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August 18, 2006

Golden parachutes for Loudeye execs

Posted by Kim Peterson at 1:19 PM

In a regulatory filing today, Loudeye said that Chief Executive Michael Brochu will get a $325,000 severance payment if his employment is terminated following the company's acquisition by Nokia.

Chief Financial Officer Chris Pollak will get $100,000 (or $150,000 if he leaves after Jan. 1, 2007). Edward Averdieck, the managing director for Europe, has signed on to stay with Nokia at a $267,000 annual salary and as much as $668,000 in additional bonuses through 2009.

There is no mention of Brochu or Pollak staying on at Nokia after the merger.

Also in the filing, Loudeye said it had talked with 26 companies in 2005 about some sort of partnership or merger. Discussions moved into the serious stage with three companies (including Nokia), though one would drop out in January. Things got desperate that month, because Loudeye wasn't talking to anyone that executives thought would save the company before its cash ran out, the filing said.

Talks advanced with Nokia at a Valentine's Day meeting between both companies in Barcelona. Nokia made it clear it wanted Loudeye's European operations, but made no formal proposals. Finally, on June 22, Loudeye received a written letter from Nokia with a buyout offer of $4.50 a share. Loudeye countered with a $5 a share offer, but the parties settled on $4.50.

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