SAN MATEO, Calif. Avanti Corp. chairman Gerald Hsu has been voted a golden parachute worth over $20 million by the company's board of directors.
Employment contracts worth a total of $34 million have been arranged for Hsu and 17 other Avanti executives, including Hsu's son John, board member Moriyuki Chimura, and former flight attendant turned Avanti executive Noriko Ando, according to a 10-Q statement filed with the Securities and Exchange Commission Nov. 14.
The payments would be made should the individuals be dismissed from Avanti. John Hsu and Ando would receive about $1 million each if they are dismissed, according to the filing.
Avanti's board approved chairman Hsu's employment contract earlier this year. The board also agreed to extend to 2008 the company's contract with Maingate Electronics Inc., its distributor for the Japanese market, according to the 10-Q. Maingate is 50 percent owned by Hsu, and a select group of Avanti executives owns another 28 percent of the distributor through an investment called the Eigen Fund. If Maingate is dropped as a distributor by Avanti, then Avanti must pay Maingate roughly $117 million, according to the 10-Q.
Avanti's board approved a similar contract extension with Davantech Co., Avanti's distributor in Korea, according to the 10-Q. A clause in the contract indicates that Avanti will pay $22 million to Davantech if the distributor becomes insolvent or if Avanti severs its relationship with Davantech, in which chairman Hsu holds an 8 percent ownership.
Hsu had been president, chief executive officer and chairman of Avanti, but Paul Lo has been running the company since July when he became president and chief operating officer after Hsu suffered a heart attack. Hsu remains chairman.
Hsu's health troubles were revealed earlier this year shortly after he and other Avanti executives pleaded no contest to charges of stealing source code from Cadence Design Systems Inc. EE Times' coverage of the Avanti case is available online.