RESTRUCTURING, REORGANIZATION, RELOCATION AND SEVERANCE

Manufacturing Transfer

In 2008 we entered into an arrangement to outsource aspects of our manufacturing processes. In 2011, we notified our largest contract manufacturer, accounting for approximately 10% of our revenue, that we plan to terminate the arrangement and to take over the manufacturing process. The termination contract was signed during the fourth quarter of 2011 and will be executed during the first quarter of 2012. We incurred $2.1 million of costs associated with the termination of the outsourcing arrangement.

April 2010 Restructuring

On April 12, 2010, we announced a restructuring program to consolidate the manufacturing of our small DualBeam product line by relocating manufacturing activities currently performed at our facility in Eindhoven, The Netherlands to our facility in Brno, Czech Republic. The balance of our small DualBeam product line is already based in Brno. The move, which has been substantially completed, resulted in severance costs, costs to transfer the product line, costs to train Brno employees and costs to build-out the existing Brno facility to add capacity for the additional small DualBeam production. In addition to the product line move, the April 2010 restructuring plan involved organizational changes designed to improve the efficiency of our finance, research and development and other corporate programs and improve our market focus. Costs incurred in connection with this plan were related to the consolidation of the manufacturing of our small DualBeam product line in Brno.

Information for costs related to the April 2010 restructuring plan is as follows (in thousands):



	Year Ended December 31,
Costs Incurred	2011		2010		Life of Plan
Severance costs related to work force reduction and reorganization	$	184	$	6,433	$	6,617
Product line transfer, training of Brno employees and facility build-out in Brno	963		872		1,835
Total costs incurred	$	1,147	$	7,305	$	8,452

All of the costs incurred resulted in cash expenditures. We do not expect to incur significant additional costs associated with this plan.

April 2008 Restructuring

Our April 2008 restructuring plan was related to improving the efficiency of our operations and improving the currency balance in our supply chain so that more of our costs are denominated in dollar or dollar-linked currencies. Also included in these costs were amounts related to IT system upgrades, which were expected to increase the efficiency of our manufacturing operations. These activities reduced operating expenses, improved our factory utilization and helped to offset the effect of currency fluctuations on our cost of goods sold. The main activities and related costs are described in the table below.

The April 2008 restructuring plan was completed in 2010. Total costs incurred related to this plan were $11.6 million. In 2010 and 2009, we incurred $3.8 million and $3.5 million, respectively, under the April 2008 restructuring plan and incurred no additional costs related to this plan in 2011. All of the costs resulted in cash expenditures and we do not expect to incur any additional costs under this plan.

A summary of the expenses related to our April 2008 restructuring plan is as follows:



Costs Incurred	Life of Plan
Severance costs related to work force reduction	$ 3.3 million
Transfer of manufacturing and other activities	0.3 million
Shift of supply chain	5.9 million
IT system upgrades	2.1 million

Restructuring, Reorganization, Relocation and Severance Accrual

The following tables summarize the charges, expenditures and write-offs and adjustments related to our restructuring, reorganization, relocation and severance accrual (in thousands):



Year Ended December 31, 2011	Product line transfer and training of Brno employees			Severance, outplacement and related benefits for terminated employees			IT system upgrades			Abandoned leases, leasehold improvements and facilities			Manufacturing transfer		Total
Beginning accrued liability	$	—		$	4,832		$	20		$	32		$	—	$	4,884
Charged to expense, net	963			184			—			(32		)	2,100		3,215
Expenditures	(963		)	(5,083		)	—			—			—		(6,046		)
Write-offs and adjustments	—			180			(20		)	—			—		160
Ending accrued liability	$	—		$	113		$	—		$	—		$	2,100	$	2,213



Year Ended December 31, 2010	Product line transfer and training of Brno employees			Severance, outplacement and related benefits for terminated employees			Transfer of manufacturing and related activities and shift of supply chain			IT system upgrades			Abandoned leases, leasehold improvements and facilities		Total
Beginning accrued liability	$	—		$	—		$	—		$	—		$	32	$	32
Charged to expense, net	872			6,777			1,312			2,106			—		11,067
Expenditures	(872		)	(2,342		)	(1,312		)	(2,086		)	—		(6,612		)
Write-offs and adjustments	—			397			—			—			—		397
Ending accrued liability	$	—		$	4,832		$	—		$	20		$	32	$	4,884



Year Ended December 31, 2009	Product line transfer and training of Brno employees		Severance, outplacement and related benefits for terminated employees			Transfer of manufacturing and related activities and shift of supply chain			IT system upgrades		Abandoned leases, leasehold improvements and facilities			Total
Beginning accrued liability	$	—	$	221		$	—		$	—	$	19		$	240
Charged to expense, net	—		94			3,336			—		26			3,456
Expenditures	—		(288		)	(3,339		)	—		(10		)	(3,637		)
Write-offs and adjustments	—		(27		)	3			—		(3		)	(27		)
Ending accrued liability	$	—	$	—		$	—		$	—	$	32		$	32