No Naperville for Kennedy

Ed Kennedy, president of North America for Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), has resigned and withdrawn his name from Tellabs' CEO search.

The reason given? He doesn't want to move to Naperville, Ill. Can you believe it? [Ed. note: Can you blame him?]

The announcement comes as a bit of a surprise, as Kennedy was considered a favorite for the Tellabs CEO job -- and of course he's also one of Light Reading's Top Ten Movers and Shakers in Telecom (um, we might have to reconsider that now). Kennedy came to Tellabs two years ago through its acquisition of Ocular Networks, where he was founder and CEO. At Tellabs he was working on integrating the Ocular products and positioning the company's next-generation data networking and metro products (see Lehman Likes Tellabs/Vivace, Tellabs Regroups, Promotes Kennedy, and Tellabs Sees Ocular Upside).

"We are slightly disappointed by this development as Ed was one of the top candidates for the CEO role," writes Steve Levy, an analyst with Lehman Brothers, in a research note issued this morning. "Additionally Ed has brought many fresh ideas to Tellabs since joining in 2001 through the Ocular acquisition."

Both Kennedy and the company cited geographical issues for the resignation. Kennedy and his family are based in the Washington, D.C., area, which is where Ocular was based, and Tellabs headquarters are in Naperville, which is about 20 miles outside of Chicago. He had been commuting in the two years since the Tellabs acquisition.

"After long and careful consideration, it's best for my family that we remain in the Washington, D.C., area," Kennedy said in a prepared statement.

At least one person familiar with Kennedy said the reason for his departure made sense.

"There's really not much there [in Naperville] except for Tellabs," says Doug Green, principal of the Bradam Group who worked for Kennedy as vice president of marketing at Ocular. "I'm sure it came down to him not wanting to move his family."

Michael Birck, Tellabs' chairman and CEO, will assume Kennedy's role in the meantime, while the company continues its CEO search (see Tellabs CEO to Retire... Again). Birck tells Light Reading that the field has been narrowed to six candidates and will likely be concluded in the next few months.

"We have some excellent candidates, and Ed was one of them," says Birck. "I think he just was concerned about moving his young family, and then working a lot. He looks a lot more relaxed now [that the decision has been made]."

It's also possible that the timing of Kennedy's decision was tied to contract talks. Green noted that this week is the two-year anniversary of Tellabs' acquisition of Ocular, and it's possible that he was working under a contract that was expiring anyway.

Kennedy was not available for comment beyond what Tellabs published in its press statement. — R. Scott Raynovich, US Editor, Light Reading

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