Leadership Changes

6 Months Ended

Jun. 30, 2017

12. Leadership Changes

On January 7, 2016, the Company’s former Chief Financial Officer and Chief Operating Officer entered into a separation and transition agreement (the “Separation and Transition Agreement”) pursuant to which he separated from the Company effective March 31, 2016. The Company incurred a total cost of $1,043,000, including $331,000 of equity-based compensation expense, which was recorded to “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income during the six months ended June 30, 2016.

The Company’s severance and other related expenses incurred for the aforementioned leadership changes were $1,043,000 for the six months ended June 30, 2016, which is included in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income. There were no such expenses incurred during the three or six months ended June 30, 2017.

On December 31, 2014, the Company’s former Chief Executive Officer retired and pursuant to the terms of the Separation and Release of Claims Agreement (the “Separation Agreement”), the Company is required to provide severance and other related benefits over a 36-month period. The Company recorded a liability, measured at its estimated fair value, for payments that will be made under the Separation Agreement, with a corresponding charge to “Selling, general and administrative expenses.” The Company incurred a total cost of $3,581,000, including $1,007,000 of equity-based compensation expense related to this retirement.

The following table presents a rollforward of the estimated fair value liability for the six months ended June 30, 2017 established for the aforementioned leadership changes (in thousands):


Balance, January 1, 2017	$	964
Severance and other related expenses		—
Accretion		14
Cash payments		(541)
Balance, June 30, 2017	$	437