Seven Directors Of Spectrum Quit As Company Shrinks Board
NEW YORK (AP) _ Spectrum Information Technologies Inc. said Monday that seven of its 11 board directors are quitting in a shift to outside control of the troubled wireless data communications company.
The board shakeup comes as the once-obscure company attempts to distance itself from a rash of negative publicity, including the departure last month of its chairman, John Sculley, the former chairman of Apple Computer Inc.
Spectrum plans to shrink the size of its board to seven members by filling just three of the vacancies, all with directors who aren’t company employees.
The company said the board members voluntarily resigned, keeping in mind the urging by shareholders for the small company to break ties with its past.
″I applaud these changes,″ said Heiko Thieme, chairman of the American Heritage Fund, the company’s largest stockholder. ″When people have problems, you can’t let the company suffer.″
After the announcement, Spectrum stock gained 12 1/2 cents to $2.81 on the Nasdaq stock market.
Spectrum, which claims to hold valuable patents in cellular modem communications, was relatively unknown until it recruited Sculley as its chairman last fall.
But Sculley later quit in a stormy split, alleging that he wasn’t fully informed of company problems, including a Securities and Exchange Commission investigation.
Among the board departures Monday are four Spectrum executives, including Peter T. Caserta, who took an indefinite leave of absence as company president last week to clear his name after the arrests of five associates. Outside directors comprise the other three resignations.
Authorities had charged the five men with running an investment fraud scheme. Those charged included a current Spectrum employee along with the owner of a company that, until recently, was owned by Caserta. Neither Caserta nor Sculley was charged.
″The question is, ‘Can they break all their ties to the former management?’ I can’t imagine investors being very comfortable with anything less than that,″ said Barry Goodstadt, a wireless industry consultant at EDS Management Consulting Services in Washington.
An outside spokesman for the Manhasset, N.Y.-based company said the realignment decision was made by Spectrum chairman and chief executive Edward E. Maskaly with the approval of all the board members.
″Maskaly feels it will give additional credibilty to the company and there is a need for strong independent governance at the board level,″ said the spokesman, Bill Campbell.
In addition to Caserta, the Spectrum executives leaving the board are Andrew Migliorini, head of Spectrum’s technology unit; James L. Paterek, head of contract engineering; and A. Werner Pleus, head of investor relations.
The company said the three departing outside directors are Michael D. Madden, who is head of global business development at Kidder, Peabody & Co.; Lt. Gen. Thomas P. Stafford, who runs his own consulting company; and Joseph H. Allen, a retired business executive.
Campbell said the three outside directors all resigned for personal and business reasons. But Thieme said that ″they resigned because they were people Peter (Caserta) had put on the board.″