NOTE 10: EMPLOYEE BENEFIT PLANS

Employee Retirement Plan

Effective May 9, 1997, the Company adopted a Defined Contribution 401(k) and Profit Sharing Plan (the “401(k) Plan”) for its United States and Canada employees. The 401(k) Plan covers all regular full-time and part-time employees who have completed three months of service and attained the age of twenty-one. United States employees can contribute up to 100 percent of their annual compensation but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) plan permits matching and discretionary employer contributions. The Company’s matching contributions for its United States and Canada employees vest ratably over a five-year period. During the years ended December 31, 2013 and 2012, the Company contributed approximately $0.1 million for each year to the 401(k) Plan for matching contributions.

The Company also sponsors a non-U.S. defined benefit plan covering its employees in its Japan subsidiary (the “Benefit Plan”). Benefits under the Benefit Plan are based on years of service and annual salary. On July 1, 2012, the Company amended the Benefit Plan to convert the years of service and annual salary components of the Benefit Plan to a point system for position grade and years of service. The projected benefit obligation (“BPO”) for the year ended December 31, 2012 included a prior service cost gain of $0.7 million. The Company utilizes actuarial methods. Inherent in the application of these actuarial methods are key assumptions, including, but not limited to, discount rates and expected long-term rates of return on plan assets. Changes in the related Benefit Plan costs may occur in the future due to changes in the underlying assumptions, changes in the number and composition of plan participants, and changes in the level of benefits provided. The Company uses a measurement date of December 31 to evaluate and record any post-retirement benefits related to the Benefit Plan.

Projected Benefit Obligation and Fair Value of Plan Assets

The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands):

Projected benefit obligation:	2013			2012
Balance, beginning of year	$	714		$	1,270
Service cost		106			169
Interest cost		6			15
Liability losses		59			94
Benefits paid to participants		(121	)		(71	)
Special termination benefit		—			7
Prior service cost		—			(678	)
Foreign currency		(135	)		(92	)
Balance, end of year	$	629		$	714

Plan assets:	2013			2012
Fair value, beginning of year	$	—		$	—
Company contributions		121			71
Benefits paid to participants		(121	)		(71	)
Fair value, end of year	$	—		$	—

Funded status of the Benefit Plan as of December 31 (in thousands):	2013			2012
Benefit obligation	$	(629	)	$	(714	)
Fair value of plan assets		—			—
Excess of benefit obligation over fair value of plan assets	$	(629	)	$	(714	)

Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands):	2013			2012
Accrued benefit liability	$	(629	)	$	(714	)
Transition obligation and unrealized gain		(458	)		(682	)
Net amount recognized in the consolidated balance sheets	$	(1,087	)	$	(1,396	)

	Years Ended December 31,
Other changes recognized in comprehensive income/loss (in thousands):	2013			2012
Net periodic cost	$	64		$	158
Current year loss		59			94
Amortization of transition obligation		(4	)		(5	)
Total recognized in other comprehensive income		55			89
Total recognized in comprehensive income (loss)	$	119		$	247

	As of December 31,
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain/loss (in thousands):	2013			2012
Transition obligation	$	66		$	168
Prior service cost		447			602
Net actuarial gain		(55	)		(88	)
Total recognized in accumulated other comprehensive loss	$	458		$	682

2014 estimated amounts of amortized transition obligation (in thousands):		2014
Transition obligation		$	(4	)

	As of December 31,
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets (in thousands):	2013			2012
Projected benefit obligation		$	629		$	714
Accumulated benefit obligation			629			714
Fair value of plan assets			—			—

The weighted-average assumptions to determine the benefit obligation and net cost are as follows:

	2013			2012
Discount rate		0.50	%		1.00	%
Rate of increase in compensation levels		—			—	%

Components of Expense

Pension expense for the Benefit Plan is included in selling, general and administrative expenses in the Consolidated Statements of Operations and is comprised of the following for the years ended December 31 (in thousands):

	2013			2012
Service cost	$	106		$	169
Interest cost		6			15
Amortization of transition obligation		4			5
Gain		(4	)		(9	)
Special termination		—			7
Prior service cost		(48	)		(29	)
Benefit adjustment		—			—
Total pension expense	$	64		$	158

Estimated Benefits and Contributions

The Company expects to contribute approximately $90,000 to the Benefit Plan in 2014. As of December 31, 2013, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands):

2014	$	90
2015		135
2016		57
2017		54
2018		50
Next five years		210
Total expected benefits to be paid	$	596