10. NON-RECURRING CHARGES

In July 2013, the Company entered into a settlement agreement with First Manhattan in connection with a proxy contest related to the Company’s 2013 Annual Meeting of Stockholders. According to the terms of the settlement agreement, more than a majority of the members of the Company’s Board of Directors resigned and new members were appointed. The change in the majority of the members of the Company’s Board of Directors, effective July 19, 2013, triggered certain “change of control” benefits in accordance with the Amended and Restated Change of Control and Severance Agreements, or the Amended Agreements, with certain of the Company’s employees. Under the Amended Agreements, all unvested stock options held by these employees automatically vested in full and became immediately exercisable. In addition, the resignations of both the Company’s Chief Executive Officer and President resulted in severance charges under the Chief Executive Officer’s employment agreement and the President’s Amended Agreement. Further, the employment of the Company’s Senior Vice President Finance and Global Corporate Development and Chief Financial Officer, Vice President and Chief Accounting Officer, and Senior Vice President and Chief Commercial Officer terminated which resulted in severance charges under the Amended Agreements. As a result, the Company incurred one-time severance costs from the terminations of certain of the Company’s executive officers, and some of the severance payments are being paid over a period of up to 24 months from the separation date.

In addition, as part of the Company’s ongoing efforts to reduce costs by eliminating expenses that are not essential to expanding the use of Qsymia, the Company implemented a cost reduction plan that reduced the Company’s workforce by approximately 20 employees, or 17%, excluding the sales force, in the year ended December 31, 2013. This cost reduction plan was substantially complete at December 31, 2013; however certain employee terminations were finalized in the three months ended March 31, 2014. Some of the severance payments are being paid over a period of up to 24 months from the separation date.

The following table sets forth activities for the Company’s cost reduction plan obligations during the three months ended March 31, 2014 (in thousands):

	Severance obligations			Facilities- related obligations			Total
Balance of accrued costs at December 31, 2013	$	6,509		$	1,022		$	7,531
Charges*	1,711			—			1,711
Payments	(1,659		)	(180		)	(1,839		)
Balance of accrued costs at March 31, 2014	$	6,561		$	842		$	7,403

* In addition to the above non-recurring charges, as previously described, the Company incurred $0.3 million in non-cash share-based compensation expense for an aggregate total of $2.1 million in non-recurring charges for the three months ended March 31, 2014.

The accrued facilities-related costs at March 31, 2014 represent estimated losses, net of expected subleases, on space vacated as part of the Company’s cost reduction plan. The noncancelable operating leases and scheduled payments against the amounts accrued extend through May 2020, unless the Company is able to negotiate earlier terminations.

Of the total accrued employee severance and facilities-related costs in the Company’s unaudited condensed consolidated balance sheet at March 31, 2014, $4.7 million is included under current liabilities in “Accrued and other liabilities” and $2.7 million is included in “Non-current accrued and other liabilities.”

The balance of the accrued employee severance and facilities-related costs at March 31, 2014 is anticipated to be paid out as follows (in thousands):

2014 (remaining nine months)	$	3,846
2015	3,220
2016	184
2017	50
2018	43
Thereafter	60
	$	7,403