Odds & Ends: Fine print edition…

June 15, 2010

Sometimes it takes a little digging and explanation to fully appreciate material in corporate filings. Other times, the good stuff is more immediately apparent. With summer upon us and attention-spans shortening, here are a few tidbits that jumped off the page in recent days:

  • At Unilife Corp. (UNIS), a retractable-syringe maker in Lewisberry, Pennsylvania, R. Richard Wieland II was appointed executive vice-president and chief financial officer to some fanfare, replacing Daniel Calvert, who is moving back to Indiana for family reasons, according to an 8-K filed on Monday. Wieland gets all the usual goodies — two house-hunting trips, a $100,000 relocation allowance with the possibility of more should expenses accumulate, 80,000 shares of restricted stock and options on 240,000 shares, all vesting over three years. Like a lot of contracts, Wieland’s employment agreement says his shares and options vest if there’s a change in control. Here’s what caught our eye: They also vest “upon Mr. Wieland’s resignation within 180 days after Alan Shortall ceases to be our Chief Executive Officer for any reason—” In other words: Lose your CEO and you risk losing your CFO soon after.
  • First Niagara Financial Group (FNFG) filed an 8-K containing an “acknowledgement and release” — aka, termination agreement — with J. Lanier Little, executive vice-president for consumer banking, on Thursday. Little is out sometime between July 1 and August 1, and will get $528,000 cash over the following 12 months, plus $10,000 outplacement reimbursement, a year of “Park Club dues” and a $1,000-a-month car allowance, $75,000 to cover legal and relocation costs, a yearlong extension of his discount mortgage rate, and accelerated vesting on stock options and restricted shares. But in a twist we haven’t seen often, the disclosure also lays out changes Little sought, and secured, in the agreement. Among them: a guarantee that payments would continue even if Little dies before they’re scheduled to end. Another addition at Little’s request: a commitment from the bank that it “will not disparage the Executive in any way, either orally or in writing, or provide information, issue statements or take any action, directly or indirectly, that would cause the Executive embarrassment or humiliation or otherwise cause or contribute to the Executive being held in disrepute, except as required by law.” (We can’t help but wonder if we’ll start seeing a trend in these reverse-disparagement clauses.)
  • When Enzon Pharmaceuticals (ENZN) put out its definitive proxy statement last week, there were some curious changes from its earlier preliminary filing. An affiliate of New York hedge-fund managers DellaCamera Capital Management LLC, which had warned months earlier that it might mount a campaign to elect board members of its own, appears to have dropped the bid, perhaps mollified by the company’s decision to add two board members — Thomas F. Deuel and Richard A. Young — and a proposal to declassify the board. The new proxy reflects the tumult largely by what’s missing: Gone is language warning shareholders of the competing proxy and urging them to side with the incumbents. But also gone is this more civic-sounding exhortation to shareholders: “This year’s Annual Meeting will be a particularly important one, and YOUR vote is extremely important.” With the current board’s future assured, it would seem, your votes may not be so important after all.

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