STEC » Topics » 15. Subsequent Events

These excerpts taken from the STEC 10-K filed Mar 12, 2009.

Subsequent Events

On February 4, 2009, we commenced a reduction of our workforce at our Santa Ana, California headquarters as part of the transition of certain of our operations to our new 210,000 square foot manufacturing facility in Penang, Malaysia. This reduction, which is primarily in our U.S. based workforce, will occur over several stages and is expected to be completed by the end of 2009. The workforce reduction will affect approximately 200 jobs, which represents approximately 25% of our then-current global workforce. Notwithstanding the reduction in force, we expect our global workforce to exit calendar year 2009 at approximately the same level at which we exited calendar year 2008, as operations at our Penang facility become mature. In connection with this reduction in workforce, we expect to incur expenses of between $1.2 million to $1.7 million for severance and related costs. We expect to record these expenses in 2009, with a majority to be recorded in the first quarter of 2009. We expect substantially all of the expenses associated with the reduction of workforce to result in cash expenditures. Actual amounts and the exact timing of the workforce reductions could differ from these estimates. We expect cost savings of $11.5 million in 2009 related to the workforce reduction.

Subsequent Events

FACE="Times New Roman" SIZE="2">On February 4, 2009, we commenced a reduction of our workforce at our Santa Ana, California headquarters as part of the transition of certain of our operations to our new 210,000 square foot manufacturing
facility in Penang, Malaysia. This reduction, which is primarily in our U.S. based workforce, will occur over several stages and is expected to be completed by the end of 2009. The workforce reduction will affect approximately 200 jobs, which
represents approximately 25% of our then-current global workforce. Notwithstanding the reduction in force, we expect our global workforce to exit calendar year 2009 at approximately the same level at which we exited calendar year 2008, as operations
at our Penang facility become mature. In connection with this reduction in workforce, we expect to incur expenses of between $1.2 million to $1.7 million for severance and related costs. We expect to record these expenses in 2009, with a majority to
be recorded in the first quarter of 2009. We expect substantially all of the expenses associated with the reduction of workforce to result in cash expenditures. Actual amounts and the exact timing of the workforce reductions could differ from these
estimates. We expect cost savings of $11.5 million in 2009 related to the workforce reduction.

13. Subsequent Events

On February 4, 2009, the Company commenced a reduction of its workforce at its Santa Ana, California headquarters as part of the transition of certain of its operations to its new 210,000 square foot manufacturing facility in Penang, Malaysia. This reduction, which is primarily in its U.S. based workforce, will occur over several stages and is expected to be completed by the end of 2009. The workforce reduction will affect approximately 200 jobs, which represents approximately 25% of the Company’s then-current global workforce. In connection with this reduction in workforce, the Company expects to incur expenses of between $1.2 million to $1.7 million for severance and related costs. The Company expects to record these expenses in 2009, with a majority to be recorded in the first quarter of 2009. The Company expects substantially all of the expenses associated with the reduction of workforce to result in cash expenditures. Actual amounts and the exact timing of the workforce reductions could differ from these estimates.

 

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STEC, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

This excerpt taken from the STEC 10-K filed Mar 30, 2007.

15. Subsequent Events

On February 9, 2007, the Company entered into an Asset Purchase Agreement (“Purchase Agreement”) with Fabrik, Inc. (“Fabrik”) and Fabrik Acquisition Corp. (together with Fabrik, the “Purchasers”) for the sale of assets relating to a portion of the Company’s business which is engaged in the designing, final assembling, selling, marketing and distributing consumer-oriented products based on Flash memory, DRAM and external storage technologies known as the Consumer Division of the Company. The consideration paid to the Company pursuant to the Purchase Agreement consisted of cash in the amount of approximately $43.0 million, which was $10.0 million above the net working capital of the Consumer Division. The purchase price is subject to a post-closing adjustment for accrued expenses, reserves on inventory, reserves on accounts receivables and overhead capitalization of the Consumer Division. The sale of assets included the “SimpleTech” name and the Company effected a corporate name change on March 7, 2007 from SimpleTech, Inc. to STEC, Inc.

In connection with the consummation of the sale of the assets of the Consumer Division, the Purchasers hired substantially all of the employees of the Consumer Division. The sale of the assets of the Consumer Division has also resulted in the elimination of the senior management position held by Mike Moshayedi, the Company’s President, co-founder and head of the Consumer Division. The Company entered into a severance agreement with Mr. Moshayedi governing the termination of his employment. In addition, Mr. Moshayedi tendered his resignation as a director from the board of directors effective February 9, 2007. Mr. Moshayedi’s resignation as a director is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices.

 

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