Ex-Danka CEO seeks arbitration judgment
By JEFF HARRINGTON
© St. Petersburg Times, published February 23, 2001
Larry Switzer accused Danka Business Systems of breach of contract even as he exited the chief executive offices with a seven-digit severance package.
Switzer, who abruptly left the troubled St. Petersburg copier distributor in October, filed a complaint against the company Dec. 11 with the American Arbitration Association, Danka disclosed in a filing with the Securities and Exchange Commission this week.
The filing came after Switzer was paid $800,000 in severance plus another $800,000 to be paid over 12 months. He also received 578,313 American depository shares as part of the severance agreement. Each depository share is equal to four ordinary shares in the company. Danka currently trades for less than $1 a share.
The SEC documents do not specify how much Switzer is seeking in damages through arbitration or detail his allegations. The documents say only that he alleges a breach of his employment contract, breach of amendments to his employment contract and breach of an agreement that Danka would provide split-dollar insurance.
A date has not been set for the hearing, which will be held inSt. Petersburg.
Danka spokesman Sanjay Sood would not discuss details of Switzer's allegations, except to indicate that the former executive was not forced to leave.
"It was just a mutual decision on his part as well as the board to make a change at that point," Sood said Thursday. "It wasn't a contentious thing."
Danka named board member Michael Gifford interim chief executive after Switzer's departure. Gifford was paid at a rate of $5,000 a day for his four-month stint as acting CEO and will receive $200,000 a year in his current role as chairman.
P. Lang Lowrey, who takes over as chief executive this month, will receive an annual salary of $500,000 plus a $250,000 signing bonus and other bonuses based on performance that could more than double his compensation.
He also is receiving up to $8,000 a month for temporary living and travel expenses for up to a year.
This week, Lowrey revealed a restructuring plan to help Danka refinance $750-million in short- and long-term debt.
- Contact Jeff Harrington at firstname.lastname@example.org or (813) 226-3407.
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