SiliconBeat

Let the proxy battle begin. Sybase, the Dublin data software firm, said Friday it had received notice from a disgruntled shareholder that it would be nominating its own slate of candidates to the company’s board of directors.

Funds associated with Sandell Asset Management have acquired 5.4 million shares of Sybase over the last few months, giving it a 6 percent stake in the company and making it its second largest shareholder. Sandell sent Sybase a letter back in October letting the company know it was not pleased at “the discount” at which Sybase shares were then tradin around $26 per share, little changed from where they are now.

In the letter, Sandell asked Sybase’s board to “immediately” do one or more of the following: repurchase shares, spin off its mobile division into an initial public offering, and/or sell the company. “Since that time,” Sandell said in a filing Friday, Sybase “has taken no discernable action on any of these initiatives, nor has it taken any of its own actions to improve value.”

Sybase insisted in a press release Friday afternoon that it has “had an open dialogue with Sandell, as we do with all Sybase stockholders, since they first invested in our Company.” The company said it “repurchased almost $33 million worth” of its stock in its fiscal 2007 third quarter, and has repurchased $311 million since 2004.

Among the three board nominations Sandell intends to make are John McFarlane, currently a board member and interim chief executive at Exar, a fabless semiconductor company in Fremont that was recently the subject of another dissident shareholder shake up; and Jonathan Macey, a professor of corporate finance and securities law at the Yale Law School.

Sybase has yet to schedule its 2008 shareholder meeting.

You’d think a man who man who was paid $3.5 million in salary and bonus last year and got millions more worth of stock compensation could afford to pay his own living expenses. Evidently not, at least not Michael Fister, chief executive of Cadence Design Systems since 2004.

The company filed its third amendment to Fister’s 2004 employment agreement with the SEC last week, yet another in a series of filings companies slipped in late in the day Friday before the long holiday weekend.

When he was hired in May 2004, in addition to his $1 million signing bonus, Fister was given a $5,000 per month housing allowance, good for two years, according to his original employment agreement. He was also assured that the company would reimburse his moving costs when he relocated from Oregon, and pay any broker costs associated with buying a house here and/or selling his home in Portland.

Fister’s employment agreement was first changed a year later when his monthly housing
allowance was more than tripled to $17,000 and extended through May 15, 2007. By the end of 2005, he had finally purchased a home in the Bay Area but had yet to sell his previous home. His agreement was amended yet again in May when his $17,000 housing was extended through Dec. 31, 2007.

On Friday, the agreement was changed a third time, ""deleting the date "December 31, 2007′ and inserting in lieu thereof the following: "the earlier of (A) December 31, 2008, or (B) the later closing date of the sale of each of Mr. Fister’s two (2) private residences in Lake Oswego, Oregon”.

Whoa, little doggy. Did we just read ”two (2) residences in Lake Oswego”?! What happened to the the one (1) home in Portland that was cited in his original offer letter? In any case, it looks as if his housing allowance now helps Fister maintain mutliple residences.

As Mel Brooks might say, it’s good to be CEO.

We suspected there might be some late filing gifts put under the SEC tree Friday afternoon that might escape notice before a long holiday weekend , and we were right.

McAfee released restated results – a process the company is all too familiar with — this time, to account for past errors in the way it granted and accounted for stock options. Bottom line: an additional $137.4 million in non-cash stock based compensation charges for the years 1995 through 2005.

As with many of the other reports from special committees at other companies looking into possible backdating, the language used by McAfee’s board is priceless. Here are some examples of what the committee had to say about certain “qualitative concerns” it had relating to its historical “stock option granting process” in its 10-K filing Friday.

“In some instances,” the board writes “former members of management
drafted corporate records, including employment documentation, board and compensation committee meeting minutes and actions by unanimous written consent, with the benefit of hindsight so as to choose measurement dates giving more favorable exercise prices, moreover, certain of these documents were used by us in making accounting determinations with respect to stock-based compensation.”

(So, let’s get this straight: the board relied on committee meeting minutes and
written-consent documents about its own actions that were incorrect, but they didn’t realize it at the time?)

And this: “during the course of the investigation, certain former members of
management did not provide completely accurate or consistent information and in one case, provided documentation to the special committee that the special committee determined was intentionally altered;”

So you’re saying they lied, right?

Or this: “certain former members of senior management did not display the
appropriate oversight and ‘tone at the top’ expected by the board of directors.”

Tone at the top? Since when is telling the truth and following the rules considered “tone”?

McAfee also announced Friday it has set aside $13.8 million to go toward “a tentative settlement with the plaintiffs in the pending federal and state derivative securities lawsuits related to historical stock option practices.”

The company hasn’t totaled up the cost from its own investigation into this matter, but calls the amount “material”. It has also “incurred costs related to litigation, the investigation by the SEC, the grand jury subpoena from the U.S. Attorney’s Office for the Northern District of California and the preparation and review of our restated consolidated financial statements.” But wait, there’s more: “We expect that we will continue to incur costs associated with these matters and that we may be subject to certain fines and/or penalties resulting from the findings of the investigation.”

Not-so-happy new year.

With Icahn’s blessing, or perhaps because of his threats, BEA Systems pushed back the date of its first shareholder meeting since July 2006 from Feb. 14 to March 18.

In a press release sent out Thursday afternoon, the company said its board of directors
“believes it is in the best interest of shareholders to postpone the meeting until after BEA has reported financial results for the fourth quarter and fiscal year ending January 31, 2008.”

That begs the question, how come the board didn’t think about that last month when they first reported the February meeting date along with its filing of several overdue financial reports and news about restatements related to its stock option investigation?

The company took care to point out in the release that its “largest shareholder, Carl Icahn, supports the change in meeting date.” Recall that funds affiliated with Icahn filed suit October 26 to compel the company to hold a shareholder meeting “on or before November 30, 2007, and to enjoin the company from taking certain actions pending the next annual meeting.”

The “certain actions” no doubt included rejection of a hostile offer made by that acquisitive software company known as to buy BEA for $17 a share, something BEA’s board did the same day. Icahn, you will recall, amassed a 14 percent holding of BEA stock in the months prior to the Oracle offer when the share price was trading between $11 and $12 a share.

The March 2008 shareholder meeting will be its first since July 2006.  We (finally) took note of the election results from that meeting belatedly filed in one of the quarterly reports  the company filed last month to bring it up to date.  For the second straight year, a non-binding proposal to repeal the class structure of the board passed, signifying that holders of a majority of shares want directors elected each year, rather than having staggered terms.

After giving it “intensive consideration”, BEA’s board once again opposed the measure. Should the New York City Employees’ Retirement System want to propose it again, it should know that “Solely in connection with the 2007 Annual Meeting” the company is waiving the “the advance notice to which it is entitled” and will allow stockholders to nominate persons to serve on its board of directors or to forward stockholder proposals through the “close of business” on March 7, 2008.

The company also suggests that any such actions be sent “by certified mail, return receipt requested.”

Otherwise, they might just get lost.

It would have been nice to have a piece of NetSuite’s IPO Thursday when shares of the San Mateo provider of business software services closed at $35.50, up 36.5 percent from its initial public offering price of $26.

Nicer than that, though, would have been to get options to buy shares of NetSuite the week before it went public at a price that was almost half of that. That’s what the company’s chief executive and nine other officers and directors got, according to the company’s final registration statement.

NetSuite, which first filed to go public in July, used an auction process to sell its shares
similar to the one used by Google three years ago. The company’s first estimate of the price range for the offering was filed in an amendment to its S-1 registration form file Dec. 5 and pegged the range between $13 and $16, the halfway point between which just so happened to be the price of the last-minute option grants to NetSuite insiders.

The company raised that initial range two more times before settling on an offering price Wednesday evening that was higher still.

NetSuite CEO Zachary Nelson’s last-minute grant was good for 93,750 shares, which yielded him an immediate $2 million paper profit. It was the second option granted this year to Zachary who was given the right to buy 125,001 shares priced at $12.40 in June, just weeks before the company filed its plans to go public with the SEC. In addition to a grants for 100,000 shares priced at $5, 244,507 shares priced at 70 cents and 19,783 shares priced at 60 cents, Zachary–who joined the company in 2002–also owns 1.56 million shares outright.

By our calculations, his NetSuite stake was worth roughly $76 million at the end of trading Thursday.

Company founder and chief technology officer, Evan Goldberg, also got a last-minute grant equal to Nelson’s. The value of his total options stake, plus the 3.2 million shares he already owns came to $158.6 million at the end of Thursday.

That’s nice, but nowhere near the $1.13 billion worth of shares owned by the company’s premiere shareholder, Larry Ellison. Shares of Oracle, which Ellison founded and for which he serves as chief executive, rose 6.5 percent the same day as the NetSuite IPO, increasing the value of his Oracle shares by $1.6 billion to $25.9 billion.

Remember Planktos, the company we first wrote about in September when it reported receiving $2 million in its carbon-credits business from an unnamed investor?

The Foster City company said Wednesday in a “shareholder update” distributed by Business Wire that it is considering “winding down” its operations. (We couldn’t find any mention of the news with the SEC or on the company’s own web site as of the time we posted this.)

The profitless company, whose focus is “sequestering carbon dioxide in the environment utilizing known technology intended to restore the world’s oceans and forests”, has been unable to line up the additional $2 million in funding that it said it needed to continue operations through its next fiscal year in its quarterly financial filing on Dec. 10.

Planktos had other bad news to announce. Its shares were removed by Nasdaq from its Over-the-Counter Bulletin Board Wednesday and will now trade in the Pink Sheets, because the company was too often late in filing its financial reports, according to the Financial Industry Regulatory Authority, a regulator set up by Nasdaq in July to help protect investors.

One of the company’s two projects to create carbon credits includes restoring plankton
life underwater. It was dealt a setback when the company’s research vessel was denied entry to the port of Las Palmas in the Canary Islands where it planned to take on scientific equipment from its partners at the University of Las Palmas to begin joint research activities into the company’s “ocean fertilization” project.

In September, when Planktos reported the $2 million investment from a mystery shareholder, who reportedly paid $1 a share in August, its shares were trading at 54 cents. They closed Wednesday at 12 cents.

At least one voice is wondering why various filings by Planktos over the last several months don’t seem to add up.

After Hewlett Packard filed its 10-K earlier this week, we noted the disclosure that showed how costly all those layoffs at HP have been.

Now, Michelle Leder at footnoted.org chimes in with a few more tidbits from Hewlett Packard’s 10-K that we overlooked. For instance, HP is worried about how housing market woes are going to affect consumer spending. And it’s various investment and hedging strategies have been, well, underperforming to be charitable.

And finally, the company has acknowledged quietly that the value of many of its acquisitions have tumbled.

Read the details here…

Larry Ellison’s NetSuite (ticker:N) went public today. Read our story here. And read NetSuite’s SEC filing here. The company had bumped up its offering price to $26 per share from an initial target range of $13-$16. The result is that the company raised almost twice as much money as it expected just a couple of weeks ago.

Many people will look at the initial reaction to the stock, which dipped when trading opening and then barely recovered. But NetSuite was smart. The big pop that was so desired back in the dot-com days meant that companies were trading hype for money. If a company’s IPO soared when trading first opened, it meant that investors felt it was worth far more than what the price the company offered. And that meant the company priced it too low, leaving millions of dollars on the table.

NetSuite, on the other hand, appeared to have priced its IPO just right, meaning it captured a bigger share of the money for its own use.

NetSuite, the San Mateo software company whose much-awaited initial public offering is generating so much buzz that the IPO’s price range has been raised two times in two days, made a filing today with the SEC to “update or correct some of the facts stated” in an article about it published Tuesday in the New York Times, the text of which is included in its filing.

Since the article ran, which reported an increase in the IP0’s price range on Tuesday to
$16 to $19 from $13 to $16, the range was raised again on Wednesday to $19 to $22 per share, according to the company’s sixth amendment to its initial IPO filing. The shares are being sold according to an auction method similar to the way Google shares were first offered to the public.

The Times article, by a former Mercury News colleague, Laurie J. Flynn, also said that in a Dutch auction the “share price is based on the highest bid that ensures that all” shares will be sold. The company pointed out, however, that NetSuite and the underwriters have “discretion to set the initial public offering price below the auction clearing price.”

As for corrections, NetSuite said in its filing that the article, “incorrectly states that
NetSuite’s net loss for the first nine months of 2006 was $26.9 million, rather than $27.6
million, as set forth in the preliminary prospectus.” And this: “The article states that
[chief executive] Zachary Nelson joined NetSuite in 2000, instead of 2002, as set forth in the preliminary
prospectus.”

Glad they cleared that up.

In its amended filing Wednesday, the company also corrected some its own handiwork, updating the percentage of stock owned by its largest shareholder, Larry Ellison, as of Sept. 30 to 61 percent from 60 percent. For Ellison, every little bit counts.

CyberSource threw in the towel Wednesday on its efforts to establish a stake in the online-auction payment arena. In a press release Wednesday afternoon the company said it would close its wholly owned subsidiary BidPay.com, which it acquired in 2006, at the end of this month.The company expects to incur one-time charges totaling about $1.7 million to $2.7 million in the fourth quarter of 2007 related to the shutdown, of which up to $300,000 will impact the company’s future cash balance.

CyberSource bought BidPay.com in March 2006 from First Data, which shut the site down in December 2005 when it had 4 million registered users. The deal was valued at about $3 million, including cash outlays totaling nearly $2 million and assumption of tax liabilities. CyberSource relaunched the site three months later.

In its most recent financial filing, CyberSource reported that BidPay.com revenue totaled $120,000 and generated losses in its fiscal 2007 third quarter. That was down from $173,000 in sales in the fourth quarter of 2006, when it had 250,000 registered users.