Beaver Hollow Wellness Withdraws Proxy Campaign Following TransDigm Agreement with Servotronics' (SVT)

Market Cap: $27 million | Servotronics, Inc. designs, manufactures, and markets control components and consumer products in the United States and internationally.

Beaver Hollow Wellness, LLC

• On January 9, 2025, Beaver Hollow Wellness, led by CEO Paul L. Snyder, nominated four director candidates for Servotronics' 2025 annual meeting. On January 17, Snyder highlighted the need for board change to address Servotronics' financial struggles, following executive departures and the sale of Ontario Knife Co. Source
• On January 30, 2025, Beaver Hollow Wellness issued a formal demand to the Board for an internal investigation into potential unjust enrichment and breaches of fiduciary duties. Concerns arise from excessive CEO and Board compensation totaling over $3,000,000 amidst substantial financial losses exceeding $13,000,000 and a sharp decline in unrestricted cash reserves. Source
• On February 5, 2025, Beaver Hollow Wellness urged immediate action to address critical financial instability threatening the company. Despite previous offers of support being declined by the Board and CEO, they proposed the S.A.V.E. (Shareholder Action for Value and Employees) plan to enhance manufacturing capabilities, restore customer and employee confidence, and reverse the decline in shareholder value. They criticized current leadership for enriching themselves at the company's expense and proposed a new slate of expert directors to execute this plan effectively. Source
• On March 26, 2025, Beaver Hollow Wellness, LLC criticized the company's denial of its request to inspect corporate records. Servotronics rejected the request, citing insufficient purpose, which Beaver Hollow disputes, raising concerns about transparency and governance, especially during the ongoing strategic review. Beaver Hollow plans to pursue legal action to ensure accountability. Source
• On April 23, 2025, Beaver Hollow Wellness criticized the company's amended proxy statement for including “change of control” provisions aimed at protecting executive payouts if directors are replaced. Beaver Hollow accused the board of prioritizing executive compensation over shareholder value and reaffirmed its commitment to operational reform and responsible governance. Beaver Hollow urged shareholders to reject these tactics and vote for its four nominees. Source
• On May 13, 2025, Beaver Hollow Wellness issued a presentation expressing its concerns and Hollow urged shareholders to vote for its four nominees.
• On May 22, 2025, Beaver Hollow Wellness ended its proxy campaign after the company agreed to be acquired by TransDigm (TDG), a deal praised for preserving local jobs and delivering over a 250% return since BHW launched its board campaign in January 2025. Source

Star Equity Fund

Update:

On March 25, 2025, Star Equity Fund (6%) commented on Servotronics' strategic alternatives review. While supportive of the review, Star Equity Fund believes it should have occurred earlier and stresses the need for significant progress to unlock the company's full value. Source

Background:

• On March 2, 2022, Star Equity Fund filed proxy materials soliciting votes for the election of its director nominees at 2022 AGM. It stated that under the incumbent board’s watch, the Company’s previous CEO abused his authority and perpetuated a culture of harassment at the expense of employees and shareholders (as alleged by a lawsuit filed by a former employee on June 7, 2021), with an internal investigation finding that he committed willful malfeasance in violation of his employment agreement with the Company. In addition, the incumbent board has overseen and continued to support the Company’s unprofitable Consumer Products Group without having taken meaningful action to maximize shareholder value. In addition, the incumbent board has a track record of poor corporate governance. Proxy advisory firms ISS and Glass Lewis have cited numerous issues with Servotronics’s board of directors and the Company’s corporate governance, including in its report on the Company’s 2021 annual meeting.  Source
• On April 8, 2022, Star Equity Fund filed proxy materials urging the company to schedule 2022 AGM.
• On May 13, 2022, Star Equity Fund stated that it was pleased to announce that its campaign at Servotronics, including the nomination of director candidates 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. The Fund stated that under pressure from its campaign, the company recently announced several Board composition and governance changes including, (i) the appointment of a new CEO, (ii) the addition of Karen Howard and shareholder representative Evan Wax to the Board, (iii) the naming of independent director Christopher Marks as Chairman of the Board, (iv) the resignation of Jason Bear from the Board, (v) the termination of its poison pill, and (vi) the reconfirmation that Kenneth Trbovich would not be nominated for election at its 2022 annual meeting. Further, Star Equity Fund stated that it was pleased with the two new additions to the Board and plan to withdraw its nomination for this year’s annual meeting. Source
• On October 20, 2022, Star Equity Holdings presented a non-binding indication of interest to explore a potential combination with the company. On November 2, 2022, after refusing to even engage in conversations with Star Equity Holdings regarding details of a proposal, the Board responded to Star Equity Holdings that a transaction is not in the best interests of the shareholders.
• On November 14, 2022, Star Equity Fund (5.6%) issued a press release noting the Board’s rejection of Star Equity Holdings’ proposal without genuinely engaging, and strongly questioning the incumbent directors’ commitment to the shareholders. Star Equity Fund also asserted, the Board’s actions make clear that further change to the Board’s composition needs to occur.
• On February 9, 2023, Star Equity Fund (5.4%) delivered a letter to the company nominating six director candidates for election to the Board at the 2023 AGM. Source
• On February 14, 2023, Star Equity Fund filed proxy materials seeking support for its nominees.
• On February 24, 2023, Star Equity Fund filed proxy materials seeking support for its nominees.
• On March 29, 2023, Star Equity Fund withdrew the nomination of four candidates and issued a press release announcing that it would be proceeding with the nomination of two candidates for election to the Board at the 2023 AGM.
• On April 17, 2023, Star Equity Fund filed proxy materials seeking support for its nominees.
• On May 1, 2023, Star Equity Fund filed proxy materials seeking support for its nominees.
• On May 19, 2023, Star Equity Fund issued an investor presentation titled “Our Plan for Change at Servotronics, Inc.”
• On May 19, 2023, Star Equity Fund filed proxy materials urging all stockholders to vote the WHITE proxy card to elect G. Mark Pomeroy and Richard K. Coleman, Jr. to the board at the company's 2023 AGM. Source
• On May 31, 2023, Star Equity Fund issued in a press release where it reiterated its belief that the incumbent Board, specifically, Edward Cosgrove, Christopher Marks, and William Farrell lacks the necessary experience and expertise to change the trajectory at the company. Star Equity Fund also emphasized that although the company announced its intent to sell its Consumer Products Group after pressure from Star Equity Fund's campaign, intent does not drive shareholder value, but rather execution drives value. Star Equity Holdings further stated its belief that the long-suffering shareholders would be better served by the company exploring strategic alternatives with strategic buyers for ALL its assets, which includes both its Consumer Products Group and Aerospace segments, in addition to real estate assets.
• On June 1, 2023, Star Equity Fund withdrew its nomination of Messrs. Coleman and Pomeroy for election to the Board at the annual meeting. Source

Brent D. Baird

On February 16, 2023, Brent D. Baird (10.9%) entered into a Cooperation Agreement with the Company. Pursuant to the Cooperation Agreement, the Company agreed to appoint him to the board, effective as of February 16, 2023, with a term expiring at the company’s 2023 AGM.