EMPLOYEE BENEFIT PLANS

Employee Retirement Plan

Effective May 9, 1997, the Company adopted a Defined Contribution 401(k) and Profit Sharing Plan (the “401(k) Plan”) for its United States and Canada employees. The 401(k) Plan covers all regular full-time and part-time employees who have completed three months of service and attained the age of twenty-one. United States employees can contribute up to 100 percent of their annual compensation but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code. The 401(k) plan permits matching and discretionary employer contributions. The Company’s matching contributions for its United States and Canada employees vest ratably over a five-year period. During each of the years ended December 31, 2018 and 2017, the Company contributed approximately $0.3 million and $0.3 million to the 401(k) Plan for matching contributions, respectively.

The Company also sponsors a non-U.S. defined benefit plan covering its employees in its Japan subsidiary (the “Benefit Plan”). Benefits under the Benefit Plan are based on a point system for position grade and years of service. The Company utilizes actuarial methods. Inherent in the application of these actuarial methods are key assumptions, including, but not limited to, discount rates and expected long-term rates of return on plan assets. Changes in the related Benefit Plan costs may occur in the future due to changes in the underlying assumptions, changes in the number and composition of plan participants, and changes in the level of benefits provided. The Company uses a measurement date of December 31 to evaluate and record any post-retirement benefits related to the Benefit Plan.

Projected Benefit Obligation and Fair Value of Plan Assets

The Benefit Plan’s projected benefit obligation and valuation of plan assets were as follows for the years ended December 31 (in thousands):



Projected benefit obligation:	2018			2017
Balance, beginning of year	$	367		$	451
Service cost	61			76
Interest cost	1			2
Liability (gain) loss	(18		)	(9		)
Benefits paid to participants	(31		)	(170		)
Foreign currency	8			17
Balance, end of year	$	388		$	367

Plan assets:	2018			2017
Fair value, beginning of year	$	—		$	—
Company contributions	31			170
Benefits paid to participants	(31		)	(170		)
Fair value, end of year	$	—		$	—



Funded status of the Benefit Plan as of December 31 (in thousands):	2018			2017
Benefit obligation	$	(388	)	$	(367	)
Fair value of plan assets	—			—
Excess of benefit obligation over fair value of plan assets	$	(388	)	$	(367	)



Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands):	2018			2017
Accrued benefit liability	$	(388	)	$	(367	)
Transition obligation and unrealized gain	(273		)	(289		)
Net amount recognized in the consolidated balance sheets	$	(661	)	$	(656	)



	Years Ended December 31,
Other changes recognized in comprehensive income (in thousands):	2018			2017
Net periodic cost	$	21		$	40
Current year actuarial (gain) loss	(18		)	(9		)
Amortization of transition obligation	(4		)	(4		)
Total recognized in other comprehensive income (loss)	(22		)	(13		)
Total recognized in comprehensive income	$	(1	)	$	27



	As of December 31,
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain (in thousands):	2018		2017
Transition obligation	$	40	$	28
Prior service cost	215		252
Net actuarial gain (loss)	18		9
Total recognized in accumulated other comprehensive gain	$	273	$	289



2017 estimated amounts of amortized transition obligation (in thousands):	2018
Transition obligation	$	(4	)



	As of December 31,
Aggregate Benefit Plan information and accumulated benefit obligation in excess of plan assets (in thousands):	2018		2017
Projected benefit obligation	$	388	$	367
Accumulated benefit obligation	388		367
Fair value of plan assets	—		—

The weighted-average assumptions to determine the benefit obligation and net cost are as follows:



	2018		2017
Discount rate	0.30	%	0.30	%
Rate of increase in compensation levels	—		—

Components of Expense

In accordance with ASU 2017-07, Compensation-Retirement Benefits (Topic 715 - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost), Service Cost for the Benefit Plan is included within selling, general and administrative expenses and all other items noted in the table below (Interest Cost, Amortization of Transition Obligation, and Prior Service Cost) are included within other income and expense. Pension costs, which are included within Consolidated Statement of Operations are detailed below for the years ended December 31 (in thousands):



	2018			2017
Service cost	$	61		$	76
Interest cost	1			2
Amortization of transition obligation	4			4
Gain (loss)	(3		)	—
Prior service cost	(42		)	(42		)
Total pension expense	$	21		$	40

Estimated Benefits and Contributions

The Company expects to contribute approximately $26,000 to the Benefit Plan in 2019. As of December 31, 2018, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands):



2019	$	26
2020	28
2021	25
2022	61
2023	26
Next five years	286
Total expected benefits to be paid	$	452