Malibu dreaming in jeopardy for Hypercom CEO?
Yesterday, word came down shortly before 3 pm that the U.S. Justice Department had filed suit against the $485 million deal announced last November for Verifone (PAY) to acquire Hypercom (HYC). The deal initially raised regulatory concerns, and last month, Verifone and Hypercom announced plans to spin off Hypercom’s US payment systems business. But apparently, that wasn’t enough. Here’s a snip from the DOJ release yesterday:
—The combination of VeriFone and Hypercom would likely lead to retailers paying higher prices for POS terminals, said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. —The proposed divestiture does not resolve the significant competitive concerns posed by the merger, and in some ways exacerbates them.
Both stocks dropped dramatically yesterday on the news — the WSJ has a summary of the situation here. The stocks have recovered slightly today.
But the whole situation made us wonder about something we caught in the amended 10-K that Hypercom filed two weeks ago regarding its CEO, Philippe Tartavull and his post-Hypercom plans. Will he actually be on the line for covering his own moving expenses to Malibu if the deal doesn’t go through? Or, will he simply be stuck in Phoenix? Here’s a snip from the filing that describes how the company is responsible for paying those Phoenix to Malibu moving expenses:
The Tartavull Employment Agreement also contains a change of control provision that states that, if Mr. Tartavull is terminated without cause or resigns for good reason within one year following a —change of control (as defined in the Tartavull Employment Agreement), he will be entitled to receive: reimbursement by us of moving expenses to relocate Mr. Tartavull’s primary residence from the greater Phoenix, Arizona, metropolitan area to Malibu, California, provided that he has previously relocated his primary residence from Malibu, California to the greater Phoenix, Arizona, metropolitan area, and, within a period of six months following his covered termination of employment, he relocates his primary residence from the greater Phoenix, Arizona, metropolitan area to Malibu, California and such relocation is not at the expense of a new employer.
Of course, considering that Tartavull stands to make at least $5 million on the transaction, assuming the deal does go through, looking for extra money to cover moving expenses seems a bit chintzy. Then again, he’s not the first top executive looking to go home again (and expecting the company to cover the costs) after a deal.
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