Steven S. Myers, the largest shareholder of SM&A as wellas the company’s founder and retired chairman, will solicit proxies for theelection of four candidates, including himself, to the SM&A board ofdirectors at its upcoming annual meetingin May.
In a preliminary proxy statement filed this week with theSecurities and Exchange Commission, Myers, who owns approximately 15.8 percentof the company’s stock, will lead a partial board slate that also includesKenneth W. Colbaugh, Albert S. Nagy, and Redge E. Bendheim.
The decision of Myers, Colbaugh, Nagy, and Bendheim to seekseats on the SM&A board was based on a shared belief that the decline ofmore than 40 percent in the company’s stock price over the past year is“largely or entirely attributable to inappropriate financial guidance providedby the CEO on investment community conference calls in recent quarters; poorlycontrolled growth of the company’s selling, general and administrative(SG&A) expenses over the same period; inappropriate handling of variousaspects of a recently completed strategic transaction; and management actionsor failures to act resulting in the loss of several highly capable seniorprofessionals, some of whom have since started businesses that now compete withthe Company – some or all of which circumstances might not have occurred withbetter board oversight.
“In my view,SM&A’s stock price is well below its intrinsic value,” said Myers in a statement. “A better-qualified board isneeded to provide the expertise and guidance necessary to help SM&A realizeits full business potential.”
Myers, 61, founded SM&A, formerly Steven Myers &Associates, in 1982 to providecompetition management and program support services to industrial customersprimarily in the aerospace and defense, information technology, andtelecommunications industries. He served as chairman and CEO until hisretirement last year.
Colbaugh, 55, served as a director and COO of SM&A from1990 to 1999, during which the company achieved a compound annual growth rateof 44 percent.
Nagy, 62, was a director from June 2000 to April 2005.Bendheim, 54, was until his recent retirement a tax partner with KPMG LLP; inthat capacity he provided financial and tax planning services to numerouspublicly and privately held companies, including SM&A.
The four proposed directors on the Myers slate would replacecurrent SM&A directors William C. Bowes, John P. Stenbit, Joseph B. Reaganand Robert J. Untracht. If the Myers slate is elected, and assuming there-election of SM&A’s other directors, the company’s nine-member boardwould also include Dwight L. Hanger, J. Christopher Lewis, Cathy L. McCarthy,Gen. Peter Pace, and Robert Rodin.