So they fire Jerry and then hire him back at $750/hr on a contract basis?
No doubt he has something to add, but if he has done something against company policy / or which is illegal, then it would seem risky to me to hire him to do anything. Just the perception issues alone create a big concern.
They must be really concerned about the pipeline or the company would never do this. My guess is that the sales pipeline is in jeopardy.
The company is going to have to disclose the basis for the termination, and when it does there is bound to be a rectal inspection. Keeping the old guard around is very stupid unless you plan to not have to explain why.
Bottom line: Jerry and Stu said that they would never sell the company, but now they have forced the company to be sold by their actions. We are finally heading for an acquisition - Jerry helps goose the sales to maximize the multiple and before all the dirt comes out the company is sold to.. ?? (IBM, KPMG, ??) Its the only scenario that makes sense, otherwise Jerry's involvement is too much of a liability. The f-ed up thing about this is that Jerry & Stu's stock has the potential to go up so that he/they get rewarded for bad behavior. (Jerry's just slick enough to plan this as an exit strategy). Lawsuit either way.. makes no sense..
First, for hiring Jerry as a contractor, they simply can't let him walk away. There is a lot he does for the firm, I'm sure, so keeping him oin retainer is a smart thing.
I'm just guessing but maybe he took this as a way to get out? I canunderstand firing the CFO, but the stock option pricing back in 1997 had to be completely greek to both Stu/Jerry. Heck, the ESPP allowed for the lower of the 2 prices from the first and last day, and then a 15% discount on top of that. So I can't see why they would blink at back pricing stock options for execs.
I'm just glad this is a non-cash expense, to affect earnings pre 2001. I'm guessing the market doesn't care, since the stock has remained flat. I would hope Alan has a nice plan in mind for the future (Reinvention?) and the investors jump back on board.