Restructuring Activities and Other Charges

2015: On December 14, 2015, the Company approved a global realignment plan that is expected to allow the Company to more efficiently meet client needs across its international platform. Through improved integration of global resources, the plan will create back office and other efficiencies and allow for the elimination of approximately 100 positions deemed unnecessary. In connection with these actions, the Company expects to incur total pre-tax cash restructuring charges of $3.7 million to $5.2 million, the majority of which will be recognized during 2016. These cash charges will include approximately $3.5 million to $4.9 million for employee severance and related benefits and $0.2 million to $0.3 million for lease and contract termination and other associated costs. As required by law, the Company is consulting with each of the affected countries’ local Works Councils throughout implementation of this plan.

During the year ended December 31, 2015, the Company recognized $1.1 million in restructuring charges related to this plan of which $0.2 million, $0.1 million and $0.8 million related to the North America, Latin America and EMEA segments, respectively. This plan is expected to be completed during 2016.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2015 (in thousands):



	Employee Severance and Related Benefits			Lease and Contract Termination Costs		Total
Balance at December 31, 2014	$	—		$	—	$	—
Charges	978			75		1,053
Cash payments	(694		)	—		(694		)
Balance at December 31, 2015	$	284		$	75	$	359

2014: No restructuring activities occurred during the year ended December 31, 2014.

2013: During the third quarter of 2013, the Company commenced various restructuring actions which resulted in charges of $3.0 million during the quarter. These actions consisted of terminating 49 employees and providing them with severance benefits in accordance with benefit plans previously communicated to the affected employee group or local employment laws.

During the year ended December 31, 2013, the Company recognized $3.0 million in restructuring charges related to this plan of which $2.7 million and $0.3 million related to the North America and EMEA segments, respectively. This plan was completed during 2013.

The Company’s SMB division was one of the principal groups affected by the restructuring actions noted above. In addition to these restructuring charges, the Company changed its compensation structure during the third quarter so that remaining employees of SMB are paid a fixed salary. This change in compensation structure resulted in the recording of an additional charge of $1.3 million for these employees in 2013.

The following table summarizes the restructuring activities for this plan for the year ended December 31, 2013 (in thousands):



	Employee Severance and Related Benefits
Balance at December 31, 2012	$	—
Charges⁽¹⁾	3,006
Cash payments	(382		)
Non-cash settlements⁽²⁾	(2,624		)
Balance at December 31, 2013	$	—


(1)	Charges in this table exclude the $1.3 million charge recognized for the change in compensation structure of SMB employees discussed above.

(2)

Non-cash settlements consist of the write-off of prepaid commission balances. Prepaid commission balances represent cash paid to account executives in advance of commissions earned and is recorded in prepaid expenses on the balance sheet. For employees who had a balance and were affected by the restructuring actions, which primarily includes Small and Medium Business (“SMB”) account executives, the Company included these balances as part of the severance paid to these individuals.