It was just a one-page filing at the Securities and Exchange Commission, a routine document that nobody seemed to pay much attention to.
But Patrick D. Walravens, a software industry analyst for a small California investment firm, read between the lines of the December disclosure that Vastera Inc. of Dulles had given new contracts to its top executives.
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Vastera "looks to be in play," proclaimed Walravens, upgrading his rating on the long-depressed stock of Vastera, a company that automates the complex paperwork involved in importing and exporting goods.
"Investors' suspicions regarding Vastera's status as a takeover target seemed to be confirmed" by the SEC filing, he said in a report to clients of JMP Securities LLP of San Francisco. In the SEC filing, Vastera disclosed it had granted unusual incentives to five top executives.
Two got new severance agreements, which entitled them to collect about six times as much as they had previously been eligible for -- $950,000 for chief executive Timothy A. Davenport and $750,000 for chief financial officer Maria Henry. Three other executives were promised "retention bonuses," ranging from $75,000 to $175,000, if they stayed with the company through Sept. 1, 2005.
All Vastera said was that the money was an incentive for the executives "to remain employed by the company for a period of time sufficient to enable the company to execute upon its long-range business plans."
Walravens's suspicion that the long-range plan was to sell the company was confirmed Jan. 7 when Vastera said it was being sold to J.P. Morgan Chase Bank for $3 a share.
But Walravens probably wasn't the first to conclude that the sale of Vastera was in the works. Some investors may have figured it out at least a week before Vastera notified the SEC of the executive deals on Dec. 3.
During that week, Vastera's stock jumped 25 percent on trading volume that was two to three times the number of shares usually traded.
The stock languished around $1.80 a share during the fall, but climbed to $2.25 in the days before the company gave the first hint of a sale. After Walravens decoded the SEC filing, the stock continued to climb. Since the sale to J.P. Morgan Chase was announced two weeks ago, the stock has settled in a few cents below the $3 a share buyout price.