Adaptec has suddenly fired John Noellert, its worldwide sales boss, and Adaptec's CEO has been voted off the board.
Adaptec is the server I/O adapter company that has been struggling to make profits and lost a boardroom and investor battle two weeks ago when activist investor Steel Partners gained control of the board in a shareholder proxy battle.
Since then, Adaptec has only been communicating significant company information via SEC filings. What we have learned is that the number of seats on the board has been reduced from nine, the number before the proxy battle, to seven, as Steel Partners wanted.
Adaptec's CEO Sundi Sundaresh has lost his board seat as has Robert Loarie, a board member not in favour of Steel Partners. Steel Partners president Jack Kennedy has been reinstated as board chairman.
He also has become the chair of Adaptec's Governance and Nominating committee, replacing Doug Van Houweling who was not a Steel Partners supporter. Lawrence Ruisi, who supports Steel Partners, has joined the Governance and Nominating Committee, replacing Joe Kennedy, the now replaced Adaptec board chairman. This committee nominates people to sit on the board.
These were the first changes revealed after Steel Partners gained control of the board.
The big executive change everyone expects is that the board will dismiss Sundaresh. That has not happened. Instead an SEC filing tells us that on 17 November John Noellert, the VP of worldwide sales, was "informed...that his position will be terminated, effective November 20, 2009".
He has been offered a lump sum equivalent to nine months plus one week of his target annual earnings, reimbursement of COBRA benefit payments, and (surely a box-ticking and possibly insulting) "outplacement services valued up to $5,000".
Adaptec also "informed John M Westfield, the Company's Principal Accounting Officer for the purpose of filing the Company's reports with the SEC, that his position will be terminated, effective December 4, 2009".
The SEC filing mentioned a "restructuring plan to better align its operating costs with the continued decline in its net revenues. The Company expects to incur a restructuring charge in the range of $0.9m and $1.1m associated with this plan in the third quarter of fiscal 2010, of which we expect $0.7m and $0.9m will be related to severance and related benefits and $0.2m will be related to exiting certain facilities."
Most of the severance cash could be due to Noellert.
The next day CFO Mary Dotz sold 31,092 Adaptec shares at a price of about $3.28, suggesting she made about $102,000 less sales costs. This sale may be not connected to what is going on inside Adaptec at all.
So Adaptec now has no one running its sales operation, and the ejector seat apparently primed and ready to be fired under its CEO. I daresay Adaptec's customers, channel partners, and no doubt the vast majority of its staff would love to know where Adaptec is headed. ®