Crying over spilt milk?

July 13, 2006

Tekelec (TKLC), which finally got around to reporting its results for the quarter ended March 31 late yesterday and whose stock is down about 10% so far today, had this interesting exhibit buried in the Q.

It seems that former CEO Fred Lax, who left the company on January 1 after receiving severance of $1.57 million, was unhappy about restrictions on another chunk of change he was due: nearly 150,000 options at $8.54 a share, which would have added roughly another $500K to the deal (even more if you go back a bit further). But because Tekelec had announced back in February that it was restating three years of earnings and taking a $51 million charge, there was a lock-down on executives exercising options, which according to the exhibit, prompted Lax to say he had "been deprived of a substantial benefit." The agreement extended Lax’s ability to exercise the options until July 1.

As for investors, who have watched the stock lose about 40% since last fall, there’s no such luck. Too bad we can’t say the same for the guy who was calling the shots when the company had to restate 3 years worth of earnings.

Leave a Reply

You must be logged in to post a comment.