Reorganization and Realignment Costs

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



	Three Months Ended
	March 29, 2015		March 30, 2014
G&A realignment	$	4,163	$	—
System optimization initiative	450		14,711
Reorganization and realignment costs	$	4,613	$	14,711

G&A Realignment

In November 2014, the Company initiated a plan to reduce its general and administrative expenses. The plan includes a realignment and reinvestment of resources to focus primarily on accelerated restaurant development and consumer-facing restaurant technology to drive long-term growth. The Company expects to achieve the majority of the expense reductions through the realignment of its U.S. field operations and savings at its Restaurant Support Center in Dublin, Ohio. We recognized costs totaling $4,163 during the first quarter of 2015 and $17,089 in aggregate since inception. The Company expects to incur additional costs aggregating approximately $8,000 to $9,500 during the remainder of 2015, comprised of severance and related employee costs of $700, recruitment and relocation costs of $4,000 for the reinvestment in resources to drive long-term growth and share-based compensation of $3,300 to $4,800. The Company anticipates the realignment will be substantially completed by the end of the second quarter of 2015.

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



	Three Months Ended		Total Incurred Since Inception
	March 29, 2015		Total Incurred Since Inception
Severance and related employee costs	$	1,982	$	13,899
Recruitment and relocation costs	470		679
Other	32		120
	2,484		14,698
Share-based compensation (a)	1,679		2,391
Total G&A realignment	$	4,163	$	17,089

_______________


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

The table below presents a rollforward of our accruals for our G&A realignment plan, which are included in “Accrued expenses and other current liabilities” and “Other liabilities.”



	Balance December 28, 2014		Charges		Payments			Balance March 29, 2015
Severance and related employee costs	$	11,609	$	1,982	$	(3,386	)	$	10,205
Recruitment and relocation costs	149		470		(398		)	221
Other	5		32		(37		)	—
	$	11,763	$	2,484	$	(3,821	)	$	10,426

System Optimization Initiative

The Company has recognized costs related to its system optimization initiative which includes the sale of restaurants to franchisees. The Company anticipates recognizing additional costs related to sales of restaurants in Canada through the second quarter of 2015 of approximately $500 which include severance and related employee costs and professional fees. The Company also expects to incur additional professional fees in connection with reducing its ongoing company-owned restaurant ownership to approximately 5% of the total system; however it is currently unable to estimate such costs.

The following is a summary of the costs recorded as a result of our system optimization initiative:



	Three Months Ended				Total Incurred Since Inception
	March 29, 2015		March 30, 2014		Total Incurred Since Inception
Severance and related employee costs	$	326	$	5,533	$	17,584
Professional fees	41		2,631		5,854
Other	83		2,437		4,624
	450		10,601		28,062
Accelerated depreciation and amortization (a)	—		475		17,414
Share-based compensation (b)	—		3,635		5,013
Total system optimization initiative	$	450	$	14,711	$	50,489

_______________


(a)	Primarily includes accelerated amortization of previously acquired franchise rights related to company-owned restaurants in territories that were sold in connection with our system optimization initiative.


(b)	Represents incremental share-based compensation resulting from the modification of stock options and performance-based awards in connection with the termination of employees under our system optimization initiative.

The table below presents a rollforward of our accrual for our system optimization initiative, which is included in “Accrued expenses and other current liabilities.”



	Balance December 28, 2014		Charges		Payments			Balance March 29, 2015
Severance and related employee costs	$	2,235	$	326	$	(1,999	)	$	562
Professional fees	146		41		(52		)	135
Other	423		83		(3		)	503
	$	2,804	$	450	$	(2,054	)	$	1,200