,403
$
24,927
$
24,330
Pro forma earnings from continuing operations attributable to ESCO shareholders(8)
23,920
18,249
31,116
24,124
16,869
Earning per weighted average share outstanding(9)
Basic earnings per share from continuing operations allocated to ESCO common shareholders
$
6.81
$
24.18
$
41.08
$
23.14
$
156.32
Diluted earnings per share from continuing operations allocated to ESCO common shareholders(10)
$
6.62
$
15.16
$
26.21
$
20.74
$
12.62
Weighted average shares outstanding
Basic
1,086
1,083
1,081
1,077
106
Diluted
1,118
1,204
1,187
1,163
1,337
Pro forma earnings per share from continuing operations attributable to ESCO shareholders
Basic
$
$
$
$
$
Diluted
Pro forma weighted average shares outstanding
Basic
Diluted
Cash dividends declared per common share(11)
$
11.00
$
10.00
$
11.00
$
12.00
$
10.52
As of
(dollars in thousands)
December 31,
2010
pro forma
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Balance sheet data:
Cash and cash equivalents
$
114,101
$
114,101
$
168,487
$
113,167
$
84,070
$
92,230
Current assets, excluding cash and cash equivalents
268,166
268,166
203,854
231,169
240,043
201,423
Property and equipment, net
167,446
167,446
161,919
164,237
171,640
148,191
Total assets
723,622
723,622
675,745
646,111
619,489
538,711
Current liabilities, excluding the current portion of debt
133,854
133,854
101,162
121,767
115,831
95,391
Total debt, including current portion
273,314
273,314
306,498
304,096
305,753
309,529
Contingently redeemable equity securities(12)
—
232,184
144,064
132,038
135,653
97,471
Total equity/(deficit)(12)
227,562
(4,622
)
44,699
17,259
16,563
10,262
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Fiscal year ended
(dollars in thousands)
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Other data:
Adjusted EBITDA(13)
$
127,780
$
99,497
$
130,853
$
105,903
$
90,182
Adjusted net earnings from continuing operations(14)
$
48,588
$
28,977
$
44,108
$
37,090
$
36,639
(1)
Non-cash
ESOP compensation costs are included in cost of goods sold and selling and administrative expenses. See "Description of Employee Stock
Ownership Plan."
(2)
The
mark to market on SARs, an expense of $7.7 million and $0.0 million, income of $0.3 million and an expense of $0.3 million
in 2010, 2009, 2008 and 2007, respectively, are included in selling and administrative expenses. No SARs were outstanding in 2006.
(3)
Restructuring
costs included: in 2010, expenses related to the closure of our Saskatoon, Saskatchewan foundry; in 2009, personnel reductions and the closure
of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry; and in 2008, personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits
for our U.S. defined benefit plans.
(4)
Loss
on early extinguishment of debt primarily includes the write-off of $4.0 million of unamortized loan costs and the early redemption
call premium of $8.6 million paid upon redemption of $300.0 million principal amount of senior unsecured notes in December 2010 as part of our debt refinancing. Debt extinguishment costs
also include $0.4 million of unamortized debt costs associated with our asset-backed line of credit cancelled in November 2010 as part of our debt refinancing.
(5)
Other
(income) expense primarily includes foreign exchange losses and gains on settlement transactions of foreign denominated accounts receivable and
accounts payable. Other expense in each of 2009 and 2008 includes $0.3 million of insurance retention expenses.
(6)
Discontinued
operations for 2009, 2008 and 2007 included earnings from ESCO Soldering Locacoes de Marquinas e Equipmentos Ltda, which we divested in
June 2009 as part of the transaction that resulted in our acquisition of 100% ownership of ESCO Soldering, now known as ESCO Brazil. Discontinued operations for the periods ended December 28,
2007 and December 29, 2006 included earnings from our Integrated Manufacturing (IMG) and Engineered Metals (EMG) groups, which were divested in the fourth quarter of 2006, except certain assets
and the related income stream that we retained.
(7)
Valuation
adjustment of Class C Preferred Stock is the mark to market change of the redemption value of the shares of Class C Preferred Stock
classified as contingently redeemable equity securities on our balance sheet. The corresponding offset is a change in our retained earnings. Upon the conversion of Class C Preferred Stock into
Class A Common Stock in connection with the offering made by this prospectus, the stock will be reclassified from contingently redeemable equity securities to shareholders' equity and this
valuation adjustment will no longer be included in our financial statements.
(8)
Pro
forma earnings from continuing operations attributable to ESCO shareholders reflects the reclassification from contingently redeemable equity securities
to shareholders' equity of Class C Preferred Stock and Class A Common Stock subject to contingent repurchase obligations. See "Description of our Employee Stock Ownership Plan" and "Description of
Capital Stock."
(9)
Pro
forma per share data reflect the changes in our capital structure that will occur before we complete the offering described in this prospectus; other
per share data do not. See "Explanatory Note Regarding Changes in Our Capital Stock". Per share data in 2006 reflect our 2006 ESOP transaction. The Legacy Class A Common Stock and the
Class B Common Stock were converted from preferred stock when we implemented our ESOP, which occurred on December 27, 2006. The weighted average common shares outstanding in 2006 was
minimal due to the short time the Legacy Class A Common Stock and Class B Common Stock existed in 2006.
(10)
Diluted
earnings per share includes the weighted average number of Class C Preferred Stock outstanding and the incremental shares that would be
issued upon the assumed exercise of stock options for the period they were outstanding.
(11)
See
"Dividend Policy".
(12)
Contingently
redeemable equity securities are redeemable upon the holder's retirement at age 65, death or disability. See "Description of Capital
Stock — Shareholder Agreements" and "Description of Employee Stock Ownership Plan". The presentation reflects shares of Class C Preferred Stock and Legacy Class A
Common Stock at their redemption value. Shares of Class C Preferred Stock automatically convert on a one-for-one basis into shares of the Class A Common Stock
upon the completion of the offering made by this prospectus. Shares of Legacy Class A Common
36
Table of Contents
Stock
automatically convert on a one-for-one basis into shares of the Class A Common Stock over a period of up to 360 days as described in "Explanatory Note
Regarding Changes in Our Capital Stock". Upon the conversion of Class C Preferred Stock or Legacy Class A Common Stock into Class A Common Stock, the stock will be reclassified
from contingently redeemable equity securities to shareholders' equity.
(13)
Adjusted
EBITDA is earnings from continuing operations, net of tax, before interest, taxes, depreciation and amortization and non-operating
expense (income) adjusted to add back ESOP non-cash compensation expenses, mark to market on SARs expense, unrealized (gains) losses on long-term investments and certain
restructuring charges. Adjusted EBITDA has limitations as an analytical tool, and is not intended to represent net earnings, earnings from continuing operations, net of tax, or cash flow from
operations as these terms are defined by generally accepted accounting principles in the United States and should not be used as an alternative to net earnings as an indicator of operating performance
or to cash flow as a measure of liquidity. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other companies may not calculate those measures in the same
manner we do. We have included Adjusted EBITDA in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business. We believe Adjusted EBITDA is useful to investors in evaluating our operating performance for the following reasons:
•
Our management uses Adjusted EBITDA in conjunction with GAAP financial measures as
part of our assessment of our business and in communications with our board of directors concerning our financial performance;
•
Adjusted EBITDA provides consistency and comparability with our past financial
performance, facilitates period-to-period comparisons of operations and facilitates comparisons with peer companies, many of which use similar non-GAAP financial
measures to supplement their GAAP results; and
•
Adjusted EBITDA excludes non-cash charges, such as depreciation,
amortization, ESOP compensation expense and mark to market on SARs expense, and those non-cash charges in any specific period may not directly correlate to the underlying performance of
our business operations and can vary significantly between periods.
The
following table reconciles earnings from continuing operations, net of tax to Adjusted EBITDA for the periods indicated below.
Fiscal year ended
(dollars in thousands)
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Earnings from continuing operations, net of tax
$
28,554
$
20,786
$
36,189
$
26,517
$
17,007
Add/(Subtract):
Interest (net) and loss on early extinguishment of debt
36,723
26,226
26,736
27,816
7,561
Income tax expense
9,423
8,487
13,297
14,013
11,416
Depreciation and amortization(a)
27,479
25,113
24,187
22,661
19,191
Other (income) expense
(731
)
(1,091
)
4,259
(2,610
)
450
ESOP non-cash compensation expense(b)
17,259
16,504
20,248
19,682
34,315
Mark to market on SARs expense(c)
7,678
—
(260
)
266
—
Unrealized (gains) losses on long-term investments(d)
(1,953
)
(2,860
)
4,405
(1,142
)
(1,758
)
Restructuring and other(e)
748
6,332
1,792
(1,300
)
2,000
Port Hope reclamation(f)
2,600
—
—
Adjusted EBITDA
$
127,780
$
99,497
$
130,853
$
105,903
$
90,182
(a)
Depreciation
and amortization excludes the amortization of debt issuance, which is included in interest (net).
(b)
We
recognize non-cash compensation expense equal to the fair value of the Class C Preferred Stock released as security for the loan to
the ESOP and allocated to participant accounts. A portion of the non-cash ESOP compensation expense is allocated to cost of goods sold and a portion is allocated to selling and
37
Table of Contents
administrative
expenses, based on the number of shares allocated to the accounts of manufacturing employees and other employees. See "Description of Employee Stock Ownership Plan". ESOP
non-cash compensation expense in 2006 includes $3.9 million of ESOP-related expenses.
(c)
Each
quarter, we record the mark to market change in the value of our SARs. Our determination of fair value includes, among other factors, the valuation
determined by the independent valuation firm used by the ESOP trustee. We add this back to derive Adjusted EBITDA because it is a non-cash expense that will end in 2011. In 2011, we
changed our SARs long-term incentive program to stock-settled grants. The awards' grant date fair value will be amortized over their required service period. We expect that all of our
existing cash-settled SARs will be converted to stock-settled SARs in 2011. Any impact to expense from this conversion will be amortized over the remaining service period for the unvested
awards.
(d)
Unrealized
(gains) and losses on long-term investments represent the mark to market on our investments held to fund our deferred compensation
and supplemental executive retirement programs.
(e)
Restructuring
and other activity in 2010 included restructuring expenses related to the closure of our Saskatoon, Saskatchewan foundry. Restructuring
activity in 2009 included restructuring expenses related to personnel reductions and the closure of our West Jordan, Utah plant and the Saskatoon, Saskatchewan foundry. Restructuring activity in 2008
included restructuring expenses related to personnel reductions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans. Other
activity in 2007 included insurance recovery from a fire in our U.K. facility in 2006 and estimated lost earnings before interest and taxes due to a work stoppage at our Herstal, Belgium facility.
Other activity in 2006 included estimated costs and business interruption expenses associated with a fire in our U.K. facility, net of partial insurance recovery received in 2006.
(f)
The
expense in 2010 represents the estimated cost of removing an accumulation of solid waste at our Port Hope, Ontario, Canada facility. We plan to complete
the removal within a five-year period. This expense is included in selling and administrative expenses in our consolidated financial statements.
(14)
We
define adjusted net earnings from continuing operations as net earnings from continuing operations attributable to ESCO shareholders plus loss on early
extinguishment of debt, net of tax; mark to market on SARs expense, net of tax; and ESOP non-cash compensation expense, net of tax. The adjustments assume a 35% tax rate. We have included
adjusted net earnings from continuing operations in this prospectus because it represents a basis upon which our management assesses financial performance and may provide a more complete understanding
of the factors and trends affecting our business.
The
following table reconciles net earnings from continuing operations attributable to ESCO shareholders to adjusted net earnings from continuing operations.
Fiscal year ended
(dollars in thousands)
December 31,
2010
December 31,
2009
December 26,
2008
December 28,
2007
December 29,
2006
Net earnings from continuing operations attributable to ESCO shareholders
$
23,920
$
18,249
$
31,116
$
24,124
$
16,869
Loss on early extinguishment of debt, net of tax
8,458
—
—
—
—
Mark to market on SARs expense, net of tax
4,991
—
(169
)
173
—
ESOP non-cash compensation expense, net of tax
11,219
10,728
13,161
12,793
19,770
Adjusted net earnings from continuing operations
$
48,588
$
28,977
$
44,108
$
37,090
$
36,639
38
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations
together with our financial statements and the related notes included in this prospectus. In addition to historical financial information, this discussion contains forward-looking statements
reflecting our plans, estimates, outlook, beliefs and expectations that involve risks and uncertainties. As a result of many factors, particularly those under "Risk Factors" and "Special Note
Regarding Forward-Looking Statements" in this prospectus, our actual results and the timing of events may differ materially from those anticipated in these forward-looking
statements.
Overview
We design, develop and manufacture highly engineered wear and replacement parts and related products used in mining, infrastructure
development, industrial,
power generation and aerospace applications. Our consumable wear and replacement products, which accounted for more than 75% of our 2010 net sales, generate recurring sales for us as these items wear
and are required to be replaced. We employ a diversified distribution model for product sales that includes direct sales, a network of independent dealers, licensees and OEMs.
We
have two operating groups:
•
Engineered Products Group, or EPG,
designs, develops and manufactures wear
parts and wear part carriers and attachments and provides solutions for mining, infrastructure development and other challenging industrial wear applications. EPG accounted for $712.6 million,
or 84%, of our net sales in 2010.
•
Turbine Technologies Group, or TTG,
manufactures superalloy precision
investment cast components used in the power generation and aerospace markets. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of turbines and considered replacement parts.
TTG represented $136.9 million, or 16%, of our net sales in 2010.
We
were founded in 1913 in Portland, Oregon. Through nearly a century of operations, we have focused on product innovation and on growing our business to serve customer needs. Our
business has been built on creating solutions to customer problems through metallurgy, foundry casting capabilities and innovative product design that emphasizes value, durability and safety. We were
an early innovator in earthmoving wear parts, producing the industry's first two-piece ground engaging tool, or GET, tooth system. Since then we have introduced new generations of
two- and three-piece tooth systems, making us the global leader in GET tooth systems used in surface mining and infrastructure development, and expanded our EPG product portfolio to over
25,000 SKUs. Over time we also diversified our business to include the production of superalloy precision investment castings for gas turbine engines used in aerospace and power generation
applications. We have expanded geographically and grown our business, and are now a global company with more than 1,000 customers and 4,600 employees and operations in 19 countries on six continents.
Our
net sales were $849.5 million, $680.4 million and $939.9 million in 2010, 2009 and 2008, respectively. More than half of our net sales were from outside of the
United States in each of these years. We generated net earnings attributable to ESCO shareholders of $23.9 million, $18.4 million and $31.2 million and Adjusted EBITDA (as defined
in "Selected Consolidated Financial and Other Data") of $127.8 million, $99.5 million and $130.9 million in 2010, 2009 and 2008, respectively.
39
Table of Contents
Trends, Opportunities and Challenges
Recent Activity
Our customers maintain inventories of our parts to use or resell in the short term based on their expectations of market activity. As
a result, their purchases from us may be at a higher or lower rate than the rate of their use or sale of our products as they "stock up" or "destock" in anticipation of upswings or downturns in the
economy generally or in their particular market. Throughout much of 2008, customers built elevated inventory levels in anticipation of continuing strong market conditions. In late 2008, however,
activity in our customers' end markets decreased significantly, which resulted in some customers holding excess levels of inventory of our products and led to destocking of our parts. In 2009, the
recession further decreased activity in the mining, infrastructure development and industrial markets served by EPG and in the power generation and aerospace markets served by TTG. This resulted in
further supply chain destocking and lower demand for our products. In late 2009, our bookings and net sales began to increase, which we believe was driven by increased market activity in our
customers' end markets and a need to replenish inventory of our parts. In TTG, we believe there was a similar destocking that started later and continued in 2010 because of the order lead time and the
length of the supply chain in the power generation market, mitigated by recovery in the aerospace market.
In
2010, we saw a return to the secular growth trends in mining and infrastructure development due to the continued urbanization and infrastructure development in emerging markets, and
resulting increased demand for commodities. We believe these market dynamics, as well as some customer inventory restocking, led to increased demand for our EPG wear parts and attachments. In 2010, we
focused on:
•
efficiently managing the rapid turnaround in EPG from the recession in 2009 and supply chain restocking;
•
executing our geographic expansion and direct distribution strategies through strategic acquisitions of Swift Engineering
and Austcast in Australia, which added foundry and fabrication capabilities and additional products, including a patented truck body, to our EPG product portfolio; and
•
expanding manufacturing and distribution in Brazil, Canada, China, Indonesia, South Africa and the United States.
As
a result of the economic turnaround and our expansion initiatives, we increased our global workforce to more than 4,600 employees in 2010 from fewer than 3,800 employees in 2009.
Market Outlook
EPG.
We believe we are well positioned to capitalize on our investments in foundry capacity, direct distribution and global
expansion as the mining
and infrastructure development markets grow.
Demand
for mined commodities is expected to increase as the global economy grows and consumption of raw materials in connection with urbanization and development in emerging markets
increases. These dynamics can be expected to drive increased demand for mining capital equipment on which we expect to have first fitment opportunities; increased restocking of inventories of our
products; and increased use of wear parts, particularly as ore grades decline and shallow ore deposits are depleted, requiring more earth excavation.
As
a result of market activity levels and expected trends, we plan to continue to invest in our geographic expansion in key mining regions in countries such as Australia, Brazil,
Canada, Indonesia, South Africa and the United States. We also plan to continue to build our direct
40
Table of Contents
distribution
model and grow our product offering in markets where there is a high concentration of mining activity. These investments in our growth may negatively impact our operating margin in the
short term.
TTG.
Continued growth in global air traffic, which began in 2010, can be expected to cause OEMs to increase production
and increase demand
for aerospace components. We expect improved sales of components for new OEM equipment driven by increased production in aircraft programs such as Boeing's 787 and 747-8 and the Airbus
A380. While visibility remains limited, we also believe our industrial gas turbine, or IGT, markets may begin to improve in late 2011, but at a lower rate than in past recoveries. We expect growth in
orders for power turbine components, including in the aftermarket, to be driven by new turbine builds, restocking in the supply chain, and shorter maintenance cycles as energy consumption grows.
Key Metrics
We regularly review a number of metrics, including the following, to evaluate our business, measure our performance, indentify trends
affecting our business, formulate financial projections and make strategic decisions.
Fiscal year ended
(dollars in millions)
December 31,
2010
December 31,
2009
December 26,
2008
Net sales
$
849.5
$
680.4
$
939.9
Operating profit
$
74.0
$
54.4
$
80.5
Operating profit margin
8.7%
8.0%
8.6%
Net earnings attributable to ESCO shareholders
$
23.9
$
18.4
$
31.2
Adjusted net earnings from continuing operations*
$
48.6
$
29.0
$
44.1
Adjusted EBITDA*
$
127.8
$
99.5
$
130.9
Adjusted EBITDA Margin*
15.0%
14.6%
13.9%
Cash from operations
$
78.3
$
88.8
$
88.5
*
These
measures are non-GAAP financial measures. See "Selected Consolidated Financial and Other Data" where these measures are discussed and where
non-GAAP financial measures are reconciled to the most comparable GAAP measure.
In
addition to the measures above, we review monthly key raw material costs and pricing trends. We generally seek to pass raw material cost increases to our customers through EPG
product price increases and through surcharges or escalator provisions in our long-term agreements with TTG customers. Historically, there is a delay of several months between raw material
cost increases and our realization of price increases.
Basis of Presentation of Our Results of Operations
Net Sales
EPG net sales primarily consist of sales of wear parts and attachments serving as wear part carriers for mining, infrastructure
development and other industrial markets and royalties from a limited number of licensees from sales of our products in some geographies. EPG sales are made to OEMs and end-users
directly and indirectly through a network of independent dealers.
41
Table of Contents
TTG
net sales primarily consist of sales of replacement parts and structural components for turbines used in the aerospace and power generation markets. TTG net sales are derived from
products that are developed by our customers, and almost all TTG net sales are direct.
Cost of Goods Sold
Cost of goods sold includes raw materials; employee compensation and benefits, including ESOP non-cash compensation
expense; and other costs, including distribution expenses, depreciation, product development costs, insurance, taxes, operating supplies, utilities and warranty costs. Manufacturing development
expense and a portion of foundry pattern amortization, which we consider part of our product development cost, are included in cost of goods sold rather than in research and development.
Selling and Administrative Expenses
Selling and administrative expenses include employee compensation and benefits, including ESOP non-cash compensation
expense and long-term incentive accruals; research and development costs; product optimization costs; outbound freight not invoiced to the customer; professional fees; insurance; mark to
market gains or losses on our long-term investments held to fund our deferred compensation and supplemental executive retirement programs and certain facility costs. All
long-term incentive performance awards and SARs expenses are recorded in selling and administrative expenses. See "— Critical Accounting Policies and
Estimates — Share-Based Compensation".
Product
optimization, part of which we consider part of our product development cost, is included in selling and administrative expenses in addition to research and development expense.
Restructuring and Other
Restructuring and other represents costs associated with plant shutdowns and reduction in force programs initiated in 2008 and 2009
and other non-routine expenses.
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Table of Contents
Operating Results
Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
Statement of Earnings Data (dollars in millions)
Year ended
December 31,
2010
% of Net Sales
Year ended
December 31,
2009
% of Net Sales
Net sales
$
849.5
100.0
%
$
680.4
100.0
%
Cost of goods sold(1)
626.9
73.8
%
507.1
74.5
%
Gross profit
222.6
26.2
%
173.3
25.5
%
Selling and administrative expenses(1)
147.9
17.4
%
112.5
16.5
%
Restructuring and other
0.7
0.1
%
6.4
0.9
%
Operating profit
74.0
8.7
%
54.4
8.0
%
Interest expense, net
23.7
2.8
%
26.2
3.9
%
Loss on early extinguishment of debt
13.0
1.5
%
—
—
Other income, net
(0.7
)
(0.1
)%
(1.1
)
(0.2
)%
Earnings from continuing operations before income taxes
38.0
4.5
%
29.3
4.3
%
Income tax expense
9.4
1.1
%
8.5
1.2
%
Earnings from continuing operations, net of tax
28.6
3.4
%
20.8
3.1
%
Earnings from discontinued operations, net of tax
—
—
0.3
—
Net earnings
28.6
3.4
%
21.1
3.1
%
Less: net earnings attributable to the noncontrolling interest — continuing operations
(4.7
)
(0.6
)%
(2.5
)
(0.4
)%
Less: net earnings attributable to the noncontrolling interest — discontinued operations
—
—
(0.2
)
—
Net earnings attributable to ESCO shareholders
$
23.9
2.8
%
$
18.4
2.7
%
(1)
ESOP
non-cash compensation expense included in these line items is as follows:
Cost of goods sold
$
11.9
1.4
%
$
11.1
1.6
%
Selling and administrative expenses
5.4
0.6
%
5.4
0.8
%
Total
$
17.3
2.0
%
$
16.5
2.4
%
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Table of Contents
Year ended
Statement of Earnings Data (dollars in millions)
December 31,
2010
December 31,
2009
$ Change
% Change
Net sales
$
849.5
$
680.4
$
169.1
24.9
%
Cost of goods sold(1)
626.9
507.1
119.8
23.6
%
Gross profit
222.6
173.3
49.3
28.4
%
Selling and administrative expenses(1)
147.9
112.5
35.4
31.5
%
Restructuring and other
0.7
6.4
(5.7
)
(89.1)
%
Operating profit
74.0
54.4
19.6
36.0
%
Interest expense, net
23.7
26.2
(2.5
)
(9.5)
%
Loss on early extinguishment of debt
13.0
—
13.0
n/m
Other income, net
(0.7
)
(1.1
)
0.4
(36.4)
%
Earnings from continuing operations before income taxes
38.0
29.3
8.7
29.7
%
Income tax expense
9.4
8.5
0.9
10.6
%
Earnings from continuing operations, net of tax
28.6
20.8
7.8
37.5
%
Earnings from discontinued operations, net of tax
—
0.3
(0.3
)
(100.0)
%
Net earnings
28.6
21.1
7.5
35.5
%
Less: net earnings attributable to the noncontrolling interest — continuing operations
(4.7
)
(2.5
)
(2.2
)
88.0
%
Less: net earnings attributable to the noncontrolling interest — discontinued operations
—
(0.2
)
0.2
(100.0)
%
Net earnings attributable to ESCO shareholders.
$
23.9
$
18.4
$
5.5
29.9
%
(1)
ESOP
non-cash compensation expense included in these line items is as follows:
Cost of goods sold
$
11.9
$
11.1
$
0.8
7.2
%
Selling and administrative expenses
5.4
5.4
—
—
Total
$
17.3
$
16.5
$
0.8
4.8
%
Net sales
(dollars in millions)
2010
2009
$ Change
% Change
Net Sales
$
849.5
$
680.4
$
169.1
24.9
%
EPG
$
712.6
$
530.5
$
182.1
34.3
%
TTG
$
136.9
$
149.9
$
(13.0
)
(8.7
)%
For 2010, net sales were $849.5 million, an increase of $169.1 million, or 24.9%, from $680.4 million for 2009. The combined
net sales of EPG and TTG wear parts and replacement components represented more than 75% of our net sales for both 2010 and 2009. Net sales directly or indirectly outside of the United States made up
55.7% of our 2010 net sales and 52% of our 2009 net sales. Our top 10 customers generated 26% of our net sales in 2010 and 23% of our net sales in 2009. No single customer accounted for 10% or more of
our net sales in 2010 or 2009.
EPG.
Net sales increased $182.1 million, or 34.3%, to $712.6 million for 2010 from $530.5 million for 2009.
The
$182.1 million increase was composed of a $130.2 million, or 40.9%, increase in mining product sales across all geographies, including $30.5 million contributed by the two
Australian businesses acquired in 2010; a $41.3 million, or 24.3%, increase in infrastructure development product sales driven by customer inventory restocking and market growth; and a
$10.6 million, or 25.0%, increase in industrial products sales. Included in these increases is the net effect of a $14.0 million benefit in 2010 compared to 2009 due to favorable foreign
exchange rates. In 2010, 48% of our EPG net sales were sales directly to end-users, 36% were generated through our EPG global dealer distribution network and 16% were sales to
OEMs. In 2009, 44% of our EPG net sales were sales directly to end customers, 43% were generated through our EPG global dealer
44
Table of Contents
distribution
network and 13% were sales to OEMs. The increase in net sales generated through our direct channel in 2010 was primarily driven by the acquisition of two Australian businesses and
the secular recovery of global mining markets. The increase in net sales generated by our OEMs was primarily driven by supply chain restocking.
TTG.
Net sales were $136.9 million for 2010, a decrease of $13.0 million, or 8.7%, from $149.9 million for
2009. The decrease
was primarily composed of a $19.6 million decrease in IGT sales driven by late cycle destocking, particularly with our maintenance, repair and overhaul ("MRO") customers, and a
$2.5 million decrease in industrial/other sales. The IGT decrease was mitigated by a $9.1 million increase in our aerospace engine component sales, which we believe was driven by
increased airline traffic.
Gross profit
(dollars in millions)
2010
% of Net
Sales
2009
% of Net
Sales
$ Change
% Change
Gross profit
$
222.6
26.2
%
$
173.3
25.5
%
$
49.3
28.4
%
EPG
$
209.8
29.4
%
$
154.1
29.0
%
$
55.7
36.1
%
TTG
$
24.8
18.1
%
$
30.4
20.3
%
$
(5.6
)
(18.4
)%
Other
$
(12.0
)
$
(11.2
)
$
(0.8
)
(7.1
)%
Gross profit was $222.6 million for 2010, an increase of $49.3 million from $173.3 million for 2009 driven primarily by EPG
sales volume impact of $55.6 million and increased utilization efficiencies of the EPG manufacturing cost base of $14.4 million, partially offset by EPG sales volume-related
costs, such as increased distribution and other expenses of $12.2 million, lower TTG sales volume and lower TTG capacity utilization of $5.6 million and a $2.9 million LIFO decrement.
This decrement was the effect of reduced inventories in 2009, resulting in a liquidation of LIFO inventory carried at the lower costs prevailing in prior years than the cost of 2009 purchases. Gross
profit as a percentage of net sales increased to 26.2% for 2010 from 25.5% for 2009. Excluding ESOP non-cash compensation expense of $11.9 million for 2010 and $11.1 million
for 2009, gross profit as a percentage of net sales increased for 2010 to 27.6% from 27.1% for 2009.
EPG.
Gross profit increased $55.7 million, or 36.1%, to $209.8 million in 2010 from $154.1 million in 2009,
primarily due to an
increase in net sales volumes and increased utilization efficiencies of EPG manufacturing cost base. EPG gross profit margin increased to 29.4% for 2010 from 29.0% for 2009, primarily as the result of
higher production volumes, which better leveraged manufacturing capacities, and manufacturing cost reductions that focused on utilities and operating supplies. Partially offsetting the increase in
gross profit percentage were increased raw material costs in 2010. We did not initiate pricing increases to pass on raw material costs until the second half of 2010.
TTG.
Gross profit decreased $5.6 million, or 18.4%, to $24.8 million in 2010 from $30.4 million in 2009 due
to lower sales
volumes, lower manufacturing capacity utilization and manufacturing development and product trial expenses associated with new parts and a higher aerospace product mix, which generally have lower
margins than IGT, as a result of the late cycle destocking in the IGT markets.
Other.
Other represents principally the ESOP non-cash compensation expense of $11.9 million in 2010 and
$11.1 million in
2009.
45
Table of Contents
Selling and administrative expenses
(dollars in millions)
2010
% of Net
Sales
2009
% of Net
Sales
$ Change
% Change
Selling and administrative
$
147.9
17.4
%
$
112.5
16.5
%
$
35.4
31.5
%
EPG
$
101.6
14.3
%
$
81.6
15.4
%
$
20.0
24.5
%
TTG
$
16.1
11.8
%
$
15.8
10.5
%
$
0.3
1.9
%
Other
$
30.2
$
15.1
$
15.1
Selling and administrative expenses were $147.9 million for 2010, an increase of $35.4 million, or 31.5%, over 2009. Selling and
administrative expenses as a percentage of net sales increased to 17.4% for 2010 from 16.5% for 2009. Excluding ESOP non-cash compensation expense, selling and administrative expenses
increased $35.4 million, or 32.9%, for 2010 compared to 2009 and, as a percentage of net sales, selling and administrative expenses increased to 16.8% for 2010 from 15.8% for 2009.
EPG.
Increased selling and administrative expenses for 2010 resulted from increased sales volume activity due to improved
market conditions,
growth-related hiring and our entry into Australia in anticipation of the expiration of our Australian license agreement on June 30, 2011, expansion of our global direct distribution model and
recovery in our markets. Our entry into Australia in the second half of 2010 increased selling and administrative expenses by $6.6 million, which primarily consisted of operational and
acquisition related costs. EPG selling and administrative expenses as a percentage of net sales decreased to 14.3% in 2010 from 15.4% in 2009.
TTG.
Increased selling and administrative expenses was due to customer-related travel expenses. Selling and administrative
expenses as a percentage
of net sales increased to 11.8% in 2010 from 10.5% in 2009.
Other.
Increased selling and administrative expenses for 2010 resulted primarily from a $10.1 million increase in our
long-term
incentive compensation cash awards accrual due to a mark to market change on our cash-settled SARs, a $2.6 million charge to remove accumulation of solid waste at a Canadian plant
and a $0.9 million increase from a less favorable unrealized gain on our long-term investment assets.
Restructuring and other
In 2010 we incurred $0.7 million of restructuring costs associated with a restructuring plan initiated in prior years for the
shutdown of our West Jordan, Utah blades facility in 2008 and our Saskatoon, Saskatchewan foundry in 2009. These restructuring costs were primarily composed of impairment losses and
on-going facility costs. In 2009, we incurred $6.3 million of restructuring costs associated with the shutdown of these facilities and severance and other costs as a result of our
global workforce reduction of 17.6% in 2009.
Operating profit
(dollars in millions)
2010
% of Net
Sales
2009
% of Net
Sales
$ Change
% Change
Operating Profit
$
74.0
8.7
%
$
54.4
8.0
%
$
19.6
36.0
%
EPG
$
108.2
15.2
%
$
72.5
13.7
%
$
35.7
49.2
%
TTG
$
8.7
6.4
%
$
14.6
9.7
%
$
(5.9
)
(40.4
)%
Other
$
(42.9
)
$
(32.7
)
$
(10.2
)
31.2
%
EPG.
Operating profit increased 49.2% to $108.2 million, or 15.2% of net sales, for 2010 from $72.5 million, or
13.7% of net sales,
for 2009. The increase in operating profit was caused by increased sales volumes in 2010. Operating profit margin increased in 2010 to 15.2% from 13.7% in
46
Table of Contents
2009
as the result of the leveraging of manufacturing expenses and selling and administrative expenses.
TTG.
Operating profit decreased to $8.7 million, or 6.4% of net sales, for 2010 compared to $14.6 million, or
9.7% of net sales, for
2009. The decrease in operating profit was caused by lower IGT sales volumes and the associated reduced capacity utilization as that market recovered more slowly from the global economic downturn and
its supply chain destocking experienced over the past two years.
Interest expense, net
Interest expense, net was $23.7 million for 2010 compared to $26.2 million for 2009. The decrease in interest expense,
net reflects lower average effective interest rates on our floating rate notes during 2010, a two-week benefit of the refinancing of our fixed and floating rate notes at lower interest
rates, a net reduction in debt of $35.3 million and higher interest income of $0.3 million, resulting from improved yields on our invested cash funds.
Loss on early extinguishment of debt
During the fourth quarter of 2010, we refinanced $300 million of fixed and floating rate notes that we issued in 2006 through a
five-year term loan and a revolving credit facility. As a result, we incurred $8.6 million in prepayment fees on the notes and a write-off of $4.0 million
unamortized loan costs for the remaining 2006 transaction fees.
During
the fourth quarter of 2010, we terminated our U.S. asset-backed line of credit agreement and recorded a $0.4 million loss on an early extinguishment of debt for the
unamortized loan costs on the line of credit.
Income tax expense
The effective tax rate from continuing operations for 2010 was 24.8% compared to 29.0% for 2009. The effective tax rate decreased in
2010 due to the reversal of uncertain tax provisions from prior years and lower state income tax.
Noncontrolling interest
Noncontrolling interest reflects the net after tax profits in our three less than 100%-owned subsidiary companies allocable to the
non-ESCO shareholders. Noncontrolling interest was $4.7 million for 2010 compared to $2.5 million for 2009. The increase in 2010 reflects increased sales for those entities.
47
Table of Contents
Year Ended December 31, 2009 Compared to Year Ended December 26, 2008
Statement of Earnings Data (dollars in millions)
Year ended
December 31,
2009
% of Net Sales
Year ended
December 26,
2008
% of Net Sales
Net sales
$
680.4
100.0
%
$
939.9
100.0
%
Cost of goods sold(1)
507.1
74.5
%
724.9
77.1
%
Gross profit
173.3
25.5
%
215.0
22.9
%
Selling and administrative expense(1)
112.5
16.5
%
132.7
14.1
%
Restructuring and other
6.4
0.9
%
1.8
0.2
%
Operating profit
54.4
8.0
%
80.5
8.6
%
Interest expense, net
26.2
3.9
%
26.7
2.8
%
Other (income) expense, net
(1.1
)
(0.2
)%
4.3
0.5
%
Earnings from continuing operations before income taxes
29.3
4.3
%
49.5
5.3
%
Income tax expense
8.5
1.2
%
13.3
1.4
%
Earnings from continuing operations, net of tax
20.8
3.1
%
36.2
3.9
%
Earnings from discontinued operations, net of tax
0.3
—
0.4
—
Net earnings
21.1
3.1
%
36.6
3.9
%
Less: net earnings attributable to the noncontrolling interest — continuing operations
(2.5
)
(0.4
)%
(5.1
)
(0.6
)%
Less: net earnings attributable to the noncontrolling interest — discontinued operations
(0.2
)
—
(0.3
)
—
Net earnings attributable to ESCO shareholders
$
18.4
2.7
%
$
31.2
3.3
%
(1)   ESOP non-cash compensation expense included in these line items is as follows:
Cost of goods sold
$
11.1
1.6
%
$
14.0
1.5
%
Selling and administrative expenses
5.4
0.8
%
6.3
0.7
%
Total
$
16.5
2.4
%
$
20.3
2.2
%
48
Table of Contents
Year Ended
Statement of Earnings Data (dollars in millions)
December 31,
2009
December 26,
2008
$ Change
% Change
Net sales
$
680.4
$
939.9
$
(259.5
)
(27.6
)%
Cost of goods sold(1)
507.1
724.9
(217.8
)
(30.0
)%
Gross profit
173.3
215.0
(41.7
)
(19.4
)%
Selling and administrative expenses(1)
112.5
132.7
(20.2
)
(15.2
)%
Restructuring and other
6.4
1.8
4.6
255.6
%
Operating profit
54.4
80.5
(26.1
)
(32.4
)%
Interest expense, net
26.2
26.7
(0.5
)
(1.9
)%
Other (income) expense, net
(1.1
)
4.3
(5.4
)
(125.6
)%
Earnings from continuing operations before income taxes
29.3
49.5
(20.2
)
(40.8
)%
Income tax expense
8.5
13.3
(4.8
)
(36.1
)%
Earnings from continuing operations, net of tax
20.8
36.2
(15.4
)
(42.5
)%
Earnings from discontinued operations, net of tax
0.3
0.4
(0.1
)
(25.0
)%
Net earnings
21.1
36.6
(15.5
)
(42.3
)%
Less: net earnings attributable to the noncontrolling interest — continuing operations
(2.5
)
(5.1
)
2.6
(51.0
)%
Less: net earnings attributable to the noncontrolling interest — discontinued operations
(0.2
)
(0.3
)
0.1
(33.3
)%
Net earnings attributable to ESCO shareholders
$
18.4
$
31.2
$
(12.8
)
(41.0
)%
(1)   ESOP non-cash compensation expense included in these line items is as follows:
Cost of goods sold
$
11.1
$
14.0
$
(2.9
)
(20.7
)%
Selling and administrative expenses
5.4
6.3
(0.9
)
(14.3
)%
Total
$
16.5
$
20.3
$
(3.8
)
(18.7
)%
Net sales
(dollars in millions)
2009
2008
$ Change
% Change
Net Sales
$
680.4
$
939.9
$
(259.5
)
(27.6
)%
EPG
$
530.5
$
752.0
$
(221.5
)
(29.5
)%
TTG
$
149.9
$
187.9
$
(38.0
)
(20.2
)%
For 2009, net sales decreased $259.5 million, or 27.6%, to $680.4 million from $939.9 million for 2008. The decrease in net
sales was principally driven by the recession and the supply chain destocking that began in the third quarter of 2008. EPG and TTG respectively represented 78% and 22% of our net sales in 2009 and 80%
and 20% of our net sales for 2008.
EPG.
Net sales decreased $221.5 million, or 29.5%, to $530.5 million for 2009 from $752.0 million for 2008.
The decrease in net
sales was due to the global economic crisis that began in the third quarter of 2008 and continued throughout 2009 that reduced demand for EPG products. The $221.5 million decrease was composed
of a $110.3 million, or 25.7%, decrease in mining sales
across all geographies; a $85.6 million, or 33.5%, decrease in infrastructure development product sales; and a $25.6 million, or 37.7%, decrease in industrial product sales. Included in
these decreases is the net effect of unfavorable foreign exchange of $17.0 million on net sales and pricing increases of $14.2 million.
TTG.
Net sales decreased $38.0 million, or 20.2%, to $149.9 million for 2009 from $187.9 million for 2008.
The decrease was
composed of decreases of $12.8 million in IGT sales,
49
Table of Contents
$7.3 million
in industrial/other and $17.9 million in aerospace. The decreases were the result of the recession and late cycle destocking.
Gross profit
(dollars in millions)
2009
% of Net
Sales
2008
% of Net
Sales
$ Change
% Change
Gross Profit
$
173.3
25.5
%
$
215.0
22.9
%
$
(41.7
)
(19.4
)%
EPG
$
154.1
29.0
%
$
196.5
26.1
%
$
(42.4
)
(21.6
)%
TTG
$
30.4
20.3
%
$
32.5
17.3
%
$
(2.1
)
(6.5
)%
Other
$
(11.2
)
$
(14.0
)
$
2.8
20.0
%
Gross profit decreased $41.7 million, or 19.4%, to $173.3 million in 2009 from $215.0 million for 2008. Gross profit as a
percentage of net sales increased to 25.5% for 2009 from 22.9% for 2008. Excluding ESOP non-cash compensation expense of $11.1 million in 2009 and $14.0 million in 2008,
gross profit as a percentage of net sales also increased to 27.1% for 2009 from 24.4% for 2008. The increase in gross profit as a percentage of net sales was primarily a result of cost reduction and
containment measures taken early in the year in response to the global reduction in demand caused by the economic crisis, firm market pricing, lower raw material costs and a $2.9 million LIFO
decrement. This decrement was the effect of reduced inventories in 2009, resulting in a liquidation of LIFO inventory carried at the lower costs prevailing in prior years than the cost of 2009
purchases.
EPG.
Gross profit decreased $42.4 million, or 21.6%, to $154.1 million in 2009 from $196.5 million in 2008,
primarily as a
result of reduced volumes that negatively impacted our manufacturing cost base. EPG's gross profit margin increased to 29.0% from 26.1% as a result of lower input commodity costs during the year and
pricing increases of $14.2 million.
TTG.
Gross profit decreased $2.1 million, or 6.5%, to $30.4 million in 2009 from $32.5 million in 2008. The
primary driver was
sales volume reduction.
Selling and administrative expenses
(dollars in millions)
2009
% of Net
Sales
2008
% of Net
Sales
$ Change
% Change
Selling and Administrative
$
112.5
16.5
%
$
132.7
14.1
%
$
(20.2
)
(15.2
)%
EPG
$
81.6
15.4
%
$
92.4
12.3
%
$
(10.8
)
(11.7
)%
TTG
$
15.8
10.5
%
$
18.5
9.8
%
$
(2.7
)
(14.6
)%
Other
$
15.1
$
21.8
$
(6.7
)
(30.7
)%
Selling and administrative expenses decreased $20.2 million, or 15.2%, to $112.5 million in 2009 from $132.7 million in
2008. Selling and administrative expenses as a percentage of net sales increased to 16.5% for 2009 from 14.1% for 2008. ESOP non-cash compensation expense contributed $5.4 million
and $6.3 million to selling and administrative expenses for 2009 and 2008, respectively. Excluding these charges, selling and administrative expenses decreased $19.2 million, or 15.2%,
for 2009 over 2008 and, as a percentage of net sales, selling and administrative expenses increased to 15.8% for 2009 from 13.4% in 2008. The compensation expense effect of SARs on selling and
administrative expenses during 2009 was negligible due to then-current market conditions and results that negatively affected the fair value of the Legacy Class A Common Stock.
EPG.
Selling and administrative expenses decreased $10.8 million, or 11.7%, to $81.6 million in 2009 from
$92.4 million in
2008. The decrease in selling and administrative expenses in EPG for 2009 was due to cost reductions, including workforce reductions, undertaken as part of our response to the global economic crisis
and generally less favorable market conditions.
50
Table of Contents
TTG.
Selling and administrative expenses decreased $2.7 million, or 14.6%, to $15.8 million in 2009 from
$18.5 million in 2008.
The decrease in selling and administrative expenses in TTG for 2009 was due to cost reductions, including workforce reductions, undertaken as part of our response to the global economic crisis and
generally less favorable market conditions.
Other.
Selling and administrative expenses decreased $6.7 million, or 30.7%, to $15.1 million in 2009
from $21.8 million in 2008 primarily due to favorable swings in unrealized gain in our long-term investment assets.
Restructuring and other
In 2009, we incurred $6.3 million of restructuring costs associated with the shutdown of our West Jordan, Utah blades facility
and our Saskatoon, Saskatchewan foundry, and layoff and severance costs. Restructuring activity in 2008 included $1.8 million of restructuring costs associated with severance costs resulting
from our reduction in force due to economic conditions, the closure of our West Jordan, Utah plant and curtailment costs related to freezing benefits for our U.S. defined benefit plans.
Operating profit
(dollars in millions)
2009
% of Net
Sales
2008
% of Net
Sales
$ Change
% Change
Operating Profit
$
54.4
8.0
%
$
80.5
8.6
%
$
(26.1
)
(32.4
)%
EPG
$
72.5
13.7
%
$
104.1
13.8
%
$
(31.6
)
(30.4
)%
TTG
$
14.6
9.7
%
$
14.0
7.5
%
$
0.6
4.3
%
Other
$
(32.7
)
$
(37.6
)
$
4.9
13.0
%
EPG.
Operating profit decreased 30.4% to $72.5 million, or 13.7% of net sales, for 2009 from $104.1 million, or
13.8% of net sales,
for 2008. The lower operating profit was driven by decreased sales volumes in 2009 and was partially offset by lower raw material costs, market pricing discipline and cost reduction and containment
measures taken in the year.
TTG.
Operating profit increased to $14.6 million, or 9.7% of net sales, for 2009 from $14.0 million, or 7.5% of
net sales, for 2008.
The increase in operating profit in actual dollars and as a percentage of net sales was driven by cost reduction measures, lower alloy costs and pricing increases.
Interest expense, net
Interest expense, net was $26.2 million for 2009 compared to $26.7 million for 2008. The lower net interest expense was
due to the lower average variable rate of 4.8% in 2009 compared to 7.1% in 2008 on then outstanding floating rate senior notes, partially offset by $1.7 million lower interest income on our
invested cash funds due to lower interest rates.
Income tax expense
The effective tax rate from continuing operations was 29.0% for 2009 compared to 26.9% for 2008. The effective tax rate was higher for
2009 due primarily to a higher percentage of income earned in the United States than in 2008, which is taxed at a higher rate than income earned in foreign jurisdictions, and reduced foreign tax
credits earned during the year.
Other expense (income)
For 2009, we had other income due to foreign exchange gains on settlement of our foreign currency denominated accounts receivable and
accounts payable partially offset by a $0.3 million
51
Table of Contents
insurance
claim retention expense. For 2008, we had other expense due to foreign exchange losses on settlement of our foreign currency denominated accounts receivable and accounts payable partially
offset by a $0.3 million insurance claim retention expense.
Noncontrolling interest
Noncontrolling interest reflects the net after tax profits in our less than 100%-owned subsidiary companies allocable to the
non-ESCO shareholders. Noncontrolling interest was $2.5 million in 2009 compared to $5.1 million in 2008 due to our purchase in May 2009 of the remaining 40% interest in
Soldering.
Quarterly Operating Results
The following unaudited quarterly financial data for the quarters in 2009 and 2010 have been prepared on a basis consistent with our
audited consolidated annual financial statements, and in management's opinion, include all normal recurring adjustments necessary for the fair statement of the financial information contained in those
statements. The period-to-period comparison of financial results is not necessarily indicative of future results. You should read this data together with our consolidated
financial statements and the related notes included elsewhere in this prospectus.
Quarter ended
December 31,
2010
September 30,
2010
June 30,
2010
March 31,
2010
December 31,
2009
September 30,
2009
June 30,
2009
March 31,
2009
(dollars in millions)
$
% of net
sales
$
% of net
sales
$
% of net
sales
$
% of net
sales
$
% of net
sales
$
% of net
sales
$
% of net
sales
$
% of net
sales
Net sales
234.9
100.0
%
228.1
100.0
%
201.2
100.0
%
185.3
100.0
%
177.9
100.0
%
159.2
100.0
%
161.9
100.0
%
181.4
100.0
%
Gross profit
59.4
25.3
%
59.0
25.9
%
55.1
27.4
%
49.1
26.5
%
48.0
27.0
%
38.3
24.1
%
42.9
26.5
%
44.1
24.3
%
Selling and administrative expenses (including restructuring)
49.2
20.9
%
32.9
14.4
%
35.0
17.4
%
31.5
17.0
%
35.7
20.0
%
26.1
16.4
%
27.3
16.9
%
29.8
16.4
%
Operating profit
10.2
4.3
%
26.1
11.4
%
20.1
10.0
%
17.6
9.5
%
12.3
6.9
%
12.2
7.7
%
15.6
9.7
%
14.3
7.9
%
Net earnings (loss) attributable to ESCO shareholders
(2.4)
(a),(b)
(1.0
)%
11.8
5.2
%
8.7
4.3
%
5.9
3.2
%
3.2
1.8
%
4.3
2.7
%
6.7
4.2
%
4.2
2.3
%
Adjusted net earnings from continuing operations(c)
13.9
5.9
%
14.7
6.4
%
11.6
5.8
%
8.5
4.6
%
5.7
3.2
%
7.0
4.4
%
9.3
5.7
%
7.1
3.9
%
Adjusted EBITDA(d)
31.5
13.4
%
35.8
15.7
%
32.7
16.2
%
27.8
15.0
%
22.9
12.9
%
22.8
14.3
%
26.1
16.1
%
27.8
15.3
%
(a)
The
net loss in the fourth quarter is attributable to our debt refinancing expense of $13.0 million, a mark to market on our SARs expense of
$6.9 million and a $2.6 million provision to remove an accumulation of solid waste at a Canadian facility. The debt refinancing expense was $13.0 million, which consisted of
$8.6 million call premium and $4.4 million acceleration of our unamortized expenses associated with our 2006 bond offering and asset-backed line of credit.
(b)
This
reflects a mark to market adjustment on our cash settlement SARs awards due to improved markets and forecasts. In 2011, we changed our SARs
long-term incentive program to feature a stock settlement grant rather than a cash settlement grant. Our existing cash settled SARs will be converted to stock settled SARs in 2011. The
mark to market liability accounting will not occur after the first quarter of 2011. Additional expense on our long-term cash incentives awards also affected fourth quarter results.
Combined, the net impact was $9.2 million in the fourth quarter of 2010. Our 2011 long-term incentive awards incentive program is an equity awards program.
(c)
Adjusted
net earnings from continuing operations is a non-GAAP measure. We have included adjusted net earnings in this prospectus because it
represents a basis upon which our management assesses financial performance and may provide a more complete understanding of the factors and trends affecting our business. See "Selected Consolidated
Financial and Other Data" and the reconciliation to net earnings (loss) from continuing operations attributable to ESCO shareholders below.
Adjusted Net Earnings Reconciliation
Quarter ended
(dollars in millions)
December
31, 2010
September
30, 2010
June 30,
2010
March 31,
2010
December
31, 2009
September
30, 2009
June 30,
2009
March 31,
2009
Net earnings (loss) from continuing operations attributable to ESCO shareholders
$
(2.4
)
$
11.8
$
8.7
$
5.9
$
3.2
$
4.3
$
6.6
$
4.2
Loss on early extinguishment of debt, net of tax
8.5
—
—
—
—
—
—
—
Mark to market on SARs expense, net of tax
4.5
0.3
0.2
—
—
—
—
—
ESOP non-cash compensation expense, net of tax
3.3
2.6
2.7
2.6
2.5
2.7
2.7
2.9
Adjusted net earnings from continuing operations
$
13.9
$
14.7
$
11.6
$
8.5
$
5.7
$
7.0
$
9.3
$
7.1
(d)
Adjusted
EBITDA is a non-GAAP measure. See "Selected Consolidated Financial and Other Data" and the reconciliation to earnings from continuing
operations, net of tax below.
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Table of Contents
Adjusted EBITDA Reconciliation
Quarter ended
(dollars in millions)
December
31, 2010
September
30, 2010
June 30,
2010
March 31,
2010
December
31, 2009
September
30, 2009
June 30,
2009
March 31,
2009
Earnings from continuing operations, net of tax
$
(1.3
)
$
13.2
$
9.6
$
7.1
$
4.4
$
4.7
$
7.0
$
4.7
Add/(Subtract):
Interest (net) and loss on early extinguishment of debt
17.9
6.1
6.3
6.4
6.4
6.6
6.3
6.9
Income tax expense (benefit)
(5.3
)
7.3
3.7
3.7
1.6
1.9
2.2
2.8
Depreciation and amortization
7.6
6.8
6.5
6.5
6.4
6.3
6.2
6.2
Non-operating expense (income)
(1.1
)
(0.6
)
0.5
0.5
(0.1
)
(1.0
)
—
0.1
ESOP non-cash compensation expense
5.1
4.1
4.2
4.0
3.8
4.2
4.1
4.4
Mark to market on SARs expense
6.9
0.5
0.3
—
—
—
—
—
Unrealized (gains) losses on long term investments
(1.2
)
(1.6
)
1.5
(0.6
)
(0.5
)
(1.6
)
(1.5
)
0.8
Restructuring and other
2.9
—
0.1
0.3
0.9
1.7
1.8
2.0
Adjusted EBITDA
$
31.5
$
35.8
$
32.7
$
27.8
$
22.9
$
22.8
$
26.1
$
27.8
Our operations are not significantly affected by seasonality. For a discussion of trends affecting our results of operations, see
"— Trends, Opportunities and Challenges — Recent Activity".
Liquidity and Capital Resources
Our principal sources of liquidity include cash provided by operations, existing cash and cash equivalents, and our revolving credit
facility. At December 31, 2010, we had $114.1 million of cash and cash equivalents and $272.0 million available under our revolving credit facility. Based upon our current and
planned level of operations, we believe these sources of liquidity are sufficient to fund our operations and contractual obligations for at least the next 12 months.
Both
our liquidity and access to additional capital improved in 2010. We internally funded $35.3 million in debt reduction, $13.7 million in debt issuance costs and
premium paid on early debt extinguishment, $33.8 million (net of cash acquired) in acquisition consideration and $26.9 million in shareholder dividends while our cash balance remained
strong at $114.1 million at December 31, 2010. We refinanced our senior notes with a new credit facility, which, had it been in place during 2010, would have reduced our annual interest
expense by approximately $11.0 million in 2010.
Fiscal year ended
(dollars in millions)
December 31, 2010
December 31, 2009
December 26, 2008
Earnings from continuing operations, net of tax
$
28.6
$
20.8
$
36.2
Depreciation and amortization
29.2
26.8
25.9
ESOP non-cash compensation and SARs expense
24.9
16.5
20.2
Changes in operating assets and liabilities
(13.6
)
28.9
7.8
Other
9.2
(4.4
)
(2.6
)
Discontinued operations
—
0.2
1.0
Net cash provided by operating activities
$
78.3
$
88.8
$
88.5
Capital expenditures
$
(20.5
)
$
(14.1
)
$
(29.7
)
Business acquisitions
(33.8
)
(0.2
)
0
Other
(2.4
)
9.4
(6.7
)
Discontinued operations
—
(0.3
)
(1.1
)
Net cash used in investing activities
$
(56.7
)
$
(5.2
)
$
(37.5
)
Proceeds from debt issuance
$
271.4
$
2.7
$
1.5
Payments on debt
(306.7
)
(6.5
)
(4.0
)
Dividends paid
(26.9
)
(26.1
)
(14.6
)
Other
(14.3
)
(2.1
)
(0.7
)
Net cash used in financing activities
$
(76.5
)
$
(32.0
)
$
(17.8
)
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Table of Contents
Working Capital and Cash Flow
2010 Compared to 2009
Cash Provided by Operating Activities.
Cash provided by operating activities for 2010 was $78.3 million
compared to $88.8 million for
2009. The decrease was primarily due to increased use of working capital in 2010 to support the increased sales and production levels in EPG.
The
year-over-year change of $42.5 million in our operating assets and liabilities is due to an increase of $13.6 million in 2010 due to an
increased need for working capital caused by increased sales and production levels in EPG compared to a decrease of $28.9 million in 2009 that was the result of decreased sales. The year-over-year
change of $8.4 million in non-cash ESOP compensation and SARs expense was due to improvement in our operating performance, which increased the fair value of our Class C Preferred Stock
and Class A Common Stock.
The
year-over-year change of $13.6 million in "other" category in the net cash provided by operating activities is due primarily to the loss on early
extinguishment of debt in 2010.
Cash Used in Investing Activities.
Cash used in investing activities increased $51.5 million in 2010 to
$56.7 million compared to
$5.2 million in 2009. This increase was driven by our 2010 acquisitions of the Engineering and Mining Products divisions of Swift Group Holdings Pty Ltd and Austcast Pty Ltd. for
an aggregate purchase price of $33.8 million (net of cash acquired). $2.4 million of other net cash used in investing activities in 2010 related to investments in our Chilean joint
venture. No investment was made in the joint venture in 2009. Capital expenditures in 2010 increased to $20.5 million from $14.1 million in 2009 as we returned to normal capital
expenditure levels. In 2009, we made only those capital expenditures we believed were critical for maintaining our facilities.
Cash Used in Financing Activities.
Cash used in financing activities increased $44.5 million in 2010 compared
to 2009. The increase was
primarily a result of net pay down of debt of $35.3 million in 2010 compared to $3.8 million in 2009, and refinancing costs of $13.7 million in 2010.
2009 Compared to 2008
Cash Provided by Operating Activities.
Cash provided by operating activities for 2009 was $88.8 million
compared to $88.5 million for
2008. The slight increase was due to lower working capital requirements required to support lower sales and production in 2008, which was partially offset by the decline in net earnings from
continuing operations in 2009.
Cash Used in Investing Activities.
Cash used in investing activities was $5.2 million in 2009 compared to
$37.5 million in 2008. Other
net cash used in investing activities in 2009 was the beginning cash balance of a previously unconsolidated affiliate that we included in our consolidated accounts. Other net cash used in investing
activities in 2008 was $6.2 million and related to investment in our Chilean joint venture. No investment was made in the joint venture in 2009. In addition, during 2009, we reduced our capital
expenditures to a maintenance level in line with our focus on protecting margin, liquidity and cash flow. Capital expenditures totaled $14.1 million during 2009 and $29.7 million during
2008.
Cash Used in Financing Activities.
Cash used for financing activities, which is primarily cash dividends paid and
payments on long-term
debt for 2009, was $32.0 million compared to $17.8 million for 2008. The majority of the increase was due to a $10.4 million dividend paid to the noncontrolling shareholder of
ESCO Soldering prior to our purchase of the shareholder's 40% equity interest in May 2009.
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Table of Contents
Capital expenditure commitments
On July 13, 2007, we entered into a 50/50 joint venture (JV) agreement with our Chilean licensee,
Compañía Electro Metalurgica S.A. (Elecmetal), to build an EPG foundry in Chile scheduled to be operational in 2012. The JV will supply wear parts exclusively to
Elecmetal for sale in Chile and to us for sales into other countries in South America and elsewhere. We delayed the foundry's construction during the 2009 economic downturn and restarted construction
in 2010. As a result of the delay, the increased demand for construction resources in Chile and new building codes following the 2009 Chilean earthquake, the foundry's construction costs have
increased an estimated 40% from the 2007 start of the project. Construction of the foundry is estimated to cost approximately $76 million, $48.0 million of which will be funded equally
by us and Elecmetal ($24.0 million each). The remaining 40% will be financed by a construction loan that will convert to a seven-year term loan at completion of the foundry. The
loan is secured by property, equipment and standby letters of credit in the amount at December 31, 2010 of $7.6 million from each of us and Elecmetal. We have funded $8.8 million
through December 31, 2010 and will fund the remaining $15.2 million of the estimated costs in 2011.
Description of Indebtedness
Credit Agreement
On November 18, 2010, we entered into a credit agreement with a bank syndicate led by Bank of America, N.A., which includes a
$200 million term loan facility and a revolving credit facility of up to $350 million. It also permits letters of credit with sublimits of up to $50 million and swing line loans
with sublimits of up to $25 million. Subject to the terms of the credit agreement, we may request an increase in the revolving credit facility of up to $100 million on the same terms. If
we request an increase, the increase must be a minimum of $10 million.
We
used the proceeds from the credit agreement to pay off our floating rate senior notes and 8.625% senior notes, which we issued in 2006.
The
interest rate on our loans is calculated based on LIBOR or a base rate, plus a margin rate depending on our consolidated net leverage ratio. The base rate is the highest of
(a) the federal funds rate plus 0.50%, (b) the publicly announced Bank of America "prime rate" and (c) the rate for the LIBOR-based rate loans plus 1%. Consolidated net leverage
ratio is the ratio of (a) funded debt less the sum of our unencumbered cash and cash equivalents greater than $20 million to (b) consolidated Adjusted EBITDA for the most recently
completed four quarters. In addition, we pay a quarterly unused commitment fee equal to 0.375% of the unused portion of the revolving credit facility.
At
December 31, 2010, we had availability under our credit facility of $272.0 million, net of $13.0 million in outstanding letters of credit and
$65.0 million drawn under the facility.
Our
obligations under the credit agreement are secured by a lien on substantially all of our assets and by a pledge of the stock in our directly held subsidiaries.
At
December 31, 2010, we were in compliance with our covenants under the facility.
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Table of Contents
Contractual Obligations
We are obligated to make future payments under various contracts such as debt agreements and leases. The following table sets forth
our long-term contractual cash obligations as of December 31, 2010.
Payments Due
(in millions)
Total
Less than
1 Year
1-3
Years
3-5
Years
More Than
5 Years
Long-term debt obligations
$
200.2
$
10.0
$
20.1
$
170.0
$
—
Interest on long-term debt
14.1
5.1
4.8
4.3
—
Operating lease obligations
18.6
5.1
4.0
3.0
6.6
Capital lease obligations
2.8
1.5
1.3
0.1
—
$
235.7
$
21.7
$
30.2
$
177.4
$
6.6
For additional potential payments, see the following notes to our consolidated audited financial statements: Note 17 —
Income Taxes, Note 20 — Contingently Redeemable Equity Securities, and Note 28 — Business Acquisitions.
Off-Balance Sheet Arrangements
At December 31, 2010, we had outstanding a $7.6 million standby letter of credit to secure construction loan obligations
of our unconsolidated Chilean joint venture entity. See "— Liquidity and Capital Resources — Capital expenditure commitments". Other than this, we have no
off-balance sheet arrangements as that term is defined by SEC regulations.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in accordance with generally accepted accounting principles is based on the
selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain. This requires that we make
estimates and judgments that affect the reported amounts of assets, liabilities, net sales and expenses and their related disclosures. Our estimates and judgments are based on historical experience
and various assumptions that we believe to be reasonable. Actual results could differ from our estimates and assumptions, and any differences could be material to our consolidated financial
statements. We consider the accounting policies discussed below to be critical to the understanding of our financial statements.
Revenue Recognition
We recognize net sales on customer and distributor sales when persuasive evidence of an arrangement exists, delivery has occurred or
the services have been rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to the customer at the
time product is transferred to a common carrier. We have allowances for product returns and cash discounts which are calculated based on historical experience.
We
have certain licensee agreements in which we receive royalty revenue. Royalty revenue is accounted for based on royalty percentages of actual sales by licensees.
Trade Receivables
Trade receivables, reduced by an allowance for doubtful accounts, are recorded at the invoiced amount less discounts and do not bear
interest. The collectability of trade receivable
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balances
is regularly evaluated based on a combination of factors such as customer credit-worthiness, past transaction history with the customer, economic industry trends and changes in customer
payment terms. If we become aware of circumstances that may impair a specific customer's ability to meet its financial obligations, a specific reserve is recorded to reduce the related receivable to
the amount expected to be recovered. For all other trade receivable balances we maintain a reserve that is based on our historical uncollectible accounts as a percentage of net sales.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method
(LIFO) at ESCO Corporation and one of its U.S. subsidiaries. Cost is determined using the first-in, first-out method (FIFO) or average cost method for all other subsidiaries of
ESCO.
Cost of inventory includes raw materials, employee compensation and benefits, outside processing, depreciation of manufacturing machinery and equipment, operating supplies and manufacturing overhead
directly attributable to the manufacturing of goods.
Inventories
with quantities on hand that have not been sold during the prior 12 months or are in excess of forecasted usage are reviewed quarterly for obsolescence by operations
personnel. We evaluate the value of our inventory quarterly based on a combination of factors including, but not limited to, the following: forecasted sales or usage, historical usage rates, future
selling prices, product end-of-life dates, estimated current and future market values and new product introductions. If we determine we have obsolete inventory in excess of our
reserve for obsolete inventory, a charge equal to the book value of this excess inventory would increase our cost of goods sold and decrease our operating profit.
Goodwill and Long-Lived Assets
Goodwill is tested for impairment annually (in the second quarter) or more frequently if an indicator of impairment exists. Such
indicators may include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition or slower growth rates, among others. It is
important to note that fair values that could be realized in an actual transaction may differ from those used to evaluate the potential impairment of goodwill. Goodwill is allocated among and
evaluated for impairment at the reporting unit level. For our company, a reporting unit is defined as an operating segment.
The
evaluation of impairment involves the comparison of the fair value of each reporting unit to its carrying value, including goodwill. We use a discounted cash flow ("DCF") model as
well as a comparison to peer company multiples to estimate the fair value of our reporting units when testing for impairment, as management believes these methods are the best indicators of such fair
value. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and
prices, costs to produce, tax rates, capital spending, discount rate and working capital changes. Our reporting units' fair value has historically been significantly above their carrying values. In
the event the estimated fair value of a reporting unit is less than the carrying value, additional analysis would be required. The additional analysis would compare the carrying amount of the
reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwill is the excess of the fair value of the reporting unit over the fair value amounts assigned to
all of the assets and liabilities of that unit as if the reporting unit was acquired in a business combination and the fair value of the reporting unit represented the purchase price. If the value of
goodwill exceeds its implied fair value, an impairment loss equal to such excess would be recognized, which could significantly and adversely impact reported results of operations and stockholders'
equity.
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Table of Contents
Long-lived
assets, principally property, equipment and identifiable definite-lived intangibles, are reviewed for impairment whenever events or circumstances indicate that
the carrying amount of the assets may not be recoverable. We evaluate recoverability of assets by comparing the carrying amount of the asset to estimated future net undiscounted cash flows generated
by the asset. If such assets are considered not to be recoverable, the impairment recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Income Taxes
Significant judgment is required in determining income tax provisions as well as deferred tax asset and liability balances, including
the estimation of valuation allowances and the evaluation of uncertain tax positions. Valuation allowances are established to reduce deferred tax assets when it is more likely than not that some
portion or all of the deferred tax assets will not be realized. In determining the need for valuation allowances, we have considered and made judgments and estimates regarding estimated future taxable
income and ongoing prudent and feasible tax planning strategies. These estimates and judgments include some degree of uncertainty, and changes in these estimates and assumptions could require us to
adjust the valuation allowances for our deferred tax assets. Historically, changes to valuation allowances have been caused by major changes in the business cycle in certain countries, and the
associated profitability in our business, and changes in local country law. The ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income in the applicable
taxing jurisdictions.
Our
income tax provision is determined using the asset and liability approach of accounting for incomes taxes. Under this approach, deferred income taxes are recognized for the tax
consequences of temporary differences by applying enacted statutory tax rates expected to apply in future years to differences between the financial statement carrying amounts and the tax bases of
assets and liabilities. The provision for income taxes represents income taxes paid or payable for the year plus the change in deferred taxes during the year. Valuation allowances based on our
judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized based on expected future operating results and available tax alternatives.
Our estimates are based on facts and circumstances in existence as well as interpretations of existing tax regulations and laws applied to the facts and circumstances.
We
are subject to income taxes in the United States and numerous foreign jurisdictions and as a result, we are subject to the jurisdiction of numerous domestic and foreign tax
authorities. Determination of taxable income in any jurisdiction requires the interpretation of the related tax laws and regulations and the use of estimates and assumptions regarding significant
future events such as the amount, timing and character of deductions; permissible revenue recognition methods under the tax law; and the sources and character of income and tax credits. Changes in tax
laws, regulations, agreements and treaties; foreign currency exchange restrictions; or our level of operations or profitability in each taxing jurisdiction could have an impact on the amount of income
taxes that we incur during any given year.
Share-Based Compensation, Accounting Effects of Our SARs and ESOP, and Share Valuation
Grants of equity awards
We have adopted the provisions of the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic
718, Compensation-Stock Compensation. This guidance generally requires that compensation expense be determined based on the grant date fair value of the share-based compensation awards and that the
expense be recognized over the required service period of the award.
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Table of Contents
Because
no stock options have been granted after December 30, 2005, we have continued to apply the intrinsic value method in accounting for stock options. Under the intrinsic
value method, compensation expense for employee stock options is not recognized if the exercise price of the option equals or exceeds the fair value of the stock on the date of grant. As a result, no
compensation expense has been recorded for options vesting during the reporting periods presented in the consolidated financial statements.
We
classify our awards of cash-settled stock appreciation rights ("SARs") as liabilities. SARs are settled in cash for the difference between fair value of our Legacy
Class A Common Stock on the date of grant and its fair value on the date of exercise.
Through
the third quarter of 2010, we used the current-value method described below to estimate the fair value of SARs awards on the date of grant and recognize expense on a
straight-line basis over the required service period. At December 31, 2010, and for the quarter then ended, we changed our valuation method to a Black-Scholes option pricing method
as described below. At each period end after grant, the related liability balance is adjusted to reflect any changes in our stock value and our payout liability. Any impact to expense from these
period end adjustments is recognized as incurred for fully vested awards and amortized over the remaining service period for unvested awards. Fluctuations in the value of our Class A Common
Stock have significantly affected our financial results.
In
the first quarter of 2011 we changed our SARs long-term incentive program to feature a stock settlement grant rather than the previous cash settlement grant. The award's
grant date fair value will be amortized over the required service period. Our board of directors has approved an amendment to our existing cash-settled SARs that will convert them to
stock-settled SARs in 2011 if the holders execute the amendment. The final revaluation of cash-settled SARs upon this conversion will be amortized over the remaining service period for the unvested
awards and recognized immediately for vested awards.
Accounting effects of SARs and ESOP
Quarterly changes in the fair value of our Class A Common Stock and our Class C Preferred Stock affects our financial
statements, including a quarterly non-cash compensation expense related to (1) a "mark to market" compensation expense from the adjustment of the value of the shares of
Class A Common Stock underlying our SARs and (2) the fair value of the shares of Class C Preferred Stock released each quarter as collateral securing the ESOP's indebtedness to
us, which is allocated to cost of goods sold, based on the number of ESOP shares allocated to the accounts of manufacturing employees, or to selling and administrative expense, based on the number of
ESOP shares allocated to the accounts of other employees. Because of the contingent redemption feature of the Class C Preferred Stock, changes in the fair value of these shares are reflected in
adjustments to contingently redeemable equity securities and corresponding changes to retained earnings, which affects our earnings per share calculation. Differences in the fair value of the
Class C Preferred Stock upon allocation to employees compared to the fair value at inception of the ESOP Trust are credited or debited to additional paid-in capital.
Valuation of shares
In determining the fair value of the Class C Preferred Stock, we consider a number of factors, including the valuation
performed by the independent financial adviser to the ESOP trustee to establish the contractual repurchase price under the terms of the ESOP Trust. As bases for determining the fair value of our
Class A Common Stock and Class C Preferred Stock, we value the enterprise at the arithmetic average of the values derived through a guideline company method and a discounted cash flow
method. We select public companies comparable to ESCO in respect to
59
Table of Contents
investment
risk and return and derive an estimated enterprise value after making adjustments for size, growth, profitability, global structure and risk considerations. Under the discounted cash flow
method, we assume a weighted average cost of capital and determine an enterprise value based on a detailed cash flow forecast for the next five years and a terminal value discounted to present value.
At December 31, 2010, our assumptions for this method were a weighted average cost of capital of 12.5% based on required return on equity of 17.1% (70% weight), a cost of debt after tax of 2%
(30% weight) and a termination value after the sixth year assuming an exit EBITDA multiple of 7.0x, based on observations of pricing multiples from the guideline company method, discounted to present
value.
Through
the third quarter of fiscal 2010, we determined the fair value of our Class C Preferred Stock using the current method. This method allocates the enterprise value to the
Class A Common Stock and Class C Preferred Stock based on their conversion values, which differs between these classes of stock primarily due to the value of the future dividend streams
of the Class C Preferred Stock. Also, we included a 5% marketability discount when valuing the Class C Preferred Stock, but no such discount when valuing the Class A Common Stock.
At December 31, 2010 and for the quarter then ended, we changed our valuation method to a Black-Scholes option pricing method because we believed this method was more appropriate given the
increased likelihood of completing an initial public offering. The option pricing method of allocating enterprise value among common stock and preferred stock treats each class of stock as a call
option on all or part of the enterprise's value. At December 31, 2010, we believed the probability of completing a public offering was 20%, and therefore we believed the Black-Scholes option
pricing method, rather than a probability-weighted expected return method, was the appropriate valuation method. Under the Black-Scholes method, we used the enterprise value derived as described above
and made assumptions for volatility, expected life and likely risk-free interest rates.
Applying
the Black-Scholes method, we determined that, before taking into consideration the stock split described in "Explanatory Note Regarding Changes in Our Capital Stock", at
December 31, 2010 the value of the Class C Preferred Stock was $891.65 per share and the value of the Class A Common Stock was $688.20 per share. We used these amounts for
financial reporting purposes, including to calculate the compensation expense recognized for the fourth quarter of fiscal 2010.
Employee Benefit Plans
We have an employee savings plan under the provisions of Section 401(k) of the Internal Revenue Code. We also have defined
benefit plans in the U.S. and certain foreign subsidiaries. In accordance with accounting guidance, we use actuarial valuations that are based on assumptions, including discount rates,
long-term rates of return on plan assets and rates of change in participant compensation levels. We evaluate funded status of each plan using these assumptions and consider applicable
regulatory requirements, tax deductibility, reporting consideration and other relevant factors, and thereby determine the appropriate funding level for each period. The discount rate used to calculate
the present value of the pension and post-retirement benefit obligations is assessed at least annually. The discount rate represents the rate inherent in the price at which the plans'
obligations are intended to be settled at the measurement date.
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Table of Contents
The
weighted-average assumptions used to determine benefit obligations at December 31, 2010 and 2009 were as follows:
Pension Benefits
Other Benefits
2010
2009
2010
2009
Discount rate
5.7
%
6.1
%
5.8
%
6.0
%
Rate of compensation increase
3.7
%
3.7
%
—
—
The
weighted-average assumptions used to determine net periodic cost for fiscal years ending December 31, 2010, December 31, 2009 and December 26, 2008 were as
follows:
Pension Benefits
Other Benefits
2010
2009
2008
2010
2009
2008
Discount rate
6.1
%
6.6
%
6.1
%
6.0
%
6.3
%
6.3
%
Expected return on plan assets
7.1
%
7.1
%
7.8
%
—
—
—
Rate of compensation increase
3.7
%
3.9
%
4.0
%
—
—
5.0
%
We
used the following health care cost inflation rate assumptions in measuring the accumulated post-retirement benefit obligations as of December 31, 2010,
December 31, 2009 and December 26, 2008:
2010
2009
2008
Rate assumed for next year
8.4
%
8.7
%
9.0
%
Ultimate rate
4.5
%
4.5
%
4.5
%
Year in which ultimate rate is reached
2028
2028
2028
A
1% increase in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the post-retirement benefit
obligation. A 1% decrease in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the post-retirement benefit
obligation.
Newly Adopted Accounting Standards
In June 2009, new guidance was issued on the accounting for transfers of financial assets, which is intended to improve the relevance
and comparability of information about transfers of financial assets. We adopted this guidance as of the beginning of fiscal year 2010, and it did not have a material impact on our consolidated
financial position results of operations or cash flows.
In
June 2009, new guidance was issued on variable interest entities. This guidance modifies the definition of a primary beneficiary in a variable interest entity. We adopted this
guidance as of the beginning of fiscal year 2010. This guidance did not have a material impact on our consolidated financial position results of operations or cash flows.
In
January 2010, new guidance was issued that clarifies existing disclosures and requires new disclosures for fair value measurements. The clarifications relate to the level of
disaggregation a company uses for the disclosure and calls for further details in the valuation techniques used to measure fair value for fair value measurements that fall into Level 2 and 3
categories. Disclosure of significant transfers in and out of Levels 2 and 3 and a description of the reason for the transfers are required. Our adoption of this guidance at the beginning of
2010 did not have a material impact on our consolidated financial position, results of operations or cash flows.
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In
January 2010, new guidance was issued that requires new disclosures for fair value measurements. In the reconciliation for Level 3 fair value measurements, the disclosures
should present separately information about purchases, sales, issuances and settlements (gross rather than net amounts). This guidance is effective for reporting periods beginning after
December 15, 2010. Our adoption of this guidance at the beginning of 2011 did not have a material impact on our consolidated financial position, results of operations or cash flows.
In
December 2010, new guidance was issued that clarified required additional disclosures for business combinations. This guidance requires supplemental pro forma information to disclose
net sales and earnings of the combined entities for all periods presented. This guidance is effective for fiscal years beginning after December 15, 2010. We will adopt these additional
disclosure requirements for all material acquisitions beginning in fiscal 2011. See Note 3 to our Consolidated Financial Statements.
Recently Issued Accounting Standards
None.
Quantitative and Qualitative Disclosure Regarding Market Risk
We are exposed to market risk from changes in interest rates, foreign currency exchange rates and commodity prices. We manage our
exposure to these market risks through our regular operating and financing activities, and, when deemed appropriate, through the use of derivatives. When utilized, derivatives are used as risk
management tools and not for trading purposes. See "Interest Rate Risk" and "Commodity Price Risk" below for discussion of expectations regarding future use of interest rate and commodity price
derivatives.
Interest Rate Risk
We monitor our ratio of fixed-rate debt to variable-rate debt with the objective of achieving a mix that
management believes is appropriate. Historically, we have, on occasion, entered into interest rate swap agreements to exchange fixed and variable interest rates based on agreed upon notional amounts.
In December 2010, we entered into interest rate swaps to manage a portion of our exposure to changes in LIBOR-based interest rates on our variable rate debt, effectively fixing the interest payments
on $200.0 million and subsequent amortization value of our term loan. All of the swaps in place at December 31, 2010 have been designated as cash flow hedges of LIBOR-based interest
payments. At December 31, 2009 and December 26, 2008 we did not have any outstanding interest rate derivatives. Historically, if market interest rates had averaged 10% higher than actual
levels for 2010, 2009 or 2008, the effect on our interest expense and net earnings would not have been material. We have fixed the rate on our term loan at 2.04% plus our credit risk spread for the
duration of the loan. A variance of 0.125% in the rate on our variable rate line of credit at December 31, 2010 borrowing levels would impact interest expense by approximately $82,000 per year
and would not be material.
Concentration of Credit Risk
Financial instruments that potentially subject us to significant concentration of credit risk consist primarily of cash and cash
equivalents, accounts receivable and derivative financial instruments used in hedging activities. A majority of cash and cash equivalents are maintained with major financial institutions in the United
States, Canada and Europe. Balances in these institutions exceeded the regions' respective insurance amounts as of December 31, 2010 and 2009.
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Concentration
of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up our customer base. We control credit risk
through credit approvals, credit limits and monitoring processes.
We
are also exposed to credit loss in the event of non-performance by counterparties on the derivative financial instruments used in hedging activities. These counterparties
are large international financial institutions domiciled in the United States and to date, no such counterparty has failed to meet its financial obligations to us, and we do not anticipate
non-performance by these counterparties.
Foreign Currency Risk
We are exposed to fluctuations in foreign currency for transactions denominated in other currencies. We had foreign currency
derivatives in place at December 31, 2010 to reduce such exposure. The potential loss in fair value on such financial instruments from a hypothetical 10% adverse change in quoted foreign
currency exchange rates would not have been material to our financial position as of December 31, 2010 or as of December 31, 2009. In addition to the direct effects of changes in
exchange rates, such changes also affect the volume of sales or the foreign currency sales price as competitors' products become more or less attractive. Our sensitivity analysis of the effects of
changes in foreign currency exchange rates does not factor in potential changes in net sales levels or local currency prices.
Commodity Price Risk
We secure raw materials through purchasing functions at each operating division. These functions are staffed by professionals who
determine the sourcing of materials by assessing quality, availability, price and service of potential vendors. When possible, multiple vendors are utilized to ensure competitive prices and to
minimize risk of lack of availability of materials.
We
purchase scrap, various grades of steel and nickel at market prices, which are subject to price volatility over time. Generally, we have been able to pass any increases through price
increases on our products or the assessment of surcharges or escalator provisions in our long-term agreements with customers; however, typically there has been a historical time lag of
several months between the time a price increase is effective and our ability to realize a price increase in the market. This historical time lag could increase in more volatile time periods. As a
result, our gross margin percentage may decline, and we may not be able to implement other price increases for our products. Both operating segments review raw material cost to pricing relationships
on a regular basis. We have not hedged against the price volatility of any raw materials within our operating segments with any derivative instruments.
Our
suppliers and sources of raw materials are based in the United States, Asia, Latin America, Australia and Europe. We believe that our sources are adequate for our needs in the
foreseeable future, that there exist alternative suppliers for our raw materials and that in most cases those materials are readily available. We have not experienced any work stoppage or supply
stoppage due to raw material availability.
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INDUSTRIES
Our Industries
Engineered Products Group
EPG provides wear parts and wear part carriers to the mining and infrastructure development markets, as well as the industrial market.
Mining
The mining industry consists of a series of closely linked operating activities that begins with identifying possible ore reserves and ends with delivering a refined product. These activities consist of
exploration, mine development, extraction, materials handling, crushing and grinding, concentration and refining into usable product. Extraction, the activity most relevant to our business, is divided into surface mining and underground
mining.
Surface mining involves the excavation of commodities such as copper, iron ore, oil sands and coal. Underground mining involves the extraction of commodities, predominantly coal, that are deep below the
surface. Surface mining requires the use of numerous types of heavy equipment, which require wear parts and wear part carriers. Sales of new surface mining equipment are closely tied to fluctuations in the prices of their related commodities and
global macroeconomic conditions. The aftermarket for parts and services for mining equipment, in contrast, tends to be less volatile and is linked to mining production. Once a mine is opened, it is unlikely to be shut down due to the high fixed costs
associated with its operation. There are also high switching costs, including lost revenues, to replace aftermarket parts and their related fitments installed on mining capital equipment.
Mining
products include ground engaging tools, or GET, products such as tooth systems and cutting edges; crusher wear parts; dragline rigging; and wear part carriers such as dragline
buckets, cable shovel buckets, excavator buckets and wheel loaders. Wear parts typically generate recurring sales as the parts are used in mining and regular replacement is required. In most market
conditions, this recurring business provides a base level of demand because wear parts are generally required to operate mining equipment and are not discretionary capital expenditures.
Demand Drivers.
The demand for wear parts in the mining industry is driven by the demand for mined commodities. As
commodity demand rises and
commodity prices increase, it becomes economical for mining companies to extract lower grade ores in more challenging extraction environments, which typically requires greater use of wear parts. We
estimate that in 2010 the mining commodities below represented over 90% of our mining net sales.
Copper.
Copper is a basic material used in residential and commercial construction, electrical equipment, transportation,
industrial machinery and
durable consumer goods. Demand for copper is driven by accelerating economic growth in the developing world and continued consumption in the developed world. According to AME Mineral Economics,
worldwide mine production of copper was 16.0 million tons in 2010 and is projected to be 18.9 million tons by 2012.
Iron Ore.
Iron ore is one of the few sources of primary iron used to make steel and is mined in more than 50 countries. The
market for iron ore is
largely a function of the demand for steel.
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According
to AME Mineral Economics, worldwide production of iron ore in 2010 was 2.58 billion tons and is estimated to be 3.03 billion tons in 2012.
Oil Sands.
Oil sands are a viscous mixture of sand, bitumen, clay and water. According to the Canadian Association of
Petroleum Producers, oil
production from oil sands in Canada was estimated at 1.6 million barrels per day in 2010 and is projected to be 2.0 million barrels per day in 2012.
Coal.
Coal is the world's most abundant low-cost energy source and is responsible for over 40% of the world's power
generation. We
believe the large amount of coal reserves and significant coal infrastructure present difficulties for transition from coal to other energy sources. Additionally, new clean coal technologies, flue gas
desulphurization and carbon capture and storage may help to mitigate environmental and regulatory concerns with the use of coal for power generation. New technologies, such as gasification and
liquefaction, create opportunities for future growth in the use of coal. According to the 2010 International Energy Outlook of the U.S. Energy Information Administration, worldwide production of coal
in 2010 was 130.4 quadrillion Btu; this is forecasted to increase to 139.4 quadrillion Btu in 2015.
Gold.
The price of gold is determined through trading in the gold and derivatives markets and is affected by factors such
as consumer sentiment,
interest rates and inflation expectations. Production of gold in 2010 was 2,653 tons and is expected to grow to 2,693 tons in 2012, according to the Australian Bureau of Agricultural and Resource
Economics and Sciences.
Growth
in demand for these commodities is a function of economic activity, population growth and continuing improvements in living standards in many areas of the world. China and India,
which together accounted for 37% of the world's population as of December 15, 2009, have fast-growing economies and rapidly urbanizing populations and have had a significant
positive impact on secular trends in commodity production. One of the key drivers of the demand for commodity ore has been growth in construction in China, which experienced a 15%
compound annual growth rate from 1998 to 2010, according to IHS Global Insight. This increased demand has created a corresponding increase in mining activity in resource-rich areas of the
world, especially the United States, Brazil, Australia and Russia. For example, the capital expenditure budgets for the top five global mining companies by market capitalization have increased an
average of 73% in 2011 over 2010. The chart below illustrates the movement in certain commodity prices over the two years ended March 31, 2011.
Commodity Prices
(Indexed Price Movement, 3/31/2009 = 100)
Source: Bloomberg, FactSet.
The major participants in the mining industry are mine operators, mining OEMs, parts manufacturers and independent distributors. Most mine
operators, which are the end-users of mining products, are state-owned enterprises or large multinational corporations with operations in the major mining markets throughout the world.
Increasingly, large multinational mine operators
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have
reduced operating costs by employing larger, costlier and more efficient and sophisticated machines. These mine operators generally have high-throughput operating processes, with high
fixed costs and high costs of downtime in the form of lost revenues and costs of storage. As a result, these mining companies generally operate 24 hours a day, seven days a week, under
demanding conditions. To maximize profits under these conditions, these companies require high quality wear parts that they can quickly and safely replace, and frequently purchase wear parts and
replacement products for their capital equipment in the aftermarket.
Infrastructure Development
The global infrastructure development industry, as it relates to EPG, consists primarily of heavy construction and underwater hard
rock dredging activities. Like the mining sector, infrastructure development involves the use of numerous types of heavy equipment that require wear parts and wear part carriers.
Heavy Construction.
Heavy construction involves the development and repair of buildings, sewers, pipelines, highways, dams,
harbors and other
manmade structures. Many EPG products for heavy construction are the same as those used in mining, but typically are smaller.
Underwater Hard Rock Dredging.
Underwater hard rock dredging includes harbor expansion and deepening projects.
The
chart below illustrates the infrastructure industry growth rate from 2010 through 2014 for Brazil, Russia, India and China (BRIC countries) and non-BRIC countries.
Infrastructure Industry Outlook
(Value, $ Billions)
Source: Business Monitor International.
Demand Drivers.
The demand for infrastructure products is tied to maintenance activities in developed nations and
infrastructure development in
developing countries. In developed countries, drivers of demand include the required maintenance and rebuilding of aging infrastructure. For example, the American Society of Civil Engineers estimates
the United States needs to spend $2.2 trillion over the next five years to return the country's infrastructure to "good condition". There is significant government support for infrastructure build in
the United States. For example, the American Recovery and Reinvestment Act of 2009 set aside $120.0 billion for infrastructure construction in the United States. Urbanizing populations are one
of the key drivers of the growth in construction in developing countries such as China, which experienced a 15% compound annual growth rate in construction activity from 1998 to 2010 (according to IHS
Global Insight), and other emerging economies such as India and Brazil.
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Unlike
mining, heavy construction is fragmented across a large number of local and regional firms. Other major participants in the global infrastructure development industry are OEMs,
parts manufacturers and independent distributors. Underwater hard rock dredging is concentrated among a small number of dredging companies.
Industrial
EPG industrial products include specialty castings for scrap metal recycling, locomotive engines and track work, offshore oil platform
moorings, wire rope rigging, structural sockets, aircraft forming dies and conveying chain systems. The primary market drivers in these areas are the global economy, North American industrial
production and the demand for lumber, aluminum, recycled scrap steel and pulp and paper products.
Turbine Technologies Group
TTG manufactures precision investment cast components for the aerospace and power generation (or industrial gas turbine, or IGT) and
other industrial markets.
Aerospace
The demand for aerospace castings is driven by new aircraft build rates and global airline traffic. Aircraft manufacturers experienced a record increase in backlog from 2006
through 2008, but during the recession airlines canceled some aircraft deliveries and pushed out orders. With the recovery in the global economy and growth in airline traffic, aircraft OEMs are increasing production rates and consequently,
according to Airline Monitor, engine deliveries are expected to grow 6.8% in 2011 and 13.0% in 2012. This long-term positive trend is also supported by the launch and ramp of programs such as Boeing's 787 and 747-8 and Airbus' A350XWB and
A380.
Replacement
castings demand is primarily driven by aircraft engine maintenance cycles, which depend on miles flown. As the global economy has recovered, air traffic has rebounded and,
according to Airline Monitor, airline passenger miles surpassed 2008 levels in 2010, rising 5.5% from 2009. According to Airline Monitor, revenue passenger miles are forecast to increase at a 6.1%
compound annual growth rate from 2010 through 2015, as airlines add new aircraft and increase flight hours to satisfy passenger demand. This should drive growth in the market for aircraft engine
replacement parts.
The
market participants in the aeroengine business are OEMs, including General Electric, Pratt & Whitney and Rolls Royce; OEM revenue sharing partners, or RSPs; and numerous
tiers of suppliers, like TTG, to OEMs and RSPs.
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The
chart below illustrates the forecast for engine delivery and revenue passenger miles from 2010 through 2015.
Engine Delivery Forecast
Number of Engines
World Airline Traffic
Revenue Passenger Miles
Billion
Source: Airline Monitor
Source: Airline Monitor
Industrial Gas Turbine
The IGT casting market is driven by the demand for new gas turbines and maintenance requirements for the existing installed base of
turbines. According to Frost & Sullivan, gas turbine sales are expected to increase at a compound annual growth rate of 5.1% from 2010 through 2015.
Gas
turbines are generally designed for a useful life of over 30 years, which contributes to a resilient industrial gas turbine maintenance, repair and overhaul (MRO) market. The
typical replacement cycle for "hot gas path" turbine parts is between three and seven years. The large installed base of IGT castings provides a platform for considerable aftermarket opportunities.
The
market participants for industrial gas turbines are OEMs, parts manufacturers and aftermarket suppliers of MRO parts and services.
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BUSINESS
Overview
We are a leading, independent designer, developer and manufacturer of highly engineered wear parts and replacement products used in
surface mining, infrastructure development, power generation, aerospace and industrial applications. Our products are often essential to the performance of our customers' capital equipment, which
often operates continuously in harsh environments and is subject to abrasion, impact, corrosion or extreme temperatures. We have two operating groups:
Engineered Products Group, or EPG,
designs, develops and manufactures wear parts and wear part carriers, and provides solutions for mining, infrastructure development and other challenging
industrial wear applications. We believe we are the global market leader in ground engaging tools, or GET tooth systems, used in surface mining and infrastructure development, with an extensive offering of patented GET products. EPG represented
$712.6 million, or 84%, of our net sales in 2010.
Turbine Technologies Group, or TTG,
manufactures superalloy precision investment cast components used in the power generation and aerospace markets. TTG represented
$136.9 million, or 16%, of our net sales in 2010.
We
have focused on product innovation throughout our nearly 100-year history and, as of April 11, 2011, we had 45 U.S. patents and 483 foreign patents worldwide
(including foreign counterparts to our U.S. patents). We believe our expertise in metallurgy, tribology (the science of wear), design engineering, manufacturing processes and distribution are our core
competencies.
Engineered Products Group
EPG focuses primarily on wear products and solutions for mining, infrastructure development and other challenging industrial
applications. EPG wear parts include GET such as mechanically attached teeth on buckets for earth moving, crusher parts, scrap recycling hammers and dragline rigging. We believe we are the global
market leader in GET tooth systems used in surface mining and infrastructure development, with an extensive offering of patented GET products. Our wear parts, which typically are consumed in less than
a year, represented 80% of EPG net sales in 2010. In addition to wear parts, we also design and manufacture capital equipment attachments that serve as wear part carriers, such as dragline buckets for
coal mining where we believe we are the global market leader.
We
have a global network of 21 manufacturing facilities and 35 sales and distribution offices in 18 countries, with a presence in nearly every major mining region around the globe. We
employ a diversified distribution model that includes direct sales, a network of independent dealers, licensees and OEMs. We increasingly focus on building our direct sales channel in markets
with a high concentration of mining activity. Our on-site field technical experts and sales representatives work directly with end-users to develop first-hand
knowledge of their needs. Drawing on our extensive expertise in solving wear problems at mining and infrastructure projects around the world, these local teams deliver our customers
best-in-class solutions from our broad portfolio of products. Once our products are installed on a customer's equipment, the customer can access our global multi-channel
distribution network to purchase replacement wear parts.
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We
believe we have a differentiated business model in EPG, focused on developing close relationships with both OEMs and the end-users of our products. We "push" first
fitment of our products on new machines by working closely with mining OEMs to develop products that meet their requirements. For example, when mining OEMs adopt our products as first
fitment for the buckets on their capital equipment, such as hydraulic excavators, electric cable shovels and wheel loaders, our wear parts are typically used for the life of the bucket. In addition,
our close customer relationships allow us to provide products and solutions to address a customer's critical wear problems, increase productivity, reduce total cost of ownership and improve safety,
creating a "pull" as our customers request that OEMs fit our products on their equipment. As a result, our EPG business is characterized by a significant installed base — we
estimate that our products are on approximately one-third of the surface mining machines worldwide. This, in conjunction with the high cost of switching to other suppliers and the
consumable nature of our wear products, creates recurring sales.
EPG's
success is grounded in its core competencies: innovative product design; metallurgy; tribology; manufacturing; a global sales, distribution and service network; and a culture of
continuous improvement. Leveraging these core competencies, EPG has become an innovation leader in the design and manufacture of wear parts, which we provide to diverse customers around the world.
Although EPG has large customers, including the 10 largest mining companies in the world, no single customer accounted for 10% or more of our EPG net sales in any of the last five years. In addition,
EPG benefits from diversity in the industries and geographies where we operate and from the diversity in commodities that our customers mine.
Turbine Technologies Group
TTG manufactures superalloy precision investment cast components used in the aerospace and power generation markets such as blades,
vanes and complex structural parts used in aircraft engines and industrial gas turbines. Broad manufacturing and metallurgical capabilities, responsiveness and extensive engineering expertise, backed
by the strength of our brand, have enabled TTG to become an important supplier in these markets. Our engineers work closely with OEMs and their revenue sharing partners to manufacture new and
modified products that provide high turbine efficiencies and component performance. Our rapid product development process aligns us closely with our customers to bring new products to market faster.
Investment
casting is a technical, multi-step process that uses ceramic molds in the manufacture of metal components with more complex shapes, tighter tolerances and finer
surface finishes than parts manufactured using other casting methods. TTG's engineering expertise and manufacturing know-how are critical to the production of parts to the exacting
tolerances and high metallurgical standards necessary to withstand extreme heat and other severe operating stresses. TTG employs conventional casting processes to produce fine grain castings; equiaxed
castings, in which metal grains are oriented randomly throughout the casting; directionally solidified ("DS") castings, in which metal grains are aligned longitudinally; and single crystal ("SX")
castings, which consist of one large superalloy crystal without grain boundaries. Grain boundaries and alignment affect the strength and performance characteristics of metal castings. TTG also offers
value-added services to its customers including precision machining, stem drilling and vacuum heat treating services. In 2010, 70% of TTG net sales were from products used in the "hot gas path" of
turbines and considered replacement parts.
Competitive Strengths
We believe we are well-positioned to benefit from positive secular trends in the industries we serve, and that the
following competitive strengths will enable us to maintain our leadership position, grow our market share and generate returns for our shareholders.
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Leading Position in Attractive, Diverse and Growing Markets
We are a leading and independent global provider of highly engineered wear products and solutions in the surface mining and
infrastructure development markets. Within these markets, we believe we are the global market leader in GET tooth systems used in surface mining and infrastructure development projects, with an
extensive offering of patented GET products; dragline buckets for coal mining; and first fitment for mining hydraulic excavators.
We
are positioned to benefit from positive secular trends in commodities markets and global infrastructure spending. Production of copper, iron ore and oil sands is expected to grow at
compound annual growth rates of 8.8%, 8.4% and 10.1%, respectively, over the next two years (AME Mineral Economics, the Canadian Association of Petroleum Producers); global infrastructure build
activity is expected to grow at a compound annual growth rate of 13.0% through 2014 (Business Monitor International). Similarly, we expect our TTG business to benefit from expected aerospace compound
annual growth rates of 6.1% in global passenger and cargo traffic (The Airline Monitor) and 5.1% for industrial gas turbines over the next five years (Frost & Sullivan).
Our
business benefits from diversity in:
•
Industries.
We serve customers in the mining,
infrastructure development, industrial, power generation and aerospace markets.
•
Commodities.
Our products are used in mining copper, iron,
coal, oil sands and gold.
•
Geographies.
We operate in 19 countries on six continents,
creating an expansive operating network through which we sell our products and solutions worldwide.
•
Customers.
We have over 1,000 customers, including the 10
largest global mining companies, with no single customer representing 10% or more of our net sales in any of the last five years.
We
believe we are well-positioned to maintain or improve our leading market position in these markets given the strength and breadth of our product portfolio, proprietary
technologies, strong brand, broad manufacturing presence, extensive distribution platform and long-term relationships with industry-leading customers.
Broad Portfolio of Innovative, Mission-Critical Products
We sell mission-critical wear parts essential to the productivity of our customers' capital equipment. This equipment operates in
harsh conditions, often continuously, where downtime is expensive due to lost production time. For example, we estimate that lost revenue from downtime for a large mining cable shovel in a U.S. copper
mine can be as high as $300,000 per hour. As a result, our customers highly value our product innovation, quality and performance, as well as the breadth of our product offerings.
•
Customer-Driven Innovation.
We have a long history of
working with our customers to innovate and improve our products. We have extensive expertise in tribology, design engineering, metallurgy and manufacturing, allowing us to produce innovative
high-quality products for the most demanding applications. As of April 11, 2011, we had 45 U.S. patents, with an average remaining life of approximately 11 years, and 483
foreign patents worldwide (including foreign counterparts to our U.S. patents).
•
Quality and Performance.
We have a reputation for
offering high performing products. We believe our customers enjoy a lower total cost of ownership because of the superior wear life, reliability and quick change time of our parts, which results in
reduced downtime, enabling us to price commensurate with value. One of our U.S. mining customers, for
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example,
estimated that switching to our SV2 tooth system from a competitor's product more than tripled tooth wear life, from 45,000 tons per tooth to 149,000 tons per tooth, and significantly reduced
operating costs. These qualities are becoming increasingly important in mining applications as ore grades decline and extraction becomes more difficult.
•
Breadth of Product Offering.
We are an independent
manufacturer of wear parts and wear part carriers for multiple OEM machines. Our broad portfolio of products includes both high-value products, with many covered by patents, and other
complementary products such as universal wear solutions, cutting edges and scrap recycling hammers. Over the past five years we have sold EPG products under more than 25,000 SKUs. Our leadership
position in GET is usually a customer's first introduction to our brand; our broad portfolio of products allows us to cross-sell our products once we have a customer relationship.
Significant and Growing Installed Base Generates Recurring Sales
The installed base of equipment that uses our wear parts has grown significantly in recent years — we estimate our
products are installed on approximately one-third of the world's surface mining machines, which includes draglines, excavators, cable shovels and wheel loaders. We believe we are
well-positioned to benefit from aftermarket wear parts sales as growth in mining and growth in infrastructure development in emerging markets outpace global economic growth generally, and
as the demand for mined commodities makes it profitable for our customers to extract lower grade ore, which typically requires greater use of wear parts. Our consumable wear parts generate recurring
sales for us as the parts wear and are required to be replaced. For example, in the mining industry, GET teeth can last for tens of thousands of tons of production before requiring replacement, which
can occur as often as every week depending on the product and the application. This recurring business provides a base level of demand because our parts are generally an operating requirement for our
customers and not a discretionary capital expenditure. In addition, many of our wear parts attach to our proprietary fitments, such as lip systems, installed on our customers' capital equipment.
Replacing these fitments is time consuming and expensive. As a result, there is a natural, recurring demand associated with EPG wear parts that is generally more stable than the underlying demand for
the related capital-intensive equipment to which our parts attach. Our large portfolio of EPG products provides significant recurring sales from aftermarket sales of wear parts to service the large
installed base of capital equipment that uses our products. In 2010, wear parts represented 80% of EPG net sales.
In
2010, 70% of TTG net sales were from products used in the "hot gas path" of aerospace and industrial gas turbines where they are subjected to extreme heat and operating stresses.
This results in the need for periodic replacement as part of the turbine maintenance, repair and overhaul cycle and generates recurring sales for us.
Wear
and replacement parts constituted more than 75% of our net sales in 2010.
Well-Established Brand with a Loyal, Diverse Customer Base
For nearly a century we have built our brand with responsive service, productivity improvement and customer-driven innovation. Today,
the ESCO brand is globally recognized for quality, durability, reliability, safety and superior performance in the most demanding operating conditions, from the high stress and impact of hard rock
dredging and the severe abrasion of oil sands, to the extreme temperature ranges of a jet engine.
Our
reputation has earned brand loyalty from over 1,000 customers across more than a dozen industries. We have served each of our top 10 customers in 2010 for at least 15 years.
Our customers, which include the 10 largest mining companies as well as major aircraft engine and IGT manufacturers, operate in circumstances where the failure of a component can expose them to
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significant
costs. Many customers rely on us as their primary source for mission-critical products. Many of our relationships with OEM customers and dealers in North America and Europe have lasted for
decades.
Global Operations with Local Presence
We have an expansive network of 28 manufacturing facilities, including 16 foundries, and 35 sales and distribution offices. We operate
in 19 countries on six continents, which allows us to develop strong expertise in solving the world's most challenging mining and infrastructure problems and helps us maintain an advantage in
developing new products and technologies that we can offer to customers. Our worldwide reach allows us to efficiently leverage common manufacturing systems and processes across our business. In
addition, our local presence in many key mining regions benefits our business in the following ways.
•
Deep Customer Relationships.
Our global distribution
platform increases our feet in the field at mining and infrastructure project sites around the world, and our ability to tailor solutions to immediate customer concerns. We believe this enhances the
value of our solutions to customers.
•
Global Supply Chain Capability.
We believe our network of
foundries, fabrication and distribution facilities located near major surface mining regions around the globe allows us to manufacture GET and other products for specific local markets and locate
inventory close to customers wherever they operate, which allows us to enhance our logistical capabilities.
•
Cross-Selling.
Once we've established a customer
relationship, the combination of our extensive product portfolio with our local supply and service distribution channel near customer locations enables us to cross-sell other products and
solutions for a diverse array of customer needs.
Management Team and Organizational Capability
Our executive officers have an average of over 20 years of experience in our business. Over the last 20 years, our team
has grown ESCO from a company with operations only in North America and Western Europe to a global business with operations in 19 countries on six continents and a broad, diverse and growing product
portfolio. Our operations across the world are managed by regional executives and operated by local personnel following standard policies and procedures. Our highly skilled team of engineers with
expertise in metallurgy, tribology, design engineering, and manufacturing processes helps us maintain our leading market position by improving the wear life and ease of use of our products.
Competitive Strategies
We are focused on the following strategic and operational initiatives.
Customer-Driven Innovation
Customer-driven innovation is a critical aspect of our growth strategy, and has resulted in, as of April 11, 2011, 45 U.S.
patents, with an average remaining life of approximately 11 years, and 483 foreign patents worldwide (including foreign counterparts to our U.S. patents). Through ongoing contact with our
customers in the field, we will continue to develop close relationships that allow us to determine firsthand the new products and wear solutions our customers need. In many cases we are the first
point of contact when unique and challenging problems arise, even at remote customer locations. In addition, we employ a global Voice of the Customer program, through which we obtain a detailed
understanding of our customers' requirements and gain key inputs for
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designing
new products and services. Through these relationships, we are able to solve our customers' problems using our design engineering, metallurgical and manufacturing expertise to create new
and, in many cases, proprietary products that can then be applied across multiple geographies. These products and services developed in close collaboration with customers can deliver greater value and
command higher prices, and are not easily displaced because of the risk of productivity loss and prohibitive switching costs. We continue to invest heavily in new product development.
Expand Our Global Presence
We will continue to grow our global operations by expanding alongside customers into key regions. In 2004 we had 6 manufacturing
facilities and 4 sales and distribution offices outside of North America. We now have a presence in nearly every major surface mining region around the globe with 13 manufacturing facilities and 20
sales and distribution offices outside of North America. This reflects our investment in establishing or expanding our presence in Australia, Brazil, China, Indonesia, South Africa, Peru and Russia as
each of these regions experiences significant growth in the mining and infrastructure development markets.
Our
global expansion strategy is driven by our desire to serve the fastest growing mining and infrastructure development markets and to expand our direct sales channel. For example, we
entered China 12 years ago through a joint venture company, Shanxi Changfeng Wearparts, or SCW, that we formed with Taiyuan Heavy Machinery Group in Taiyuan, China, to develop a local presence
in China's fast growing infrastructure development and mining market and a low-cost manufacturing base close to important customers in the Asia Pacific region. Having gained insight into
operating in China through SCW, in 2006 we built a wholly owned,
low-cost, state of the art foundry in China, which helps us serve our customers in that region.
Expand Direct Distribution, Selling a Broader Range of Products and Solutions
We employ a diversified distribution model for product sales in the aftermarket that includes direct sales, a network of independent
dealers, licensees and OEMs. We focus on building a direct sales channel in markets where there is a high concentration of mining activity. Our direct sales channel allows us to manage how our
products are positioned with customers, provides us with significant opportunities to cross-sell products and solutions and positions us to capture incremental growth and profitability.
Our assessment of whether to build direct sales in a particular region is based on the ability of a dealer or licensee to serve customer requirements, potential profit margins and return on invested
capital and competitive dynamics.
We
will continue to expand and transition to direct sales distribution in some large mining regions especially in North America, Australia, Indonesia, South America and South Africa. We
have established direct sales channels in the Canadian oil sands, Wyoming Powder River Basin and Brazil. Additionally, we recently decided to pursue a direct sales channel in Australia and South
Africa, rather than renew licensing arrangements there.
Increase Our Installed Base
In EPG, we will continue to pursue a "push/pull" strategy to increase first fitments of our branded products. Our product development
and engineering staff work closely with OEMs to develop products that match the requirements of their new machines. For example, when mining OEMs adopt our products as first fitment on
their buckets, our wear parts are typically used for the life of the bucket. This strong "push" for our parts creates a recurring sales stream as the end-user purchases our wear products
that are attached to our proprietary fitments on machines on an ongoing basis in the aftermarket. Our wear products are not easily displaced, as doing so would
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require
significant investment in the installation of an alternative fitment, as well as lengthy downtime of critical equipment and lost productivity. In addition, our close customer relationships
have allowed us to provide products and solutions to address customers' critical problems,
increase productivity, reduce total cost of ownership and improve safety, creating a "pull" through demand for our products. Customers often request that OEMs deliver their new equipment fitted
with our products. We plan to use this combined push/pull dynamic to grow our installed base at the OEM level, providing us a solid base for long-term net sales growth.
In
TTG, we are focused on strengthening our existing relationships with key OEMs in aerospace and IGT markets and with aerospace OEM revenue sharing partners. Our engineers work
closely with OEMs and revenue sharing partners to manufacture new and modified products that provide high turbine efficiencies and component performance. Our rapid product development process
aligns us closely with our customers to quickly bring new products to market.
Pursue Strategic Acquisitions
Since 2005 we have acquired five companies to build our EPG business for an aggregate consideration of approximately
$100 million. We plan to continue our successful identification, acquisition and integration of businesses that we believe will provide us with some or all of the following: foundry capacity in
strategic regions, proximity to key customers and enhanced distribution capabilities and complementary products or technologies. We will continue to focus on expanding our presence in the top mining
regions globally as well as emerging markets and low-cost regions where we expect to benefit from significant growth in the mining and infrastructure development markets and increasing
adoption of sophisticated machinery and operating practices. For example, our 2010 acquisitions of Swift Engineering and Austcast in Australia have provided foundry capacity, improved access to
customers and distribution and new, innovative products that can be distributed to customers in other geographies. We will continue to evaluate acquisitions based on synergy potential, return on
invested capital and earnings accretion.
Focus on Continuous Improvement and Lean Processes
We focus on lean processes to drive continuous improvements in all aspects of our business. Our lean system, which we refer to as QVS,
or "Quality, Value and Speed", has allowed us to improve process cycle times, increase quality and customer service and reduce capital requirements, including working capital and capital deployed to
increase foundry tonnage. By continually improving productivity and our cost structure, we have created a more nimble organization that can more rapidly respond to market and customer needs.
We
believe our enterprise-wide QVS initiative has improved our operating efficiency through standardized processes and increased accountability. In addition, QVS initiatives
have
allowed us to reduce manufacturing cycle times in some of our key foundries. For example, at one of our key foundries, we reduced cycle times by 39% from 2007 to 2010. In addition, we have improved
our net working capital as a percentage of net sales from 30% in 2000 to 21% in 2010.
As
we continue to expand our global operations, we believe ample opportunities continue to exist to shorten product development cycles, enhance margins and improve customer service.
Our Segments
Engineered Products Group
EPG focuses primarily on wear products and solutions for global mining, infrastructure development and other challenging industrial
applications. EPG's longstanding presence in these markets has resulted in an extensive proprietary knowledge base, which we utilize to design,
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engineer
and manufacture innovative proprietary products. We believe we are the global market leader in GET tooth systems used in surface mining and infrastructure development projects, with an
extensive offering of patented GET products. We believe we are well-positioned to maintain or improve our leading market position in these markets given the strength and breadth of our
product portfolio, proprietary technologies, strong brand, broad manufacturing presence, extensive distribution platform and long-term relationships with industry-leading customers.
The
installed base of equipment that uses our wear parts has grown significantly in recent years — we estimate our products are installed on approximately
one-third of the world's surface mining machines, including draglines, cable shovels, excavators and wheel loaders. We believe we are well-positioned to benefit from
aftermarket wear parts sales as growth in mining and infrastructure development in emerging markets outpaces global economic growth generally, and as the demand for mined commodities makes it
economical for our customers to extract lower grade ore, which typically requires greater use of wear parts.
We
believe we are the leading provider of first fitment lip systems to mining OEMs for hydraulic excavators that serve as wear part carriers, which has allowed us to build a
significant installed base. Many of our lip systems and GET products include patented fit relationships and locking systems that require the use of our replacement wear parts, generating recurring
sales for us once our lip systems are installed. OEMs choose to install our systems because of the value our solutions bring to their machines and their customers. Compared to competing
products, we believe the advantages of our wear products that improve economics for our customers include superior wear life, increased productivity and performance and quick change times for
replacement parts. One of our U.S. mining customers, for example, estimated that switching to our SV2 tooth system from a competitor's product more than tripled productivity, from 45,000 tons per
tooth to 149,000 tons per tooth, and significantly reduced operating costs. There are high switching costs associated with retrofitting a machine after our wear part carriers and adapters have been
installed, which can include removal time and costs and decreased productivity and performance.
Operations and Manufacturing
We own and operate 21 manufacturing facilities and 35 sales and distribution offices in 18 countries across six continents, with a
foundry near most of the major markets we serve. We use capital-intensive manufacturing equipment and specialized manufacturing processes in the casting, welding and assembly of our wear parts and
wear part carriers. Our diverse, efficient and experienced manufacturing operations are core to our global footprint with local presence. This global manufacturing platform allows us to leverage our
considerable resources and common manufacturing processes to provide products and solutions to our multinational clients wherever they operate. Local manufacturing presence near most of the world's
major mining regions provides us with significant operating benefits, including reduced transit times, lower shipping costs and improved feedback between manufacturing and wear parts technicians and
the customers they serve. On-site wear part expertise is a fundamental component of our service to our customers.
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Many of our locations' quality management systems are ISO 9001 certified. Our continuous improvement initiative allows us to improve process cycle times,
improve safety, increase quality and customer service, and reduce capital requirements, including working capital and capital deployed to increase foundry tonnage. The success of our continuous
improvement culture has shown itself through increased incremental capacity with minimal capital cost, shorter cycle times to better serve our customers' needs and a more nimble cost structure.
Products and Services
EPG provides thousands of innovative and reliable wear products designed specifically to perform in the harsh environments where our
customers' machines operate. EPG sales over the past five years included over 25,000 SKUs. We provide an extensive offering of
GET, complete cast and plate lip systems and other wear parts for mining equipment and crushing applications.
Sales
of mining products represented 63% of EPG net sales in 2010, infrastructure development products 30% and industrial products 7%. Mining, infrastructure development and industrial
wear parts represented approximately 80% of EPG's net sales in 2010; wear part carriers represented approximately 10%; and industrial and other components represented approximately 10%. Over 45% of
our EPG net sales in 2010 were from our patented products.
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Wear and replacement parts.
Most of EPG's net sales are from sales of consumable wear products, which we define as products
with a typical wear life
of less than one year. Wear cycles vary widely. The teeth on dredge cutterheads used to cut through hard rock, for example, can be replaced as often as every few hours. Consumable EPG wear parts
include the following:
Product
Applications
Machines / Price Range
GET
Tooth Systems
Used on most earth moving equipment primarily to improve bucket penetration for improved productivity and to protect the bucket lip for longer service life.
•
Excavators
•
Cable shovels
•
Draglines
•
Wheel loaders
•
Skid steer loaders
•
Tractor loader backhoes
•
Price ranges from $10 to $6,000
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Product
Applications
Machines / Price Range
GET
Cutting Edges
Used to push earth, rock and snow and protect the moldboard of the machines.
•
Dozers
•
Graders
•
Snow plows
•
Price ranges from $50 to $1,250
Crusher Wear Parts
Used to crush and size rock (aggregate) in quarry operations and to crush ore in mining operations.
•
Jaw crushers
•
Gyratory crushers
•
Cone crushers
•
Impact crushers
•
Price ranges from $1,600 to $32,000
Dragline Rigging
Used for hoisting and loading dragline buckets that are typically used in coal mining operations to remove overburden (rock and
dirt) to uncover coal seams.
•
Draglines
•
Price ranges from $250 to $75,000
Universal Wear Solutions
Used to protect high wear areas in a variety of mining and infrastructure development applications.
•
Processing plants
•
Cable shovels
•
Draglines
•
Excavators
•
Wheel loaders
•
Dozers
•
Graders
•
Scrapers
•
Truck bodies
•
Price ranges from $10 to $850
Scrap Recycling Hammers
Used to shred metal products during the recycling process.
•
Metal recycling machines
•
Price ranges from $200 to $1,350
Attachments and wear part carriers.
EPG manufactures attachments and wear part carriers used in mining and infrastructure
development, including lip
systems, dragline buckets, cable shovel buckets, hydraulic excavator buckets and face shovels, wheel loader buckets, truck bodies
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and
dredge cutterheads. These products typically have a wear life of five to 20 years, with regular maintenance cycles to replace wear components.
Product
Application
Machine / Price Range
Lip Systems
Installed on buckets that are used to excavate and move earth and cut through rock.
•
Excavators
•
Wheel loaders
•
Cable shovels
•
Draglines
•
Price ranges from $5,000 to $350,000
Buckets
Used in construction sites, pipeline and other general construction, aggregate quarries and mining applications.
•
Excavators
•
Cable shovels
•
Wheel loaders
•
Draglines
•
Price ranges from $2,400 to $1,200,000
Dredge Cutterheads
Used to deepen ports and shipping lanes in hard rock dredging and sand and clay dredging operations.
•
Dredger
•
Price ranges from $80,000 to $675,000
Industrial and other components and services.
EPG manufactures and supplies a variety of industrial products and services
including castings for
locomotive engines and track work, offshore oil platform moorings, wire rope rigging, structural sockets, aircraft forming dies and conveying chain systems. EPG also provides services, including
specialty casting and bucket repair services.
Sales and Distribution
We employ a diversified distribution model for EPG product sales in the aftermarket that includes direct sales, a network of
independent dealers, licensees and OEMs. In 2010, 36% of EPG's net sales were generated through our EPG global dealer distribution network, 48% sold directly to end customers and 16% to OEMs.
We
use a "push/pull" strategy to increase first fitments of EPG products globally. We work closely with OEMs to develop new products that meet evolving requirements. In addition,
our technical specialists and sales representatives work directly with the end-users of our products, and we use formal surveys to develop first-hand knowledge of users' needs.
As a result, OEMs often use our wear parts as first fitment on their capital equipment and customers often prefer our wear parts on the capital equipment they purchase. OEM adoption of our
products as first fitment on their capital equipment creates a "push" for our products, and customer requests for our products on the capital equipment create a "pull" for our products. Once our
products are installed on the
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end-users'
equipment, end-users can access our global multi-channel distribution network to purchase wear parts and other replacement parts.
Our
authorized dealer and expanding direct supply and service network allow us to strategically expand our reach into new regional markets and establish close contact with key
customers. These distribution channels allow us to leverage our common manufacturing systems and business processes on a local distribution, sales and service network, which provides us with deep
customer relationships, opportunities to develop better solutions and a reputation as a local product solution specialist. We believe our global distribution, sales and service network is a
competitive advantage that strengthens our ability to benefit from strong positive trends in global resource demand, infrastructure development in emerging markets, as well as infrastructure
development projects in North America and Western Europe.
Our
licensees play a strategic role in maintaining relationships with regional customers, providing localized availability of parts and service, and work in partnership with us to serve
the needs of global customers. Our licensing relationships with manufacturers Compañía Electro Metalúrgica S.A., in Chile, and Mitsubishi Steel
Mfg. Co., Ltd., in Japan were established approximately 50 years ago. Each of our licensees manufactures and sells a range of our products using our designs, patents, alloys,
manufacturing and metallurgical know-how and brand name, and pays us a royalty from sales. Through design and manufacturing controls and the use of standard gauging tools provided by us,
we assure interchangeability of wear parts to customers around the world. For example, a mining customer in Chile can, for its European OEM machine, obtain aftermarket wear parts from our Chilean
licensee to replace worn teeth on a lip system we built in the United States.
Our products' global interchangeability allows our customers to purchase reliable products directly from us, the OEMs we serve, our licensees and our authorized dealers.
In
some regions, we have moved from licensee relationships to direct manufacture and sale. For example, we will not renew our license in Australia with Bradken Resources Pty Ltd.
when it expires on June 30, 2011. In anticipation of the license termination, we have taken steps to expand our direct presence in the attractive Australian market. During 2010, we acquired
Swift Engineering, a provider of mining site services and fabrication in Australia with facilities in Mackay and Kingaroy, Queensland, and Austcast, with foundries in Northgate, Queensland and
Dunedin, New Zealand primarily serving the mining markets. The Swift acquisition also expanded our product offering through an innovative line of mining haul truck bodies. Beginning in 2010, we
introduced and expanded our direct supply and service capability in key Australian mining regions. The combination of these two acquisitions, the establishment of independent dealers and the
development and deployment of other resources position us to serve the Australian market with products and services when the license expires.
We
are also a partner in three joint ventures. We jointly own our Taiyuan, China manufacturing facility with a minority owner, Taiyuan Heavy Machinery Group. We also have a joint
venture with Elecmetal, our Chilean licensee, to build and operate a foundry in Chile to produce wear parts for the Chilean market and for our global distribution outside Chile. Finally, we have a
sales and distribution joint venture with ESS Holdings, Inc. to serve our oil sands customers in Fort McMurray, Alberta, Canada.
EPG
customers consist of OEMs and dealers of capital equipment in the mining, infrastructure development and industrial markets, as well as the end-users of that
capital equipment. Although EPG has large customers, including the 10 largest mining companies in the world, no single customer accounted for 10% or more of its net sales in any of the last five
years.
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Competition
EPG operates in the mining, infrastructure development and industrial wear parts markets. EPG competes on a variety of factors,
including equipment productivity, design and performance, technology, metallurgical expertise, reliability, customer relationships, delivery lead times and price. EPG's competitors range from some of
the world's largest multi-national equipment manufacturers to small single-product niche manufacturers. Competitors include Hensley Industries, Inc., a division of Komatsu, Ltd.;
Berkeley Forge & Tool Inc.; Columbia Steel Castings; Metalogenia S.A.; CQMS Pty Ltd.; and Van Reenen Steel Ltd. When our licensee relationship with Bradken Resources
Pty Ltd. expires on June 30, 2011, it may also compete with EPG.
The
mining and infrastructure development wear parts market has substantial barriers to entry. We believe that successful participation in the industry requires (i) extensive
experience in metallurgy, tribology and advanced manufacturing processes; (ii) a broad portfolio of products; (iii) significant capital expenditures to establish the necessary global
operations and the local distribution infrastructure; and (iv) brand recognition, which is generally promoted by a long-term track record of innovation, quality, client
relationships and an active installed base. We have developed these capabilities over a nearly 100-year history and believe we are well-positioned in the wear parts industry.
Turbine Technologies Group
TTG operates in the aerospace and power generation markets. TTG serves customers that require superalloy precision investment castings
for gas turbines that generate power for cities and jet engines that keep airliners flying. Due to the highly complex nature of the investment casting process for turbine components and structures,
and the exacting standards required so that products can withstand intense heat and operating stresses, few manufacturers can compete in this space.
Operations and Manufacturing
TTG's metallurgical castings include fine grain castings; equiaxed castings; directionally solidified ("DS") castings; and single
crystal ("SX") castings. TTG employs conventional casting processes to produce equiaxed castings, in which the metal grains are oriented randomly throughout the casting. A more advanced process
enables us to produce DS castings, in which the metal grains are aligned longitudinally. This alignment decreases the internal stress on the weakest portion of a metal part where the various grains
adjoin, thereby providing increased strength and improved efficiencies in engine performance over equiaxed parts. An even more advanced process enables us to produce SX castings, which consist of one
large superalloy crystal without grain boundaries. SX castings provide greater strength and performance characteristics than either equiaxed or DS castings, as well as longer engine life. We believe
our ability to manufacture a broad range of part sizes and configurations, using DS/SX and equiax manufacturing processes, makes TTG one of the few investment castings suppliers to the aerospace and
IGT markets capable of meeting a wide range of customer needs with facilities in the United States, Mexico and Europe.
Products and Services
TTG's aerospace offerings include blades, vanes and complex structural parts used in commercial and military aircraft engines. In
2010, approximately 71% of our aerospace engine component net sales were from products for commercial usage. Over 55% of our aerospace engine products net sales in 2010 were from products used in the
"hot gas path" of aircraft turbines and,
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as
a result, are considered replacement parts, while the balance are high-specification structural castings typically associated with new engine builds.
Our
power generation products are similar to the products we produce for aerospace engines, but are much larger. While a vane casting for an aircraft engine may weigh as little as 0.5
pounds, a vane casting for a large IGT turbine can weigh as much as 200 pounds. In the power generation market, TTG produces a range of "hot gas path" components, including blades, vanes and
multi-vanes. Over 90% of our IGT net sales in 2010 were from products used in the "hot gas path" of turbines and, as a result, are considered replacement parts.
TTG
is also an important supplier of superalloy precision investment castings sold to the locomotive and marine turbocharger markets, and participates in other niche industrial markets.
In addition, TTG provides and manages post-cast value-added processes such as precision machining, grinding and stem drilling.
TTG
produces complex superalloy castings used in civil and military aircraft engines and IGT at facilities in the United States, Mexico and Europe.
Sales and Distribution
TTG's core customers are IGT OEMs and MRO replacement part providers, and aerospace engine manufacturers and their revenue
share partners. All sales are generated through our highly technical direct sales force. Due to the sophisticated nature of the TTG products, sales efforts require both sales and engineering personnel
to work closely with customers to identify and assist in the development of new and modified products. TTG customers frequently visit manufacturing sites to work with TTG product and process engineers
in developing
new programs or to audit quality systems and production capabilities. Our sales staff works with our customers to identify and develop growth opportunities that will develop over three to five years
with our strategic customers.
Competition
TTG's largest competitors by sales are Precision Castparts Corp., Howmet Corporation, a wholly owned subsidiary of Alcoa Inc.,
and Doncasters Group Limited. TTG typically focuses on niche opportunities with its aerospace and IGT customers while its three largest competitors typically focus on the highest volume and highest
technology opportunities. TTG also has numerous smaller competitors. TTG can produce metallurgical structures ranging from equiax to fine grain to DS/SX and can manufacture small simple blades to
large complex cored IGT blades, large IGT multi-vanes and medium-size aero engine structural components. As a result, other than TTG's three largest competitors, to our knowledge, none of
the other superalloy investment casting suppliers have the range of technical, metallurgical and manufacturing capabilities offered by TTG combined with its manufacturing footprint in the United
States and Europe, including lower-cost sites in Mexico and Slovakia.
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Principal Properties
The following table lists our principal properties, the segment that uses each property and related information.
Location
Group
Type
Owned/Leased
Portland, OR, USA:
Headquarters
HQ
Executive Offices
Owned
Main Plant
EPG
Foundry/EPG HQ
Owned
Portland Plant 3
EPG
Foundry
Owned
Newton, MS, USA
EPG
Foundry
Owned
Covington, KY, USA
EPG
Fabrication
Owned
Phoenix, AZ, USA
EPG
Fabrication
Leased
Bucyrus, OH, USA
EPG
Blade production
Owned
Nisku, Alberta, Canada
EPG
Foundry
Owned
Port Hope, Ontario, Canada
EPG
Foundry
Owned
Port Coquitlam, BC, Canada
EPG
Foundry
Owned
Edmonton, Alberta, Canada
EPG
Casting overlays
Owned
Steinbach, Manitoba, Canada
EPG
Blade production
Leased
Altacomulco, Mexico
EPG
Blade production
Owned
Guisborough, England, UK
EPG
Foundry
Owned
Brisbane, Queensland, Australia
EPG
Asia Pacific HQ
Leased
Kingaroy, Queensland, Australia
EPG
Fabrication
Leased
Mackay, Queensland, Australia
EPG
Fabrication
Leased
Northgate, Queensland, Australia
EPG
Foundry
Leased
Dunedin, New Zealand
EPG
Foundry
Leased
Taiyuan, Peoples' Republic of China
EPG
Foundry
Leased
Xuzhou, Peoples' Republic of China
EPG
Foundry
Land — Leased
Building — Owned
Frameries, Belgium
EPG
Distribution/Europe HQ
Owned
Betim, Minas Gerais, Brazil
EPG
Fabrication/Latin America HQ
Owned
Chittenango, NY, USA
TTG
Foundry/TTG HQ
Owned
Eastlake, OH, USA
TTG
Foundry
Leased
Guaymas, Mexico
TTG
Foundry
Leased
Herstal, Belgium
TTG
Foundry
Owned
Povaszska Bystrica, Slovak Republic
TTG
Foundry
Owned
Research and Development
A core team of our product engineers works to improve the value of our products to customers, focusing on features such as ease of
use, installation and removal, safety, reliability, productivity and increased wear life in field applications. Often, these engineers work directly with customers and end-users in the
field to gain a first-hand understanding of wear and productivity improvement opportunities. Before field testing any new designs, our engineers analyze product prototypes using
computer-aided design technology and rapid prototype systems for design, pre-manufacture and field testing processes. Much of this work is not reflected in research and development in our
financial statements, which includes only new product development and applied research expenses. Our research and development costs in 2010 were $5.9 million. Not included in that amount are
product optimization expenses, annual new pattern spending, manufacturing development and trial lot expenses, which are allocated to the cost of goods sold and selling and administrative expenses.
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Intellectual Property
We often seek U.S. and foreign patent protection on innovations in our EPG business. As of April 11, 2011, we held 45 U.S.
patents, with an average remaining life of approximately 11 years, and 18 U.S. patent applications. Worldwide, including the United States, we held 528 patents and had 533 patent applications,
which includes foreign counterparts to our U.S. patents and patent applications, as of the same date. We have federal registrations for many of our trademarks in the United States and other foreign
jurisdictions.
We
also have entered into exclusive licensing arrangements in certain jurisdictions pursuant to which licensees may use our intellectual property in the manufacture and sale of products
in those jurisdictions. We receive royalties for licensees' use of our intellectual property, but they are not otherwise permitted to exploit our intellectual property during the terms of the license
agreements. See "Business — Our Segments — Engineered Products Group — Sales and Distribution".
Employees
As of December 31, 2010, we had 4,679 employees, consisting of 3,633 employees in EPG and corporate and 1,046 employees in TTG.
As of December 31, 2010, unions or workers counsels represented 116 employees in Belgium, 349 employees in Brazil, 292 employees in Canada and 311 employees in China. In addition, we estimate
unions represented 50 employees in Australia and New Zealand as of December 31, 2010.
Backlog
Backlog in EPG is composed of bookings derived from orders received from our customers. Most EPG orders are not cancellable, and when
we allow cancellations we typically charge a restocking fee. We believe EPG backlog is useful to project sales for two to four months, but does not provide a reliable long-term forecast of
sales. In addition, EPG backlog can be affected by changes to customer lead-times and our ability to meet production demands, which can limit the usefulness of backlog as a projection of
sales even in the short term. EPG backlog at March 31, 2011 reflects longer lead-times resulting from increased mining activity and approximately $40.0 million contributed by
Swift and Austcast in Australia, which we acquired in 2010.
Backlog
in TTG is composed of orders received under long-term agreements or purchase orders. TTG orders are cancellable with the customer typically obligated to pay for any
costs incurred by us on the associated orders.
The
backlog of unfilled orders believed to be firm at March 31, 2011, compared to the prior year, is listed below.
(dollars in thousands)
March 31, 2010
March 31, 2011
Total
$
218,747
$
350,506
EPG
123,211
253,232
Mining
67,694
163,090
Infrastructure development
41,982
68,951
Industrial
13,535
21,191
TTG
95,536
97,274
Raw Materials and Suppliers
We purchase plate and scrap steel, alloys such as nickel, cobalt, molybdenum, tantalum and titanium and other materials from numerous
suppliers with no single source being dominant. Each of our EPG and TTG businesses secures raw materials through its own purchasing function, where
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the
quality, availability, pricing and service from potential vendors is assessed. We generally seek to pass raw material cost increases to our customers through EPG product price increases and
through surcharges or escalator provisions in our long-term agreements with TTG customers. Historically, there is a delay of several months between raw material cost increases and our
realization of price increases.
Government Regulation
Some of our products are manufactured and sold under U.S. government contracts or subcontracts. Consequently, we are directly and
indirectly subject to various U.S. federal rules, regulations and orders applicable to government contractors. Violation of applicable government rules and regulations could result in civil liability,
cancellation or suspension of existing contracts or ineligibility for future contracts or subcontracts funded in whole or in part with federal funds.
Internationally,
we are subject to U.S. government laws and regulations, local government laws and regulations, and procurement policies and practices (including laws and regulations
relating to bribery of foreign government officials, import-export control, investments, exchange controls and repatriation of earnings) and varying currency, political and economic risks.
Environmental Matters
We are subject to federal, state, local, provincial, regional and foreign environmental laws and regulations concerning, among other
things, ground water discharges, air emissions, waste management, toxic use reduction and environmental clean-up.
Environmental laws and regulations continue to evolve. As a result, it is likely we will be subject to increasingly stringent environmental standards in the future, particularly with respect to air
and water quality, and we may be required to make additional expenditures, which could be significant, relating to environmental matters on an ongoing basis. If we violate or fail to comply with these
laws and regulations, we could be fined or otherwise sanctioned by regulators. These environmental laws also require us to obtain permits for some of our operations from governmental authorities.
These authorities can deny, modify or revoke our permits and can enforce compliance through fines and injunctions.
We
could also be held liable for any consequences arising out of human exposure to hazardous materials or other environmental damage. We own, lease and operate properties, and have
owned, leased and operated properties, or conduct or have conducted operations at properties, where hazardous materials have been used for many years, including during periods before management
standards for these materials were required or generally believed to be necessary. Consequently, we are subject to environmental laws that impose liability for historical releases of hazardous
materials.
See
"Legal Proceedings — Portland Harbor Superfund Site" below and "Risk Factors — We are subject to environmental laws, and any violation of,
litigation relating to or liabilities under these laws could adversely affect us" above for a discussion of our potential liability with respect to the Portland Harbor Superfund site and "Risk
Factors — Regulatory effects of climate change could adversely affect our business" for more details.
In
2010, we committed to remove an accumulation of solid waste at our Port Hope, Ontario plant. We estimate the removal will cost $2.6 million and we plan to perform this removal
within five years.
Our
financial statements include reserves for estimated costs for resolving claims that have been asserted with respect to environmental issues relating to our properties and
operations. At December 31, 2010, we had accrued aggregate environmental reserves of approximately
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$3.1 million.
Our actual future expenditures, however, relating to compliance matters and clean-up of environmental conditions cannot be conclusively determined.
Legal Proceedings
We are subject to claims and litigation arising in the ordinary course of business, including those relating to exposure to hazardous
materials, and regularly assert our patent rights against parties that may be infringing those rights. Although we cannot predict the final outcome of pending legal proceedings with certainty, we do
not expect the ultimate disposition of these matters will have a material adverse effect on our financial position, results of operations or cash flows.
Bradken Resources Pty Ltd.
In March 2008, we began an arbitration proceeding against our Australian licensee, Bradken Resources Pty Ltd. In the
arbitration, we sought a declaration of our rights and obligations under our 1999 agreement, as amended, with Bradken, under which we granted Bradken the exclusive right to distribute and manufacture
some of our products in Australia, New Zealand and Papua New Guinea. In the arbitration, we sought to resolve disputes regarding (i) whether Bradken was obliged to use our trademarks in
connection with the manufacture and sale of our products, (ii) whether Bradken could use customer field trials to promote its competing products, (iii) whether the agreement's
prohibition on Bradken selling products similar to or in competition with our products was enforceable and (iv) whether the agreement's prohibition on Bradken from using our
know-how, product designs and special alloys for a three-year period following termination of our agreement with Bradken was enforceable. In addition, we sought termination of
the agreement prior to its scheduled expiration on June 30, 2011.
Bradken
filed counterclaims against us alleging, among other things, that we (i) violated U.S. antitrust laws, (ii) breached the agreement with Bradken and
(iii) misused certain patent rights, and seeking a large damage award.
On
June 17, 2010, an International Chamber of Commerce arbitrator issued a final award in our favor on all issues presented to the arbitrator with the exception of our request
that the agreement be terminated before June 30, 2011. Bradken was awarded nothing. The arbitrator affirmed our contract positions, including that Bradken must continue to apply our trademarks
as we direct during the term of the license, Bradken cannot sell parts that compete with our licensed products anywhere in the world during the term of the license, and Bradken cannot use our
know-how or alloys nor make any of our patented or non-patented products for a period of three years after the end of the license. Finally, the arbitrator awarded us our share
of the ICC administrative expenses and arbitrator's remuneration and substantially all of our legal expenses. In the proceeding we began in United States District Court to confirm the final
award and secure a judgment so that we may collect the amount awarded to us, Bradken has challenged the award of legal expenses.
Portland Harbor Superfund Site
We received a questionnaire dated March 12, 2010 from the EPA regarding historical operational practices in connection with the
Portland Harbor Superfund site. The EPA also named us as one of more than 100 businesses to date that are potentially responsible parties for this site. Consequently, we may be responsible for
clean-up or other costs related to the site under the Comprehensive Environmental Response, Compensation, and Liability Act, also known as CERCLA or the Superfund law. The current
aggregate clean-up costs to be allocated among responsible parties is estimated to be approximately $1.0 billion. We have entered into a participation agreement with a group of
named potentially responsible parties and other companies under which
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we
admit to no liability. The agreement provides a framework to determine how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party
to pay its portion of assessed costs may result in increased costs to other parties. We are also participating in a process with other potentially responsible parties to quantify and potentially
allocate natural resource damages claims with respect to the site. We cannot predict our ultimate liability with respect to the Portland Harbor Superfund Site at this time, but it could be substantial
if the EPA determines that we are a responsible party for this site.
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MANAGEMENT
Directors and Executive Officers
The following table is a list of our executive officers, key employees and directors (ages are as of March 31, 2011).
Name
Age
Position
Steven D. Pratt
64
Chief Executive Officer and Chairman of the Board of Directors
Calvin W. Collins
52
President and Chief Operating Officer
Ray Verlinich
55
Vice President — Finance and Chief Financial Officer
Gene K. Huey
62
Vice President and Treasurer
Nicholas L. Blauwiekel
55
Vice President of Human Resources
Kevin S. Thomas
37
Vice President, General Counsel and Corporate Secretary
François Baril
45
President, Turbine Technologies Group
F. Patrick Fonner
61
Group Vice President, Engineered Products Group
Peter F. Adams
67
Director
Frank Alvarez
65
Director
Stephen E. Babson
60
Director
Peter F. Bechen
63
Director
Frank Jungers
84
Director
Henry T. Swigert
80
Director
Robert C. Warren, Jr.
62
Director
John W. Wood, Jr.
67
Director
Steven D. Pratt
is our Chief Executive Officer and Chairman of the ESCO board of directors. Mr. Pratt has been employed with us
for his entire career, beginning in 1972. His 39 years of service includes plant management roles, President of the Engineered Products Group, and Executive Vice President and Chief Operating
Officer. He became President and Chief Executive Officer in 1995 and Chairman of the board of directors in 2003, and has been a member of our board of directors since 1993. Mr. Pratt is a
director of Stimson Lumber Company, Inc., where he serves as chairman of the compensation committee and as a member of the nominating and governance committee and the executive committee. Our
board of directors believes Mr. Pratt's long history with the company, extensive experience in our industry and business knowledge enable him to provide meaningful input and guidance to the
board.
Calvin W. Collins
is our President and Chief Operating Officer and he continues to serve as President of our Engineered Products Group, a
position he has held since September 2009. Mr. Collins joined us in November 2000 as Assistant General Counsel. In October 2001, he became Vice President, General Counsel and Corporate
Secretary. In 2003, he became Vice President of Administration with responsibilities for human resources, tax and risk management. In his role as Vice President of Administration, General Counsel and
Corporate Secretary, he was involved in our significant financing, acquisition and divestiture transactions and our corporate strategy. Mr. Collins was named Group Vice
President — Engineered Products, North American Operations in April 2007 and in September 2009 he was named President — Engineered Products. In January 2011, he
was named the Company's President and Chief Operating Officer. Before joining us, Mr. Collins was an attorney in private practice focusing on general business and corporate matters.
Ray Verlinich
was appointed Vice President — Finance and Chief Financial Officer in April 2011. Mr. Verlinich
joined us in February 1996, beginning as Finance Director and Finance Project Manager for our global Oracle ERP implementation. He became Corporate Controller in July 1997, Assistant Treasurer in May
2010 and Vice President, Finance in February 2011. In those roles, he had responsibility for global tax and treasury management. Before joining us Mr. Verlinich served in
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various
financial management positions, including expatriate assignments at PPG Industries Inc, a coatings and specialty products supplier.
Gene K. Huey
began his career with us in 1970 and held a series of positions that included responsibilities for financial accounting,
taxes, administration services, information systems, treasury, and financial analysis and planning. Mr. Huey has been involved in our strategic planning and our significant financing,
acquisition and divestiture transactions. He served as Chief Financial Officer from 1984 until his resignation from that position in April 2011 and now serves as our Vice President and Treasurer.
Mr. Huey expects to retire in December 2011.
Nicholas L. Blauwiekel
was appointed Vice President of Human Resources in June 2005. Mr. Blauwiekel has over 30 years of
human resources experience. Prior to joining us, Mr. Blauwiekel worked for Ingersoll Rand as the vice president of human resources for the infrastructure sector and for Teledyne Technologies
Incorporated and Shiloh Industries, Inc. as a senior human resources executive. He also worked for Cooper Industries, Inc. in a senior human resources role.
Kevin S. Thomas
joined us in February 2003 as corporate counsel. In April 2007, he was named General Counsel and Corporate Secretary. In
May 2009, he also became a Vice President. Mr. Thomas oversees our legal affairs, as well as fulfilling additional responsibilities and obligations as assigned by our board of directors. Before
joining us, Mr. Thomas was in private practice focusing on mergers, acquisitions and public and private securities offerings.
François Baril
joined us in February 1997, beginning as District Manager for our Industrial Casting Division. He also
served as Business Unit Leader for the Industrial Casting Division, Site Manager for ESCO Ltd. in Port Hope, Ontario, and Managing Director for ESCO Engineered Products Europe. In October 2005,
Mr. Baril was named Vice President of ESCO Turbine Technologies Group and in January 2007, he was promoted to President of the Group.
F. Patrick Fonner
joined us in June 1976 and held sales positions throughout the United States in the early years of his tenure.
Mr. Fonner has served as General Manager for a variety of our products and markets, including expendables, attachments, sales, marketing and product development. Mr. Fonner also served
as General Manager of our construction business unit from
June 2000 through December 2004. He became Group Vice President, Engineered Product Group in January 2005.
Peter F. Adams
became a director in 1983. Mr. Adams is the president and an owner of Farmington Landfill Inc., a quarry
reclamation and construction materials recycling company. As a private investor, Mr. Adams is an owner of companies in a variety of fields, including wine-grape growing and vineyard
management, wine production and marketing, and emergency vehicle manufacturing. Mr. Adams is also a director of several private companies. Our board of directors believes Mr. Adams'
experience as a director and executive of diverse corporations enables him to provide meaningful input and guidance to the board and our management. Upon Henry T. Swigert's death or resignation as
trustee, Mr. Adams and Robert C. Warren, Jr. will become co-trustees of the Swigert 2000 Trust.
Frank Alvarez
became a director in 2001. Mr. Alvarez joined Intel Corporation in 1979 and served as Vice President of the
Technology and Manufacturing Group until his retirement in 2000. Our board of directors believes Mr. Alvarez's experience in the semiconductor manufacturing industry provides valuable expertise
to the board and his extensive experience in a capital-intensive global industry enables him to make important contributions to our growth strategy.
Stephen E. Babson
became a director in 2003 and is chairman of the nominating and governance committee of the board of directors.
Mr. Babson is a managing director of Endeavour Capital, a private equity firm in the Pacific Northwest. Before joining Endeavour Capital, Mr. Babson was a partner focusing on mergers,
acquisitions and public and private securities offerings and the chairman of Stoel Rives LLP. He also serves on the boards of Columbia Sportswear Company, New
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Seasons
Market LLC, Bristol Farms LLC, Northland Transportation Company, Tidewater Holdings, Inc., Columbus Foods, LLC, Little Red Services Inc. and National Frozen
Foods Corporation. Our board of directors believes that Mr. Babson's experience in mergers and acquisitions and with private equity matters and his role as an investment professional provide
important insight for our growth strategy. His significant financial expertise and experience contribute to our board of directors' understanding and ability to analyze complex issues.
Peter F. Bechen
became a director in 2000 and is chairman of the audit committee of the board of directors. Mr. Bechen has served
as the president and chief executive officer of Pacific Realty Associates since 1983 and was president of its predecessor from 1975 until 1983. Mr. Bechen has served as a director of Capmark
Financial Group Inc. since March 2006 and is a member of the Industrial and Office Park Development Council of the Urban Land Institute. Our board of directors believes Mr. Bechen's
experience as a chief executive officer enables him to provide meaningful advice and guidance to management and the board.
Frank Jungers
became a director in 1984 and is chairman of the compensation committee of the board of directors. Mr. Jungers
retired as Chief Executive Officer and Chairman of Arabian American Oil Company (ARAMCO) in 1978. Mr. Jungers has been an independent investor, consultant and director since that time.
Mr. Jungers serves on the board of directors for Vero Corporation and Pacific Star Communications and served as a director of Horizon Lines, Inc. until 2008. He is also a trustee of the
board of trustees of Oregon Health and Science University Foundation. Our board of directors believes that Mr. Jungers' extensive executive experience in a large international company positions
him to advise management and the board on a wide range of strategic and financial matters. Mr. Jungers' knowledge of our business and its operations, gained through serving on our board of
directors for more than 25 years, enables him to provide valuable guidance to management and the board.
Henry T. Swigert
became a director in 1958. He began working at ESCO in 1955 as a molder's helper and later moved on to be a sales
representative before being promoted to Vice President of Finance. Mr. Swigert served as Chairman of the board from 1979 until 2003 when he retired. Mr. Swigert has been a member of our
board of directors for over 50 years and is familiar with our business and strategy. Mr. Swigert is the uncle of Robert C. Warren, Jr., a director. Our board of directors believes that
Mr. Swigert's extensive experience and knowledge of our business allow him to provide valuable guidance to the board.
Robert C. Warren, Jr.
became a director in 1986. Mr. Warren is the president and chief executive officer of Cascade Corporation, a
manufacturer of material handling equipment for lift trucks, where he has worked for more than 35 years. Prior to that, Mr. Warren was Vice President-Marketing at Cascade Corporation.
Mr. Warren is also a member of the board of directors of Cascade Corporation. Mr. Warren is the nephew of Henry T. Swigert, a director. Our board of directors believes that
Mr. Warren's experience as the chief executive officer of a publicly traded corporation enables him to provide meaningful input and guidance to the board. Upon Henry T. Swigert's death or
resignation as trustee, Peter F. Adams and Mr. Warren will become co-trustees of the Swigert 2000 Trust.
John W. Wood, Jr.
became a director in 2001. Mr. Wood was formerly the president and chief executive officer of Analogic
Corporation, a maker of medical imaging and airport security products, from 2003 to 2006. Prior to joining Analogic Corporation, Mr. Wood held senior executive positions over a
22-year career at Thermo Electron Corporation. Mr. Wood served as president of Peek Ltd., a division of Thermo Electron Corporation, and as a senior vice president of the
parent company. He previously served as president and chief executive officer of Thermedics, a subsidiary of Thermo Electron Corporation. Mr. Wood is a member of the board of directors of
American Semiconductor Corporation, a provider of electric power infrastructure, and FLIR Systems, Inc., a provider of thermal imaging equipment. Our board of directors believes that
Mr. Wood's experience as a
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director
and executive of large, diverse corporations enables him to provide meaningful input and guidance to the board and our management.
Composition of the Board of Directors
Our board of directors consists of nine members. After completion of the offering made by this prospectus, our articles of
incorporation will provide that directors will be elected by the Class A Common Stock, Legacy Class A Common Stock and Class B Common Stock, voting together as a single class. Our
board of directors has determined, after taking into consideration each director's direct and indirect relationships,
that                          of our directors will qualify as "independent" under NASDAQ
rules and regulations. Our bylaws permit our board of directors to establish by resolution the authorized number of directors; and 10 directors are authorized.
After
completion of the offering made by this prospectus, our articles of incorporation will provide that our board of directors is divided into three classes with staggered
three-year terms. Only one class of directors will be elected at each annual meeting of shareholders, with the other classes continuing for the remainder of their three-year
terms. Our directors will be divided among the three classes as follows:
•
the Class 1 directors will be                          ,
                          ,
and                          , and their terms will expire at
the annual meeting of shareholders in 2012;
•
the Class 2 directors will
be                          ,
                          ,
and                          , and their terms will expire at
the annual meeting of shareholders in 2013; and
•
the Class 3 directors will
be                          ,
                          ,
and                          , and their terms will expire at
the annual meeting of shareholders in 2014.
Any
additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that each class will be as nearly equal in number of
directors as possible.
Committees of the Board of Directors
Our board of directors has an audit committee, a compensation committee and a nominating and governance committee, each of which has
the composition and responsibilities described below.
Audit Committee
Our audit committee is composed of Messrs. Bechen, Adams, Babson and Swigert. Our board of directors has determined that each
of Messrs. Bechen, Adams and Babson is an "independent" director according to the rules and regulations of the SEC and of NASDAQ. Our board of directors has also determined that each of these
directors is financially literate as required by the rules and regulations of NASDAQ and that Mr. Bechen is an audit committee "financial expert" as defined by SEC rules. Mr. Bechen is
the chairman of our audit committee. The audit committee operates under a written charter that satisfies the applicable SEC and NASDAQ standards.
The
audit committee is responsible for, among other things:
•
selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed
by our independent auditors;
•
evaluating the qualifications, performance and independence of our independent auditors;
•
monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they
relate to financial statements or accounting matters; and
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•
reviewing the adequacy and effectiveness of our internal control policies and procedures.
Compensation Committee
Our compensation committee is composed of Messrs. Jungers, Alvarez, Warren and Wood. Our board of directors has determined that
each of these directors is an "independent" director according to the rules and regulations of NASDAQ, a "non-employee director" as defined under the Securities Exchange Act of 1934, and
an "outside director" as defined in Internal Revenue Code regulations. Mr. Jungers is the chairman of our compensation committee. The compensation committee is responsible for, among other
things:
•
reviewing and recommending our chief executive officer's annual base salary and annual incentive bonus, including the
specific goals and amount, equity compensation, employment agreements, severance arrangements and change in control agreements/provisions, and any other benefits, compensation or arrangements;
•
reviewing and approving our other executive officers' annual base salaries and annual incentive bonuses, including the
specific goals and amount, equity compensation, employment agreements, severance arrangements and change in control agreements/provisions, and any other benefits, compensation or arrangements;
•
evaluating and recommending to the board incentive compensation plans; and
•
administering, reviewing and making recommendations with respect to our incentive compensation plans.
Nominating and Governance Committee
Our nominating and governance committee is composed of Messrs. Babson, Bechen and Wood. Our board of directors has determined
that each of these directors is an "independent" director according to the rules and regulations of the SEC and of NASDAQ. Mr. Babson is the chairman of our nominating and governance committee.
The nominating and governance committee is responsible for, among other things:
•
assisting the board in identifying prospective director nominees and recommending to the board director nominees for each
annual meeting of shareholders;
•
developing and recommending to the board governance principles applicable to us;
•
overseeing the evaluation of the board of directors and management;
•
recommending members for each board committee; and
•
reviewing and making recommendations with respect to related-person transactions.
Compensation Committee Interlocks and Insider Participation
None of the members of our compensation committee are, or have been at any time during the past year, our officers or employees. None
of our executive officers serve, or in the past year have served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our
board of directors or compensation committee.
Code of Business Conduct
We have adopted a code of business conduct that applies to all of our employees, officers and directors, including those officers
responsible for financial reporting. The code of business conduct and ethics will be available on our website at
www.escocorp.com
after we complete this
offering. We plan to disclose any amendments to the code, or any waivers of its requirements, on
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our
website or in a filing with the SEC to the extent required by applicable SEC or NASDAQ standards.
Director Compensation
Non-employee directors receive the following fees in cash: (i) an annual retainer of $30,000 for board service;
(ii) $1,500 for each board meeting attended; (iii) $1,000 for each committee meeting attended, except that the attendance fees for the chairs of the audit, compensation and nominating
and governance committees are $2,000 per meeting; and (iv) a $7,500 annual fee for service as chair of the audit committee and a $5,000 annual fee for service as chair of the compensation
committee and of the nominating and governance committee. In addition, each non-employee director who was a director on May 8, 2010 received stock appreciation rights for 311 shares
of Legacy Class A Common Stock. For 2011, we expect directors will receive stock grants instead of stock appreciation rights.
The
information in the following table reflects compensation we paid to non-employee directors for 2010:
Name
Fees Earned or
Paid in Cash
Option Awards(1)
Total
Peter F. Adams
$
40,000
$
61,003
$
101,003
Frank Alvarez
37,000
61,003
98,003
Stephen E. Babson
48,500
61,003
109,503
Peter F. Bechen
56,500
61,003
117,503
Frank Jungers
45,000
61,003
106,003
Henry T. Swigert
39,000
61,003
100,003
Robert C. Warren, Jr.
37,000
61,003
98,003
John W. Wood, Jr.
38,500
61,003
99,503
(1)
Amounts
represent the grant date fair value of stock appreciation rights based on a value of $196.15 per share for stock appreciation rights granted on
May 8, 2010 calculated using the Black-Scholes option pricing method. Assumptions made in determining this grant date fair value are disclosed in footnote 3 to the Summary Stock Compensation
Table below, except that the risk-free interest rate was 3.57%. Each non-employee director received stock appreciation rights for 311 shares with a base value of $438.55 per
share, representing the fair market value of a share of Legacy Class A Common Stock on the grant date as determined by the board of directors. The stock appreciation rights vest in full on
May 8, 2013. The compensation committee approved amendments to the stock appreciation rights reflected in this table in March 2011 to provide for settlement in shares of Legacy Class A
Common Stock rather than cash to qualify the awards for equity accounting treatment. If the holders of the stock appreciation rights agree to the amendments, the amendments will be effective as of
March 25, 2011. At December 31, 2010, each non-employee director held outstanding stock appreciation rights with respect to 1,007 shares of Legacy Class A Common
Stock, including SARs granted in prior years at a weighted average base value of $238.97.
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COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
This Compensation Discussion and Analysis presents information about the compensation of our executive officers, including the Chief
Executive Officer, the Chief Financial Officer in 2010 and the three other most highly compensated executive officers who were serving as executive officers on December 31, 2010 as listed in
the Summary Compensation Table below (the "NEOs").
Objectives and Elements of Our Executive Compensation Program
Our executive compensation program is designed to:
•
provide incentives for our executive officers to achieve high levels of job performance and to enhance shareholder value;
and
•
attract and retain key executives who are important to our long-term success.
To
achieve these objectives, the compensation committee (the "Committee") selected the following elements to be included in the compensation program for our executive
officers:
•
base salary;
•
annual performance-based cash bonuses;
•
long-term incentives in the form of stock appreciation rights and performance units; and
•
retirement plans, the ESOP, deferred compensation plans and perquisites.
Our
executive compensation program implements our performance objective by rewarding executive officers for achieving annual performance targets and long-term performance
targets and for long-term increases in the value of our stock. The program implements our retention objective by offering base pay, incentives and benefits that are competitive with those
provided to executive officers of companies with which we compete for executive talent.
Executive Compensation Process
Pursuant to authority delegated by the board of directors, the Committee develops our executive compensation policies and programs and
determines the compensation of each of our executive officers. In 2010, the board of directors determined the compensation of our Chief Executive Officer based on the Committee's recommendation.
The
Committee directly retains the services of a compensation consulting firm. The Committee retained Towers Watson in this capacity from 2006 through 2010. The compensation consulting
firm provides information and data to the Committee from its surveys, proprietary databases and other sources, which the Committee uses along with information provided by management and obtained from
other sources. For 2010, Towers Watson provided the Committee with survey data from the Watson Wyatt 2009/2010 Top Management Survey, the 2009 Mercer Executive Survey and the Watson Wyatt 2009/2010
Report on Long Term Incentives, Policies and Practices, as well as data on executive compensation from proxy statements for the following peer companies: Agco Corporation, Alamo Group Inc.,
Astec Industries Inc., Barnes Group Inc., Bucyrus International Inc., Cascade Corporation, Joy Global Inc., Kennametal Inc., Ladish Co. Inc., LMI
Aerospace Inc., Northwest Pipe Company, Precision Castparts Corp., Sifco Industries Inc., Triumph Group, Inc. and Woodward Governor Company. The Committee used these companies
because they are publicly held and similar to us in terms of markets served or business model. The Committee reviews the survey data and publicly reported information and results for our peer
companies to assist in its determination of individual compensation plans for our NEOs where applicable. Towers Watson did
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not
make any recommendations to the Committee in 2010 regarding the form or amount of executive compensation. The Chief Executive Officer makes recommendations to the Committee regarding the
compensation of all executive officers other than himself and attended each Committee meeting in 2010 except for portions of meetings in which his compensation was discussed.
Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives
Total Direct Compensation.
For each executive officer, the Committee sets target total direct compensation consisting
of base salary and an annual
performance-based cash bonus. The Committee generally targets the total direct compensation to be at approximately the median of the total direct compensation for similarly situated executive officers
at the companies in the peer group and survey data, but it also takes into account the experience level and performance of each executive officer. In arriving at the median target, for those executive
officers for whom there are at least three comparable positions (including Messrs. Pratt, Huey, Collins and Fonner), the survey data is weighted at 75% and peer company data from proxy
statements is weighted at 25%, while for all other executives (including Mr. Huget) the survey data is weighted at 100%.
Base Salaries.
The Committee generally targets base salaries to be near the median for comparable positions at the peer and
survey companies. The
Committee establishes base salaries for executive officers at various times during the year so that an executive officer's change in base salary is effective approximately one year after the executive
officer's prior change in base salary.
The
Committee recommended the 2010 base salary for the Chief Executive Officer following its review of Mr. Pratt's performance, the compensation information from the peer
companies and the survey data. The board established a base salary for Mr. Pratt for 2010 that represented a 3.9% increase above his prior base salary and was near the median of the combined
survey group and peer company data. Mr. Pratt was awarded this raise for his effort and performance during a difficult recessionary year. For the other executive officers, the Committee
established, taking into account compensation information for the peer companies and survey data and Mr. Pratt's recommendations, base salaries for 2010 that were near the median of the survey
and peer group companies. Salary increases for the other NEOs for 2010 were: 3.6% for Mr. Huey, 3.2% for Mr. Fonner and 0% for Messrs. Huget and Collins. Messrs. Huey and
Fonner were awarded raises on the same basis as for Mr. Pratt. Messrs. Huget and Collins were subject to a salary freeze initiated in 2009 that remained in effect for them throughout
2010.
Performance-Based Cash Bonuses.
We use annual performance-based cash bonuses under our Annual Bonus Plan to motivate and
reward executive officers
for achieving corporate and operating unit annual performance targets (80% of the incentive) and individual objectives (20% of the incentive). The performance criteria applicable to each executive
differ based on the portion of our
operations for which the executive is responsible. Target bonus levels as a percentage of base salary are determined based on the executive's position. For there to be any payout under the Annual
Bonus Plan, performance under at least one financial measure must be at the threshold level or above, and bonuses are subject to a maximum amount.
The
target Annual Bonus Plan payouts for 2010 as a percentage of salary were 85% for Mr. Pratt, 60% for Mr. Huget, 55% for Messrs. Huey and Collins and 50% for
Mr. Fonner. All bonus targets were set at approximately the median for comparable positions in the peer and survey companies. The financial objectives for Messrs. Pratt, Huget and Huey
were based on Company EBIT and Company Net Working Capital Turnover, each as defined in the table below, and for Messrs. Collins and Fonner were based on EPG EBIT and EPG Net Working Capital
Turnover, each as defined in the table below.
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The
following table indicates the performance level for each financial metric required to achieve payouts at the threshold, target and maximum levels.
Performance Criteria
Weighting (% of target
bonus subject to
each criteria)(3)
Performance for 70%
Threshold Bonus
Payout
Performance for 100%
Target Bonus
Payout
Performance for 200%
Maximum Bonus
Payout
Company EBIT(1)
70-75%
$
73,700,000
$
81,300,000
$
92,000,000
Company Net Working Capital Turnover(2)
25-30%
4.1
4.3
4.6
EPG EBIT(1)
70%
$
79,100,000
$
85,300,000
$
94,000,000
EPG Net Working Capital Turnover(2)
30%
3.9
4.1
4.4
(1)
We
define Company EBIT as operating profit as reflected in our audited financial statements or the related notes, subject to adjustments approved by the
Committee. We define EPG EBIT as EPG operating profit, subject to adjustments approved by the Committee.
(2)
"Company
Net Working Capital Turnover" and "EPG Net Working Capital Turnover" are calculated for each quarter during the year as of the end of the quarter
based on our financial statements, subject to certain adjustments, as follows: total net sales for the quarter divided by (trade receivables at the end of the quarter plus inventory on the basis of
FIFO at the end of the quarter minus trade payables at the end of the quarter). The average of these quarterly amounts is the net working capital turnover for the year.
(3)
For
Mr. Pratt and Mr. Huey, the Company EBIT measure was weighted at 75% and the Company Net Working Capital Turnover measure was weighted at
25%. For Mr. Huget, the Company EBIT measure was weighted at 70% and the Company Net Working Capital Turnover measure was weighted at 30%. For Mr. Collins and Mr. Fonner, the EPG
EBIT measure was weighted at 70% and the EPG Net Working Capital Turnover measure was weighted at 30%.
In 2010 we achieved Company EBIT of $94.8 million, Company Net Working Capital Turnover of 4.1%, EPG EBIT of $109 million and EPG
Net Working Capital Turnover of 3.9%, in each case with adjustments made by the Committee. Company EBIT reflects adjustments to operating profit to eliminate the effects of non-cash
compensation expenses relating to the ESOP, transaction costs and operating profits relating to the Swift Engineering and Austcast acquisitions and the environmental reserve accrued in 2010. EPG EBIT
reflects similar adjustments to operating profit except that no adjustment was made for the environmental reserve. This performance resulted in Annual Cash Bonuses relating to financial performance
for 2010 equal to 169% of target bonuses for Messrs. Pratt and Huey and 162% of target bonuses for Messrs. Huget, Collins and Fonner.
For
each NEO, 20% of the target Annual Cash Bonus was based on individual performance objectives. The possible payout percentage for achieving individual goals ranged from 0 to 100%.
However, if both financial measures are satisfied at the target level or above and the individual goals are achieved at the 100% level, a multiplier is applied to the payout for achieving the
individual goals. In that event, the target amount for achieving individual goals is multiplied by the payout percentage for achieving the EBIT goal.
For
each NEO, the Committee approved three individual objectives supportive of key corporate strategies and assigned a weight to each objective. For each individual objective, the
Committee approved more specific objectives and measures. The specific individual objectives and measures were based on objective criteria, subjective criteria or a combination of objective and
subjective criteria.
The
individual objectives for Mr. Pratt were to (i) grow sales and market share (weighted at 40%), with specific objectives and measures to increase sales of
non-licensed products and sales of acquired products, open or acquire new ESCO supply and service locations and capture new tool orders for TTG; (ii) drive operational performance
(weighted at 30%), with specific objectives and measures to reduce manufacturing costs as a percent of casting sales for TTG, reduce TTG scrap and reduce EPG unfavorable manufacturing variance; and
(iii) build personnel depth in
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positions
critical to strategy (weighted at 30%), with specific objectives and measures relating to management succession planning.
The
individual objectives for Mr. Huget were to (i) grow sales and market share (weighted at 35%), with specific objectives and measures to increase the capabilities of
the TTG sales team, secure new TTG tool orders, satisfy EPG customer demand in Australia and increase capability to open and run ESCO supply and service locations globally; (ii) drive
operational performance (weighted at 35%), with specific objectives and measures to reduce key controllable TTG manufacturing costs, reduce TTG scrap, deploy the QVS Process Management System across
identified TTG manufacturing areas and reduce unfavorable EPG manufacturing variance; and (iii) build organizational capability (weighted at 30%), with specific objectives and measures to
identify personnel positions critical to strategy and management succession planning.
The
individual objectives for Mr. Huey were to (i) support focused growth (weighted at 40%), with specific objectives and measures relating to assessment of capital
structure and risk tolerance and preparation for access to debt and equity capital markets, as appropriate; (ii) support an Australia growth strategy (weighted at 30%), with specific objectives
and measures relating to acquisitions, integration of corporate financial and accounting systems and the development of an Australia growth plan model and its integration into the corporate strategic
plan; and (iii) provide investment analysis for strategic plans (weighted at 30%), with specific objectives and measures relating to our ESCO supply and service strategy and reduction of
manufacturing cost variance.
The
individual objectives for Messrs. Collins and Fonner were to (i) grow sales and market share (weighted at 40%), with specific objectives and measures to open and run
ESCO supply and service locations globally and improve the EPG proprietary product portfolio; (ii) drive operational performance (weighted at 30%), with specific objectives and measures
relating to various aspects of EPG's business; and (iii) ensure that EPG has the people to execute on business objectives and strategies (weighted at 30%), with specific objectives and measures
relating to succession planning and people development.
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The
following table indicates the extent to which the financial and individual measures described above were achieved and the amounts received by the NEOs under the Annual Bonus Plan
for 2010.
Name
Measure
Target Payout
Payout %
Payout Amount
Steven D. Pratt
Financial
$
460,360
169
%
$
776,282
Individual
$
115,090
75
%
$
85,742
Total
$
575,450
150
%
$
862,024
Larry Huget
Financial
$
186,833
162
%
$
303,323
Individual
$
46,708
91
%
$
42,575
Total
$
233,541
148
%
$
345,898
Gene K. Huey
Financial
$
163,959
169
%
$
276,475
Individual
$
40,990
90
%
$
36,686
Total
$
204,949
153
%
$
313,161
Calvin W. Collins
Financial
$
127,600
162
%
$
207,159
Individual
$
31,900
100
%
$
31,900
Total
$
159,500
150
%
$
239,059
F. Patrick Fonner
Financial
$
110,881
162
%
$
180,016
Individual
$
27,720
100
%
$
27,720
Total
$
138,601
150
%
$
207,736
Long-Term Incentive Compensation.
Our long-term incentive compensation for executive officers consists of two
components:
stock appreciation rights and performance units. Annual long-term award values are split equally between the two components. Target total long-term compensation amounts, as a
percentage of base salary, were determined by the Committee for each executive officer based on a review of the prior year grant levels; market-based long-term incentive plan grant levels,
as assessed by Towers Watson; the relative scope of the business responsibilities and the individual performance and experience of each executive officer; and, in the case of executive officers other
than the Chief Executive Officer, the recommendations by the Chief Executive Officer. Our target levels, as a percentage of base salary, were established in 2006 and have not changed substantially in
subsequent years. In 2011 the Committee will review the target levels, as a percentage of base salary, and determine if adjustments are appropriate. Target total long-term compensation
amounts, as a percentage of base salary, for the NEOs for 2010 were: 175% for Mr. Pratt, 150% for Mr. Huget, 140% for Mr. Huey and 120% for Messrs. Collins and Fonner. Half
of the target total long-term compensation was established as the cash amount to be paid at target performance under the performance units. The other half was awarded in stock appreciation
rights.
Stock Appreciation Rights.
The Committee believes stock appreciation rights strongly and directly align the interests of
our executive officers with
those of our shareholders because stock appreciation rights only have realizable value if the value of our stock increases after the stock appreciation rights are granted, and the Committee believes
stock appreciation rights are an effective mechanism for optimizing executive officers' long-term performance incentives given the cyclical nature of our industry. All stock appreciation
rights vest in full three years after grant, contingent upon continued employment, with vesting subject to acceleration in the limited circumstances described below under "Potential Payments upon
Change in Control". The board of directors has historically determined the base value of all stock appreciation rights granted to
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executive
officers on the date of grant. For stock appreciation rights granted after the offering made pursuant to this prospectus, the base value will be the closing market price of our
Class A Common Stock on the date of grant. See "Grants of Plan-Based Awards in 2010" below for information regarding SARs granted to each NEO in 2010.
Performance Units.
Our performance units are designed to focus executive officers on the achievement of long-term objective
performance
goals established by the Committee and vest only to the extent those performance goals are met. The Committee makes annual awards of performance units covering three-year performance
periods.
For
the awards granted in 2010, the Committee established performance targets based on cash flow and sales growth over 2010, 2011 and 2012. The following table indicates the performance
level for each criterion required to achieve payouts at the end of the three-year period at the threshold, target and maximum levels.
Performance Criteria
Weighting (% of target
bonus subject to
each criteria)
Performance for 60%
Threshold Bonus
Payout
Performance for 100%
Target Bonus
Payout
Performance for 300%
Maximum Bonus
Payout
Cash Flow(1)
40
%
$
216,210,000
$
254,670,000
$
321,960,000
Net Sales Growth(2)
60
%
$
130,700,000
$
193,810,000
$
290,720,000
(1)
Cash
flow for the performance period is equal to the sum of our operating profit for each year in the performance period less the change in net working
capital over the performance period. Net working capital is trade accounts receivables plus inventories minus accounts payables.
(2)
Net
Sales growth for the performance period is equal to the net sales for the year ending December 31, 2012 minus net sales for the year ended
December 31, 2009.
See "Grants of Plan-Based Awards in 2010" below for information regarding performance units granted to each NEO in 2010.
For
2011, the Committee granted performance units based on a target number of shares of Legacy Class A Common Stock rather than a target dollar amount.
The
three-year performance period for the performance units granted in 2008 ended on December 31, 2010. These awards used cash flow (weighted at 40%) and net sales
growth (weighted at 60%) as performance measures. The aggregate cash flow performance goals were approximately $324 million for a 60% (threshold) payout, $336 million for a 100% (target)
payout and $360 million for a 300% (maximum) payout. The aggregate net sales growth performance goals were approximately $150 million for a 60% (threshold) payout, $213 million
for a 100% (target) payout and $413 million for a 300% (maximum) payout. Our aggregate cash flow for 2008, 2009 and 2010 was approximately $261 million, resulting in no payout under the
cash flow performance measure, and our aggregate net sales growth for 2008, 2009 and 2010 was approximately $61 million, resulting in no payout under the net sales growth performance measure.
Retirement Plans, ESOP, Deferred Compensation and Perquisites
Our standard benefit package for executive officers includes ERISA-qualified retirement benefits, our ESOP, nonqualified supplemental
retirement benefits, compensation deferral opportunities and perquisites the Committee believes are reasonable and competitive with benefits provided to executive officers of companies we compete with
for executive talent. For more information about our ESOP, see "Description of Employee Stock Ownership Plan".
We
sponsor a retirement pension plan covering a majority of our employees, including all of our executive officers. In December 2008, the pension plan was frozen to new participants and
no benefits were earned for current participants, including the NEOs, after that date. Supplemental retirement benefits are provided to each NEO under supplemental executive retirement plans. In
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December
2008, the supplemental retirement plan was frozen and no new benefits were earned following that date for any NEO. For details regarding the determination and payment of benefits
under our pension plan and supplemental executive retirement plans and the present value of accumulated benefits for each NEO, see "Pension Benefits at December 31, 2010" below.
We
maintain a tax-qualified retirement savings plan ("401(k) Plan") under which all U.S.-based employees, including the NEOs, are able to make pre-tax
contributions from their cash compensation, subject to limitations imposed by the Internal Revenue Code. We make specified matching contributions. Our executive officers participate in our ESOP on the
same basis as other employees. Our contributions for the benefit of the NEOs under the 401(k) Plan and the ESOP are included under the "All Other Compensation" column in the Summary Compensation Table
below.
To
further help our executive officers save for retirement, we make available deferred compensation plans that allow executive officers to voluntarily defer the receipt of salary and
earned cash bonuses. In addition, the executive officers participate in a 401(k) restoration plan and ESOP restoration plan on the same basis as any other eligible employee whose salary level, under
IRS regulations, limits our contributions to the qualified plans. See "Nonqualified Deferred Compensation at December 31, 2010" below for details about the deferred compensation and restoration
plans and accumulated balances for each NEO.
In
2010, we provided perquisites to the NEOs and selected other executive officers. Total perquisite costs for the NEOs for 2010 are included under the "All Other Compensation" column
in the Summary Compensation Table below.
Change in Control Provisions
Under the terms of the stock appreciation rights granted before 2011, any unvested awards would vest upon a change in control of the
Company as described below under "Potential Payments upon Change in Control". This provision recognized that a change in control has the potential to cause a significant disruption or change in
employment relationships and thus treated all participants the same regardless of their employment status after the transaction. In addition it provided our executives with the same opportunities as
our other shareholders to participate in any transaction resulting in a change in control.
Stock
appreciation rights granted in 2011 will be subject to accelerated vesting only when two events (a "double trigger") occur. Vesting of these grants will generally be accelerated
(and the exercise period extended for up to one year) only if there is a change in control of the Company and either the acquiring entity fails to assume the awards or the executive's employment is
terminated by the acquirer without cause or by the executive for good reason within two years following a change in control. This double trigger was adopted to encourage executive retention through a
period of uncertainty and a subsequent integration with an acquirer. The Committee
believes that this approach is appropriate for a publicly held company, will enhance shareholder value in the context of an acquisition and will align executives with the interests of investors.
The
award agreements relating to performance units provide for an accelerated payout upon a change in control prior to the end of the three-year performance period as
described below under "Potential Payments upon Change in Control". The Committee believes that it is appropriate to terminate the performance period at the time of the change in control and calculate
the benefits based on the shorter period because the financial performance measures used in the grants may not be appropriate in the context of the Company's business or the acquirer's business
following a change in control.
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Tax Deductibility of Executive Compensation
After the closing of the offering made pursuant to this prospectus, Section 162(m) of the Internal Revenue Code will generally
limit our federal income tax deduction to $1 million per person for compensation paid to our Chief Executive Officer and certain other highly compensated executive officers in any year.
Qualifying performance-based compensation is not subject to this limit on deductibility. The Committee will consider the impact of Section 162(m) when developing and implementing our executive
compensation program.
Summary Compensation Table
The following table shows 2010 compensation earned by our NEOs.
Name and
Principal Position(1)
Year
Salary
($)
Bonus
($)(2)
Option
Awards
($)(3)
Non-Equity
Incentive
Plan
Compensation
($)(4)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
All Other
Compensation
($)(6)
Total
($)
Steven D. Pratt
Chief Executive Officer
2010
677,000
85,742
860,703
776,282
656,583
297,125
3,353,435
Larry R. Huget
Chief Operating Officer
2010
389,235
42,575
418,839
303,323
452,862
230,413
1,837,247
Gene K. Huey
Vice President & Chief Financial Officer
2010
372,633
36,686
383,803
276,475
472,533
160,960
1,703,090
Calvin W. Collins
President, Engineered Products Group
2010
290,000
31,900
266,880
207,159
55,423
120,945
972,307
F. Patrick Fonner
Vice President, Engineered Products Group
2010
276,836
27,720
236,848
180,016
186,382
116,208
1,024,010
(1)
On
January 1, 2011, Mr. Huget retired and Mr. Collins became President and Chief Operating Officer. On April 15, 2011,
Mr. Huey resigned as Chief Financial Officer and became Vice President and Treasurer in anticipation of his retirement scheduled to begin on January 1, 2012.
(2)
Amounts
paid under the Annual Bonus Plan based on subjectively evaluated management objectives and individual performance measures. See
"— Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives".
(3)
Represents
the aggregate grant date fair value of stock appreciation right awards computed in accordance with Accounting Standards Codification ("ASC")
Topic 718. The fair value of stock appreciation rights is estimated using the Black-Scholes option pricing method, using the following assumptions: risk-free interest
rate — 3.67%, expected dividend yield — 0, term — 10 years and expected volatility — 30%. See
"— Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives". The stock appreciation rights reflected in this table were modified in March 2011 to
provide for settlement in shares of Class A Common Stock rather than cash in order to qualify the awards for equity accounting treatment.
(4)
Consists
of amounts paid under the Annual Bonus Plan based on achieving objective Company performance criteria. See "— Base Salaries,
Annual Performance-Based Cash Bonuses, Long-Term Incentives".
(5)
Represents
changes in the actuarial present value of accumulated benefits under the Pension Plan and Supplemental Executive Retirement Plans
(Mr. Pratt — $509,134; Mr. Huget — $286,551; Mr. Huey — $222,612; Mr. Collins — $19,335 and
Mr. Fonner — $145,847) and interest under the Deferred Compensation Plans (Mr. Pratt — $147,449; Mr. Huget — $166,311;
Mr. Huey — $249,921; Mr. Collins — $36,088 and Mr. Fonner — $40,535).
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(6)
Includes
(i) tax preparation services, (ii) club dues and memberships, (iii) automobile allowance and fuel purchase benefits,
(iv) physicals and (v) Company contributions to the NEO accounts under the 401(k) Plan, the 401(k) Restoration Plan, the ESOP and the ESOP Restoration Plan, including the following
amounts:
401(k)
401(k)
Restoration
ESOP
ESOP
Restoration
Steve D. Pratt
$
18,988
$
68,730
$
39,369
$
142,104
Larry R. Huget
18,988
47,361
39,368
91,817
Gene K. Huey
18,988
26,276
39,368
55,192
Calvin W. Collins
18,988
13,960
39,368
30,365
F. Patrick Fonner
18,988
13,561
39,388
30,056
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Grants of Plan-Based Awards in 2010
The following table contains information concerning cash bonus opportunities and stock appreciation rights and performance units
granted in 2010.
All Other
Option
Awards
Number of
Securities
Underlying
Options (#)
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant Date
Fair Value of
Option
Awards($)(4)
Name
Grant Date
Threshold
($)
Target
($)
Maximum
($)
Steven D. Pratt
2/2/2010(1)
322,252
460,360
920,720
2/2/2010(2)
359,880
599,800
1,799,400
2/2/2010(3)
4,299
422.80
860,703
Larry R. Huget
2/2/2010(1)
130,783
186,833
373,666
2/2/2010(2)
175,140
291,900
875,700
2/2/2010(3)
2,092
422.80
418,839
Gene K. Huey
2/2/2010(1)
114,771
163,959
327,918
2/2/2010(2)
158,340
267,500
791,700
2/2/2010(3)
1,917
422.80
383,803
Calvin W. Collins
2/2/2010(1)
89,320
127,600
255,200
2/2/2010(2)
109,800
186,000
549,000
2/2/2010(3)
1,333
422.80
266,880
F. Patrick Fonner
2/2/2010(1)
77,616
110,881
221,762
2/2/2010(2)
102,180
165,000
510,900
2/2/2010(3)
1,183
422.80
236,848
(1)
Amounts
reported for these awards represent a portion of the potential bonuses payable for performance in 2010 under the Annual Bonus Plan. Only the portion
of the bonus based on performance against financial or other objective measures is an incentive plan award reportable in this table. The Committee annually approves target bonus levels as a percentage
of base salary paid during the year. The total target bonus under the Annual Bonus Plan, as a percentage of base salary, were as follows: Mr. Pratt — 85%,
Mr. Huget — 60%, Mr. Huey — 55%, Mr. Collins — 55% and Mr. Fonner — 50%. The portion based on
performance against financial or other objective measures, and therefore reflected in the above table, was 80% of the total target bonus for each NEO. See "— Base Salaries, Annual
Performance-Based Cash Bonuses, Long-Term Incentives". Actual bonus amounts paid for 2010 are included in the "Summary Compensation Table".
(2)
Amounts
reported for these awards represent performance units granted in 2010 and are based on performance during years 2010-2012. See
"— Base Salaries, Annual Performance-Based Cash Bonuses, Long-Term Incentives".
(3)
Amounts
reported for these awards represent grants of stock appreciation rights. The base value of all stock appreciation rights reflected in this table was
equal to the fair market value of the Legacy Class A Common Stock on the grant date as determined by the board of directors. The stock appreciation rights become 100% vested three years after
the grant date, based on continued employment. Vesting may also be accelerated in the circumstances described below under "Potential Payments upon Change in Control". Each stock appreciation right has
a maximum term of 10 years, subject to earlier termination upon the
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employee's
termination of employment. The Committee approved amendments to the stock appreciation rights reflected in this table in March 2011 to provide for settlement in shares of Legacy
Class A Common Stock rather than cash in order to qualify the awards for equity accounting treatment. If the holders of the stock appreciation rights agree to the amendments, the amendments
will be effective as of March 25, 2011.
(4)
Represents
the grant date fair value of stock appreciation rights granted in 2010 based on a value of $200.21 per share, calculated using the Black-Scholes
option pricing method. Assumptions made in determining the grant date fair value are disclosed in footnote 3 to the Summary Compensation Table.
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Outstanding Equity Awards at December 31, 2010
The following table sets forth information concerning outstanding equity awards of the NEOs as of December 31, 2010.
Option Awards
Name
Grant Date
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
Option
Exercise Price
($)
Option
Expiration
Date
Steven D. Pratt
3/7/2007(1)
2,490
—
439.55
3/7/2017
2/5/2008(2)
—
3,400
477.05
2/5/2018
2/3/2009(3)
—
3,381
517.60
2/3/2019
2/2/2010(4)
—
4,299
422.80
2/2/2020
Larry R. Huget
3/7/2007(1)
1,319
—
439.55
3/7/2017
2/5/2008(2)
—
1,620
477.05
2/5/2018
2/3/2009(3)
—
1,710
517.60
2/3/2019
2/2/2010(4)
—
2,092
422.80
2/2/2020
Gene K. Huey
3/7/2007(1)
1,267
—
439.55
3/7/2017
2/5/2008(2)
—
1,500
477.05
2/5/2018
2/3/2009(3)
—
1,492
517.60
2/3/2019
2/2/2010(4)
—
1,917
422.80
2/2/2020
Calvin W. Collins
3/7/2007(1)
745
—
439.55
3/7/2017
2/5/2008(2)
—
940
477.05
2/5/2018
2/3/2009(3)
—
931
517.60
2/3/2019
2/2/2010(4)
—
1,333
422.80
2/2/2020
10/23/2001(5)
187
—
9.68
10/23/2011
2/4/2003(5)
385
—
9.87
2/4/2013
2/3/2004(5)
387
—
13.34
2/3/2014
8/9/2005(5)
2,566
—
65.51
8/9/2015
F. Patrick Fonner
3/7/2007(1)
750
—
439.55
3/7/2017
2/5/2008(2)
—
900
477.05
2/5/2018
2/3/2009(3)
—
967
517.60
2/3/2019
2/2/2010(4)
—
1,183
422.80
2/2/2020
8/9/2005(5)
684
—
65.51
8/9/2015
(1)
Represents
stock appreciation rights. Amount in the "option exercise price" column represents the fair market value of the Legacy Class A Common
Stock at grant as determined by the board of directors.
(2)
Represents
stock appreciation rights that vest 100% on February 5, 2011. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class A Common Stock at grant as determined by the board of directors.
(3)
Represents
stock appreciation rights that vest 100% on February 3, 2012. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class A Common Stock at grant as determined by the board of directors.
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(4)
Represents
stock appreciation rights that vest 100% on February 2, 2013. Amount in the "option exercise price" column represents the fair market
value of the Legacy Class A Common Stock at grant as determined by the board of directors.
(5)
Represents
stock options.
Option Exercises in 2010
The following table sets forth information concerning the exercise of stock options by the NEOs in 2010.
Option Awards(1)
Name
Number of Shares Acquired
on Exercise (#)
Value Realized on Exercise ($)
Steven D. Pratt
6,156
2,179,347
Larry R. Huget
3,078
1,089,674
Gene K. Huey
2,770
980,635
Calvin W. Collins
—
—
F. Patrick Fonner
—
—
(1)
The
"value realized on exercise" is based on the spread between the fair market value of the Legacy Class A Common Stock, as determined by the board
of directors, on the exercise date and the exercise price. Shares acquired on exercise of the options were not sold by the NEOs. No stock appreciation rights were exercised by the NEOs in 2010.
Pension Benefits at December 31, 2010
Each of the NEOs participates in the ESCO Corporation Pension Plan, our qualified pension plan, and in the ESCO Corporation 2005
Supplemental Executive Retirement Plan (the "2005 SERP") and the ESCO Corporation Supplemental Executive Retirement Plan (the "SERP").
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The
following table provides information regarding accumulated benefits under these plans at December 31, 2010. No payments were made to NEOs under these plans in 2010.
Name
Plan Name
Number of Years
Credited Service (#)
Present Value of
Accumulated Benefit
($)(1)
Steven D. Pratt
Pension Plan
36.95
900,157
2005 SERP
4
2,081,964
SERP
32.95
3,108,666
Larry R. Huget
Pension Plan
36.39
987,677
2005 SERP
4
1,334,611
SERP
32.39
1,163,675
Gene K. Huey
Pension Plan
38.06
827,520
2005 SERP
4
879,812
SERP
34.06
859,201
Calvin W. Collins
Pension Plan
8.16
126,035
2005 SERP
4
54,794
SERP
4.16
0
F. Patrick Fonner
Pension Plan
32.53
760,997
2005 SERP
4
720,807
SERP
28.53
159,003
(1)
Represents
the actuarial present value as of December 31, 2010 of the NEO's pension benefits under the Pension Plan, the 2005 SERP and the SERP based
on credited years of service and average annual compensation as of that date but assuming retirement at the earliest age at which benefits under the plans are unreduced (age 65 under all plans). The
actuarial present values were calculated using a discount rate of 6% and the RP-2000 Mortality Table, the same assumptions used in the pension benefit calculations reflected in our audited
balance sheet as of December 31, 2010.
Qualified Pension Plan
We maintain the Pension Plan, a tax-qualified defined benefit retirement plan, to provide income for retirees. The Pension
Plan includes five different benefit schedules that provide varying benefits to different employee groups. The NEOs participate in the National Benefit Schedule under the Pension Plan on the same
terms as all other participating employees in the National Benefit Schedule.
Participation
in and benefit accruals under the Pension Plan were generally frozen as of December 31, 2008. However, participants in the National Benefit Schedule who were at
least 45 years old and who had at least 10 years of credited service as of December 31, 2008 continued to accrue benefits under special terms of the Pension Plan. All of the NEOs
except Mr. Collins qualified for these benefits.
Benefits
become 100% vested after five years of service. The National Benefit Schedule in effect on and before December 31, 2008 provided a monthly benefit following retirement
based on a final average pay formula that takes into account years of credited service, average annual compensation and estimated Social Security benefits. Average annual compensation for purposes of
calculating benefits under the National Benefit Schedule generally consists of a participant's highest average compensation for the five consecutive calendar years in the last 10 calendar years
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during
which the participant rendered any service to us or any of our subsidiaries, but not including calendar years after 2008. The amount of annual compensation taken into account is limited to
$230,000 in 2008, under the Internal Revenue Code ("Code").
Under
the terms of the National Benefit Schedule in effect on and before December 31, 2008, a monthly normal retirement benefit is payable upon retirement at age 65 and is equal
to one-twelfth of the greater of (i) 1% of the participant's average annual compensation multiplied by the participant's years of credited service (up to 30) plus $60 for
each year of credited service in excess of 30; and (ii) 45% of the participant's average annual compensation less 50% of the participant's annual primary insurance amount determined under the
Social Security Act on the date of retirement, multiplied by a fraction, the numerator of which is the number of years (including partial years) of credited service (not to exceed 30 years) and
the denominator of which is 30; provided that the annual retirement benefit payable to any retired participant not exceed 40% of the participant's average annual compensation.
Participants
in the National Benefit Schedule who were at least 45 years old and who had at least 10 years of credited service as of December 31, 2008 and continued
as employees after December 31, 2008 are entitled to an additional monthly normal retirement benefit equal to one-twelfth of 0.9% times the participant's compensation paid prior to
attaining a maximum of 30 years of credited service. This benefit accrues at the end of each pay period with respect to compensation paid during the pay period. The amount of annual
compensation taken into account is limited to $245,000 in 2010 under the Code.
The
basic benefit form for normal and early retirement under the National Benefit Schedule is a monthly annuity for life. A participant may choose among different annuity forms that are
the actuarial equivalent of the basic benefit form, but a lump sum is not available.
Under
the National Benefit Schedule, a participant who is age 55 or older with at least 10 years of service is eligible to elect an early retirement benefit, which is the normal
retirement benefit after reduction for early commencement of benefits. Under the National Benefit Schedule, for each month that a participant's early retirement benefits start prior to the
participant's 65th birthday, the participant's monthly retirement benefit is reduced by 0.5%. Mr. Huget retired on January 1, 2011. All of the NEOs other than Mr. Collins
are eligible for early retirement.
Under
the Pension Plan: (i) if a participant becomes totally and permanently disabled after attaining age 55 and completing five years of service, and before attaining age 65,
the participant is entitled to a monthly disability benefit for the rest of the participant's life equal to the normal retirement benefit that would have been payable at age 65 based on actual years
of credited service (adjusted actuarially for form of payment); and (ii) if a participant becomes totally and permanently disabled before attaining age 55, but after completing five years of
service, the participant is entitled to an ancillary monthly disability benefit payable until attaining age 55, equal to the normal retirement benefit that would have been payable at age 65 based on
actual years of credited service, and upon attaining age 55 shall be entitled to a monthly disability benefit for the rest of his or her life equal to the normal retirement benefit that would have
been payable at age 65 based on actual years of credited service (adjusted actuarially for form of payment).
Supplemental Executive Retirement Plans
We maintain the 2005 SERP and the SERP to provide for retirement benefits above amounts available under the Pension Plan. All NEOs are
eligible to participate in the SERPs. Participants are 100% vested in their SERP benefits.
To
calculate normal retirement benefits under the SERPs, a target monthly retirement benefit in the form of a single life annuity is determined for each participant based on final
average pay and
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years
of service, which is then reduced by (i) the participant's estimated monthly primary Social Security benefit assuming commencement at age 65, (ii) the participant's monthly single
life annuity benefit under the Pension Plan, assuming commencement at age 65 and (iii) the monthly single life annuity amount that is actuarially equivalent to the balances or distributions
under any defined contribution plan, which the Committee has determined to take into consideration and which are deemed to be employer-provided.
The
target retirement benefit under the SERPs upon retirement at age 65 is equal to 60% of the participant's monthly final average compensation (without the limitation applied to
compensation in the Pension Plan, and including any compensation deferred by the participant but disregarding compensation after December 31, 2008), multiplied by a fraction, the numerator of
which is the participant's years of service ending on or before December 31, 2008, not to exceed 30, and the denominator of which is 30.
A
participant who has attained age 55 and who has at least 10 years of service at separation from service is eligible for early retirement benefits under the SERPs. For each
month that the benefit
commencement date is prior to age 65, the normal retirement benefit is reduced by 0.5% under the SERPs. For purposes of calculating an early retirement benefit, the primary Social Security benefit
offset is the monthly benefit payable at age 62, or the benefit commencement date if later (determined as if the participant terminated no later than December 31, 2008) and determined as if the
participant has zero earnings between the early retirement date and age 62. Mr. Huget retired on January 1, 2011. All of the NEOs except Mr. Collins are eligible for early
retirement.
The
normal or early retirement benefit under the SERPs is paid as a monthly annuity for life if the participant is not married, and is paid as an actuarially equivalent 100% joint and
survivor annuity if the participant is married. A participant may elect an alternative actuarially equivalent annuity form of payment.
Under
the SERP (but not under the 2005 SERP) a participant or beneficiary is entitled to an immediate distribution of a lump sum actuarially equivalent to 90% of his or her vested
accrued benefit within 24 months following a change in control or any time following termination of employment, forfeiting the remaining 10%. Under the SERP change in control is generally
defined to include certain mergers, the sale of substantially all of our assets and transactions whereby a person acquires 50% of our voting stock.
Under
the SERPs, if a participant separates from service as a result of disability, the participant is entitled to an unreduced monthly benefit equal to the benefit that would have been
payable at age 65, calculated using the estimated Social Security benefit payable to the participant at age 65 (calculated under current law at time benefits commence and assuming zero earnings to age
65), and calculated using the Pension Plan benefit and defined contribution plan benefits payable on the date the SERP benefits commence.
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Nonqualified Deferred Compensation at December 31, 2010
Name
Plan(1)(2)
Executive
Contributions
in Last FY ($)
Registrant
Contributions
in Last FY ($)
Aggregate
Earnings in
Last FY ($)
Aggregate
Withdrawals/
Distributions
($)
Aggregate
Balance at
Last FYE ($)
Steven D. Pratt
DCP II
—
—
38,054
—
528,296
DCP
—
—
109,395
—
1,518,699
401(k)
—
68,730
14,764
—
155,010
Restoration Plan
ESOP
—
142,104
168,105
—
287,902
Restoration Plan
Larry R. Huget
DCP II
319,978
(3)
—
75,582
—
1,252,715
DCP
—
—
90,729
—
1,259,567
401(k)
—
47,361
3,392
—
81,273
Restoration Plan
ESOP
—
91,817
103,538
—
157,594
Restoration Plan
Gene K. Huey
DCP II
—
—
72,440
—
1,005,660
DCP
—
—
177,481
—
2,463,914
401(k)
—
26,276
2,698
—
55,491
Restoration Plan
ESOP
—
55,192
64,878
—
109,506
Restoration Plan
Calvin W. Collins
DCP II
—
—
21,870
—
303,620
DCP
—
—
14,218
—
197,382
401(k)
—
13,965
1,240
—
24,997
Restoration Plan
ESOP
—
30,364
36,403
—
64,220
Restoration Plan
F. Patrick Fonner
DCP II
65,396
(4)
—
38,420
16,605
560,804
DCP
—
—
2,115
—
29,367
401(k)
—
13,561
3,110
—
33,320
Restoration Plan
ESOP
—
30,056
36,322
—
65,194
Restoration Plan
(1)
See
"Deferred Compensation Plans" below for information regarding the Deferred Compensation Plan ("DCP") and Deferred Compensation Plan II ("DCP II"). See
"Other Deferred Compensation Plans — Restoration Plans" below for information regarding the 401(k) Restoration Plan and the ESOP Restoration Plan.
(2)
Amounts
for the ESOP Restoration Plan represent the value, and increases in value, of the Class C Preferred Stock credited under this plan for the
NEOs. As of December 31, 2010, the following amounts of Class C Preferred Stock were credited under this plan for the accounts of the NEOs: Mr. Pratt — 330
shares, Mr. Huget — 179 shares, Mr. Huey — 125 shares, Mr. Collins — 74 shares and Mr. Fonner —
75 shares. The fair market value of the Class C Preferred Stock as of December 31, 2010 was determined to be $873.50 per share.
(3)
This
amount is reported in the Summary Compensation Table, with $42,666 reported in the "Salary" column and $277,312 reported in the "Bonus" column.
(4)
This
amount is reported in the Summary Compensation Table, with $41,581 reported in the "Salary" column and $23,815 reported in the "Bonus" column.
Deferred Compensation Plans
All NEOs are eligible to participate in the DCP and the DCP II, which are unfunded plans for management or highly compensated
employees who are designated for participation by the board. The DCP and DCP II enable participants to defer receipt of compensation. The DCP provides for deferrals prior to January 1, 2005,
and the DCP II provides for deferrals on and after January 1,
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2005.
The DCP allowed and the DCP II allows participants to elect in advance of earning salary and bonuses to defer a percentage of salary and bonuses and have the deferred amount credited to a plan
account. Each plan account is credited with earnings each month at a rate equal to the nominal annual yield of Moody's Average Corporate Bond Yield for the preceding month or any substantially similar
index selected by the board, plus 2%. The maximum allowed deferral percentage under the DCP II is 25% of salary and 50% of bonuses.
Benefits
accrued after January 1, 2005, are generally paid pursuant to election made by the participant prior to earning the compensation. The form of payment is specified in the
participant's deferral election and is either a cash lump sum, monthly installments not to exceed 180 or any combination of the two. A participant may withdraw amounts deferred under the DCP
(including earnings) at any time, subject to forfeiture of 10% of the balance. If elected prior to earning the compensation, participants may withdraw amounts deferred under the DCP II (but not the
earnings thereon) prior to separation from service. The DCP and DCP II provide for distribution upon retirement, termination of employment, death, disability or financial hardship.
Other Deferred Compensation Plans — Restoration Plans
The NEOs participate in two additional nonqualified deferred compensation plans: the 401(k) Restoration Plan and the ESOP Restoration
Plan. These unfunded plans are designed to provide benefits that would have been provided in our tax-qualified 401(k) Plan and ESOP, had the compensation of the participant not been
limited under the Code, and had the participant not made elective deferrals under the DCP.
In
the 401(k) Restoration Plan, participants receive quarterly notional account credits equal to the nonelective employer contributions that would have been allocated to their accounts
in the 401(k) Plan had their compensation not been limited or deferred. Nonelective contributions vest after a three-year period of employment. Accounts are credited with earnings based on
participant election among various investment options. Account balances are distributed on termination of employment or death. Account balances of $5,000 or more are paid in 60 monthly
installments. Account balances of less than $5,000 are paid in a lump sum.
In
the ESOP Restoration Plan, a participant's account is credited with notional phantom Class C Preferred Stock units for each quarter, which are equal in value to (i) the
number of shares of Class C Preferred Stock that would have been allocated to the participant's account in the ESOP had the participant's compensation not been limited or deferred and
(ii) the amount that would have been allocated to the participant's account in the ESOP from dividends if those shares had been allocated to the participant's account in the ESOP. Accounts vest
according to a six-year graded schedule. Account balances are distributed on termination or death in five annual installments.
Potential Payments upon Change in Control
We have agreed, in connection with a change in control of the Company, to (i) accelerate the vesting of stock appreciation
rights granted in 2008, 2009 and 2010 and (ii) provide for an accelerated payout of performance units. A change in control would occur if any person or group acquires stock possessing the right
to elect a majority of the board of directors.
Under
the terms of the stock appreciation rights granted to the NEOs in 2008, 2009 and 2010, any unvested awards would become exercisable in the event of a change in control of the
Company. This acceleration of vesting will occur whether or not the officer's employment is terminated.
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We
granted performance units to the NEOs in fiscal 2009 and 2010 pursuant to which cash payments will be made based on the Company's performance during the applicable
three-year performance periods relating to the awards. The award agreements relating to the performance units provide for an accelerated payout upon a change in control. An accelerated
payout of performance units would occur even if the named executive officer's employment was not terminated in connection with the change in control.
The
following table sets forth the estimated change in control benefits that would have been payable to each NEO if a change in control had occurred on December 31, 2010.
Name
Acceleration
of Stock
Appreciation
Rights(1)
Accelerated
Payout of
Performance
Units(2)
Total
Steven D. Pratt
$
2,224,035
$
1,283,498
$
3,507,533
Gene K. Huey
$
986,270
$
571,444
$
1,557,714
Calvin W. Collins
$
649,891
$
390,927
$
1,040,818
F. Patrick Fonner
$
610,718
$
355,280
$
965,998
(1)
See
"Outstanding Equity Awards at December 31, 2010" for information regarding outstanding unexercisable stock appreciation rights held by each NEO.
The amounts in the table above represent the spread between $669.10 (the value of the Legacy Class A Common Stock on December 31, 2010 as determined by the board of directors) and the
value of the Legacy Class A Common Stock at the date of grant of the stock appreciation right as determined by the board of directors for each outstanding stock appreciation right granted in
2008, 2009 and 2010 and held by the applicable NEO on December 31, 2010.
(2)
Under
the terms of the performance unit award agreements granted to the NEOs in 2009 and 2010, upon a change in control an NEO would receive a payout in an
amount equal to the payout calculated as if the performance period had ended on the last day of our most recently completed fiscal quarter prior to the date of the change in control, taking into
account provisions in the award agreements for calculating performance for a shorter performance period. The amounts in the table above represent the estimated value of outstanding performance unit
awards that would vest and be paid out pursuant to the terms of the award agreements.
Potential Payments upon Retirement, Disability or Death
The performance unit award agreements provide for the payment of awards in the event of the retirement, death or disability of an NEO
prior to end of the three-year performance period. The following table sets forth the estimated benefits that would have been payable to the NEOs under the performance units if each
officer's employment had been terminated on December 31, 2010 because of retirement, disability or death.
Name
Payment of Performance Units(1)
Steven D. Pratt
$
1,052,744
Gene K. Huey
$
466,213
Calvin W. Collins
$
302,370
F. Patrick Fonner
$
297,357
(1)
Under
the terms of the performance unit awards granted to the NEOs in 2009 and 2010, if an NEO's employment is terminated due to total disability or
retirement (at age 65 or earlier at
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our
discretion) prior to the end of the three-year performance period, the NEO would be entitled to receive a prorated award to be paid following completion of the performance period,
taking into account the cash amount that would otherwise have been paid based on the actual performance through the entire performance period and the portion of the performance period the officer had
worked. Under the terms of the performance unit awards, if an NEO's employment is terminated due to death prior to the end of the three-year performance period, the NEO would be entitled
to receive a prorated portion of the target cash amount taking into account the portion of the performance period the officer had worked. Amounts in the table are based on the estimated payout based
on actual results through December 31, 2010 applicable in the event of retirement or total disability.
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Table of Contents
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
This section describes relationships between the company and our directors, executive officers, beneficial holders of 5% or more of
our Class A Common Stock, Legacy Class A Common Stock or Class B Common Stock, or any member of their immediate family or entities affiliated with them("Insiders"). Other than as
described below, since January 1, 2008, none of the Insiders has had or will have a direct or an indirect material interest in any transaction or series of similar transactions in which we were
a party or will be a party in which:
•
the amount involved exceeded or will exceed $120,000; and
•
the Insider had or will have a direct or indirect material interest.
Shareholder Agreements
shareholders who hold an aggregate
of             shares of Legacy Class A Common Stock are parties to
agreements with us that give the shareholder the right to require to us to purchase the shareholder's shares upon disability or death. In addition, with respect to             shares,
those
agreements include a repurchase obligation upon retirement. The agreements do not apply to Class A Common Stock issuable upon conversion of Legacy Class A Common Stock. As a result, all
of the agreements will terminate 360 days after the date of this prospectus. See "Description of Capital Stock — Shareholder Agreements".
Employee Stock Ownership Plan
We sponsor an employee stock ownership plan, or ESOP, that holds all of our Class C Preferred Stock, representing 14.4% of our
Class A Common Stock on a pro forma basis before the offering and after giving effect to the events described in "Explanatory Note Regarding Changes in Our Capital Stock". The ESOP covers all
U.S. employees who meet service requirements, including our executive officers. See "Description of Employee Stock Ownership Plan" for a description of our arrangements with the ESOP and "Principal
and Selling Shareholders" for a description of voting provisions under the ESOP.
Policies and Procedures for Related Party Transactions
Our nominating and governance committee will review any transactions with related persons, as defined in Item 404 of
Regulation S-K, or in which a related person has a direct or an indirect interest, and determine whether to ratify or approve the transaction. A transaction may only be ratified or
approved if the committee determines that it is fair to us or otherwise in our interest. The committee has pre-approved some types of transactions under our pre-approval
policy. These pre-approved transactions include:
•
compensation arrangements approved by the compensation committee or entered into in the ordinary course of business,
including compensation arrangement with relatives of related persons provided that the related persons were not involved in the hiring decisions;
•
transactions in the ordinary course of business where the related person's interest arises only (a) from his or her
position as a director of another entity that is party to the transaction, and (b) from an equity interest of less than 5% in another entity that is party to the transaction; and
•
transactions in the ordinary course of business where the interest of the related party arises solely from the ownership
of a class of our equity securities where all holders of the class of equity securities will receive the same benefit on a pro rata basis.
No
director may participate in the approval of a transaction for which he or she is a related party.
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Table of Contents
PRINCIPAL AND SELLING SHAREHOLDERS
The following table sets forth information regarding beneficial ownership of our capital stock as of March 31, 2011 for
•
each person who we know beneficially owns more than 5% of our Class A Common Stock;
•
each of our directors;
•
each of our named executive officers;
•
all of our directors and executive officers as a group; and
•
each other selling shareholder.
We
determined beneficial ownership according to the SEC rules. Generally, a person has beneficial ownership of a security if the person possesses sole or shared voting or investment
power of the securities. The table below includes shares issuable upon exercise of options and stock-settled stock appreciation rights held by the person exercisable within 60 days of
March 31, 2011 and shares allocated to the person's account under our ESOP that vest within 60 days of March 31, 2011. To calculate the shares issuable upon the exercise of
stock-settled stock appreciation rights, we have used $             per share, the midpoint of the price range set forth on the cover of this prospectus. Except as indicated in the
footnotes below,
based on the information furnished to us, each of the shareholders listed below has sole voting and investment power with respect to all shares of common stock shown are beneficially owned, subject to
community property laws where applicable.
The
table lists beneficial ownership before the offering on a pro forma basis after giving effect to the events described under "Explanatory Note Regarding Changes in Our Capital
Stock", including the conversion of shares of Legacy Class A Common Stock and Class C Preferred Stock into Class A Common Stock.
Except
for shares held under the ESOP, which convert from Class C Preferred Stock into Class A Common Stock upon completion of the offering made by this prospectus but are
distributed to the beneficial owner only upon specified events (See "Description of Employee Stock Ownership Plan"), all shares owned before the offering and after the offering are shares of Legacy
Class A Common Stock that convert into Class A Common Stock 180 days and 360 days after the date of the final prospectus used in the offering. See "Description of Capital
Stock." No public market exists for the Legacy Class A Common Stock and we do not intend to list those shares on a securities exchange. All shares of Class B Common Stock outstanding are
owned by Henry T. Swigert as Trustee of the Swigert 2000 Trust. Shares of Legacy Class A Common Stock and Class B Common Stock will be convertible one-for-one
into Class A Common Stock.
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Table of Contents
Unless
otherwise noted below, the address for each of the shareholders in the table below is c/o ESCO Corporation, 2141 NW 25th Avenue, Portland, Oregon 97210.
Percentage of
Common Stock
Beneficially Owned
After the Offering
If Underwriters
Exercise Option in
Full
Shares of Common
Stock Beneficially
Owned Before
the Offering
Shares of Common
Stock Beneficially
Owned After
the Offering
Number
of
shares offered
Name of Beneficial Owner
Class A
Number
Class B
Number
Total
%
Class A
Number
Class B
Number
Total
%
%
%
%
%
%
5 Percent Shareholders
Charles F. Snow(1)
P.O. Box 871178
Vancouver, WA 98687
9.38
%
7.86
%
ESCO Corporation
Employee Stock Ownership Plan Trust(2)
17.48
%
14.65
%
Directors and Executive Officers
Steven D. Pratt(3)
2.15
%
1.80
%
Calvin W. Collins(4)
*
*
F. Patrick Fonner(5)
*
*
Gene K. Huey(6)
1.88
%
1.58
%
Larry R. Huget(7)
1.17
%
*
Henry T. Swigert(8)
2.27
%
100
%
18.10
%
Peter F. Adams(9)
*
*
Frank Alvarez
*
*
Stephen E. Babson(10)
*
*
Peter F. Bechen
*
*
Frank Jungers(11)
*
*
Robert C. Warren, Jr.(12)
2.53
%
2.12
%
John W. Wood, Jr.
*
*
All directors and executive officers as a group (16 persons)(8)
13.77
%
27.74
%
Other Selling Shareholders
*
Less
than 1%
(1)
Includes             shares
owned by Charles F. Snow as Trustee of the Elizabeth S. Snow Generation Skipping Trust FBO Charles F.
Snow and             shares of Class A Common Stock beneficially owned by Charles F. Snow as president of 'Nchiawana Enterprises, L.P.
(2)
The
ESOP holds Class C Preferred Stock, which generally does not have the right to vote except as required by law. At the completion of the offering
made by this prospectus, the shares will convert into Class A Common Stock. The trustee of the ESOP will vote shares that are held by the ESOP and not allocated to any participant's account. An
ESOP participant may direct the trustee how to vote shares allocated to the participant's account. Undirected shares are voted by the ESOP trustee in the trustee's discretion. As
of             ,
2011,             of the shares held by the ESOP trustee had been allocated to participant accounts
and             shares were unallocated. Each ESOP participant is entitled to receive a
distribution of vested shares allocated to the participant's account upon death, disability, retirement at age 65 or other termination of employment, subject to the restrictions specified in the ESOP.
(3)
Includes             shares
beneficially owned under the ESOP.
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Table of Contents
(4)
Includes             exercisable
options to purchase Class A Common Stock and             shares beneficially owned under the ESOP.
(5)
Includes             shares
beneficially owned by F. Patrick Fonner as Trustee of the F. Patrick Fonner and B. Lynne Fonner Trust U/A dated
August 6, 2009. Includes             exercisable options to purchase Class A Common Stock.
(6)
Includes             shares
beneficially owned under the ESOP.
(7)
Includes             shares
beneficially owned under the ESOP.
(8)
All             shares
of Class B Common Stock are held by Henry T. Swigert as Trustee of the Swigert 2000 Trust.
(9)
Includes             shares
beneficially owned by Peter F. Adams as Trustee of the Peter F. Adams Family Trust.
(10)
Includes             shares
beneficially owned by Stephen E. Babson as an officer of Babson EC LLC.
(11)
Includes             shares
beneficially owned by Frank Jungers as Trustee of the Francis Jungers Trust U/A dtd 11/13/03.
(12)
Includes             shares
beneficially owned by Robert C. Warren Jr. as Trustee of the Lucy Christenson Warren Trust.
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DESCRIPTION OF EMPLOYEE STOCK OWNERSHIP PLAN
We sponsor an employee stock ownership plan, or ESOP, that covers all of our U.S. employees who meet service requirements. We
implemented the ESOP on December 27, 2006 by borrowing money which we loaned to the ESOP. The ESOP used that money to buy Class C Preferred Stock from us and from our shareholders in
proportion to their shareholdings. The ESOP transaction provided a one-time, tax-efficient payment to our shareholders and an ownership stake in the company to our employees,
and it continues to generate tax savings for us. Each quarter, we pay dividends on the Class C Preferred Stock and make contributions to the ESOP in an aggregate amount of $7.4 million,
and the ESOP pays that amount back to us to service the loan. The loan is secured by a pledge of the Class C Preferred Stock purchased by the ESOP. As a portion of the loan is paid each
quarter:
•
5,630 pledged shares of Class C Preferred Stock are released and allocated to ESOP participant accounts; and
•
we recognize a non-cash compensation expense equal to the fair value of the allocated shares determined by an
independent financial adviser to the ESOP trustee. A portion of the expense is allocated to cost of goods sold and a portion is allocated to selling and administrative expense, based on the number of
shares allocated to the accounts of manufacturing employees and other employees.
An
ESOP participant is entitled to an account balance distribution upon termination of employment, retirement at age 65 or because of death or disability, and we have been obligated to
offer to repurchase the shares allocated to that former ESOP participant at the fair value determined by an independent financial adviser to the ESOP trustee.
Upon
completion of the offering made by this prospectus:
•
all of the shares of Class C Preferred Stock will convert to Class A Common Stock;
•
our obligation to purchase shares from former ESOP participants will terminate;
•
the shares held by the ESOP and its participants will be included in shareholders' equity in our financial statements,
rather than accounted for as contingently redeemable equity securities;
•
we will make quarterly contributions to the ESOP, net of any dividends paid on the Class A Common Stock held by the
ESOP, in an amount sufficient for it to service its debt to us, which will continue to have no effect on our cash position; and
•
we will continue to recognize a non-cash compensation expense each quarter until the ESOP repays its debt to
us, and all shares pledged as security for the debt are released, which will occur on or before December 31, 2013.
We
add the ESOP compensation expense back to the financial measures we monitor, including operating profit and EBITDA, because it is a non-cash charge that can significantly
affect our reported financial results and, because it depends on quarterly fair value appraisals, can fluctuate significantly between quarters. The ESOP compensation expense is not ongoing share-based
compensation and we believe our employees receive competitive compensation excluding the shares allocated to them under the ESOP.
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DESCRIPTION OF CAPITAL STOCK
Our articles of incorporation, as in effect upon the completion of the offering made by this prospectus, authorize us to issue up to
         shares of Class A Common Stock,         shares of Legacy Class A Common Stock,         shares of
Class B Common Stock and         shares of
"blank check" preferred stock, which could be issued by the board without shareholder approval and could have voting, liquidation, dividend and other rights superior to the Class A Common
Stock. The Class C Preferred Stock, all of which is held by our ESOP, will convert automatically into Class A Common Stock upon completion of this offering and will no longer be
outstanding. Upon the completion of this offering, the outstanding shares of capital stock will be:
•
shares of Class A Common Stock.
•
shares of Legacy Class A Common Stock, excluding shares we expect will be converted to
Class A Common Stock and sold in this offering. Each share of Legacy Class A Common Stock (a) that is sold in an underwritten public offering (including this offering) will
automatically convert into one share of Class A Common Stock immediately upon such sale, (b) outstanding on the date that is 180 days following the date of this prospectus (the
first "Automatic Conversion Date") will automatically convert on that date into one-half of a share of new Class A Common Stock and one-half share of Legacy
Class A Common Stock, (c) outstanding on the date that is 360 days after the date of this prospectus (the second "Automatic Conversion Date") will automatically convert on that
date into one share of new Class A Common Stock (subject, in each case, to adjustment for stock splits, stock dividends, recapitalizations and similar events occurring after the offering made
pursuant to this prospectus).
•
shares of Class B Common Stock. Henry T. Swigert, as Trustee of the Swigert 2000 Trust,
beneficially holds all of the shares of our outstanding Class B Common Stock. Each share of Class B Common Stock will automatically convert upon transfer to a person other than those
described below or if fewer than         shares of Class B Common Stock are outstanding (a) if transferred before the first Automatic Conversion Date, into one share of Legacy
Class A Common Stock; (b) if transferred after the first but before the second Automatic Conversion Date, into one-half share of Legacy Class A Common Stock and
one-half share of Class A Common Stock; and (c) if transferred on or after the second Automatic Conversion Date, into one share of Class A Common Stock (subject, in
each case, to adjustment for any stock splits, stock dividends, recapitalizations and similar events occurring after the offering made pursuant to this prospectus). The shares of Class B Common
Stock may be transferred without automatic conversion to Henry T. Swigert; any trustee, in the capacity of trustee, of the Swigert 2000 Trust; or any trustee, in the capacity of trustee, of any
trust created under the Swigert 2000 Trust. Mr. Swigert is a member of our board of directors.
As
of March 31, 2011, we had 246 holders of record of our Legacy Class A Common Stock, one holder of record of our Class B Common Stock and one holder of record of
our Class C Preferred Stock. No shares of Class A Common Stock will be outstanding until issued in connection with the sale of stock in the offering made by this prospectus.
Common Stock Voting
Each holder of our Class A Common Stock is entitled to one vote per share. Each holder of Legacy Class A Common Stock
and Class B Common Stock is entitled to the number of votes per share equal to the number of shares of Class A Common Stock into which the holder's shares are convertible; the conversion
ratio will be one-for-one upon completion of the offering. Except as required by law and as described below, holders of Class A Common Stock, Legacy Class A
Common Stock and Class B Common Stock vote together as a single voting group on all matters
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submitted
to shareholders for a vote. In addition to any class vote required by law, the Legacy Class A Common Stock and the Class A Common Stock, as a single voting group, and the
Class B Common Stock vote separately on the following matters:
•
conversion, merger or share exchange, as described in Oregon Business Corporation Act Sections 60.470 through
60.501, except for transactions that do not require shareholder approval under Oregon Business Corporation Act Section 60.487(7);
•
any sale of assets other than in the ordinary course of business, as described in Oregon Business Corporation Act
Section 60.534; and
•
any dissolution, as described in Oregon Business Corporation Act Sections 60.621 through 60.645.
All
shares of Class B Common Stock will convert automatically into shares of Class A Common Stock or Legacy Class A Common Stock, depending on the conversion date,
when the number of shares of Class B Common Stock outstanding is less than         (subject to adjustment for any stock split or dividend).
Dividend Rights
Class A Common Stock, Legacy Class A Common Stock and Class B Common Stock share equally and ratably, on an
as-converted basis, in any dividends we pay or set aside on our common stock.
Liquidation Rights
Class A Common Stock, Legacy Class A Common Stock and Class B Common Stock share ratably, on an
as-converted basis, in all assets we distribute as a result of our liquidation, dissolution or winding up.
Preferred Stock
Our articles of incorporation, as in effect upon the completion of the offering made by this prospectus, authorize         
shares of "blank check" preferred stock, with respect to which our board of directors can, without shareholder approval, (1) fix the rights, preferences, privileges and restrictions, including
voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, subscription rights and the number of shares constituting any series, and (2) cause the company
to issue preferred stock in one or more series. Our board of directors may designate preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of
common stock.
Shareholder Agreements
shareholders who hold an aggregate of         shares of Legacy Class A
Common Stock are parties to
restated stock transfer restriction agreements ("RSTRA") and         shareholders who hold an aggregate         shares of Legacy Class A Common Stock are
parties to stock purchase
agreements ("SPA"). Each RSTRA and SPA gives a shareholder the right to require us to purchase the shareholder's shares upon retirement or death. In addition, the RSTRA also gives a shareholder the
right to require us to purchase the shares upon disability and the SPA requires us to repurchase shares upon the termination of the shareholder's employment with us.
The
RSTRA and SPA only apply to shares of Legacy Class A Common Stock. As a result, all of the agreements will terminate when the underlying Legacy Class A Common Stock
converts to Class A Common Stock, which will occur no later than 360 days after the date of this prospectus. In 2009 and 2010, we repurchased shares under the RSTRA for aggregate
consideration of $1.0 million and $0.7 million, respectively. We repurchased no shares under the SPA in those years.
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We
cannot predict with certainty the extent to which repurchase obligations will occur or the future fair market value of our stock.
Restated Stock Transfer Restriction Agreement
Each shareholder subject to a RSTRA has the right to sell all or some shares to us upon retirement or disability. If that right is
exercised, the sale will take place in three installments over a two-year period: up to one-third of the shares on the first on the date of the retirement or disability;
between one-third and two-thirds of the shares on the second on the first anniversary of the retirement or disability; and any remaining shares on the third on the second
anniversary of the retirement or disability. If a shareholder sells more than $1.0 million of shares back to us at any of those installments, we may, at our option, pay $1.0 million on
that closing date and half of the remaining amount on each of the first and second anniversaries of the closing date.
In
addition, successors in interest to shareholders subject to the RSTRA may, upon the death of a shareholder, sell up to half of the shares held by the shareholder at death to us and
any remaining shares on the first anniversary of the shareholder's death. When a repurchase right is exercised after a shareholder's death, we have the option of paying the purchase price in two equal
annual installments.
Our
repurchase obligation under the RSTRA is based on the fair market value of the shares subject to the RSTRA at the time of exercise, which is measured as of the last day of the
fiscal quarter immediately preceding the quarter in which the retirement, death or disability occurred or in which the applicable anniversary of the retirement, death or disability occurs. After
completion of the offering made by this prospectus, we expect to measure the fair market value of the shares by the trading value of the Class A Common Stock. Our obligation to repurchase
shares under the RSTRA is subject to restrictions under Oregon corporate law and our credit facility, which may also impact the priority in which we purchase shares if multiple shareholders exercise
their put options at once.
We
have a right of first refusal to purchase the shares subject to the RSTRA on the same terms, including price, as those on which a shareholder subject to the RSTRA attempts to sell
his or her shares to a bona fide purchaser.
Stock Purchase Agreement
Shares subject to a SPA may only be sold or transferred in accordance with that SPA. Each shareholder subject to a SPA must sell his
or her shares back to us upon death or termination of the shareholder's employment or service as a director. The repurchase price is based on the book value of the shares, as adjusted based on our
consolidated
earnings on the last day of each fiscal year. Unless otherwise agreed, we must pay the repurchase price for the shares within 30 days of death or termination.
Anti-Takeover Provisions
Articles of Incorporation and Bylaws
Our articles of incorporation and bylaws, as in effect upon the completion of this offering, contain provisions that may delay or
prevent a change in control of our company or changes in our management, including provisions that:
•
authorize "blank check" preferred stock, which could be issued without shareholder approval and could have voting,
liquidation, dividend and other rights superior to our common stock;
•
create a classified board of directors whose members serve staggered three-year terms;
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•
provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though
less than a quorum; and
•
require a two-thirds vote of the holders of our Class A Common Stock, Legacy Class A Common
Stock, and Class B Common Stock, voting as a single group, to amend specified provisions of our articles of incorporation and bylaws.
These
provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
Oregon Business Combination Act
We are subject to the Oregon Business Combination Act, which prohibits an Oregon corporation from engaging in any business combination
with any interested shareholder for three years after the date the shareholder became an interested shareholder, with the following exceptions:
•
before the combination or transaction date, the board of directors of the corporation approved either the business
combination or the transaction that resulted in the shareholder becoming an interested shareholder;
•
upon completion of the transaction that resulted in the shareholder becoming an interested shareholder, the interested
shareholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the
outstanding voting stock owned by the interested shareholder) (i) those shares owned by persons who are directors and also officers and (ii) employee stock plans in which employee
participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or an exchange offer; or
•
on or after that date, the business combination is approved by the board of directors and authorized at an annual or a
special meeting of the shareholders, and not by written consent, by the affirmative vote of at least 66
2
/
3
% of the outstanding voting stock that is not owned by the interested
shareholder.
In
general, the Oregon Business Combination Act defines "business combination" to include the following:
•
any merger or consolidation involving the corporation or any direct or indirect majority owned subsidiary of the
corporation and the interested shareholder or any other corporation, partnership, unincorporated association or other entity if the merger or consolidation is caused by the interested shareholder and
as a result of such merger or consolidation the transaction is not excepted as described above;
•
any sale, transfer, pledge or other disposition (in one transaction or a series) of 10% or more of the assets of the
corporation involving the interested shareholder;
•
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of
the corporation to the interested shareholder;
•
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any
class or series of the corporation beneficially owned by the interested shareholder; or
•
the receipt by the interested shareholder of the benefit of any losses, advances, guarantees, pledges or other financial
benefits by or through the corporation.
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In
general, the Oregon Business Combination Act defines an "interested shareholder" as an entity or a person who, together with the person's affiliates and associates, beneficially
owns, or within three years prior to the time of determination of interested shareholder status owned, 15% or more of the outstanding voting stock of the corporation.
Oregon Control Share Act
We are subject to the Oregon Control Share Act, which regulates the process by which a person may acquire control of certain
Oregon-based corporations without the consent and cooperation of the corporation's board of directors. Under the Oregon Control Share Act a person who acquires voting stock in a transaction that
results in the person holding more than 20%, 33
1
/
3
% or 50% of the total voting power cannot vote the shares it acquires in the acquisition. This restriction does not apply if
voting rights are given to the control shares by:
•
the holders of a majority of the outstanding voting shares, excluding the control shares held by the acquirer and shares
held by our officers and employee directors, and
•
the holders of a majority of the outstanding voting shares, including the control shares held by such person and shares
held by our officers and employee directors.
To
retain the voting rights attached to acquired shares, these approvals are required at the time an acquirer's holdings first exceed 20% of the total voting power, and again at the
times the acquiring person's holdings first exceed 33
1
/
3
% and 50%. An acquiring person includes persons acting as a group.
The
acquirer may, but is not required to, submit to the target company an "acquiring person statement" including specific information about the acquirer and its plans for the
corporation. The acquiring person statement may also request that the corporation call a special meeting of shareholders to determine whether the control shares will be allowed to have voting rights.
If the acquirer does not request a special meeting of shareholders, the issue of voting rights of control shares will be considered at the next annual or special meeting of shareholders that is held
more than 60 days after the date of the acquisition of control shares. If the acquirer's control shares are allowed to have voting rights and represent a majority or more of all voting power,
shareholders who do not vote in favor of voting rights for the control shares will have the right to receive the appraised fair value of their shares, which may not be less than the highest price paid
per share by the acquirer for the control shares.
Shares
are not deemed to be acquired in a control share acquisition if, among other things, they are acquired from the issuing corporation, or are issued pursuant to a plan of merger or
exchange effected in compliance with the Oregon Business Corporation Act and the issuing corporation is a party to the merger or exchange agreement.
Listing
We intend to apply to list our common stock on The NASDAQ Global Market under the symbol "ESCO".
Transfer Agent and Registrar
The transfer agent and registrar for our Class A Common Stock is American Stock Transfer & Trust Company, LLC.
The transfer agent's address is Operations Center, 6201 15th Avenue, Brooklyn, NY 11219.
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SHARES ELIGIBLE FOR FUTURE SALE
The Class A Common Stock to be sold in the offering made by this prospectus is a new class of common stock, none of which will
be outstanding until issuance in connection with the offering made by this prospectus. There has not been a public market for our Class A Common Stock. Nevertheless, future sales of substantial
amounts of our Class A Common Stock, including shares issued upon exercise of options of stock appreciation rights or conversion of our Legacy Class A Common Stock or Class B
Common Stock, or the possibility of these sales, in the public market, could cause the market price of our Class A Common Stock to fall or impair our ability to raise equity capital. In
addition, future sales of shares of substantial amounts of our Legacy Class A Common Stock could also cause the market price of our Class A Common Stock to fall or impair our ability to
raise equity capital, although there is no public market for our Legacy Class A Common Stock and we do not plan to list the shares of Legacy Class A on any exchange or otherwise
facilitate the creation of a public market.
Based
on the number of shares of Legacy Class A Common Stock and Class B Common Stock outstanding as of December 31, 2010, upon completion of this offering and
assuming no exercise by the underwriters of their option to purchase additional shares, we will have        shares of Class A Common Stock,        shares of Legacy
Class A Common Stock and        shares of Class B Common Stock outstanding.
The        shares
of our Class A Common Stock sold in this offering will be freely tradable in the public market without restriction or further registration under
the Securities Act, unless these shares are held by our affiliates, as that term is defined in Rule 144 under the Securities Act. The remaining        shares of Class A
Common Stock not sold in this offering, the        shares of our Legacy Class A Common Stock and the        shares of our Class B Common Stock held by our
existing holders will be "restricted securities", as that term is defined in Rule 144, and will only be available for public sale if they are registered under the Securities Act or if they
qualify for an exemption from registration under Rule 144 or Rule 701 of the Securities Act, which are summarized below.
shares
of Class A Common Stock will be held by our ESOP as a result of the conversion of each share of the outstanding Class C Preferred Stock into shares
of Class A Common Stock in connection with the offering and the amendment of our articles of incorporation. Shares allocated to an ESOP participant's account are not distributed to ESOP
participants before death, disability, retirement at age 65 or other termination of employment. Of these shares,             have been allocated to persons that have entered into lockup
agreements
described below. The remaining        shares will be immediately eligible for sale following this offering in the public market under Rule 144 or Rule 701 upon the
distribution of the shares to an ESOP participant pursuant to the terms of the ESOP.
All
of the Legacy Class A Common Stock outstanding after this offering will automatically convert on a one-for-one basis into shares of the Class A
Common Stock in equal installments on a pro rata basis at dates that are 180 days and 360 days after the date of this prospectus. Only the        shares of Legacy
Class A Common Stock owned by our executive officers and directors and all of the shares of Class B Common Stock will be subject to lock-up agreements described below. We
expect the remaining       shares of Class A Common Stock issuable upon the conversion of the Legacy Class A Common Stock, will be eligible for sale in the public market
pursuant to Rule 144 or Rule 701, subject to some limitations on the shares held by our affiliates. There is, however, no public market for our Legacy Class A Common Stock and we
do not plan to list the shares of Legacy Class A on any exchange or otherwise facilitate the creation of a public market.
In
addition, upon transfer to a person other than those specified in the articles of incorporation,        shares of Class B Common Stock outstanding will convert
on a one-for-one
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basis
into shares of Legacy Class A Common Stock or Class A Common Stock depending on the date of transfer. The shares of Class B Common Stock, and any shares of Class A
Common Stock or Legacy Class A Common Stock issuable upon conversion of the Class B Common Stock, will be eligible for sale pursuant to Rule 144 upon the expiration of lockup
agreements entered into with the holders of all of the shares of our Class B Common Stock, subject to limitations on the shares held by our affiliates.
Lockup Agreements
All of our officers and directors who, following this offering, together will beneficially own        shares, or
       %, of our Class A Common Stock,        shares, or       %, of our Legacy Class A Common Stock
and        shares, or       %,
of our Class B Common Stock (or       % of our total Class A Common Stock, assuming the conversion of the Legacy Class A Common Stock and Class B Common Stock) have
agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their Class A Common Stock or securities convertible into or exchangeable for shares of
Class A Common Stock (including Legacy Class A Common Stock and Class B Common Stock) during the period from the date of this prospectus continuing through the date
180 days after the date of this prospectus, except with the prior written consent of each of the representatives of the underwriters. This agreement is subject to certain exceptions, and is
also subject to extension for up to an additional 34 days, as described in "Underwriting".
Rule 144
In general, a person who beneficially owns restricted shares of any class of our common stock (shares other than those purchased in a
registered public offering) for at least six months is entitled to sell those restricted securities, if that person is not an affiliate of ours at the time of, or at any time during the 90 days
preceding, the sale. A person who beneficially owns restricted shares of our common stock for at least six months and who is our affiliate at the time of, or was our affiliate any time during the
90 days preceding, a sale is subject to additional restrictions on the sale of securities. Those additional restrictions limit the number of securities the person may sell within any
three-month period to the number of securities that do not exceed the greater of the following:
•
1% of the number of shares of the applicable class of common stock then outstanding, which, in the case of our
Class A Common Stock, equals approximately       shares based on the number of shares of Class A Common Stock outstanding as of       , 2011; or
•
with respect to Class A Common Stock, the average weekly trading volume of the Class A Common Stock on The
NASDAQ Global Market during the four calendar weeks before the filing of a notice on Form 144 with respect to the sale.
Sales
by or on behalf of affiliates under Rule 144 must also comply with the manner of sale, current public information, and notice provisions of Rule 144.
Rule 701
In general, Rule 701 allows a shareholder who purchased shares of our common stock pursuant to a written compensatory plan or
contract and who is not an affiliate of ours during the immediately preceding 90 days to sell these shares under Rule 144, but without compliance with the public information, holding
period, volume limitation or notice provisions of Rule 144. Rule 701 also permits our affiliates to sell Rule 701 shares under Rule 144 without complying with the holding
period requirements of Rule 144. All holders of Rule 701 shares, however, are required to wait until 90 days after the date of this prospectus before selling shares pursuant to
Rule 701. The shares that may be sold in compliance with Rule 701 that are subject to lock-up agreements described
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above
and under "Underwriting" below will not be eligible for sale until expiration or waiver of the restrictions set forth in those agreements.
Stock Plans
We plan to file a registration statement on Form S-8 to cover shares of Class A Common Stock under
our 2000 Stock Incentive Plan, our 2010 Stock Incentive Plan and our ESOP. Resale of these registered shares may occur only after conversion of the shares underlying plan awards into Class A
Common Stock and the expiration of any contractual lock-up periods.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
TO NON-U.S. HOLDERS
The following is a summary of the material United States federal income tax consequences to non-U.S. holders (as defined
below) of the acquisition, ownership and disposition of our Class A Common Stock issued pursuant to this offering. This discussion is not a complete analysis of all the potential United States
federal income tax consequences relating thereto, nor does it address any estate and gift tax consequences or any tax consequences arising under any state, local or foreign tax laws, or any other
United States federal tax laws. This discussion is based on the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated thereunder, judicial decisions and published rulings and
administrative pronouncements of the Internal Revenue Service ("IRS"), all as in effect as of the date of this offering. These authorities may change, possibly retroactively, resulting in United
States federal income tax consequences different from those discussed below.
This
discussion is limited to non-U.S. holders who purchase our Class A Common Stock issued pursuant to this offering and who hold our Class A Common Stock as
a "capital asset" within the meaning of the Internal Revenue Code (generally, property held for investment). This discussion does not address all of the United States federal income tax consequences
that may be relevant to a particular holder in light of such holder's particular circumstances. This discussion also does not consider any specific facts or circumstances that may be relevant to
holders subject to special rules under the United States federal income tax laws, including, without limitation, shareholders, partners, beneficiaries or other owners of a person holding our
Class A Common Stock; former citizens or residents of the United States subject to tax as expatriates; partnerships or other entities treated as partnerships for U.S. federal income tax
purposes; corporations that accumulate earnings to avoid United States federal income tax; financial institutions; insurance companies; brokers, dealers or traders in securities, commodities or
currencies; tax-exempt organizations; tax-qualified retirement plans; persons that own, or have owned, actually or constructively, more than 5% of our Class A Common
Stock; and persons holding our Class A Common Stock as part of a hedging or conversion transaction or straddle, or a constructive sale, or other risk reduction strategy.
PROSPECTIVE
INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING AND DISPOSING OF
OUR CLASS A COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR FOREIGN TAX LAWS OR ANY OTHER UNITED STATES FEDERAL TAX LAWS OR UNDER ANY APPLICABLE TAX TREATY.
Definition of Non-U.S. Holder
For purposes of this discussion, a non-U.S. holder is a person that is not a "U.S. person" for United States federal
income tax purposes. A U.S. person is any of the following:
•
an individual citizen or resident of the United States;
•
a corporation or partnership (including any entity treated as such for United States federal income tax purposes) created
or organized under the laws of the United States, any state thereof, or the District of Columbia;
•
an estate the income of which is subject to United States federal income tax regardless of its source; or
•
a trust (1) the administration of which is subject to the primary supervision of a United States court and which
has one or more U.S. persons who have the authority to control all
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substantial
decisions of the trust, or (2) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.
An
individual may be treated as a resident of the United States in any calendar year by being present in the United States for at least 31 days in that calendar year and for an
aggregate of at least 183 days during the three-year period ending in that calendar year. For purposes of determining days present in the United States, certain days that an
individual is actually present in the United States are not taken into account. In addition, the 183-day test is determined by counting all of the days the individual is treated as being
present in the current year, one-third of such days in the immediately preceding year and one-sixth of such days in the second preceding year.
Distributions on Our Class A Common Stock
If we make distributions of cash or other property on our Class A Common Stock, such distributions will constitute dividends
for United States federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in
excess of our current and accumulated earnings and profits generally will constitute a return of capital and will first be applied against and reduce a non-U.S. holder's tax basis in the
Class A Common Stock, but not below zero. Any excess will be treated as gain realized on the sale or other disposition of the Class A Common Stock and will be treated as described under
"Gain on Disposition of Our Class A Common Stock" below.
Dividends
paid to a non-U.S. holder of our Class A Common Stock, except as provided below with respect to dividends that are treated as effectively connected with the
non-U.S. holder's conduct of a trade or business in the United States, will be subject to United States federal withholding tax at a rate of 30% of the gross amount of the dividends, or
such lower rate specified by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish to us or our paying agent a valid IRS
Form W-8BEN (or applicable successor form) certifying such holder's qualification for the reduced rate. This certification must be provided to us or our paying agent prior to the
payment of dividends and must be updated periodically. Non-U.S. holders that do not timely provide us or our paying agent with the required certification, but that qualify for a reduced
treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Dividends
we pay to a non-U.S. holder that are treated as effectively connected with such holder's United States trade or business (and, if required by an applicable income
tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States) are not subject to United States federal withholding tax. Instead, such
dividends generally will be subject to United States federal income tax on a net income basis at regular graduated United States federal income tax rates in much the same manner as if such holder were
a resident of the United States. To inform us that dividends are not subject to United States federal withholding tax, the non-U.S. holder generally must furnish to us or our paying agent
a properly executed IRS Form W-8ECI (or applicable successor form). This certification must be provided to us or our paying agent prior to the payment of dividends and must be
updated periodically. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable
income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders are encouraged to consult their tax advisors
regarding any applicable income tax treaties that may provide for different rules.
A
non-U.S. holder who claims the benefit of an income tax treaty generally will be required to satisfy applicable certification and other requirements prior to the
distribution date. Non-U.S. holders
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are
encouraged to consult their tax advisors regarding their entitlement to benefits under a relevant income tax treaty.
Gain on Disposition of Our Class A Common Stock
Subject to the discussion below regarding backup withholding, a non-U.S. holder generally will not be subject to United
States federal income tax on any gain realized upon the sale or other disposition of our Class A Common Stock, unless:
•
the non-U.S. holder is a nonresident alien individual who is present in the United States for 183 days
or more during the taxable year of the disposition (but nevertheless is treated as a nonresident alien because some or all of those days were not taken into account for purposes of determining whether
the individual is a U.S. resident under the 183-day test described in the definition of "non-U.S. holder" above);
•
the gain is effectively connected with the non-U.S. holder's conduct of a trade or business in the United
States and, if required by an applicable income tax treaty, attributable to a permanent establishment maintained by the non-U.S. holder in the United States; or
•
we are, or have been, a United States real property holding corporation (USRPHC) for United States federal income tax
purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder's holding period for our Class A Common Stock and our
Class A Common Stock has ceased to be traded on an established securities market prior to the beginning of the calendar year in which the sale or other disposition occurs. Generally, we will be
a USRPHC if the fair market value of our United States real property interests equals or exceeds 50% of the sum of the fair market value of our other trade or business assets, our United States real
property interests, and our foreign real property interests, all as determined under applicable Treasury Regulations. Although we believe we are not and do not anticipate becoming a USRPHC for United
States federal income tax purposes, no assurances can be made in this regard.
Gain
realized on a sale of our Class A Common Stock by a non-U.S. holder described in the first bullet point above will be subject to United States federal income tax
at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by United States source capital losses (even though the individual is not considered a resident
of the United States), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses.
Gain
described in the second and third bullet points above will be subject to United States federal income tax on a net income basis at regular graduated United States federal income
tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation that realizes gain described in the second bullet point
above also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the
taxable year, as adjusted for certain items. In addition, if we are determined to be a USRPHC and our Class A Common Stock has ceased to be traded on an established securities market, as
described in the third bullet point above, then a purchaser may be required to withhold 10% of the proceeds payable to a non-U.S. holder from a sale or other taxable disposition of our
Class A Common Stock. This 10% withholding, if applicable, is not an additional tax, and amounts withheld may be credited against the non-U.S. holder's federal income tax liability.
Non-U.S. holders are encouraged to consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
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Information Reporting and Backup Withholding
We generally must report annually to the IRS and to each non-U.S. holder the amount of distributions on our Class A
Common Stock paid to such holder and the amount of any tax withheld with respect to those distributions. These information reporting requirements apply even if no withholding was required. This
information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established.
The
gross amount of dividends paid to a non-U.S. holder subject to information reporting that fails to certify its non-U.S. holder status in accordance with
applicable Treasury Regulations may be subject to backup withholding, currently at a 28% rate. In addition, information reporting and backup withholding may apply to the proceeds from a sale or other
disposition of our Class A Common Stock, if the non-U.S. holder fails to certify its non-U.S. status. Generally, a non-U.S. holder furnishes the required
certification by providing a valid IRS Form W-8BEN or IRS Form W-8ECI, as applicable. Notwithstanding the foregoing, backup withholding may apply if the payor has
actual knowledge, or reason to know, that the holder is a U.S. person that is not an exempt recipient.
Backup
withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a non-U.S. holder's
United States federal income tax liability, provided the required information is timely furnished to the IRS.
Recent Legislation Imposing Withholding Tax on Foreign Entities That Do Not Comply with New Disclosure Requirements.
Recently enacted U.S. legislation generally will impose a 30% withholding tax on certain payments to non-U.S. financial
institutions and certain other non-U.S. nonfinancial entities after December 31, 2012. The types of payments subject to the new tax will include dividends in respect of our
Class A Common Stock and gross proceeds from the sale or other disposition of our Class A Common Stock. The tax will not apply, however, if the applicable non-U.S. entity
satisfies certain due diligence and disclosure requirements (generally relating to ownership by U.S. persons in or accounts with the non-U.S. entity). Other exceptions also may apply.
Non-U.S. holders are encouraged to consult
their own tax advisors regarding the potential application of the new withholding tax based upon their particular
circumstances.
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UNDERWRITING
We, the selling shareholders and the underwriters named below, have entered into an underwriting agreement with respect to the shares
of Class A Common Stock being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Goldman,
Sachs & Co. and Morgan Stanley & Co. Incorporated are the representatives of the underwriters.
Underwriters
Number of Shares
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Total
The
underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this
option is exercised.
If
the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an
additional                          shares from us. They
may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in
the table above.
The
following tables show the per share and total underwriting discounts to be paid to the underwriters by us and the selling shareholders. Such amounts are shown assuming both no
exercise and full exercise of the underwriters' option to purchase                          additional shares.
Paid by Us
No Exercise
Full Exercise
Per Share
$
$
Total
$
$
Paid by the Selling Shareholders
No Exercise
Full Exercise
Per Share
$
$
Total
$
$
Shares
sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the
underwriters to securities dealers may be sold at a discount of up to $             per share from the initial public offering price. If all the shares are not sold at the initial
public offering
price, the representatives may change the offering price and the other selling terms. The offering of the shares by the underwriters is subject to receipt and acceptance, and subject to the
underwriters' right to reject any order in whole or in part.
Our
officers, directors and the holder of our Class B Common Stock have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of their
Class A Common Stock or securities convertible into or exchangeable for shares of Class A Common Stock
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(including
shares of Legacy Class A Common Stock and Class B Common Stock), and we have agreed not to issue shares of Class A Common Stock, during the period from the date of this
prospectus through 180 days after the date of this prospectus, except with the prior written consent of each of the representatives. These agreements are subject to exceptions, including
issuances of securities under existing stock incentive plans or as consideration in acquisitions, provided that the aggregate number of shares of Class A Common Stock issued or issuable in
acquisitions may not exceed    % of the shares offered by this prospectus and that the recipient of those securities must agree to be bound by the lock-up restrictions described
in this paragraph. See "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions.
The
180-day restricted period described in the preceding paragraph will be automatically extended if (1) during the last 17 days of the 180-day
restricted period the Company issues an earnings release or announces material news or a material event; or
(2) prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 15-day period following the last day
of the 180-day period, in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the announcement of the material news or material event.
Prior
to the offering, there has been no public market for the shares. The initial public offering price has been negotiated among us and the representatives. Among the factors to be
considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and
earnings prospects, an assessment of our management and the consideration of the above factors in relation to market valuation of companies in related businesses.
We
intend to apply to have our Class A Common Stock listed on The NASDAQ Global Market under the symbol "ESCO".
In
connection with the offering, the underwriters may purchase and sell shares of Class A Common Stock in the open market. These transactions may include short sales, stabilizing
transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering.
"Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from us in the offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the
underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the
option granted to them. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short
position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the Class A Common Stock in the open market after pricing that could
adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of Class A Common Stock made by the underwriters in the open market
prior to the completion of the offering.
The
underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the
representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.
Purchases
to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a
decline in
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the
market price of our Class A Common Stock and, together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of our Class A Common
Stock. As a result, the price of our Class A Common Stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued
at any time. These transactions may be effected on The NASDAQ Global Market, in the over-the-counter market or otherwise.
The
underwriters do not expect sales to discretionary accounts to exceed 5% of the total number of shares offered.
We
estimate that the total expenses of the offering that we expect to pay, excluding underwriting discounts, but including certain expenses of the selling shareholders, will be
approximately $             .
We
and the selling shareholders have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act.
The
underwriters and their respective affiliates are full-service financial institutions engaged in various activities, which may include securities trading, commercial and
investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. Certain of the underwriters and their respective
affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees
and expenses.
In
the ordinary course of their various business activities, the underwriters and their respective affiliates may make or hold a broad array of investments and actively trade debt and
equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities
activities may involve our securities and/or instruments. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views
in respect of such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant
Member State"), each underwriter has represented and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant
Implementation Date") it has not made and will not make an offer of shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the shares which has been
approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of shares to the public in that Relevant
Member State at any time:
(a)
to
legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is
solely to invest in securities;
(b)
to
any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance
sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
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(c)
to
fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of
the representatives for any such offer; or
(d)
in
any other circumstances which do not require the publication by the issuer of a prospectus pursuant to Article 3 of the Prospectus Directive.
For
the purposes of this provision, the expression an "offer of shares to the public" in relation to any shares in any Relevant Member State means the communication in any form and by
any means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe for the shares, as the same may be varied in
that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.
United Kingdom
Each underwriter has represented and agreed that:
(a)
it
has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of the shares in
circumstances in which Section 21(1) of the FSMA does not apply to us; and
(b)
it
has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares in, from or
otherwise involving the United Kingdom.
Hong Kong
The shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer
to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), (ii) to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap.32,
Laws of Hong Kong), and no advertisement, invitation or document relating to the shares may be issued to or may be in the possession of any person for the purpose of issue (in each case whether in
Hong Kong or
elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with
respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder.
Singapore
This prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any
other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold,
or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under
Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"); (ii) to a relevant person, or any person pursuant to Section 275(1A), and in
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accordance
with the conditions specified in Section 275 of the SFA; or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where
the shares are subscribed or purchased under Section 275 by a relevant person which is (a) a corporation (which is not an accredited investor) the sole business of
which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an
accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, shares, debentures and units of shares and debentures of that corporation or the
beneficiaries' rights and interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the shares under Section 275 except (1) to an
institutional investor under Section 274 of the SFA or a relevant person, or to any person pursuant to Section 275(1A), and in accordance with the conditions specified in
Section 275 of the SFA; (2) where no consideration is given for the transfer; or (3) by operation of law.
Japan
The securities have not been and will not be registered under the Financial Instruments and Exchange Law of Japan (the "Financial
Instruments and Exchange
Law"), and each underwriter has agreed that it will not offer or sell any securities, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein
means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan
or to a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Law and any other applicable
laws, regulations and ministerial guidelines of Japan.
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LEGAL MATTERS
Certain legal matters with respect to the legality of the shares of Class A Common Stock offered in this prospectus will be
passed upon for us by Stoel Rives LLP, Portland, Oregon. The underwriters are being represented by Davis Polk & Wardwell LLP, Menlo Park, California, in connection with the
offering.
EXPERTS
The consolidated financial statements as of December 31, 2009 and 2010 and for each of the three years in the period ended
December 31, 2010 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on
the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares
of our Class A Common Stock offered by this prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the registration statement or the exhibits to the registration statement as permitted by the rules and regulations of the SEC. For
further information with respect to us and our Class A Common Stock, we refer you to the registration statement, including the exhibits and the financial statements and notes filed as a part of
the registration statement. Statements contained in this prospectus concerning the contents of any contract (or other document) are not necessarily complete. If a contract or document has been filed
as an exhibit to the registration statement, see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is
qualified in all respects by the filed exhibit.
You
may obtain copies of this information by mail from the Public Reference Section of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549, at prescribed rates.
You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website that
contains reports, proxy statements and other information about issuers that file electronically with the SEC. The address of that website is
www.sec.gov
.
After
this offering, we will file with the SEC periodic reports, proxy statements and other information required by the Securities Exchange Act of 1934. We also maintain a website at
www.escocorp.com
at which,
 following the completion of this offering, you may access these materials after they are electronically filed with, or
furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this prospectus.
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INDEX TO FINANCIAL STATEMENTS
CONTENTS
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-2
CONSOLIDATED FINANCIAL STATEMENTS:
STATEMENTS OF EARNINGS
F-3
BALANCE SHEETS
F-4
STATEMENTS OF CASH FLOWS
F-5
STATEMENT OF CHANGES IN CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY
F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
F-10
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
To
the Board of Directors and Shareholders of ESCO Corporation:
In
our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, cash flows, and contingently redeemable equity securities and
shareholders' equity present fairly, in all material respects, the financial position of ESCO Corporation and its subsidiaries at December 31, 2010 and December 31, 2009, and the results
of their operations and their cash flows for each of the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our
audits of these statements 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, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Portland,
Oregon
May 2, 2011
F-2
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENTS OF EARNINGS
For the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008
(in thousands, except per share data)
2010
2009
2008
Net sales
$
849,481
$
680,390
$
939,913
Cost of goods sold
626,883
507,115
724,921
Gross profit
222,598
173,275
214,992
Operating expenses
Selling and administrative expenses
147,881
112,535
132,719
Restructuring and other
748
6,332
1,792
Operating profit
73,969
54,408
80,481
Interest income
(704
)
(420
)
(2,068
)
Interest expense
24,414
26,646
28,804
Loss on early extinguishment of debt
13,013
—
—
Other (income) expense
(731
)
(1,091
)
4,259
Earnings from continuing operations before income taxes
37,977
29,273
49,486
Income tax expense
9,423
8,487
13,297
Earnings from continuing operations, net of tax
28,554
20,786
36,189
Earnings from discontinued operations, net of tax
—
306
443
Net earnings
28,554
21,092
36,632
Less: net earnings attributable to the noncontrolling interests — continuing operations
(4,634
)
(2,537
)
(5,073
)
Less: net earnings attributable to the noncontrolling interests — discontinued operations
—
(141
)
(343
)
Net earnings attributable to ESCO shareholders
23,920
18,414
31,216
Valuation adjustment on Class C preferred shares
(16,521
)
7,933
13,287
Net earnings attributable to ESCO common shareholders
$
7,399
$
26,347
$
44,503
Earnings per weighted average share outstanding (Note 26)
Basic:
Earnings from continuing operations allocated to ESCO common shareholders
$
6.81
$
24.18
$
41.08
Earnings from discontinued operations allocated to ESCO common shareholders
—
0.15
0.09
Net earnings allocated to ESCO common shareholders
$
6.81
$
24.33
$
41.17
Diluted:
Earnings from continuing operations allocated to ESCO common shareholders
$
6.62
$
15.16
$
26.21
Earnings from discontinued operations allocated to ESCO common shareholders
—
0.14
0.08
Net earnings allocated to ESCO common shareholders
$
6.62
$
15.30
$
26.29
Weighted average shares outstanding (Note 26)
Basic
1,086
1,083
1,081
Diluted
1,118
1,204
1,187
Amounts attributable to ESCO common shareholders
Earnings from continuing operations, net of tax
$
7,399
$
26,182
$
44,403
Earnings from discontinued operations, net of tax
—
165
100
Net earnings attributable to ESCO common shareholders
$
7,399
$
26,347
$
44,503
Pro forma earnings per share from continuing operations allocated to ESCO shareholders (unaudited)
Basic
$
$
$
Diluted
Pro forma weighted average shares outstanding (unaudited)
Basic
Diluted
Pro forma earnings from continuing operations attributable to ESCO shareholders (unaudited)
$
23,920
$
18,249
$
31,116
The accompanying notes are an integral part of these financial statements.
F-3
Table of Contents
ESCO Corporation
CONSOLIDATED BALANCE SHEETS
As of December 31, 2010 and December 31, 2009
(in thousands)
2010
2009
2010
Pro forma
Shareholders'
Equity
(unaudited)
ASSETS
Current assets
Cash and cash equivalents
$
114,101
$
168,487
Trade accounts receivable, net of reserves of $1,232 and $1,238
140,000
106,478
Inventories
105,435
77,054
Deferred income taxes
7,631
4,081
Prepaid expenses and other current assets
15,100
16,241
Total current assets
382,267
372,341
Property and equipment, net
167,446
161,919
Intangibles, net
14,379
6,558
Goodwill
57,608
40,072
Deferred income taxes
55,875
51,688
Long-term investments
30,749
27,518
Other noncurrent assets
14,181
12,974
Assets held for sale
1,117
2,675
TOTAL ASSETS
$
723,622
$
675,745
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable
$
65,693
$
47,133
Accrued payroll, payroll taxes and benefits
36,908
28,163
Other accrued liabilities
30,227
13,511
Dividends payable
1,026
12,355
Short-term debt
70,338
1,541
Current portion of long-term debt
11,502
965
Total current liabilities
215,694
103,668
Long-term debt, net of current portion
191,474
303,992
Accrued pension and other retirement costs
76,192
75,968
Other long-term liabilities
12,700
3,354
TOTAL LIABILITIES
496,060
486,982
Commitments and contingencies — See Note 19
Contingently redeemable equity securities:
Preferred Stock-Class C, 205,000 authorized, 188,354 and 189,325 outstanding
107,691
71,211
$
Common Stock-Class A, 5,000,000 authorized, 890,294 and 875,516 outstanding
124,493
72,853
Equity:
ESCO shareholders' equity (deficit)
New Common Stock-Class A, no shares authorized and outstanding actual,
              shares authorized,                shares outstanding pro forma (unaudited)
Preferred Stock-Class C unallocated ESOP shares, 67,577 and 90,104 actual, no shares authorized or outstanding pro forma (unaudited)
78,482
104,643
Common Stock-Class A, 5,000,000 authorized, 890,294 and 875,516 outstanding actual,
                shares authorized,                shares outstanding pro forma
(unaudited)
—
—
Common Stock-Class B, 243,737 authorized, 208,395 and 208,395 outstanding actual,
              shares authorized or             outstanding pro forma (unaudited)
10,343
10,343
Preferred Stock-Class C unallocated ESOP shares, 67,577 and 90,104
(78,482
)
(104,643
)
(Accumulated deficit)/retained earnings
(19,944
)
36,222
Accumulated other comprehensive loss
(9,802
)
(15,133
)
Total ESCO shareholders' equity (deficit)
(19,403
)
31,432
Noncontrolling interests
14,781
13,267
Total equity (deficit)
(4,622
)
44,699
$
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
723,622
$
675,745
The accompanying notes are an integral part of these financial statements.
F-4
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the fiscal years ended December 31, 2010, December 31, 2009 and December 26,
2008
(in thousands)
2010
2009
2008
Cash flows from operating activities
Earnings from continuing operations, net of tax
$
28,554
$
20,786
$
36,189
Adjustments to reconcile earnings from continuing operations, net of tax, to net cash provided by operating activities:
Depreciation and amortization
29,204
26,817
25,892
Loss on early extinguishment of debt
13,013
—
—
Non-cash compensation
24,937
16,504
20,248
Loss on asset dispositions
787
2,778
1,084
Unrealized (gains) losses on long term investments
(1,953
)
(2,860
)
4,405
Tax benefit on stock compensation plans
3,440
3,718
2,227
Deferred income taxes
(6,090
)
(5,898
)
(8,897
)
Interest in earnings (loss) of unconsolidated affiliates, net of distributions
57
(2,110
)
(1,482
)
Change in operating assets and liabilities:
Trade accounts receivable
(18,840
)
37,203
(22,766
)
Inventories
(19,438
)
24,101
3,633
Prepaid expenses and other assets
1,557
949
(11,927
)
Accounts payable, accrued expenses and other
23,100
(33,329
)
38,846
Net cash provided by operating activities — discontinued operations
—
166
1,008
Net cash provided by operating activities
78,328
88,825
88,460
Cash flows from investing activities
Capital expenditures
(20,516
)
(14,114
)
(29,691
)
Proceeds from sale of property and equipment
1,349
1,408
403
Business acquisitions, net of cash acquired
(33,770
)
(165
)
—
Investment in unconsolidated affiliates
(2,255
)
9,383
(6,170
)
Insurance proceeds received
—
—
481
Investment in other assets
(1,528
)
(1,481
)
(1,416
)
Net cash used in investing activities — discontinued operations
—
(271
)
(1,060
)
Net cash used in investing activities
(56,720
)
(5,240
)
(37,453
)
The
accompanying notes are an integral part of these financial statements.
F-5
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
For the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008
(in thousands)
2010
2009
2008
Cash flows from financing activities
Proceeds from short-term debt
$
70,775
$
2,135
$
834
Payments on short-term debt
(5,553
)
(4,344
)
—
Proceeds from long-term debt
200,575
529
658
Payments on long-term debt
(301,114
)
(2,189
)
(3,989
)
Debt issuance costs
(5,116
)
—
—
Bond premium paid on debt extinguishment
(8,626
)
—
—
Dividends paid
(26,873
)
(26,097
)
(14,571
)
Common stock issued
857
129
133
Common stock retired
(710
)
(1,010
)
—
Preferred stock retired
(727
)
(1,105
)
(857
)
Net cash used in financing activities
(76,512
)
(31,952
)
(17,792
)
Effect of exchange rate changes
518
3,687
(4,118
)
Net increase (decrease) in cash and cash equivalents
(54,386
)
55,320
29,097
Cash and cash equivalents at beginning of year
168,487
113,167
84,070
Cash and cash equivalents at end of year
$
114,101
$
168,487
$
113,167
Cash paid during the year for
Interest
$
21,876
$
22,206
$
23,177
Income taxes
$
4,258
$
15,393
$
21,601
Non-cash activities
Cash dividends declared, not yet paid
$
1,026
$
12,355
$
12,123
The
accompanying notes are an integral part of these financial statements.
F-6
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY
For the fiscal years ended December 31,
 2010, December 31, 2009, and December 26, 2008
CONTINGENTLY REDEEMABLE EQUITY SECURITIES
Number of Shares
Preferred Stock
Common Stock
(in thousands, except share data)
Class C
Preferred
Allocated ESOP
shares
Class A
Common Stock
shares
Class C
Preferred Stock
ESOP
Class A
Common Stock
Balance, December 28, 2007
56,723
161,129
$
51,697
$
83,956
Net earnings
Foreign currency translation
Change in employee benefit plan liability, net of tax of $9,252
Amortization of employee benefit plan liability, net of tax of ($280)
Change in measurement date for pension plans, net of tax of $372
Comprehensive income (loss)
Cash dividends declared $11.00 per common share
Stock issued upon exercise of options
3,805
133
Stock retired for cash
(1,025
)
(857
)
Tax benefit on stock incentive awards
25
Contingently redeemable shares valuation adjustment
(13,287
)
(12,104
)
Release of ESOP shares
22,524
20,248
Tax benefit of allocation of ESOP stock
2,227
Balance, December 26, 2008
78,222
164,934
$
60,028
$
72,010
Net earnings
Foreign currency translation
Change in employee benefit plan liability, net of tax of $2,075
Amortization of employee benefit plan liability, net of tax of ($265)
Comprehensive income (loss)
Cash dividends declared $10.00 per common share
Stock issued upon exercise of options
3,415
129
Stock retired for cash
(1,526
)
(2,230
)
(1,105
)
(34
)
Acquisition of non-controlling interest in Soldering
Non-controlling interest of previously unconsolidated subsidiary
Tax benefit on stock incentive awards
20
Contingently redeemable shares valuation adjustment
(7,933
)
728
Release of ESOP shares
22,525
16,504
Tax benefit of allocation of ESOP stock
3,717
Balance, December 31, 2009
99,221
166,119
$
71,211
$
72,853
Net earnings
Foreign currency translation
Change in employee benefit plan liability, net of tax of $1,062
Amortization of employee benefit plan liability, net of tax of ($503)
Derivatives, net of tax of $237
Comprehensive income
Cash dividends declared $11.00 per common share
Stock issued upon exercise of options
16,575
857
Stock retired for cash
(971
)
(1,797
)
(727
)
(37
)
Tax benefit on stock incentive awards
13
Contingently redeemable shares valuation adjustment
16,521
50,807
Release of ESOP shares
22,527
17,259
Tax benefit of allocation of ESOP stock
3,427
Balance, December 31, 2010
120,777
180,897
$
107,691
$
124,493
The accompanying notes are an integral part of these financial statements.
F-7
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY (Continued)
For the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008
ESCO SHAREHOLDERS' EQUITY
Number of Shares
Preferred Stock
Common Stock
(in thousands, except share data)
Class C
Preferred
Unallocated
ESOP
shares
Class A
Common
Stock
shares
Class B
Common
Stock
Shares
Class C
Preferred
Allocated
ESOP
Class C
Preferred
Unallocated
ESOP
Class A
Common
Stock
Class B
Common
Stock
Retained
Earnings
Accumulated
Other
Comprehensive
Income
(Loss)
Total
Shareholders'
Equity
Balance, December 28, 2007
135,153
709,397
208,395
$
156,961
$
(156,961
)
$
—
$
11,814
$
(13,524
)
$
7,362
$
5,652
Net earnings
31,216
31,216
Foreign currency translation
(28,583
)
(28,583
)
Change in employee benefit plan liability, net of tax of $9,252
(14,641
)
(14,641
)
Amortization of employee benefit plan liability, net of tax of ($280)
501
501
Change in measurement date for pension plans, net of tax of $372
(712
)
(712
)
Comprehensive loss
(12,219
)
Cash dividends declared $11.00 per common share
(13,780
)
(13,780
)
Stock issued upon exercise of options
—
Stock retired for cash
—
Tax benefit on stock incentive awards
—
Contingently redeemable shares valuation adjustment
25,391
25,391
Release of ESOP shares
(22,524
)
(26,158
)
26,158
—
Tax benefit of allocation of ESOP stock
—
Balance, December 26, 2008
112,629
709,397
208,395
$
130,803
$
(130,803
)
$
—
$
11,814
$
28,591
$
(35,361
)
$
5,044
Net earnings
18,414
18,414
Foreign currency translation
21,313
21,313
Change in employee benefit plan liability, net of tax of $2,075
(3,330
)
(3,330
)
Amortization of employee benefit plan liability, net of tax of ($265)
691
691
Comprehensive income
37,088
Cash dividends declared $10.00 per common share
(10,839
)
(10,839
)
Stock issued upon exercise of options
—
Stock retired for cash
(977
)
(977
)
Acquisition of non-controlling interest in Soldering
(6,172
)
(1,471
)
1,554
(6,089
)
Non-controlling interest of previously unconsolidated subsidiary
—
Tax benefit on stock incentive awards
—
Contingently redeemable shares valuation adjustment
6,172
1,033
7,205
Release of ESOP shares
(22,525
)
(26,160
)
26,160
—
Tax benefit of allocation of ESOP stock
—
Balance, December 31, 2009
90,104
709,397
208,395
$
104,643
$
(104,643
)
$
—
$
10,343
$
36,222
$
(15,133
)
$
31,432
Net earnings
23,920
23,920
Foreign currency translation
7,073
7,073
Change in employee benefit plan liability, net of tax of $1,062
(2,437
)
(2,437
)
Amortization of employee benefit plan liability, net of tax of ($503)
1,074
1,074
Derivatives, net of tax of $237
(379
)
(379
)
Comprehensive income
29,251
Cash dividends declared $11.00 per common share
(12,085
)
(12,085
)
Stock issued upon exercise of options
—
Stock retired for cash
(673
)
(673
)
Tax benefit on stock incentive awards
—
Contingently redeemable shares valuation adjustment
(67,328
)
(67,328
)
Release of ESOP shares
(22,527
)
(26,161
)
26,161
—
Tax benefit of allocation of ESOP stock
—
Balance, December 31, 2010
67,577
709,397
208,395
$
78,482
$
(78,482
)
$
—
$
10,343
$
(19,944
)
$
(9,802
)
$
(19,403
)
The accompanying notes are an integral part of these financial statements.
F-8
Table of Contents
ESCO Corporation
CONSOLIDATED STATEMENT OF CONTINGENTLY REDEEMABLE EQUITY SECURITIES AND SHAREHOLDERS' EQUITY (Continued)
For the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008
NONCONTROLLING INTERESTS
(in thousands)
Noncontrolling
Interests
Other
Comprehensive
Income (Loss)
Total
Allocated
to
Noncontrolling
Interests
Total
Equity
Balance, December 28, 2007
$
9,124
$
1,787
$
10,911
$
16,563
Net earnings
5,416
5,416
36,632
Foreign currency translation
(4,112
)
(4,112
)
(32,695
)
Change in employee benefit plan liability, net of tax of $9,252
(14,641
)
Amortization of employee benefit plan liability, net of tax of ($280)
501
Change in measurement date for pension plans, net of tax of $372
(712
)
Comprehensive income (loss)
1,304
(10,915
)
Cash dividends declared $11.00 per common share
(13,780
)
Stock issued upon exercise of options
—
Stock retired for cash
—
Tax benefit on stock incentive awards
—
Class A share valuation adjustment
25,391
Release of ESOP shares
—
Tax benefit of allocation of ESOP stock
—
Balance, December 26, 2008
$
14,540
$
(2,325
)
$
12,215
$
17,259
Net earnings
2,678
2,678
21,092
Foreign currency translation
1,967
1,967
23,280
Change in employee benefit plan liability, net of tax of $2,075
(3,330
)
Amortization of employee benefit plan liability, net of tax of ($265)
691
Comprehensive income
4,645
41,733
Cash dividends declared $10.00 per common share
(13,263
)
(13,263
)
(24,102
)
Stock issued upon exercise of options
—
Stock retired for cash
(977
)
Acquisition of non-controlling interest in Soldering
1,269
(1,554
)
(285
)
(6,374
)
Non-controlling interest of previously unconsolidated subsidiary
8,746
1,209
9,955
9,955
Tax benefit on stock incentive awards
—
Class A share valuation adjustment
7,205
Release of ESOP shares
—
Tax benefit of allocation of ESOP stock
—
Balance, December 31, 2009
$
13,970
$
(703
)
$
13,267
$
44,699
Net earnings
4,634
4,634
28,554
Foreign currency translation
351
351
7,424
Change in employee benefit plan liability, net of tax of $1,062
(2,437
)
Amortization of employee benefit plan liability, net of tax of ($503)
1,074
Derivatives, net of tax of $237
(379
)
Comprehensive income
4,985
34,236
Cash dividends declared $11.00 per common share
(3,471
)
(3,471
)
(15,556
)
Stock issued upon exercise of options
—
Stock retired for cash
(673
)
Tax benefit on stock incentive awards
—
Class A share valuation adjustment
(67,328
)
Release of ESOP shares
—
Tax benefit of allocation of ESOP stock
—
Balance, December 31, 2010
$
15,133
$
(352
)
$
14,781
$
(4,622
)
The accompanying notes are an integral part of these financial statements.
F-9
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — NATURE OF OPERATIONS
ESCO Corporation (ESCO or the Company) is a global provider of highly engineered metal wear parts and replacement products used in mining, infrastructure development, power generation,
aerospace and specialized industrial markets. The Company uses its expertise in metallurgy and foundry operations to design, engineer, manufacture and deliver solutions to its customers.
The
Company operates in two reporting segments: the Engineered Products Group (EPG) and the Turbine Technologies Group (TTG). The Chief Executive Officer has been identified as the
chief operating decision-maker. See
Note 27 — Segment Reporting.
The
Company was founded in 1913 and is headquartered in Portland, Oregon. The Company has subsidiaries in the United States, Canada, the United Kingdom, Belgium, Germany, France,
Slovakia, Hong Kong, Indonesia, Australia, South Africa, Argentina, Brazil, Peru, Chile, Mexico, Russia and China.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated financial statements include the accounts of ESCO Corporation and its majority owned and wholly owned
subsidiaries. Investments in affiliates in which ESCO has a non-controlling ownership interest are accounted for under the equity method. All intercompany accounts and transactions have
been eliminated. Management also evaluates whether an ESCO entity or interest is a variable interest entity and whether ESCO is the primary beneficiary. Consolidation is required if both of these
criteria are met. The Company does not have any variable interest entities requiring consolidation.
Prior
to fiscal year 2009, the Company reported on a 52 or 53-week fiscal year consisting of four thirteen-week periods and ending on the last Friday of the
calendar year. Fiscal 2008, which ended on December 26, 2008, was a 52-week fiscal year which included 364 days. Effective December 27, 2008, the Company changed to a
calendar year. The Company's fiscal year 2009 began on December 27, 2008 and ended on December 31, 2009, resulting in a 370-day year. The Company's fiscal year 2010 began on
January 1, 2010 and ended on December 31, 2010, resulting in a 365-day year. All references to years are references to fiscal years unless otherwise noted.
Reclassifications
The Company made certain reclassifications to the prior years' financial statements to conform them to the presentation as of and for
the year ended December 31, 2010. These reclassifications had no effect on consolidated net earnings, shareholders' equity or net cash flows for any of the periods presented.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the reporting
period. Examples include revenue recognition, inventory valuation, product warranty reserves, allowance for doubtful accounts, fair
F-10
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
value
measurements, goodwill valuation, estimates of contingencies, intangible asset valuations, pension plan and share-based compensation assumptions, and the assessment of the valuation
of deferred income taxes and income tax contingencies. Management believes the estimates used are reasonable. Actual results may differ from those estimates.
Pro Forma Shareholders' Equity (Unaudited)
The pro forma shareholders' equity column (unaudited) reflects the conversion of the Class C preferred stock to the new
Class A common stock upon the Company's initial public offering (IPO), the conversion of the historical Class A common stock to new Class A common stock upon such IPO and through
the first 360 days thereafter, as well as the    -to-one stock split to be effected prior to the Company's IPO. Upon conversion, the put feature associated
with the Class C preferred stock and historical Class A common stock will expire and the respective shares reclassified to permanent equity.
Cash and Cash Equivalents
All highly liquid investments with original maturities of three months or less are considered to be cash equivalents. The carrying
value of these investments approximates fair value.
Trade Accounts Receivables, net
Trade accounts receivables, net of reserves for doubtful accounts, are recorded at the invoiced amount less discounts and do not bear
interest. The collectability of trade accounts receivable is regularly evaluated based on a combination of factors such as customer credit-worthiness, past transaction history with the
customer, current industry economic trends and changes in customer payment terms. If the Company becomes aware of circumstances that may impair a customer's ability to meet its financial obligations,
a specific reserve is recorded to reduce the related receivable to the amount expected to be recovered. For all other trade accounts receivable, the Company maintains a reserve based on the Company's
historical uncollectible accounts as a percentage of sales.
Inventories
Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method
(LIFO) for the majority of inventories in the U.S. Cost is determined using the first-in, first-out method (FIFO) or average cost method for all subsidiaries outside of
the U.S. Cost of inventory includes raw materials, employee compensation and benefits, outside processing, depreciation of manufacturing machinery and equipment, operating supplies and
manufacturing overhead directly attributable to the manufacturing of goods.
Property and Equipment
Property and equipment are recorded at historical cost. Depreciation is calculated using the straight-line method over the
estimated useful lives of the
assets. Expenditures for repairs and maintenance are expensed as incurred. When assets are sold or retired, the cost and related accumulated depreciation are removed from the accounts and the
resulting gain or loss is included as a component of operating expenses.
F-11
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Long-Lived Assets
Long-lived assets, principally property, equipment and identifiable definite-lived intangibles, are reviewed
for impairment when events or circumstances indicate that the carrying amount of the assets may not be recoverable. The Company evaluates recoverability of assets by comparing the carrying amount of
the asset to estimated future net undiscounted cash flows generated by the asset. If such assets are considered not to be fully recoverable, the impairment recognized is measured as the amount by
which the carrying amount of the assets exceeds the fair value of the assets.
Intangible
assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, with a weighted average useful life of 11 years
at December 31, 2010.
Goodwill
Goodwill is not amortized; it is tested for impairment annually (in the second quarter) or more frequently if indicators of impairment
exist or if a decision is made to sell a business. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in
expected cash flows, a significant adverse change in legal factors or in the business climate, unanticipated competition, slower growth rates, and others. Fair values that could be realized in an
actual transaction may differ from those used to evaluate the potential impairment of goodwill. Goodwill is allocated to and evaluated for impairment at the reporting unit level (also defined as the
operating segment).
The
evaluation of impairment involves the comparison of the current fair value of each reporting unit to its carrying value, including goodwill. The Company uses a discounted cash flow
(DCF) model as well as a comparison to peer company multiples to estimate the current fair value of its reporting
units when testing for impairment because management believes these methods are the best indicators of such fair value. A number of significant assumptions and estimates are involved in the
application of the DCF model to forecast operating cash flows, including markets and market share, sales volumes and prices, costs to produce, tax rates, capital spending, discount rate, and working
capital changes. If the estimated fair value of a reporting unit is less than the carrying value, additional analysis would be required. The additional analysis would compare the carrying amount of
the reporting unit's goodwill with the implied fair value of that goodwill. The implied fair value of goodwill is the excess of the fair value of the reporting unit over the fair value amounts
assigned to all of the assets and liabilities of that unit as if the reporting unit was acquired in a business combination and the fair value of the reporting unit represented the purchase price. If
the current value of goodwill exceeds its implied fair value, an impairment loss equal to the excess would be recognized, which could significantly and adversely impact reported results of operations
and shareholders' equity.
Allocation of Acquisition Purchase Price
The Company accounts for business combinations under the acquisition accounting method. The Company allocates the purchase price of
acquisitions to identified tangible and intangible assets acquired and liabilities assumed based on their fair values at the acquisition date, with any residual amounts allocated to goodwill. The
determination of fair values of assets and liabilities acquired requires the Company to make estimates and use valuation techniques when the market
F-12
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
value
is not readily available. The transaction costs associated with business combinations are expensed as incurred. Operating results of all acquisitions are included in the consolidated statement
of earnings from the date of acquisition.
Fair Value of Financial Instruments
The carrying amounts reflected in the balance sheet for cash and cash equivalents, receivables and payables approximate, in all
material respects, their fair values due to the short-term nature of these items.
Current
and non-current marketable securities are recorded at fair market value. When developing fair value measurements, the Company uses quoted market prices when
available and when not available, the Company seeks to maximize the use of observable inputs and
minimize the use of unobservable inputs. The Company did not choose the fair value option for financial liabilities; therefore, its long-term debt is not reported at fair value. See
Note 12 — Fair Value
Measurements
for additional information.
Derivative Financial Instruments
The Company's primary objectives for holding derivative financial instruments are to manage foreign currency risk and variable
interest rate risk. The Company's accounting policies for these instruments are based on whether the instruments are designated as a hedge or non-hedge instrument. The criteria for
designating a derivative as a hedge include the instrument's effectiveness in risk reduction and, in most cases, a one-to-one matching of the derivative instrument to its
underlying transaction.
All
derivatives are recorded at fair value on the balance sheet and changes in the fair value of derivative financial instruments are either recognized in other comprehensive income (a
component of shareholders' equity), or net earnings depending on the nature of the underlying exposure, whether the derivative is formally designated as a hedge, and, if designated, the extent to
which the hedge is effective. The changes in fair value of the Company's undesignated foreign currency derivatives are marked to market through earnings in foreign currency gains/losses.
The
Company classifies the cash flows from settlement of derivatives in the same category as the cash flows from the related hedged items. For undesignated hedges and designated cash
flow hedges, this is within the cash provided by operations component of the consolidated statement of cash flows. The cash flows associated with these derivative instruments are periodic interest
payments while the swaps are outstanding, which are reflected in net earnings within the cash provided by operations component of the cash flow statement.
Foreign Currency
Assets and liabilities of foreign operations are translated into U.S. dollars at the period-end rate of exchange.
Related revenues and expenses are translated at average monthly exchange rates. Translation adjustments are recorded in accumulated other comprehensive income, a separate component of shareholders'
equity. Foreign currency transactions gains and losses are generated from the effect of exchange rate changes on transactions denominated in a currency other than the functional currency of the
entity. Gains and losses on foreign currency transactions
F-13
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
are
generally recognized in the determination of net earnings or loss for the period. The Company records these gains and losses in other (income) expense. Foreign exchange transaction gains (losses)
were $0.7 million, $1.3 million and ($4.0) million for the years ended December 31, 2010, December 31, 2009 and December 26, 2008.
Share Repurchases
The Company accounts for the repurchase of shares by recording the difference between the amount paid for the shares and the amount
recorded upon issuance as an adjustment to retained earnings.
Comprehensive Income/Loss
Comprehensive income/loss includes net earnings or loss and "other comprehensive income," which includes charges or credits to equity
that are not the result of transactions with shareholders. Comprehensive loss within these consolidated financial statements includes cumulative foreign currency translation adjustments, certain gains
and losses on derivatives used for hedging forecasted transactions and net periodic benefit cost not yet recognized in earnings.
Earnings per Share
Basic earnings per share (EPS) is computed based on earnings attributable to ESCO common shareholders and utilizing the weighted
average number of shares outstanding during the period. Diluted EPS also considers common stock equivalents, such as stock options, stock-settled stock appreciation rights (SARs) and
shares of Class C Preferred Stock allocated to the employee stock ownership plan, to the extent that they are not antidilutive.
Revenue Recognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or the services have been
rendered, the sales price is fixed or determinable and collection of the related receivable is reasonably assured. Title and risk of loss generally pass to the customer at the time product is
transferred to a common carrier.
The
Company has licensee agreements under which the Company receives royalty revenue. Royalty revenue is accounted for based on royalty percentages of actual sales by licensees. The
Company has an allowance for product returns and cash discounts. These reserves are calculated based on historical returns and cash discounts.
Research and Development Costs
Research and development costs are expensed as incurred. These costs include personnel and project-related expenses
related to developing new products and improving existing products or processes. The Company recognized $5.9 million, $5.4 million and $6.5 million of research and development
costs classified in selling and administrative expenses in fiscal 2010, 2009 and 2008, respectively.
F-14
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Advertising
The Company expenses advertising costs as incurred. Advertising expenses were not material for any of the periods presented.
Shipping and Handling
Shipping and handling expenses incurred for customer sales are often billed to customers, which are included in sales and cost of
sales. Amounts not billed to customers are included in selling and administrative expenses and were not material for fiscal 2010, 2009 and 2008.
Product Warranty
In the ordinary course of business, the Company warrants its products against defects in design, materials and workmanship over
various time periods. A standard one-year warranty from the date of acceptance is provided on most products. The Company evaluates obligations related to product warranties quarterly.
Warranty charges are comprised of costs to service the warranty, including labor to repair the product and replacement parts for defective items, as well as other costs incidental to the repairs. The
Company estimates average warranty cost per product or part type based on historical experience and records the provision for such charges as an element of cost of goods sold upon recognition of the
related revenue. Accrued product warranty is included on the consolidated balance sheets as a component of accrued liabilities. The warranty program as of December 31, 2010, December 31,
2009 and December 26, 2008 was not material to the Company's consolidated financial position, results of operations or cash flows.
Leases
Certain leases contain payment escalation clauses which provide stated increases in the payments over the term of the lease. Rent
expense is recorded on a straight-line basis over the lease term.
Share-Based Compensation
The Company has adopted the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC)
Topic 718—
Compensation-Stock Compensation
(ASC Topic 718). This guidance generally requires that compensation
expense be determined based on the grant-date fair value of the share-based compensation awards and that the expense be recognized over the requisite service period of the
award. The guidance was effective for the Company's fiscal year 2006, which began on December 31, 2005.
The
Company has granted no stock options since the effective date of the guidance; therefore, the Company has continued to apply the intrinsic value method of accounting for options
granted before that date. Under the intrinsic value method, compensation expense for employee stock options is not recognized if the exercise price of the option equals or exceeds the fair value of
the stock on the date of grant. As a result, no compensation expense has been recorded for options vesting during the reporting periods presented.
The
Company classifies its awards of cash-settled stock appreciation rights (SARs) as liabilities. SARs are settled in cash for the difference between fair value of the
Company's Class A
F-15
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
common
stock on the date of grant and its fair value on the date of exercise. The Company uses the Black-Scholes model to estimate the fair value of SAR awards on the date of grant and
recognizes expense on a straight-line basis over the requisite service period. At each period end after grant, the related liability balance is adjusted to reflect changes in the Company's
stock value and its actual payout liability. Any impact to expense from these period-end adjustments is recognized as incurred for fully vested awards and amortized over the remaining
service period for unvested awards.
Employee Stock Ownership Plan
The Company sponsors an employee stock ownership plan (ESOP) that covers all U.S. employees who meet service requirements. The
Company makes annual contributions to the ESOP equal to the ESOP's debt service to the Company less dividends received by the ESOP on unallocated shares. All dividends and contributions received by
the ESOP are used to pay debt service. The ESOP shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees. The Company
accounts for its ESOP in accordance with the guidance on stock compensation. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are
released from collateral, the Company reports compensation expense equal to the current fair value of the shares.
Income Taxes
The Company's income tax provision is determined using the asset and liability approach of accounting for income taxes. Under this
approach, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates expected to apply in future years to differences between the
financial statement carrying amounts and the tax bases of assets and liabilities. The provision for income taxes represents income taxes paid or payable for the current year plus the change in
deferred taxes during the year. Valuation allowances based on the Company's judgments and estimates are established when necessary to reduce deferred tax assets to the amount expected to be realized
based on expected future operating results and available tax alternatives. The Company's estimates are based on facts and circumstances in existence as well as interpretations of tax regulations and
laws applied to the facts and circumstances.
Employee Benefit Plans
The Company has an employee savings plan under the provisions of Section 401(k) of the Internal Revenue Code. The Company also
has defined benefit plans in the U.S. and certain non-U.S. jurisdictions. The Company accounts for these plans based on the provisions of ASC Topic 715 —
Compensation-Retirement Benefits
and accordingly uses actuarial valuations that are based on assumptions, including discount rates,
long-term rates of return on plan assets, and rates of change in participant compensation levels. The Company evaluates the funded status of each plan using these assumptions and considers
applicable regulatory requirements, tax deductibility, reporting consideration and other relevant factors to determine the appropriate funding level for each period. The discount rate used to
calculate the present value of the pension and post-retirement benefit obligations is assessed at least annually. The discount rate represents the
F-16
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
rate
inherent in the price at which the plans' obligations are intended to be settled at the measurement date.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and
cash equivalents, accounts receivable and derivative financial instruments used in hedging activities. A majority of cash and cash equivalents is maintained with major financial institutions in the
United States, Canada and Europe. Balances in these institutions exceeded the regions' respective insurance amounts as of December 31, 2010 and 2009.
Concentration
of credit risk with respect to accounts receivable is limited because a large number of geographically diverse customers make up the Company's customer base. The Company
controls credit risk through credit approvals, credit limits and monitoring processes.
The
Company is also exposed to credit loss in the event of non-performance by counterparties on the derivative financial instruments used in hedging activities. These
counterparties are large international financial institutions domiciled in the United States and to date no such counterparty has failed to meet its financial obligations to the Company, and the
Company does not anticipate non-performance by these counterparties.
NOTE 3 — RECENT ACCOUNTING PRONOUNCEMENTS
In June 2009, new guidance was issued on the accounting for transfers of financial assets, which is intended to improve the relevance and comparability of information about transfers of
financial assets. The Company adopted this guidance as of the beginning of fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or
cash flows.
In
June 2009, new guidance was issued on variable interest entities. This guidance modifies the definition of a primary beneficiary in a variable interest entity. The Company adopted
this guidance as of the beginning of its fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.
In
January 2010, new guidance was issued that clarifies existing disclosures and requires new disclosures for fair value measurements. The clarifications relate to the level of
disaggregation a company uses for the disclosure and calls for further details in the valuation techniques used to measure fair value for fair value measurements that fall into Level 2 and 3
categories. Disclosure of significant transfers in and out of Levels 2 and 3 and a description of the reason for the transfers are required. The Company adopted this guidance at the beginning
of fiscal 2010; it did not have a material impact on the Company's consolidated financial position, results of operations or cash flows.
In
December 2010, new guidance was issued that clarified required disclosures for business combinations. This guidance requires supplemental pro-forma information to
disclose revenue and earnings of the combined entities for all periods presented. This guidance is effective for fiscal years beginning after December 15, 2010. The Company will adopt these
additional disclosure requirements for all material acquisitions beginning in 2011.
F-17
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 3 — RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
In
January 2010, new guidance was issued that requires new disclosures for fair value measurements. In the reconciliation for Level 3 fair value measurements, disclosures should
present separately information about purchases, sales, issuances and settlements (gross rather than net amounts). This guidance is effective for reporting periods beginning after December 15,
2010. The Company's adoption of this guidance at the beginning of 2011 did not have a material impact on its consolidated financial position, results of operations or cash flows.
NOTE 4 — INVENTORIES
Inventories consist of the following as of December 31:
(in thousands)
2010
2009
Raw materials
$
36,768
$
31,748
Work-in-process
30,390
17,004
Finished goods
66,648
54,202
Total FIFO cost
133,806
102,954
Less excess of FIFO cost over LIFO cost
28,371
25,900
Total inventories
$
105,435
$
77,054
Inventories
of $30.8 million and $19.1 million are stated at LIFO cost at December 31, 2010 and 2009, respectively.
During
the fiscal year ended December 31, 2009, certain inventory quantities were reduced, resulting in a liquidation of LIFO inventory quantities carried at lower costs
prevailing in prior years. The effects of this decrease are presented in the table below.
(in thousands, except per share data)
Cost of goods sold decrease
$
2,944
Net earnings increase
$
2,072
Diluted earnings per share increase
$
1.72
During
the year ended December 31, 2010 and the fiscal year ended December 26, 2008, there were no LIFO liquidations.
NOTE 5 — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following as of December 31:
(in thousands)
2010
2009
Prepaid expenses
$
9,021
$
7,513
Income taxes receivable
6,079
8,728
Total prepaid expenses and other current assets
$
15,100
$
16,241
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Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6 — PROPERTY AND EQUIPMENT
Property and equipment consist of the following as of December 31:
(in thousands)
Estimated Lives
2010
2009
Buildings and improvements
10 - 40 years
$
87,699
$
83,134
Machinery and equipment
3 - 15 years
368,292
346,479
455,991
429,613
Less accumulated depreciation
(297,795
)
(276,027
)
158,196
153,586
Land
9,250
8,333
Total property and equipment, net
$
167,446
$
161,919
Depreciation
expense for the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008 was $25.9 million, $24.2 million and
$23.3 million, respectively.
NOTE 7 — INTANGIBLES
The carrying amounts of intangible assets as of December 31, 2010 and 2009 were as follows:
2010
2009
(in thousands)
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Proprietary technology
$
15,468
$
5,604
$
9,864
$
9,961
$
4,104
$
5,857
Trademarks
2,005
1,164
841
1,754
1,053
701
Non-compete
407
68
339
—
—
—
Customer relationships
3,557
222
3,335
—
—
—
Total
$
21,437
$
7,058
$
14,379
$
11,715
$
5,157
$
6,558
Amortization
expense for the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008 was $1.5 million, $0.9 million and
$0.9 million, respectively. Of these amounts, $0.7 million, $0.1 million and $0.1 million, respectively, were included in selling and administrative expenses and
$0.8 million, $0.8 million and $0.8 million, respectively, were included in cost of goods sold for those years. Estimated amortization expense for the years ending
December 31, 2011 through December 31, 2015 is as follows: 2011 — $2.2 million, 2012 — $2.2 million, 2013 —
$2.1 million, 2014 — $1.9 million, and 2015 — $1.5 million.
F-19
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 8 — GOODWILL
December 31, 2010
December 31, 2009
(in thousands)
EPG
TTG
EPG
TTG
Balance at beginning of year
$
21,764
$
18,308
$
17,906
$
18,113
Additions during the year(1)
16,115
—
—
—
Currency translation
2,086
(665
)
3,858
195
Balance at end of year
$
39,965
$
17,643
$
21,764
$
18,308
(1)
Additions
and purchase price adjustments relating to Swift Group Holdings Pty Ltd and Austcast Pty Ltd goodwill acquired. The Company is
finalizing certain valuations of assets acquired and liabilities assumed; therefore, the additions to goodwill are preliminary and subject to refinement.
NOTE 9 — JOINT VENTURES
The Company entered into joint ventures to take advantage of strategic business opportunities. As of December 31, 2010 and 2009, the Company was participating in the following
joint ventures:
1)
A
50% joint venture with its licensee, Compañía Electro Metalurgica S.A. (Elecmetal), to build a foundry in Chile for
its EPG segment, scheduled to be operational in 2012.
2)
A
50% joint venture with its dealer, ESS Holdings, Inc., to operate an industrial service and supply location in Ft. McMurray, Alberta, Canada for its
EPG segment.
3)
A
joint venture with Taiyuan Heavy Machinery in China. The joint venture manufactures EPG products for mining, infrastructure development and
industrial applications. ESCO's equity share in the joint venture is 54.43%, which is also consistent with its rights to profits and losses.
ASC
Topic 810 —
Consolidation
requires companies to evaluate the qualitative nature of joint ventures to determine (1)
whether they represent variable interest entities, (2) whether the Company is the primary beneficiary of the joint venture and (3) whether the entities should be consolidated into the
Company's financial statements.
A
variable interest entity (VIE) is an entity that either (1) has insufficient equity to permit the entity to finance its activities without additional subordinated financial
support or (2) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the
power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could be
significant to the VIE.
The
Company has evaluated its joint ventures and determined that its joint ventures in China and Canada do not meet the criteria of a VIE; however, these joint ventures should be
consolidated based on the Company's ability to control the entities' operations. The Company has consolidated the results of these joint ventures into its financial statements as of
December 31, 2010 and 2009.
F-20
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9 — JOINT VENTURES (Continued)
The
Company has determined the Elecmetal joint venture did not have sufficient capital to permit the entity to finance its activities without additional financial support from the
equity holders and therefore is a VIE. Also, because the Company does not have the power to direct the entity's economic performance or the obligation to absorb losses or the right to receive benefits
from the entity that would be significant to that entity, the Company has determined that it is not the primary beneficiary of this VIE. Because the results of the VIE are not consolidated into the
Company's consolidated financial statements, the Company uses the equity method to account for the joint venture. Under the equity method, a proportionate share of the net earnings or loss of the
joint venture is recognized in the Company's consolidated statement of earnings. For the years ended December 31, 2010 and 2009, these amounts were insignificant.
The
Company's maximum exposure to loss from the VIE of which it is not the primary beneficiary at December 31 is presented below.
(in thousands)
2010
2009
Investment
$
8,825
$
6,627
Cash collateralized letters of credit
7,600
—
Total maximum exposure
$
16,425
$
6,627
NOTE 10 — OTHER NONCURRENT ASSETS
Other noncurrent assets consisted of the following as of December 31.
(in thousands)
2010
2009
Investment in ESCO Elecmetal Fundicion Limitada
$
8,825
$
6,627
Loan costs
4,993
5,987
Other noncurrent assets
363
360
Total other noncurrent assets
$
14,181
$
12,974
NOTE 11 — ASSETS HELD FOR SALE
Assets held for sale were $1.1 million and $2.7 million at December 31, 2010 and 2009, respectively. These amounts represent the land and building of the Company's
Saskatoon, Saskatchewan facility, which was closed in May 2009 as part of the Company's restructuring activity ($1.0 million and $2.6 million at December 31, 2010 and 2009,
respectively), and three apartments in Taiyuan, China ($0.1 million at December 31, 2010 and 2009). See
Note 29 —
Restructuring
. All assets
classified as held for sale are in the EPG segment. These assets are listed for sale and the Company expects to receive net proceeds approximately equal to the carrying value.
NOTE 12 — FAIR VALUE MEASUREMENTS
The Company applied the guidance in ASC Topic 820—
Fair Value Measurements and Disclosures
(ASC Topic 820) which defines fair
value as the exchange price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an
orderly transaction between market participants on the
F-21
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12 — FAIR VALUE MEASUREMENTS (Continued)
measurement
date. This guidance also establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as
follows:
Level 1    Quoted
prices in active markets for identical assets or liabilities.
Level 2    Observable
inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or
other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3    Unobservable
inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, which
requires the reporting entity to develop its own assumptions.
The
following table presents the Company's financial assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of
the fair value hierarchy as of December 31, 2010.
Fair Value Measurements
Assets/Liabilities
at Fair Value
(in thousands)
Level 1
Level 2
Level 3
Assets
Interest rate swaps
$
—
$
19
$
—
$
19
Foreign currency forward contracts
—
25
—
25
Marketable securities intended to fund non-qualified retirement and deferred compensation plans
—
14,257
—
14,257
Assets held for sale
—
—
1,117
1,117
Total assets
$
—
$
14,301
$
1,117
$
15,418
Liabilities
Interest rate swaps
$
—
$
635
$
—
$
635
Utilities futures contracts
—
63
—
63
Total liabilities
$
—
$
698
$
—
$
698
The
Company's Level 3 assets (assets held for sale with a carrying value of $1.3 million) were written down to their fair value of $1.2 million (less
$0.1 million in selling costs) resulting in a loss of $0.2 million, which was included in selling and administrative expenses for the year ended December 31, 2010.
F-22
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12 — FAIR VALUE MEASUREMENTS (Continued)
The
following table presents the Company's financial assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of
the fair value hierarchy as of December 31, 2009.
Fair Value Measurements
Assets/Liabilities
at Fair Value
(in thousands)
Level 1
Level 2
Level 3
Assets
Marketable securities intended to fund non-qualified retirement and deferred compensation plans
$
—
$
11,501
$
—
$
11,501
Assets held for sale
—
—
2,675
2,675
Total Assets
$
—
$
11,501
$
2,675
$
14,176
Liabilities
Foreign currency forward contracts
$
—
$
48
$
—
$
48
Utilities futures contracts
—
104
—
104
Total Liabilities
$
—
$
152
$
—
$
152
The
Company's Level 3 assets (assets held for sale with a carrying value of $3.1 million) were written down to their fair value of $2.8 million (less
$0.1 million in selling costs) resulting in a loss of $0.4 million, which was included in selling and administrative expenses for the year ended December 31, 2009.
The
Company's assessment of the significance of an input to the fair value measurement requires judgment and involves consideration of factors specific to the asset or liability. The
Company's financial assets and liabilities are classified in their entirety based on the most significant level of input into the fair value measurement. Marketable securities are valued based on the
net asset value from active to less active markets and the reliability of available financial information. The fair value for foreign currency forward contracts and utilities futures contracts is
determined using observable market inputs.
The
Company did not choose the fair value option for financial liabilities; therefore, its long-term debt is not reported at fair value. There were no transfers between
Level 1, Level 2 and Level 3 categories during 2010 and 2009.
F-23
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 — ACCRUED LIABILITIES
Accrued liabilities as of December 31 included:
(in thousands)
2010
2009
Unearned revenues
$
7,557
$
1,131
Taxes payable
7,213
2,491
Accrued warranty reserve
2,601
1,973
Accrued workers' compensation
2,020
1,933
Accrued rebate reserve
1,828
1,407
Accrued retirement liabilities
724
569
Derivative liabilities
635
48
Other accrued liabilities
7,649
3,959
Total other accrued liabilities
$
30,227
$
13,511
NOTE 14 — SHORT-TERM AND LONG-TERM DEBT
At December 31, 2009, the Company had a secured $110.0 million U.S.-based line of credit and a $5.5 million foreign-based line of credit,
none of which was drawn down. At December 31, 2009, the interest rate on the U.S.-based line of credit (set at LIBOR) was 3.3% per annum, and the line of credit was reduced by the
collateral base to $51.7 million. The fixed interest rate on the foreign-based line of credit was 11.9%. The weighted-average interest rate on short-term
borrowings in 2009 was 11.1%.
At
December 31, 2009, the Company had $200.0 million principal amount of 8.625% secured senior notes and $100.0 million principal amount of floating rate senior
notes outstanding. The Company issued these notes in 2006 in a private transaction. The interest rate on the floating rate notes was reset quarterly equal to LIBOR plus 3.875%. At December 31,
2009, the interest rate on the floating rate notes was 4.129%. At December 31, 2009, the carrying value of these notes was $300.0 million and the fair value was $283.0 million,
based on the most recently quoted market prices in the PORTAL Alliance.
In
November 2010, the Company terminated its U.S.-based line of credit agreement and recorded a $0.4 million loss on early extinguishment of debt for the remaining
unamortized loan costs. The Company entered into a $550.0 million Senior Secured Syndicated Credit Facility, which consists of a five-year $200.0 million term loan and a
$350.0 million line of credit. The term loan and line of credit have a floating LIBOR interest rate that is set quarterly based upon a consolidated net leverage ratio matrix. The Company's
credit risk spread ranges from 1.75% to 2.50% depending on the consolidated net leverage ratio matrix. In 2010, the Company capitalized $5.1 million in loan costs related to its debt
restructuring. Deferred loan costs are amortized on a straight-line basis over the term of the loan, which approximates the effective interest rate method. The debt balance recorded on the
Company's balance sheet as of December 31, 2010 represents fair value.
On
December 17, 2010, the Company called its senior notes. The Company paid a premium of $8.6 million related to the early extinguishment and also recorded a
$4.0 million loss for the remaining unamortized loan costs related to the notes. These amounts were recorded in loss on early extinguishment of debt in the consolidated statement of earnings
for the year ended December 31, 2010.
F-24
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 14 — SHORT-TERM AND LONG-TERM DEBT (Continued)
At
December 31, 2010, the Company had total authorized lines of credit in the amount of $359.0 million. At December 31, 2010, the interest rate on the
U.S.-based line of credit, which had $350.0 million authorized of which $65.0 million drawn down and outstanding, was 2.51% (credit risk spread of 2.25% plus LIBOR of .26%)
and the interest rate on the foreign-based line of credit, which had $9.0 million authorized of which $2.1 million drawn down and outstanding, was 15.03%. During the second
quarter of 2010, the authorized amount of the foreign-based line of credit was increased by $4.0 million. The weighted average interest rate on short-term borrowings in
2010 was 4.46%.
Scheduled
maturities of debt as of December 31, 2010 are as follows:
(in thousands)
2011
$
11,502
2012
11,088
2013
10,335
2014
20,051
2015
150,000
$
202,976
NOTE 15 — DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into derivative financial instruments in order to manage foreign currency risk and variable interest rate risk.
The
Company hedges material non-functional currency monetary asset and liability balances. The gains and losses from foreign exchange contracts are recognized at the end of
each fiscal period in the Company's results of operations. Such gains and losses are typically offset by
the corresponding changes to the related underlying hedged item. Cash flows from derivative financial instruments are classified in the same category as the cash flows from the items being hedged.
In
December 2010, the Company entered into interest rate swaps to manage a portion of its exposure to changes in LIBOR-based interest rates on the Company's variable rate
debt, effectively fixing the interest payments on $200.0 million of the Company's term loan. All of the swaps in place at December 31, 2010 have been designated as cash flow hedges of
LIBOR-based interest payments. Accordingly, the change in fair value was included in accumulated other comprehensive loss as of December 31, 2010.
F-25
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 15 — DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
Interest
rate swaps in place at December 31, 2010 were as follows:
(in thousands)
Amount
Weighted-Average
Interest Rate
Maturity Date
$
2,500
2.039
%
March 31, 2011
2,500
2.039
%
June 30, 2011
2,500
2.039
%
September 30, 2011
2,500
2.039
%
December 31, 2011
2,500
2.039
%
March 31, 2012
2,500
2.039
%
June 30, 2012
2,500
2.039
%
September 30, 2012
2,500
2.039
%
December 31, 2012
2,500
2.039
%
March 31, 2013
2,500
2.039
%
June 30, 2013
2,500
2.039
%
September 30, 2013
2,500
2.039
%
December 31, 2013
5,000
2.039
%
March 31, 2014
5,000
2.039
%
June 30, 2014
5,000
2.039
%
September 30, 2014
5,000
2.039
%
December 31, 2014
5,000
2.039
%
March 31, 2015
5,000
2.039
%
June 30, 2015
5,000
2.039
%
September 30, 2015
135,000
2.039
%
November 18, 2015
$200,000
The
net losses on interest rate swaps included in accumulated other comprehensive loss were $0.6 million for the year ended December 31, 2010. The accumulated other
comprehensive loss, net of tax benefit, related to interest rate swaps was $0.4 million at December 31, 2010. For derivatives that are designated in a cash flow hedging relationship, the
effective portion of the change in fair value of the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same classification as the
earnings effect of the hedged transaction. There were no amounts of gain (loss) reclassified from accumulated other comprehensive income into income for the year ended December 31, 2010. The
Company had no interest rate swaps in effect during the fiscal years ended December 31, 2009 and December 26, 2008.
F-26
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 15 — DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
The
pre-tax fair value of the Company's interest rate swaps and foreign currency forward contracts and the accounts in the consolidated balance sheets in which the gross
amounts are included as of December 31, 2010 and December 31, 2009 were as follows:
2010
2009
(in thousands)
Prepaid
Expenses
and Other
Current
Assets
Other
Accrued
Liabilities
Prepaid
Expenses
and Other
Current
Assets
Other
Accrued
Liabilities
Derivatives formally designated as hedging instruments:
Interest rate swaps
$
19
$
635
$
—
$
—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts
25
—
—
48
Total Derivatives
$
44
$
635
$
—
$
48
The
amount of gain (loss) recognized in other income (expense) on foreign currency forward contracts during the fiscal years ended December 31, 2010, December 31, 2009 and
December 26, 2008 was $0.3 million, $(0.1) million and $(2.5) million, respectively.
NOTE 16 — OTHER LONG-TERM LIABILITIES
Other long-term liabilities consisted of the following at December 31:
(in thousands)
2010
2009
Deferred compensation
$
9,875
$
733
Environmental liability
1,734
—
Taxes payable
376
1,815
Other long-term liabilities
715
806
Total other long-term liabilities
$
12,700
$
3,354
NOTE 17 — INCOME TAXES
Income before income taxes for the fiscal years ended December 31, 2010, December 31, 2009, and December 26, 2008 was:
(in thousands)
2010
2009
2008
Income (loss) before income taxes
United States
$
1,886
$
6,918
$
(4,486
)
Foreign
36,091
22,355
53,972
Total
$
37,977
$
29,273
$
49,486
F-27
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — INCOME TAXES (Continued)
Income
tax expense from continuing operations consisted of the following for the fiscal years ended December 31, 2010, December 31, 2009, and December 26, 2008:
(in thousands)
2010
2009
2008
Current
United States
Federal
$
3,132
$
516
$
1,737
State
508
1,021
619
Foreign
8,417
8,445
20,897
Current Total
12,057
9,982
23,253
Deferred
United States
Federal
865
(961
)
(6,302
)
State
312
147
(343
)
Foreign
(3,811
)
(681
)
(3,311
)
Deferred Total
(2,634
)
(1,495
)
(9,956
)
Total tax expense
$
9,423
$
8,487
$
13,297
The
federal rate reconciles to the effective rate as follows:
2010
2009
2008
Federal statutory rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal benefit
0.5
3.4
1.9
Nondeductible expenses
(3.1
)
(6.8
)
3.3
Effect of foreign tax rates
(4.0
)
(5.1
)
(6.1
)
Unrecognized tax benefits
(3.2
)
4.2
(7.1
)
Tax credits and other
(0.4
)
(1.7
)
(0.1
)
Effective rate
24.8
%
29.0
%
26.9
%
F-28
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — INCOME TAXES (Continued)
The
deferred tax assets (liabilities) were comprised of the following as of December 31:
(in thousands)
2010
2009
Deferred tax assets
Deferred compensation
$
16,583
$
11,874
Warranty reserves
1,070
718
Employee benefits
11,616
13,893
Tax credits
27,803
26,008
Net operating losses
4,141
1,695
Reserves and accrued liabilities
14,400
11,970
Total deferred tax assets
75,613
66,158
Valuation allowance
(3,461
)
(1,695
)
Total deferred tax assets after valuation allowance
72,152
64,463
Deferred tax liabilities
Depreciation
(8,646
)
(8,694
)
Total deferred tax liability
(8,646
)
(8,694
)
Net deferred tax asset
$
63,506
$
55,769
As
of December 31, 2010, the Company had approximately $27.8 million of tax credit carryforwards for federal income tax purposes. These credits primarily consist of
foreign tax credits of $16.7 million that will expire beginning in 2017 if not used and alternative minimum tax credits of $10.3 million that have an indefinite carryforward.
Deferred
tax assets as of December 31, 2010 and December 31, 2009 were reduced by a valuation allowance related to tax benefits of certain subsidiaries with operating
losses where it is more likely than not that the deferred tax asset will not be recognized. The net change in the valuation allowance was an increase of $1.8 million for the year ended
December 31, 2010, which consisted of a decrease of approximately $0.2 million reflected in the tax rate and an increase of $2.0 million recorded as a portion of purchase price
accounting. Increases of $0.3 million and $0.2 million were recorded for the fiscal years ended December 31, 2009 and December 26, 2008, respectively, which affected the
tax rate.
As
of December 31, 2010, the cumulative unremitted earnings of the Company's foreign subsidiaries were approximately $114.0 million. The Company has concluded that
predominantly all of these unremitted earnings have been and will be indefinitely reinvested in its foreign operations and, therefore, the recording of deferred tax liabilities for these unremitted
earnings is not required. It is impracticable to determine the total amount of unrecognized deferred taxes with respect to these permanently reinvested earnings; however, foreign tax credits would be
available to partially reduce U.S. income taxes in the event of a distribution.
The
Company and its subsidiaries file federal U.S., state and foreign income tax returns. With a few minor exceptions, the Company is no longer subject to income tax examinations by tax
authorities for tax years prior to 2006. All U.S. tax years prior to 2009 have been audited by the U.S. Internal Revenue Service or are closed by statute except 2007. Various state and
foreign jurisdictions are
examining the Company's tax returns for various years through 2009. The Company is not aware of any material adjustments that could arise from these examinations.
F-29
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 17 — INCOME TAXES (Continued)
The
Company completed a Canadian federal tax audit and related administrative review for the tax years prior to 2006. Issues related to provincial allocation and reassessments resulting
from the conclusion of the federal audit are still outstanding; however, the Company does not anticipate any material adjustments.
A
reconciliation of the beginning and ending amount of unrecognized tax benefits is shown below as of December 31, 2010, December 31, 2009 and December 26, 2008.
(in thousands)
2010
2009
2008
Balance at beginning of fiscal year
$
2,132
$
1,241
$
4,509
Additions for tax positions of prior years
230
44
317
Reductions for tax positions of prior years
(1,405
)
—
(2,464
)
Additions based on tax positions related to the current year
56
847
55
Settlements of prior tax authority audits
(234
)
—
(1,176
)
Balance at end of fiscal year
$
779
$
2,132
$
1,241
During
2010, the Company decreased its reserve related to state and local taxes. This overall net decrease in the reserve for state and local taxes resulted from decreases related to
the expiration of
statutes and settlements offset by increases related to new positions. The Company's policy is to accrue interest and penalties related to potential underpayment of income and withholding taxes within
the provision for income taxes. In fiscal year 2010, there was $0.1 million reduction of amounts accrued in the income tax provision for interest and penalties. The liability for accrued
interest and penalties as of December 31, 2010, December 31, 2009 and December 26, 2008 was $0.5 million, $0.6 million and $0.3 million, respectively.
Interest and penalties are computed on the difference between the Company's uncertain tax benefit positions and the amount provided on the Company's tax returns.
NOTE 18 — PENSION PLANS
The Company has various pension and other post-retirement plans, including defined benefit and defined contribution plans that cover most employees worldwide.
The
defined benefit pension plans for most salaried employees provide pension benefits that are based on years of service and the average of the employee's earnings as defined. Plans
for hourly employees generally provide benefits of stated amounts based on years of service. The Company's funding policy is to make contributions necessary to maintain funding of the plans during the
participants' working lifetimes.
The
Company's defined benefit post-retirement plan provides medical coverage for certain employees. The Company does not fund retiree health care benefits in advance, and it
has the right to modify this plan in the future. For employees retiring before 1993, the Company's contribution toward the cost of coverage will increase to reflect plan experience, but will not
increase more than 5% per year. For employees retiring after 1992, the Company's contribution is fixed in the year of retirement and does not change over the life of the participant. The amount of
employer contribution, however, depends on the year of retirement. For retirements in 2000 and after, there is no employer contribution toward the program.
F-30
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
The
Company froze its U.S. defined benefit pension plan effective December 31, 2008. The freeze was communicated to all employees in the fourth quarter of 2008. As a result of
the freeze, the Company incurred costs related to termination benefits in 2008.
The
difference between the plans' funded status and the balance sheet position is recognized, net of tax, as a component of Accumulated Other Comprehensive Income as of the measurement
date.
New
accounting guidance was effective for the Company's fiscal year ended December 26, 2008 that requires measurement of plan assets and benefit obligations as of the date of an
employer's fiscal year-end. The Company previously had used a measurement date of September 30. The net periodic benefit cost for the fiscal year ended December 26, 2008 was
prepared using the simplified 15-month transition option. The following table reflects the impact of the adoption of this change in measurement date.
(in thousands)
Before Change
in Measurement
Date
Change in
Measurement
Date
Adjustment
After Change in
Measurement
Date
Deferred income taxes
$
4,273
$
(372
)
$
3,901
Total assets
$
647,100
$
(372
)
$
646,728
Retained earnings
$
38,532
$
(712
)
$
37,820
Total shareholders' equity
$
140,184
$
(712
)
$
139,472
The
U.S. pension plans and the Supplemental Executive Retirement Plan were frozen effective December 31, 2008, and a transition benefit was added for certain participants under
the U.S. pension plans. The transition benefit is prospective and did not increase the December 31, 2008 projected benefit obligation. The curtailment resulted in a curtailment gain of
$12.5 million for the fiscal year ended December 26, 2008.
The
following table is a summary of the curtailment accounting as of December 26, 2008.
(in thousands)
Immediately
before
Curtailment
Effect of
Curtailment
Immediately
after
Curtailment
Assets and obligations
Projected benefit obligation
$
(150,182
)
$
12,067
$
(138,115
)
Fair value of plan assets
94,843
—
94,843
Funded status
$
(55,339
)
$
12,067
$
(43,272
)
Reconciliation of net amount recognized in accumulated other comprehensive income (loss)
Unrecognized prior service credit (cost)
$
(390
)
$
390
$
—
Unrecognized net gain (loss)
(50,623
)
12,067
(38,556
)
Total
$
(51,013
)
$
12,457
$
(38,556
)
The
Post-retirement Benefit Plan reflects a curtailment event which resulted from a plan amendment that eliminates life insurance coverage for future retirees. The plan
amendment resulted
F-31
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
in
a decrease to the December 31, 2009 accumulated post-retirement benefit obligation of $0.3 million. This also resulted in a curtailment gain of $0.3 million for the
fiscal year ended December 31, 2009.
The
following table is a summary of the curtailment accounting as of December 31, 2009.
(in thousands)
Immediately
before
Amendment
Effect of
Amendment
Immediately
after
Amendment
Effect of
Curtailment
Immediately
after
Curtailment
Assets and obligations
Projected benefit obligation
$
(1,518
)
$
288
$
(1,230
)
$
—
$
(1,230
)
Fair value of plan assets
—
—
—
—
—
Funded status — net amount recognized
$
(1,518
)
$
288
$
(1,230
)
$
—
$
(1,230
)
Reconciliation of net amount recognized
Unrecognized prior service credit (cost)
$
298
$
288
$
586
$
(292
)
$
294
Unrecognized net gain (loss)
(340
)
—
(340
)
—
(340
)
Amounts recognized in accumulated other comprehensive income (loss)
(42
)
288
246
(292
)
(46
)
Accumulated contributions less net periodic benefit cost
(1,476
)
—
(1,476
)
292
(1,184
)
Net amount recognized in statement of financial position
$
(1,518
)
$
288
$
(1,230
)
$
—
$
(1,230
)
F-32
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
The
following tables provide information on the status of the plans as of December 31.
Pension Benefits
Other Benefits
(in thousands)
2010
2009
2010
2009
Change in benefit obligation
Benefit obligation — beginning of year
$
179,853
$
157,936
$
16,373
$
15,616
Service cost
3,078
1,817
—
12
Interest cost
10,854
10,205
964
963
Employee contributions
300
262
—
—
Foreign exchange rate changes
2,566
5,976
—
—
Plan amendments and curtailments
398
—
—
(288
)
Actuarial (gain) loss
7,721
11,828
286
435
Benefits paid
(8,936
)
(8,171
)
(381
)
(365
)
Benefit obligation — end of year
$
195,834
$
179,853
$
17,242
$
16,373
Change in plan assets
Fair value of plan assets — beginning of year
$
142,115
$
125,209
$
—
$
—
Actual return on plan assets
16,009
17,377
—
—
Foreign exchange rate changes
2,402
5,421
—
—
Contributions
10,021
2,279
381
365
Benefits paid
(8,936
)
(8,171
)
(381
)
(365
)
Fair value of plan assets — end of year
$
161,611
$
142,115
$
—
$
—
Funded status
$
(34,223
)
$
(37,738
)
$
(17,242
)
$
(16,373
)
Amounts recognized in the consolidated balance sheets consist of:
Current liabilities
$
—
$
—
$
(724
)
$
(569
)
Non-current liabilities
(34,223
)
(37,738
)
(16,518
)
(15,804
)
Net amount recognized
$
(34,223
)
$
(37,738
)
$
(17,242
)
$
(16,373
)
Pension
Benefits
Other
Benefits
(in thousands)
2010
2009
2010
2009
Other changes recognized in other comprehensive income:
Amortization of prior service (credit) cost
$
18
$
185
$
(28
)
$
(52
)
Amortization of accumulated (gain) loss
$
1,504
$
812
$
83
$
11
Prior service credit (cost) arising during the period
$
(398
)
$
—
$
—
$
(4
)
Net gain (loss) arising during the period
$
(2,815
)
$
(5,063
)
$
(286
)
$
(435
)
F-33
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
2011 Expected
(in thousands)
Pension
Benefits
Other
Benefits
Amounts expected to be recognized as components of net periodic costs for fiscal 2011:
Amortization of prior service credit (cost)
$
(64
)
$
28
Amortization of accumulated gain (loss)
$
(2,411
)
$
(125
)
Pension Benefits
Other Benefits
(in thousands)
2010
2009
2008
2010
2009
2008
Components of net periodic benefit cost:
Service cost
$
3,078
$
1,817
$
5,213
$
—
$
12
$
368
Interest cost
10,854
10,205
10,653
964
963
982
Expected return on plan assets
(11,033
)
(10,579
)
(12,564
)
—
—
—
Amortization of prior service (credit) cost
18
185
367
(28
)
(52
)
(32
)
Amortization of (gain) loss
1,504
812
1,257
83
11
319
Curtailment (gain) loss
—
—
238
—
(292
)
152
Net periodic post-retirement benefit cost
$
4,421
$
2,440
$
5,164
$
1,019
$
642
$
1,789
The
following table represents amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income at December 31.
Pension Benefits
Other Benefits
(in thousands)
2010
2009
2010
2009
Prior service credit (cost)
$
(497
)
$
(104
)
$
267
$
295
Accumulated gain (loss)
(57,891
)
(56,573
)
(2,311
)
(2,108
)
Accumulated other comprehensive income (loss)
$
(58,388
)
$
(56,677
)
$
(2,044
)
$
(1,813
)
The
accumulated benefit obligations for the plans at December 31, 2010, and 2009, were as follows.
(in thousands)
Pension Benefits
Other Benefits
December 31, 2010
$
189,301
$
17,242
December 31, 2009
$
174,270
$
16,373
The
weighted-average assumptions used to determine benefit obligation at December 31, 2010 and 2009 were as follows.
Pension
Benefits
Other
Benefits
2010
2009
2010
2009
Discount rate
5.7
%
6.1
%
5.8
%
6.0
%
Rate of compensation increase
3.7
%
3.7
%
—
—
F-34
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
The
weighted-average assumptions used to determine net periodic cost for fiscal years ending December 31, 2010, December 31, 2009 and December 26, 2008 were as
follows.
Pension Benefits
Other Benefits
2010
2009
2008
2010
2009
2008
Discount rate
6.1
%
6.6
%
6.1
%
6.0
%
6.3
%
6.3
%
Expected return in plan assets
7.1
%
7.1
%
7.8
%
—
—
—
Rate of compensation increase
3.7
%
3.9
%
4.0
%
—
—
5.0
%
The
discount rate is based on settling the pension obligation with high-grade, high-yield corporate bonds, and the rate of compensation increase is based on
actual experience and future expectations. The expected return on plan assets is based on historical performance as well as expected future rates of return on plan assets considering the current
investment portfolio and investment strategy.
The
Company used the following health care cost inflation rate assumptions in measuring the accumulated post-retirement benefit obligations as of December 31, 2010,
December 31, 2009 and December 26, 2008:
2010
2009
2008
Rate assumed for next year
8.4
%
8.7
%
9.0
%
Ultimate rate
4.5
%
4.5
%
4.5
%
Year in which ultimate rate is reached
2028
2028
2028
A
one percentage-point increase in assumed health care cost trend rates would have a minimal impact on total service and interest cost components as well as the
post-retirement benefit obligation. A one percentage-point decrease in assumed health care cost trend rates would have a minimal impact on total service and interest cost
components as well as the post-retirement benefit obligation.
The
plans have been designed and adopted by the Company and certain of its affiliates as plan sponsor to provide qualifying employees with a meaningful foundation of retirement income.
Benefits are defined by the plan terms with reference to employment-related factors including length of service. Employer contributions fund benefits and pay plan expenses.
The
primary objectives for investment of plan funds are to preserve and to grow the assets as the foundation for the long-term payment of benefits the plan is designed to
provide. The objectives include achieving consistency of investment returns through both capital appreciation and current income. Diversification is intended to reduce the risk of large losses and to
enhance opportunities for appropriate appreciation along with current income. Appropriate liquidity is designed to meet the plan's foreseeable benefit payment and administrative obligations.
The
Company's overall investment strategy is to achieve a mix of approximately 70% of investments for long-term growth and 30% for near-term benefit payments,
with wide diversification of asset types, fund strategies, and fund managers. The target allocations for plan assets are 36% equity securities, 57% fixed income securities, and 7% to all other
types of investments. Equity securities include investments in large-cap and small-cap companies located in the U.S. and internationally. Fixed income securities include
corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. treasuries. Other types of investments include investments in private real estate
funds and absolute return funds that follow several different strategies.
F-35
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
The
following table provides information on the fair value measurements of the plan assets as of December 31, 2010.
(in thousands)
Total
Quoted prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$
735
$
735
$
—
$
—
Equity securities:
Domestic small cap(a)
5,712
—
5,712
—
Domestic large cap(b)
28,247
11,792
16,455
—
International equity(c)
21,243
9,810
11,433
—
Fixed income securities:
Long duration fixed income(d)
56,193
56,193
—
—
Other types of investments:
International balanced(e)
33,830
33,830
—
—
Real estate(f)
5,635
—
—
5,635
Absolute return(g)
10,016
—
—
10,016
Total
$
161,611
$
112,360
$
33,600
$
15,651
(a)
This
category represents funds that invest primarily in domestic common stocks.
(b)
This
category represents mutual funds invested in broadly diversified common stock and commingled funds that invest primarily in domestic common stocks.
(c)
This
category represents funds that invest primarily in international common stocks.
(d)
This
category represents mutual funds that invest primarily in investment-grade fixed income securities.
(e)
This
category represents funds that invest primarily in international equity and fixed income securities.
(f)
This
category represents funds that hold direct investments in real estate that are diversified by geography and type of property.
(g)
This
category represents funds that invest in a wide range of instruments and markets, including domestic and international equities and
equity-related instruments, fixed income and other debt-related instruments, currencies, commodities and derivative instruments.
F-36
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
The
following table provides information on the fair value measurements of the plan assets as of December 31, 2009.
(in thousands)
Total
Quoted prices in
Active Markets for
Identical
Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Cash and cash equivalents
$
643
$
643
$
—
$
—
Equity securities:
Domestic small cap(a)
4,229
—
4,229
—
Domestic large cap(b)
29,355
14,800
14,555
—
International equity(c)
33,291
21,402
11,889
—
Fixed income securities:
Long duration fixed income(d)
59,967
59,967
—
—
Other types of investments:
Real estate(e)
5,130
—
—
5,130
Absolute return(f)
9,500
—
499
9,001
Total
$
142,115
$
96,812
$
31,172
$
14,131
(a)
This
category represents funds that invest primarily in domestic common stocks.
(b)
This
category represents mutual funds invested in broadly diversified common stock and commingled funds that invest primarily in domestic common stocks.
(c)
This
category represents funds that invest primarily in international common stocks.
(d)
This
category represents mutual funds that invest primarily in investment-grade fixed income securities.
(e)
This
category represents funds that hold direct investments in real estate that are diversified by geography and type of property.
(f)
This
category represents funds that invest in a wide range of instruments and markets, including domestic and international equities and
equity-related instruments, fixed income and other debt-related instruments, currencies, commodities and derivative instruments.
F-37
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
Changes in Fair Value
Measurements of Level 3
Plan Assets
(in thousands)
Real Estate
Absolute
Return
Total
Beginning balance, December 26, 2008
$
8,095
$
4,783
$
12,878
Realized (losses)
(134
)
—
(134
)
Unrealized gains (losses) relating to instruments still held in the reporting period
(1,967
)
716
(1,251
)
Purchases, sales, issuances and settlements (net)
(864
)
3,502
2,638
Ending balance, December 31, 2009
5,130
9,001
14,131
Realized (losses)
(60
)
—
(60
)
Unrealized gains relating to instruments still held in the reporting period
509
515
1,024
Purchases, sales, issuances and settlements (net)
56
500
556
Ending balance, December 31, 2010
$
5,635
$
10,016
$
15,651
The
Company expects to contribute $14.1 million to its pension plans in 2011. Cash contributions in subsequent years will depend on a number of factors, including performance of
plan assets and legislative changes.
Administrative
expenses of the plans were $1.0 million, $0.8 million, and $1.0 million in 2010, 2009, and 2008, respectively. Future benefit payments expected to be
paid to participants for years ending December 31 are shown below:
(in thousands)
2011
$
10,347
2012
11,648
2013
12,398
2014
13,017
2015
13,507
2016+
73,643
$
134,560
The
Company has 12 defined contribution retirement savings plans (Savings Plans) which provide for pension, disability and death benefits. Eligible employees are permitted to defer a
portion of their compensation up to a maximum amount. The Company may match, at its discretion, a portion of each employee's contribution, subject to the Savings Plans' limitations. In addition, the
Company may make annual discretionary contributions to the Savings Plans approved by the Board of Directors. The Company contributed $6.1 million, $5.9 million, and $2.6 million
to the Savings Plans in 2010, 2009, and 2008, respectively.
In
2009, the Company began providing a 401(k) restoration and/or an ESOP restoration plan to selected participants. Both plans are non-qualified benefit plans. The Company
recorded
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 18 — PENSION PLANS (Continued)
expense
of $0.2 million and $0.2 million for the 401(k) plan and $0.2 million and $0.5 million for the ESOP plan in 2010 and 2009, respectively.
Long-term
investments at December 31, 2010 and 2009 were $30.7 million and $27.5 million, respectively. These investments included assets held by the
Company to fund its non-qualified benefit plans (Supplemental Employee Retirement Plan and defined compensation plans). The Company funds its plans through insurance policies which are in
turn funded by equity and fixed income mutual funds. The Company recognized unrealized gains/losses related to these investments for the fiscal years ended December 31, 2010,
December 31, 2009 and December 26, 2008 of $1.5 million, $2.4 million, and $(4.9) million, respectively, in selling and administrative expenses. The associated liability
included in accrued pension and other retirement costs was $23.8 million and $21.3 million as of December 31, 2010 and 2009, respectively.
NOTE 19 — COMMITMENTS AND CONTINGENCIES
Leases
The Company has operating leases that contain renewal options. Minimum rental commitments on non-cancellable operating
leases for years ending December 31 are shown below:
(in thousands)
2011
$
5,084
2012
3,977
2013
3,034
2014
2,359
2015
1,524
Thereafter
2,688
$
18,666
The
Company's rent expense in 2010, 2009, and 2008, was $7.3 million, $6.3 million, and $5.9 million, respectively. The Company also has capital lease obligations
related to computer equipment, vehicles and equipment that are not material to these consolidated financial statements.
Letters of Credit
The Company has a contingent liability for letters of credit outstanding in the amount of $13.0 million at December 31,
2010 and $6.5 million at December 31, 2009. These letters of credit primarily relate to the guarantee of a loan to the Company's Chilean joint venture and letters of credit required for
various state workers' compensation programs.
Capital Expenditure Commitment
On July 13, 2007, the Company entered into a 50/50 joint venture with its Chilean licensee,
Compañía Electro Metalurgica S.A. (Elecmetal), to build an EPG foundry in Chile. The foundry's construction was delayed during the 2009 economic downturn; however,
construction resumed during 2010 and the foundry is expected to be operational in 2012. As a result of the delay, the increased demand for construction resources in Chile and new building codes
following the Chilean
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 19 — COMMITMENTS AND CONTINGENCIES (Continued)
earthquake,
the foundry's construction costs have increased an estimated 40% from the 2007 start of the project. Construction of the foundry is estimated to cost approximately $76 million,
$48 million of which will be funded equally by the Company and its joint venture partner ($24 million each). The remaining balance will be financed by a construction loan that will
convert to a seven-year term loan upon completion of the foundry. The loan is secured by property, equipment and standby letters of credit in the amounts of $7.6 million from each
partner at December 31, 2010. The Company has funded $8.8 million through December 31, 2010 and will fund the remaining $15.2 million of the estimated costs in 2011.
Legal Proceedings
The Company is subject to claims and litigation arising in the ordinary course of business, including those relating to exposure to
hazardous materials, and regularly asserts its patent rights against parties that may be infringing those rights. Although the Company cannot predict the final outcome of pending legal proceedings
with certainty, it does not expect the ultimate disposition of these matters to have a material adverse effect on its financial position, results of operations or cash flows.
Bradken Resources Pty Ltd.
In March 2008, the Company began an arbitration proceeding against its Australian licensee, Bradken Resources Pty Ltd. In the
arbitration, the Company sought a declaration of its rights and obligations under its 1999 agreement, as amended, with Bradken, under which the Company granted Bradken the exclusive right to
distribute and manufacture some of its products in Australia, New Zealand and Papua New Guinea. In the arbitration, the Company
sought to resolve disputes regarding (i) whether Bradken was obliged to use the Company's trademarks in connection with the manufacture and sale of the Company's products, (ii) whether
Bradken could use customer field trials to promote its competing products, (iii) whether the agreement's prohibition on Bradken selling products similar to or in competition with the Company's
products was enforceable and (iv) whether the agreement's prohibition on Bradken using the Company's know-how, product designs and special alloys for a three-year period
following termination of its agreement with Bradken was enforceable. In addition, the Company sought termination of the agreement prior to its scheduled expiration on June 30, 2011. Bradken
filed counterclaims against the Company alleging, among other things, that the Company had (i) violated U.S. antitrust laws, (ii) breached the agreement with Bradken and
(iii) misused certain patent rights, and seeking a damage award.
On
June 17, 2010, an International Chamber of Commerce arbitrator issued a final award in the Company's favor on all issues presented to the arbitrator with the exception of the
Company's request that the agreement be terminated before June 30, 2011. Bradken was awarded no damages. The arbitrator affirmed our contract positions, including that Bradken must continue to
apply the Company's trademarks as the Company directed during the term of the license, Bradken cannot sell parts that compete with the Company's licensed products anywhere in the world during the term
of the license, and Bradken cannot use the Company's know-how or alloys nor make any of the Company's patented or non-patented products for a period of three years after the
end of the license. Finally, the arbitrator awarded the Company its share of the ICC administrative expenses, and arbitrator's remuneration and substantially all of the Company's legal expenses. In
the proceeding the Company began in United States District Court to confirm the final award and
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 19 — COMMITMENTS AND CONTINGENCIES (Continued)
secure
a judgment to collect the amount awarded to us, Bradken has challenged the award of legal expenses.
Portland Harbor Superfund Site
The Company received a questionnaire dated March 12, 2010 from the Environmental Protection Agency (EPA) regarding historical
operational practices in connection with the Portland Harbor Superfund site. The EPA also named the Company as one of more than 100 businesses to date that are potentially responsible parties for this
site. Consequently, the Company may be responsible for clean-up or other costs related to the site under the Comprehensive Environmental Response, Compensation, and Liability Act, also
known as CERCLA or the Superfund law. The current aggregate clean-up costs to be allocated among responsible parties is estimated to be approximately $1.0 billion. The Company has
entered into a participation agreement with a group of named potentially responsible parties and other companies under which the Company admits to no liability. The agreement provides a framework to
determine how to allocate cleanup costs among the parties to the agreement if the EPA finds them responsible. The inability of a party to pay its portion of assessed costs may result in increased
costs to other parties. The Company is also participating in a process with other potentially responsible parties to quantify and potentially allocate natural resource damages claims with respect to
the site. The Company cannot predict its ultimate liability with respect to the Portland Harbor Superfund site at this time, but it could be substantial if the EPA determines that the Company is a
responsible party for this site.
NOTE 20 — CONTINGENTLY REDEEMABLE EQUITY SECURITIES
Class A Common Stock
Certain employee and director holders of Class A common stock are party to Restricted Stock Transfer Restriction Agreements
(RSTRA) or a Stock Purchase Agreement (SPA) and have the right to sell back shares to the Company upon death or retirement (for employees), subject to restrictions contained within credit facilities
and relevant state laws, as applicable. In addition, the RSTRA also gives a shareholder the right to require the Company to purchase the shares upon disability and the SPA requires the Company to
repurchase shares upon the termination of the shareholder's employment. The price for any shares purchased by the Company is (1) if purchased under the RSTRA, the fair value of the shares as of
the last day of the fiscal quarter immediately preceding the quarter in which the death, disability or retirement occurs or (2) if purchased under the SPA, an amount based on an adjusted book
value calculation.
Put
options under the RSTRA may be exercised by written notice to the Company within 90 days of the date of the death, disability or retirement. The price for any shares
purchased by the Company is the fair value of the shares as of the last day of the fiscal quarter immediately preceding the quarter in which the death, disability or retirement (Triggering Event)
occurs or in which the applicable anniversary of the Triggering Event occurs. Accordingly, the Company classifies shares subject to the RSTRA as contingently redeemable equity securities and revalues
them each quarter. Put options may be exercised by written notice to the Company in specified periods. Notice must
be given to the Company within 90 days of the Triggering Event and the purchase must be completed between 45 and 60 days after the end of the 90-day notice period.
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 20 — CONTINGENTLY REDEEMABLE EQUITY SECURITIES (Continued)
Since
2009, upon retirement or disability, each shareholder with a RSTRA has had a right to sell to the Company a portion or all shares held by that shareholder in three installments
over a two-year period. Upon retirement or disability, the shareholder may exercise a put option for up to 1/3 of the shares held by the shareholder as of retirement or disability. On the
first anniversary of the retirement or disability, the shareholder may exercise a put option for between 1/3 and 2/3 of the shares held by the shareholder as of retirement or disability. On the second
anniversary of the date of the retirement or disability, shareholder may exercise a put option for any remaining shares. For put option exercises by a shareholder with an aggregate purchase price not
exceeding $1 million, the Company must pay the total purchase price on the exercise closing date. For put option exercises by a shareholder with an aggregate purchase price exceeding
$1 million, the Company may pay $1 million on the closing date for the exercise of the put option and 1/2 of the remaining amount on each of the first and second anniversaries of the
Triggering Event.
Since
2009, upon the death of a shareholder, the shareholder's successor may exercise the put option for up to 1/2 of the shares held by the shareholder on the date of death. On the
first anniversary of that date, the shareholder's successor may exercise the put option for any remaining shares. For put option exercises within one year for more than 1/2 of the shares subject to
the option as of the date of death, the Company may pay the repurchase price in two equal annual installments, with the first installment payable on the exercise closing date and the remaining amount
payable on the first anniversary of that date. For put option exercises with respect to up to 1/2 of the shares held by a shareholder as of the date of death, the Company must pay the total purchase
price at the applicable closing date.
Shares
subject to the Stock Purchase Agreement (SPA) may only be sold or transferred in accordance with the SPA. Each shareholder subject to the SPA must sell his or her shares back to
us upon death or termination of employment or service as a director. Unless otherwise agreed, the Company must repurchase the shares within 30 days of the date of death or separation from
service.
Class C Preferred Stock
The authorized number of shares of Class C preferred stock is 205,000. The ESOP owns all of the Class C preferred stock.
The Class C preferred stock is nonvoting, except for certain protective voting rights and except where required by law. Each share of the Class C preferred stock is convertible into one
share of Class A common stock at the discretion of the holder of the Class C preferred stock. The Class C preferred stock will automatically convert into Class A common
stock when the ESOP has fully repaid its loan to the Company or upon an initial public offering of the Company's stock. See
Note 22 —
ESOP
.
All
holders of Class C preferred stock have the right to sell back shares to the Company upon death, disability or separation (for employees) pursuant to a distribution schedule
that is determined by the reason for separation and the value of shares in an account. The price for any shares purchased by the Company is the fair value of the shares as of the last day of the
fiscal quarter immediately preceding the quarter in which the shares are repurchased. Accordingly, the Company classifies shares as contingently redeemable equity securities and revalues them each
quarter. The repurchase obligation terminates upon an initial public offering of the Company's stock when the
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 20 — CONTINGENTLY REDEEMABLE EQUITY SECURITIES (Continued)
Class C
preferred stock converts to publicly tradable stock. At that time, the Class C preferred stock will be included in shareholders' equity.
Valuation of Class A Common Stock and Class C Preferred Stock
To determine the fair value of the Class A common stock and the Class C preferred stock, the Company values the
enterprise at the arithmetic average of the values derived through a guideline company method and a discounted cash flow method. The Company selects public companies comparable to the Company in
respect to investment risk and return perspective and derives an estimated enterprise value after making adjustments for size, growth, profitability, global structure and risk considerations. Under
the discounted cash flow method, assumptions included a weighted average cost of capital of 12.5% based on required return on equity of 17.1% (70% weight), a cost of debt after tax of 2% (30% weight)
and a termination value after the sixth year assuming an exit EBITDA multiple of 7.0x, based on observations of pricing multiples from the guideline company method, discounted to present value.
In
fiscal periods 2008, 2009 and through the third quarter of fiscal 2010, the Company determined the fair value of its Class C preferred stock using the Current Method. This
method allocates the
enterprise value to the Class A common stock and Class C preferred stock based on their conversion values, which differ between these two classes of stock primarily due to the value of
the future dividend streams of the Class C preferred stock attributed to such class. Furthermore, the Company included a discount for lack of marketability of 5% in valuing the Class C
preferred stock, but applies no discount in valuing the Class A common stock. At December 31, 2010 and for the quarter then ended, the Company changed its valuation method to a
Black-Scholes option pricing model because this method was more appropriate given the increased likelihood of completing an initial public offering. The option pricing model of allocating
enterprise value among common stock and preferred stock treats each class of stock as a call option on all or part of the enterprise's value. The Black-Scholes model uses the enterprise
value derived as described above and made assumptions for volatility (20%), expected life (.75 years) and risk-free interest rate (.29%).
Applying
the Black-Scholes model at December 31, 2010 and the Current Method at December 31, 2009, the value of the Class C preferred stock was $891.65
and $717.70 per share and the value of the Class A common stock was $688.20 and $438.56 per share, respectively.
Reclassification of Contingently Redeemable Equity Securities as Shareholders' Equity
When the Company's repurchase obligation terminates, which will occur upon the conversion of the subject class of stock into publicly
tradable securities, the subject stock is reclassified as shareholders' equity. This will occur, with respect to the Class C preferred stock, when the Company completes an underwritten public
offering and, with respect to the Class A common stock, (1) immediately prior to the sale of those shares in the offering, (2) with respect to 1/2 of any remaining shares,
180 days after the completion of the offering, and (3) with respect to the remaining shares, 360 days after the completion of the offering.
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 21 — SHARE-BASED COMPENSATION
The Company's share-based compensation awards include options and cash-settled stock appreciation rights (SARs). The Company also sponsors an employee stock
ownership plan (ESOP) that is discussed in more detail in
Note 22 — ESOP.
Stock Incentive Plans
As of December 31, 2010, the Company had 2000 and 2010 Stock Incentive Plans (the "Plans") under which there were 175,000 and
162,500 shares of common stock reserved for issuance, respectively. The Plans were adopted by the Board of Directors and approved by the shareholders and provide for the grant of incentive options,
non-qualified options and other stock-based compensation grants. The 2000 Stock Incentive Plan expired in 2010 and all remaining shares available rolled into the 2010 plan. At
December 31, 2010, there were 180,336 shares available for grant in the 2010 Stock Incentive Plan and no shares available for grant in the 2000 Stock Incentive Plan. As of December 31,
2010, all outstanding options were granted under the 2000 Stock Incentive Plan and no options had been granted under the 2010 Stock Incentive Plan. Unless terminated earlier, the 2010 Incentive Award
Plan will continue in effect until all shares available for issuance under the plan have been issued and all restrictions on the shares have lapsed.
Stock Options
Effective December 31, 2005, the Company adopted the fair value method of recognizing expense for stock based compensation
prescribed by ASC Topic 718. The
Company applied the modified prospective approach to adoption in which expense is recognized prospectively for previously granted but unvested options and new option grants. Under this transition
method, options granted prior to adoption continue to be reported under the intrinsic value method of expense recognition, under which compensation expense for employee stock options was not
recognized if the exercise price of the option equaled or exceeded the fair value of the stock on the date of grant. Because the Company has granted no stock options since adoption of this method, no
compensation expense has been recorded for options vesting during the reporting periods presented.
A
summary of option activity for the year ended December 31, 2010 is presented below.
Number of
shares
Weighted
Average
Exercise Price
Options outstanding December 31, 2009
37,887
$
54.61
Granted
—
—
Exercised
(16,575
)
51.69
Forfeited
(34
)
35.38
Expired
(1,175
)
35.38
Options outstanding December 31, 2010
20,103
$
58.17
During
2010, 3,595 options became exercisable and, as of December 31, 2010, all outstanding options were fully exercisable. The intrinsic value of options exercised during 2010
was
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 21 — SHARE-BASED COMPENSATION (Continued)
$10.6 million.
As of December 31, 2010, the aggregate intrinsic value of outstanding options was $12.7 million and the weighted average remaining contractual term was
4.3 years.
During
the fiscal years ended December 31, 2010, December 31, 2009 and December 26, 2008, the Company granted no options. There was no share-based
compensation expense recognized or capitalized for stock options in fiscal years 2010, 2009 and 2008. Cash received for option exercises during 2010 was $0.9 million.
Stock Appreciation Rights
The Plans also permit stock appreciation rights (SARs) to be granted to employees and directors. The Company's SARs vest at the end of
a three-year period and expire no more than ten years after the grant date. SARs are settled in cash for the difference between the exercise price (which reflects fair value of the
Company's Class A common stock on the date of the grant) and the fair value of such stock upon exercise. As a result, SARs are recorded in the Company's consolidated balance sheet as a
liability until exercise.
A
summary of SARs activity for the fiscal year ended December 31, 2010 is presented below.
Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual Life
(years)
Aggregate
Intrinsic Value
(in thousands)
Outstanding at December 31, 2009
33,917
$
481.59
Granted
15,617
422.80
Exercised
—
—
Forfeited or expired
—
—
Outstanding at December 31, 2010
49,534
$
463.06
8.7
$
11,152
Exercisable, December 31, 2010
9,411
$
439.55
7.0
$
2,340
The
Black-Scholes option pricing model is utilized to determine the fair value of SARs granted. The following weighted average assumptions were used in calculating the fair
value during the periods presented:
2010
2009
2008
Risk-free interest rate
3.65%
2.89%
3.61%
Expected dividend yield
—
—
—
Expected lives
10 years
10 years
10 years
Expected volatility
30%
30%
30%
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 21 — SHARE-BASED COMPENSATION (Continued)
Information
pertaining to SARs awards for the fiscal years ended December 31, 2010, December 31, 2009, and December 26, 2008 is presented below:
(in thousands, except per share data)
2010
2009
2008
Grant date fair value per share
$
199.56
$
173.39
$
257.50
Total weighted-average fair value of grants
$
3,117
$
2,168
$
3,091
Total intrinsic value of exercises
$
—
$
—
$
—
Total fair value of SARs vested
$
1,524
$
—
$
—
Total share-based liabilities paid
$
—
$
—
$
—
At
December 31, 2010, the aggregate intrinsic value of exercisable awards was $2.3 million and the weighted average remaining contractual term was 7.0 years. At
December 31, 2010, the Company
had $3.5 million of unrecognized SARs-related compensation expense yet to recognize for unvested awards, net of immaterial estimated forfeitures. This expense is expected to be
recognized over a weighted-average period of two years. The impact of any change in the payout liability for vested awards will be recognized as incurred.
Total
SARs compensation expense recognized in fiscal years ended December 31, 2010, December 31, 2009, and December 26, 2008 is presented below.
(in thousands)
2010
2009
2008
Selling and administrative (income) expense
$
7,678
$
—
$
(260
)
Tax (benefit) expense
(2,956
)
—
100
Net (income) expense
$
4,722
$
—
$
(160
)
At
December 31, 2010, the Company had accrued $7.7 million in other long-term liabilities for SARs payout liability. No share-based compensation
expense related to SARs was capitalized during fiscal 2010, 2009 and 2008. Because no SARs were exercised in 2010, no cash was used to settle these awards during 2010.
On
March 25, 2011, the Compensation Committee of the Company's Board of Directors approved the conversion of previously awarded SARs from cash settlement to equity settlement.
The Company has sent conversion consent forms to award recipients and expects all affected employees to consent to the conversion.
NOTE 22 — ESOP
The Company sponsors an employee stock ownership plan (ESOP) that covers all U.S. employees who meet service requirements. The Company makes annual contributions to the ESOP
equal to the ESOP's debt service to the Company less dividends received by the ESOP on unallocated shares. All dividends and contributions received by the ESOP are used to pay debt service. The ESOP
shares are pledged as collateral for its debt. As the debt is repaid, shares are released from collateral and allocated to active employees. The Company accounts for its ESOP in accordance with the
guidance on stock compensation. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the balance sheet. As shares are released from collateral, the Company reports
compensation expense equal to the current fair value of the shares.
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 22 — ESOP (Continued)
ESOP
non-cash compensation expense was $17.3 million, $16.5 million and $20.2 million for 2010, 2009, and 2008, respectively.
(in thousands, except share data)
2010
2009
Allocated shares
124,394
101,867
Shares repurchased from former employees
(3,617
)
(2,646
)
Unreleased shares
67,577
90,104
Total ESOP shares
188,354
189,325
Fair value of unreleased shares
$
60,255
$
65,010
NOTE 23 — NONCONTROLLING INTERESTS
The noncontrolling interest for three subsidiaries classified as a separate component of equity was $14.8 million and $13.3 million as of December 31, 2010 and
2009, respectively. Net earnings attributable to the noncontrolling interests from continuing operations were $4.6 million, $2.5 million, and $5.1 million for 2010, 2009, and
2008, respectively. These amounts are net of income tax of $1.2 million, $0.6 million, and $1.4 million for 2010, 2009, and 2008, respectively.
NOTE 24 — SHAREHOLDERS' EQUITY
Class A and Class B Common Stock
The authorized number of shares of Class A common stock and Class B common stock are 5,000,000 and 243,737,
respectively. The Company's Class A and Class B
common stock have one vote per share. Each share of Class B common stock automatically converts into one share of Class A common stock if transferred to other than specified persons. The
Class A common stock and Class B common stock share equally and ratably with identical rights and preferences in any dividends, except those paid to Class C preferred stock
shareholders.
Upon
liquidation, holders of Class A common stock and Class B common stock are entitled to receive ratably any distribution of assets after payment of a certain
preferential amounts to holders of Class C preferred stock. Each class votes separately on any amendment to the Company's Articles of Incorporation if the action would (1) adversely
affect the rights, preferences and privileges of that class or (2) increase the number of authorized shares of that class. In addition, holders of Class A common stock and Class B
common stock vote separately on a change in control or sale of the Company as long as a minimum number of shares of Class B common stock are outstanding.
Certain
holders of Class A common stock are party to the Restated Stock Transfer Restriction Agreement (RSTRA) or the Stock Purchase Agreement (SPA). See
Note 20 — Contingently Redeemable Equity
Securities.
When the shares subject to those agreements convert to publicly tradable
stock, those shares will be included in shareholders' equity.
Class C Preferred Stock
The authorized number of shares of Class C preferred stock is 205,000. The ESOP owns all of the Class C preferred stock.
The Class C preferred stock is nonvoting, except for certain protective
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 24 — SHAREHOLDERS' EQUITY (Continued)
voting
rights and except where required by law. Each share of the Class C preferred stock is convertible into one share of Class A common stock at the discretion of the holder of the
Class C preferred stock. The Class C preferred stock will automatically convert into Class A common stock when the ESOP has fully repaid its loan to the Company or upon an initial
public offering of the Company's stock. See
Note 22 — ESOP
.
All
holders of Class C preferred stock have the right to sell back shares to the Company upon death, disability or separation (for employees) pursuant to a distribution schedule
that is determined by the reason for separation and the value of shares in an account. The price for any shares purchased by the Company is the fair value of the shares as of the last day of the
fiscal quarter immediately preceding the quarter in which the shares are repurchased. Accordingly, the Company classifies shares as contingently redeemable equity securities and revalues them each
quarter. The repurchase obligation terminates upon an initial public offering of the Company's stock when the Class C preferred stock converts to publicly tradable stock. At that time, the
Class C preferred stock
will be included in shareholders' equity. See
Note 20 — Contingently Redeemable Equity Securities.
NOTE 25 — ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated other comprehensive income (loss) represents primarily unrealized foreign currency translation gains and losses. These gains and losses are excluded from net earnings and
exclude income tax expense or benefit because the Company has reinvested the associated earnings of its non-U.S. subsidiaries for an indefinite period of time. These foreign
currency gains and losses will be realized when a foreign subsidiary is liquidated or sold. Other amounts recorded in other comprehensive income (loss) include adjustments related to pension and other
retirement plans and derivative gains and losses related to interest rate hedges.
The
following reflects the balances included in other comprehensive income (loss), net of tax, for the fiscal years presented.
(in thousands)
2010
2009
2008
Cumulative translation adjustment
$
28,561
$
21,489
$
(1,378
)
Defined benefit plans
(38,115
)
(36,753
)
(34,114
)
Derivatives and other
(248
)
131
131
Total accumulated other comprehensive loss
$
(9,802
)
$
(15,133
)
$
(35,361
)
NOTE 26 — EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE
Basic earnings per share is computed by dividing the net earnings available to common shareholders by the weighted average number of shares of common stock outstanding. The net earnings
available to common shareholders includes an adjustment to revalue Class C preferred shares to the current redemption value. For purposes of calculating diluted earnings per share, the
denominator includes the weighted average number of shares of common stock outstanding, the weighted average number of preferred shares outstanding, and the number of dilutive common stock
equivalents, such as stock options and Class C preferred stock, as determined using the treasury stock method and "as-if-converted," respectively.
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ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 26 — EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE (Continued)
Basic
and diluted net earnings per share were as follows for the years ended:
(in thousands, except per share data)
2010
2009
2008
Basic weighted average shares outstanding — common
1,086
1,083
1,081
Dilutive effect of employee stock options
32
35
41
Weighted average shares outstanding — Class C preferred shares
—
86
65
Weighted average shares outstanding assuming dilution
1,118
1,204
1,187
Net earnings from continuing operations attributable to ESCO common shareholders
$
7,399
$
26,182
$
44,403
Valuation adjustment on Class C preferred shares
—
(7,933
)
(13,287
)
Net earnings from continuing operations attributable to ESCO common shareholders
$
7,399
$
18,249
$
31,116
Basic earnings per share from continuing operations allocated to ESCO common shareholders
$
6.81
$
24.18
$
41.08
Diluted earnings per share from continuing operations allocated to ESCO common shareholders
$
6.62
$
15.16
$
26.21
For
purposes of calculating earnings per share, the Company uses the "if converted" method. As both classes of common stock share the same rights in dividends, basic and diluted
earnings per share are the same for both classes under both the "if converted" method and the "two-class" method. For 2010, the Class C preferred stock is anti-dilutive
and excluded from dilutive EPS.
Pro
forma basic and diluted net earnings per share of common stock (unaudited) has been computed to give effect to the assumed conversion of the Class C preferred stock into
common stock, the expiration of the put options associated with the Class A common stock and the Class C preferred stock that will occur in connection with the IPO and through the first
360 days thereafter, and the             -for-one stock split. Also, the numerator in the pro forma basic and diluted net earnings per share calculation has been
adjusted to remove changes resulting from re-measurements of the outstanding Class C preferred stock through December 31, 2010.
F-49
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 26 — EARNINGS PER SHARE AND PRO FORMA EARNINGS PER SHARE (Continued)
The
following table sets forth the computation of our pro forma basic and diluted net earnings per share of common stock (unaudited):
(in thousands)
2010
2009
2008
Pro forma net earnings attributable to ESCO common shareholders
$
23,920
$
18,249
$
31,116
Shares used in computing basic net earnings per share
Pro forma adjustments to reflect assumed conversion of Class C preferred stock
Shares used in computing pro forma basic net earnings per share
Shares used in computing diluted net earnings per share
Pro forma adjustments to reflect assumed conversion of Class C preferred stock
Shares used in computing pro forma diluted net earnings per share
Pro forma basic net earnings per share
$
$
$
Pro forma diluted net earnings per share
NOTE 27 — SEGMENT REPORTING
The Company's reporting segments are based on the nature of business activities (types of products and production processes) from which each earns net sales and incurs expenses,
financial information reviewed by the chief operating decision maker (the Company's CEO), capital allocation and performance assessment process, organizational structure and financial information
presented to the Board of Directors and investors.
The
Company's reporting segments are as follows:
EPG:
This segment designs, develops and manufactures wear parts, wear part carriers and attachments for capital equipment primarily used in the mining, infrastructure development, and
industrial markets. EPG's products are comprised of wear parts (including ground engagement tools (GET) and lip systems, crusher wear parts, dragline rigging and cutting edges), wear parts carrier
systems (including dragline buckets, cable shovel buckets, hydraulic excavator buckets and shovel fronts, wheel loader buckets, truck bodies and dredge cutterheads) and industrial components
(including wear parts for waste and metal recycling hammers, conveying systems).
TTG:
This segment manufactures superalloy precision investment cast components for the aerospace and power generation markets. TTG's products include complex superalloy metal components
and products for airplane engines and industrial gas turbines.
Segment measurement and reconciliations
The following list presents the more significant items related to segment measurement and reconciliation between the Company's segment
reporting and its external reporting:
1)
The
Company uses operating income (loss) to measure segment performance.
F-50
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 27 — SEGMENT REPORTING (Continued)
2)
The
Company does not allocate general corporate administrative income/expense such as interest income and expense, income taxes, currency exposures, other
income and expenses or management and administrative expenses that are not specifically identifiable to a segment, including ESOP compensation expense. Corporate administrative income/expense is
reflected as a reconciling item between the results of the two reporting segments above and the total consolidated results reported in the Company's external reporting. Because of these unallocated
income and expenses, the operating income of each reporting segment does not reflect the operating income or loss the reporting segment would have as a stand-alone business.
3)
There
are no inter-segment sales between EPG and TTG.
4)
Segment-related
assets include inventories (primarily stated at FIFO cost), trade receivables and property, plant and equipment.
Segment-related liabilities primarily include trade payables, warranty and inventory reserves, and workers compensations accruals.
The
following table presents information regarding operations and assets by segment for the fiscal years ended December 31, 2010, December 31, 2009 and December 26,
2008:
(in thousands)
Total Net
Sales
Depreciation
and
Amortization
Operating
Income
(Loss)
Capital
Expenditures
Year ended December 31, 2010:
Engineered Products
$
712,625
$
23,086
$
108,183
$
18,603
Turbine Technologies
136,856
4,244
8,695
1,913
Total Operating Segments
849,481
27,330
116,878
20,516
All Other
—
1,874
(42,909
)
—
Total Company
$
849,481
$
29,204
$
73,969
$
20,516
Year ended December 31, 2009:
Engineered Products
$
530,517
$
20,484
$
72,452
$
13,379
Turbine Technologies
149,873
4,407
14,604
735
Total Operating Segments
680,390
24,891
87,056
14,114
All Other
—
1,926
(32,648
)
—
Total Company
$
680,390
$
26,817
$
54,408
$
14,114
Year ended December 26, 2008:
Engineered Products
$
752,006
$
19,588
$
104,051
$
24,701
Turbine Technologies
187,907
4,383
13,986
4,990
Total Operating Segments
939,913
23,971
118,037
29,691
All Other
—
1,921
(37,556
)
—
Total Company
$
939,913
$
25,892
$
80,481
$
29,691
F-51
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 27 — SEGMENT REPORTING (Continued)
The
following table presents segment accountable asset information for the fiscal years ended, December 31, 2010, December 31, 2009 and December 26, 2008:
(in thousands)
Trade
Receivables
Inventories
Trade
Payables
Property
and
Equipment
Total
Assets
Year ended December 31, 2010:
Engineered Products
$
121,186
$
87,266
$
48,966
$
135,588
$
408,689
Turbine Technologies
18,795
18,169
17,115
32,010
86,617
Total operating segments
139,981
105,435
66,081
167,598
495,306
All Other
19
—
(388
)
(152
)
228,316
Total Company
$
140,000
$
105,435
$
65,693
$
167,446
$
723,622
Fiscal year ended December 31, 2009:
Engineered Products
$
86,404
$
59,456
$
28,806
$
126,029
$
309,281
Turbine Technologies
20,055
17,598
16,417
35,477
91,438
Total operating segments
106,459
77,054
45,223
161,506
400,719
All Other
19
—
1,910
413
275,026
Total Company
$
106,478
$
77,054
$
47,133
$
161,919
$
675,745
Fiscal year ended December 26, 2008:
Engineered Products
$
107,064
$
62,964
$
35,010
$
124,632
$
336,427
Turbine Technologies
25,069
23,466
23,053
38,868
105,516
Total operating segments
132,133
86,430
58,063
163,500
441,943
All Other
(55
)
—
2,717
737
204,168
Total Company
$
132,078
$
86,430
$
60,780
$
164,237
$
646,111
The
following table presents segment net sales and long-lived assets by geographic area for the fiscal years ended December 31, 2010, December 31, 2009 and
December 26, 2008:
Net Sales by Ship to Address
Long-lived Assets
(in thousands)
2010
2009
2008
2010
2009
2008
United States
$
376,387
$
325,933
$
447,191
$
91,358
$
93,826
$
100,729
Canada
101,668
89,893
103,357
38,856
38,006
35,134
All Others
371,426
264,564
389,365
109,218
76,717
71,303
Total
$
849,481
$
680,390
$
939,913
$
239,432
$
208,549
$
207,166
No
single customer accounts for 10% of more of the Company's net sales or accounts receivable in the fiscal years ended December 31, 2010, December 31, 2009 and
December 26, 2008.
F-52
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 28 — BUSINESS ACQUISITIONS
On July 1, 2010, the Company acquired 100% of the Engineering and Mining Products divisions of Swift Group Holdings Pty Ltd, an Australian company. These divisions (Swift)
provide equipment,
truck and wear part fabrication and refurbishment services, including on-site maintenance services, in the Bowen and Surat Basins of Australia.
The
results of Swift's operations have been included in the consolidated financial statements since the acquisition date. The Company paid $17.5 million ($17.8 million
cash less $0.3 million receivable from the former owners related to purchase price adjustments) net of $2.1 million cash acquired, which resulted in goodwill in the EPG reporting unit of
$3.9 million. This goodwill is deductible for income tax purposes. The Swift acquisition expands our footprint to provide a more direct presence throughout Australia's mining regions and
enhances our product offering through its fabrication facilities and its patented mining truck body offering.
The
following table presents a summary of the results of the Swift operations since the acquisition date:
(in thousands)
Six Months Ended
December 31, 2010
(Unaudited)
Net sales
$
28,767
Gross profit
$
2,616
Operating profit
$
133
Net profit
$
1,343
The
following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition.
(in thousands)
As of
July 1, 2010
Net consideration
$
17,526
Less:
Current assets
9,809
Property, plant and equipment
5,418
Patents
4,283
Customer relationships
2,998
Non-compete agreements
343
Deferred tax assets
1,129
Add:
Current liabilities
9,769
Other liabilities
610
Goodwill — Preliminary
$
3,925
F-53
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 28 — BUSINESS ACQUISITIONS (Continued)
On
December 1, 2010, the Company acquired 100% of the issued and outstanding shares of Austcast Pty Ltd in Brisbane, Australia, and its subsidiary Newlcast in Dunedin, New
Zealand (collectively, Austcast). Austcast manufactures certain industrial products and the Company plans to adjust its operations in 2011 to include ESCO's Ground Engaging Tools (GET) and other
mining and infrastructure wear parts.
The
results of Austcast's operations have been included in the consolidated financial statements since the acquisition date. The total acquisition price was $17.4 million
($15.9 million cash and $1.5 million of contingent consideration) less $1.0 million cash acquired, which resulted in goodwill in the EPG reporting unit of $12.2 million.
This goodwill is deductible for income tax purposes.
Contingent
consideration of up to $1.5 million is payable October 15, 2011, provided certain tooling builds are completed during the measurement period of April 1,
2011 through September 30, 2011. The Company expects to pay out $1.5 million.
The
following table presents a summary of the results of operation of the Austcast operations since the acquisition date.
(in thousands)
One Month Ended
December 31, 2010
(Unaudited)
Net sales
$
1,787
Gross profit
$
(67
)
Operating profit
$
46
Net profit
$
509
The
following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition, December 1, 2010. The Company is finalizing
certain valuations of assets purchased and liabilities assumed; therefore, the allocation shown below is preliminary and subject to refinement.
(in thousands)
As of
December 1,
2010
Net consideration
$
17,366
Less
Current assets
7,498
Property, plant and equipment
1,334
Other assets
166
Add
Current liabilities
3,335
Other liabilities
487
Goodwill — Preliminary
$
12,190
F-54
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 29 — RESTRUCTURING AND OTHER
The following table is a summary of the restructuring activities during the fiscal years presented:
(in thousands)
Employee
Severance
Curtailment
Expense and
Other Costs
Total
Provisions
$
1,062
$
730
$
1,792
Deductions
(523
)
(390
)
(913
)
December 26, 2008
539
340
879
Provisions
2,856
3,476
6,332
Deductions
(3,361
)
(3,816
)
(7,177
)
December 31, 2009
34
—
34
Provisions
68
680
748
Deductions
(102
)
(680
)
(782
)
December 31, 2010
$
—
$
—
$
—
To
align cost structures with lower capacity utilization, the Company closed its West Jordan, Utah plant in 2008 and its Saskatoon, Saskatchewan foundry in 2009. Both of these
facilities were part of the EPG segment. In 2009 the Company reduced its overall workforce by 17.6%, which resulted in employee severance costs. In 2010 the Company incurred additional shutdown
costs and fair value adjustments related to the Saskatoon foundry, a portion of which is still held for sale.
NOTE 30 — DISCONTINUED OPERATIONS
For the periods presented in the consolidated financial statements, businesses classified as discontinued operations included the Integrated Manufacturing (IMG) and Engineered Metals
(EMG) groups, which were divested in the fourth quarter of 2006, and included a portion of Soldering Rental, which was divested in the second quarter of 2009 as part of the transaction which resulted
in the Company's acquisition of 100% of Soldering. The IMG and EMG groups were each reported in their own segments, which were discontinued. Soldering Rental was in the EPG segment.
There
were no discontinued operations for 2010. The following table shows selected financial information for the businesses included in discontinued operations as of December 31,
2009 and December 26, 2008:
(in thousands)
2009
2008
Net sales
$
506
$
1,099
Earnings before income taxes
$
433
$
588
Income tax expense
$
127
$
145
Net earnings attributable to noncontrolling interests
$
141
$
343
Net earnings from discontinued operations
$
165
$
100
F-55
Table of Contents
ESCO Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 31 — SUBSEQUENT EVENTS
In preparing the audited financial statements, the Company has reviewed events that occurred after December 31, 2010, the balance sheet date, up until May 2, 2011, the
date the accompanying audited financial statements were available to be issued.
On
February 1, 2011, the Company acquired the assets of Trans Equipment for $6.7 million. Trans Equipment has operated as a full-line equipment and supply
company for the mining, infrastructure development and industrial markets. This acquisition will offer direct supply and service capabilities to key mining and infrastructure customers in Wyoming. The
acquisition's operating results will be integrated into the EPG reporting segment. The Company is finalizing certain valuations included in the purchase agreement.
On
March 25, 2011, the Compensation Committee of the Company's Board of Directors approved the conversion of previously awarded long-term incentive stock appreciation
rights from cash settlement to equity settlement. The Company has sent conversion consent forms to award recipients and expects all affected employees to consent to the conversion.
No
other material events were noted during the Company's review.
F-56
Table of Contents
Shares
ESCO Corporation
Class A Common Stock
Goldman, Sachs & Co.
Morgan Stanley
Through and including                           , 2011 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities,
whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with
respect to an unsold allotment or subscription.
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.    Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses, other than underwriting discounts, payable by us in connection with the sale
and distribution of the securities being registered. All amounts are estimated except the SEC registration fee and the FINRA filing fee.
Item
Amount*
SEC registration fee
$
FINRA filing fee
Initial NASDAQ Global Market listing fee
Legal fees and expenses
Accounting fees and expenses
Printing and engraving expenses
Transfer agent and registrar fees
Blue sky fees and expenses
Miscellaneous fees and expenses
Total
$
*
To
be provided by amendment.
Item 14.    Indemnification of Directors and Officers
Under Section 60.047(2)(d) of the Oregon Business Corporation Act, a corporation's articles of incorporation may limit the
personal liability of directors under some circumstances. In accordance with Oregon law, our 2011 Restated Articles of Incorporation filed as an exhibit to this registration statement, to be in effect
upon the completion of this offering, limit a director's personal liability to us and our shareholders for monetary damages for conduct as a director, except for liability arising from any act or
omission for which elimination of liability is not permitted under the Oregon Business Corporation Act.
Under
Section 60.391 of the Oregon Business Corporation Act, a corporation may indemnify a person who is made a party to a proceeding because the person is or was a director
against liability incurred in the proceeding if (i) the person acted in good faith; (ii) the person reasonably believed the conduct was in the corporation's best interests, or at least
was not opposed to its best interests; and (iii) in the case of a criminal proceeding, the person had no reasonable cause to believe the conduct was unlawful. In addition, a person who is
wholly successful, on the merits or otherwise, in the defense of a proceeding in which the person was a party because the person was a director, is entitled to indemnification for expenses actually
and reasonably incurred by the person in connection with the proceeding. Our 2011 Restated Articles of Incorporation, to be in effect upon the completion of this offering, requires us to indemnify, to
the fullest extent permitted by the Oregon Business Corporation Act, any current or former officer or director made, or threatened to be made, a party to or a witness or other participant in, any
proceeding, by reason of the fact that the person is or was our director or officer, against liability and expenses of a type indemnified against under the Oregon Business Corporation Act. We must
also advance expenses to or for any current or former director in advance of the final disposition of an indemnifiable proceeding upon the person's compliance with the advancement provisions of the
Oregon Business Corporation Act.
In
addition, we have entered into indemnification agreements, a form of which is filed as an exhibit to this registration statement, with our directors, officers and some employees,
which contain provisions that are in some respects broader than the specific indemnification provisions contained
II-1
Table of Contents
in
the Oregon Business Corporation Act. The indemnification agreements may require us, among other things, to indemnify our directors against certain liabilities that may arise by reason of their
status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.
Reference
is also made to the underwriting agreement filed as an exhibit to this registration statement, which, under certain conditions, provides for indemnification by the
underwriters of our officers and directors against certain liabilities.
Item 15.    Recent Sales of Unregistered Securities
The following sets forth all securities issued by us within the past three years without registration under the Securities Act. No
underwriters were involved in any of the stock issuances and, unless otherwise noted, no commissions were paid in connection therewith. In each of the following transactions, we relied on the
exemption from registration under the Securities Act set forth in Rule 701.
Certain
of our employees have participated in a deferred compensation plan which allows participants to elect in advance of earning salary and bonuses to defer a percentage of salary
and bonuses and have the deferred amount credited to a plan account. Employees elected to defer $1.3 million, $1.7 million and $2.1 million in 2010, 2009 and 2008, respectively,
into the deferred compensation plan.
In
the last three years, our employees and directors have exercised options to purchase an aggregate of 32,614 shares of Legacy Class A Common Stock, with exercise prices ranging
from $2.37 to $65.51 per share, depending upon the date of grant.
Item 16.    Exhibits and Financial Statements
(a)     Exhibits
Exhibit
No.
Description of Exhibit
*1.1
Form of Underwriting Agreement
*3.1
Form of 2011 Articles of Incorporation of ESCO Corporation
*3.2
Form of 2011 Bylaws of ESCO Corporation
*5.1
Form of Opinion of Stoel Rives LLP
10.1
Credit Agreement Between ESCO Corporation, subsidiaries of ESCO Corporation named therein, as guarantors, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National
Association, as Syndication Agent, Union Bank, N.A., as Documentation Agent, U.S. Bank National Association, as Co-Agent, and the Other Lenders named therein, dated November 18, 2010. Portions of this exhibit have been redacted and filed
separately with the SEC pursuant to a confidential treatment request.
10.2
Form of Indemnification Agreement between ESCO Corporation and each of its directors and executive officers**
10.3
2010 Stock Incentive Plan**
10.4
2000 Stock Incentive Plan, as amended**
10.5
Form of Restated Stock Transfer Restriction Agreement**
10.6
Form of Stock Purchase Agreement**
10.7
Form of Stock Option Agreement**
10.8
Form of Stock Appreciation Rights Agreement for grants after 2010**
10.9
Form of Stock Appreciation Rights Agreement and form of amendment for grants prior to 2011**
10.10
Form of Performance Unit Award Agreement for grants after 2010**
II-2
Table of Contents
Exhibit
No.
Description of Exhibit
10.11
Form of Performance Unit Award Agreement for grants prior to 2011**
*10.12
ESCO Corporation Deferred Compensation Plan, as amended**
*10.13
ESCO Corporation Deferred Compensation Plan II, as amended**
10.14
ESCO Corporation 401(k) Restoration Plan, as amended**
*10.15
ESCO Corporation Supplemental Executive Retirement Plan, as amended**
*10.16
ESCO Corporation 2005 Supplemental Executive Retirement Plan, as amended**
*10.17
Annual Cash Bonus Plan, as amended**
10.18
ESCO Corporation ESOP Restoration Plan, as amended**
*10.19
Amended and Restated ESCO Corporation Employee Stock Ownership Plan dated May 5, 2007, as amended**
10.20
Letter Agreement with Gene K. Huey**
21.1
Subsidiaries of the registrant.
23.1
Consent of PricewaterhouseCoopers LLP
*23.2
Consent of Stoel Rives LLP (included in Exhibit 5.1)
*
To
be filed by amendment.
**
Management
contract or compensatory plan or arrangement.
(b)     Financial
Statement Schedules. Schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the consolidated
financial statements or notes thereto.
Item 17.    Undertakings
Insofar as indemnification for liabilities arising under the Securities Act may be permitted as to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 14, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The
undersigned registrant hereby undertakes that:
(1)
For
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus as filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2)
For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
The
undersigned registrant hereby undertakes to provide the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriters to permit prompt delivery to each purchaser.
II-3
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we have duly caused this Registration Statement on
Form S-1 to be signed on our behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on the 2nd day of May, 2011.
ESCO CORPORATION
By:
/s/ STEVEN D. PRATT
Steven D. Pratt,
Chief Executive Officer
KNOW
ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints, jointly and severally, Steven D. Pratt, Ray Verlinich, and Kevin S.
Thomas and each of them, attorneys-in-fact for the undersigned, each with the power of substitution, for the undersigned in any and all capacities to sign any and all
amendments to this Registration Statement (including post-effective amendments and any registration statement relating to the same offering as this Registration Statement that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ STEVEN D. PRATT
Steven D. Pratt
Chief Executive Officer, Chairman of
the Board and Director (principal
executive officer)
May 2, 2011
/s/ RAY VERLINICH
Ray Verlinich
Chief Financial Officer (principal
financial and accounting officer)
May 2, 2011
/s/ PETER F. ADAMS
Peter F. Adams
Director
May 2, 2011
/s/ FRANK ALVAREZ
Frank Alvarez
Director
May 2, 2011
/s/ STEPHEN E. BABSON
Stephen E. Babson
Director
May 2, 2011
II-4
Table of Contents
Signature
Title
Date
/s/ PETER F. BECHEN
Peter F. Bechen
Director
May 2, 2011
/s/ FRANK JUNGERS
Frank Jungers
Director
May 2, 2011
/s/ HENRY T. SWIGERT
Henry T. Swigert
Director
May 2, 2011
/s/ ROBERT C. WARREN, JR.
Robert C. Warren, Jr.
Director
May 2, 2011
/s/ JOHN W. WOODS, JR.
John W. Wood, Jr.
Director
May 2, 2011
II-5
Table of Contents
Exhibit Index
Exhibit
No.
Description of Exhibit
*1.1
Form of Underwriting Agreement
*3.1
Form of Restated 2011 Articles of Incorporation of ESCO Corporation
*3.2
Form of Restated 2011 Bylaws of ESCO Corporation
*5.1
Form of Opinion of Stoel Rives LLP
10.1
Credit Agreement Between ESCO Corporation, subsidiaries of ESCO Corporation named therein, as guarantors, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National
Association, as Syndication Agent, Union Bank, N.A., as Documentation Agent, U.S. Bank National Association, as Co-Agent, and the Other Lenders named therein, dated November 18, 2010. Portions of this exhibit have been redacted and filed
separately with the SEC pursuant to a confidential treatment request.
10.2
Form of Indemnification Agreement between ESCO Corporation and each of its directors and executive officers**
10.3
2010 Stock Incentive Plan**
10.4
2000 Stock Incentive Plan, as amended**
10.5
Form of Restated Stock Transfer Restriction Agreement**
10.6
Form of Stock Purchase Agreement**
10.7
Form of Stock Option Agreement**
10.8
Form of Stock Appreciation Rights Agreement for grants after 2010**
10.9
Form of Stock Appreciation Rights Agreement and form of amendment for grants prior to 2011**
10.10
Form of Performance Unit Award Agreement for grants after 2010**
10.11
Form of Performance Unit Award Agreement for grants prior to 2011**
*10.12
ESCO Corporation Deferred Compensation Plan, as amended**
*10.13
ESCO Corporation Deferred Compensation Plan II, as amended**
10.14
ESCO Corporation 401(k) Restoration Plan, as amended**
*10.15
ESCO Corporation Supplemental Executive Retirement Plan, as amended**
*10.16
ESCO Corporation 2005 Supplemental Executive Retirement Plan, as amended**
*10.17
Annual Cash Bonus Plan, as amended**
10.18
ESCO Corporation ESOP Restoration Plan, as amended**
*10.19
Amended and Restated ESCO Corporation Employee Stock Ownership Plan dated May 5, 2007, as amended**
10.20
Letter Agreement with Gene K. Huey**
21.1
Subsidiaries of the registrant.
23.1
Consent of PricewaterhouseCoopers LLP
*23.2
Consent of Stoel Rives LLP (included in Exhibit 5.1)
*
To
be filed by amendment.
**
Management
contract or compensatory plan or arrangement.
II-6