August 8, 2002 9:53 PM PDT
Sonicblue replaces CEO
In a press release, the company said that it has terminated the employment of Chief Executive Ken Potashner, effective immediately. L. Gregory Ballard, Sonicblue's executive vice president for marketing and product management, was named interim CEO. Ballard, the former CEO of graphics chipmaker 3dfx, joined Sonicblue in April 2002.
"Sonicblue is at an important turning point," Ballard said. "The company has transitioned from a graphics chip supplier business to an innovative consumer-electronics provider. In this next phase, it is imperative that we focus on managing the company to profitability."
Potashner, also the company's chairman, was not immediately available for comment.
A company spokeswoman told CNET News.com that the move was not related to accounting irregularities. "We believe the relative financial filings provided by company accurately reflect the current condition of the company," said Tracy Perry-Neumann.
Potashner's firing is the latest in a series of executive shuffles at the company. In April, Chief Operating Officer John Todd left the company. That same month, Chief Financial Officer David Sugishita departed after less than two months at the company.
Potashner's dismissal comes after an apparent disagreement between Potashner and other members of Sonicblue's board over loans the company made to its executives and board members. The loans were made in conjunction with the company's RioPort spinoff.
In December 1999, the company made loans of more than $250,000 to Potashner and more than $75,000 to another executive to allow them to purchase shares of the RioPort subsidiary. These interest-bearing loans come due this December.
Separately, in June 2000, the company lent three of its current directors and one of its former directors more than $175,000 to buy RioPort shares, with those loans coming due in June 2003. The loans were disclosed in Securities and Exchange Commission filings that included the company's most recent proxy statement.
The board has been evaluating how best to address the loans, Perry-Neumann said, adding that any dispute over the loans was not the cause of Potashner's termination.
"He was not terminated because of this issue that they were discussing," Perry-Neumann said later Thursday.
Potashner has led Sonicblue since October 1998, when the company was known as S3, overseeing its transition from graphics chipmaker to a company known for the Rio MP3 players and ReplayTV digital video recorders.
Sonicblue changed its name in November 2000, when it finished splitting off its graphics chip unit.