Pat,
LU sells 980's to TYC if I recall correctly, but I don't remember LU selling a division to them.
In any case, these guys are rich!!!!
JDS pays laser execs $215 million in cash
By Bloomberg News
September 7, 2000, 3:30 p.m. PT
WASHINGTON--JDS Uniphase agreed to pay $215 million in cash to five executives of SDL upon completing its acquisition of the laser manufacturer.
Donald Scifres and Gregory Dougherty, the chairman and chief operating officer respectively of SDL, will each receive $75 million, according to merger documents filed with the Securities and Exchange Commission (SEC). JDS, the largest manufacturer of fiber-optic components, is acquiring SDL for more than $42 billion in stock. JDS sees the purchase as an opportunity to add to and improve its product line and make it more competitive with rivals Lucent Technologies and Corning.
The size of the executive payments are unusual, according to one compensation expert, given that the SDL officers will continue to work for JDS once the acquisition is completed. Scott Spector, a compensation consultant to high-tech companies in California, suggested that the money helped JDS win the right to acquire SDL.
"You are buying people off, that is what you are doing," said Spector, who works in the Palo Alto, Calif., office of the law firm Fenwick & West. "At some point in time, people say this is too much money to pay to do a deal."
Spector said he had no specific knowledge of JDS's July offer to buy SDL, whose lasers strengthen signals on telecommunications networks. The $215 million in payments equal about 0.5 percent of the total that JDS is paying for SDL.
Others vying
Several other companies were vying to acquire SDL at the same time that JDS was considering a bid, according to the SEC filing. That could have given SDL officers the leverage to command top dollar, both for the company and themselves.
In addition to the money reserved for Scifres and Dougherty, JDS will pay $40 million in cash to David Welch, SDL's chief technology officer. Michael Foster, the chief financial officer of SDL, will get $20 million, and Della Bynum, vice president of human resources, will get $5 million.
Michael Foster, SDL's chief financial officer, said that the five people who will receive the payments all had change of control agreements. JDS is paying in part for them to forgo stock option benefits they would have received under these agreements when the acquisition was completed.
"The idea of the payments came up because of the change of control agreements," Foster said. "It was very important for our suitors to maintain the management of the company," he added.
The payments include signing bonuses for the five executives, according to the SEC filing. They are also being paid in return for agreeing not to compete with the combined company and to forgo the immediate vesting of their SDL stock options, which would have otherwise become exercisable in tandem with a change of control.
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