|9 Months Ended|
Sep. 30, 2015
|Restructuring and Related Activities [Abstract]|
In May 2015, the Company closed its Memphis, Tennessee office and consolidated all major business functions into its Irvine, California headquarters. The Company did not retain any of its Memphis-based employees. A total of seven employees were impacted by the consolidation, including three executives of the Company. In connection with this consolidation, the Company recorded restructuring charges of $753,400 in March 2015, concurrent with its public announcement of the consolidation, of which approximately $718,000 related to costs associated with severance and other compensation for the impacted employees.
In connection with the then-contemplated consolidation of the Companys business functions discussed above, effective August 1, 2014, the Company entered into new employment agreements with its then-Chief Financial Officer and one other executive officer. Among other items, the new agreements each provided that if, on or before July 31, 2015, the Company were to terminate the employment of either officer, any unvested stock options would become fully vested on the termination date and would be exercisable until the contractual expiration date of each such option. Under the officers prior employment agreements, the exercise period subsequent to termination without cause was three years. In connection with the Companys consolidation of its business functions as discussed above, these officers employment with the Company was terminated without cause on May 15, 2015.
Also in connection with the consolidation of the Companys business functions discussed above, effective April 1, 2015, the Companys then-Executive Chairman and former Chief Executive Officer separated his employment with the Company (continuing thereafter as Chairman). In recognition of the Chairmans contributions as an officer of the Company, the Companys Board of Directors accelerated the vesting of all previously unvested options held by the Chairman and extended the exercise period until the contractual expiration date of each such option. Under the Chairmans prior employment agreement, the exercise period subsequent to termination without cause was three years.
As a result of the modification of the terms of stock options, and as of the employment separation dates in 2015, all as discussed in the preceding two paragraphs, the Company revalued such options and recognized non-cash restructuring costs of $492,926, and recorded a corresponding amount as additional paid-in capital. Also, in the second fiscal quarter of 2015, the Company recorded additional restructuring charges of $6,258.
As a result of the foregoing, the Company recorded aggregate restructuring costs of $1,252,584 in its condensed consolidated statement of operations for the nine months ended September 30, 2015 related to the consolidation of its business functions.
A reconciliation of the liability for accrued restructuring charges, included in other accrued liabilities in the accompanying condensed consolidated balance sheet, for the nine months ended September 30, 2015 is as follows:
The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.
Reference 1: http://www.xbrl.org/2003/role/presentationRef