MMI
INVESTMENTS ISSUES LETTER TO CHEMED STOCKHOLDERS ILLUSTRATING THE SUPERIOR
QUALIFICATIONS OF THE MMI NOMINEES
NEW YORK, NY, April 28, 2009
-- MMI Investments, L.P. (“MMI Investments”) today sent a letter to Chemed
Corporation’s (“Chemed”) (NYSE: CHE) stockholders along with their proxy
statement urging stockholders to elect MMI Investments’ five independent and
highly qualified nominees to Chemed’s board. Chemed’s 2009 annual meeting of
stockholders is scheduled to be held on May 29, 2009, at 11:00 a.m. local time
at The Queen City Club located at 331 East Fourth Street, Cincinnati, Ohio (the
“Annual Meeting”). Stockholders of record as of March 31, 2009 are entitled to
vote at the Annual Meeting.
MMI
Investments President and Chemed director nominee, Clay B. Lifflander, stated:
“MMI Investments has nominated director candidates for Chemed’s board that are,
in our opinion, superior to the incumbents we oppose in operational and
strategic credentials, relevant industry experience and independence from the
current board and management. We believe that’s the way corporate
directors should be elected: on the basis of being the best qualified, not the
sons of former chairmen, management insiders and lawyers for the
company. Yet that’s the profile of the incumbent directors we
oppose. We believe the MMI Investments nominees offer a far better
choice, and encourage Chemed stockholders to support the MMI Investments
nominees by voting the GOLD proxy card.”
The full
text of the letter follows:
ELECT
MMI’S SUPERIOR DIRECTOR NOMINEES TO BRING EXPERIENCE, INDEPENDENCE AND STRATEGIC
CREDENTIALS TO CHEMED’S BOARD
VOTE
YOUR GOLD PROXY
CARD TODAY
April 28,
2009
Dear
Fellow Chemed Stockholder:
MMI
Investments, L.P. (“MMI Investments”), a long-only investment fund and owner of
3.5% of Chemed Corporation’s (“Chemed”) outstanding capital stock, is seeking
your support for five highly qualified, independent and experienced director
candidates (the “MMI Nominees”) for election to Chemed’s eleven-member board at
the 2009 annual meeting of stockholders (the “Annual Meeting”). The
MMI Nominees are Scott J. Cromie, James Foy, Clay B. Lifflander, Peter A. Michel
and Carroll R. Wetzel, Jr. We note that we are soliciting proxies on
the GOLD
proxy card to elect not only the five MMI Nominees, but also the candidates who
have been nominated by Chemed other than Patrick P. Grace, Thomas C. Hutton,
Walter L. Krebs, Donald E. Saunders and George J. Walsh III.
The chart
on the following page in our opinion clearly illustrates the superiority of the
MMI Nominees to the Chemed incumbents we oppose, whether by measures of
operating and strategic credentials or independence from Chemed management and
the rest of the board.
We
encourage you to consider which slate is better equipped to maximize value for
Chemed stockholders, and urge you to support the MMI Nominees by signing, dating
and returning the enclosed GOLD
proxy card.
Of the
five incumbent directors we oppose, two are sons of former Chemed Chairmen, two
are practicing attorneys with no operational experience, four are current or
former employees of Chemed or a former affiliate, and one is a former paid
service provider to Chemed as recently as 2007. These incumbent
directors have a total of only 21 months experience in industries currently
relevant to Chemed, no outside public company director experience beyond Chemed
and its past affiliates and an average tenure as Chemed director of 16
years.
In
contrast, the five MMI Nominees bring decades of relevant operational experience
in both of Chemed’s two industries: healthcare administration (35 years) and
residential services (36 years), a strong track record of public company board
service and effective governance, strategic alternatives review and execution
expertise, and total uncompromised independence and stockholder
alignment.
CONSIDER
THE RISK-REWARD ANALYSIS OF SUPPORTING THE MMI NOMINEES:
·
|
The
Chemed incumbents we oppose have financial and/or familial ties to Chemed
and virtually no relevant operational experience, despite decades of
employment with Chemed.
|
·
|
The
MMI Nominees have significant experience in Chemed’s sectors, superior
public company board credentials, and unquestioned independence and
alignment with stockholders.
|
IF NOT FOR INCUMBENCY, WOULD
THERE EVEN BE A QUESTION?
To view the chart illustrating
biographical information and comparing the credentials of the MMI Nominees and
the Chemed incumbents we oppose included in the letter mailed to stockholders,
please click www.viewourmaterials.com/mmi-chemed/NomineeTable .
THE
MMI NOMINEES HAVE ONLY ONE GOAL: MAXIMIZING VALUE FOR CHEMED
STOCKHOLDERS
After
several years as a stockholder, nearly a dozen in-depth meetings with Chemed
senior management and much time, effort and research into Chemed’s operations,
strategic alternatives and corporate governance, MMI Investments concluded that
Chemed’s board is in desperate need of significant change and we have nominated
five independent directors who are committed to maximizing stockholder
value.
We do not
seek board representation for stockholders lightly. We are not
seeking control of the board and we do not have any singular agenda for
Chemed. What we do have are significant concerns about the
independence of the incumbent board and a lack of confidence that, without
stockholder representation, Chemed’s board will act in the best interests of
stockholders.
CHEMED
STOCKHOLDERS DESERVE AN EXPERIENCED, INDEPENDENT BOARD WITHOUT MANAGEMENT
INSIDERS, SONS OF FORMER CHAIRMEN AND VENDORS TO THE COMPANY
Even
after adding two new, independent and qualified director candidates to its
slate, the Chemed board remains, based upon our research, a tangled web of
nepotism and interrelationships, mostly financially compensated. We
note that prior to nominating two new director candidates, ten of Chemed’s
eleven directors had significant ties to the company that compromised their
independence, and the eleventh, while technically independent, has no relevant
operational experience and was a personal friend of the former chairman prior to
joining the board. Three independent members of an eleven member
board does not constitute good governance.
Independence
matters – particularly when a board must objectively make decisions to maximize
value for stockholders, including deciding whether to separate two completely
unrelated businesses, and in doing so dismantle an outdated, expensive and
unnecessary corporate infrastructure. Dismantling the Chemed board’s
cronyism alone would be a vast improvement in our opinion, but the MMI Nominees
offer much more: superior credentials to the incumbents we oppose in relevant
operational experience, public board service and strategic alternatives
expertise. Furthermore, with the MMI Nominees added to the board, Chemed would
have a vastly improved corporate governance profile.
We urge
all stockholders to support the MMI Nominees and send a message to the incumbent
board of Chemed that independence and experience matter by signing, dating and
returning the enclosed GOLD proxy card today.
Sincerely,
|
|
MMI
Investments, L.P.
|
CERTAIN
INFORMATION CONCERNING THE PARTICIPANTS
MMI
Investments, L.P., a Delaware limited partnership (“MMI Investments”), together
with the other participants named below, has made a definitive filing with the
Securities and Exchange Commission (“SEC”) of a proxy statement (the “Proxy
Statement”) and an accompanying proxy card to be used to solicit votes in
connection with the solicitation of proxies in support of its director nominees
at the 2009 Annual Meeting of Stockholders of Chemed Corporation (the
“Company”).
MMI
INVESTMENTS ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT
AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. IN ADDITION, THE PARTICIPANTS IN THE PROXY SOLICITATION
WILL PROVIDE COPIES OF THE PROXY STATEMENT WHEN AVAILABLE WITHOUT CHARGE UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY
SOLICITOR, MACKENZIE PARTNERS, INC. BY CALLING (800) 322-2885. ANY SUCH PROXY
MATERIALS WILL ALSO BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV
AND MMI INVESTMENTS’ WEBPAGE AT HTTP://WWW.VIEWOURMATERIALS.COM/MMI-CHEMED.
The
participants in the proxy solicitation are MMI Investments, MCM Capital
Management, LLC (“MCM”), which is the general partner of MMI Investments, John
S. Dyson, who is Chairman and a voting member of MCM, Clay B. Lifflander, who is
President and a voting member of MCM, Scott J. Cromie, James Foy, Peter A,
Michel and Carroll R. Wetzel, Jr. (the “Group”). As of April 27,
2009, MMI Investments beneficially owned 800,000 shares of capital stock, $1 par
value per share (the “Common Stock”), of the Company, which shares represent
approximately 3.5% of the outstanding Common Stock, and Mr. Cromie beneficially
owned two shares of Common Stock. Except for the shares owned by MMI
Investments and Mr. Cromie, which each member of the Group may be deemed to
beneficially own under SEC rules, none of the other members of the Group
beneficially owns any Common Stock of the Company. Additional information
concerning MMI Investments and the other members of the Group is included in the
Proxy Statement.
If
you have any questions, require assistance in voting your GOLD proxy card,
or
need additional copies of MMI’s proxy materials, please contact
MacKenzie
Partners, Inc. at the address or phone numbers listed below.
MACKENZIE
PARTNERS, INC.
105
Madison Avenue
New York,
New York 10016
(212)
929-5500 (Call Collect)
or
CALL
TOLL FREE (800) 322-2885