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Commitments and Contingencies
9 Months Ended
Sep. 27, 2014
Commitments and Contingencies Disclosure [Abstract]  
Note 10. Commitments and Contingencies

Capitalized Lease Obligations

 

During the nine months ended September 27, 2014, the Company entered into two financing transactions to purchase laboratory equipment.  Under the lease terms, the Company will make monthly future lease payments, including interest, of approximately $2,000 and $5,000, respectively, for 60 months, for a total payment of approximately $122,000 and $271,000, respectively.  The Company has recorded a capital lease of approximately $100,000 and $223,000, respectively.  The equipment will be utilized in our core standards and contract services segment.

 

Employment Agreement with Troy Rhonemus

 

On March 6, 2014, the Company entered into an Employment Agreement (the “Rhonemus Agreement”) with Mr. Troy Rhonemus pursuant to which Mr. Rhonemus was appointed to serve as the Chief Operating Officer of the Company.  The Rhonemus Agreement provides for a base salary of $180,000, and provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary (30% of this salary being the “Maximum Annual Bonus”), and provides for option grants of 250,000 shares of Common Stock.  The option grants were awarded on February 21, 2014 at an exercise price of $1.75 per share, which vest 33% one year from the date of grant with the remainder vesting in 24 equal monthly installments thereafter.  Upon termination, Mr. Rhonemus will be entitled to any accrued but unpaid base salary and any accrued but unpaid welfare and retirement benefits up to the termination date.  In addition, if Mr. Rhonemus leaves the Company for “Good Reason” (as defined in the Rhonemus Agreement), he will also be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary.   In the event the Company terminates Mr. Rhonemus’ employment “without Cause,” Mr. Rhonemus will be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary, or, if Mr. Rhonemus enters into a standard separation agreement, Mr. Rhonemus will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided until the expiration of the term or renewal term then in effect, however, that in the case of medical and dental insurance, until the expiration of 12 months from the date of termination.

 

Legal Proceedings

 

The Company from time to time is involved in legal proceedings in the ordinary course of our business, which can include employment claims, product claims and patent infringements.  We do not believe that any of these claims and proceedings against us as they arise are likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations.

 

During the nine-month period ended September 27, 2014, the Company settled and paid approximately $125,000 to a certain claimant.  This payment was recognized in general and administrative expenses in the statements of operations for the nine-month period ended September 27, 2014.