Troubled Oak Industries is trying to recover more than $1 million in loans and “improperly reimbursed” non-business expenses from former Chairman Everitt A. Carter, who resigned last November.
In addition, Oak officials have canceled Carter’s employment contract, which would have paid him $250,000 per year in cash compensation and more than $125,000 in benefits until 1989.
The company has demanded full payment of Carter’s $577,521 stock-option loan, an additional $500,000 for non-business expenses and all payments made to Carter since his resignation last Nov. 30, according to Oak’s proxy statement, mailed to shareholders this week.
Acting Chairman and Chief Executive E. L. McNeely refused to elaborate on the termination of Carter’s contract. “There may be (further) negotiations or litigation,” he said. Oak is now searching “without success” for a permanent chairman, chief executive and president, McNeely said.
The company, which reported losses of $149.3 million on sales of $333.2 million in 1984, is cutting costs “in a hundred different ways,” McNeely said. The organization has been streamlined, he said, with its labor force reduced to fewer than 8,000 workers, compared to about 13,000 one year ago.
In the last two months, Oak’s two remaining high-ranking executives have stepped down: President Raymond W. Peirce announced his resignation in March, and Chief Financial Officer Frank A. Astrologes quit earlier this month.
The Securities and Exchange Commission, which is investigating Oak’s financial disclosures and allegations of improper transactions between Carter and his family and friends, had previously asked that Peirce, Astrologes and two other senior managers resign. Oak officials have insisted that Peirce’s and Astrologes’ resignations had “nothing to do” with the SEC’s demands.