SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [ ]
Filed by a party other than the registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statement.
[ ] Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)
(2)).
[ ] Definitive proxy statement.
[ X ] Definitive additional materials.
[ ] Soliciting material under Rule 14a-12.
FIRST AVIATION SERVICES INC.
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(Name of Registrant as Specified in its Charter)
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P.
WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I
WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD.
WYNNEFIELD CAPITAL MANAGEMENT, LLC
WYNNEFIELD CAPITAL, INC.
NELSON OBUS
JOSHUA H. LANDES
WYNNEFIELD CAPITAL, INC. PROFIT SHARING PLAN
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACT:
Eric Berman
Joseph Kuo
of Kekst and Company
212-521-4800
or:
Nelson Obus
of Wynnefield Capital
212-760-0134
WYNNEFIELD URGES FAVS SHAREHOLDERS
TO VOTE FOR OBUS, CUMULATIVE VOTING
NEW YORK, NY, June 7, 2004 - The Wynnefield Group, the largest minority
shareholder in First Aviation Services Inc. (NASDAQ: FAVS), today mailed a
letter to the company's shareholders urging their votes for the election of
Nelson Obus to the FAvS Board, and for the adoption of cumulative voting. The
company's Annual Meeting of Shareholders is scheduled for June 15, 2004. Full
text of the letter follows:
Dear Fellow Shareholder:
My name is Nelson Obus. I am writing to you on behalf of the members of the
Wynnefield Group ("Wynnefield"), a long-time investor and owner of 2,168,444
(29.7%) of the outstanding shares of First Aviation Services Inc. ("FAvS").
After owning shares for over six years, we are dismayed at the company's
inability to create shareholder value and are running a proxy campaign to ensure
that management hears the voice of minority shareholders.
Even though you and other minority shareholders own nearly one-half (48.2%) of
FAvS' common stock, OUR VOICES AS SHAREHOLDERS ARE BEING IGNORED IN FAVOR OF
FAVS' MAJORITY SHAREHOLDER, AN INVESTMENT COMPANY (FIRST EQUITY) WHOLLY OWNED BY
FAVS' CHAIRMAN AND CEO. FIRST EQUITY BENEFITS FROM BOARD-APPROVED ADVISORY FEES
($1.4 MILLION IN FOUR YEARS) AND LEASE AND EXPENSE-SHARING PAYMENTS ($140,000 IN
FISCAL 2004) PAID BY FAVS. Rather then reinvesting its cash reserves into the
company, or completing its long stated strategy of growth through acquisitions,
in 2003 FAvS paid a $7.251 million special one-time dividend, MOST OF WHICH
BENEFITED FIRST EQUITY AND NOT THE MINORITY SHAREHOLDERS.
To help protect the rights of minority shareholders, and make a statement to
management that minority shareholders cannot be ignored, WE'RE SOLICITING
PROXIES FOR MY ELECTION TO THE BOARD OF DIRECTORS, AND FOR STEPS TO IMPLEMENT
CUMULATIVE VOTING at FAvS' Annual Meeting of shareholders scheduled to be held
on June 15, 2004.
VOTE "FOR" NELSON OBUS AND CUMULATIVE VOTING.
SIGN AND RETURN THE ENCLOSED GREEN PROXY CARD
AND DISREGARD MANAGEMENT'S WHITE PROXY CARD.
Questions? Call our proxy solicitors, Lawrence E. Dennedy or Daniel M. Sullivan
of MacKenzie Partners, at (800) 322-2885
more ...
Wynnefield Letter Urges FAvS' Shareholders Vote For Obus, Cumulative Voting -- 2
continued
HERE'S WHAT MANAGEMENT HASN'T TOLD YOU:
o FAVS STOCK ACTUALLY UNDERPERFORMED THE RUSSELL 2000 STOCK INDEX AND TWO OF
THE THREE COMPANIES INCLUDED IN THE FAVS' PEER GROUP IN ITS PROXY
STATEMENT OVER THE 12-MONTH PERIOD ENDED April 29, 2004. Management boasts
that FAvS' stock price increased 36% over that period. During the same
period, the Russell 2000 Stock Index increased 42%, Aviall, Inc.'s stock
price increased 102%, and AAR Corp.'s stock price increased 177%. EVEN
AFTER THE 36% INCREASE, FAVS STOCK ONLY TRADED NEAR NET/ NET WORKING
CAPITAL (LIQUIDATION VALUE) AND BELOW BOOK VALUE. IS THIS SOMETHING TO
BRAG ABOUT?
o THIS PROXY CONTEST IS BASED ON THE FAILURE OF THE COMPANY'S MANAGEMENT AND
BOARD TO CREATE SHAREHOLDER VALUE. Management accuses us of running a
"negative campaign" and "disparagement of incumbent directors." However,
in addition to the stock performance cited above, the company reported
AVERAGE ANNUAL LOSSES FROM CONTINUING OPERATIONS OF ($0.12) PER SHARE OVER
THE LAST FOUR FISCAL YEARS. The current directors want to keep the status
quo intact, but we think it's time for a realistic perspective on the
company's LACK OF PERFORMANCE AND SOME MUCH-NEEDED FRESH THINKING.
o WE HAVE CONSISTENTLY URGED MANAGEMENT TO COMMIT TO DEVELOPING AND
IMPLEMENTING A BENCHMARKED BUSINESS PLAN THAT DELIVERS CONSISTENT
PROFITABILITY AND SHAREHOLDER VALUE WITHIN A SPECIFIED PERIOD OF TIME --
AND BEEN REBUFFED. If this fails, we would ask the board and management to
commit to explore transactions that would release value to ALL
shareholders.
Management accuses us of pursuing a board seat in an effort to "effectuate
an exit from FAvS * * * even if the exit vehicle may be in a transaction
or at a time that is not in the best interest of all shareholders."
Wynnefield would only seek a transaction that would benefit ALL
SHAREHOLDERS EQUALLY. With the stock near liquidation value and below book
value, IT IS HARD TO IMAGINE A CHANGE THAT WOULD NOT BENEFIT ALL MINORITY
SHAREHOLDERS.
o IF CUMULATIVE VOTING WERE IMPLEMENTED, MINORITY SHAREHOLDERS COULD ELECT
ONLY ONE DIRECTOR A YEAR. WHAT IS MANAGEMENT AFRAID OF? Management claims
that our support of cumulative voting reflects a "self-interested" focus
because we could elect a director with the help of "little additional
shareholder support."
Under cumulative voting, 33.4% of FAvS stock could elect a single director
at future annual meetings (when two board seats are up for election). WE
THINK IT IS ONLY FAIR THAT MINORITY SHAREHOLDERS SHOULD BE ABLE TO HAVE AT
LEAST A SINGLE BOARD SEAT.
I 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 a director. FAVS' MANAGEMENT HAS LONG OPPOSED YOUR ABILITY TO ELECT A
SINGLE DIRECTOR OF YOUR CHOOSING.
PROTECT YOUR INTERESTS AS A FAvS MINORITY SHAREHOLDER.
VOTE "FOR" NELSON OBUS AND CUMULATIVE VOTING.
SIGN AND RETURN THE ENCLOSED GREEN PROXY CARD.
more...
Wynnefield Letter Urges FAvS' Shareholders Vote For Obus, Cumulative Voting -- 3
continued
While management is spending your money to serve their financial interests and
maintain their control of the board, WE ARE SPENDING OUR OWN MONEY in order to
help move FAvS forward and provide representation to ALL shareholders.
Management has repeatedly stated that they will not permit us to win. WE
CONTINUE TO HOLD OUT HOPE THAT, IF WE RECEIVE YOUR VOTE AND THAT OF OTHER
MINORITY SHAREHOLDERS, MANAGEMENT WILL DO THE RIGHT THING AND SUPPORT THE
ELECTION OF ONE BOARD MEMBER OF MINORITY SHAREHOLDERS' CHOOSING.
If you have any questions or need assistance in voting your proxy card, please
call me at (212) 760-0134 or our proxy solicitors, Lawrence E. Dennedy or Daniel
M. Sullivan of MacKenzie Partners, Inc., at (800) 322-2885.
Thank you in advance for your support.
Very truly yours,
Nelson Obus
President, Wynnefield Capital, Inc.
For our proxy statement and more information, please visit our web site at
www.rescuefavs.com.
Even if you have already signed the white proxy card, you can still vote for the
Wynnefield nominee as a director and for cumulative voting in director elections
by signing, dating and returning the GREEN proxy card.
ONLY THE LATEST DATED PROXY MATTERS.
DO NOT SIGN THE WHITE PROXY CARD SENT TO YOU BY
MANAGEMENT
YOUR VOTE IS EXTREMELY IMPORTANT.
If your shares are registered in your own name, please sign, date and mail the
GREEN proxy card to MacKenzie Partners, Inc.
If your shares are held in the name of a brokerage firm, bank nominee or other
institution, please sign, date and mail the GREEN proxy card.
If you have lost your GREEN proxy card from the Wynnefield Group, or did not
receive one, you may obtain another proxy statement and card by contacting
MacKenzie Partners, Inc. at the phone numbers listed above.
If you have any questions, or need assistance in voting your shares, please
contact Lawrence E. Dennedy or Daniel M. Sullivan at:
MACKENZIE PARTNERS, INC.
105 Madison Avenue
New York, New York 10010
email: proxy@mackenziepartners.com
Call Collect: (212) 929-5500
or
Toll-Free (800) 322-2885
Facsimile: (212) 929-0308
* * * * * * *
more...
Wynnefield Letter Urges FAvS' Shareholders Vote For Obus, Cumulative Voting -- 4
continued
ADDITIONAL INFORMATION:
Shareholders are advised to read the Wynnefield Group's definitive proxy
statement, which contains important information. Shareholders may obtain a free
copy of the proxy statement and other documents filed by the Wynnefield Group
with the SEC at the SEC's internet website at www.sec.gov. The proxy statement,
a proxy card, and other documents may also be obtained free of charge from the
Wynnefield Group's proxy solicitor or from the Wynnefield Group by request to:
Lawrence E. Dennedy or Nelson Obus
Daniel M. Sullivan The Wynnefield Group
MacKenzie Partners, Inc. 450 Seventh Avenue, Suite 509
105 Madison Avenue Phone: (212) 760-0134
New York, NY 10016
Phone: (800) 322-2885
If you have lost your proxy card from the Wynnefield Group, or did not receive
one, you may obtain another proxy statement and card by contacting MacKenzie
Partners, Inc. or The Wynnefield Group at the phone numbers listed above.
ABOUT THE WYNNEFIELD GROUP:
The Wynnefield Group is First Aviation's largest outside shareholder, holding
29.7% of the company's outstanding common stock. Wynnefield is a long-term
investor in FAvS, having first invested in the company shortly after its initial
public offering more than six years ago.
The Wynnefield Group includes several affiliates of Wynnefield Capital, Inc.
(WCI), a value investor, specializing in U.S. small cap situations that have
company- or industry-specific catalysts. WCI was established in 1992. Its
founding partners, Nelson Obus and Joshua Landes, held senior research and
institutional equity positions at Lazard Freres & Co. during the 1980s, and the
initial Wynnefield investors included many of their colleagues at Lazard. The
fund has grown to approximately $200 million under management. Nelson Obus
currently serves on the boards of directors of two publicly traded companies,
Layne Christensen Company (NASDAQ: LAYN) and Sylvan Inc. (NASDAQ: SYLN) and
additionally serves on the audit committees of both companies and the
compensation committee of Layne.
More information about the Wynnefield Group's efforts to help provide value to
all FAvS shareholders can be found at www.rescuefavs.com.
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