Leadership Changes and Restructuring Activities

3 Months Ended

Mar. 31, 2015

Restructuring And Related Activities [Abstract]

Leadership Changes and Restructuring Activities

11. Leadership Changes and Restructuring Activities

The Company’s former Chief Executive Officer retired on December 31, 2014 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, beginning on December 31, 2014. 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 of $3,545,000 recorded in 2014. As of March 31, 2015 and December 31, 2014, the short-term portion of the liability was $453,000 and $500,000, respectively, and is included in “Accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2015 and December 31, 2014, the long-term portion of the liability was $1,321,000 and $1,488,000, respectively, and is included in “Other liabilities, net of current portion” in the accompanying Condensed Consolidated Balance Sheets.

As a result of realignment of Company resources subsequent to the retirement of the Company’s former Chief Executive Officer, the Company incurred severance and other related expenses of $451,000 during the three months ended March 31, 2015, which was included in “Selling, operating and administrative expenses” in the accompanying Condensed Consolidated Statements of Income.

In addition, management of the Company approved and implemented a restructuring plan during the fourth quarter of 2014 designed to improve operating efficiencies, which reduced the Company’s overall headcount at its corporate headquarters (the “Restructuring Plan”). In connection with the Restructuring Plan, the Company incurred $1,303,000 of expenses in 2014 related to severance and outplacement services provided to certain former employees of the Company.  

The following table presents a rollforward of the estimated fair value liability established for the aforementioned severance and other related costs, which are entirely attributable to the Company’s Real Estate Franchise Services reportable segment, from January 1, 2015 to March 31, 2015 (in thousands):

Balance, January 1, 2015	$	2,408
Additional severance and other related expenses		451
Accretion		17
Cash payments		(744	)
Balance, March 31, 2015	$	2,132