You know how those ornately painted matryoshka dolls open to reveal hidden dolls inside? That image came to mind after we discovered a newsworthy nugget in the eighth exhibit to the 10-Q that J. Crew Group, Inc. (JCG) filed with the SEC at 4:10 p.m. last Friday. Pre-holiday weekend filings often make for the juiciest reading, and J. Crew’s didn’t disappoint on that front.

The document in question is simply titled “Amended and Restated Employment Agreement, dated July 15, 2010.”  (Despite its execution date, the agreement wasn’t filed until now.)  Read on and you’ll learn the agreement is with J. Crew’s star designer, Jenna Lyons Mazeau, who is generally referred to as “Jenna Lyons.”

Per the new agreement, J. Crew agreed to pay Lyons “a one-time cash contract supplement” of $2 million by August 15th. The money is hers to keep so long as she stays with the company through July 15, 2012, but she may have to repay half of it if she leaves before mid-July, 2014. (If you’re feeling a sense of déjà-vu, footnoted readers, you may recall that Lyons got another million-dollar bonus on October 27, 2009.)

The company also promised to give Lyons 50,000 restricted shares of Common Stock. No restrictions are prescribed for half of the shares, but the agreement provides that the other half will vest on the fourth and fifth anniversaries of the grant date if the company can meet certain goals for “total shareholder return.”

Now, to the salary issue…. This employment agreement states that Lyons’ annual base salary will be $675,000 and that she has the opportunity to earn a target bonus worth another 50% to 100% of her salary if performance objectives are met.  But that number ($675,000) doesn’t square with the one that J. Crew reported in an 8-K filed July 14, 2010, when it announced Lyons’ promotion and other changes within the executive ranks:

“In connection with these organizational changes and the related increase in responsibilities, the Compensation Committee of the Board of Directors approved base salary increases for Ms. Lyons, Mr. Scully and Ms. Wadle on July 12, 2010. Effective immediately their base salaries are as follows: Ms. Lyons – $1,000,000;….”

No explanation is given for why two documents dated one day apart contain such disparate numbers. However, if the company can beat its recently-lowered sales outlook and coax its stock price back up (earlier in the year, it traded at more than $40 per share), shareholders may not care how much money Lyons gets.

Image source: indiekrush.com

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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.

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Six days ago, near the small town of Winnemucca, Nevada, a mine employee was carrying his lunchbox. Another employee maneuvered a large front-end loader around the mine’s maintenance shop.

Corporate filings don’t normally include this kind of you-are-there detail. But these vignettes are now permanently enshrined in the database of the Securities and Exchange Commission thanks to a 174-word provision in the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act. Or perhaps they’re there because Newmont Mining (NEM) has nervous lawyers — or wants to make a point about congressional meddling.

The catch is that the two workers at Newmont’s Twin Creeks Mine weren’t doing these things the way they were supposed to under mine-safety rules: The man with the lunchbox was supposed to have it attached to him as he approached a particular piece of mining equipment; the one on the front-end loader’s decking lacked “fall protective devices,” according to this 8-K filed by Newmont.

We’ll kill the suspense: Both workers are fine. Mine operations weren’t disrupted. In fact, these events were non-events. Yet both wound up in Newmont’s “The loader was stopped and the employee immediately exited without incident,” the filing noted. “The employee attached the box to his body without incident…”

So why the SEC filing? Newmont blames section 1503(b)(1) of the Dodd-Frank act, which, sure enough, requires that

“each issuer that is an operator, or that has a subsidiary that is an operator, of a coal or other mine shall file a current report with the Commission on Form 8-K … disclosing the following regarding each coal or other mine of which the issuer or subsidiary is an operator:

(1) The receipt of an imminent danger order issued under section 107(a) of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 817(a)).”

Mind you, in Newmont’s case, these imminent danger orders seem to have lasted mere moments — until the one man strapped on his lunchbox, and the other employee stopped and exited the front-end loader. While we don’t know all the details, we can only assume that a company or government inspector happened to see this behavior and intervened — in formal terms, issuing an imminent danger order — and then “terminated the order” when all was set right in short order. Still, the issuance of the order must have triggered the 8-K.

Newmont is hardly alone in this meticulous documentation of safety slip-ups. Other mining companies have been doing it since the Dodd-Frank act was signed into law in late July.

Peabody Energy (BTU) filed an 8-K on Tuesday noting a vague citation for “violating fall protection rules” that was “immediately corrected.” Massey Energy (MEE) filed an 8-K on August 23 reporting a citation for “the improper underground storage of a locked box containing explosives” (which actually sounds pretty serious to us); the problem was fixed when the box was brought to the surface, and the explosives were later disposed of. Arch Coal (ACI) disclosed that the operator of a “diesel manlift” at the Sufco mine in Utah failed to wear a safety belt or use tie-off lines, according to an 8-K filed on August 19. As with the others, Arch Coal’s problem was fixed without incident.

None of this should be read to suggest that mine-safety is trivial. The events at Massey’s Upper Big Branch Mine, where 29 people were killed in an April explosion, and the drama unfolding in slow motion in Chile serve to underscore quite the opposite. (Massey went so far in its 8-K on August 23 as to say that the improperly secured explosives “did not relate to the April 2010 Upper Big Branch tragic accident.”)

In any case, expect to see more references to mining infractions in the filings. The Dodd-Frank bill also includes other mine-safety provisions, requiring publicly traded mining companies to disclose in their regular filings the number of health or safety violations at each of their mines, along with the aggregate dollar value of proposed penalties and total fatalities, as well as other safety statistics.

If the additional attention brought on by these imminent-danger 8-Ks prevents another disaster like Upper Big Branch, it’s hard to get too upset. But if the new rule only serves to elevate all infractions, however brief, to the same level, it could wind up doing more harm than good.

Image source: Canadian Design Resource

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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.

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.

What with the generic names that hedge funds and private-equity shops adopt these days, it’s not too surprising that the suitor of Burger King Holdings (BKC) was confused briefly with 3i, the U.K. private-equity shop that boasts £9.6 billion under management.

But no, it appears that Burger King’s buyer, at $4 billion, is 3G Capital, a New York-based investment firm with ties to high-profile Brazilian financiers, and one that, until now, has contented itself with buying stakes in CSX, Coca-Cola and the like.

As it turns out, that the Brazilian connection is fitting: There seems to be something of a mutual love-fest going on between the Home of the Whopper and the home of samba, capoeira and feijoada. From the 10-K that Burger King filed late last week:

“We believe that there are significant growth opportunities in South America. For example, we entered the Brazil market five years ago, and, as of June 30, 2010, had 93 restaurants in the country with those open for more than 12 months having average restaurant sales of $1.8 million on a trailing twelve-month basis. We currently expect to open approximately 500 restaurants in Latin America over the next five years. For the fiscal year, we opened 72 new restaurants in Latin America.”

Going from zero to 93 in five years isn’t too shabby, and the prospect of 500 more restaurants across Latin America in the next half-decade can’t have passed 3G by.

Still, this is BK’s second foray into private-equity’s hands in recent years: It was taken private in 2002 by a TPG Capital, Bain Capital and others, and then went public again in 2006. Now, a mere four years later, it’s going private again.

When BK last went public, it shelled out a $12.1 million in dividends and related payments to executives, directors and various funds controlled by the private-equity shops that had bought it several years earlier. It also paid those shops a $30 million “sponsor management termination fee,” according to its registration statements at the time. Goldman Sachs, a unit of which was one of the private-equity owners, also got $5 million more for helping to run the public offering. And we’re pretty sure we missed some other fees.

And Burger King’s stock? It was down 3% since it went public, the WSJ reported. All of which makes us wonder just how much value this game of ownership ping-pong really creates, and how much is being siphoned off in the process.

Image source: Burger King Brazil

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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.

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The publishing world buzzed at Meredith Corporation’s (MDP) August 2 announcement that John H. (Jack) Griffin, Jr., the President of its National Media Group, was leaving four days later “to pursue another opportunity.” News leaked – even before an official announcement was made – that Time Warner, Inc. (TWX) had tapped Griffin to become Time, Inc’s. CEO at the end of September and eventually become its Chairman, too.

On August 30, an Exhibit (“Separation Agreement and Release”) attached to Meredith’s 10-K disclosed that Griffin got about $1.4 million worth of payments and benefits on his way out the door; and it appears that Meredith was not contractually obligated to pay him most of that money.  Of course, there’s always the chance that Griffin’s departure wasn’t voluntary – but from all outward appearances, he left to take a sweet gig at Time, Inc., not because the board was unhappy with him.  And that makes the board’s largesse all the more puzzling.

Griffin’s Employment Agreement (executed March 9, 2008 and re-executed August 24, 2009) states that if Griffin voluntarily left the company before the contract expired on June 30, 2011

“…in such event the Company’s only obligation to Griffin shall be to make Base Salary payments provided for in this Agreement through the date of such voluntary termination…. and (b) the Company shall have no further obligation to pay any bonuses to Griffin under the terms of the MIP or this Agreement.”

Yet – addressing subsection (b) first – Meredith gave Griffin a lump sum payment for $1,256,301.00 on August 6 that is stated to be “in full and final satisfaction of his FY2010 MIP bonus.”

Next, Griffin’s Separation Agreement clearly states that its effective date was August 6, 2010; thus, the company’s stated obligation (per his Employment Agreement) was to pay his base salary through the end of that week. But the Separation Agreement reveals that the company paid him $125,000 “in full and final satisfaction” for any claims he had that related to his FY2011 compensation. Griffin’s base salary was $725,000 a year, which means that Meredith gave him more than two months’ worth of extra pay.

In exchange for releasing “any and all claims under the Age Discrimination in Employment act of 1967,” Meredith agreed to pay

“the equivalent of his existing base pay, and a pro rata share (equal to Nine Thousand Three Hundred Seventy-Five Dollars ($9,375) of the “Stay Bonus” provided for in section 5.3 of the Employment Agreement, through September 17, 2010.”

But Meredith’s September 25, 2009 proxy states on p. 24 that Griffin isn’t entitled to a Stay Bonus or a continuation of health benefits if he left voluntarily.  Thus, the company gave him an extra month and a half’s worth of the stay bonus (which, per the Employment Agreement, was paid at the rate of $6,250 per month so long as Griffin worked for Meredith), and it gave him nearly two months of extra health benefits, through September 30, 2010.

The company doesn’t explain why it paid Griffin so much money following such an abrupt departure; it seems unlikely that Griffin would sue Meredith for any claim when he left voluntarily for an even higher profile job (for which no Employment Agreement has been filed yet).  But perhaps the board harbors hope that someday he will return?

Image source: Aresauburn at flickr

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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.

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That’s the cover of the new ethics policy at Sysco (SYY), the big food-service company. The company filed it with the Securities and Exchange Commission on Tuesday afternoon, several hours after filing its 10-K.

In the 8-K that included the document, Sysco describes its ethics-policy overhaul in dry, lawyerly terms, saying it was intended

“to reflect a more principles-based approach.  Bright-line rules and numerical limits and thresholds have generally been eliminated in favor of rules intended to foster more thoughtfulness about the relevant facts and circumstances. … The Associates’ Code has also been revised to enhance overall readability and understanding … and is accompanied with learning aids such as frequently asked questions and examples.  Notwithstanding these changes, the overriding ethical principles underlying each provision of the prior ‘code of ethics’ remain substantively unchanged.”

And while the policy document (PDF or HTML) goes on for another 23 brightly colored pages after that striking plate-and-slogan cover, the catch-phrase is a recurring theme:

“Relationships require a strong foundation of mutual trust and understanding that is nurtured day after day.  That trust is earned, not just by following the letter of the law, but also by striving to ‘do the right thing’. … For situations not specifically included in this Code, or in Sysco’s other policies and rules, we still expect that Sysco and its associates will try to do the right thing. …

The “Overall Standard” on page 2 begins: “Always do the right thing.” In an FAQ about handling a “lumper service” that seems to be refusing its employees overtime, the answer concludes: “Do the right thing — talk with your supervisor.”

As that suggests, of course, this corporate version of the Golden Rule actually boils down to following explicit corporate policies — and checking with supervisors or the human-resources department when in doubt.

From a business perspective, doing the right thing means following our Code, speaking up, getting advice and complying with the law. There is no way to provide rules of conduct that will apply to every possible situation. … Any activity or relationship that presents, or appears to present, a conflict of interest must be reported to your immediate supervisor before you engage in the activity.”

So kudos to Sysco for serving up a bold and eye-catching catchphrase in their ethics policy. But for the shareholders’ sake, we’re glad to see that the nuts and bolts of the policy goes into a little more detail.

Image source: Sysco Corp.

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Hardly a day goes by without hearing somebody’s opinion on whether we’re headed for a double-dip recession. Last week, it was Fed Chief Ben Bernake saying he would do whatever he could to avoid the double dip, which as this NPR story shows is being viewed as an increasing possibility. And this morning, there’s a new survey out by Citibank (C) that shows that an overwhelming majority of small business owners — a whopping 86% — believe the economy is headed for a double-dip.

Given all this, we thought we’d take a look at some recent filings to see if there’s any consensus there on the much-feared double dip. To be sure, we saw a marked increase in the number of companies talking about a double-dip recession in their filings. How much more? We counted nearly 200 filings during August that talked about a double-dip recession in some form or another. That compares to exactly 1 filing during August 2009.

Much of this concern is being noted in the filings made by mutual fund companies, the investments most favored by so-called mom and pop investors. While we don’t tend to pay a lot of attention to these filings here at footnoted, we thought this was worth a short diversion off the usual footnoted path.

For example, yesterday, George C.W. Gatch, president and CEO of JP Morgan Funds noted in his President’s letter that “The U.S. economy has clearly entered a soft patch on its path to economic recovery. These signs of slower growth have ignited concerns that we are headed for a double-dip recession. Although there is uncertainty over the pace of the recovery, investors should note that double dip recessions have historically been rare.”

Jonathan Baum, Chairman and CEO of mutual fund giant The Dreyfus Corp was even more optimistic in his letter filed on Monday, noting that “we still believe that it is unlikely that we’ll encounter a “double-dip” recession.” And US Global Investors Funds (UNWIX) noted in its letter that “the “double-dip” recession debate is escalating…With growing concerns about a slowdown or even a “double-dip” recession in the U.S. and Europe, China may ease up on its policies directed at slowing the economy.”

While I majored in economics at college, that was a long time ago. As a result, I don’t profess to be one of the prognosticators on whether we’re on the verge of a double-dip and will leave that to the so-called experts. But judging by what we’re seeing in the filings — the sheer number alone should tell you all that you need to know — fears of a double dip are clearly a big concern

Image source: 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.

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.