15.

Pension Plan

A Canadian subsidiary of the Company sponsors a defined benefit pension plan in which a majority of its employees are members. The employer contributes 100% to the plan. The benefits, or the rate per year of credit service, are established by the Company's subsidiary and updated at its discretion.

Cost of Benefits

The components of the expense the Company incurred under the pension plan are as follows (in thousands):

	Year Ended December 31,
	2012			2011
Current service cost, net of employee contributions	$	32		$	25
Interest cost on accrued benefit obligation		140			149
Expected return on plan assets		(156	)		(159	)
Amortization of transitional obligation		14			14
Amortization of past service costs		9			9
Amortization of net actuarial gain		46			33
Total cost of benefit	$	85		$	71

Benefit Obligation

The Company's obligation for the pension plan is valued annually as of the beginning of each fiscal year. The projected benefit obligation represents the present value of benefits ultimately payable to plan participants for both past and future services expected to be provided by the plan participants.

The Company's obligations pursuant to the pension plan are as follows (in thousands):

	December 31,
	2012			2011
Projected benefit obligation, at beginning of year	$	2,911		$	2,732
Current service cost, net of employee contributions		32			25
Employee contributions		39			35
Interest cost		140			149
Actuarial loss		(49	)		-
Impact of change in discount rate		395			229
Impact in change of assumptions		36			-
Benefits paid		(188	)		(192	)
Foreign exchange adjustment		67			(67	)
Projected benefit obligation, at end of year	$	3,383		$	2,911

A summary of expected benefit payments related to the pension plan is as follows (in thousands):

Year ending December 31,	Pension Plan

2013	$	201
2014		206
2015		230
2016		234
2017		240
2018 - 2022	$	1,214

Other changes in plan assets and benefit obligations recognized in other comprehensive income are as follows (in thousands):

	Year Ended December 31,
	2012			2011
Net loss	$	407		$	432
Amortization of prior service cost		(9	)		(8	)
Amortization of gain		(47	)		(32	)
Amortization of transitional asset		(13	)		(13	)
		338			379
Taxes		(92	)		(102	)
Total recognized in other comprehensive income, net of taxes	$	246		$	277

The estimated net loss amortized from accumulated other comprehensive income into net periodic benefit cost over the next year amounts to approximately $47,000. The estimated prior service cost amortized from accumulated other comprehensive income into net periodic benefit cost over the next year amounts to approximately $9,000. The estimated transitional asset amortized from accumulated other comprehensive income into net periodic benefit cost over the next year amounts to approximately $13,000.

The accumulated other comprehensive loss consists of the following amounts that have not yet been recognized as components of net benefit cost (in thousands):

	December 31,
	2012			2011
Unrecognized prior service cost	$	120		$	129
Unrecognized net actuarial loss		84			97
Unrecognized transitional obligation		1,542			1,182
Deferred income taxes		(507	)		(415	)
	$	1,239		$	993

Plan Assets

Assets held by the pension plan are invested in accordance with the provisions of the Company's approved investment policy. The pension plan's strategic asset allocation was structured to reduce volatility through diversification and enhance return to approximate the amounts and timing of the expected benefit payments. The asset allocation for the pension plan at the end of fiscal years 2012 and 2011 and the target allocation for fiscal year 2013, by asset category, is as follows:

	Allocation at December 31,						2013 Target
	2012			2011			Allocation
Equity securities		57	%		58	%		57	%
Fixed income securities		30			34			30
Real estate		9			6			9
Other		4			2			4
Total		100	%		100	%		100	%

The fair market values, by asset category are as follows (in thousands):

	December 31,
	2012		2011
Equity securities	$	1,451	$	1,359
Fixed income securities		764		795
Real estate		229		141
Other		102		47
Total	$	2,546	$	2,342

The Company has classified the assets as level 1. Changes in the assets held by the pension plan in the years 2012 and 2011 are as follows (in thousands):

	December 31,
	2012			2011
Fair value of plan assets, at beginning of year	$	2,342		$	2,424
Actual return on plan assets		131			(44	)
Employer contributions		169			173
Employee contributions		39			34
Benefits paid		(188	)		(192	)
Foreign exchange adjustment		53			(53	)
Fair value of plan assets, at end of year	$	2,546		$	2,342

Contributions

The Company's policy is to fund the pension plan at or above the minimum required by law. The Company made $0.2 million of contributions to its defined benefit pension plan in each of the 2012 and 2011 years. The Company expects to make contributions of less than $0.2 million to the defined benefit pension plan in 2013. Changes in the discount rate and actual investment returns which continue to remain lower than the long-term expected return on plan assets could result in the Company making additional contributions.

Funded Status

The funded status of the pension plan is as follows (in thousands):

	December 31,
	2012		2011
Projected benefit obligation	$	3,383	$	2,911
Fair value of plan assets		2,546		2,342
Accrued obligation (long term)	$	837	$	569

Assumptions

Assumptions used in accounting for the pension plan are as follows:

	December 31,
	2012			2011
Weighted average discount rate used to determine the accrued benefit obligations		3.80	%		4.80	%
Discount rate used to determine the net pension expense		4.80	%		5.50	%
Expected long-term rate of return on plan assets		6.50	%		6.50	%

To determine the expected long-term rate of return on pension plan assets, the Company considers the current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. The Company applies the expected rate of return to a market related value of the assets which reduces the underlying variability in assets to which the Company applies that expected return. The Company amortizes gains and losses as well as the effects of changes in actuarial assumptions and plan provisions over a period no longer than the average future service of employees.

Primary actuarial assumptions are determined as follows:

The expected long-term rate of return on plan assets is based on the Company's estimate of long-term returns for equities and fixed income securities weighted by the allocation of assets in the plans. The rate is impacted by changes in general market conditions, but because it represents a long-term rate, it is not significantly impacted by short-term market swings. Changes in the allocation of plan assets would also impact this rate.

The assumed discount rate is used to discount future benefit obligations back to today's dollars. The discount rate is reflective of yield rates on U.S. long-term investment grade corporate bonds on and around the December 31 valuation date. This rate is sensitive to changes in interest rates. A decrease in the discount rate would increase the Company's obligation and expense.