Star Equity Fund Issues Statement on Successful Campaign at Servotronics
13 Mai 2022 - 2:30PM
Star Equity Fund, LP (“Star Equity Fund”, “we”, “our”), a
shareholder of Servotronics, Inc. (NYSE American: SVT)
(“Servotronics” or “the Company”), seeks to unlock shareholder
value and improve corporate governance at its portfolio companies.
We are pleased to announce that our campaign at Servotronics,
including our nomination of a diverse, highly qualified slate of
director candidates for election to the Company’s board of
directors (the “Board”) and advocacy for various improvements in
the Company’s corporate governance, caused the Company to take
several positive steps it likely would not have taken
independently.
Under pressure from our campaign, the Company
recently announced several Board composition and governance changes
including:
- The appointment of a new, qualified
Chief Executive Officer
- The addition of Karen Howard and
shareholder representative Evan Wax to the Board
- The naming of independent director
Christopher Marks as Chairman of the Board
- The resignation of Jason Bear from
the Board
- The termination of its poison
pill
- The reconfirmation that Kenneth
Trbovich would not be nominated for election at its 2022 annual
meeting
We believe these developments improve the Board
and do not believe the incumbent Board would have
made such sweeping changes had it not been for our activist
campaign.
Unfortunately, the incumbent Board also made
several other changes to its bylaws, erecting barriers to
shareholders holding the Board accountable by nominating qualified
candidates for election to the Board. These changes include:
- The establishment of an early
nomination window of 120-150 days from the anniversary of the prior
year’s annual meeting
- The addition of a requirement that
director candidates deliver a Company-form questionnaire at the
time of their nomination, with the form required to be requested
from the Company in advance of nomination
- The addition of update requirements
for certain information required to be provided in a nomination
notice
- The addition of the general ability
for the Company to require additional information from nominees
after the nomination
In addition, we are disappointed that Ed
Cosgrove and Lucion Gygax remain on the Board. In our view, both
directors either enabled or at best failed to see malfeasance
occurring at Servotronics, and we believe their continued
directorship represents an impediment to further positive change
and is harmful to shareholders’ interests.
While we are pleased with the two new additions
to the Board and plan to withdraw our nomination for this year’s
annual meeting, we will continue to monitor the Company’s progress
and will remain ready to act in the future on behalf of
shareholders if progress on improving shareholder value and
shareholder rights is not made.
About Star Equity Fund, LPStar
Equity Fund, LP is an investment fund managed by Star Equity
Holdings, Inc. Star Equity Fund seeks to unlock shareholder value
and improve corporate governance at its portfolio companies.
About Star Equity Holdings,
Inc.Star Equity Holdings, Inc. is a diversified
holding company with three divisions: Healthcare, Construction, and
Investments.
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Star Equity Fund, LP (“Star Equity Fund”),
together with the other participants named herein (collectively,
“Star Equity”), intends to file a preliminary proxy statement and
accompanying WHITE proxy card with the Securities and Exchange
Commission (“SEC”) to be used to solicit votes for the election of
its slate of highly qualified director nominees at the 2022 annual
meeting of stockholders of Servotronics, Inc., a Delaware
corporation (the “Company”).
STAR EQUITY STRONGLY ADVISES ALL STOCKHOLDERS OF
THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS
AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON
THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE
PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST.
The participants in the proxy solicitation are
anticipated to be Star Equity Fund, Star Equity Fund GP, LLC (“Star
Equity Fund GP”), Star Value, LLC (“Star Value”), Star Equity
Holdings, Inc. (“Star Equity Holdings”), Star Investment
Management, LLC (“Star Investment Management”), Jeffrey E.
Eberwein, Hannah M. Bible, BaShara (Bo) Boyd, Richard K. Coleman,
Jr., John W. Gildea, Daniel M. Koch, Louis A. Parks, Robert G.
Pearse, G. Mark Pomeroy and Brandon G. Stranzl.
As of the date hereof, Star Equity Fund
beneficially owns directly 54,688 shares of common stock, par value
$0.20 per share, of the Company (the “Common Stock”). Star Equity
Fund GP, as the general partner of Star Equity Fund, may be deemed
to beneficially own the 54,688 shares of Common Stock owned
directly by Star Equity Fund. Star Value, as the sole member of
Star Equity Fund GP, may be deemed to beneficially own the 54,688
shares of Common Stock owned directly by Star Equity Fund. Star
Equity Holdings, as the parent company of Star Equity Fund, may be
deemed to beneficially own the 54,688 shares of Common Stock owned
directly by Star Equity Fund. Star Investment Management, as the
investment manager of Star Equity Fund, may be deemed to
beneficially own the 54,688 shares of Common Stock owned directly
by Star Equity Fund. Mr. Eberwein, as the Portfolio Manager of Star
Equity Fund, may be deemed to beneficially own the 54,688 shares of
Common Stock owned directly by Star Equity Fund. As of the date
hereof, none of Mses. Bible or Boyd or Messrs. Coleman, Gildea,
Koch, Parks, Pearse, Pomeroy, or Stranzl beneficially owns any
Common Stock.
For more information contact: |
|
Star Equity Fund, LP |
The Equity
Group |
Jeffrey E. Eberwein |
Lena Cati |
Portfolio Manager |
Senior Vice President |
203-489-9501 |
212-836-9611 |
jeff.eberwein@starequity.com |
lcati@equityny.com |
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