The following actions are being implemented over the course of the next month:
- The Company is implementing a 10% pay reduction for the majority of U.S. exempt employees, a slightly larger percentage reduction for the Company’s three senior officers and unpaid days off for U.S. non-exempt employees.
- The annual bonus program for management will be suspended for fiscal 2009. There will also be lower sales commission payments to the Company’s sales force.
- There will be a reduction in the worldwide work force of approximately seven percent, which includes the impact of an early retirement program.
- The Company will suspend its 401(k) match for fiscal 2009.

The estimated cost of these actions is expected to approximate between $1.5 million and $2.0 million on a pre-tax basis. The final cost will not be known until the actions are completed in January, and it is expected that the majority of the charges will be recorded in the second quarter of fiscal 2009. The Company is currently estimating that the cumulative annualized savings of all cost reduction actions announced since September 25, 2008, will be greater than 20% of the Company’s operating costs in fiscal 2008.

“We are taking these actions in response to the sudden declines throughout the electronics industry,” stated Joseph P. Keithley, the Company’s Chairman, President and Chief Executive Officer. “We know these actions will have a significant impact on our employees; however, we have made these decisions to maintain the financial stability of the Company in light of this dramatic economic recession and the near-term uncertainties.”