Storage Technology Corp. CEO Patrick
Martin will make about $43 million in severance, option
profits and stock proceeds when the sale of his company to Sun
Microsystems closes later this year.
For Martin, who joined the company in the summer of 2000
and has seen the value of its shares more than triple since,
the cash-out brings his total take at StorageTek to more than
$78 million in cash, stock sales and option profits.
The Rocky
Mountain News estimated the amounts based on a review of
the company's Securities and Exchange Commission filings for
the past five years.
Martin told the News he wasn't aware of what he'll
make in the deal.
"I've not read my employment agreement since I've signed
it," he said, adding that he felt it was a "pretty vanilla"
agreement for a company the size of StorageTek.
A company spokesman declined to comment on the severance.
As part of his contract, Martin gets $6 million in cash:
three times his annual salary of $1 million and three times
his target bonus of $1 million. He also gets a severance
payment of $5.75 million from the company's executive
incentive stock plan.
Other StorageTek executives are eligible for severance of
two times their salary and bonus, which will lead to packages
of $2 million to $2.6 million for each of the company's next
four highest-paid execs.
Martin owns about 434,000 shares of StorageTek stock,
nearly all of it given to him by the company at no cost over
the past five years as part of "restricted stock" awards. At
the merger price of $37 per share, Martin will gross $16
million from the shares.
The CEO also has more than 1.1 million unexercised stock
options worth another $15 million at the $37 merger price.
The lion's share of Martin's StorageTek compensation came
from his initial option grant of 1 million shares when he
joined the company in 2000. Those options have an exercise
price of $12.06.
Through early 2005, Martin still was working his way
through that grant, accumulating almost $12.5 million in
profits in the past two years.
In the subsequent five years, StorageTek gave Martin nearly
1 million more options, none of which has been used - and all
of which will now be profitable.
The company also has given Martin nearly 700,000 shares of
stock over the past five years, most in 2000 when he joined
and in 2003 when he was awarded 250,000 shares and a special
$2 million cash bonus for extending his employment contract.
Martin already has sold some of those shares on the open
market.
Before he joined StorageTek, Martin was a senior vice
president at Xerox, where he served as president of its North
American Solutions Group. He served in other executive roles
at Xerox from 1996 to 1999.
StorageTek severance at a
glance
• Patrick Martin Chairman/CEO ......$11.75 million
• Angel Garcia Corporate VP ......$2.54 million
• Roy Perry Corporate VP ......$2.20 million
• Robert Kocol Corporate VP/CFO ......$2.53 million
• Roger Gaston Corporate VP ......$2.09 millionSeverance Based On Two Times 2004 Salary
And Estimated Target Bonus, A Portion Of 2005 Bonus For Some
Executives And Payout From Stock Plan Source ...
David Milstead is finance editor of the Rocky Mountain
News. He can be reached at 303-892-2648 or via e-mail at milstead@RockyMountainNews.com.
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