Reorganization and Realignment Costs

The following is a summary of the initiatives included in “Reorganization and realignment costs:”



	Three Months Ended
	March 31, 2019		April 1, 2018
G&A realignment	$	782	$	2,626
System optimization initiative	16		—
Reorganization and realignment costs	$	798	$	2,626

General and Administrative (“G&A”) Realignment

In May 2017, the Company initiated a plan to further reduce its G&A expenses. The Company expects to incur total costs aggregating approximately $32,000 to $35,000 related to the plan. The Company recognized costs totaling $782 and $2,626 during the three months ended March 31, 2019 and April 1, 2018, respectively, which primarily included severance and related employee costs. The Company expects to incur additional costs associated with our G&A realignment plan aggregating approximately $3,500, comprised of (1) severance and related employee costs of approximately $500, (2) recruitment and relocation costs of approximately $1,500, (3) third-party and other costs of approximately $500 and (4) share-based compensation of approximately $1,000. The Company expects to recognize the majority of the remaining costs associated with the plan during the remainder of 2019.

In May 2019, the Company announced changes to its leadership structure that includes the creation of two new positions, a President, U.S and Chief Commercial Officer and a President, International and Chief Development Officer. The Company expects to incur incremental reorganization and realignment costs associated with these leadership changes of approximately $2,500, of which approximately $1,500 will be severance and related employee costs and approximately $1,000 will be share-based compensation. This will increase total reorganization and realignment costs to approximately $34,500 to $37,500. Also as a result of these changes, the Company’s chief operating decision maker is currently evaluating the Company’s management and operating structure and anticipates this evaluation will result in a change to its existing operating segment structure by the end of 2019.

The following is a summary of the activity recorded as a result of the G&A realignment plan:



	Three Months Ended				Total Incurred Since Inception
	March 31, 2019		April 1, 2018		Total Incurred Since Inception
Severance and related employee costs	$	472	$	2,059	$	19,225
Recruitment and relocation costs	114		148		1,680
Third-party and other costs	16		328		2,126
	602		2,535		23,031
Share-based compensation (a)	180		91		6,864
Termination of defined benefit plans	—		—		1,335
Total G&A realignment	$	782	$	2,626	$	31,230

_______________


(a)	Primarily represents incremental share-based compensation resulting from the modification of stock options in connection with the termination of employees under our G&A realignment plan.

The accruals for our G&A realignment plan are included in “Accrued expenses and other current liabilities” and “Other liabilities” and totaled $4,730 and $765 as of March 31, 2019, respectively, and $8,781 and $2,731 as of April 1, 2018, respectively. The tables below present a rollforward of our accruals for the plan.



	Balance December 30, 2018		Charges		Payments			Balance March 31, 2019
Severance and related employee costs	$	7,241	$	472	$	(2,218	)	$	5,495
Recruitment and relocation costs	83		114		(197		)	—
Third-party and other costs	—		16		(16		)	—
	$	7,324	$	602	$	(2,431	)	$	5,495



	Balance December 31, 2017		Charges		Payments			Balance April 1, 2018
Severance and related employee costs	$	12,093	$	2,059	$	(2,844	)	$	11,308
Recruitment and relocation costs	177		148		(121		)	204
Third-party and other costs	—		328		(328		)	—
	$	12,270	$	2,535	$	(3,293	)	$	11,512

System Optimization Initiative

The Company recognizes costs related to acquisitions and dispositions under its system optimization initiative. The Company has incurred costs of $72,208 under the initiative since inception and expects to incur additional costs of approximately $500 during the remainder of 2019, which are primarily comprised of professional fees.