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Frequency Electronics, in accord with Privet, expands board

Frequency Electronics Headquarters at 55 Charles Lindbergh Blvd.

Frequency Electronics Headquarters at 55 Charles Lindbergh Blvd. on Wednesday, July 27, 2016, in Uniondale. Credit: Howard Schnapp

Frequency Electronics Inc. has reached an agreement to expand its board of directors and appoint two new board members designated by an activist hedge fund.

Previously, the Uniondale maker of timing devices used for satellites, missiles and wireless communication networks had said the hedge fund, Atlanta-based Privet Fund Management, was trying to seize control of the company.

The agreement, detailed in a filing with the Securities and Exchange Commission, expands the board of directors from seven to eight members. It also named two directors proposed by Privet to fill the new board seat and another left vacant when Joseph P. Franklin, an 82-year-old retired Army major general, resigned from the board.

Frequency Electronics president and chief executive Martin Bloch said in a telephone interview Monday, “The extra board members will help the company pursue the business more vigorously . . . We’re all on the same page.”

He also said timing is increasingly important in securing communications networks.

Calls to Privet were not immediately returned.

Shares of Frequency fell 41 cents, or 3.7 percent, to close at $10.60 Monday on the Nasdaq Stock Market. They are down two cents in 2016.

Filling the board seats will be Ryan Levenson, Privet principal and portfolio manager, and Lance W. Lord, a retired Air Force general and chief executive of L2 Aerospace. Levenson and Lord had been on Privet’s four-person slate of proposed director candidates opposing incumbent board members.

Privet has assets of more than $100 million, and is Frequency’s largest shareholder, owning about 12 percent of its shares.

In the filing, made Friday, Frequency said Privet had “terminated its pending proxy contest” to elect its slate of directors at the 2016 shareholder meeting on Nov. 1. Frequency had characterized that campaign as “an effort to acquire control of the company without paying a premium to the company’s stockholders.”

In July, the company announced that Franklin would step down as chairman of the board but continue as a director. Board member Joel Girsky, 77, was elected by the board to succeed Franklin as chairman. Earlier this month, however, Franklin said he was resigning from the board effective Sept. 13.

The terms of Levenson and Lord will expire at the 2016 annual meeting on Nov. 1, but they will be included in the company’s slate of nominees at the 2016 and 2017 annual meetings if certain conditions are met, the company said.

The agreement also bars Privet from acquiring more than 14.9 percent of the company’s outstanding common stock.

The company has about 430 employees worldwide, according to its latest annual report.


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