Commitments, Contingencies and Legal Proceedings

Lease Commitments

The Company leases office facilities and equipment under operating leases. The office facilities are generally used for sales, recruitment, engineering, design, drafting and administrative functions and are under leases with various expiration dates in the future. Rent expense for operating leases was $12.1 million, $12.3 million and $13.0 million in 2013, 2012 and 2011, respectively. Sublease proceeds were $0.4 million, $0.2 million and $0.7 million in 2013, 2012 and 2011, respectively. Future minimum annual rental payments under non-cancelable leases, excluding expected sublease proceeds of $0.2 million and $0.1 million for 2014 and 2015, are as follows for the indicated periods:



Year	Amount

2014	$	10,739
2015	8,652
2016	5,410
2017	3,950
2018	3,083
Thereafter	485
Total	$	32,319

Self-Insurance

The Company self-funds certain losses related to workers' compensation and employee health benefit claims. The Company maintains stop-loss insurance for workers’ compensation and health care benefit claims that generally limits the Company’s exposure to $250 thousand and $200 thousand per incident, respectively. The Company records expense for its estimated claims exposure based on incurred claims, historical experience and third-party insurance professionals or actuaries. The amounts accrued give consideration to the estimated undiscounted cash payments expected to be paid to satisfy existing claims and an allowance for incurred-but-not-reported claims. The accrual for workers’ compensation estimated claims exposure was $2.1 million and $2.0 million as of December 31, 2013 and 2012, respectively. The Company established its self-funded health benefits program during 2011 and had accrued $5.2 million and $4.0 million as of December 31, 2013 and 2012, respectively, for its estimated claims exposure.

Contingent Earnout Liability

On December 20, 2010, the Company acquired substantially all of the assets and certain liabilities of DSPCon, Inc. (DSPCon) for a purchase price of $6.9 million. Approximately $5.6 million of the purchase price was allocated to intangible assets, including $1.7 million for client relationships, $0.5 million for developed technology, $0.1 million for a trademark and $3.4 million for goodwill. The first of up to two contingent purchase consideration payments occurred during 2012 in the amount of $0.4 million. During 2013, the Company reversed $1.8 million of contingent purchase consideration liability through "Operating and administrative expense" in the consolidated statement of operations. As of December 31, 2013, the remaining contingent purchase consideration was $0.2 million and is expected to be paid in 2014.

Legal Proceedings and Claims

The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Although management cannot predict the timing or outcome of these matters with certainty, management does not believe that the final resolution of these matters, individually or in the aggregate, would have a material adverse effect on the Company’s consolidated financial condition, results of operations or cash flows.

In April 2011, the Company received a favorable ruling from the Competition Appeal Tribunal (CAT) on the Company’s appeal of a fine imposed by the United Kingdom’s Office of Fair Trading (OFT). The ruling by the CAT reduced the fine from $12.3 million to $2.5 million. The Company originally reserved $12.3 million for the fine in 2009 but as a result of the appeal, reversed $9.7 million of that reserve in the second quarter of 2011 through “Operating and administrative expenses” in the consolidated statement of operations.