Ousted Seagate chief executive Al Shugart will receive $750,000 per year during the next three years, keep his outstanding stock and stock options, and agree to work as a part-time consultant for the disk-drive maker, according to his separation agreement.
No detail was spared in hammering out the separation pact, the terms of which were disclosed today in a regulatory filing. For example, Seagate retains "all right, title, and interest" in paintings that were provided to the company by Shugart's wife, Rita. Her paintings were displayed at Seagate's offices, a company spokesman said.
Earlier this month, Seagate said that it expects to take a charge of between $8 million and $10 million during the current quarter because of the separation pact with Shugart, who holds options for more than 1 million shares of the company's stock. Seagate reiterated Shugart's separation agreement and stock holdings in a proxy statement filed today.
Seagate's stock closed at 25 today, down .125.
Last month's ouster of the 67-year-old Shugart, a cofounder of Seagate and a pioneer of the disk drive, shook up the high-tech industry. The company's directors said it was "time to make a change in leadership," and named president Stephen Luezo, a former investment banker, as Shugart's replacement. Earlier this month, Seagate said it expects to take a charge of between $8 million and $10 million during the current quarter because of the separation pact with Shugart, who holds options for more than 1 million shares of the company's stock. Seagate's stock closed at 25.125 today, down 1 point.
"As a condition to the severance benefits [Shugart] is to receive, [he] agrees to make himself available to perform consulting services reasonably requested of him during the three-year period beginning July 20, 1998, and ending July 19, 2001," the agreement states. "All assignments will come from the chief executive officer of the company."
The consultancy will total up to 30 hours for each of the company's fiscal quarters during the three-year term of the agreement.
Shugart agreed not to provide services to any business that is "at the time in competition" with Seagate unless he receives written permission from Luezo, the filing states. He also must agree not to "disparage, defame, or slander" the company or any of its officers for a four-and-a-half-year period ending in January 2002.
He agreed to vacate his office at Seagate last week, the filing said. A spokesman confirmed that Shugart no longer has an office at the company.