SCHEDULE 14A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant |_|
Filed by a Party other than the Registrant |X|
Check the appropriate box
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Mechanical Technology Incorporated
(Name of Registrant as Specified in Its Charter)
First Albany Companies Inc.
George C. McNamee
Alan P. Goldberg
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
|_| $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
|_| $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
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:
|X| 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:
1996 ANNUAL MEETING OF SHAREHOLDERS
of
MECHANICAL TECHNOLOGY INCORPORATED
PROXY STATEMENT OF THE FIRST ALBANY COMMITTEE
TO OUR FELLOW SHAREHOLDERS OF MECHANICAL TECHNOLOGY
INCORPORATED
This Proxy Statement is being furnished to holders (the
"Shareholders") of the $1.00 par value common stock (the "Common Stock") of
Mechanical Technology Incorporated, a New York corporation ("MTI"), in
connection with the solicitation of proxies by THE FIRST ALBANY COMMITTEE (the
"Committee") for use at the 1996 Annual Meeting of Shareholders of MTI, or at
any and all adjournments or postponements thereof (the "Annual Meeting"). The
Annual Meeting was scheduled to be held on March 28, 1996 and has been adjourned
to Thursday, May 16, 1996, to be held at the corporate offices of MTI, 968
Albany-Shaker Road, Latham, New York 12110 at 10:00 a.m. E.S.T. Copies of this
Proxy Statement and the accompanying BLUE proxy card are being mailed by the
Committee to shareholders on or about May 8, 1996.
At the Annual Meeting, six Directors are to be elected to hold
office for a one- year term and until their successors shall have been elected
and qualified. The Committee is
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soliciting your proxy in support of the election of (i) George C. McNamee (who
is Chairman and a Director of First Albany Companies Inc. ("First Albany")) and
Alan P. Goldberg (who is a Director and President of First Albany) and (ii)
certain nominees from the slate of Directors supported by the current Board of
Directors of MTI (the "Board of Directors"). As of May 7, 1996, First Albany
(who, together with Messrs. McNamee and Goldberg, comprises the Committee)
beneficially owns 1,036,698 shares of Common Stock (including 909,091 shares
recently received upon consummation of the Purchase Agreement described herein
and excluding the Proxy Shares described herein), representing approximately
29.0% of the outstanding Common Stock.
The Committee urges all shareholders to attend the meeting in
person. If you are unable to attend in person and wish to have your shares
voted, please sign and date the enclosed BLUE proxy card and return it in the
postage prepaid envelope as promptly as possible. Be sure you carefully review
the Proxy Statement and the enclosed materials. YOUR PROXY IS IMPORTANT. IF YOU
ARE UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON YOUR PROXY IS THE ONLY MEANS
AVAILABLE FOR YOU TO VOTE. No matter how many or how few shares you own, please
vote FOR the Committee's nominees for Director by so indicating and by signing,
marking, dating and mailing the enclosed BLUE proxy card promptly. By returning
the enclosed BLUE proxy card, shareholders will be able to vote on all matters
described in MTI's Proxy Statement dated February 16, 1996 (the "MTI Proxy
Statement"), including the election of four of the six nominees proposed by the
Board of Directors.
THE COMMITTEE URGES YOU NOT TO SIGN THE WHITE PROXY CARD OR
ANY OTHER PROXY CARD SENT TO YOU BY MTI. IF YOU HAVE ALREADY SIGNED AND RETURNED
ANY SUCH PROXY CARD, YOU MAY REVOKE YOUR PROXY BY SIGNING AND RETURNING THE
ENCLOSED BLUE PROXY CARD, BY DELIVERING A WRITTEN NOTICE OF REVOCATION TO THE
SECRETARY OF MTI OR BY VOTING IN PERSON AT THE ANNUAL MEETING. ONLY YOUR LATEST
PROXY WILL COUNT AT THE ANNUAL MEETING.
If you own shares of Common Stock but your stock certificate
is held for you by a brokerage firm, bank or other institution, it is very
likely that the stock certificate is actually in the name of such brokerage
firm, bank or other institution. If so, only it can execute a BLUE proxy card
and vote your shares. The brokerage firm, bank, or other institution holding the
shares for you is required to forward proxy materials to you and solicit your
instructions with respect to the granting of proxies; it cannot vote your shares
unless it receives your specific instructions.
PLEASE SIGN, DATE AND RETURN TODAY THE ENCLOSED BLUE PROXY CARD TO:
THE FIRST ALBANY COMMITTEE
c/o First Albany Companies Inc.
30 South Pearl Street
Albany, New York 12207-1599
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THE COMMITTEE
The Committee has been formed by, and consists of, First
Albany, George C. McNamee (who is Chairman, a Director and Co-Chief Executive
Officer of First Albany) and Alan P. Goldberg (who is a Director, President and
Co-Chief Executive Officer of First Albany) for the purpose of this
solicitation, in order to effect changes in MTI's current Board of Directors and
to designate certain representatives of First Albany to serve as members of the
Board of Directors. The Committee believes that a successful solicitation will
facilitate the exploration of alternatives for revitalizing MTI and maximizing
shareholder value. These alternatives include new strategies and policies and
enhancement of MTI's balance sheet through a private placement of equity and the
restructuring or refinancing of certain MTI indebtedness that First Albany has
agreed to purchase from the New York State Superintendent of Insurance, as
described below under "Certain Agreements and Arrangements." Each of the members
of the Committee may be deemed to be a "participant" in this solicitation.
First Albany is a holding company which, through its principal
wholly-owned subsidiary, First Albany Corporation ("FAC"), is an investment
banking, securities trading and brokerage firm serving corporations, governments
and institutional and individual investors. The address of First Albany's
principal office and principal business is 30 South Pearl Street, Albany, New
York 12207-1599.
For additional information with respect to the participants in
this solicitation, see Schedules I, II and III hereto.
BACKGROUND OF THE SOLICITATION
On September 28, 1995, FAC purchased 101,900 shares of Common
Stock in the open market and on January 16, 1996, FAC purchased 25,707 shares in
the open market. On April 4, 1996, FAC transferred such 127,607 shares
(representing approximately 3.6% of the outstanding Common Stock) to First
Albany.
In connection with its then ongoing negotiations with the New
York State Superintendent of Insurance with respect to the possible purchase of
approximately 25% of the outstanding Common Stock, on March 26, 1996, First
Albany obtained a limited purpose proxy from Ford Motor Company relating to
156,250 shares of Common Stock beneficially owned by Ford Motor Company and on
March 28, 1996, First Albany obtained a limited purpose proxy from Atlas Copco
AB relating to 140,000 shares of Common Stock beneficially owned by Atlas Copco
AB (collectively, the "Proxy Shares"). Such proxies authorized First Albany to
vote such Proxy Shares at the Annual Meeting scheduled for March 28, 1996 (and,
in the case of the proxy from Atlas Copco AB, at any adjournment thereof) for an
adjournment of such meeting. Without a formal vote of stockholders (and,
therefore, without exercise of such proxies), the Annual Meeting was adjourned
to May 16, 1996.
On April 12, 1996, First Albany entered into a Purchase
Agreement (as described below), pursuant to which First Albany, subject to the
satisfaction of certain conditions, agreed
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to purchase 909,091 shares of Common Stock and the Purchased Debt (as defined
below). Such purchase was consummated on May 7, 1996.
As a result of the foregoing, First Albany is currently the
beneficial owner of 1,036,698 shares of Common Stock (excluding the Proxy
Shares), representing approximately 29.0% of the outstanding Common Stock.
THE COMMITTEE'S INTENTIONS WITH RESPECT TO MTI
The purpose of the acquisition of securities by First Albany
described herein is to influence the Board of Directors and the management of
MTI, to assist in the revitalization of MTI, and for investment. First Albany is
seeking representation on the Board of Directors, to be considered and acted
upon at the Annual Meeting.
In connection with negotiating the Purchase Agreement and
First Albany's request for approval thereof by the Board of Directors pursuant
to Section 912 of the New York Business Corporation Law (the New York
anti-takeover statute), First Albany has delivered letters to the Board of
Directors of MTI and to a board member (collectively, the "Board
Correspondence"), as described below under "Certain Agreements and
Arrangements." The Board Correspondence sets forth, among other things, that
First Albany plans (based on the then current economic condition of MTI) to
assist in the revitalization of MTI by enhancing its balance sheet through the
ultimate infusion of approximately $2,000,000 in new equity and through the
restructuring or refinancing of the Purchased Debt. Such correspondence also
indicates that First Albany plans to maintain MTI as a viable going concern that
provides jobs and economic opportunities in the New York capital region. First
Albany also stated that it intends, through the contemplated stock and debt
purchases, to act in the best interests of MTI and does not intend to strip the
assets of MTI, do a leveraged buyout, squeeze out minority shareholders or merge
MTI with First Albany or any of its subsidiaries.
The Committee anticipates that the Purchased Debt would be
restructured or refinanced as described under "Certain Agreements and
Arrangements" below. In addition, First Albany anticipates that in the case of
any private placement by MTI to raise new equity, it may seek to be designated
as placement agent, on terms no less favorable to MTI than those that MTI could
obtain from a third party on an arm's length basis.
The letters described above that were delivered by First
Albany to the Board of Directors contain certain representations relating to
First Albany's intentions with respect to MTI. Nevertheless, First Albany notes
such expressions of intent were stated based solely on then current conditions
and circumstances and were not intended to, and do not constitute, binding
obligations of First Albany. First Albany and the Committee expressly reserve
the right to take actions inconsistent with the intentions expressed in such
Board Correspondence, although First Albany and the Committee have no current
plans to do so.
Prior to entering into the Purchase Agreement, First Albany
was advised by MTI that the Board of Directors had approved the purchases
contemplated by the Purchase Agreement.
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From time to time, First Albany has engaged in discussions
with MTI, its officers and Directors and other significant shareholders relating
to MTI's policies, management, directors, business, operations, financial
condition, strategies and other developments, and First Albany intends to engage
in such discussions in the future. As contemplated hereby, First Albany intends
to discuss with the officers and Directors of MTI and certain other significant
shareholders changes in the present Board of Directors and the designation of
certain representatives of First Albany to serve as members of the Board of
Directors, to be considered and acted upon at the Annual Meeting.
From time to time, First Albany may buy or sell additional
shares of Common Stock, on the open market, in private negotiated transactions,
from MTI or otherwise.
Notwithstanding the foregoing, as a significant shareholder of
MTI and through any of its representatives that may be members of MTI's Board of
Directors, First Albany may consider, from time to time, (i) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving MTI or any of its subsidiaries, (ii) a sale or transfer of a material
amount of assets of MTI or any of its subsidiaries, (iii) material changes in
the present capitalization or dividend policy of MTI, (iv) other material
changes in MTI's business or corporate structure, (v) changes in MTI's
certificate of incorporation and by-laws or other actions which may impede the
acquisition of control of MTI by any person, (vi) causing a class of securities
of MTI to be delisted from a national securities exchange or to cease to be
authorized in an inter-dealer quotation system of a registered national
securities association, (vii) causing a class of equity securities of MTI to
become eligible for termination of registration pursuant to Section 12(g)(4) of
the Securities Exchange Act of 1934, as amended or (viii) any action similar to
any of those enumerated above.
No assurance can be given that the Committee or its nominees
will be able to implement any of the foregoing plans or produce favorable
financial results. The Committee could, and expressly reserves the right to,
modify its plans with respect to MTI.
VOTING RIGHTS
MTI has set February 13, 1996 as the record date for
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. According to MTI, at the close of business on February 13, 1996, MTI
had outstanding 3,568,868 shares of Common Stock, which is the only class of
securities entitled to vote at the meeting. Each share of Common Stock entitles
the holder thereof to one vote on the matters to be voted upon by such
shareholders. The presence of a majority of the outstanding Common Stock that is
entitled to vote thereat, present in person or represented by proxy, will
constitute a quorum. For each vote, absentions will be counted, but "broker
non-votes" will not be so counted, as shares present for purposes of determining
the existence of a quorum at the Annual Meeting.
At the Annual Meeting, six Directors are to be elected, each
to hold office until the next Annual Meeting of Shareholders and until a
successor shall be elected and shall qualify.
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The number of shares voted "for" the election of each person
nominated for election as a Director, as well as the number of shares as to
which authority is withheld from the proxies to vote for any individual nominee
or for all of the Committee Nominees and the Designated MTI Nominees (each as
defined below) as a group and the number of shares held for customers by brokers
(or their nominees) and represented at the meeting but not voted with respect to
the election of Directors, will be tabulated by inspectors of election appointed
in accordance with the applicable provisions of the New York Business
Corporation Law. The nominees for election as Director receiving a plurality of
the votes which are cast at the meeting with respect to the election of
Directors will be elected. Thus, except that such action may reduce the number
of shares which are voted "for" the election of any person nominated for
election as a Director and may reduce the number of votes which are cast at the
meeting with respect to the election of Directors, neither a shareholder's
withholding of authority from the proxies to vote his shares for any individual
nominee or for all of the Committee Nominees and the Designated MTI Nominees as
a group, nor the failure of brokers to vote, with respect to the election of
Directors, shares held by them (or their nominees) for customers, will otherwise
affect the vote required for the election of Directors; the six nominees for
election receiving the greatest number of votes will be elected, without regard
to the actual number of shares voted (or not voted) for each or the total number
of votes cast for all nominees.
REVOCATION RIGHTS
A shareholder who executes the enclosed proxy may revoke it at
any time before it is exercised. An executed proxy may be revoked either by a
later dated proxy with respect to the same matters, by giving notice of
revocation to the Secretary of MTI or by voting in person at the Annual Meeting.
Proper execution of the Committee's enclosed proxy will revoke a previously
executed proxy delivered to MTI. If the proxy is not revoked, it will be voted
by those herein named as you direct on the proxy.
If you do not specifically instruct us otherwise, your shares
will be voted for George C. McNamee, Alan P. Goldberg, Harry Apkarian, R. Wayne
Diesel, Stanley I. Landgraf and E. Dennis O'Connor and your shares will abstain
from voting for the reappointment by the Board of Directors of Coopers & Lybrand
as MTI's independent accountants.
ELECTION OF DIRECTORS
According to the MTI Proxy Statement, MTI currently has six
Directors, all of whose terms will expire at the Annual Meeting. The Committee
proposes that MTI shareholders elect George C. McNamee and Alan P. Goldberg
(collectively, the "Committee Nominees") as Directors of MTI at the Annual
Meeting. In addition, the Committee proposes that MTI shareholders elect each of
Harry Apkarian, R. Wayne Diesel, Stanley I. Landgraf and E. Dennis O'Connor
(each of whom is a nominee of MTI) as Directors of MTI at the Annual Meeting
(such MTI nominees collectively, the "Designated MTI Nominees"). The Designated
MTI Nominees constitute the nominees of MTI for Director, other than Albert W.
Lawrence and Lawrence A. Shore.
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Each of the foregoing nominees, if elected, would hold office
until the 1997 Annual Meeting of Shareholders and until a successor has been
elected and qualified. Although the Committee has no reason to believe that any
of the foregoing nominees will be unable to serve as Directors, if any one or
more of such nominees are not available for election, the persons named on the
BLUE proxy card will vote for the election of such other nominees as may be
proposed by the Committee (which the Committee expects, other than in the case
of Mr. McNamee's or Mr. Goldberg's unavailability, would include Beno
Sternlicht, a founder of MTI who is currently not an officer or director of MTI
or otherwise affiliated therewith).
There is no assurance that MTI's nominees will serve if
elected with any of the Committee's nominees.
The Committee Nominees and the Designated MTI Nominees for the Board of
Directors
George McNamee, age 49, is currently Chairman, a Director and
Co-Chief Executive Officer of First Albany and FAC. Mr. McNamee joined FAC in
1969. From 1975 until 1989, he served as President of FAC. He has served as
Chairman of FAC since 1984 and as Co-Chief Executive Officer of FAC since 1993.
Mr. McNamee serves on the Board of Directors of the New York State Science and
Technology Foundation, the Internet Shopping Network and MapInfo Corporation,
and is currently completing his term as a Director of Home Shopping Network,
Inc. Mr. McNamee has been Chairman and a Director of First Albany since its
incorporation in 1985.
Alan P. Goldberg, age 50, is currently President, Co-Chief
Executive Officer and a Director of First Albany and FAC. Mr. Goldberg joined
FAC in 1980 and shortly thereafter became Executive Vice President. Mr. Goldberg
became President of FAC in 1989 and Co- Chief Executive Officer in 1993. Mr.
Goldberg is Chairman of the Board of Trustees of the Albany Institute of History
and Art, Chair-Elect of the Greater Albany Colonie Chamber of Commerce and a
Director of the Center for Economic Growth and of the Albany Symphony Orchestra.
Mr. Goldberg has been a Director of First Albany since its incorporation in
1985.
Messrs. McNamee and Goldberg may be deemed to be beneficial
owners of the Common Stock of MTI beneficially owned by First Albany, and do not
beneficially own shares of Common Stock in any other capacity. The disclosure of
this information shall not be construed as an admission that Mr. McNamee or Mr.
Goldberg is the beneficial owner of any of the Common Stock owned by First
Albany, either for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended, or for any other purpose, and such beneficial ownership is
expressly disclaimed.
Pages 2-4 of the MTI Proxy Statement (incorporated herein by
reference) set forth the names, background, qualifications and other information
concerning the Designated MTI Nominees. Information is also provided concerning
the committees of the Board of Directors.
First Albany's by-laws contain provisions that provide each of
the Committee Nominees with certain indemnification rights from First Albany
against any expenses (including
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legal fees) arising out of participation in the proxy solicitation and, if
elected, service on the MTI Board of Directors.
Intention to Increase the Size of the Board of Directors
MTI's by-laws provide that the Board of Directors shall
consist of not less than five nor more than fifteen Directors, as determined by
the Board of Directors from time to time. MTI's by-laws further provide that if
the office of any Director or Directors becomes vacant for any reason, the
Directors in office may choose a successor or successors who shall hold office
for the unexpired term in respect to which such vacancy occurred or until the
next election of Directors, or any vacancy may be filled by shareholders at any
meeting thereof.
If elected, the Committee Nominees currently intend to seek to
increase the size of the Board from six to seven or more Directors, pursuant to
the foregoing provisions, and to cause Beno Sternlicht, a founder of MTI who is
currently not an officer or director of MTI or otherwise affiliated therewith,
to be appointed to fill one of such resulting vacancies. Any decision by such
nominees to take such action would be dependent upon the composition of the
Board, actions taken by management and the current Directors and other
circumstances then existing.
Mr. Sternlicht has not agreed to accept any such appointment;
accordingly, there is no assurance that he would serve if so appointed.
VOTING PROCEDURES
Unless otherwise directed on the proxy card as more fully
described below, we will vote FOR each of the Committee Nominees and FOR each of
the Designated MTI Nominees.
The accompanying BLUE proxy card will be voted at the Annual
Meeting in accordance with your instructions on such card. You may vote FOR the
election of each of the Committee Nominees and FOR each of the Designated MTI
Nominees as Directors of MTI or withhold authority to vote for the election of
all the Committee Nominees and the Designated MTI Nominees by marking the proper
box on the BLUE proxy card. You may also withhold your vote from any one or more
of the Committee Nominees and/or any one or more of the Designated MTI Nominees
by writing the name of such candidate in the space provided on the BLUE proxy
card. As required by Reg. Sec. 240.14a-4(d)(iv) promulgated under the Securities
Exchange Act of 1934, as amended, the Committee hereby states that there is no
assurance that MTI's nominees will serve if elected with any of the Committee
Nominees. However, the Committee has no reason to believe that they will not
serve. IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO
VOTE THE SHARES REPRESENTED BY THE BLUE PROXY CARD FOR THE ELECTION OF ALL OF
THE COMMITTEE NOMINEES AND ALL OF THE DESIGNATED MTI NOMINEES, PROVIDED THAT YOU
HAVE SIGNED AND DATED THE PROXY CARD.
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APPROVAL OF INDEPENDENT AUDITORS
As set forth in the MTI Proxy Statement, at the Annual
Meeting, the shareholders will consider a proposal to ratify the reappointment
of Coopers & Lybrand as the auditors of MTI, subject to the receipt of a
satisfactory letter of engagement from such firm. Coopers & Lybrand have been
MTI's auditors since 1978. First Albany intends to vote its shares of Common
Stock in favor of the proposal, but the Committee is making no recommendations
to shareholders as to how their shares of Common Stock should be voted with
respect to this proposal.
Approval of auditors by the shareholders is not required by
the by-laws of MTI. Should the Board's appointment of the auditors not be
ratified, other auditors will be appointed by the Board of Directors.
The accompanying BLUE proxy card will be voted at the Annual
Meeting in accordance with your instructions on such card. You may vote for the
appointment of Coopers & Lybrand or vote against, or abstain from voting on, the
appointment of Coopers & Lybrand by marking the proper box on the BLUE proxy
card. IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO
ABSTAIN FROM VOTING THE SHARES REPRESENTED BY THE BLUE PROXY CARD WITH RESPECT
TO THE APPOINTMENT OF COOPERS & LYBRAND.
CERTAIN AGREEMENTS AND ARRANGEMENTS
As described above under "Background of the Solicitation,"
First Albany has received limited purpose proxies from Ford Motor Company (which
is no longer effective by its terms) and Atlas Copco AB, in each case
authorizing First Albany to vote for adjournment of the Annual Meeting.
First Albany entered into a Stock and Debt Purchase Agreement
(the "Purchase Agreement") dated as of April 12, 1996 with the New York State
Superintendent of Insurance (the "Superintendent"), as Liquidator of United
Community Insurance Company ("UCIC"), pursuant to which it purchased on May 7,
1996 (i) 909,091 shares of Common Stock at a purchase price of $1.50 per share
and (ii) certain rights in $3,000,000 principal amount (plus accrued and unpaid
interest which, as of March 30, 1996, is an amount equal to approximately
$946,148) of indebtedness, in respect of which MTI is the obligor, for
consideration of $1.00 (the "Purchased Debt"). The respective purchase prices
for the shares of Common Stock and the Purchased Debt resulted from negotiations
between First Albany and the Superintendent, and are reflected in allocations
set forth in the Purchase Agreement.
The Purchased Debt relates to a $5,000,000 loan (the "Term
Loan") made on December 21, 1993 by UCIC to First Commercial Credit Corporation
("FCCC"), secured by an interest in all of FCCC's unencumbered assets, including
the proceeds of any contract acquired with the proceeds of the loan. FCCC used
$3,000,000 of such proceeds to enter into a Claim Participation Agreement with
MTI's UTE subsidiary, to be secured by a guarantee of MTI (as amended, the
"Guaranteed Claim Participation Agreement"). As a result of
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amendments to the Guaranteed Claim Participation Agreement, MTI is currently the
sole obligor thereon. Pursuant to the Purchase Agreement, First Albany agreed to
purchase either (i) if the Superintendent obtains FCCC's and MTI's consent, an
assignment of the Guaranteed Claim Participation Agreement directly from FCCC to
First Albany or (ii) a pro rata participation in the Term Loan. On May 7, 1996,
First Albany, lacking the requisite consent, purchased a pro rata participation
in the Term Loan pursuant to a Participation Agreement with the Superintendent
(the "Participation Agreement"). The Participation Agreement contemplates that
First Albany may (i) negotiate directly with MTI or FCCC to restructure the
terms and conditions of the Purchased Debt or (ii) participate pro rata with the
Superintendent in its efforts to collect on the Term Loan. In any event, First
Albany may act as limited agent for the Superintendent in enforcing any of its
rights under the Term Loan for a period not to exceed six months. According to
information contained in the MTI Proxy Statement, certain officers and directors
of MTI had been officers or directors of UCIC.
As described below under "Certain Agreements and
Arrangements," First Albany intends to negotiate a restructuring of the
Purchased Debt, and in negotiating and discussing any restructuring of the
Purchased Debt, First Albany is considering certain options, including (i)
restructuring such debt on terms and conditions more favorable than currently
exist and on terms and conditions at least comparable to those existing in the
marketplace at the time of the restructuring, (ii) conversion of the debt to
preferred stock, (iii) conversion of the debt to common stock (at a per share
price of not less than $1.50 per share) and (iv) some combination of the options
that MTI or the Board presents.
Pursuant to the Purchase Agreement, First Albany has agreed
that if it or any of its affiliates purchases any shares of Common Stock
directly from the Lawrence Group, Inc. (of which UCIC had been a wholly-owned
subsidiary), or any affiliates or subsidiaries thereof, within six months after
the closing date, First Albany will pay the Superintendent the difference
between the per share price paid to such entity and $1.50, multiplied by 909,091
shares.
First Albany's obligations to consummate the transactions
contemplated by the Purchase Agreement were subject to the satisfaction of
certain conditions, including (i) satisfactory review of an accurate and current
assessment of environmental issues affecting MTI or any real property owned by
it, reflecting no environmental liabilities that will or can exceed $100,000
(excluding amounts already reserved for), (ii) substantial resolution of certain
pending threatened criminal proceedings against MTI's UTE subsidiary, (iii)
substantial resolution of the bankruptcy proceedings pending against MTI's UTE
subsidiary, (iv) satisfactory completion of First Albany's due diligence and (v)
certain other customary conditions specified in the Purchase Agreement.
The Liquidator's obligations to consummate the transactions
contemplated under the Purchase Agreement were subject to the accuracy of the
representations and warranties of First Albany made in the Purchase Agreement,
performance by First Albany of its obligations under the Purchase Agreement and
payment under the Purchase Agreement.
In connection with (and pursuant to) the Purchase Agreement,
on May 7, 1996, First Albany received an irrevocable written proxy to vote the
909,091 shares purchased thereunder at any shareholders meeting, including but
not limited to the Annual Meeting, and
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at any adjournments thereof. Such proxy expires by its terms on March 28, 1997
unless otherwise extended by the express written consent of the parties to the
Purchase Agreement.
In connection with negotiating the Purchase Agreement and
First Albany's request for approval thereof pursuant to Section 912 of the New
York Business Corporation Law (the New York anti-takeover statute), on March 28,
1996, First Albany delivered a letter to the Board of Directors, in which, among
other things, First Albany expressed its plans to assist in the revitalization
of MTI. On March 28, 1996, First Albany also delivered a similar letter to a
board member, and on April 3, 1996 and April 11, 1996, First Albany delivered
additional letters to the Board of Directors.
In the letter dated April 3, 1996, First Albany represented,
among other things, that it is its intention to assist in the recapitalization
of MTI in order to preserve and enhance the economic benefits it brings to the
New York capital region. First Albany indicated that is not its intention to
enter into any transactions with MTI other than to negotiate a restructuring or
refinancing of the Purchased Debt and, specifically, that First Albany shall not
(i) merge with MTI, (ii) cause the consolidation of MTI into First Albany or any
of its subsidiaries or (iii) participate as a principal in the sale or lease of
greater than 10% of the assets of MTI. First Albany also represented that if MTI
and the Board of Directors determine that a rights offering is in the best
interests of MTI and its shareholders, First Albany shall either abstain or
recuse itself from any vote of shareholders or, if it is represented on the
Board of Directors, any vote of the Directors, on such an issue.
In the same letter, First Albany also indicated that, in
negotiating and discussing any restructuring of the Purchased Debt, First Albany
will consider certain options, including (i) restructuring such debt on terms
and conditions more favorable than currently exist and on terms and conditions
at least comparable to those existing in the marketplace at the time of the
restructuring, (ii) conversion of the debt to preferred stock, (iii) conversion
of the debt to common stock (at a per share price of not less than $1.50 per
share) and (iv) some combination of the options that MTI or the Board presents.
The letter indicates that any restructuring would be subject to the approval by
a majority of disinterested Directors of the Board of Directors. The letter also
indicates that First Albany will propose raising approximately $2,000,000 in
equity pursuant to a private placement. In the case of any such private
placement, First Albany anticipates that it may seek to be designated as
placement agent, on terms no less favorable to MTI than those that MTI could
obtain from a third party on an arm's length basis.
In the letter dated April 11, 1996, First Albany reiterated
and represented, among other things, that it is not its intention to enter into
any transactions with MTI other than to negotiate a restructuring or refinancing
of the Purchased Debt and shall not (i) merge with MTI, or cause MTI to merge or
to be merged with any of its subsidiaries or affiliates, (ii) cause the
consolidation of MTI into First Albany or any of its subsidiaries or affiliates
or (iii) participate as a principal in the sale or lease of greater than ten
percent of the assets of MTI.
In the letter of April 11, First Albany indicated that should
MTI and the Board of Directors determine that a preemptive rights offering is in
the best interests of MTI and its shareholders in connection with a conversion
of the Purchased Debt to equity or the offer of additional Common Stock of MTI
in a private placement to accredited investors, First Albany
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shall either abstain or recuse itself from any vote of shareholders or, should
First Albany be represented on the Board of Directors, any vote of the
Directors, on such an issue.
The letters described above that were delivered by First
Albany to the Board of Directors contain certain representations with respect to
First Albany's intentions with respect to MTI. Nevertheless, First Albany notes
such expressions of intent were stated based solely on then current conditions
and circumstances and were not intended to, and do not constitute, binding
obligations of First Albany. First Albany and the Committee expressly reserve
the right to take actions inconsistent with the intentions expressed in such
Board Correspondence, although First Albany and the Committee have no current
plans to do so.
SECURITY OWNERSHIP
Based on the information set forth in the MTI Proxy Statement
at page 12 (incorporated herein by reference), as of December 29, 1995, MTI's
Directors and executive officers beneficially owned, as a group, approximately
32.7% of the outstanding Common Stock.
Schedules I and II set forth certain information relating to
shares of Common Stock owned by members of the Committee, the Committee Nominees
and other persons who may be deemed to be participants in this solicitation.
Schedule III sets forth information with respect to beneficial owners of more
than 5% of the outstanding Common Stock, including the Committee.
Certain information regarding Common Stock ownership by MTI's
Directors, executive officers and 5% shareholders is contained in the MTI Proxy
Statement and is incorporated herein by reference or is set forth herein. The
Committee assumes no responsibility for the accuracy or completeness of any
information contained herein which is based on, or incorporated by reference to,
the MTI Proxy Statement.
OTHER MATTERS
Except as set forth in this Proxy Statement, the Committee is
not aware of other matters to be considered at the Annual Meeting. However, if
any other matters properly come before the Annual Meeting, the proxies also
confer authority to the persons named in the accompanying BLUE proxy card to
vote the shares of Common Stock to which the proxy relates on such matters at
their discretion.
Reference is made to the MTI Proxy Statement for information
concerning beneficial ownership of the Common Stock by, and other information
concerning, the Board of Directors and management and the principal holders of
the Common Stock. The Committee assumes no responsibility for the accuracy or
completeness of any information contained in the MTI Proxy Statement.
-13-
SOLICITATION OF PROXIES
The Committee anticipates that proxies will be solicited by
members of the Committee primarily by telephone and personal interviews. Proxies
may also be solicited by mail, advertisement, facsimile and telegram. The
Committee will also request brokers, custodians and other nominees to forward
solicitation materials to the beneficial owners of Common Stock, and such
persons will be reimbursed for their reasonable out-of-pocket expenses. Proxies
may be solicited personally and by telephone by employees of First Albany, none
of whom will receive additional compensation for such solicitation.
The cost of this solicitation will be borne solely by the
Committee. The Committee estimates that its total expenditures relating to this
solicitation will be approximately $26,500 (excluding costs represented by
salaries and wages of regular employees of First Albany). Total expenditures to
date, including printing and postage expenses, are estimated to be approximately
$24,000. Although the Committee believes that its efforts and this solicitation
will enhance the value of all shareholders' investments in MTI, the Committee
will not seek reimbursement for the cost of this solicitation from MTI.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
According to the MTI Proxy Statement, proposals of
shareholders intended to be presented at MTI's 1997 Annual Meeting of
Shareholders held in 1997 must be received by MTI before October 18, 1996 in
order to qualify for inclusion in MTI's proxy statement relating to such
meeting.
THE FIRST ALBANY COMMITTEE
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED BLUE PROXY CARD
PROMPTLY AND MAIL IT IN THE POSTAGE PREPAID ENVELOPE PROVIDED HEREWITH.
If your shares are held in the name of a broker, bank or
nominee, only it can sign a proxy card and only upon receipt of your specific
instructions to do so. Accordingly, please contact the person responsible for
your account and give him or her appropriate instructions to execute the BLUE
proxy card.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN VOTING YOUR
SHARES, PLEASE CALL PHONE NO. 518-447-8501.
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Schedule I
TRANSACTIONS IN THE COMMON STOCK OF MTI
DURING THE PAST TWO YEARS
The following table sets forth information with respect to all
purchases and sales of MTI Common Stock by First Albany, George C. McNamee, Alan
P. Goldberg and FAC during the past two years. Messrs. McNamee and Goldberg may
be deemed to be beneficial owners of the Common Stock of MTI beneficially owned
by First Albany and have not engaged in any purchases or sales in any other
capacity. The disclosure of this information shall not be construed as any
admission that Mr. McNamee or Mr. Goldberg is the beneficial owner of any of the
Common Stock owned by First Albany, either for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, or for any other purpose, and such
beneficial ownership is expressly disclaimed. The transactions referred to in
Note (1) were the sole transactions of FAC with respect to the Common Stock
during the past two years, other than trading, market-making and brokerage
transactions effectuated in First Albany's and FAC's ordinary course of
business. First Albany and FAC may, at any time, hold long or short positions
and may trade or otherwise effect transactions in securities of MTI.
The source of funds for the purchases by First Albany and FAC
was working capital. Except where otherwise noted, each of the transactions was
effected on the open market.
FIRST ALBANY COMPANIES INC.
Price
Per Date of
Shares of Common Stock Purchased (Sold) Share Purchase
- --------------------------------------- ----- --------
101,900 (1) $.9375 9/28/95
25,707 (1) .65 1/16/96
156,250 (2) -- 3/26/96
140,000 (3) -- 3/28/96
909,091 (4) 1.50 4/12/96
(1) Such shares were purchased on the open market by FAC and on April 4,
1996 were transferred to First Albany.
(2) Beneficial interest consisted solely of a limited purpose proxy from
Ford Motor Company to vote for adjournment of the Annual Meeting. The
limited purpose proxy by its terms is no longer effective.
(3) Beneficial interest consists solely of a limited purpose proxy from
Atlas Copco AB to vote for adjournment of the Annual Meeting.
(4) As discussed herein, First Albany entered into a Stock and Debt
Purchase Agreement dated April 12, 1996 with the New York State
Superintendent of Insurance, as Liquidator, to purchase such shares,
and as of such date was deemed to be the beneficial owner thereof. Such
purchase was consummated on May 7, 1996. Accordingly, First Albany
currently owns, and has received a proxy to vote, such shares, and has
obtained certain rights in $3,000,000 principal amount (plus accrued
and unpaid interest, which, as of March 30, 1996 is an amount equal to
approximately $946,148) of indebtedness, in respect of which MTI is an
obligor.
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Schedule II
INFORMATION CONCERNING THE DIRECTORS AND
EXECUTIVE OFFICERS
OF FIRST ALBANY
The following table sets forth the name and the present
principal occupation or employment, and the name, principal business and address
of any corporation or other organization in which the employment is carried on,
of the directors and executive officers of First Albany. Unless otherwise
indicated, the principal business address of each such director and executive
officer is 30 South Pearl Street, Albany, New York 12207-1599.
Present Principal Occupation or
Name and Principal Address Employment
-------------------------- -------------------------------
George C. McNamee Chairman, Director and Co-Chief Executive
Officer of First Albany and FAC.
Alan P. Goldberg Director, President and Co-Chief Executive
Officer of First Albany and FAC.
Daniel V. McNamee III Chairman of the Publishing & Media
Director of First Albany Group, a management consulting firm
specializing in the media communications
The Publishing Media Group industry.
475 Fifth Avenue
19th Floor
New York, New York 10017
J. Anthony Boeckh, Ph.D. Chairman and Chief Executive Officer of
Director of First Albany BCA Publications Ltd., Montreal, Canada,
and Editor-in-Chief of The Bank Credit
BCA Publications Ltd. Analyst. He is also a principal of
1002 Sherbrooke St. West Greydamus, Boeckh & Associates, Inc.,
Suite 1600 Montreal, Canada, a fixed income specialty
Montreal, Canada H3A3L6 manager.
Honorable Hugh L. Carey Chairman of the Board of Advisors of
Director of First Albany Cambridge Partners, L.L.C. (an investment
banking company) and of counsel to the law
65 East 55th Street firm of Whitman, Breed, Abbot & Morgan.
Suite 3300
New York, New York 10022-3219
Hugh A. Johnson Director, Senior Vice President and Chief
Investment Officer of First Albany and
FAC and Chairman of First Albany Asset
Management Corporation.
Benaree P. Wiley President and Chief Executive Officer of
Director of First Albany The Partnership, a Boston-based
organization founded by business and civic
334 Boylston Street leaders to promote the development of
Suite 400 professionals of color through access to
Boston, MA 02116 corporate, municipal and state leaders.
Charles L. Schwager Consultant to Loanet, Inc., a provider of
Director on-line, real time accounting services to
support financial institutions engaged in the
12B Manor Parkway business of borrowing and lending
Salem, NH 03079 securities.
Edwin T. Brondo Vice President of First Albany and Senior
Vice President and Chief Administrative
Officer of FAC.
David J. Cunningham Vice President and Chief Financial Officer
of First Albany and Senior Vice President
and Chief Financial Officer of FAC.
Michael R. Lindburg Vice President, Secretary and General
Counsel of First Albany and Senior Vice
President, General Counsel, Managing
Director of Retail Sales and Secretary of
FAC.
BENEFICIAL OWNERSHIP OF COMMON STOCK
BY THE MEMBERS OF THE COMMITTEE,
THE DIRECTORS AND EXECUTIVE OFFICERS OF FIRST ALBANY
(INCLUDING THE COMMITTEE NOMINEES)
AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND MTI
Beneficial ownership of Common Stock by First Albany and
Messrs. McNamee and Goldberg is set forth in Schedule III below.
Except as otherwise set forth in this Proxy Statement, none of
the members of the Committee, the directors and executive officers of First
Albany, the Committee Nominees or (to the best knowledge of the Committee) any
other person who may be deemed a "participant" in this solicitation or any
associate of any of the foregoing persons is the direct or indirect beneficial
or record owner of any securities of MTI or of any parent or subsidiary of MTI.
Furthermore, except as otherwise set forth in this Proxy Statement, none of such
persons has purchased or sold any such securities of MTI within the past two
years, borrowed any funds for the purpose of acquiring or holding any securities
of MTI or is or
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was within the past year a party to any contract, arrangement, or understanding
with respect to any securities of MTI.
Except as disclosed in this Proxy Statement, none of the
members of the Committee, the directors and executive officers of First Albany,
the Committee Nominees or (to the best knowledge of the Committee) any other
person who may be deemed a "participant" in this solicitation, or their
associates, has any arrangement or understanding with any person (i) with
respect to any future employment by MTI or its affiliates or (2) with respect to
future transactions to which MTI or any of its affiliates will or may be a
party, nor any material interest, direct or indirect, in any transaction that
has occurred since January 1, 1995, or any currently proposed transaction, or
series of similar transactions, that MTI or any of its affiliates was or is to
be a party and in which the amount involved exceeds $60,000. Certain Committee
Nominees and directors and executive officers of First Albany and/or their
respective associates may also be directors and officers of other companies and
organizations that have engaged in transactions with MTI or its subsidiaries in
the ordinary course of business since January 1, 1995, but the Committee
believes that the interest of such persons in such transactions is not of
material significance.
Except as disclosed in this Proxy Statement, (i) no person who
is a party to an arrangement or understanding pursuant to which a Committee
Nominee is proposed to be elected has any substantial interest, direct or
indirect, by security holdings or otherwise, in any matter to be acted upon by
the shareholders of MTI, (ii) there are no material proceedings to which any
Committee Nominee or any associate of any such Committee Nominee is a party
adverse to MTI or any of its subsidiaries or has a material interest adverse to
MTI or any of its subsidiaries and (iii) no Committee Nominee has been party to
any of the following events that occurred during the past five (and in the case
of clause (B) , ten) years and that are material to an evaluation of the ability
or integrity of any person nominated to become a Director of MTI: (A) a petition
under the Federal bankruptcy laws or any state insolvency law was filed by or
against, or a receiver, fiscal agent or similar officer was appointed by a court
for the business or property of such person, or any partnership in which he was
a general partner at or within two years before the time of such filing, or any
corporation or business association of which he was an executive officer at or
within two years before the time of such filing; (B) such person was convicted
in a criminal proceeding or is a named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses); (C) such person was the
subject of any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining him from, or otherwise limiting, the following activities: (1) acting
as a futures commission merchant, introducing broker, commodity trading advisor,
commodity pool operator, floor broker, leverage transaction merchant, any other
person regulated by the Commodity Futures Trading Commission, or an associated
person of any of the foregoing, or as an investment advisor, underwriter, broker
or dealer in securities, or as an affiliated person, director or employee of an
investment company, bank, savings and loan association or insurance company, or
engaging in or continuing any conduct or practice in connection with such
activity; (2) engaging in any type of business practice or (3) engaging in any
activity in connection with the purchase or sale of any security or commodity or
in connection with any violation of Federal or State securities laws or Federal
commodities laws; (D) such person was the subject of any order, judgment or
decree, not
-3-
subsequently reversed, suspended or vacated, of any Federal or State authority
barring, suspending or otherwise limiting for more than 60 days the right of
such person to engage in any activity described in subparagraph (1) above, or to
be associated with persons engaged in any such activity; (E) such person was
found by a court of competent jurisdiction in a civil action or by the
Securities and Exchange Commission to have violated any Federal or State
securities law, and the judgment in such civil action or finding by the
Securities and Exchange Commission has not been subsequently reversed, suspended
or vacated or (F) such person was found by a court of competent jurisdiction in
a civil action or by the Commodities Futures Trading Commission to have violated
any Federal commodities law, and the judgment in such civil action or finding by
the Commodity Futures Trading Commission has not been subsequently reversed,
suspended or vacated.
Notwithstanding the foregoing, in 1992 FAC and Michael
Lindburg, its Chief Compliance Officer, were named as respondents in an
administrative proceeding instituted by the Securities and Exchange Commission
(the "SEC"). The administrative proceeding arose out of allegations that a
former employee of FAC had engaged in a series of trades that were alleged to be
designed to manipulate the market price of a publicly traded company, and that
respondents had failed to reasonably supervise such activity so as to detect and
prevent violations of the federal securities laws. Further, the SEC alleged that
FAC, while acting as a market-maker, published a favorable research report
relating to certain securities, the sale of which was deemed to be a
distribution in violation of Rule 10b-6. Without admitting or denying the
findings, facts or conclusions of law, the respondents consented in the
administrative proceeding to a finding that respondents had failed reasonably to
supervise a registered representative who was subject to their supervision, with
a view to preventing violations of Section 17(a) of the Securities Act of 1933,
as amended, Section 10(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and Rule 10b-5 thereunder, within the meaning of Sections
15(b)(4)(E) and 15(b)(6) of the Exchange Act; and that FAC willfully violated
Section 7(c) of the Exchange Act and Regulation T thereunder, and Rule 10b-6
under the Exchange Act. In connection with such findings, Mr. Lindburg consented
to a one year supervisory suspension, and FAC agreed to retain a consultant to
review and report upon the policies, procedures and practices of FAC designed to
detect and prevent violations of the federal securities laws.
-4-
Schedule III
BENEFICIAL HOLDERS OF 5% OR MORE OF MTI'S COMMON STOCK
The following table sets forth information with respect to
persons who are beneficial owners of more than 5% of the outstanding Common
Stock. Except in the case of the information set forth below relating to the
Committee and its members, the information in the table has been obtained from
MTI's Proxy Statement dated February 16, 1996, which was current as of December
29, 1995, and the Committee takes no responsibility for the accuracy or
completeness thereof.
Amount of
Beneficial Percent
Name Address Ownership of Class
---- ------- --------- --------
Superintendent of 160 West Broadway 909,091 (1) 25.5%
Insurance as New York, N.Y. 10013
Liquidator of United
Community Insurance
Company
Lawrence Insurance 500 Fifth Avenue 820,909 (2) 23.0%
Group, Inc. New York, N.Y. 10110
Harry Apkarian 968 Albany-Shaker Road 288,001 (3) 8.1%
Latham, N.Y. 12110
First Albany Companies Inc. First Albany Companies Inc. 1,036,698 (4) 29.0%
30 South Pearl Street
Albany, N.Y. 12207-1599
(1) As described in Note (4) below, these shares are the subject of a Purchase
Agreement with First Albany Companies Inc., the transaction under which closed
on May 7, 1996. These shares were owned of record by United Community Insurance
Company ("UCIC"), a wholly-owned subsidiary of Lawrence Insurance Group, Inc.
(See Note (2) below.) In July 1994, upon application of the Superintendent of
Insurance of the State of New York ("Superintendent"), alleging that UCIC was
insolvent due to inadequate reserves and, with the consent of UCID, an Order of
Rehabilitation was entered in the Supreme Court of the State of New York,
Schenectady County, with respect to UCIC. The Order of Rehabilitation, among
other things, authorized the Superintendent to take control of all of UCIC's
assets and to conduct its business and affairs. On November 9, 1995, with the
consent of Lawrence Insurance Group, Inc. as the sole shareholder of UCIC, an
Order of Liquidation of UCIC was entered in the Supreme Court of the State of
New York, Schenectady County. The Order of Liquidation determined that UCIC was
insolvent, and appointed the Superintendent as Liquidator of UCIC, with the
authority to take possession of its property and liquidate its business and
affairs; the Superintendent's authority under the Order of Liquidation includes
the authority to sell all real or personal property of UCIC
(including any stock or other securities, such as the shares of Common Stock,
owned by UCIC) on such terms and conditions as in his discretion he deems to be
in the best interest of the creditors of UCIC.
By reason of the Order of Liquidation and the powers granted
to the Superintendent thereunder, Lawrence Insurance Group, Inc. no longer has
the power to vote or dispose of the 909,091 shares of the Common Stock owned by
UCIC, and thus is no longer deemed to be the beneficial owner of such shares
(which represents about 25% of the outstanding Common Stock); pursuant to the
authority granted to him by the Order of Liquidation, the Superintendent (in his
capacity as Liquidator under the Order, acting for the benefit of the
policyholders and other creditors of UCIC), prior to the consummation of the
transactions contemplated by the Purchase Agreement as described in Note (4)
below, was the beneficial owner of the shares of the Common Stock owned by UCIC.
In addition to the shares of the Common Stock owned by UCIC of record, the
Superintendent may, by reason of UCIC's ownership of 21.4% of the outstanding
stock of the United Republic Insurance ("URIC") subsidiary of The Lawrence
Insurance Group, Inc. also be deemed to be the beneficial owner of a portion of
the 820,909 shares of the Common Stock owned by URIC and its subsidiaries. (See
Note (2) below.) As a result of the matters referred to in the preceding
paragraphs of this Note (1), the Superintendent's exercise of the powers and
authority granted to him under the Order of Liquidation (including, among other
things, the sale of the shares of the Common Stock owned by UCIC) could result
in a change in control of MTI. (See Note (4) below for a description of the
purchase agreement relating to such shares between the Superintendent and First
Albany.)
At the time the Order of Rehabilitation with respect to UCIC
was entered, and for several years prior to that time, Albert Lawrence, a
Director of MTI, was Chairman of the Board of UCIC, and Messrs. R. Wayne Diesel,
President, Chief Executive Officer and a Director of MTI, and Lawrence Shore,
Chairman of the Board of Directors of MTI, were members of the UCIC Board of
Directors. Mr. Diesel was also Treasurer of UCIC.
(2) 363,636 of these shares are owned of record by URIC, and the balance are
owned of record by wholly-owned subsidiaries of URIC as follows: Global
Insurance Company ("Global") - 349,068 shares; and Senate Insurance Company
("Senate") - 108,205 shares. 78.6% of the outstanding stock of URIC is owned by
Lawrence Insurance Group, Inc.; the remaining 21.4% is owned by UCIC, another
subsidiary of Lawrence Group, Inc. which is under the control of the
Superintendent of Insurance of the State of New York and is undergoing a court
ordered liquidation. (See Note (1) above.)
According to the August 9, 1995 Proxy Statement of Lawrence
Insurance Group, Inc. for its August 29, 1995 Annual Meeting of Stockholders,
Lawrence Group, Inc. is the beneficial owner of approximately 93% of the
outstanding shares of the common stock of Lawrence Insurance Group, Inc. Albert
W. Lawrence (a Director of MTI) is, along with Barbara C. Lawrence, his wife,
the owner of 100% of the common stock of Lawrence Group, Inc.; as a result, Mr.
and Mrs. Lawrence may be deemed to be the beneficial owners of the shares of
Common Stock held of record by URIC and its subsidiaries and referred to in the
preceding paragraph. Mrs. Lawrence also owns beneficially and of record an
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additional 100 shares of Common Stock; Mr. Lawrence disclaims beneficial
ownership of such shares.
In August 1995 URIC consented to the entry of an Order
("Consent Order") issued by the Commissioner of Insurance of the State of Texas
("Commissioner") in connection with URIC's release from a June 1994 Order that
had placed URIC in a state of confidential supervision. The Consent Order, among
other things, required URIC to achieve certain levels of policyholders surplus
by various dates specified in the Consent Order and to solicit offers for the
sale of its Global and Senate subsidiaries. The Consent Order also contained the
consent of URIC to the entry of an order of conservatorship against URIC, at the
request of the Commissioner, if URIC failed to satisfy certain of the
requirements of the Consent Order; if the order of conservatorship is entered
against URIC, the Commissioner would be empowered to assume all control and
decision-making authority with respect to URIC's business and assets (including
the shares of Common Stock owned by URIC and its Global and Senate
subsidiaries).
MTI has been advised that URIC has not yet satisfied certain
of the requirements set forth in the Consent Order, although the specified dates
for doing so have passed; however, MTI also understands that to date the
Commissioner has taken no action to have the order of conservatorship entered
against URIC despite its failure to satisfy the requirements of the Consent
Order. If the Commissioner takes action to have an order of conservatorship
entered against URIC, the Commissioner would be empowered to vote or dispose of
the shares of the Common Stock owned by URIC and its Global and Senate
subsidiaries; as a result of the authority that would be granted to him under
such an order, the Commissioner (in his capacity as Conservator under such an
order acting for the benefit of the policyholders and other creditors of URIC)
would be deemed the beneficial owner of the shares of the Common Stock owned by
URIC and its Global and Senate subsidiaries. Furthermore, the Commissioner's
exercise of the power and authority that would be granted to him under an order
of conservatorship (such as, among other things, the sale of the shares of the
Common Stock owned by URIC and its Global and Senate subsidiaries) could result
in a change in control of MTI.
At the time the confidential order of supervision of URIC was
entered in 1994, and for several years prior to that time, Albert Lawrence, a
Director of MTI, was Chairman of the Board of URIC, and Messrs. R. Wayne Diesel,
President, Chief Executive Officer and a Director of MTI, and Lawrence Shore,
Chairman of the Board of Directors of MTI, were members of the URIC Board of
Directors.
(3) Includes 2,000 shares issued under MTI's Restricted Stock Incentive Plan
which are still subject to forfeiture.
(4) Includes the 909,091 shares of Common Stock that prior to May 7, 1996 were
owned by the Superintendent. First Albany entered into an Agreement for the
Purchase of Stock and Debt dated April 12, 1996 with the Superintendent to
purchase such shares. Such purchase was consummated on May 7, 1996 and First
Albany currently owns, and has received a proxy to vote, such shares of Common
Stock. Excludes 140,000 shares of Common Stock in respect of which First Albany
has received a limited purpose proxy to vote
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for adjournment of the Annual Meeting and 156,250 shares of Common Stock in
respect of which First Albany received a limited purpose proxy to vote for
adjournment of the Annual Meeting which has, by its terms, expired.
Messrs. McNamee and Goldberg may be deemed to be beneficial owners of
the Common Stock of MTI beneficially owned by First Albany, and do not
beneficially own shares of Common Stock in any other capacity. The disclosure of
this information shall not be construed as an admission that Mr. McNamee or Mr.
Goldberg is the beneficial owner of any of the Common Stock owned by First
Albany, either for purposes of Section 13(d) of the Securities Exchange Act of
1934, as amended, or for any other purpose, and such beneficial ownership is
expressly disclaimed.
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Schedule IV
BENEFICIAL OWNERSHIP OF MTI COMMON STOCK
BY DIRECTORS AND EXECUTIVE OFFICERS OF MTI
The following table sets forth certain information with
respect to the beneficial ownership of shares of MTI's Common Stock by (i) each
Director and nominee for Director of MTI, (ii) each named executive officer
described in the section of the MTI Proxy Statement captioned "Executive
Compensation", and (iii) all present Directors and Officers of MTI as a group,
as of December 29, 1995. The information in the table (including the notes
thereto) has been obtained from MTI's Proxy Statement dated February 16, 1996,
and the Committee assumes no responsibility for the accuracy or completeness
thereof.1
NAME OF BENEFICIAL OWNER AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL CLASS
OWNERSHIP
- ------------------------- ----------------------- ---------
Harry Apkarian 288,001(2) 8.1%
Dennis P. Chaves 2,600 *
R. Wayne Diesel 35,000(2),(5),(6) *
Douglas McCauley 8,000(2) *
Stanley I. Landgraf 1,000 *
Albert W. Lawrence 820,909(4) 23.0%
E. Dennis O'Connor -0- *
Lawrence A. Shore -0-(5) *
Stephen Sullivan 10,000(2),(3) *
All present Directors and Officers 1,165,510(2),(3),(4),(6)
as a group (10 persons)
* Percentage is less than 1.0% of the outstanding Common Stock.
(1) To the best of MTI's knowledge, based on information reported by such
Directors and officers or contained in MTI's shareholder records. Except as
otherwise indicated, each of the named persons is presumed to have sole voting
and investment power with respect to all shares shown. None of MTI's present
Directors or officers other than Mr. Apkarian and Mr. Lawrence (see Schedule III
above) beneficially own more than 1% of outstanding Common Stock; all present
Directors and officers as a group beneficially own, in the aggregate,
approximately 32.7% of the outstanding Common Stock.
(2) Includes shares granted under MTI's Restricted Stock Incentive Plan which
are still subject to forfeiture as follows: Mr. Apkarian, 2,000 shares; Mr.
Chaves, 2,000 shares; Mr.
Diesel, 29,000 shares; Mr. McCauley, 6,500 shares; and Mr. Sullivan, 1,000
shares. All present Directors and officers as a group, 40,500 shares.
(3) Includes the right to purchase 5,000 shares pursuant to exercisable options
granted under MTI's stock option plan.
(4) Includes 820,909 shares owned by subsidiaries of Lawrence Insurance Group,
Inc. Albert W. Lawrence and his wife, Barbara, may be deemed to be the
beneficial owners of the Lawrence Insurance Group, Inc. shares. (See Schedule
III above). Excludes 100 shares owned by Barbara C. Lawrence, wife of Albert W.
Lawrence. Mr. Lawrence disclaims beneficial ownership of such shares.
(5) Excludes shares owned by subsidiaries of Lawrence Insurance Group, Inc.; Mr.
Shore and Mr. Diesel, as Directors, share the power to vote and dispose of such
shares. Mr. Shore and Mr. Diesel disclaim beneficial ownership of such shares.
(6) Does not include 100 shares held by Mr. Diesel's wife as custodian for their
minor child: Mr. Diesel disclaims beneficial ownership of such shares.
-2-
MECHANICAL TECHNOLOGY INCORPORATED
1996 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY
THE FIRST ALBANY COMMITTEE
The undersigned shareholder of Mechanical Technology
Incorporated hereby appoints each of George C. McNamee and Alan P. Goldberg, and
each of them with full power of substitution, for and in the name of the
undersigned, to represent and to vote, as designated below, all shares of Common
Stock of Mechanical Technology Incorporated, that the undersigned is entitled to
vote if personally present at the 1996 Annual Meeting of Shareholders of
Mechanical Technology Incorporated to be held on May 16, 1996 at the corporate
offices of Mechanical Technology Incorporated, 968 Albany-Shaker Road, Latham,
New York, NY 12110, and at any adjournment, postponement or rescheduling
thereof. The undersigned hereby revokes any previous proxies with respect to the
matters covered by this Proxy.
THE FIRST ALBANY COMMITTEE
RECOMMENDS A VOTE FOR ITEM 1 SET FORTH BELOW.
(Please mark with an "X" in the appropriate boxes)
1. ELECTION OF DIRECTORS: Election of George C. McNamee, Alan P. Goldberg,
Harry Apkarian, R. Wayne Diesel, Stanley I. Landgraf and E. Dennis
O'Connor.
-- FOR all nominees -- WITHHOLD AUTHORITY
except as marked below for all nominees
(INSTRUCTION: To withhold authority to vote for one or more nominees, mark FOR
above and print the names(s) of the person(s) with respect to whom you wish to
withhold authority in the space provided below.)
2. Approval of proposal to approve Coopers and Lybrand as Independent
Auditors.
For Against Abstain
-- -- --
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
(continued on the reverse side)
This Proxy, when properly executed, will be voted in the
manner marked herein by the undersigned shareholder. Reg. Sec. 240.14a-4(d)(iv)
promulgated under the Securities Exchange Act of 1934, as amended, requires the
following statement on this card: There is no assurance that MTI's nominees will
serve if elected with any of the Committee's nominees. IF NO MARKING IS MADE,
THIS PROXY WILL BE VOTED "FOR" ALL OF THE NOMINEES LISTED ABOVE AND WILL ABSTAIN
FROM VOTING ON THE PROPOSAL TO APPROVE COOPERS & LYBRAND AS INDEPENDENT
AUDITORS.
Please date and sign this proxy exactly as your name appears
hereon:
Dated: _________________________, 1996
---------------------------------------
(Signature)
---------------------------------------
(Signature, if held jointly)
---------------------------------------
(Title)
When shares are held by joint tenants, both should sign. When
signing as attorney-in-fact, executor, administrator, trustee,
guardian, corporate officer or partner, please give full title
as such. If a corporation, please sign in corporate name by
President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
To vote in accordance with THE FIRST ALBANY COMMITTEE recommendation, and to
abstain from voting on the proposal to approve Coopers & Lybrand as independent
auditors, just sign and date this proxy; no boxes need to be checked.
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY CARD
PROMPTLY IN THE ENCLOSED
ENVELOPE PROVIDED.
If you have any questions on voting, please call: 518-447-8501.