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, 2019 and 2018, 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:	2019			2018
Balance, beginning of year	$	388		$	367
Service cost	56			61
Interest cost	1			1
Liability (gain) loss	(2		)	(18		)
Benefits paid to participants	(128		)	(31		)
Foreign currency	4			8
Balance, end of year	$	319		$	388

Plan assets:	2019			2018
Fair value, beginning of year	$	—		$	—
Company contributions	128			31
Benefits paid to participants	(128		)	(31		)
Fair value, end of year	$	—		$	—



Funded status of the Benefit Plan as of December 31 (in thousands):	2019			2018
Benefit obligation	$	(319	)	$	(388	)
Fair value of plan assets	—			—
Excess of benefit obligation over fair value of plan assets	$	(319	)	$	(388	)



Amounts recognized in the accompanying Consolidated Balance Sheets consist of, as of December 31 (in thousands):	2019			2018
Accrued benefit liability	$	(319	)	$	(388	)
Transition obligation and unrealized gain	(234		)	(273		)
Net amount recognized in the consolidated balance sheets	$	(553	)	$	(661	)



	Years Ended December 31,
Other changes recognized in comprehensive income (in thousands):	2019			2018
Net periodic cost	$	14		$	21
Current year actuarial (gain) loss	(2		)	(18		)
Amortization of transition obligation	(4		)	(4		)
Total recognized in other comprehensive income (loss)	(6		)	(22		)
Total recognized in comprehensive income	$	8		$	(1	)



	As of December 31,
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive gain (in thousands):	2019		2018
Transition obligation	$	58	$	40
Prior service cost	174		215
Net actuarial gain (loss)	2		18
Total recognized in accumulated other comprehensive gain	$	234	$	273



2018 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):	2019		2018
Projected benefit obligation	$	319	$	388
Accumulated benefit obligation	319		388
Fair value of plan assets	—		—

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



	2019		2018
Discount rate	0.20	%	0.30	%
Rate of increase in compensation levels	—		—

Components of Expense

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):



	2019			2018
Service cost	$	56		$	61
Interest cost	1			1
Amortization of transition obligation	4			4
Gain (loss)	(4		)	(3		)
Prior service cost	(43		)	(42		)
Total pension expense	$	14		$	21

Estimated Benefits and Contributions

The Company expects to contribute approximately $39,000 to the Benefit Plan in 2020. As of December 31, 2019, benefits expected to be paid by the Benefit Plan for the next ten years is approximately as follows (in thousands):



2020	$	39
2021	32
2022	62
2023	24
2024	119
Next five years	118
Total expected benefits to be paid	$	394