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Msg  118209 of 180997  at  4/12/2013 10:12:37 PM  by


JCQ and 14D


There has been much speculation (uninformed) about the circumstances of JCQ’s departure but now we have the 14A to examine. Upon a quick lookie through, it does tell a story. First this:

<<In November 2012, the Board established a Transition Planning Committee to assist the Board with respect to the planning for, and effecting the orderly transition to, our next chief executive officer. Mr. Storey was selected as our new Chief Executive Officer effective April 11, 2013. The Board believes that the creation of a Transition Planning Committee provided additional structure to its ongoing and regular chief executive officer succession planning activities. The Board determined that the Transition Planning Committee will have a limited duration, existing only as long as necessary to transition the chief executive officer role, and will not be a permanent, standing Board committee. >>

So, they basically saw it was time to make a change and it seems it will be disbanded after the change.

<<Effective April 11, 2013, Mr. Storey was named our President and Chief Executive Officer, replacing Mr. Crowe as Chief Executive Officer. In addition, Mr. Crowe will not be nominated for election to the Board. As a result of those actions, Mr. Crowe's employment with the company will terminate, and he will be entitled to the benefits under his employment agreement that are described in more detail in the fifth paragraph of this section.>>

First thing, it would be typical for a person (JCQ) to transition to the sinecure of Chairman and continued benefits, but no, he’s completely gone. But let’s see what paragraph 5 says:

<<Upon termination of Mr. Crowe's employment by us without "cause" or by Mr. Crowe with "good reason," Mr. Crowe will be entitled to any awarded and unpaid annual bonus in respect of any completed fiscal year, cash severance equal to his base salary and annual bonuses (based on the annual target bonus) for the remaining employment term (that is, until December 31, 2014), and two years of continued access to our health plans. In addition, upon termination of employment by us without "cause" or by Mr. Crowe with "good reason," Mr. Crowe will become immediately vested in all of his then-unvested equity-based awards that were awarded pursuant to the employment agreement. Mr. Crowe's vested RSUs will settle and be paid immediately and his vested OSOs will settle on December 31, 2014.>>

There is no other credible interpretation of those words in that context other than JCQ either had “good reason” to terminate his contract (reduction in responsibility typically) and get this sort of treatment or that he was effectively terminated without contractual “cause” ("cause" usually in CEO contracts means getting caught in some egregious act of moral turpitude which we can assume was not the case). The short time frame in which the announcement was made and the replacement was named strongly suggests a pre-planned program—certainly not enough time passed for a credible search. So the committee that met once in 2012 made a decision to pull the trigger, spent some time to figure out who was right and perhaps negotiating with JCQ for a “gentle removal”, then actually pulled the trigger. The fact that JCQ  is also leaving the board is another indicator of a strong desire for a change of direction.

Since SEC documents can’t usually fib sometimes they are instructive.

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Msg # Subject Author Recs Date Posted
118217 Re: JCQ and 14D thinkith 1 4/13/2013 11:37:17 AM
118228 Re: JCQ and 14D wcrimi 8 4/14/2013 9:37:42 AM
118236 Re: JCQ and 14D loonginvestor 0 4/15/2013 12:45:50 PM

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