ELMA,
N.Y., June 1, 2023 /PRNewswire/ -- Servotronics,
Inc. (NYSE American – SVT) a designer and manufacturer of
servo-control components and other advanced technology products
today announced that leading proxy advisory firm, Institutional
Shareholder Services (ISS) has recommended shareholders vote "FOR"
all of Servotronics directors on the BLUE proxy card at the
Company's 2023 annual meeting of shareholders which will be held
virtually on June 9, 2023 at 9:00 am
ET.
All of our Board nominees have been critical
in the progress Servotronics has made over the past year,
implementing change and driving our Company to better
performance.
The dissident has continued to assert that their
nominations would be beneficial additions to the Board of
Directors, citing aerospace expertise, M&A experience, and
turnaround experience, to replace two current Board members,
Edward C. Cosgrove, and Christopher M. Marks. While the dissident
asserts that these directors are not the right people to help lead
our Company, in fact, Mr. Cosgrove and Mr. Marks were instrumental
in driving needed change at Servotronics. From a minority position
on the Board, they were able to begin improving corporate
governance by accelerating the removal of the "poison pill"
provision. They were also directly involved in the process of
refreshing the Board and identifying and recruiting William F. Farrell, Jr. as Servotronics' new
CEO. In concluding that support for our incumbent slate is
warranted, ISS notes in its recommendation that "[t]he replacement
of three legacy directors with new board members that are large
shareholders (Baird and Wax) or have professional experience in
investor relations and corporate finance (Howard) is laudable."
The current slate of Directors possesses
experience and relevant expertise in the core aerospace end market,
including both engineering and technical expertise needed to
sustainably grow operations, as well as broader M&A and
turnaround experience. We recognize a need to further enhance the
Board with expertise in aerospace manufacturing however we note
that the dissident nominees lack that experience. Over the coming
year we aim to recruit a director with essential manufacturing
experience to further strengthen our Board. In supporting our
superior slate, ISS notes "While the dissident and the company
agree that operational improvements are needed, the dissident has
not made a case that change in the boardroom, exchanging Cosgrove
and Marks for Coleman and Pomeroy, will improve oversight or lead
to better value for shareholders."
We believe the dissidents have obfuscated
their long history of value destruction embedded in their
activism.
We are gravely concerned at the potential risk of
allowing the dissident's nominees to serve on the Servotronics
Board given the results of their previous efforts at a number of
other companies. We believe the dissident has selectively picked
examples to illustrate their claims of generating shareholder
value, but they have failed to provide the full picture.
Richard K. Coleman, Jr. was elected
to the Crossroads Systems, Inc. Board of Directors in April 2013 along with Jeffrey E. Eberwein, the Executive Director of
Star. Shortly thereafter, just nine days later, Mr. Coleman was
appointed as interim President and CEO of Crossroads. He led the
Company until August 2017, when it
was forced to file for bankruptcy under Chapter 11.
The two then embarked on a campaign to join the
Hudson Global Inc. Board of Directors in 2014. Mr. Eberwein was
quoted saying "Rick has expertise in operations and turnarounds
across many industries while I specialize in capital allocation,
strategy and maximizing value for all shareholders." Following
Hudson's Annual meeting on May 29,
2014, both individuals were appointed to Hudson Global's
Board of Directors. Since that day, and utilizing the quoted
"turnaround experience," shareholders have witnessed the
destruction of 52.2% of their equity value.
Mr. Eberwein also served as Chairman of the Board
of Directors at Aetrium, Inc. In January
2013, Aetrium's shares were trading in the $16-$17 range.
Following the leadership of Mr. Eberwein, when Aetrium was acquired
by Digirad (where Mr. Eberwein was serving as Chairman), the shares
of Aetrium were trading at approximately $0.30 per share. In addition, since Mr. Eberwein
was appointed as the Chairman of the Board of Star, which was
formerly Digirad, the value of Star's shares declined 95.64%, a
stunning destruction of shareholder value.
These examples provide a clear track record of
significant shareholder value destruction, while creating financial
gain for the Star executives and nominees. We continue to believe
that the campaign launched by the dissidents is not intended to
increase Servotronics' shareholder value, but instead maximize
their own financial position.
We believe our highly qualified directors'
interests are aligned with Servotronics' shareholders.
The current Board of Directors has been working
to transform Servotronics, through refreshment of management and
the strategic vision for the Company to achieve growth in revenues
and profitability. The Board also includes two of Servotronics'
largest shareholders, who are working to ensure that the Company is
making the correct strategic decisions to maximize shareholder
value for all shareholders. With two-thirds of the Board
represented by new directors, with fresh ideas and diverse
experience to foster improved performance, as well as significant
share ownership, we believe our nominees are well aligned with the
interests of all shareholders.
Our belief in the strength of our Board is
reflected by the recommendation set forth by leading proxy advisory
firm ISS. While the Board and management are disappointed with the
recommendation of smaller proxy advisor Glass Lewis to support
election of one of the dissident nominees, we believe that their
conclusion would have been more aligned with the conclusions of ISS
had they opted to engage with us directly, prior to issuing their
recommendation.
VOTE THE BLUE PROXY CARD TODAY "FOR" ALL
SERVOTRONICS' DIRECTOR NOMINEES
We urge you to use the BLUE proxy card to vote
today "FOR" ALL of Servotronics' nominees. Simply follow the easy
instructions on the BLUE proxy card to vote by Internet or by
signing, dating and returning the BLUE proxy card in the
postage-paid envelope provided. Please DISCARD all proxy cards and
materials sent to you by Star Equity.
Shareholders who have any questions or need
assistance voting may contact the Company's proxy solicitors,
Georgeson, LLC, toll-free at (866) 767-8867.
ABOUT SERVOTRONICS
The Company is composed of two groups – the
Advanced Technology Group (ATG) and the Consumer Products Group
(CPG). The ATG primarily designs, develops and manufactures servo
controls and other components for various commercial and government
applications (i.e., aircraft, jet engines, missiles, manufacturing
equipment, etc.). The CPG designs and manufactures cutlery,
bayonets, pocket knives, machetes and combat knives, survival,
sporting, agricultural knives and other edged products for both
commercial and government applications.
IMPORTANT INFORMATION
The Company has filed with the Securities and
Exchange Commission (the "SEC") a definitive proxy statement on
Schedule 14A on May 1, 2023,
containing a form of BLUE proxy card and other relevant documents
with respect to its solicitation of proxies for Servotronics' 2023
annual meeting of shareholders (the "2023 Annual Meeting").
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE
PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
FILED BY SERVOTRONICS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR
WILL CONTAIN IMPORTANT INFORMATION ABOUT ANY SOLICITATION.
Investors and security holders may obtain copies of these documents
and other documents filed with the SEC by Servotronics free of
charge through the website maintained by the SEC at www.sec.gov.
Copies of the documents filed by Servotronics are also available
free of charge by accessing Servotronics' website
https://servotronics.com/investor-relations/.
The Company, its directors and its executive
officers may be deemed participants in the Company's solicitation
of proxies from shareholders in connection with the matters to be
considered at the upcoming annual meeting of shareholders.
Information about the Company's directors and executive officers is
set forth in the Company's definitive proxy statement for the 2023
Annual Meeting, which was filed with the SEC on May 1, 2023 and is available at the SEC's website
at www.sec.gov.
FORWARD-LOOKING STATEMENTS
This news release contains certain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this
release, the words "project," "believe," "plan," "anticipate,"
"expect" and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain these identifying words. Forward-looking
statements involve numerous risks and uncertainties which may cause
the actual results of the Company to be materially different from
future results expressed or implied by such forward-looking
statements. There are a number of factors that will influence the
Company's future operations, including: uncertainties in today's
global economy, including political risks, adverse changes in legal
and regulatory environments, and difficulty in predicting defense
appropriations, the introduction of new technologies and the impact
of competitive products, the vitality of the commercial aviation
industry and its ability to purchase new aircraft, the willingness
and ability of the Company's customers to fund long-term purchase
programs, and market demand and acceptance both for the Company's
products and its customers' products which incorporate Company-made
components, the Company's ability to accurately align capacity with
demand, the availability of financing and changes in interest
rates, the outcome of pending and potential litigation, the
severity, magnitude and duration of the COVID-19 pandemic,
including impacts of the pandemic and of businesses' and
governments' responses to the pandemic on our operations and
personnel, and on commercial activity and demand across our and our
customers' businesses, and on global supply chains, the ability of
the Company to obtain and retain key executives and employees and
the additional risks discussed in the Company's filings with the
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company
assumes no obligation to update forward-looking statements, whether
as a result of new information, future events or otherwise.
SERVOTRONICS, INC. (SVT) IS LISTED ON NYSE
American
View original
content:https://www.prnewswire.com/news-releases/major-proxy-advisory-firm-recommends-vote-for-servotronics-highly-qualified-director-nominees-on-the-blue-proxy-card-301839427.html
SOURCE Servotronics, Inc.