Business NEWS

Michael Fister the acquisition machine resigns, a Cadence cry

By Amarendra Bhushan for CEOWORLD Magazine Updated:October 15, 2008

Software company Cadence Design Systems Inc. slid in pre-market trading, after the company’s president and Chief Executive Michael Fister resigned. Wheer as company said it created an interim office led by three senior executives to run Cadence until a successor is named.

The stock was down 30 cents around 9:15 am ET, slipping to $5.00. If pre-market losses hold, the stock will open at its lowest level since Monday.

Cadence Design Systems announced the resignation of Michael Fister, its President, Chief Executive Officer and a director, by mutual agreement. Cadence also announced additional senior management changes.

The company announced the formation of an Interim Office of the Chief Executive to oversee the day-to-day running of its operations, effective immediately. The company noted that it has also formed a search committee to identify permanent President and Chief Executive Officer.

The company said it currently expects third quarter results to be in line with the business outlook previously announced on July 23, 2008. Total revenue is estimated to be in the range of $235 million to $245 million. Third quarter net loss per share is estimated to be in the range of $0.27 to $0.25 on GAAP basis and in the range of $0.11 to $0.09 on non-GAAP basis. In August, Cadence terminated a hostile takeover bid for rival Mentor Graphics Corp. Cadence was forced to withdraw its offer because of its own deteriorating condition and the difficulty in obtaining attractive terms from lenders to finance the proposed $1.6 billion deal.

Fister, a former high-ranking Intel Corp. executive, orchestrated a number of acquisitions since taking over Cadence in 2004. In June, the company launched its bid to buy Mentor Graphics in response to a slowing economy and stiffer competition in the semiconductor-design market. The deal was seen as a way to cut costs and boost market share.

Cadence Design Systems, Inc. (NASDAQ: CDNS) today announced that its Board of Directors has formed an Interim Office of the Chief Executive to oversee the day-to-day running of the company’s operations, effective immediately. The Interim Office of the Chief Executive includes: John B. Shoven, Ph.D., Chairman of the Board of Directors of Cadence, who has been appointed to the position of Interim Executive Chairman, Lip-Bu Tan, a director of Cadence since 2004, who has been appointed Interim Vice Chairman of Cadence’s Board, and Kevin S. Palatnik, Senior Vice President and Chief Financial Officer. Charlie Huang, Senior Vice President – Business Development, has been named Chief of Staff of the Interim Office of the Chief Executive.

The formation of the Interim Office of the Chief Executive followed Michael Fister’s resignation as President, Chief Executive Officer and a director of the company, by mutual agreement between Mr. Fister and the Board.

The Board has formed a search committee, co-chaired by Dr. Shoven and Mr. Tan, to identify qualified candidates to lead the company on a permanent basis.

“Our Board of Directors believes that the formation of the Interim Office of the Chief Executive is the best structure to lead Cadence during this time of transition,” said Dr. John Shoven, Chairman of the Board. “Each of us is looking forward to working closely, together with the entire Cadence organization, to better position the company for future success. We remain focused on leveraging the company’s many strengths while continuing to fulfill the needs of our customers with compelling products and solutions. We believe strongly that Cadence has a solid foundation in place that positions the company for strong performance as economic and business trends improve.”

Dr. Shoven continued, “On behalf of the Board, I would like to thank Mike Fister for his leadership, hard work and dedication to Cadence. Since he joined the company in 2004, he has made a number of important contributions to the company and we wish him the best in his future endeavors.”

The company also announced that Kevin Bushby has resigned as Executive Vice President – Worldwide Field Operations, effective immediately. Thomas Cooley, Corporate Vice President – Field Marketing, will succeed Mr. Bushby, leading Worldwide Field Operations. Mr. Cooley’s proven leadership in the field, combined with his deep knowledge of Cadence’s products and customers acquired over 13 years in the Cadence sales organization, makes him an ideal leader for the company’s field operations.

The company also announced the resignations of James S. Miller, Jr., Executive Vice President – Products and Technologies Organization, William Porter, Executive Vice President and Chief Administrative Officer, and R.L. Smith McKeithen, Executive Vice President – Corporate Affairs, effective immediately. The company does not intend to fill the positions held by Mr. Miller, Mr. Porter or Mr. McKeithen.

“The Board of Directors would like to express its sincere appreciation to Kevin Bushby, Smith McKeithen, Jim Miller and Bill Porter for their years of service, numerous contributions and deep commitment to Cadence. Cadence has benefited from their collective experience and leadership. We wish them all continued success in the years ahead,” continued Dr. Shoven.

About John Shoven
Dr. John B. Shoven, 61, has served as Cadence’s Chairman of the Board of Directors since July 2005, and has been a member of the Board since 1992. He is currently the Charles R. Schwab Professor of Economics at Stanford University, where he has taught since 1973. Dr. Shoven has served as director of the Stanford Institute for Economics Policy Research since November 1999 and served in that capacity from 1989 to 1993. Dr. Shoven served as Chairman of the Economics Department at Stanford University from 1986 to 1989 and as Dean of the School of Humanities and Sciences from 1993 to 1998. Dr. Shoven also serves as a director of Exponent, Inc., and a member of the Mountain View Board of American Century Funds. Dr. Shoven is also a member of the American Academy of Arts and Sciences.

About Lip-Bu Tan
Lip-Bu Tan, 48, has been a member of Cadence’s Board of Directors since 2004, and serves as a member of the Finance and Technology Committees of the Board. He is the founder and Chairman of Walden International, an international venture capital firm founded in 1987. Mr. Tan also serves as a director of Flextronics International Ltd., Semiconductor Manufacturing International Corporation and SINA Corporation. Mr. Tan received an M.S. in nuclear engineering from the Massachusetts Institute of Technology, an MBA from the University of San Francisco, and a B.S. from Nanyang University in Singapore.

About Kevin Palatnik
Kevin S. Palatnik, 50, serves as Cadence Senior Vice President and Chief Financial Office. Prior to his appointment as CFO, Palatnik served as Senior Vice President and Corporate Controller. Before joining Cadence in 1994, Palatnik spent 13 years with IBM Corporation, where he held engineering and senior financial positions including Controller of one of IBM’s largest manufacturing sites. Palatnik received his Bachelor of Science degree in Industrial Engineering and Operations Research as well as an M.B.A. from Syracuse University.

Like this article! ‹ A must read book The Game-Changer by A. G. Lafley and Ram Charan Recommended CEO’S and Entrepreneurs resources for Corporate Governance part- 2 ›
Share this Post: Get It Delivered To Your Inbox