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May Is That Time of Year for Shareholder Meetings

If it’s May, it’s shareholder meeting season, with many public companies hosting mandatory gatherings to elect directors, affirm auditors, and change how they pay top officials.

If this sounds dull, it’s because it is. Most shareholder meetings are perfunctory, and take no more than an hour, if that.

And most are not well attended by stockholders.

For example, Cohu Inc.’s annual meeting at its Poway headquarters May 13 likely won’t attract more than 30 investors.

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“In the 13 years that I’ve been here, it’s been pretty limited attendance, probably a range between 20 to 30,” said former Chief Financial Officer John Allen, who retired last year but still works on various projects.

This year, Cohu is asking shareholders to elect two directors for three-year terms and to confirm the selection of accounting firm Ernst & Young to audit the books.

Cohu’s investors probably don’t have much to complain about, given its recent performance. For the first quarter, Cohu, which makes testing equipment for the semiconductor industry, reported net income of $2 million compared with $1.7 million for last year’s first quarter.

Sales for the first quarter exceeded the company’s forecast by a bit, which is always nice, and its backlog of orders is holding fairly steady.

Chief Executive Officer James Donahue says besides improved operating profits and margins, the company had strong sales in its microwave communication equipment, the next largest generator of sales behind the testing equipment.

“However, business conditions in the back-end semiconductor equipment industry remain challenging and we do not expect this to change in the near term,” Donahue said.

Cohu’s customers feature the world’s largest makers of semiconductors, and include Intel Corp., Advanced Micro Devices Inc. and Texas Instruments Inc.

The company generated $58.4 million in revenue for the first quarter, or $5 million above the 2007 first quarter. For all of 2007, it had $241 million in revenue and net income of $8 million.

Another reason Cohu’s investors may be in a good mood next week is the stock price. After taking a big hit last year, shares sold at $17.48 on April 29, three bucks short of the price the Nasdaq-traded stock reached a year ago. One analyst has a price target of $22.

Investors have the joy of poring over proxy reports, including compensation and bonuses paid to its top executives.

Donahue, also Cohu’s president, is the highest paid executive with a compensation package in 2007 of $1.45 million. That’s down from $1.58 million in 2006.

He received a base salary of $484,000 and a cash bonus of $349,000, with the remainder coming from the value of option grants, stock awards and other compensation, according to the proxy.

Cohu recently named Roger Hopkins the vice president of sales and services for its main Delta Design subsidiary. Hopkins is receiving a base annual salary of $180,000 and has a target bonus of $75,000, according to a securities filing. He succeeds Colin Scholefield, who left to pursue other interests and had an annual base of $220,000.

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Ticker Takes: ImageWare Systems Inc. says it’s being delisted from the American Stock Exchange because it has shareholders equity of less than $4 million and posted losses from continuing operations and net losses in three out of its four most recent years. The company says it will be eligible for listing on the Over the Counter Bulletin Board. Directed Electronics Inc. says a distribution agreement it has with Sirius Satellite Radio Inc. was extended another year from August 2008. The company says the pending merger of the Sirius and XM satellite radio firms should happen in the near future, which should improve consumer demand. EMC Corp. began its tender offer to acquire all the outstanding shares of Iomega Corp. EMC is offering $3.85 per share for an aggregate price of $213 million for Iomega. The tender offer expires May 21. Overland Storage Inc. is reporting a net loss of $4.9 million on revenue of $31.8 million for its third quarter, which ended March 31. Frontera Investment Inc. changed its ticker to FRNV on the Pink Sheets from its earlier symbol of BDNW.PK before conducting a reverse merger with Bidnow.com. DivX Inc. says it entered into an agreement with LG Electronics to include its technology in a new cell phone. Javo Beverage Co. is reporting a net loss of $1.8 million on revenue of $3.9 million for the first quarter of 2008.

Send any news of locally based public companies to Mike Allen via e-mail at mallen@sdbj.com. He can be reached at (858) 277-6359.

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