Aerojet Rocketdyne Executive Chairman Warren Lichtenstein Sends Letter to Fellow Shareholders Regarding Critical Vote at June 30th Special Meeting
June 14 2022 - 7:15AM
Business Wire
Urges Shareholders to Vote on the
GREEN Proxy Card to Elect His
Refreshed Slate of Eight Highly Qualified Director Candidates,
Which Possesses the Right CEO and a Superior Strategy
Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) (“Aerojet
Rocketdyne” or the “Company”) Executive Chairman Warren
Lichtenstein, who collectively with his affiliates and the
participants in his solicitation owns approximately 5.6% of the
Company's outstanding shares, today sent the below letter to
shareholders in connection with a special meeting of shareholders
(the “Special Meeting”) scheduled to be held on June 30, 2022. Mr.
Lichtenstein is seeking support on the GREEN Proxy Card to elect his recently
refreshed slate of highly qualified candidates to the Company’s
Board of Directors (the “Board”). Learn more about the slate and
its plan for enhanced value creation by visiting
www.SaveAerojet.com.
***
Dear Fellow Shareholder,
Thank you for your investment in Aerojet Rocketdyne and your
willingness to evaluate the refreshed slate of director candidates
I have nominated for election at the June 30th Special Meeting.
I want you to know it remains my privilege to be aligned with
you and champion your interests in the boardroom. Since making an
initial investment in 2000 and joining the Board in 2008, I have
focused on helping the Company transform into a technology-led
aerospace and defense business that can grow with its customers and
produce long-term value for its shareholders. I am proud that this
focus has helped drive an approximately 7x increase in the
Company’s market capitalization and more than 250% total
shareholder returns. With that said, Aerojet Rocketdyne has to
continue building on – not giving back or resting on – past
results.
I also want to acknowledge at this time that it has been a very
difficult and tumultuous period for the Company. When Lockheed
Martin terminated its acquisition in February following more than a
year of very public headwinds, we were not prepared with the
comprehensive contingency plan sought by myself and a subset of the
Board – resulting in disruptions for employees, customers and
shareholders. When it came time for the current Board to nominate a
slate for the 2022 Annual Meeting, we were unable to reach
consensus – resulting in more disruptions. Additionally, my
differences of opinion with Chief Executive Officer Eileen Drake
led her to initiate a distracting internal investigation (that
rejected claims of harassment and retaliation) and then compelled
me to file litigation over her misuse of shareholders’ resources to
pursue boardroom control. Although I always seek to do what is in
your best interest, I know the status quo is unacceptable and that
all of the Company’s stakeholders deserve better.
In the lead-up to the Special Meeting, it has very much been a
tale of two stories. Ms. Drake and her allies contend everything
has been fine at Aerojet Rocketdyne except for me. They have
consistently deflected attention away from the operational and
financial deterioration that has set in over the last 18 months by
attacking me – an engaged Executive Chairman who has put his money
where his mouth is with a more than $150 million stake and an
irrefutable record of long-term value creation. They have
maintained this posture even while Ms. Drake, who has never
purchased a share of Aerojet Rocketdyne on the open market, has
reportedly sought $48 million of shareholders’ money to leave. But
rather than continue engaging in a tit-for-tat, I want to focus
your attention on what actually matters today: since December 2020,
a lack of contingency planning and poor operational oversight at
Aerojet Rocketdyne has led to a nearly 80%
decline in real free cash flow, numerous customer complaints, sustained employee attrition and
several defense and space programs going
from the black into the red. I would have fought harder
from the boardroom to fix these issues had I not been effectively
sidelined for most of the past 18 months by Ms. Drake’s
investigation and her management team’s documented efforts to block
my access. The fact that Ms. Drake’s faction will not assume any
accountability for these issues speaks volumes about its lack of
credibility and unfitness to lead.
By voting on the GREEN Proxy
Card to elect my refreshed slate of director candidates at the
upcoming Special Meeting, I am confident you can help usher in the
better future we all want. Here is an overview of what my
eight-member slate is offering:
- The Right Level of
Credibility – Our slate, which includes six new director
candidates and only two incumbents, possesses necessary experience
in capital allocation, corporate governance, government relations,
mergers and acquisitions, and various operational areas. Several
members of the slate also have meaningful shareholdings and direct
experience as Aerojet Rocketdyne customers. Lastly, our slate has
already committed to immediate governance enhancements such as
appointing a lead independent director, phasing out the Executive
Chairman role, expanding the Board to nine directors, and
reestablishing quarterly earnings calls and more substantive
shareholder engagement throughout the off-season. Instead of
believing Ms. Drake’s baseless claim that this refreshed slate is
comprised of “friends,” I ask that you assess each nominee’s
background and engage with us. You will find that each candidate is
fiercely independent and has value-add expertise aligned with the
Company’s needs.
- The Right Chief Executive
Officer – Our slate has recruited Mark Tucker, Aerojet
Rocketdyne’s former Chief Operating Officer from 2015 through 2020,
to return to the Company as Chief Executive Officer. He has more
than three decades of defense and space sector experience,
including holding various senior operating roles at Northrop
Grumman Corporation. His industry expertise and institutional
knowledge of Aerojet Rocketdyne make him the ideal leader to
reverse the financial and operational deterioration that has set in
since the Lockheed Martin transaction was announced in late 2020.
As documented in the recent shareholder presentation that can be
found at www.SaveAerojet.com/resources, the Company needs to
immediately fix its diminishing cash flows, frayed customer
relationships and unhappy employee base. Mr. Tucker has the acumen
and vision to address these challenges. He is also squarely aligned
with investors, with several million dollars of shareholdings and a
stated intent to purchase more shares on the open market after the
Special Meeting.
- The Right Plan and Strategy
– As many of you heard from Mr. Tucker on his recent shareholder
call, our slate’s plan entails healing the organization so that
employees, customers and shareholders once again trust us. From
there, he believes the Company can produce at least $65 per share
in value over the next three years and unlock growth opportunities
for the longer term by (i.) establishing fundamentally sound
program operations, (ii.) initiating smarter capital allocation and
(iii.) investing in R&D tied to the future of propulsion
technologies. If strategic alternatives present themselves, our
slate is equally committed to evaluating those opportunities with
an open mind and through a comprehensive, transparent process.
Unlike Ms. Drake, who is not acknowledging the Company’s
vulnerabilities or providing a comprehensive plan, Mr. Tucker and
our slate have detailed their multi-faceted strategy in the
shareholder presentation found at
www.SaveAerojet.com/resources.
Looking ahead, I urge all shareholders of Aerojet Rocketdyne to
evaluate their voting decision based on these three prongs. The
path to a more stable future and long-term value creation begins
with a credible Board, a high-quality Chief Executive Officer and a
viable strategy. That is exactly what my slate is offering. There
is no need to roll the dice on Ms. Drake, who seems to be focused
on a fire sale in this challenging market environment, when the
Company has so much potential that can be realized in the coming
quarters and years under Mr. Tucker and the right leadership.
Thank you for your consideration. My fellow nominees and I look
forward to earning your support on the GREEN Proxy Card.
Sincerely,
Warren G. Lichtenstein Executive Chairman Aerojet Rocketdyne
Holdings, Inc.
***
SUMMARIZED BIOGRAPHIES
FOR THE LICHTENSTEIN SLATE
- The Hon. Tina Jonas has held numerous leadership roles
within government and the private sectors, while having experience
serving on boards of directors and possessing deep expertise in the
aerospace sector.
- Government financial experience and
customer experience: Served as Undersecretary of
Defense/Comptroller and Chief Financial Officer for the U.S.
Department of Defense.
- Deep knowledge of aerospace
sector: Former executive at Sikorsky Aircraft and at PASSUR
Aerospace, Inc. (OTCMKTS: PSSR), a provider of software and
business intelligence platforms to airlines.
- Relevant public company board
experience: Currently a director at Virgin Galactic
Holdings, Inc. (NYSE: SPCE), Centrus Energy (NYSE: LEU) and Serco
North America, a provider of services to the Department of Defense
and other federal agencies.
- Warren G. Lichtenstein has extensive experience in capital
allocation, corporate finance and strategic transactions, serving
as a director and advisor to a diverse group of public companies in
aerospace, defense, manufacturing and banking.
- Long-term shareholder perspective:
Significant shareholder for more than 20 years.
- Extensive financial and aerospace
expertise: Deep experience in corporate finance, executive
management and investing as well as operations experience in
aerospace and defense manufacturing.
- Relevant public company board
experience: Has served as a director of over 20 public
companies.
- Joanne M. Maguire has significant engineering and general
management expertise as a result of decades of experience in the
aerospace, defense and technology sectors.
- Operational and engineering
experience: Has years of space, engineering, defense and
leadership experience across the private sector, including
leadership positions at Lockheed Martin and Northrop Grumman.
- Relevant public company board
experience: Has served as a director at companies including
CommScope Holding Company, Inc. (NASDAQ: COMM), Tetra Tech, Inc.
(NASDAQ: TTEK) and Visteon Corporation (NASDAQ: VC).
- Recognized sector leader: Received
the 2022 General James E. Hill Lifetime Space Achievement
Award.
- Aimee Nelson possesses valuable expertise in capital
allocation and finance as a result of her experience serving in
various executive roles and on boards of directors.
- Extensive financial and commercial
banking expertise: Has years of financial and strategy
consulting experience including numerous banking leadership roles
at Fifth Third Bank and elsewhere.
- CFO and audit experience:
Previously served as Chief Financial Officer of MKCuisine Global,
LLC and currently a director of CorpHousing Group Inc.
- Real estate experience: Previously
served as Senior Vice President of Real Estate Banking, and Senior
Vice President of Commercial Banking, at Park Cities Bank, a
full-service bank.
- Mark Tucker has three-and-a-half decades of experience in
the defense and space sectors, including in areas such as
operations, supply chain, acquisitions and strategy.
- Deep operational familiarity with Aerojet
Rocketdyne: Served as Aerojet Rocketdyne COO from 2015-2020
and has vast knowledge of the Company’s operations and
business.
- Proven credibility and track record of
success: Possesses strategic and financial acumen and drove
critical cost cutting and operational improvement programs at the
Company, including interfacing frequently with the Board.
- Extensive operational experience in U.S.
defense sector: Has more than 35 years of experience,
including senior roles at Northrop Grumman Corporation.
- Martin Turchin has held various leadership positions and has
broad experience at public companies, with a particular focus on
legal and real estate matters.
- Extensive familiarity with Aerojet
Rocketdyne, governance and audit experience: Director of
Aerojet Rocketdyne since 2008 and is a member of the Audit and
Corporate Governance and Nominating Committees.
- Significant real estate expertise and
financial acumen: Has served as nonexecutive Vice Chairman
of CBRE Group, Inc. (NYSE: CBRE), a commercial real estate services
and investment firm and principal and Vice Chairman of Edward S.
Gordon Company.
- Public company board experience:
Served as a director of Boston Properties, Inc. (NYSE: BXP).
- Vice Admiral Mathias W. Winter (Ret.) possesses extensive
leadership, defense, procurement, technology and national security
expertise, including 35 years of military experience.
- Decades of leadership, defense,
procurement, technology and national security expertise:
Managed a $30 billion annual budget with contracting authority and
fiscal responsibility encompassing the design, manufacture,
delivery and operation of F-35 weapon systems.
- Customer perspective: In his
leadership roles, he was responsible in part for purchasing from
Aerojet Rocketdyne.
- Significant leadership experience:
Held various ranks in the U.S. Navy for 35 years and led over 5,000
personnel.
- Heidi R. Wood has served in various executive leadership
positions and has deep expertise in the aerospace industry from her
career as a leading sell-side analyst
- Aerospace sector experience and broad
network: Held leadership roles at L3Harris Technologies,
Inc. (NYSE: LHX), an aerospace and defense technology innovator and
was appointed by President George W. Bush as Commissioner on the
Commission on the Future of the U.S. Aerospace Industry.
- Growth strategy and business development
expertise: Executive Vice President, Business Development
& Growth Initiatives of CAE Inc. (NYSE: CAE).
- Aerospace financial expertise: Was
Managing Director and Senior Aerospace and Defense Analyst at
Morgan Stanley.
***
Forward-Looking Statements
This press release contains certain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
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"estimate," "will" and similar expressions. These forward-looking
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cause its actual results, performance, prospects or opportunities
to differ materially from those expressed in, or implied by, these
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limitation, the adverse effects of the COVID-19 pandemic to SPLP’s
business, results of operations, financial condition and cash
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financial reporting; fluctuations in crude oil and other commodity
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Longacre Square Partners Greg Marose / Joe Germani
gmarose@longacresquare.com / jgermani@longacresquare.com
Okapi Partners Mark Harnett, 646-556-9350
mharnett@okapipartners.com
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