SM&A - Additional Proxy Soliciting Materials - Non-Management (definitive) (DFAN14A)
May 05 2008 - 6:06AM
Edgar (US Regulatory)
UNITED
STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
o
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Filed by a Party other than the
Registrant
x
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Check the appropriate box:
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o
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Preliminary Proxy Statement
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Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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x
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Definitive Additional Materials
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Soliciting Material Pursuant to
§240.14a-12
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SM&A
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(Name
of Registrant as Specified In Its Charter)
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Steven
S. Myers
Albert S. Nagy
Kenneth W. Colbaugh
Redge E. Bendheim
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the
appropriate box):
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x
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No fee required.
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o
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Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to
which transaction applies:
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(2)
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Aggregate number of securities to
which transaction applies:
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(3)
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Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of
transaction:
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(5)
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Total fee paid:
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o
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Fee paid previously with preliminary
materials.
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o
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Check box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration
Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Steven S.
Myers has prepared the following presentation in response to the presentation
filed by SM&A on May 2, 2008:
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5/5/08 1
Presentation by Steven S. Myers Largest Shareholder of SM&A Commenting on
the SM&A Board Presentation of 5/02/08 This proxy contest is about
present and future share price. Their briefing ignores the core issues, and
diverts shareholders attention with unwarranted personal attacks, slanted
historical analysis and unsubstantiated hopes for the future, while
squandering the companys sustainable competitive advantage.
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5/5/08 2 THIS
PRESENTATION IS FOR GENERAL INFORMATIONAL PURPOSES ONLY. IT DOES NOT PERTAIN
TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY, OR
THE PARTICULAR NEEDS OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS
PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS OF ANY
INVESTMENT DECISION. THE VIEWS EXPRESSED HEREIN REPRESENT THE OPINIONS OF
STEVEN S. MYERS, AND ARE BASED ON PUBLICLY AVAILABLE INFORMATION WITH RESPECT
TO SM&A (THE "ISSUER"). CERTAIN FINANCIAL INFORMATION AND DATA
USED HEREIN HAVE BEEN DERIVED OR OBTAINED FROM FILINGS MADE WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE SEC) BY SM&A. EXCEPT FOR THE HISTORICAL
INFORMATION CONTAINED HEREIN, THE MATTERS ADDRESSED IN THIS PRESENTATION ARE
FORWARD-LOOKING STATEMENTS THAT INVOLVE CERTAIN RISKS AND UNCERTAINTIES. YOU
SHOULD BE AWARE THAT ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
CONTAINED IN THE FORWARD-LOOKING STATEMENTS. MR. MYERS ASSUMES NO OBLIGATION
TO UPDATE THE FORWARD-LOOKING INFORMATION. MR. MYERS RESERVES THE RIGHT TO
CHANGE ANY OF HIS OPINIONS EXPRESSED HEREIN AT ANY TIME AS HE DEEMS
APPROPRIATE. MR. MYERS DISCLAIMS ANY OBLIGATION TO UPDATE THE INFORMATION
CONTAINED HEREIN. MR. MYERS HAS NOT SOUGHT OR OBTAINED CONSENT FROM ANY THIRD
PARTY TO USE ANY STATEMENT OR INFORMATION INDICATED IN THIS PRESENTATION AS
HAVING BEEN OBTAINED OR DERIVED FROM STATEMENTS MADE OR PUBLISHED BY THIRD
PARTIES. ANY SUCH STATEMENT OR INFORMATION SHOULD NOT BE VIEWED AS INDICATING
THE SUPPORT OF SUCH THIRD PARTY FOR THE VIEWS EXPRESSED HEREIN. NO WARRANTY
IS MADE THAT DATA OR INFORMATION, WHETHER DERIVED OR OBTAINED FROM FILINGS
MADE WITH THE SEC OR FROM ANY THIRD PARTY, IS ACCURATE. MR. MYERS SHALL NOT
BE RESPONSIBLE OR HAVE ANY LIABILITY FOR ANY MISINFORMATION CONTAINED IN ANY
SEC FILING OR THIRD PARTY REPORT. THERE IS NO ASSURANCE OR GUARANTEE WITH
RESPECT TO THE PRICES AT WHICH ANY SECURITIES OF THE ISSUER WILL TRADE, AND
SUCH SECURITIES MAY NOT TRADE AT PRICES THAT MAY BE IMPLIED IN THIS
PRESENTATION. ANY ESTIMATES, PROJECTIONS AND PRO FORMA INFORMATION SET FORTH
IN THIS PRESENTATION ARE BASED ON ASSUMPTIONS THAT MR. MYERS BELIEVES TO BE
REASONABLE, BUT THERE CAN BE NO ASSURANCE OR GUARANTEE THAT ACTUAL RESULTS OR
PERFORMANCE OF THE ISSUER WILL NOT DIFFER, AND SUCH DIFFERENCES MAY BE
MATERIAL. THIS PRESENTATION DOES NOT RECOMMEND THE PURCHASE OR SALE OF ANY
SECURITY. UNDER NO CIRCUMSTANCES IS THIS PRESENTATION TO BE USED OR
CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY. MR. MYERS CURRENTLY OWNS AN AGGREGATE OF APPROXIMATELY 15.73% OF
THE OUTSTANDING COMMON STOCK OF THE ISSUER. IT IS POSSIBLE THAT THERE WILL BE
DEVELOPMENTS IN THE FUTURE THAT CAUSE MR. MYERS FROM TIME TO TIME TO SELL ALL
OR A PORTION OF HIS SHARES IN OPEN MARKET TRANSACTIONS OR OTHERWISE
(INCLUDING VIA SHORT SALES), BUY ADDITIONAL SHARES (IN OPEN MARKET OR
PRIVATELY NEGOTIATED TRANSACTIONS OR OTHERWISE), OR TRADE IN OPTIONS, PUTS,
CALLS OR OTHER DERIVATIVE INSTRUMENTS RELATING TO SUCH SHARES. EACH OF MR.
MYERS, KENNETH W. COLBAUGH, ALBERT S. NAGY AND REDGE E. BENDHEIM IS DEEMED A
PARTICIPANT IN THE SOLICITATION OF PROXIES DESCRIBED IN THIS PRESENTATION
(COLLECTIVELY, THE PARTICIPANTS). INFORMATION REGARDING THE PARTICIPANTS
AND THEIR DIRECT OR INDIRECT INTERESTS, BY SECURITY OWNERSHIP OR OTHERWISE,
IS AVAILABLE IN THE DEFINITIVE PROXY STATEMENT ON SCHEDULE 14A FILED BY MR.
MYERS WITH THE SEC ON APRIL 18, 2008. ALL STOCKHOLDERS OF THE ISSUER ARE
ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO
THE SOLICITATION OF PROXIES BY MR. MYERS FOR USE AT THE 2008 ANNUAL MEETING OF
STOCKHOLDERS OF THE ISSUER WHEN AND IF THEY BECOME AVAILABLE BECAUSE THEY DO
AND WILL CONTAIN IMPORTANT INFORMATION. THE DEFINITIVE PROXY STATEMENT AND
FORM OF PROXY WERE FIRST MAILED TO STOCKHOLDERS OF THE ISSUER ON OR ABOUT
APRIL 18, 2008. SM&A SHAREHOLDERS MAY OBTAIN COPIES OF THE DEFINITIVE
PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS AT NO CHARGE ON THE SEC'S WEB
SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, MR. MYERS WILL PROVIDE COPIES OF THE
DEFINITIVE PROXY STATEMENT WITHOUT CHARGE UPON REQUEST.
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5/5/08 3
Snapshot of the SM&A Board Presentation of 5/02/08 SM&A has
historically served its clients by producing stellar briefings to win major
procurements SM&A briefings are world-class in persuasiveness - via
clear logic, compelling graphics, clarity of text, and focus on the message
The 5/02/08 SM&A Board diatribe has none of these virtues It is a
rambling, disjointed, contradictory discussion of peripheral issues without a
strategy for future governance and direction of the company They should
discuss why share values are down and what they will do about it - these
subjects are treated with silence.
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5/5/08 4
Examples of Their Misleading Misdirection Our presentation says that 8 of
9 of current board members feel no pain when the stock falls. We propose a
board slate owning over 16% of stock Their presentation says that they have
a 7.17% vested stake in the company But their number includes both stock
owned and stock options, most of which are underwater. They are silent on the
Boards real stock ownership The reconstituted boards personal shareholdings
better aligns their interests with the interests of all SM&A
shareholders.
Board Member Beneficial Ownership (Excluding Options)
Current Board
Bowes 1,864
Hanger 4,227
Lewis 327,256
McCarthy 17,354
Pace 0
Reagan 2,864
Rodin 0
Stenbit 0
Untracht 0
Total - 1.9%
353,586
Reconstituted
Board
Bendheim 10,000
Colbaugh 20,000
Hanger 4,227
Lewis 327,256
McCarthy 17,357
Myers 2,997,225
Nagy 10,000
Pace 0
Rodin 0
Total - 16.8%
3,386,065
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5/5/08 5
Examples of Their Misleading Misdirection The SM&A briefing makes
numerous claims of the salutary effect on future earnings of a new SM&A
subsidiary, led by General Pace, hired in January 2008 at great expense as
the President & CEO of SM&As Strategic Advisors. While we greatly
admire and deeply respect General Pace, we now learn that he has two other
jobs. SM&A is paying $540,000 in first year compensation for a part-time
employee? How does that work? Has the SM&A Board been candid with
investors - how will the large investment in part-time General Pace pay off?
General Peter Pace & SM&A Join Forces From January 18, 2008 Press
Release "As I considered my post military career options, the
opportunity to make a difference, by bringing effective and efficient
solutions to the military personnel in the field and by helping the
government get what it pays for on time and on budget, was the major driver
in my selection process. SM&A presents me with the best opportunity to
pursue these goals. I look forward to working with our team and our clients
as we expand our strategic advisory services. "We welcome General Pace
to SM&A. His leadership and experience will be key elements in continuing
SM&A's growth and in helping our clients in their business strategies. I
believe the step we are taking today will provide a transformational
opportunity for our company," concluded Ms. McCarthy. Behrman Capital
Names General Peter Pace as Operating Partner From April 2, 2008 Press
Release Behrman Capital, today announced that General Peter Pace, the former
Chairman of the Joint Chiefs of Staff, has joined the firm as an Operating
Partner. General Pace has been named Chairman of the Board of Behrman
portfolio company Pelican Products, Inc., and Director of portfolio company
ILC Industries Inc. "General Peter Pace brings extraordinary experience
and expertise to his new role as a Behrman Capital Operating Partner, and we
are delighted to welcome him to the firm," said Grant G. Behrman,
Managing Partner of Behrman Capital. "I am delighted to be joining
Behrman and look forward to working with the team on current investments,
including Pelican Products and ILC, as well as new opportunities," said
General Pace. "Behrman Capital is well known for its private equity expertise.
Equally important is the firm's commitment to achieving success through
disciplined analysis and hard work, and in a manner consistent with its own
principles and high standards of excellence." Reality:
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5/5/08 6
Examples of Their Misleading Misdirection Their briefing correctly shows a
significant increase in revenue and earnings for 2007 For which they take
full credit They make no mention of the commensurate decline in stock price
x And are silent on their plans to correct the loss of shareholder value x Or
how they will recover from their very disappointing prospects for 2008
performance Instead they trumpet their overarching strategy (their page
8) x But their four-bullet strategy is not a strategy at all x it is a wish
list of abstract objectives and intentions, such as Grow SM&A revenue to
$500M+ per year They dont say how any of these objectives can be met x
They have not formulated a credible strategy x They have no practical
mechanism for implementing their objectives Our slates approach exploits
the strong linkage between SM&A clients winning success and subsequent
SM&A role in support of their programs: Recover proposal management
capabilities to regain and sustain 85% win rate by attracting top talent lost
from SM&A since last August and now at competing firms through
acquisition, teaming arrangements, and hiring. Grow program management
support business 25%/year by offering proposal customers a discount in return
for a significant role in the program after the win - aiming for a 5:1
benefit to risk ratio. Reduce excessive SG&A by empowering the deployed
proposal and program management teams to build the business rather than
depending entirely upon overhead-funded account executives. Rebuild
shareholder value and analyst trust by enhancing the credibility,
transparency, and accountability of the leadership team and the Board. The
current board can not articulate a credible strategy for recovery.
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5/5/08 7
Examples of Their Misleading Misdirection After 33 meandering charts,
interspersed with personal attacks, their chart 34 is, finally, the why us
chart It highlights their strategic plan for growth and profitability
Diversified product portfolio Increased addressable market Sound
acquisition strategy Again, these are slogans - what do they mean? Are
they focused on the markets where SM&A has been dominant? Or, are they
pin-wheeling ever further away from SM&As core strengths? They never
mention what their acquisition strategy is - do they have one? Whatever
happened to the much-heralded MIT strategic plan? Their basic message is
trust me The current board can not articulate a credible strategy for
recovery.
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5/5/08 8
Summary and Conclusions SM&A has been the world leader in compelling
presentations. But the current boards presentation is typical of what
SM&A proposal managers call perfuming the pig. It is emblematic of
the current boards inability to communicate clearly and honestly to the
analysts and shareholder communities - the core problem that has tanked
SM&A stock. Their approach never wins competitions - it will not win
this seminal contest for the future of SM&A. They dont know how to get
out of the hole they have dug in shareholder value.
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