A day after voting themselves $20,000 in cash for “past services” and a day before their company filed for bankruptcy, three directors of Tvia, a fabless — and profitless — Santa Clara company focused on chips for digital displays, called it quits Tuesday, according to a filing Thursday.
Among those resigning was Bathsheba Malsheen, who was first appointed to the board in May, along with William Walker. Malsheen is currently chief executive of Mino Wireless, a Santa Clara provider of roaming services for mobile phone operators. Walker, who remains on the board along with David Levi, is a vice president of Hi/fn, a Los Gatos chip company. Also quitting were BaiChuan Du, who has served as chair of China’s HDTV Experts Group, and Bruce Berkoff, chair of the LCD TV Association.
The board decided that, in addition to the one-time $20,000 payments, its two remaining directors will also be entitled to receive an 5,000 for every month they continue to serve.
Tvia also agreed to pay its CEO, Eli Porat, a $15,000 bonus per month for the next year in addition to his $240,000 annual salary, as long as he doesn’t quit. The board also set up a Transaction Bonus Plan designed to provide bonus payments in the case of a “Liquidity Event”, with the total pool equal to 5 percent of any net proceeds, with Porat eligible to receive half of that.
Since its founding in 1993 as Intergraphics Systems, Tvia has incurred “significant operating losses”, which totaled $86.8 million at end of its quarter ended Sept. 30, 2006, the last period for which the company has filed results with the Securities and Exchange Commission.
In May, the company got a subpoena from the SEC, which turned its initial inquiry into a formal investigation of the company’s past accounting practices, including “potential misapplication of funds by certain former employees”. In January, Tvia’s board concluded that “all earnings press releases and similar communications” in the past “should not be relied upon.”