Adaptec, the Milpitas maker of data-storage related products, that in December revealed holding a large chunk of shares in Los Gatos chip maker hi/fn, is now in the midst of selling its stake off. The reason? Hi/fn’s agreement to be acquired by yet another Silicon Valley company, Exar.
Adaptec first disclosed owning Read the rest of this entry »
On Monday, less than two months after paying him the last of a $127,500 special bonus given for the expressed purpose of keeping him with with the company, Adaptec told its vice president of engineering, Manoj Goyal, that his “”position will be terminated” effective, well, that very day.
Goyal, who joined the company in May 2006 with a $50,000 signing bonus, gets nine-months severance, worth $191,250, plus the rest of the incentive bonus covering the last two quarters, which totaled $10,000. And his COBRA benefits paid through the end of the year.
One thing Goyal won’t get is much more time to exercise options that have already vested the way more favored executives in the valley often do. You know, when they are retained as consultants for an extra year or two. Goyal’s separation agreement specifically reminds him that has three months during which to exercise his vested options.
Fat chance. The shares that were vested as of the company’s last proxy are priced at $4.48. The last time Adaptec’s shares were that high was in early January 2007. They were trading Friday below $3 a share.
Adaptec and its recent nemesis and largest shareholder, Steel Partners, declared a cease fire Friday afternoon when the Milpitas maker of computer storage products said it would nominate three of Steel’s representatives to its board of directors, while the New York private investment firm agreed to withdraw its opposing slate of five nominees.
It’s a little hard to know what to make of the 8-k filed by Adaptec (ticker: ADPT) on Thursday. The company disclosed that its board had approved a new bonus for its CEO S. “Sundi” Sundaresh.
The filing says Sundaresh will be paid up to two months of his current salary “upon successful completion of a performance goal by September 30, 2007.” What goal? Please, please tell us! Tell us!
Uh, no.
The filing also notes that Sundaresh has to actually stick around until Nov. 23, 2007 to get the two month bonus.
But wait, there’s more. He could get four months of salary “upon the successful completion of two additional performance goals by March 31, 2008.” Of course, only if he’s still employed on April 10, 2008.
The tension is killing us.
It’s never a good sign when you’ve got to give your top executives some extra cash just to stick around. So what to make of this latest from Adaptec of Milpitas?
On Monday, the digital storage company filed an 8-K detailing changes in a number of employment agreements with top executives. These basically fall into two categories. The first covers what happens if the company gets bought. Adaptec’s board agreed to expand the reasons that chief executive Sundi Sundaresh and chief financial officer Chris O’Meara could leave and still get severance packages if the company gets acquired.
In addition, on August 14, Adaptec’s board approved new retention agreements for O’Meara and three other executives. Under the terms, each will get a bonus equal to six months of salary for “continued satisfactory performance of his duties.” Two months of that will be payable in November, and the rest in February. All this would be in addition to the other bonuses for which these folks are eligible.
These changes come about a week after the company announced that revenue in the first quarter fell 38 percent to $42.4 million and that it was cutting 20 percent of employees.
Who knows what the insiders see coming down the road. But it’s possible they’re feeling some extra attention from their largest shareholder, Steel Partners, run by Warren G. Lichtenstein. According to a 13D-A filed last Wednesday, in the first 10 days of August, Steel bought 1.4 million shares in Adaptec stock, giving it a total of 17.8 million shares, or 14.99 percent of the company.
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