LAPORTE, Ind., Sept. 19, 2011 (GLOBE NEWSWIRE) -- Longtime P&F Industries, Inc. (Nasdaq:PFIN) shareholder Timothy Stabosz, the Company's largest unaffiliated individual stockholder, with 7% ownership, today announced his filing, on Sept. 12, 2011, of a Form 13D Amendment with the SEC. In the filing, Stabosz criticizes what he sees as the intolerable dominance of the P&F board by a majority of members (Dennis Kalick, Alan Goldberg, Mitchell Solomon, Robert Dubofsky, and Richard Horowitz), whose primary focus is the advancement of the personal agenda of Chairman and CEO Richard Horowitz, and the need to replace at least one of these Horowitz cronies with a new bonafide independent member. Stabosz's main filing can be found at this link:
http://www.sec.gov/Archives/edgar/data/75340/000116289311000005/pf13d14.txt
Also attached to the filing, Stabosz included a demand letter, addressed to the P&F board, dated August 17, 2011, and located at this link:
http://www.sec.gov/Archives/edgar/data/75340/000116289311000005/pfindmd.txt
In the letter, Stabosz demanded that the board "come clean," and release the list of peer companies from the prior outside compensation study, related to the expiring employment agreement of CEO Richard Horowitz, and also demanded the board release the list of peer companies from the current outside compensation study (which will be used to help determine the pay structure for a new CEO contract).
On the board's refusal to release any of the information requested, Stabosz flatly remarked, "The board has not been forthcoming...and I believe the reason they have not been forthcoming is because they are protecting the questionable actions of the prior Compensation Committee, a committee that consisted of diehard Horowitz loyalists Alan Goldberg and Mitch Solomon. In my view, the lack of a willingness to release this information reflects poorly on the integrity of the board as a whole, destroys shareholder trust, and suggests the board is more interested in protecting the actions of Mr. Horowitz's cronies, than in making a determination of whether a good faith process was legitimately followed...which my own peer company research clearly suggests was NOT." (Stabosz's previous P&F peer company research can be viewed at the link listed below.)
http://www.sec.gov/Archives/edgar/data/75340/000116289310000004/pfincomp.txt
Stabosz continued, "Until there is a flow of information from the P&F boardroom that makes it clear that the board is not afraid of transparency and accountability, or the board is, once-and-for-all, reconstituted to consist of a majority of members personally DISINTERESTED in Mr. Horowitz, there will continue to be a cloud hanging over our company. Serious and pervasive doubts exist on whether a majority of the P&F board is concerned about protecting the interests of the broader shareholder base...or keeping the cover securely fastened, over a history of self-serving actions by the board, in fulfilling Mr. Horowitz's unchecked needs and desires, without witness or consequence."
While the board refused to provide the information requested, Stabosz reported, on a somewhat positive note, that the current Compensation Committee did offer him the chance to give his input on a new CEO employment contract, in a private conference call with its two members, Kenneth Scheriff and Jeffrey Franklin. That call was held on September 2, 2011. A day later, Stabosz wrote a letter to the Compensation Committee, summarizing his input. That letter is accessible at the following link:
http://www.sec.gov/Archives/edgar/data/75340/000116289311000005/pfincmp.txt
In the letter, Stabosz, citing his own peer company research, argued for a 75% reduction in the CEO position's base pay, to $250,000, with a considerable bonus component, so that, if Richard Horowitz should be retained, he will be rewarded accordingly, based upon his level of success...instead of receiving a 'cool' $1 million or so a year, regardless of whether he DESTROYS shareholder value (as he has) or not.
"It is clear to me that the old Goldberg/Solomon Compensation Committee was demonstrably conflicted, and primarily driven by a desire to provide Richard Horowitz the highest compensation possible, out of personal loyalty to the CEO...irrespective of the rightful claim of P&F's outside shareholders. With the removal of Goldberg and Solomon from the Compensation Committee a year ago, will the new Compensation Committee (which, thankfully, appears to consist of bonafide independent members) finally assert the legitimate interests of P&F's entire shareholder base, and promptly give Richard Horowitz his walking papers, if Horowitz continues to think it perfectly acceptable to make obscene compensation demands upon our company? Or will they hand over the 'keys to the kingdom' to Horowitz, as Goldberg and Solomon did?
"Let us hope that the new Compensation Committee 'gets it,' does the right thing, and begins to finally build a reputation for integrity and independence for itself, and the broader P&F board. Absent this, and the stepping down from the board of one or more of the Horowitz cronies, I am convinced most investors will continue to see P&F for what it has been, since Horowitz took over as CEO 15+ years ago.....a nominally public company, being operated primarily for the private gain of Richard Horowitz. That MUST stop," Stabosz concluded.