(6) Debt

On December 22, 2009, we issued $50.0 million in convertible senior notes, which will mature on December 15, 2014. The notes bear a coupon rate of 7.0% per annum that is payable semi-annually in arrears on June 15 and December 15 of each year. We paid approximately $3.5 million of interest on the convertible senior notes in 2011. We incurred debt issuance costs of approximately $2.5 million in 2009, which have been deferred and are being amortized over the life of the notes.

These convertible notes rank junior to any secured indebtedness to the extent of the assets that secure such indebtedness, and are structurally subordinated in right of payment to all indebtedness and commitments of our subsidiaries. Holders of our convertible notes may convert their shares to common stock at their option any day prior to the close of business on December 14, 2014. Upon conversion, for each $1,000 in principal amount outstanding, we will deliver a number of shares of our common stock equal to the conversion rate. The initial conversion rate for the notes is approximately 156.64 shares of common stock per $1,000 in principal amount of notes. The initial conversion price is approximately $6.38 per share of common stock. The conversion rate is subject to change upon the occurrence of specified normal and customary events as defined by the indenture, such as stock splits or stock dividends, but will not be adjusted for accrued interest.

Subject to certain fundamental change exceptions specified in the indenture, which generally pertain to circumstances in which the majority of our common stock is obtained, exchanged or no longer available for trading, holders may require us to repurchase all or part of their notes for cash at a price equal to 100% of the principal amount of the notes being repurchased plus any accrued and unpaid interest up to, but excluding, the relevant repurchase date. However, we are not otherwise permitted to redeem the notes prior to maturity.

We have a credit facility that provides for $55.0 million of borrowings in U.S. dollars, euro or yen, with a multi-currency facility that provides for the issuance of letters of credit in an aggregate amount not to exceed the equivalent of $1.0 million. We had approximately $44.0 million of borrowings outstanding under our credit facility at December 30, 2011. Our credit facility was amended on August 5, 2011 and the revised terms included a reduction to the borrowings permitted under the credit facility from $100.0 million to $70.0 million. The facility was further reduced to $60.8 million following a debt repayment in September 2011. The amendment on August 5, 2011 also included an increase in the interest rates on both the unborrowed portion of the commitment and on the outstanding borrowings, changes to our debt covenants, a change to our permitted capital expenditure levels, and restrictions on our ability to make dividend payments.

In the quarter ended December 30, 2011, we did not meet certain of the financial covenants required under the credit facility. On March 9, 2012, we amended the credit agreement and received a waiver for the following financial covenants for the fourth quarter of 2011: i) total debt (excluding our convertible senior notes) as compared to our rolling four-quarter EBITDA; ii) fixed charges as compared to our rolling four-quarter EBITDA; and iii) a minimum rolling six-month EBITDA. The March 2012 amendment eliminated the requirement that we comply with the these financial covenants for the remainder of the facility term, reduced our borrowing limit from $60.8 million to $55.0 million, increased the interest rates on the outstanding borrowings, reduced our permitted capital expenditures and reduced the available cash we are required to maintain to $1.0 million.

The maturity date of the facility continues to be February 28, 2013. As of March 9, 2012, we have outstanding borrowings under the credit facility of $55.0 million that will be classified as a current liability in our consolidated balance sheet.

As of March 9, 2012, our outstanding borrowings under the credit facility are $55.0 million. The maturity date of the facility continues to be February 28, 2013. We have accelerated our strategic plan to significantly delever our balance sheet, which includes the repayment of the outstanding borrowings under our credit facility. Consistent with our strategy to streamline our business operations and focus on our core competencies in each of our Network, Power, and Wireless segments, we have identified a number of non-strategic assets that remain within our three segments. These assets represent product lines and facilities, but the potential disposal of any or all of these assets will enable us to increase our focus on the future growth or business prospects of the company. To that end, we have engaged financial advisors to direct the possible sale of certain non-strategic assets. We entered into a definitive agreement to complete the first of these sales on February 29, 2012. This transaction includes the sale of two of our manufacturing plants and related equipment in China and our encapsulated transformer product line. We are also currently engaged in the process of selling two additional non-strategic assets. We expect these transactions to be completed by the end of the second quarter of 2012. We also expect to increasingly benefit from a series of actions taken in 2011 to improve our liquidity and cash available from operations. These actions included restructuring actions, headcount reductions, plant consolidations and reductions in general and administrative expenses. We intend to continue prudent management of our expenses and cash balances in 2012.

Interest: As of December 30, 2011, the fee on the unborrowed portion of the commitment ranged from 0.40% to 0.50% of the total commitment, depending on the following total debt-to-EBITDA ratios:

Total debt-to-EBITDA ratio	Commitment fee percentage
Less than 1.50		0.40	%
Less than 2.25		0.40	%
Less than 3.00		0.45	%
Less than 4.00		0.50	%
Less than 5.00		0.50	%
Greater than 5.00		0.50	%

Under the amendment to our credit facility in March 2012, the interest rate on the unborrowed portion of the commitment is 0.50%, regardless of debt-to-EBITDA ratio.

As of December 30, 2011, the interest rate on the outstanding borrowings is a combination of the variable base rate plus a credit margin spread. The credit margin spread ranged from 3.25% to 4.50%, depending on the following total debt-to-EBITDA ratios:

Total debt-to-EBITDA ratio	Credit margin spread
Less than 1.50		3.25	%
Less than 2.25		3.50	%
Less than 3.00		3.75	%
Less than 4.00		4.00	%
Less than 5.00		4.25	%
Greater than 5.00		4.50	%

Under the amendment to our credit facility in March 2012, the interest rate on the outstanding borrowings is a combination of the variable base rate plus a credit margin spread of 10%, regardless of debt-to-EBITDA ratio.

In calculating the total debt-to-EBITDA ratio in 2011 for purposes of the commitment fee and credit margin spread, the total debt included the debt outstanding under the credit facility and the convertible senior notes. The weighted-average interest rate on our credit facility borrowings during the years ended December 30, 2011 and December 31, 2010, including the credit margin spread, was approximately 2.7% and 2.8% respectively.

Debt Covenants: As of December 30, 2011, outstanding borrowings under our credit facility were subject to leverage and fixed charges covenants, which were computed as of the most recent quarter-end. These covenants required the calculation of a rolling four-quarter EBITDA according to the definition prescribed by the amended senior revolving credit facility agreement, including certain restructuring cost addbacks in 2011.

For the quarter ended December 30, 2011, our fixed charges covenant required that our rolling four-quarter EBITDA be equal to or greater than 0.75 times fixed charges, our leverage covenant required that our total debt outstanding (excluding our senior convertible notes) not exceed 6.00 times our rolling four-quarter EBITDA, and we were required to comply with a minimum six month rolling EBITDA level of $8.25 million. As of December 30, 2011, our rolling six month EBITDA level was below the minimum EBITDA level required. In March 2012, we received a waiver for the covenants for the fourth quarter of 2011 from our lenders. Under the March 2012 amendment, we are no longer required to comply with the financial covenants of total debt(excluding our convertible senior notes) and fixed charges as compared to our rolling four-quarter EBITDA and a minimum rolling six-month EBITDA.

Borrowing base, capital expenditures and dividend payment: With the amendment in August 2011, we agreed to limit our borrowings to an amount not to exceed total eligible accounts receivable and cash, to maintain available cash of $5.8 million, and to suspend payment of dividends following a payment in the quarter ended December 30, 2011. We also agreed to limit our capital expenditures to $13.5 million during the six months ended December 30, 2011.

Under the March 2012 amendment, the level of unrestricted cash that we are required to maintain was reduced to $1.0 million and our capital expenditure levels were reduced to the following levels:

Six Months Ended	Capital expenditure level
June 29, 2012	$	7.0 million
December 28, 2012	$	6.5 million

Warrants to purchase common stock: In connection with the March 2012 amendment, we issued in a private placement warrants to the lender group to purchase approximately 2.7 million shares of our common stock at an exercise price of $0.01 per share. The warrants vest and become exercisable as follows: on June 28, 2012, warrants to purchase 0.8 million shares of our common stock will vest unless we have repaid the outstanding borrowings under the credit facility by such date; on September 28, 2012, warrants to purchase an additional 0.8 million shares of our common stock will vest unless we have repaid the outstanding borrowings under the credit facility by such date; and on December 31, 2012, warrants to purchase an additional 1.5 million shares of our common stock will vest unless we have repaid the outstanding borrowings under the credit facility by such date. Thus, if we repay the outstanding borrowings under the credit facility by any such dates, any unvested warrants will revert to us and will effectively be cancelled. If the outstanding borrowings are not repaid as of June 28, 2012, but repayment occurs as of September 28, 2012 or as of December 31, 2012 then 1.9 million or 1.5 million of the warrants will revert to us and be cancelled, respectively. If the outstanding borrowings are not repaid by December 31, 2012, none of the warrants will revert to us. The warrants are exercisable from the vesting date through March 9, 2015.

The amended credit facility also has other customary and normal provisions. Multiple subsidiaries, both domestic and international, have guaranteed obligations specified by our senior revolving credit facility agreement. Also, certain domestic and international subsidiaries have pledged shares, as well as selected accounts receivable, inventory, machinery and equipment and other assets as collateral. If we default on our obligations, our lenders may take possession of the collateral and may license, sell or otherwise dispose of those related assets in order to satisfy our obligations.

We paid total fees and expenses of approximately $1.4 million in connection with the amendment in August 2011, of which $1.2 million have been capitalized as debt issuance costs and amortized on a straight-line basis through the maturity date of the debt. In addition, in connection with the with the August 2011 amendment, we recorded a charge of approximately $0.2 million to write off previously capitalized fees and costs that related to the credit facility and its amendments. We incurred fees and expenses related to the March 2012 amendment, including $1.1 million of fees upon execution of the amendment, legal fees, and other expenses. Under the amendment, additional fees calculated as 0.5% of outstanding borrowings are due on specific dates in 2012 if amounts under the facility remain outstanding at those dates.

During the year ended December 25, 2009, we incurred costs of approximately $5.1 million related to amendments to our credit facility, which were deferred and are being amortized over the remaining term of the credit agreement. During the year ended December 25, 2009, we recorded a charge of approximately $6.3 million to write-off previously capitalized fees and costs that related to our credit agreement and its amendments. Of the $6.3 million of charges, $4.7 million was allocated to discontinued operations on a pro-rata basis for the year ended December 25, 2009, based upon the debt retired or expected to be retired from the dispositions as compared to our total debt outstanding. Similar fees of our continuing operations were classified as interest expense on our Consolidated Statement of Operations for the year ended December 25, 2009.

At December 30, 2011 and December 31, 2010, we had no short-term debt or current installments of long-term debt and long-term debt was as follows (in thousands):

Bank Loans	2011		2010
Variable-rate unsecured debt (denominated in US dollars) due February 2013	$	43,950	$	32,150

Convertible Senior Notes
Fixed-rate unsecured convertible notes (denominated in US dollars) due December 2014		50,000		50,000

Total long-term debt	$	93,950	$	82,150

Principal payments of long-term debt due within the next five years are as follows (in thousands):

Year Ending
2012		--
2013	$	43,950
2014	$	50,000
2015		--
2016		--
Thereafter		--