Milacron Inc. shareholders now will get one vote for each share of stock, after they eliminated so-called ``supervoting rights'' at the company's annual meeting May 23.
The company-backed proxy won with more than 58 percent of the votes. But the one-share/one-vote proposal - which followed an aborted proxy by members of Milacron's founding Geier family seeking to elect another family representative to the board - exposed a schism between Milacron leaders and the Geiers and some other shareholders.
Ken McCurdy, a spokesman for the Geier family, said before the shareholders meeting that the board enacted the supervoting rights proxy as a direct response to a proposal by the four-person Geier Family Shareholder Group to place a second family representative on the board.
Milacron spokesman Al Beaupre denied that the measure was retribution for the earlier Geier move.
``We have said publicly this was not directed at the Geier family. There were lots of other holders of the 10-to-one votes. It wasn't just the Geier family.''
Supervoting rights gave 10 votes for each share of common stock for long-term shareholders who had owned the stock for three years or more. Cincinnati-based Milacron enacted supervoting rights in 1986 - the height of the leveraged-buyout days - as a way to make a hostile takeover more difficult. Other U.S. companies enacted the strategy, but most since have dropped it, and today nine companies still have supervoting, according to Beaupre.
McCurdy said the 10-to-one voting power gave Milacron a stable ownership base. He said some founding-family members think Milacron's low stock price and debt could make it vulnerable to a hostile takeover.
``We've been very loyal to the company through the difficult periods, so we have a big stake in it,'' said McCurdy, who lives in Rochester, N.Y.
Beaupre said management is confident the company is protected without supervoting. Milacron's company proxy cites a law in Delaware, where the machinery maker is incorporated, that already blocks a corporation from engaging in any ``business combination'' with a stockholder for three years after the stock first is purchased.
The Geier Shareholder Group had filed its proxy March 24 seeking to elect Jerome L. Fedders to the board. Fedders, a former controller at Milacron, retired from the company last fall. He would have joined current board member Charles Turner, the great-grandson of Frederick A. Geier, who co-founded the company in 1884. But less than one month later, the family group withdrew that proxy. The group never has explained publicly why it did so. Turner declined to comment before the May 23 meeting.
The extended Geier family owns about 10 percent of total Milacon stock. The Geier Family Shareholders Group, a narrower group, owns about 2.2 percent.
Fedders was not on the ballot at the shareholders meeting. Three other directors were re-elected.
Milacron lost money in 2000 and 2001. For most of this year, its share price has languished below $5. U.S. shipments of injection molding presses, a key Milacron segment, have declined by 50 percent from the level of 2000.
During the meeting, Ronald Brown, chairman and chief executive officer, said 2002 ``was clearly a year of major transformation for Milacron.'' He said selling the company's metal-cutting tools businesses was a key ``to protecting our core during this difficult, prolonged manufacturing recession,'' which he called ``deeper and more prolonged than any manufacturing recession since the Great Depression of the 1930s.''
Brown said officials expect the company to return to profitability in the second half of 2003. A general recovery in capital machinery could happen in late 2003 or early 2004, he told shareholders.
The skirmish with the Geier descendants apparently is happening behind the scenes. The shareholders' meeting, held in Cincinnati's Museum Center in a restored train station, was mostly devoid of fireworks.
Steve Sawzin, who was employed by Milacron's machine tools business, filed his own proposal asking that the board reduce the salaries of top executives, and eliminate stock awards and other bonuses. He praised the Geiers and slammed current leaders: ``This is a management of downsizing. ... This management has not earned their pay or any other benefits.''
Shareholders rejected his proposal by a 74 percent vote.
