SiliconBeat

Should they be out this St. Patrick’s evening drinking beer, some Nuvelo employees may have good reason to be crying in it. The San Carlos biotech said in a filing with the SEC it would layoff 22 percent of its workers beginning Thursday because it has decided to discontinue clinical development of its blood-clot dissolver, alfimeprase, after results of its latest trials fell short of expectations.

Nuvelo had 76 employees as of Dec. 31, down by nearly half from the year before. It will
provide severance to the terminated employees and expects to take a $3 million restructuring charge in its current quarter.

Among those losing his job is Michael Levy, executive vice president in charge of research and development. His severance package includes 12 months of salary “”continuation” worth $410,000 last year. He’ll also get 12 months of accelerated vesting of stock options and the
company will pick up the tab for his COBRA medical insurance coverage premiums, worth about $18.969. Last year’s proxy also listed a $225,000 cash bonus among his termination benefits.

Earlier this month, the board of directors for entertainment software developer Electronic Arts adopted what it called a “Key Employee Continuity Plan,” which seems to guarantee the continuity of compensation for key employees prior to and after some “change in control” event, say a take-over, hostile or otherwise.

No surprise, of course, that it names only executive-level employees who might lose their job “without cause” within two months before such an event, or for up to a year after such an event, even if the executive quits for “good cause.”

The executives are classified into four “tiers:” tier 1 is really just numero uno, the
chief executive; tier 2 includes presidents, executive vice presidents and the chief financial officer; tier 3 is made up of senior vice presidents; and tier 4 includes vice presidents.

As usual, them that gots the most gets the most. The tiers kick-in when lump sum severance payments are calculated by taking a year’s worth of salary and bonus and multiplying it by a pre-ordained factor: with tier 1 and 2 executives getting 1.5 times salary and bonus, tier 3 executives getting 1 times salary and bonus, and tier 4 executives getting half a year’s salary and bonus.

The compensation caste system even works its way down to any medical payments paid in the wake of terminations, with tier 1 and 2 employees getting eighteen months of health care benefits paid for, while tier 3 employees would get 12 months and tier 4 employees six months worth.

This is compensation designed by executives for executives. What sense does this make, business or otherwise? Surely, the highest paid executives at the company are the employees who would be most able to afford paying their health care premiums after losing their jobs, right?

BEA Systems finally got around to filing its proxy statement covering the fiscal year that
ended more than a year ago on Jan. 31, 2007. It turned out to be a very good year for
co-founder and chief executive Alfred Chuang, even though BEA shares ended that year still down 30 percent from where they were five years before.

In addition to his $862,500 salary Chuang was given two bonuses: one for his work in fiscal 2007 totaled $929,543, and a second “”discretionary bonus” for his efforts in fiscal 2006 of $200,000. (Note: that would be in addition to the $750,000 bonus the board had already given Chuang for his fiscal 2006 efforts.) Oh, and Chuang also made another $6 million exercising options in fiscal 2007.

Chuang also got various other goodies, including the use of a company car and driver worth $188,853, matching 401(k) contributions of $3,000 (Geez, what’s the match?), personal financial planning and tax preparation services worth $15,545 plus $6,955 to pay for the taxes on it, “miscellaneous other compensation of $5,910,” plus $6,800 for  “donations.” (Um, couldn’t he afford to make his OWN donations?)

Total on the above: $8.2 million. But wait, there’s more.

Chuang was also given a stock award for 233,000 shares that were worth $3 million when granted, but whose value has risen to $4.5 million given Oracle’s pending purchase of BEA Systems for $19.38 per share. And an option grant covering 700,000 shares with a strike price of $12.93 will net Chuang another $4.5 million when the deal with Oracle is done.

As of a year ago, Chuang also controlled options covering 5.67 million shares that will bring him $63.6 million when the sale goes through. That should help salve any wounds he feels once Larry Ellison becomes his boss. It will also help take the sting out of the $2.45 million Chuang agreed to repay BEA last year to cover the amount of improper gain he received exercising and selling shares from three mis-priced option grants in 1998 and 1999.

BEA Systems will be filing another proxy before much longer in preparation for a shareholder vote to approve the Oracle buy-out. We look forward to seeing what kind of compensation arrangements were made for Chuang during BEA’s final fiscal year just ended.  Could his parachute get any more golden?

Tuesday night, as we trolled through SEC filings from earlier in the day while listening to
primary election returns we came across an 8-K filing from SunPower reporting details of its newly adopted “Key Employee Quarterly Key Initiative Bonus Plan” (That’s what it’s called, honest).

Before our eyes glazed over we came across this non-sequitur news near the bottom: “effective as of January 31, 2008, PM Pai resigned as the Chief Operating Officer of the Company.”

Um, that seemed kinda “material” to us, especially for a company whose sales more than tripled last year, along with its stock price, as it took advantage of the mania for the solar energy systems in which its semiconductors are used. We assumed we’d missed a press release prior to this filing, but couldn’t find one on our Bloomberg box nor on SunPower’s Web site.

As part of his severance agreement, Pai is going “to provide certain services to the Company on a part-time basis through July 31, 2008 to facilitate the transition of responsibilities,” for which he’ll be paid $15,333 per month for the first three months and $13,800 per month for the last three months. SunPower will continue to pay Pai’s “existing level of housing and other expenses associated with his residence in the Philippines, and the Company will reimburse Mr. Pai for up to $25,000 of
relocation costs.”

Oh yeah, and “In exchange for a general release by Mr. Pai and his agreement to certain
non-competition and other conditions, the Company will pay him an additional $13,800.00 per month” for five months from August through December.

No reason was given for why Pai is leaving. We noticed that he exercised his option to buy 22,500 shares of SunPower for $3.30 each Jan. 30, the day before he quit, selling them the same day for $73.19, netting a $1.57 million profit. They closed Tuesday at $66.64.

AP Pharma, the Redwood City specialty pharmaceutical maker, saidin a press release Michael O’Connell, its chief operating and financial officer, will leave the company Jan. 18, or the end of this week. A 15-year veteran with the company, O’Connell originally joined the company as its CFO. In 2000, he was named chief executive officer, serving as CEO until departing in October 2006 on a medical leave. O’Connell rejoined the company in the middle of last year when he took on his current duties.

The terse press release announcing the move offered no reasons why O’Connell was leaving, nor did it included any of the typical words of praise or thanks from either the company or O’Connell.

The release did take pains to note that O’Connell “will be entitled to the benefits of
a retention agreement that are payable due to his not being reappointed to the position of President and Chief Executive Officer” when he returned to the company last year.

The company called a special shareholders meeting in December in order to get shareholder approval for approve a new “”2007 Equity Incentive Plan” with 3 million shares reserved to be issued under it, because the exercise of most of its outstanding options as of October 31, was $8.96 per share, “”so far underwater when compared to our current market share prices that these options are basically ineffective in providing any meaningful incentive value.”

Both proposals passed.

Remember the good old days when a top Silicon Valley executive leaving the Bay Area to join a certain large software company in Redmond, Washington, was not exactly news? More often the past few years the travel has been in the other direction, from Seattle area companies to a certain large search-engine company in Mountain View.

Well, Stephen Elop is making news by giving up his job as chief operating officer job at
Juniper Networks after one year to take over as the top executive of Microsoft’s business software division.

The move will actually cut down Elop’s commute to work. He lives in Canada.

Maybe Microsoft put up a sign on the roof of its headquarters that read “If you worked here, you’d be there already” that Elop might have seen on one of his regular commutes down to the valley.

That’s right, Elop was commuting from Canada to Silicon Valley these past two years, and doing it on his employer’s dime. First at Adobe Systems, which bought his previous employer Macromedia in late 2005. Adobe paid out $145,149 to cover Elop’s commuting from Canada in 2006.

After he had been working at Adobe for about six months, Elop told the company in June 2006 he’d be leaving, setting his departure date as Dec.5, one year to the day since he had been hired. For his year of service, Elop was paid a $500,000 salary and $315,000 bonus. Oh, and got a $1.88 million severance payment, on top of that. And all of his restricted shares vested when he left, despite the original performance strings that had been attached to them.

No, we’re not making this up.

At Juniper, where Elop resigned on Wednesday — also one year to the day from when he started — he was guaranteed $200,000 in additional “relocation reimbursement and benefits” plus “reimbursement of travel costs between his current home and Juniper’s offices in Sunnyvale.” That was in addition to his $540,000 salary.

Not coincidentally, we suspect, Wednesday was also the day the first installment vested of a 300,000 option award given him when he was hired in January 2007. Juniper had a very good 2007, with its stock price rising 75 percent last year. The 75,000 shares of his option grant set to vest Wednesday were priced at $20.23, making them worth $794,250 that day.

He starts at Microsoft at the end of the month. Mark the date. You know Elop will.

It seems so long ago that JDS Uniphase (ticker:JDSU) was a stock market darling. That was back in 2000 before the San Jose fiber optic collapsed into a heap in early 2001.

Six years later, well, things are sorta better. The company still exists. That’s good. And in 2007, it lost $26.3 million, which was a lot less than the $151.2 million it lost the year before. And revenue went up to $1.4 billion in 2007 from $1.2 billion in 2006.

Apparently those results have made the board giddy. Last month, they disclosed in their proxy that they paid CEO Kevin Kennedy $6.1 million in 2007, a figure that includes $575,000 in annual salary, a bonus of $425,000, and $5.1 million in new stock and options.

But since happy days are here again at JDS, Kennedy got another big smooch from the board. In an 8-K filed on Tuesday, the company disclosed the terms of his new employment agreement. It includes a raise in annual pay to $800,000 and the potential to earn an annual bonus worth up to $1 million.

Kennedy also signed a new severance agreement that would give him three years of salary in a lump sum and three years worth of bonuses. That’s potentially worth $5.4 million, not counting all the options and stock goodies.

Unfortunately, none of this has helped shareholders. Kennedy joined the company on Sept. 1, 2003, when the stock was trading at a split-adjusted $27.60 per share. On Tuesday, the stock was trading at $15.78. It’s also slightly down from a year ago when it was trading around $17.00 per share.

If only JDS made time machines so it could take investors back to July 26, 2000. Closing price of the stock: A split-adjusted $1,087.52 per share.

In a filing Thursday, Applied Micro Circuits reported that its board “approved a restructuring plan back on August 21 to reorganize the Company’s operations and reduce its workforce” back on August 21. It’s the company’s fifth restructuring plan since 2003.

The plan became effective Thursday, the same day as the filing, and is to affect
“approximately 4 percent” of its employees. The total severance cost involved in laying them off — approximately 25 folks based on the 619 workers Applied Micro had at the end of its fiscal year March 31 — was estimated to be between $600,000 to $900,000.

The Sunnyvale maker of integrated circuits, which spent $9.1 million in its last quarter to buy back 2.9 million shares, says savings from the restructuring should amount to
“approximately $2.8 million annually.”

In a filing three days earlier the company reported that its compensation committee adopted a new executive severance benefit plan that increased what some of its executives would get in case they are terminated after a “change in control.”

The filing didn’t mention it was an increase, but in comparing the new plan with terms listed in the company’s most recent proxy, we found out that the salary benefit paid to its chief executive if terminated after the company was bought, for example, would rise from $600,000 to $800,000, that a bonus that would have been pro-rated depending on when the change in control took place under the previous plan will now be a full year’s worth no matter what (currently $300,000), that the payment of extended health benefits would be lengthened from 18 to 24 months, and that the vesting of equity awards would be extended from those that would have vested over an additional 24-month’s to instead include 100 percent of all unvested shares.

Almost 2.5 years after Moshe Gavrielov sold his company, Verisity of Mountain View to Cadence Design Systems of San Jose for $315 million, he’s heading for open waters. In an 8-K filed Wednesday, Cadence said as of Nov. 30, Gavrielov will no longer be Executive Vice President and General Manager of the Verification Division and will “transition” to something more nebulous until he officially leaves November 2008. He’ll get a $4,000 consulting fee starting next May and running through November 2008.

But apparently, the company wants to keep Gavrielov from going to work from a competitor in the worst way. If he doesn’t quit before next May, he gets $400,000. And if sticks around through next November, he gets another $400,000. Plus, he’ll get some portion of his annual bonus, once those are doled out next year. And he gets accelerated vesting on some unspecified amount of options.

That should pad the cushion he already has built up. Since joining the Cadence family, Gavrielov has sold $9.5 million worth of stock. And when he sold Verisity in 2005, he personally received $5.3 million for his stock.

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.

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