April 28, 2006 3:05 PM PDT

Gateway separates from two execs

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Legal costs lead to Gateway loss

April 27, 2006

Gateway has entered into separation agreements with two former senior vice presidents that ran struggling businesses at the company, it announced Friday in a filing with the Securities and Exchange Commission. Scott Bauhofer and Bruce Smith left the company as of April 24 and were given cash payments and outplacement services in exchange for agreeing not to pursue claims against Gateway.

Bauhofer ran the Box and Beyond division, which was a peripherals business that former CEO Wayne Inouye broke out from Gateway's Direct business. Smith was responsible for Gateway's Professional business. Both units have posted disappointing results for consecutive quarters, and interim CEO Rick Snyder has appointed new executives to run those groups.

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