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Details on Industry Insight.
Skullcandy disclosed in one of its public filings that it has settled three workplace complaints regarding former CEO and current board member Rick Alden, the founder and visionary behind Skullcandy.
Skullcandy began the lengthy and complicated process to go public in January of this year. That process requires the company to make many detailed disclosures.
In the document under the heading “Legal Proceedings” it says the following:
“In March 2011, we received complaints from three employees about improper workplace conduct by Rick Alden, our former CEO. Our board of directors conducted an independent investigation regarding these complaints, discussed the facts and circumstances with the individuals involved, and ultimately determined to settle each complaint for an immaterial amount.
“We recently received additional correspondence from one of these individuals alleging that we had breached the settlement agreement and that the settlement agreement was invalid because the individual had made a mistake and had signed under duress.
“We do not believe these additional assertions have merit and we intend to defend against them vigorously. We also do not believe that the outcome of this claim or any related potential claims could have a material adverse effect on our results of operations or financial condition,” Skullcandy wrote in the document.
Skullcandy CEO Jeremy Andrus declined to comment, saying the company is still in a quiet period and he is unable to comment. I spoke with Rick before and after Skullcandy’s stock began trading this week and he said he was unable to comment because of the quiet period.
Rick resigned effective March 21. In the press release announcing his resignation, no reason was given for his decision to step down. It is unclear whether this issue had any impact on his resignation.
In connection with his resignation, Skullcandy entered into an agreement with Rick for him to continue to serve on the board of directors. As part of the agreement, Rick is entitled to receive a payment equal to two years of his base salary - the salary at the time of his resignation - paid in increments over two years.
In 2010, Rick’s base salary was $262,500.