(16) Severance

On May 31, 2010, the Company implemented a Reduction-In-Force that terminated the employment of nine employees to allow better management of operating expenses. The Company also terminated the employment of an officer on July 9, 2010. As a result of these actions, the Company accrued a total of $111,000 in severance costs.

In November 2010, the Company announced that it was implementing a succession plan. The Company and its Chief Executive Officer entered into a mutual separation and transition agreement under which the Chief Executive Officer stepped down as an employee effective December 31, 2010 and agreed to serve as a consultant to the Company for eighteen months. One of the Company's non-employee directors became the new Chief Executive Officer on January 1, 2011. In connection with these arrangements, the Company incurred a charge of $418,000 included in general and administrative expenses, consisting of an accrual of separation payments for the former Chief Executive Officer of $451,000 reduced by the effect of forfeitures of previously expensed unvested option and restricted stock award costs.

During the third quarter of fiscal 2011, the Company incurred a charge of $91,000 included in general and administrative expenses, consisting of an accrual of separation payments for the second former Chief Executive Officer of $166,000 reduced by the effect of forfeitures of previously expensed unvested option and restricted stock award costs, as well as the reversal of first and second fiscal quarter accruals within the short-term management plan.

The following table reconciles activity for the years ended October 31, 2011 and 2010 for accrued severance expenses:

(In thousands)	2011	2010
Balance, beginning of year	$ −	$ 10
Severance payments	(500)	(121)
Severance incurred during the year	617	111
Balance, end of year	$ 117	$ −