TiVo filed the details of founder Michael Ramsay’s “Transition and Consulting Agreement” with the SEC Monday. It previously disclosed Sept. 5 that, in accepting his resignation from the board on Aug. 30, the company agreed to conditions that would result in “”approximately $3 million in non-cash stock-based compensation expense in connection with the agreement during our quarter ending October 31, 2007.”
The agreement, along with its two release-of-claims documents, total more than 11,000 words over 19 pages. In fact, part of it guarantees Ramsay up to $10,000 in reimbursement for attorney fees for negotiating and preparing it.
First things first: Ramsay, who is off to join New Enterprise Associates (a “leading Silicon Valley venture capital firm,” and TiVo shareholder), was to be paid $30,000 “as soon as practicable” after he resigned. It can be tough living between paychecks when you change a job.
Thereafter, Ramsay has agreed to serve as a consultant, promising to work up to 10 hours a week until the company’s 2009 annual meeting, which typically takes place the first week of August. For this TiVo will pay Ramsay $6,250 a month. That works out to $75,000 a year or about $144 an hour, along with with office space, voice-mail access, e-mail access and other support he might need.
If Ramsay gets involved providing “reasonable cooperation” in connection with “any pending or future litigation or arbitration brought against the Company and in any investigation the Company may conduct,” his hourly rate rises to $250 an hour if he’s spending more than 20 hours a week consulting.
As for the $3 million in non-cash compensation, that may be related to changes made to the vesting of Ramsay’s options to purchase 250,000 shares of TiVo stock granted on March 11, 2005. A prior agreement to double the vesting period for the shares was changed back to the original terms. All of his shares continue to vest during his “transition” period, and in some cases he may use the options’ full ten-year expiration period in which to exercise.
And 90 days after he left the board, Ramsay will “cease to be subject to the Company’s insider trading policy.”
Perhaps the most touching, and least costly, concession TiVo made in the agreement with Ramsay was Part 5, section (f): “Retirement of Email Address. Following the Date of Termination, the Company shall permanently retire Executive’s email address.”