CenturyLink (CTL) got some attention last week for an 8-K it filed, reporting that shareholders of CenturyLink and Qwest Communications International, Inc. (Q) overwhelmingly approved a merger proposal. But the company also filed a second 8-K, which received no real attention, even though it involves more than $10.2 million of shareholders’ money.

That filing disclosed that CenturyLink (formerly known as CenturyTel, Inc. until May, 2010) gave equity and deferred cash grants to its CEO, CFO, and other executive officers in order to:

“…provide the Named Executive Officers with adequate incentives to remain employed with us through the completion of the merger contemplated under the Merger Agreement… and for the critical period thereafter during which we will begin to integrate Qwest into our operations.”

The big winner is CEO Glen F. Post, III, whose retention award of 127,317 RSUs is worth nearly $4.6 million.

But other NEOs got awards, too; 25 percent of their grants are structured as deferred cash awards, and the other 75 percent as RSUs. Looking at the total awards:

• Karen Puckett, EVP/COO, received an award worth more than $1.84 million;
• R. Stewart Ewing, Jr., CFO, got over $1.66 million for his award;
• David D. Cole, SVP – Operations Support, received an award of nearly $1.08 million; and
• Stacey W. Goff, EVP/General Counsel and Secretary, received more than $1.05 million.

Half of the cash awards will be paid on the merger closing date, and the other half will be paid a year later (assuming the executive still works for the company). Unless the closing date is extended for a permitted reason, the merger must occur on or before April 21, 2011, or the cash portion of the award will be forfeited. The RSUs, meanwhile, will vest in three equal shares on the first three anniversaries of the merger closing date.  (And don’t forget that millions more will go to Qwest’s departing executives.)

At this point, the Justice Department and seven state regulatory utility commissions have signed off on the merger, and the companies expect that the deal will be completed in the first half of 2011.

Mergers are – no doubt – a lot of work, and we’re predicting that the executives will get raises and bonuses next year which are justified (on paper, at least) with the stated reason that they should be compensated for all that extra work.  But in a case like this – where we know that all of the top managers are coming from CenturyLink (see this post from April and slide #14 from this merger-announcement presentation) – it’s an open question whether these retention awards are really necessary.

Image source: Manchester-Monkey via flickr

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This morning, at a few seconds after 7 a.m., 3Par (PAR) filed its 29th document since the beginning of what we’ll cheekily call the post-nup period when the deal between 3Par and Dell (DELL) was announced publicly. This morning’s entry was a Schedule 14D-9/A and was a very slight 11 pages. On Friday, 3Par, Dell and Hewlett Packard (HPC), which has been upping the ante with its higher bids, filed a combined total of 455 pages.

And that’s just the latest salvo. The total number of pages filed by 3Par this month, or by 3Par’s suitors about it, comes to around 1,500  pages, according to figures from Morningstar Document Research (neé 10-K Wizard, and, like footnoted, a unit of Morningstar Inc.). More than 900 pages of it was filed over the last week.

That’s a lot of ink. Plenty of it is plain old boilerplate, and there’s a lot of repetition. Filing an amended document may mean re-filing an exhibit with few or no changes, for example. But we sure hope 3Par is scouring every line, and no doubt Dell and HP are scrutinizing one another’s proposals carefully as well. After all, what’s the potential cost of missing a few key sentences, or a rewritten definition?

But the companies are big boys and can take care of themselves. We’re more concerned about investors. After all, the signals can be subtle, as we discovered in our own reading of 3Par’s filings from before the M&A battle really heated up. In a FootnotedPro report we put out on Friday (subscription required), we found signs of 3Par’s house-cleaning ahead of the initial deal announcement.

With the rapid-fire pace of the bidding war, how are ordinary investors supposed to keep up? Let’s assume an investor can skim a page of dense legalese, with financial tables and definitions of terms, in about a minute. That’s pretty speedy, in our experience. Even so, it would take more than seven hours without a break to read through Friday’s filings alone — and 15 hours to read everything filed last week.

We get to spend our days ploughing through the SEC’s archives. Most investors don’t have that luxury. How are they supposed to keep up?

The alternative, of course, is that this whole M&A disclosure business is just for show, that no one really expects investors to read it all, much less absorb it, and that the participants are really working from simpler and less-stultifying documents. In which case why bother, beyond keeping securities lawyers employed, and the plaintiffs’ attorneys who trail after them?

We’re not sure exactly what the solution is, but once upon a time the SEC launched a “plain English” initiative. Maybe it’s time for companies, and their lawyers, to reacquaint themselves with it.

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Tuck into that buttery pound cake and those Jimmy Dean sausages while you can. Because in addition to rising sea levels and disappearing species, global climate change — or at the very least, governmental efforts to mitigate it — could threaten the goodies from Sara Lee (SLE).

That’s the implication of a new risk factor laid out in the food-and-consumer-good conglomerate’s latest 10-K, filed on Friday. Here’s the gist of it:

“Increased government regulations to limit carbon dioxide and other greenhouse gas emissions as a result of concern over climate change may result in increased compliance costs … We use natural gas, diesel fuel, and electricity in the manufacturing and distribution of our products. Legislation or regulation affecting these inputs could materially affect our profitability. In addition, climate change could affect our ability to procure needed commodities at costs and in quantities we currently experience …”

Last year’s 10-K also included a broad entry on “new or more stringent governmental regulations,” but lacked the climate-change and carbon-dioxide language.

Companies, of course, have been stepping up the climate-change disclosures since this winter, when the Securities and Exchange Commission ordered up additional information from public companies, prodded in part by big public- and private-sector investors. (Bloomberg’s Jim Efstathiou Jr. had a good piece on the rule in January.)

Sara Lee is far from the first to sound similar warnings — in fact, it might even be a laggard. The very first risk factor that Dole Food (DOLE) cites in its March 10-K is about bad weather that’s “difficult to predict and may be influenced by global climate change.” Kellogg (K) warns in its 10-K that commodity costs “may fluctuate widely due to government policy and regulation, weather conditions, climate change or other unforeseen circumstances,” and Coca-Cola (KO) has warned that its top ingredient, water, faces “unprecedented challenges from overexploitation, increasing pollution, poor management and climate change.” Kimberly-Clark (KMB) cites climate change multiple times in the litany of risks in its February 10-K, emphasizing “actions taken to address climate change and related market responses.”

And Molson Coors Brewing (TAP) is perhaps glummest of the bunch in a risk-factor from its November 10-Q, headed “Climate change may negatively affect our business”:

“While warmer weather has historically been associated with increased sales of beer, changing weather patterns could result in decreased agricultural productivity in certain regions which may limit availability or increase the cost of key agricultural commodities, such as hops, barley and other cereal grains … Increased frequency or duration of extreme weather conditions could also impair production capabilities, disrupt our supply chain or impact demand for our products. Climate change may also cause water scarcity…”

So chow down and drink up, folks, before things get too hot.

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Image source: El Gran Dee via Flickr

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Maybe it’s something in the water? A couple of days ago, we reported the multi-million dollar departure of an executive from a Bermuda-based energy company. Today’s post – about a different company headquartered on the tiny island – also involves a send-off worth millions of dollars.

On August 26, AXIS Capital Holdings Ltd. (AXS) filed an 8-K to announce that David Greenfield, its EVP/CFO, would be leaving the company on November 30, 2010. The press release offered no reason for Greenfield’s departure. (AXIS Capital – with a $3.71 billion market cap – sells insurance and reinsurance coverage; besides Bermuda, it has offices in the United States, Ireland, the United Kingdom, Canada, Australia, and Singapore.)

AXIS Capital also filed Greenfield’s Separation Agreement, dated August 23. Some provisions of the Separation Agreement take a seemingly stern note: Greenfield gets no bonus for 2010, and he forfeits his previously granted RSUs. Other sections are de rigueur for these types of documents; there’s a release and waiver of claims, a non-disparagement clause, and a promise to “provide reasonable assistance and cooperation” if the company needs it after he’s gone.

And then comes the payoff: AXIS Capital is paying Greenfield severance in three chunks (all of which will be adjusted for tax and withholding payments):

• The first payment – a lump sum of $4.894 million – will be paid on the 8th day after the termination date. (If any of Greenfield’s currently unvested RSUs vest between now and the date he leaves, his check will be reduced according to a formula set out in the agreement.)
• The second payment – $53,000 – will be paid in a lump sum six months and a day later.
• And the final payment – another $53,000 – will be paid in a lump sum one year after the termination date.

All told, Greenfield’s severance adds up to $5 million. That’s not bad, considering he joined AXIS Capital just over four years ago, after working for nearly 22 years at KPMG LLP.

There are a few other restrictions Greenfield must abide by in order to get his severance. He cannot quit early, start working for another company before the end of November, or violate the terms of his Separation Agreement.  But with five million reasons to abide by the document’s terms, we suspect that Greenfield will do whatever it takes to fulfill his part of the bargain.

Image source: zhengxu via flickr

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Was it really only the beginning of last week that Dell (DELL) announced plans to buy 3Par (PAR)? My how time flies! Since then, it’s been hard to keep up with the near hourly updates on the tussle between two computer giants — Dell and Hewlett-Packard (HPQ) over a company that up until recently judging by its stock chart wasn’t exactly on anyone’s radar. Just to recap quickly, Dell initially offered $18 a share for 3Par last Monday and the price (as of this morning) is now $30 as the two giants duke it out.

And the filings, well, let’s just say that we’re glad these things are mostly electronic now since whole forests would need to be cleared. By our count, Dell has filed 11 documents, HP has filed 7 and 3Par, the source of all this attention, has filed a whopping 25. Just think about the number of attorneys and paralegals involved in writing all this stuff and your eyes will really start to spin!

Given all this drama, and the fact that Dell filed its 10-Q late yesterday, we found it a bit odd that they decided to play it so straight when it came to describing what’s going on. After all, we haven’t seen this level of tussling since we played with Rock Em Sock Em Robots. Here’s a snip:

In August 2010, Dell made an offer to acquire 3Par Inc. (“3PAR”), a global provider of storage solutions optimized for the cloud environment. The acquisition of 3PAR is anticipated to enhance Dell’s storage portfolio and provide Dell’s customers with solutions at every storage tier. Subsequent to Dell’s offer to acquire, 3PAR received a competing offer and Dell responded by increasing its original offer to approximately $1.6 billion, net of 3PAR’s cash. Dell cannot predict the outcome of this matter at this time.

We honestly expected a bit more fire and brimstone in the Q. After all, if most of us were expecting to pay $18 for something and it was suddenly $30 or more, chances are we’d be doing a fair amount of whining ourselves. And, of course, the numbers are really a lot bigger.

Image source: Glocally Newark:

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See more of what’s in the filings: Check out FootnotedPro, where we highlight unusual opportunities and potential problems well in advance of the market. For more information or to inquire about a trial subscription, email us at pro@footnoted.com.