EXIT COSTS

9 Months Ended

Sep. 30, 2011

EXIT COSTS

EXIT COSTS

NOTE 10 —EXIT COSTS

The Company entered into a new lease agreement on April 4, 2011, for facilities located in Austin, Texas with the intent to relocate the activities then conducted at its Sunnyvale, California facility.  The Company expects to incur $10.5 million of exit costs including $5.5 million of employee related costs and approximately $5.0 million of contract termination and other costs in conjunction with this relocation and is reporting these costs as incurred in exit costs in its Condensed Consolidated Statements of Operations.

The following summarizes exit costs during the nine months ended September 30, 2011 (in thousands):

(Dollars in thousands)

	Nine Months Ended September 30, 2011
	Accrued Exit Cost Balance at January 1, 2011		Cost Incurred		Payments		Accrued Exit Cost Balance at September 30, 2011
Employee-related	$	—	$	3,336	$	433	$	2,903
Contract termination and other	—		1,968		1,881		87
	$	—	$	5,304	$	2,314	$	2,990

The Company incurred employee-related exit costs of $1.2 million and contract termination costs of $1.6 million of the quarter ended September 30, 2011.

In the quarter and nine month periods ended September 30, 2011, the Company reported costs of product sales of $0.4 million and $0.5 million, research and development costs of $1.0 and $1.4 million; sales and marketing costs of $0.6 and $0.8 million; and, general and administrative costs of $0.7 and 1.2 million, respectively, related to the relocation of its Sunnyvale, California activities to Austin, Texas but that did not meet the definition of exit costs.  These incremental expenses include accelerated amortization of leasehold improvements related to facilities that will cease to be used upon completion of the relocation; personnel recruiting and training expense; and, duplicative rent and employee cost.