Accrued Restructuring and Acquisition-Related Charges

Accrued restructuring, which is included in other accrued liabilities in the accompanying Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010, consisted of the following (in thousands):



	June 30, 2011		December 31, 2010
Second quarter 2009 restructuring charge	$	58	$	58
Fourth quarter 2009 restructuring charge	69		182
Fourth quarter 2010 restructuring charge	939		1,814
Continuous Computing restructuring charge	900		—
Total accrued restructuring charges	$	1,966	$	2,054

The Company evaluates the adequacy of the accrued restructuring charges on a quarterly basis. The Company records certain reclassifications between categories and reversals to the accrued restructuring charges based on the results of the evaluation. The total accrued restructuring charges for each restructuring event are not affected by reclassifications. Reversals are recorded in the period in which the Company determines that expected restructuring obligations are less than the amounts accrued.

Second Quarter 2009 Restructuring

During the second quarter of 2009, the Company initiated a restructuring plan that included the elimination of 115 positions and the relocation of eight employees as part of two strategic initiatives within manufacturing operations and engineering. As part of the initiative, the Company began a transition to a fully outsourced manufacturing model, which has transferred remaining manufacturing from its manufacturing plant in Hillsboro, Oregon to its manufacturing partners in Asia. The plan also included consolidating the Company's North American research and development ("R&D") positions and programs, and specifically transferring projects from its design center in Boca Raton, Florida, to other existing R&D centers. To date, the Company has incurred total second quarter 2009 restructuring costs of $3.0 million which has consisted primarily of accrued severance obligations, healthcare benefits, relocation incentives and related payroll taxes as well as equipment moving costs. This transition was substantially completed in 2010.

Fourth Quarter 2009 Restructuring

During the fourth quarter of 2009, the Company initiated a restructuring plan that included the elimination of 22 positions at various locations throughout the company. The primary focus of this initiative was to align expenses with the Company's 2010 operating plan objectives, which included the need to continue focusing on lowered costs. To date, the Company has incurred total fourth quarter 2009 restructuring costs of $742,000, which consisted primarily of severance and related payroll costs as well as healthcare benefits. The Company expects all activities associated with this restructuring plan to be completed by the end of 2011.

For the three months ended June 30, 2011 and 2010, the Company reversed $17,000 and $30,000 in previously estimated amounts associated with the fourth quarter 2009 restructuring plan. The Company incurred additional expenses of $33,000 and $40,000 during the six months ended June 30, 2011 and 2010. The adjustments primarily consisted of employee severance and the reversal of previously estimated payroll taxes.

The following table summarizes the changes to the fourth quarter 2009 restructuring costs (in thousands):



	Employee Termination and Related Costs
Balance accrued as of December 31, 2010	$	182
Additions	61
Reversals	(28		)
Expenditures	(146		)
Balance accrued as of June 30, 2011	$	69

Fourth Quarter 2010 Restructuring

During the fourth quarter of 2010, the Company initiated a restructuring plan that included the elimination of 67 positions at various locations throughout the company. The primary focus of this initiative was to align expenses with the Company’s 2011 operating plan objectives, which included the need to reduce the Company's infrastructure associated with the maturity of the Company's legacy communications networks products, as well as the consolidation of its contract manufacturers. To date, the Company has incurred total fourth quarter 2010 restructuring costs of $1.9 million, which consisted of severance and related payroll costs as well as healthcare benefits. The Company expects all activities associated with this restructuring plan to be substantially completed by the end of 2011.

During the three and six months ended June 30, 2011, the Company recorded a net reversal of $17,000 and $27,000 for previously estimated amounts associated with the fourth quarter 2010 restructuring plan due primarily to lower-than-expected employee separation costs.

The following table summarizes the changes to the fourth quarter 2010 restructuring costs (in thousands):



	Employee Termination and Related Costs
Balance accrued as of December 31, 2010	$	1,814
Additions	108
Reversals	(135		)
Expenditures	(848		)
Balance accrued as of June 30, 2011	$	939

Continuous Computing Related Restructuring

During the second quarter of 2011, the Company initiated a restructuring plan that included the elimination of two senior-level positions. The primary intent of these initial integration activities was to better align sales organization expenses and headcount with expected synergies to be realized as a direct result of the Company's acquisition of Continuous Computing Corporation ("Continuous Computing"), as more fully discussed in Note 15 - Subsequent Event. During the second quarter of 2011 the Company recorded restructuring costs of $900,000, which consisted of severance and related payroll costs as well as healthcare benefits. The Company expects all activities associated with this restructuring plan to be substantially completed by the end of 2011.

The following table summarizes the charges associated with the Continuous Computing restructuring initiative (in thousands):



	Employee Termination and Related Costs
Additions	$	900
Balance accrued as of June 30, 2011	$	900