Intermolecular, Inc. (NASDAQ:IMI) Files An 8-K Costs Associated with Exit or Disposal Activities
ITEM2.05
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COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES. |
On March29, 2017, Intermolecular, Inc. (the Company)
commenced a workforce reduction plan of approximately 29
employees, or approximately 20% of the Companys workforce, which
the Company expects to complete by the end of the Companys 2017
first fiscal quarter. The purpose of the plan is to reduce
non-core activities and operating costs and to improve
profitability. The Company estimates that it will incur
restructuring charges of approximately $1.5million related to
cash severance payments. Inclusive of the cash severance
payments, the Company expects to reduce cash expenditures in 2017
by approximately $4.0million as a result of this plan.
This Current Report on Form 8-K contains forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements include
expectations regarding the restructuring and reduction in
workforce, the number of employees impacted by the reduction in
workforce, the aggregate charges for employee terminations and
other costs associated with the restructuring, the related cash
expenditures and the timing to recognize these charges. All of
these forward-looking statements involve risk and uncertainty.
Actual results may differ materially from these statements for a
variety of reasons, including, without limitation, the timing and
execution of the restructuring. These and other important factors
are described in reports and documents we file from time to time
with the Securities and Exchange Commission, including the
factors described under the sections titled Risk Factors in the
Companys most recently filed periodic reports on Forms
10-K and 10-Q. The
Company disclaims any obligation to update information contained
in these forward-looking statements whether as a result of new
information, future events, or otherwise.
| ITEM5.02 |
DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS |
Leadership
Changes
On March29, 2017,
the Company announced that Dr.BruceM. McWilliams will cease his
role as Executive Chairman of the Company effective no later than
April3, 2017, and will transition to non-executive Chairman of
the Board of Directors (the Board). The Company also
announced that C. Richard Neely, Jr., the Companys Chief
Financial Officer and principal financial and accounting officer,
will retire effective April3, 2017. The Board has appointed Bill
Roeschlein to the role of the Companys Chief Financial Officer
and principal financial and accounting officer effective April3,
2017 (the Effective Date), following Mr.Neelys retirement.
Following his retirement, Mr.Neely will assist Mr.Roeschlein in
the transition as a consultant.
As non-executive
Chairman, Dr.McWilliams will not receive any compensation for so
long as he serves as a consultant to the Company. Dr.McWilliams
will enter into a Consulting Agreement with the Company, the
terms of which are to be negotiated. In connection with his
transition from his role as Executive Chairman, Dr.McWilliams
will also receive certain compensation under his severance
agreement, including an amount equal to three months salary as
Executive Chairman, or $150,000, and premium payments under COBRA
for six months. The Board also determined to award Dr.McWilliams
an additional six months of premium payments under COBRA in
connection with his transition.
Mr.Roeschlein, age
47, has served as our Vice President of Finance since August
2015. Prior to joining the Company, from January 2015 to July
2015 and from May 2010 to December 2012, Mr. Roeschlein was an
advisor for high technology companies, including Trident
Microsystems, Inc. From January 2013 to December 2014, Mr.
Roeschlein served as Chief Financial Officer of Aurora Algae,
Inc., a producer of algae-derived products for the nutrition and
biofuel markets, from 2010 until joining the Company. From 2008
to 2010, Mr.Roeschlein served as Chief Financial Officer of Power
Integrations, Inc., a supplier of high-voltage analog
semiconductors for power conversion. From 2006 to 2008,
Mr.Roeschlein served as Chief Financial Officer for Determine
Software, Inc. (formerly Selectica, Inc.), a provider of
cloud-based software solutions. Prior to 2006, Mr.Roeschlein
served in various corporate controller and financial management
roles at Ultra Clean Technology, Asyst Technologies,
Hewlett-Packard and Coopers Lybrand. Mr.Roeschlein holds an MBA
from Cornell University and a BA from UCLA, and is a CPA licensed
in the State of California. There is no arrangement or
understanding between Mr.Roeschlein and any other persons to
which he was appointed as an officer of the Company, and there is
no family relationship between Mr.Roeschlein and any directors or
executive officers of the Company.
In connection with
his appointment, Mr.Roeschlein will enter into a new offer letter
(the Offer Letter) as well as an Amended and Restated
Change in Control and Severance Agreement (the Severance
Agreement and, together Offer Letter, the Agreements),
by and between Mr.Roeschlein and the Company, each effective as
of April3, 2017. to the terms of the Agreements, Mr.Roeschlein
will receive an annual base salary of $270,000 and an annual
performance bonus target of 50% of his base salary (both to be
pro-rated for 2017).Bonus payments will be determined in the
discretion of the Board of Directors or a committee thereof
subject to achievement of any applicable bonus objectives and/or
conditions determined by the Board of Directors or a committee
thereof.In the event of an involuntary termination, Mr.Roeschlein
will receive: (i)severance consisting of a lump sum cash payment
in the amount equal to six months base salary and (ii)premium
payments under COBRA for up to 6 months.In the event of a
termination following a change in control, Mr.Roeschlein will
receive: (i)severance consisting of a lump sum cash payment in an
amount equal to 12 months base salary and (y)his target annual
bonus; (ii)premium payments under COBRA for up to 12 months; and
(iii)50% accelerated vesting of all of the unvested equity
compensation then held by Mr.Roeschlein.
Mr.Roeschlein will
also enter into the Companys form indemnity agreement for
officers and directors, which provides, among other things, that
the Company will indemnify such officer or director, under the
circumstances and to the extent provided for therein, for costs,
losses, claims, damages, judgments, fines and settlements he or
she may be required to pay in actions or proceedings in which he
or she is or may be made a party by reason of his or her position
as a director, officer or other agent of the Company or its
subsidiaries, and otherwise to the fullest extent permitted by
law.The foregoing description is qualified in its entirety by the
text of the indemnity agreement, the form of which was filed with
the Securities and Exchange Commission on November7, 2011 as
Exhibit 10.12 to the Companys Registration Statement on Form
S-1/A and is incorporated herein by reference.
In connection with
his retirement, Mr.Neely will enter into a Separation Agreement
between Mr.Neely and the Company under which he will receive
certain amounts. Under the Separation Agreement, Mr.Neely agrees
to enter into a Confidentiality Agreement with the Company and a
general release of all claims against the Company, and he will
receive an amount equal to six months of his base salary, or
$150,000, and premium payments under COBRA for six months.
Appointment of
Mr.MatthewS. Furnas to Board of Directors
On March27, 2017,
upon the recommendation of its Nominating and Corporate
Governance Committee (the Nominating Committee), the Board
increased the size of the Board from six directors to seven
directors and appointed Matthew S. Furnas to fill the vacancy
created by such increase. Mr.Furnas was appointed as a ClassIII
director, with a term of office expiring at the Companys 2017
annual meeting of stockholders (the 2017 Annual Meeting).
Mr.Furnas was also appointed as a member of the Audit Committee
of the Board. Mr.Furnas has been a Senior Analyst at Raging
Capital Management, LLC, a private investment partnership based
near Princeton, New Jersey, since 2010. He received a Bachelor of
Science in Business Administration from Olin Business School at
Washington University in St. Louis.
Previously, on
November14, 2016, the Company entered into a governance agreement
(the Governance Agreement) with Raging Capital Management,
LLC (Raging Capital), to which the Company agreed to
include an individual designated by Raging Capital in the slate
of director nominees to be recommended by the Board for election
at the 2017 Annual Meeting, subject to approval by the Nominating
Committee, subject to its fiduciary duties, not to be
unreasonably withheld. Mr.Furnas was initially presented to the
Nominating Committee
as Raging Capitals
designee to the Governance Agreement. The foregoing description
of the Governance Agreement is qualified in its entirety by
reference to the full text of such agreement, which is filed as
Exhibit 10.1 to the Companys Current Report on Form 8-K filed
with the Securities and Exchange Commission on November16, 2016
and incorporated by reference herein.
Other than the
Governance Agreement, there were no arrangements or
understandings between Mr.Furnas and any other person to which he
was appointed as a member of the Board. There have been no
transactions between Mr.Furnas and the Company required to be
disclosed by Item 404(a) of Regulation S-K.
As a non-employee
director, Mr.Furnas or his designee will receive compensation in
accordance with the Companys non-employee director compensation
program, which is described under the heading Board of Directors,
Corporate Governance and Related MattersDirector Compensation in
the Companys Definitive Proxy Statement on Schedule 14A filed
with the Securities and Exchange Commission on April12, 2016. In
connection with his appointment to the Board, Mr.Furnas was
automatically granted an option to purchase 75,000 shares of the
Companys common stock, par value $0.001 per share, effective as
of the date of his appointment, to the Companys 2011 Incentive
Award Plan. The option vests in equal annual installments over a
period of four years, with 25% of the original number of shares
subject to such option to vest on each yearly anniversary of the
grant date, subject to Mr.Furnass continuing service through each
applicable vesting date. In addition, it is expected that
Mr.Furnas will execute the Companys standard form of
indemnification agreement for directors and officers. Such form
of indemnification agreement is filed as Exhibit 10.12 to the
Companys Registration Statement on Form S-1/A filed with the
Securities and Exchange Commission on November7,
2011.
About Intermolecular, Inc. (NASDAQ:IMI)
Intermolecular, Inc. provides thin film solutions. The Company’s high productivity combinatorial (HPC) platform, which consists of its tempus processing tools, its automated characterization methods, and its Informatics analysis software, is purpose-built for research and development (R&D) using combinatorial process systems. It develops technology and Internet protocol (IP) rights focused on materials, processes, integration and device architectures in collaboration with its customers. Its HPC platform consists of tempus HPC processing, automated characterization and informatics and analysis software. The Company offers a series of wet processing tools and dry processing tools. Its informatics software includes workflow management software, analysis and reporting software, security and collaboration management software, and integration services. It caters to semiconductor device, semiconductor materials and equipment and clean energy market companies. Intermolecular, Inc. (NASDAQ:IMI) Recent Trading Information
Intermolecular, Inc. (NASDAQ:IMI) closed its last trading session up +0.020 at 0.980 with 2,112 shares trading hands.