CMTL Comtech Telecommunications Corporation

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

November 26, 2024		0-7928
Date of Report		Commission File Number
(Date of earliest event reported)

 

 

(Exact name of registrant as specified in its charter)

 

Delaware		11-2139466
(State or other jurisdiction of		(I.R.S. Employer Identification Number)
incorporation or organization)

 

	305 N 54th Street
	Chandler, Arizona 85226
	(Address of Principal Executive Offices) (Zip Code)
	(480) 333-2200
	(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.10 per share		CMTL		Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

COMTECH TELECOMMUNICATIONS CORP /DE/

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Appointment of Kenneth H. Traub as Executive Chairman

 

On November 26, 2024, the Board of Directors (the “Board”) of Comtech Telecommunications Corp. (the “Company”) appointed Mr. Kenneth H. Traub, who currently serves as a director of the Board, as Executive Chairman effective as of November 26, 2024, and entered into an employment agreement with Mr. Traub effective as of November 27, 2024 (the “Employment Agreement”). In addition to Mr. Traub’s role in chairing the Board, he will be the senior executive leading the Company.

 

Mr. Traub has over 30 years of experience as a Chairman, CEO, director and active investor with a demonstrated record of accomplishment in driving strategic, financial, operational and governance improvements. He has served as the Managing Partner of Delta Value Advisors, a strategic consulting and investment advisory firm specializing in corporate governance and turnarounds, since 2019. He was previously Managing Partner of Raging Capital, a registered investment firm, and served as President and CEO of Ethos Management LLC, a private investment and consulting firm. Mr. Traub served as President and Chief Executive Officer of American Bank Note Holographics, Inc., a leading global supplier of optical security devices for the protection of documents and products against counterfeiting from 1999 through 2008. In 1994, he co-founded Voxware, Inc., a pioneer in voice over Internet protocol communication technologies, and served as its Executive Vice President and Chief Financial Officer through 1998.

 

In addition to being a member of the Board, Mr. Traub, 63, currently serves as an independent director on the boards of Tidewater, Inc. (NYSE:TDW), the leading global operator of offshore vessels for the energy industry, Edgio, Inc. (OTC:EGIO), a software company providing digital content delivery networks and applications and Nano Dimension Ltd (Nasdaq:NNDM), a manufacturer of additive electronics and additive manufacturing equipment. Mr. Traub previously served as an independent director on the boards of numerous public companies, including DSP Group, Inc., a manufacturer of multimedia chipsets for converged communications (acquired by Synaptics Incorporated); MRV Communications, Inc., a telecommunications company (acquired by ADVA Optical Networking SE); Vitesse Semiconductor, Inc., a fabless semiconductor developer (acquired by Microsemi Corporation); Xyratex Ltd, a data storage company (acquired by Seagate Technology plc); MIPS Technologies, Inc., a semiconductor technology company (acquired by Imagination Technologies Group plc and Allied Security Trust); Intermolecular, Inc., a semiconductor materials supplier (acquired by Merck KGaA); and Phoenix Technologies, Inc., a leading supplier of firmware for computers (acquired by Marlin Equity Partners), among others. Mr. Traub received the NACD Directorship Certification, which is awarded to directors who meet the highest standards of corporate governance according to the National Association of Corporate Directors. Mr. Traub received a BA from Emory College in 1983 and an MBA from Harvard Business School in 1988.

 

Pursuant to the Employment Agreement, Mr. Traub will receive an annualized base salary of $900,000. Mr. Traub will be eligible to receive an annual bonus with a target bonus of 100% of annual base salary and a maximum bonus of up to 200% of his annual base salary based on individual and Company performance goals; provided that his bonus for the fiscal year ending July 31, 2025 will not be less than 50% of Mr. Traub’s prorated annual base salary for such period. Mr. Traub will also receive an annual grant of restricted stock units valued at $400,000, which will vest in equal annual installments on each of the first three anniversaries of the grant date, subject to Mr. Traub’s continued employment on each vesting date, and an annual grant of a target number of long-term performance shares equal to $800,000, $200,000 of which shall be settled in cash and $600,000 of which shall be settled in common stock, which shall vest on the third anniversary of the grant date, subject to achievement of performance objectives determined by the Board relating to EBITDA, revenue and relative total shareholder return over a three year performance period, and Mr. Traub’s continued employment through the third anniversary of the grant date. Mr. Traub shall be entitled to participate in health, insurance, retirement, and other benefits provided generally to similarly situated employees of the Company.

 

On termination of Mr. Traub’s employment by the Company (including due to the Company’s non-renewal of the Employment Agreement) without “cause” (other than due to Mr. Traub’s death or disability) or by Mr. Traub for “good reason” (as such terms are defined in the Employment Agreement), Mr. Traub will be entitled to termination benefits in the form of a one-time payment of 100% of the amount of Mr. Traub’s annual base salary, a pro-rata annual bonus subject to actual performance for such year, and payment or reimbursement of premiums for continued health plan coverage until the earlier of (i) 12 months and (ii) the date Mr. Traub is no longer eligible to receive such

 

coverage. If any of the terminations described above occurs within 90 days prior to or 12 months after a “change in control” (as defined in the Employment Agreement), Mr. Traub will be entitled to termination benefits in the form of (i) a one-time payment of 1.5 times the sum of Mr. Traub’s annual base salary and target bonus, (ii) a pro-rata annual bonus subject to actual performance for such year, (iii) payment or reimbursement of premiums for continued health plan coverage for until the earlier of (x) 12 months and (y) the date Mr. Traub is no longer eligible to receive such coverage and (iv) full vesting (at target performance) of Mr. Traub’s equity incentive awards which are subject to performance-based vesting conditions (provided, however, that if such termination occurs prior to a change in control, such award will remain outstanding for 90 days thereafter, and if no change in control has occurred during such period, shall be treated in accordance with the terms of the applicable award agreement (including treating any unvested award as forfeited as of the date of termination).

 

The termination benefits described above are conditioned upon Mr. Traub’s execution, delivery and non-revocation of a release of claims. The Employment Agreement also includes customary restrictive covenants, including noncompetition and nonsolicitation and nonhire covenants applicable while employed and for one year thereafter.

 

The foregoing summary of the terms of Mr. Traub’s Employment Agreement is subject to the full and complete terms of the Employment Agreement, which the Company expects to file as an exhibit to its periodic report covering the effective date of Mr. Traub’s employment.

 

Board Leadership Changes

 

On November 26, 2024, Mark Quinlan resigned from his position of Chairman of the Board (“Chairman”), effective as of November 26, 2024. Mr. Quinlan will continue serving on the Board.

 

On November 26, 2024, the Board also appointed Bruce Crawford as Lead Independent Director, effective as of November 26, 2024.

 

On November 27, 2024, the Company issued a press release announcing the appointment of Mr. Traub as Executive Chairman, the resignation of Mr. Quinlan as Chairman and the appointment of Mr. Crawford as Lead Independent Director, a copy of which is filed as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
99.1		Press Release dated November 27, 2024 issued by Comtech Telecommunications Corp.
104		Cover Page Interactive Data File (formatted as Inline XBRL)

 

 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: November 27, 2024

	COMTECH TELECOMMUNICATIONS CORP.
	By:	/s/ Michael A. Bondi
		Name:	Michael A. Bondi
		Title:	Chief Financial Officer

 

 

 

 

 

EXHIBIT 99.1

 

Comtech Elects Kenneth H. Traub as Executive Chairman

 

Bruce Crawford to Serve as Lead Independent Director

 

CHANDLER, Ariz. – November 27, 2024 – Comtech Telecommunications Corp. (NASDAQ: CMTL) (“Comtech” or the “Company”), a global technology leader, today announced that its Board of Directors (the “Board”) has unanimously elected Kenneth (Ken) H. Traub as the Executive Chairman of the Company. Mark Quinlan has stepped down from his role as Chairman of the Board and will continue serving on the Board. In addition to Mr. Traub's role in chairing the Board, he will be the senior executive leading the Company. John Ratigan, Comtech's President and CEO, will report directly to Mr. Traub and they will be working closely together. In addition, former U.S. Army Chief Information Officer, Lieutenant General (Retired) Bruce T. Crawford, has been elected to serve as Lead Independent Director.

 

“I am thrilled to lead the Comtech team as Executive Chairman during this important time for the Company,” said Mr. Traub. “I look forward to working closely with the Board, management team, employees throughout the Company as well as other stakeholders to help address lingering challenges and better position us to capitalize on significant value enhancement opportunities going forward.”

 

Mr. Traub continued, “On behalf of the Board, I thank Mark for his leadership and the contributions he has made to Comtech while serving as Chairman. We look forward to continuing to benefit from his expertise as a director and as a significant investor.”

 

“I am honored to have been selected as Lead Independent Director, and look forward to working with the Board and management team,” said Mr. Crawford. “The Comtech Board has acted decisively to strengthen the Company's leadership.”

 

“Ken joined the Comtech Board just one month ago and has already demonstrated the leadership skills and acumen that have been the hallmarks of his successful career,” said Mr. Quinlan. “Comtech is fortunate to have a leader of his caliber as we embark on the next chapter of the Company's development.”

 

Mr. Ratigan added, “I am thrilled to welcome Ken to Comtech leadership and look forward to working closely together. Ken and I have complementary skills and I look forward to collaborating with him to help Comtech achieve its full potential.”

 

About Kenneth Traub

 

Mr. Traub is a visionary and transformational corporate leader with a successful track record of building sustainable shareholder value. Mr. Traub has over 30 years of experience as a Chairman, CEO, director and active investor with a demonstrated record of accomplishment in driving strategic, financial, operational and governance improvements. Mr. Traub is adept at managing business challenges, executing turnarounds, optimizing capital allocation, driving operational improvements, implementing M&A and other strategic initiatives and capitalizing on strategic growth opportunities. Mr. Traub received a BA from Emory College in 1983 and an MBA from Harvard Business School in 1988.

 

 

About Comtech

 

Comtech Telecommunications Corp. is a leading global technology company providing satellite and space communications technologies, terrestrial and wireless network solutions, NG911 emergency services and cloud native capabilities to commercial and government customers around the world. Our unique culture of innovation and employee empowerment unleashes a relentless passion for customer success. With multiple facilities located in technology corridors throughout the United States and around the world, Comtech leverages its global presence, technology leadership and decades of experience to create the world’s most innovative communications solutions. For more information, please visit www.comtech.com.

 

Forward-Looking Statements

 

Certain information in this press release contains forward-looking statements. Forward-looking statements include, among others, statements regarding our expectations for our operational initiatives, future performance and financial condition, the plans and objectives of our management and our assumptions regarding such future performance, financial condition, and plans and objectives that involve certain significant known and unknown risks and uncertainties and other factors not under our control which may cause our actual results, future performance and financial condition to be materially different from the results, performance or other expectations implied by these forward-looking statements. Factors that could cause actual results to differ materially from current expectations are described in our filings with the Securities and Exchange Commission ("SEC"). We urge you to consider all of the risks, uncertainties and factors identified above or discussed in such reports carefully in evaluating the forward-looking statements. The risks described above are not the only risks that we face. We do not intend to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by law.

 

Important Additional Information and Where to Find It

 

The Company has filed a proxy statement on Schedule 14A, an accompanying proxy card, and other documents with the SEC in connection with its solicitation of proxies from the Company’s stockholders for the Company’s Fiscal 2024 Annual Meeting of Stockholders. THE COMPANY’S STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING PROXY CARD, AND ALL OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by the Company with the SEC at no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge by clicking the “Governance” link in the “Investors” section of the Company’s website, https://comtech.com/investors/, or by contacting investors@comtech.com as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.

 

Participants in the Solicitation

 

The Company, its directors, certain of its officers, and other employees may be deemed to be “participants” (as defined in Section 14(a) of the Securities Exchange Act of 1934, as amended) in the solicitation of proxies from the Company’s stockholders in connection with matters to be considered at the Company’s Fiscal 2024 Annual Meeting of Stockholders.

 

Information about the names of the Company’s directors and officers, their respective interests in the Company by security holdings or otherwise, and their respective compensation is set forth in the sections entitled “Stockholders, Directors and Executive Officers,” “Director Compensation,” and “Executive Compensation” of the Company’s Proxy Statement on Schedule 14A in connection with the Fiscal 2024 Annual Meeting of Stockholders, filed with the SEC on November 27, 2024. To the extent the security holdings of directors and executive officers change after the amounts described in these filings, such changes are set forth on Initial Statements of Beneficial Ownership on Form 3 or Statements of Change in Ownership on Form 4 filed with the SEC, which can be found at no charge at the SEC’s website at www.sec.gov. These documents will be available free of charge as described above.

 

Investor Relations Contact

 

Maria Ceriello

631-962-7102

investors@comtech.com

 

Media Contacts

 

Jamie Clegg

480-532-2523

jamie.clegg@comtech.com

 

Jed Repko / Aura Reinhard

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

 

v3.24.3

Cover	Nov. 26, 2024
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Document Period End Date	Nov. 26, 2024
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Entity Registrant Name	COMTECH TELECOMMUNICATIONS CORP /DE/
Entity Central Index Key	0000023197
Entity Tax Identification Number	11-2139466
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	305 N 54th Street
Entity Address, City or Town	Chandler
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85226
City Area Code	480
Local Phone Number	333-2200
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Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	CMTL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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