SM&A denies former CEO's collusion accusation

By Lisa Kerner

Charlotte, N.C., May 14 - SM&A fired back at former chief executive Steven Myers, denying his claim that City National Bank and SM&A colluded to "add an event of default under SM&A's credit agreement in order to influence the outcome of the current proxy contest."

Myers accused SM&A of using the event of default to skew the upcoming election and intimidate shareholders into voting for the incumbent board, a prior news release said.

According to an SM&A news release, City National Bank required the new event of default, triggered if three or more incumbent directors cease to be members of SM&A's board, to reassess the credit agreement terms if there are "changed circumstances" as a result of the proxy battle.

The investor asked City National to remedy what he called unlawful conduct by permanently waiving the default provision by May 12 or otherwise expose City National to "substantial legal liability, including the prospects of class-action lawsuits that will seek punitive damages," it was previously reported.

SM&A noted there are currently no borrowings under the credit agreement.

The company continued to ask shareholders to vote for SM&A's director nominees at the annual meeting on May 23.

Myers, who was asked to leave SM&A in March 2007, is seeking shareholder support for his slate of director nominees which includes himself.

SM&A, based in Newport Beach, Calif., provides competition management and program support services to industrial customers in the aerospace and defense, information technology, telecommunications, and other industries.

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