Board Invites Keith Meister of Corvex to Join
the CWH Board
Board Adopts Minimum Share Ownership Policy for
Board Members
CommonWealth REIT (NYSE:CWH) today made several announcements
concerning its Board of Trustees, as follows:
Appointment of New Independent
Trustees:
CWH today announced the appointments of Ms. Ann Logan and Mr.
Ronald Artinian as Independent Trustees to the CWH Board of
Trustees. Both of these new Independent Trustees were identified by
the search firm Korn / Ferry International and were recommended to
join the Board by CWH’s Nominating & Governance Committee,
which is comprised solely of Independent Trustees. Neither of these
individuals have any prior relationship with CWH, the CWH Board or
CWH’s management. With these appointments, the CWH Board now
consists of seven members, five of whom are Independent
Trustees.
Ms. Logan joins the CWH Board with substantial public company
board experience and senior executive experience in the real estate
industry. Ms. Logan previously served as an Independent Director of
PHH Corporation (NYSE:PHH) between 2005 and 2010. While on the
Board of PHH, Ms. Logan served as Chair of the Finance and Risk
Committee as well as a member of the Audit and Compensation
Committees. Until 2000, Ms. Logan worked at Fannie Mae, where she
served as Executive Vice President, in charge of the firm’s $1
trillion single family mortgage business between 1998 and 2000, and
as Fannie Mae’s Chief Credit Officer between 1993 and 1998. Ms.
Logan left Fannie Mae before it began making investments in
subprime residential mortgages. Previously, Ms. Logan held
positions with Standard and Poor’s Corporation and the United
States Senate Judiciary Committee. Ms. Logan also currently serves
on the Boards of Trustees of Bryn Mawr College, the Georgetown
Preparatory School and the Washington Middle School for Girls. Ms.
Logan has an A.B. from Bryn Mawr College and a M.B.A. from Columbia
University.
Mr. Artinian joins the CWH Board as a long tenured independent
director of public companies and an accomplished investment banker.
Since 2006, Mr. Artinian has served on the Board of Trustees of the
Reserve Funds, a group of public mutual funds. One of these funds,
the Reserve Primary Fund, a money market fund with approximately
$62 billion of assets, experienced a decline in net asset value to
less than $1.00 per share because of the bankruptcy of Lehman
Brothers in September 2008. Mr. Artinian subsequently became the
Lead Independent Trustee of the Reserve Funds. While serving as
Lead Independent Trustee, the Independent Trustees voted to replace
the existing external manager with a new manager to liquidate the
funds. The Reserve Primary Fund has successfully returned more than
99% of investors’ historical invested capital to date. Since 1992,
Mr. Artinian also has served on the Board of Trustees of First Real
Estate Investment Trust of New Jersey, a small publicly owned REIT,
where he is currently Chair of the Audit Committee and a member of
the Executive and Compensation Committees. Mr. Artinian previously
served on the Board of Directors as well as a member of the Audit
and Finance Committees of NYMAGIC, INC, a NYSE listed insurance
holding company, and on the Board of Directors and a member of the
Audit Committee of Laser Mortgage Management, Inc., a NYSE listed
specialty finance company that primarily invested in mortgage
loans. During a career on Wall Street that lasted more than 25
years, Mr. Artinian spent the majority of his time at Lehman
Brothers and Smith Barney as a senior executive. Mr. Artinian has a
B.A. from the University of Pennsylvania and a M.B.A. from the
Wharton School of Business.
Board Invites Mr. Keith Meister of Corvex
to Join the Board:
As previously announced, in addition to the appointments of Ms.
Logan and Mr. Artinian, the CWH Board expects to increase the ratio
of Independent Trustees to total Trustees to at least 75% by adding
one more Independent Trustee and increasing the size of the Board
to eight members. In furtherance of this goal and in an effort to
resolve CWH’s ongoing disputes with Corvex Management LP, or
Corvex, and Related Fund Management, LLC, together, Corvex/Related,
the Nominating & Governance Committee of the CWH Board today
sent a letter to Mr. Keith Meister of Corvex inviting him to join
the Board as an Independent Trustee. A copy of the letter is
attached to this press release.
Board Adopts Minimum Share Ownership
Policy for Board Members:
Simultaneous with the appointments of Ms. Logan and Mr.
Artinian, the CWH Board also approved changes to CWH’s Governance
Guidelines to provide for minimum share ownership by Board members.
Within five years of joining the CWH Board, a Trustee is expected
to accumulate and to continue to own at least 20,000 CWH common
shares, which is equivalent to owning approximately $463,000 worth
of CWH common shares (based on January 3, 2014 closing price of
$23.15 per share) or about five times the total current annual
compensation received for serving as an Independent Trustee. This
change is intended to further align the interests of Trustees with
CWH shareholders.
Board Statement:
The CWH Board issued the following statement regarding today’s
announcements:
“The Board continues to move forward to effect changes at CWH in
response to shareholder suggestions. The appointments of Ms. Logan
and Mr. Artinian add a wealth of perspective and experience to the
Board and move CWH closer to the previously announced goal of
increasing the ratio of Independent Trustees to total Trustees to
at least 75%.”
“The Board believes that, if he agrees to serve, the addition of
Keith Meister to the Board would add further diversity of
experience to the Board, achieve a ratio of Independent Trustees to
total Trustees of 75% and bring an end to the expense and
distraction caused by the disputes between CWH and Corvex/Related.
Mr. Meister’s participation as a Board member will also allow him
to collaborate with the Board to create value for all
shareholders.”
CommonWealth REIT is a real estate investment trust that
primarily owns office properties located throughout the United
States. CWH is headquartered in Newton, MA.
WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE INCLUDES FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON CWH'S AND ITS BOARD’S PRESENT BELIEFS AND EXPECTATIONS,
BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS
REASONS, INCLUDING SOME REASONS BEYOND CWH’S CONTROL. FOR THESE
REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE OR
THEIR IMPLICATIONS.
ADDITIONAL INFORMATION
REGARDING THE CONSENT SOLICITATION
CWH, its Trustees and certain of its executive officers, and
Reit Management & Research LLC and certain of its directors,
officers and employees may be deemed to be participants in the
solicitation of consent revocations from shareholders in connection
with the solicitation being conducted by Corvex/Related. On
December 26, 2013, CWH filed a revised preliminary consent
revocation statement with the Securities and Exchange Commission,
or SEC, in response to the Corvex/Related solicitation. CWH will
furnish a definitive consent revocation statement to its
shareholders, together with a WHITE consent revocation card when
available. SHAREHOLDERS ARE URGED TO READ THE CONSENT REVOCATION
STATEMENT AND ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY OTHER
RELEVANT DOCUMENTS THAT CWH WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Additional information regarding the identity of the potential
participants and their direct or indirect interests, by share
holdings or otherwise, is set forth in the preliminary consent
revocation statement and other materials to be filed by CWH with
the SEC in connection with the solicitation of revocations of
consents.
Shareholders may obtain free of charge copies of the consent
revocation statement and any other documents (when available) filed
by CWH with the SEC in connection with the Corvex/Related
solicitation at the SEC’s website (http://sec.gov), at CWH’s
website (http://cwhreit.com) or by requesting these materials from
Timothy Bonang, by phone at (617) 796-8222, or by mail at Two
Newton Place, 255 Washington Street, Newton, MA 02458 or by
requesting materials from the firm assisting the CWH in the
solicitation of consent revocations, Morrow & Co., LLC, toll
free at (800) 276-3011 (banks and brokers call collect at (203)
658-9400).
-----------------------------------------------------------
January 6, 2014
Mr. Keith MeisterFounder & Managing PartnerCorvex Management
LP712 Fifth Ave, 28th FloorNew York, NY 10019
Dear Mr. Meister:
On behalf of the CommonWealth REIT Nominating & Governance
Committee and the entire CWH Board of Trustees, I extend an
invitation to you to join the CWH Board as an Independent
Trustee.
You have been a shareholder of CWH for almost a year. During
this time, you have made numerous requests regarding changes at
CWH. Over the last several months, the CWH Board has implemented
many of the suggestions made by you and other CWH shareholders. The
goal of CWH’s Board is to create value for all CWH shareholders.
You operate an activist hedge fund with a goal of making money for
your investors by becoming actively involved in the management of
the public companies in which you invest. We believe these goals
are complementary, not adversarial. Accordingly, the only condition
to this offer is that you enter a customary “stand-still” agreement
to cease hostile activities against CWH and the Board while you
serve as a Trustee of CWH.
The CWH Nominating & Governance Committee and Board believe
that you would be the best representative of the Corvex/Related
group to serve on the CWH Board because the principals of the
Related Companies have a very troubling history of service on
boards of publicly traded real estate companies. When Mr. Blau
served on the board of American Mortgage Acceptance Company, or
AMAC, and when Messrs. Blau and Ross served on the board of
Centerline Holding Company (f/k/a Charter Municipal Mortgage
Acceptance Co., or “CharterMac”), it ended very badly for
shareholders with a bankruptcy and a de-listing from the NYSE,
respectively. Even though shareholders did poorly when Messrs. Blau
or Ross served as board members of these companies, the Related
Companies greatly benefited. At AMAC, they caused that public
company to make large mezzanine loans (in aggregate amounts in
excess of 50% of AMAC’s equity market capitalization at the time)
to other businesses of the Related Companies. These loans soon
defaulted, making them worthless, and AMAC declared bankruptcy a
short time later. At CharterMac, while Ross was on the board (and
just before Blau joined) they caused that public company to agree
to pay the Related Companies or its affiliates about $340 million
to internalize management. After this internalization, CharterMac
suffered a spiral of operating losses, 98% negative total return
for shareholders and a de-listing from the NYSE. Based on this
track record, we do not think representation by the Related
Companies on the CWH Board would be in the best interests of
shareholders.
We hope you agree that it is time for the fighting to end and
for you to join the CWH Board to collaborate with us on value
creation for all CWH shareholders. The entire Board looks forward
to working with you constructively, and we believe that our common
goal of making money for all CWH shareholders will outweigh our
past differences. We also understand that you have entered an
agreement with the Related Companies regarding your investment in
CWH, and we are hopeful that you will be able to obtain any
necessary release in order to accept our invitation.
We look forward to your response and to working with you for the
benefit of all CWH shareholders.
Sincerely,
Joseph MoreaChair, Nominating & Governance
CommitteeCommonWealth REIT Board of Trustees
ADDITIONAL INFORMATION
REGARDING THE CONSENT SOLICITATION
CWH, its Trustees and certain of its executive officers, and
Reit Management & Research LLC and certain of its directors,
officers and employees may be deemed to be participants in the
solicitation of consent revocations from shareholders in connection
with the solicitation being conducted by Corvex/Related. On
December 26, 2013, CWH filed a revised preliminary consent
revocation statement with the Securities and Exchange Commission,
or SEC, in response to the Corvex/Related solicitation. CWH will
furnish a definitive consent revocation statement to its
shareholders, together with a WHITE consent revocation card when
available. SHAREHOLDERS ARE URGED TO READ THE CONSENT REVOCATION
STATEMENT AND ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY OTHER
RELEVANT DOCUMENTS THAT CWH WILL FILE WITH THE SEC WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Additional information regarding the identity of the potential
participants and their direct or indirect interests, by share
holdings or otherwise, is set forth in the preliminary consent
revocation statement and other materials to be filed by CWH with
the SEC in connection with the solicitation of revocations of
consents.
Shareholders may obtain free of charge copies of the consent
revocation statement and any other documents (when available) filed
by CWH with the SEC in connection with the Corvex/Related
solicitation at the SEC’s website (http://sec.gov), at CWH’s
website (http://cwhreit.com) or by requesting these materials from
Timothy Bonang, by phone at (617) 796-8222, or by mail at Two
Newton Place, 255 Washington Street, Newton, MA 02458 or by
requesting materials from the firm assisting the CWH in the
solicitation of consent revocations, Morrow & Co., LLC, toll
free at (800) 276-3011 (banks and brokers call collect at (203)
658-9400).
Media Contacts:Joele Frank Wilkinson Brimmer KatcherAndrew
Siegel/Jonathan Keehner212-355-4449
Or
Investor Contact:Timothy A. Bonang, 617-796-8222Vice President,
Investor Relationswww.cwhreit.com
A Maryland Real Estate Trust with transferable
shares of beneficial interest listed on the New York Stock
Exchange.
No shareholder, Trustee or officer is
personally liable for any act or obligation of the Trust.
Media:Joele Frank Wilkinson Brimmer KatcherAndrew
Siegel/Jonathan Keehner212-355-4449orInvestor:Timothy A. Bonang,
617-796-8222Vice President, Investor Relationswww.cwhreit.com
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