Chemed Corporation (NYSE:CHE) today mailed the following
letter to the Company�s stockholders in connection with the
Company�s 2009 Annual Meeting of Stockholders, scheduled for May
29, 2009. Chemed stockholders of record as of March 31, 2009 will
be entitled to vote at the Annual Meeting.
Chemed�s Board of Directors unanimously recommends that
stockholders vote today for the Board�s highly qualified nominees
by telephone, via the Internet or by signing, dating and returning
the enclosed WHITE proxy
card.
May 13, 2009
PROTECT YOUR INVESTMENT!
ELECT YOUR BOARD�S NOMINEES BY
VOTING THE WHITE PROXY
CARD
Dear Fellow Stockholders:
As Chemed�s May 29, 2009 Annual Meeting of Stockholders
approaches, your Board of Directors urges you to vote the
WHITE proxy card to elect the
Company�s highly qualified nominees. Your Board and management
strongly believe that MMI Investments, L.P. (�MMI�), a dissident
hedge fund that is soliciting proxies to elect five dissident
nominees to your Board, threatens the value of your investment.
Accordingly, your Board urges you not to return any Gold proxy card
that MMI may send you, even as a protest. Since returning a Gold
proxy card would revoke any previously executed WHITE proxy card submitted by you, the
best way to prevent MMI from enacting its self-serving agenda is to
simply discard any Gold proxy card you may receive.
If you have previously submitted a Gold proxy card, you may
change any vote you may have cast in favor of MMI�s nominees and
vote in favor of the Board�s nominees by signing, dating and
returning the WHITE proxy
card, or by following the instructions on the WHITE proxy card to vote by telephone or
via the Internet, or by attending the Annual Meeting and voting
your shares in person.
Your Board unanimously believes its nominees are the right
nominees for Chemed. Your Board�s nominees include nine of the
current members of your Board, as well as two new, independent and
highly qualified individuals, Ernest J. Mrozek and Thomas P.
Rice.
MMI HAS ONLY ONE OBJECTIVE �
SEPARATING CHEMED�S BUSINESSES.
YOUR BOARD BELIEVES NOW IS
NOT THE TIME TO DO SO
MMI has one, and only one, idea for your Company: to separate
immediately Chemed�s businesses � VITAS and Roto-Rooter. We believe
that this idea is extremely short-sighted and threatens the value
of your investment. Your Board and management regularly review the
Company�s businesses and structure in the context of value-creating
alternatives that might be available. Our most recent review,
conducted with our outside financial and legal advisors, makes it
clear that a separation of Chemed�s businesses is NOT in
stockholders� best interests at this time. In fact, we
determined that executing the separation in the current market
environment would be risky and could impair, rather than create,
value for Chemed�s stockholders. Your Board and management have
protected stockholder value by prudently maintaining Chemed�s
current corporate structure during the global economic downturn
while at the same time taking the appropriate steps to facilitate a
separation of Chemed�s businesses when conditions are right.
MMI�S NOMINEES WILL NOT CONTRIBUTE
TO VALUE CREATION
We believe that MMI�s nominees, if elected, would not only seek
to carry out the dissident�s ill-timed, limited strategy of
separating Chemed�s businesses, they would also bring limited
relevant experience to the Board. For example:
- Of MMI�s five nominees,
only one has any professional
experience in healthcare and only
one has any professional experience in residential and
commercial cleaning services.
- In contrast to the more than
141% increase in value your Board has delivered since the
announcement of Chemed�s acquisition of VITAS in December 2003, a
compounded annual growth rate of nearly 18%, the only three MMI
nominees with prior public company board experience have overseen
significant value destruction.1
DON�T LET MMI DISTRACT YOU WITH
HALF TRUTHS AND DELIBERATE MISCHARACTERIZATIONS
We believe that MMI has resorted to half truths and
mischaracterizations because it cannot substantiate its assertion
that a separation of Chemed�s businesses at this time would create
value for stockholders. Consider the following:
- MMI has attempted to impugn the
integrity and independence of your Board�s directors by
suggestively pointing to directorships and former employment
relationships of certain Board members, despite the fact that none
of the independent directors has been an employee or a director of
any Chemed affiliate for a minimum of nearly ten years. The fact is
that nine of the Board�s 11 nominees are independent under the
director-independence requirements of the New York Stock Exchange
(the �NYSE�) and the Securities and Exchange Commission (the
�SEC�). Accordingly, the Board�s nominees are in full compliance
with both the letter and the spirit of the NYSE and SEC
requirements for director independence.
- MMI�s insinuations about your
management�s views on a potential separation of Chemed�s businesses
appear to be deliberate attempts to mislead stockholders. The
reality is that your management team has not only consistently
stated that it would consider a separation transaction when market
and economic conditions are right, but it has in fact already
positioned Chemed to separate its businesses at such time.
- MMI has distorted the facts
regarding its investment in Chemed, falsely stating that it has
held Chemed stock for over two years, when MMI has really been a
Chemed stockholder for only 13 months. In addition, you should know
that MMI sold more than 22% of its Chemed holdings in December
2008, which we believe calls into question its so-called
�long-term� interest in the Company.
VOTE FOR YOUR BOARD�S NOMINEES ON THE
WHITE PROXY CARD
TODAY
Your Board and management have a track record of creating value
for stockholders and are committed to doing so in the future. With
a winning strategy that favors the creation of value for
stockholders, Chemed�s Board and management have delivered strong
stock price performance and unlocked value through a number of
spin-offs and other strategic transactions2.
Protect your investment in Chemed � do not expose your
Company�s performance and prospects to the risk of MMI�s
short-term, self-serving agenda. Your Board is unanimous in
its opposition to MMI and requests that you discard any Gold proxy
cards you may receive. We urge all stockholders to vote for the
election of all nominees proposed by the Chemed Board, on the
WHITE proxy card
TODAY.
On behalf of the Board of Directors, we thank you for your
continued support.
Sincerely,
/s/ Kevin J. McNamara � � � � � � � � � � /s/ George J. Walsh III �
Kevin J. McNamara George J. Walsh III Chief Executive Officer
Chairman of the Board � �
Your Vote Is Important, No
Matter How Many Or How Few Shares You Own.
� If you have questions about how to vote your shares, or need
additional assistance, please contact the firm assisting us in the
solicitation of proxies: �
INNISFREE M&A
INCORPORATED
Stockholders Call Toll-Free:
(877) 825-8631
Banks and Brokers Call Collect:
(212) 750-5833
�
IMPORTANT
We urge you NOT to sign any Gold
proxy card sent to you by MMI. If you have already done so, you
have every legal right to change your vote by using the enclosed
WHITE proxy card to vote TODAY�by telephone, by
Internet, or by signing, dating and returning the WHITE
proxy card in the postage-paid envelope provided.
Cravath, Swaine & Moore LLP is acting as legal advisor to
Chemed and Lazard Fr�res & Co. LLC and J.P. Morgan Securities
Inc. are acting as financial advisors.
About Chemed
Listed on the New York Stock Exchange and headquartered in
Cincinnati, Ohio, Chemed Corporation (www.chemed.com) operates two
wholly owned subsidiaries: VITAS Healthcare and Roto-Rooter. VITAS
is the nation�s largest provider of end-of-life hospice care, and
Roto-Rooter is the nation�s leading provider of plumbing and drain
cleaning services.
Forward Looking Statements
Statements in this press release or in other Chemed
communications may relate to future events or Chemed's future
performance. Such statements are forward-looking statements and are
based on present information Chemed has related to its existing
business circumstances. Investors are cautioned that such
forward-looking statements are subject to inherent risk and that
actual results may differ materially from such forward-looking
statements. Further, investors are cautioned that Chemed does not
assume any obligation to update forward-looking statements based on
unanticipated events or changed expectations.
Important Information
Chemed filed with the SEC, on April 29, 2009, a definitive proxy
statement in connection with its 2009 annual meeting, and is
mailing the definitive proxy statement to its stockholders.
Investors and security holders are urged to read the definitive
proxy statement relating to the 2009 Annual Meeting and any other
relevant documents filed with the SEC (when available) because they
contain important information. Investors and security holders may
obtain a free copy of the definitive proxy statement and other
documents that Chemed files with the SEC (when available) at the
SEC�s website at www.sec.gov and Chemed�s website at
www.chemed.com. In addition, the definitive proxy statement and
other documents filed by Chemed with the SEC (when available) may
be obtained from Chemed free of charge by directing a request to
Chemed Corporation, Attn: Investor Relations, Chemed Corporation,
2600 Chemed Center, 255 East Fifth Street, Cincinnati, OH
45202-4726.
Certain Information Regarding Participants
Chemed, its directors and certain executive officers and
employees are participants in the solicitation of Chemed�s security
holders in connection with its 2009 Annual Meeting. Security
holders may obtain information regarding the names, affiliations
and interests of such individuals in Chemed�s Annual Report on
Form�10-K for the year ended December�31,�2008, which was filed
with the SEC on February�27, 2009, and its definitive proxy
statement for the 2009 Annual Meeting, which was filed with the SEC
on April 29, 2009. To the extent holdings of Chemed securities have
changed since the amounts printed in the definitive proxy statement
for the 2009 Annual Meeting, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. These documents may be obtained free of charge (when
available) from the SEC�s website at www.sec.gov and Chemed�s
website at www.chemed.com.
1 The stock price of Unisys Corporation has decreased
approximately 69% since Clay B. Lifflander began serving on its
board of directors; the stock price of iSECUREtrac has decreased
approximately 85% since Peter A. Michel began serving on its board
of directors; and the stock price of The Brink�s Company decreased
approximately 29% during the time Carroll R. Wetzel, Jr. served on
its board of directors.
2 The Dubois Chemicals, Omnicare and National Sanitary Supply
transactions, which are the three largest transactions effected by
Chemed, generated total gross proceeds of approximately $492
million and resulted in pre-tax gains aggregating approximately
$252 million. Since its formation in 1971, Chemed effected seven
other divestitures that generated gross proceeds of approximately
$219 million and resulted in pre-tax gains of approximately $32
million.
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