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HELP MOVE FAVS FORWARD
Management
and the Board Ignores Unaffiliated Shareholders’
Vote
for Wynnefield Nominee
and Cumulative Voting
On June 16, 2004, more than 77% of unaffiliated shares voted
at the First Aviation Services (FAvS) Annual Meeting of Shareholders
expressed dissatisfaction with the company’s current
board of directors by either voting for an opposing candidate
or withholding support for management’s slate.
As a long-time investor and owner of a 29.7 percent stake
in FAvS, and whose interests are aligned with those of other
minority shareholders, the Wynnefield Group solicited proxies
in opposition to management's director slate and in order
to implement cumulative voting.
All told, Wynnefield’s
director nominee received 60% and its shareholder
proposal for cumulative voting for directors received
73% of the votes cast by shareholders unaffiliated
with either FAvS management or Wynnefield.
We at Wynnefield
have been dismayed at FAvS' performance – performance
that resulted in a stock price below book value for
more than three years and near net/net working capital
(liquidation value) per share recently. This price
indicates that the market assigns only nominal value
to FAvS’ current business model. |
| Update: January 12,
2005
Wynnefield Submits Shareholder
Proposal for Cumulative Voting
On January 12, 2005, the Wynnefield
Group submitted a shareholder proposal and supporting
statement for inclusion in FAvS' proxy statement
for its 2005 annual shareholders meeting. The shareholder
proposal recommends that the FAvS board take the
steps necessary to implement cumulative voting
in director elections. A copy of the Wynnefield
Group's Schedule 13D relating to the shareholder
proposal is available on the SEC's web site at
www.sec.gov.
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On several occasions, we have urged that management take
steps to benefit the company and ALL shareholders by developing
and executing a successful business plan or, failing that,
undertaking a value-releasing transaction. After being repeatedly
rebuffed, we had no other choice but to engage in a proxy
contest.
FAvS blames industry conditions for its lack of performance.
However, as the chart below demonstrates, FAvS' primary competitor
Aviall (AVL) has evolved its business plan and continues
its strong recovery since 2001.
FAvS' CEO and Chairman (through their investment
firm, First Equity Group Inc.) own 51% of FAvS stock and
therefore have complete voting control in director elections.
We believe the voice of minority shareholders has been ignored
by FAvS management for too long. FAvS management benefits
from salaries, bonuses, and payments to First Equity.
We conducted the proxy contest in order to
give ALL minority shareholders a voice at FAvS by electing
a minority shareholder to ONE of the five board seats and
through implementation of cumulative voting. Nelson Obus
will bring to the board needed fresh thinking and a voice
for ALL minority shareholders. Cumulative voting will make
it possible for minority shareholders to elect one director
of their choice.
With management controlling 51% of FAvS stock, minority
shareholders cannot accomplish that without management
support. On June 16, shareholders sent a loud and clear
message to the board by voting "FOR" Nelson Obus
and "FOR" cumulative voting. We now hope that
the board will hear the message and adopt measures to give
minority shareholders a single seat on the board.
For further information, please contact:
Nelson
Obus
The Wynnefield Group
450 Seventh Avenue, Suite 509
New York, NY 10123
Phone: (212) 760-0134
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