Severance and Other Charges

9 Months Ended

Sep. 30, 2014

Restructuring and Related Activities [Abstract]

Restructuring and Related Activities Disclosure [Text Block]

6. Severance and Other Charges

Severance and other charges consist of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2013		2014		2013
Employee severance expense	$	731	$	-	$	800	$	62
Lease exit costs		74		-		117		-
Legal settlements		-		-		265		-
Total severance and other charges	$	805	$	-	$	1,182	$	62

Severance and Other Exit Costs

The Company incurred severance costs in 2014 related to its North American and United Kingdom locations, including severance benefits covering a one year period for its former chief financial officer, pursuant to a separation and release agreement, dated July 31, 2014. The Company incurred additional lease exit costs related to the exit of leases in North America.

The following summarizes the activity in the Company’s accrual for severance and other exit costs (in thousands):

			Lease Exit Costs
	Severance		Lease Exit Costs		Total
December 31, 2013	$	530	$	-	$	530
Provision in 2014		801		117		918
Payments and other settlements in 2014		(739)		(38)		(777)
Translation adjustment		(2)		-		(2)
September 30, 2014	$	590	$	79	$	669

The Company expects to pay substantially all of the accrued amounts by the third quarter of 2015.

Legal Settlements

On March 13, 2014, the Company reached a settlement with a past chief financial officer pursuant to an administrative complaint that was filed in 2010 which provides for a one-time lump sum amount of $0.4 million and the issuance of 75,000 shares of Company common stock. The Company accrued a liability of $0.6 million at December 31, 2013, which included the lump sum amount, the market value of the common stock on December 31, 2013 and $0.1 million in legal expenses incurred as of December 31, 2013, which is included in accrued expenses and other current liabilities in the accompanying balance sheet. The settlement was paid and stock issued in April 2014, and the Company recorded an additional loss of $0.1 million related to the increase in the fair value of its common stock at the time of issuance. See Note 13 for further discussion.

During the nine months ended September 30, 2014, the Company also incurred $0.1 million related to the settlement of a customer dispute.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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