Note 6. Special Charges

In June 2013, the Company commenced a restructuring plan designed to enhance product focus and streamline business operations. The restructuring plan includes a workforce reduction and the consolidation and elimination of certain engineering activities. In connection with this plan, the Company ceased development of future switch application-specific integrated circuits (ASICs). The Company expects to incur between $14 million and $17 million of exit costs associated with this restructuring plan, which consists of between $11 million and $12 million related to workforce reductions and between $3 million and $5 million related to facilities and other costs. The Company expects to substantially complete the restructuring activities during fiscal 2014.

During the three months ended June 30, 2013, the Company recorded special charges of $12.0 million, consisting of $9.6 million of exit costs and $2.4 million of asset impairment charges primarily related to property and equipment. The exit costs include severance and related costs associated with involuntarily terminated employees. Certain employees that were notified of their termination are required to provide services for varying periods in excess of statutory notice periods. Severance costs related to these services are recognized ratably over the estimated requisite service period. Exit costs also include the estimated costs associated with the portion of a facility under a non-cancelable lease that the Company ceased using and other costs.

Activity and liability balances for exit costs, including a liability associated with exit costs related to a portion of the facility the Company ceased using prior to fiscal 2013, are as follows:


	Workforce Reduction			Facilities and Other			Total
	(In thousands)
Balance as of March 31, 2013	$	—		$	1,771		$	1,771
Charged to costs and expenses		9,086			518			9,604
Payments		(2,640	)		(111	)		(2,751	)

Balance as of June 30, 2013	$	6,446		$	2,178		$	8,624

The unpaid exit costs are expected to be paid over the terms of the related agreements through fiscal 2018. As of June 30, 2013, unpaid exit costs totaling $6.6 million are included in other current liabilities.