Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Subsequent Events

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Note 12 - Subsequent Events
3 Months Ended
Apr. 02, 2017
Notes to Financial Statements  
Subsequent Events [Text Block]
 
12.
Subsequent events
 
As disclosed in note
2,
on
May
15,
2017,
the Board of Directors of the Company approved the Restructuring Plan for its manufacturing facilities and corporate level operations, which includes the closure of the Suzhou Facility and a reduction in labor force impacting approximately
210
employees at the Company’s manufacturing facilities and its corporate headquarters. The Restructuring Plan is expected to generate expense reductions for the remainder of
2017
and annualized expense reductions thereafter. The Restructuring Plan, and wind down and closure of the Suzhou Facility, is expected to be substantially completed by the end of the
second
quarter of
2017.
 
The Company estimates the total expense to be recognized in connection with the Restructuring Plan will be approximately
$1.7
million, comprised primarily of employee severance costs.
 
As disclosed more fully in note
5,
effective
May
15,
2017,
the Company entered into the Twelfth Amendment to the PNF Facilities with PNC.
 
On
May
15,
2017,
the Board of Directors of the Company appointed Eddie Smith, the Company’s Interim President and Chief Executive Officer, to the role of President and Chief Executive Officer effective
May
16,
2017.
Mr. Smith will receive an annual base salary of
$325,000
and will be eligible to participate in the Company’s short-term incentive plan with a target bonus of
50%
of his base salary. Mr. Smith will also receive a
one
-time grant of options covering
671,858
shares of Company common stock under the Company’s
2010
Incentive Plan. In connection with Mr. Smith’s stock option award grant, the Company’s Board of Directors amended the terms of Section
4(c)
of the Company’s
2010
Stock Incentive Plan, as amended, which provision limited the maximum number of shares of common stock for which stock options could be granted to any person in any calendar year to
350,000
shares, to permit, as a
one
-time waiver of such limit, the issuance of stock options covering
671,858
shares to Mr. Smith pursuant to the terms of Mr. Smith’s offer letter of employment.
 
On
May
15,
2017,
the Board of Directors of the Company appointed Richard Fitzgerald, as the Company’s Chief Operating Officer effective on or before
June
5,
2017.
Mr. Fitzgerald will receive an annual base salary of
$300,000
and will be eligible to participate in the Company’s short-term incentive plan with a target bonus of
25%
of his base salary. Mr. Fitzgerald will also receive a
one
-time grant of options covering
335,929
shares of Company common stock under the Company’s
2010
Incentive Plan.
 
On
May
15,
2017,
the Company and Roger Dunfield, the Company’s Chief Financial Officer, entered into an agreement pursuant to which Mr. Dunfield will receive a
one
-time grant of options covering
335,929
shares of Company common stock under the Company’s
2010
Incentive Plan. The agreement also amends the letter agreement between Mr. Dunfield and the Company, dated
January
22,
2016
which sets forth the terms of Mr. Dunfield’s employment, such that Mr. Dunfield will no longer be eligible to receive the Annual LTIP Grant. The terms of Mr. Dunfield’s employment will otherwise remain unchanged.