(16) Severance

In November 2010, 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.

During the quarter ended April 30, 2012, the Company incurred charges for separations in certain sales and marketing personnel in relation to executive leadership changes and cost saving force reductions of $216,000 (including $122,000 classified in discontinued operations). During the quarter ended July 31, 2012, the Company incurred charges for separations in certain additional sales and marketing personnel in cost savings force reductions of $173,000. During the quarter ended October 31, 2012, the Company incurred charges for separations in certain marketing and research and development personnel in cost saving force reductions of $356,000.

The following table reconciles activity for the years ended October 31, 2012 and 2011 for accrued cash severance expenses:



(In thousands)	2012		2011
Balance, beginning of year	$	117	$	-
Severance payments		(519)		(500)
Severance incurred during the year		745		617
Balance, end of year (included in employee compensation accrual)	$	343	$	117