Inching toward reform at Costco …

It’s a bizarre fact of American business that directors can stay on corporate boards for years after shareholders have resoundingly rejected them in an annual vote. (As we footnoted here, just look at Cablevision) So we were at first happy to see that Costco (COST), the giant warehouse-store chain, had modified its bylaws to require directors to tender their resignation if they lose a vote. Here’s how Costco put it in the 8-K it filed yesterday: The bylaws as amended provide that if in an uncontested election for directors a nominee receives a greater number of “withhold” votes than votes “for” the nominee shall offer his or her resignation. A committee of independent directors whose election is not at issue will determine and publicly report the action to be taken with respect to the resignation offer. (Costco in many ways is just playing catch-up — a study in 2007 found that a majority of S&P 500 companies already had similar provisions in place.) But then we took another look at that second sentence. Sure enough, in the revised text of the bylaws themselves (and section 3.6 in particular), we found the escape clause: Should a director have to tender his or her resignation, a special committee of independent directors gets to pick from a number of options that “can include: (i) accepting the offer of resignation; (ii) maintaining the director but addressing what the Qualified Independent Directors believe to be the underlying cause of the withhold votes; (iii) resolving that the director will not be re-nominated in the future for election; or (iv) rejecting the offer of resignation.” In other words, that rejected director could still stick around, a la Cablevision, if his buddies on the board want him to. We could be persuaded that boards need a little flexibility in handing the timing of a resignation, to give them time to recruit a replacement, for example. But can you imagine the ruckus if Congress were able to re-seat incumbents who are voted out, simply by “addressing what [they] believe to be the underlying cause” of the loss? The Whigs would still be running things up on Capitol Hill. So kudos to Costco for taking a step in the right direction. But shareholders are still a long way from being able to give board members the boot, should they so desire. Image source: Keith Bacongco via Flickr ———— 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.

Designed for investors who want to dig into the details, but don’t have the time.

Good chemistry between Argon’s execs and Boeing…

At the end of June, aviation giant Boeing Co. (BA) announced that it planned to buy Argon ST (STST) for a reported $775 million in cash.  A few details weren’t known at the time, though, such as how the acquisition would impact Argon’s top executives.

Argon ST, which is based in Fairfax, VA, sells sensors, systems, networks, and services in order to “make sense of the technology threatening our forces and provide the capability to thwart it.” It’s a strategic acquisition for Boeing that will enable it to expand its electronic communications capabilities.

At the time the deal was announced, Boeing said it would pay $34.50 cash per share; that’s a 41 percent premium over Argon’s June 29 closing price of $24.43. The acquisition is expected to close by the end of September, 2010.

On July 8, Argon filed an SC TO-T to state that, although no arrangements were in place yet, as part of the merger it would use its “reasonable best efforts” to obtain retention and non-compete agreements with its top executives, Terry L. Collins, Kerry M. Rowe, W. Joseph Carlin and Michael J. Hettmann.

By July 12, those agreements were in place, and Argon reported their terms in an amended SC TO-T. In exchange for accepting a position with Boeing (and agreeing to other terms), the executives will get the following:

Terry L. Collins will be the Vice President/General Manager of “Argon ST, A Boeing Company.” He’ll start with a base salary of $502,258 and is eligible to get an “Incentive Bonus” payment of $2,009,032.

Kerry M. Rowe will be the Vice President, Division Operations for Boeing. His base salary will start at $414,856 per year, and he’s eligible to receive an incentive bonus of $1,659,424.

W. Joseph Carlin will be a Vice President, Information Dominance with Boeing. He’ll start with a base salary of $288,184 and is eligible to receive an incentive bonus of $576,368.

Michael J. Hettmann will be the Director, Reconnaissance Systems for Boeing. He’ll start with an annual base salary of $230,360 and is eligible to receive another $230,360 as an incentive bonus.

With respect to all four executives, their incentive bonuses will be paid in chunks over a period of about two years, and they require that certain performance goals be met.

This article noted that Argon ST will be a “a stand-alone unit within Boeing.”  That bodes well for Argon’s 1,000 or so employees, especially since a slide presentation (filed as an exhibit to an SC14D9C) on June 30 stated there would be “No headcount reductions or relocation anticipated due to [the] transaction.”

Granted, they’re not walking into Boeing with lucrative retention agreements, like the top executives are.  But at least they get to keep their jobs, and that’s not something to take for granted in an M&A context.

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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.

January Special for College Students Features $30 Lift Ticket Waterville Valley, NH, November 23, 2009 – Waterville Valley and Zipcar, Inc., the world’s largest car-sharing service, are once again offering Boston skiers and snowboarders an easy, affordable way to hit the slopes this winter. When skiers arrive at Waterville Valley in a Zipcar – including all passengers in the vehicle – they will receive a $15 discount off adult or college student lift tickets that day, as well as learn to ski or snowboard packages. Zipsters also receive a deal on ski or snowboard rentals, offered at $28 for a full day, discounted from the regular price of $41.

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Waterville Valley and Zipcar Team Up on Lift Ticket Deals

NEW YORK ( TheStreet ) — Which insiders are selling and buying chunks of stocks? Below are lists of the top 10 open-market insider purchases and sales filed at the Securities and Exchange Commission Friday as ranked by dollar value

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Prospect Capital CEO Buys $936K Worth (TheStreet.com)

CEBU CITY, Philippines–(BUSINESS WIRE)–Hitachi Global Storage Technologies (Hitachi GST) announced today the expansion of its knowledge and skills enhancement initiative in the Philippines called the Integrated University Program with the launch of its regional laboratory center at Cebu Technological University (CTU) Main Campus. President Gloria Macapagal-Arroyo, DOST Secretary Dr.

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Hitachi Laboratory Equipment Donation Extends Nationwide (Business Wire)

CONCORD, NH, Nov. 19 /CNW/ – Jaguar Mining Inc.

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Jaguar Mining Provides Update of 2009 Drilling Program (CNW Group)

DETROIT (AP) — U.S. auto sales could top an annual rate of 10.8 million in November, General Motors Co.’s top sales analyst said Thursday. That would mark the first month this year that sales jumped to such levels without the aid of Cash for Clunkers rebates, which boosted sales in July and August

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GM analyst predicts solid November US sales (AP)

HOUSTON, Nov. 19 /PRNewswire/ — Twenty-five Senior Design Teams competed for prizes Thursday night at Rice University’s Brown School of Engineering Elevator Pitch Contest

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Rice University Engineering Students Pitch Projects to Local Venture Capitalists (PR Newswire)

FOR IMMEDIATE RELEASE 2009-251 Washington, D.C., Nov.

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SEC Names Senior Officials to Investor Education and Advocacy Efforts

TORONTO–(BUSINESS WIRE)–The Canadian Innovation Exchange (CIX) is proud to host a premier line-up of innovative visionaries as keynote speakers in its one-day forum December 2, 2009 at the Design Exchange in Toronto.

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Canadian Innovation Exchange Highlights Technology Visionaries As Keynote Speakers (Business Wire)