Poetry in the 8-K…

August 7, 2006

Last week, Fedders Corp. (FJC), filed this 8-K and some of the language in outgoing Chairman and CEO Sal Giordano Jr’s new employment agreement was downright poetic. As you read this, just imagine a gentle breeze in a field full of flowers:

the term of this Agreement shall be extended so that at each and every remaining moment of time thereafter, the remaining term of this Agreement shall be one year

So in theory, this is a one year agreement. Fedders even says that in the summary of the 8-K. But given that the actual agreement notes that as each moment of time that passes, the agreement is extended, it appears to last anon.

Of course, it wasn’t just the language in the new contract. It was the various goodies tucked into it too. For example, while Giordano’s new title will be "executive chairman", his salary will continue to be $625K — the same as he was making as Chairman and CEO, a job which presumably carried a bit more responsibility. There’s also $6 million in loans that were made — loans that are not due as long as Giordano remains an employee, which gets us back to the poetry. Finally, there’s an agreement for lifetime office and secretarial support staff — space that according to the contract "shall be of a size and with the furnishings and other appointment" comparable to other top executives at Fedders.

Here at footnoted.org, we first spotted Fedders back in late November of 2003. At the time, the stock was trading at around $6 a share. Since then, the stock has declined steadily, even dropping since we wrote about them again this past May.  So while there’s poetry in the 8-K, we’re guessing that Fedders shareholders aren’t waxing poetic about the company’s performance.

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