http://www.investorvillage.com/smbd.asp?mb=4804&mn=21018&pt=msg&mid=130488
The letter expresses Charles Knowles opinions, and findings which I find interesting to say the least.
The thoughts expressed are his, not necessarily mine.
Make up your own mind, do your own due diligence. I will post any correction of the facts set forth if corroborated in writing. I welcome any competing or divergent comment or opinion.
Dear fellow API shareholder,
As a fellow API investor, I’m sure you will find this letter eye-‐opening and I am writing it with one purpose: to ask you to vote yes on proposal #6 on this year’s proxy, which allows major shareholders input into the nomination of directors.
I am a 62 year-‐old father of three who has practiced veterinary medicine with my wife in WV for the past 31 years. I have followed terahertz from its start up days to the innovative high-‐tech business API has become.
I was discussing T-‐ray technology with my friend , Dr. Robert Fogglesong, a retired USAF four-‐star General, PhD Chemical Engineering, past president of Mississippi State University, and an API shareholder. “Doc” has served in the past on boards of various companies, and desires to serve on the board of API.
In 2011, I sent certified documents to API’s CEO Rick Kurtz, requesting that Dr. Fogglesong be considered for nomination to the board and placement on the ballot. Although I had delivery confirmation of the documents, neither Doc nor I received an acknowledgement from anyone at API.
In 2012 I sent another document, within the time frame given in the 2011 DEF14A. Two months later, having received no acknowledgment of this document, I contacted the API board through Lighthouse, an SEC oversight company. Over the next two months, I received two copies of the same form letter from API stating that they were considering Dr. Fogglesong for a place on the ballot.
After receiving no follow-‐up to their form-‐letter, I called the chairman of the nominating committee, Lance Brewer. Lance told me that although Dr. Fogglesong was well-‐qualified and politically connected, API couldn’t afford another board member. Dr. Fogglesong’s response was that he would be happy to serve as a board member with no compensation until API became profitable. Since I had sent his name in to be added to the list of nominees, not appointed, I was upset at API’s response. It made no sense that they would not consider such a qualified candidate.
So I did some research, uncovering information that every shareholder needs to be aware of. Did you know that three of API’s directors previously worked together at Filtertec before coming to API? Did you know that the board compensation, since these three came on board, has gone up from $10,000 to over $50,000 each conservatively over a 300% increase! Did you know that in 2012 Mr. Kurtz made $400,000 as CEO of API?
These wages are outrageous for a company that is not currently making a profit, but it may explain why API is not willing to consider someone new for a board position. Since API merged with Picometrix in 2005, there has not been a new candidate even nominated for a seat on the board. The incumbent board has reigned, year after year.
This gets to the heart of my proposal which is simply to allow a major shareholder, or group of shareholders, to nominate board candidates. This would by-‐pass the board’s present nominating committee and would take away their power to ignore or turn down new candidates. Obviously, each candidate would still require a plurality of votes cast in order to be elected and the nominating committee would retain their right to nominate candidates as well.
But here’s the problem: in order to change the API bylaws, my proposal needs a majority of outstanding shares votes cast. That’s 16 million shares!!! There have never been that many votes cast in total. The highest number ever voted was 12 million.
If you like the idea of more diversity and accountability on API’s board of directors, I urge you to vote for proposal #6. If you have already voted against it, and would like to change your vote, you can do so by calling board secretary Rob Risser (734-‐864-‐5600) or your personal brokerage firm, up to the day before the next board meeting. The meeting is scheduled to take place on Friday August 23.
New information regarding this issue continues to surface and is available to all of you on investorvillage.com under the API message boards.
Let’s take back our power as shareholders and do the right thing for API. Thank you for your support!
Sincerely,
Charles Knowles
PS: FYI, I am voting no on proposal #4, the employee equity plan, because
it dilutes the shares 10%. The non employee Director Grants allows both automatic
stock grant awards of 25,000 shares per year per non employee director and the compensation committee, at its sole discretion, may grant non-‐employee directors discretionary Awards!
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