ARLINGTON, Va., May 6, 2016 /PRNewswire/ -- Arlington Asset
Investment Corp. (NYSE: AI) (the "Company" or "Arlington") today announced that it has filed
and intends to mail a letter to shareholders in connection with the
Company's 2016 Annual Meeting of Shareholders to be held on
June 9, 2016.
The May 6, 2016 letter urges
Arlington shareholders to protect
their investment in the Company and highlights the following:
- The Arlington Board of
Directors is composed of highly qualified nominees who have
overseen a consistent and clearly articulated strategy that has
delivered robust dividends over 25 consecutive quarters;
- Imation Corp. (NYSE: IMN) and the Clinton Group (collectively,
the "Imation Group") have nominated a controlling slate to
Arlington's Board despite owning
less than 0.05% of the Company's shares, an action that we believe
is being undertaken to extract value from Arlington at the expense of all other
shareholders; and
- Since the Clinton Group won its proxy fight at Imation in
May 2015, Imation's stock has lost
approximately 65% of its value while Imation has engaged in
self-dealing transactions involving more than $50 million, or over 80% of Imation's current
$60 million market cap, all for the
benefit of the Clinton Group and other insiders.
- The Company believes that the Imation Group
would follow the same sham playbook at Arlington that destroyed value at
Imation, putting Arlington's
dividend and its shareholders' investment at significant
risk.
The full text of the letter follows:
YOUR VOTE IS IMPORTANT
A VOTE "FOR" ALL OF THE ARLINGTON BOARD NOMINEES ON THE WHITE PROXY
CARD IS A VOTE FOR CONTINUED ROBUST DIVIDENDS TO
SHAREHOLDERS
May 6, 2016
Dear Fellow Arlington Shareholder:
The Arlington Board is
dedicated to delivering value. Our performance enabled the
Company to continue to pay a significant, stable dividend of
$0.625 per share for the first
quarter of 2016.
Since we began focusing exclusively on our current investment
strategy in June 2009,
Arlington has delivered a more
than 317% total return to shareholders[1], and the Company has
paid a dividend each quarter to shareholders over 25 consecutive
quarters, for a total of $19.40 per
share. We believe our strategy and our current leadership are best
positioned to continue to deliver a stable, robust dividend to our
shareholders.
PROTECT THE VALUE OF YOUR INVESTMENT AND YOUR
DIVIDEND VOTE THE WHITE PROXY CARD TODAY
At this year's Annual Meeting on June 9,
2016, you and all fellow Arlington shareholders will be faced with a
stark choice: to support your Board's highly qualified director
nominees, who have deep and relevant industry experience and a long
record of commitment to creating value for all shareholders. Or to
elect the nominees of Imation Corp., a data storage technology
company with no experience in our sector, and the New York City-based hedge fund, Clinton Group,
Inc. (collectively, the "Imation Group"), who we believe would
advance their own self-interest and risk the value of your
investment, including the continuation of our quarterly
dividend.
Despite owning less than 0.05% of the Company's shares, the
Imation Group has nominated a controlling slate of five individuals
to stand for election to our Board at the Annual Meeting. Given its
track record and extremely small investment in the Company, we
believe that the Imation Group has nominated this controlling slate
to extract value from Arlington at
the expense of all other shareholders.
THE IMATION GROUP'S TRACK RECORD IS LITTERED
WITH SELF-DEALING FOR THE BENEFIT OF CLINTON GROUP AND OTHER
INSIDERS
After initially winning three seats through a proxy contest at
Imation's 2015 Annual Meeting, the Clinton Group's nominees quickly
took control of Imation's board and the executive suite, appointing
themselves as Imation's Chairman of the Board, Interim Chief
Executive Officer, Interim President, Interim Chief Financial
Officer and Chief Restructuring Officer.
Once the Clinton Group nominees gained control of Imation, their
board promptly caused Imation to engage in numerous highly
questionable, self-dealing transactions, involving more than
$50 million or over 83% of
Imation's current approximately $60
million market cap[2], including:[3]
- Authorizing an investment of up to $35 million of Imation's cash into a hedge fund
managed by Clinton Group.
- Imposing on Imation shareholders a lucrative off-market fee
deal with Clinton Group in connection with this
investment.
- Clinton Group obtained a 25% quarterly performance fee from
Imation, payable in Imation shares. Until your Board recently
publicly criticized this deal, these shares were to be issued to
the Clinton Group at a fixed value of $1.00 – less than two thirds of the current
market value of Imation's stock.
- According to Imation's public filings, the Clinton Group will
be paid quarterly for any gains – whether realized or not –
with no disclosed "high-water mark" or "clawback" for annual
investment losses. In other words, Clinton Group can make money
even if Imation shareholders lose value. And Imation
shareholders bear all the risk of loss.
- Entering into a consulting agreement with a restructuring
firm founded and led by Barry
Kasoff, an Imation officer and board member. Mr. Kasoff
and his firm received a total of more than $6 million in compensation from Imation,
which included fees of $3 million
in 2015 for less than 5 months of work, and up to
approximately $2.2 million in Q1
2016. In 2015, Mr. Kasoff also received $679,000 in direct compensation for 4.5 months of
employment at Imation in addition to director fees of $137,057.
- Mr. Kasoff appears to have been paid multiple times for the
exact same services – in his capacity as a director, officer,
and simultaneously for the provision of consulting services to
Imation, via the firm he founded and leads.
- Mr. Kasoff is now an Imation Group nominee to Arlington's Board.
- Reimbursing Clinton Group $600,000 for its proxy fight expenses at
Imation, at the expense of Imation's shareholders.
- Acquiring a business founded and led by Imation director
Geoff Barrall for $6.7 million at closing, plus an
additional $5 million in
future contingent payments. Director Barrall also received
$200,000 in consulting fees
(in addition to board fees) from Imation in 2015 for six weeks of
work. Mr. Barrall recently resigned from the board and is serving
as Chief Technology Officer of Imation.
- Paying $300,000 in
consulting fees to Imation director Robert
Fernander – a Clinton Group nominee to Imation's board –
for six weeks of work in addition to being paid $150,387 in director fees in 2015. Thereafter,
Mr. Fernander was appointed Chief Executive Officer of Imation and
received $1.3 million in direct
compensation for approximately 3 months of employment at
Imation in 2015.
All of these transactions were approved by a board dominated by
the beneficiaries of these deals – Clinton Group nominees and its
chosen directors. None of these transactions appear to have
included receipt of independent fairness opinions or independent
financial advice. Importantly, none of these transactions were
approved by Imation shareholders.
$1 INVESTED IN
IMATION ON MAY 21, 2015, THE DAY
AFTER CLINTON GOT ON THE IMATION BOARD, WAS WORTH 35 CENTS ON MAY 5,
2016, A DECLINE OF APPROXIMATELY 65% OVER LESS THAN A
YEAR.
You will hear the Imation Group claim that they have completed a
transformation at Imation. Here is what they are NOT telling
you about the value destructive changes that they have caused in
less than one year:
- Since the Clinton Group won its proxy contest on May 20, 2015, Imation's stock has lost
approximately 65% of its value. In fact, Imation stock has
traded so low since that time that the New York Stock Exchange has
informed Imation it is in jeopardy of being de-listed from its
exchange.
- Despite promising that they would evaluate returning excess
capital to Imation shareholders by December
1, 2015, Clinton Group nominees have failed to return
any value to Imation shareholders since taking control –
no dividends and no disclosed open market share
repurchases – instead authorizing a $35 million investment in Clinton Group
funds.
Photo -
http://photos.prnewswire.com/prnh/20160505/364503-INFO
The ONLY people who have not lost money at
Imation since May 20, 2015 are the
Clinton Group nominated directors, thanks to millions of dollars in
insider deals.
Now, the Clinton Group is using Imation as its platform to run
multiple simultaneous proxy fights at other companies, including at
Arlington. The Clinton Group is
saddling Imation's shareholders with the expense of running proxy
contests in pursuit of what we believe to be its own self-serving
agenda.
LEARN FROM THE MISTAKES OF IMATION'S
SHAREHOLDERS
The Imation Group has disclosed only hints of its plans for
Arlington, which sound
frighteningly familiar to its self-serving and value-destroying
agenda at Imation:
- If it is successful in its proxy contest, the Imation Group
intends to have Arlington repay
the Imation Group's total proxy contest fees – which it
currently anticipates to be approximately $1,000,000. This reimbursement would be at
the expense of Arlington
shareholders.
- It appears that the Imation Group will solicit an external
manager for Arlington, which they
would hand-pick with a majority of Arlington's Board. Given their track record at
Imation, we believe that the Imation Group's "process" will
result in a self-serving, related party transaction with either the
Clinton Group or Imation serving as the external manager of
Arlington.
- We believe the Imation Group would follow the same sham
playbook at Arlington that
destroyed value at Imation, putting your dividend and investment at
significant risk.
DO NOT LET THE IMATION GROUP'S NOMINEES TAKE
CONTROL OF YOUR COMPANY AND REPEAT THE DISASTER AT IMATION
VOTE "FOR" ALL OF THE ARLINGTON BOARD NOMINEES ON THE WHITE PROXY
CARD TODAY
We urge shareholders to avoid the excessive risk posed by the
Imation Group's proposal. Your Board is committed to building value
for all Arlington shareholders and
continuing to deliver a stable, robust dividend. Vote FOR your
Board of Directors' experienced and highly qualified director
nominees by telephone, over the internet, or by signing, dating and
returning the enclosed WHITE proxy card today.
We urge shareholders – do not sign or return any gold proxy
card from the Imation Group. Simply discard it. If you
have inadvertently returned a gold proxy card, you have every legal
right to change your vote, as only your latest dated proxy card
will be counted at the Annual Meeting.
On behalf of your Board of Directors and management team, we
thank you for your continued support.
Sincerely,
The Arlington Board of
Directors
Eric F.
Billings
J. Rock Tonkel,
Jr.
Daniel J.
Altobello Daniel
E. Berce
David W.
Faeder Peter
A.
Gallagher Ralph
S. Michael, III
Anthony P. Nader, III
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Your Vote Is
Important, No Matter How Many or How Few Shares You
Own
|
|
If you have any
questions or need assistance voting, please contact the firm
assisting us in the solicitation of proxies:
|
|
INNISFREE M&A
INCORPORATED
|
Shareholders may
call toll free: 1-888-750-5834
|
Banks and Brokers
may call collect: 212-750-5833
|
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IMPORTANT
|
We urge you NOT to
sign any gold proxy card sent to you by the Imation
Group.
|
|
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, via
Internet, or by signing, dating and returning the WHITE proxy card
in the postage paid envelope provided.
|
Important Additional Information
The Company, its
directors and certain of its executive officers are participants in
the solicitation of proxies in connection with the Company's 2016
Annual Meeting of Shareholders. The Company has filed a definitive
proxy statement and form of WHITE proxy card with the U.S.
Securities and Exchange Commission (the "SEC") in connection with
such solicitation of proxies from the Company's shareholders. WE
URGE INVESTORS TO READ THE DEFINITIVE PROXY STATEMENT (INCLUDING
ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING WHITE
PROXY CARD CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION.
Information regarding the names of the Company's directors and
executive officers and their respective interests in the Company by
security holdings or otherwise as of April
7, 2016, is set forth in the Company's definitive proxy
statement for its 2016 Annual Meeting of Shareholders, filed with
the SEC on April 18, 2016. Additional
information can be found in the Company's Annual Report on Form
10-K for the year ended December 31,
2015, filed with the SEC on February
16, 2016. These documents are available free of charge at
the SEC's website at www.sec.gov.
Shareholders will be able to obtain, free of charge, copies of
these documents, including any proxy statement (and amendments or
supplements thereto) and accompanying WHITE proxy card, and other
documents filed with the SEC at the SEC's website at www.sec.gov.
In addition, copies will also be available at no charge at the
Investors section of the Company's website at
http://www.arlingtonasset.com/.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain statements in this communication
that are not historical facts are forward-looking statements.
Forward-looking statements involve various important assumptions,
risks and uncertainties. Actual results may differ materially from
those predicted by the forward-looking statements because of
various factors and possible events. We discuss these factors and
events, along with certain other risks, uncertainties and
assumptions, under the heading "Risk Factors" in our Annual Report
on Form 10-K for the year ended December 31,
2015, and in our other filings with the SEC. We note these
factors for investors as contemplated by the Private Securities
Litigation Reform Act of 1995. Predicting or identifying all such
risk factors is impossible. Consequently, investors should not
consider any such list to be a complete set of all potential risks
and uncertainties. Forward-looking statements speak only as of the
date on which they are made, and we undertake no obligation to
update any forward-looking statement to reflect circumstances or
events that occur after the date of the statement to reflect
unanticipated events. All subsequent written and oral
forward-looking statements attributable to us or any person acting
on behalf of the Company are qualified by the cautionary statements
in this section.
The letter and other previously mailed materials regarding the
Board of Directors' recommendations for the Arlington 2016 Annual Meeting have been filed
with the Securities & Exchange Commission, and can be found on
the Investor Relations section of the Company's website at
http://www.arlingtonasset.com/.
About Arlington Asset Investment Corp.
Arlington Asset Investment Corp. (NYSE: AI) is a principal
investment firm that currently invests primarily in
mortgage-related and other assets. The Company is headquartered in
the Washington, D.C. metropolitan
area. For more information, please visit
www.arlingtonasset.com.
Important Additional Information
The Company, its directors and certain of its executive officers
are participants in the solicitation of proxies in connection with
the Company's 2016 Annual Meeting of Shareholders. The Company has
filed a preliminary proxy statement and form of WHITE proxy card
with the U.S. Securities and Exchange Commission (the "SEC") in
connection with such solicitation of proxies from the Company's
shareholders. WE URGE INVESTORS TO READ THE DEFINITIVE
PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND SUPPLEMENTS THERETO)
AND ACCOMPANYING WHITE PROXY CARD CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Information regarding the names of the Company's directors and
executive officers and their respective interests in the Company by
security holdings or otherwise as of April
6, 2016, is set forth in the Company's preliminary proxy
statement for its 2016 Annual Meeting of Shareholders, filed with
the SEC on April 8, 2016. Additional
information can be found in the Company's Annual Report on Form
10-K for the year ended December 31,
2015, filed with the SEC on February
16, 2016. These documents are available free of charge at
the SEC's website at www.sec.gov.
Shareholders will be able to obtain, free of charge, copies of
these documents, including any proxy statement (and amendments or
supplements thereto) and accompanying WHITE proxy card, and other
documents filed with the SEC at the SEC's website at www.sec.gov.
In addition, copies will also be available at no charge at the
Investors section of the Company's website
at http://www.arlingtonasset.com/.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Certain statements in this news release that are not historical
facts are forward-looking statements. Forward-looking statements
involve various important assumptions, risks and uncertainties.
Actual results may differ materially from those predicted by the
forward-looking statements because of various factors and possible
events. We discuss these factors and events, along with certain
other risks, uncertainties and assumptions, under the heading "Risk
Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2015, and in our other
filings with the SEC. We note these factors for investors as
contemplated by the Private Securities Litigation Reform Act of
1995. Predicting or identifying all such risk factors is
impossible. Consequently, investors should not consider any such
list to be a complete set of all potential risks and uncertainties.
Forward-looking statements speak only as of the date on which they
are made, and we undertake no obligation to update any
forward-looking statement to reflect circumstances or events that
occur after the date of the statement to reflect unanticipated
events. All subsequent written and oral forward-looking statements
attributable to us or any person acting on behalf of the Company
are qualified by the cautionary statements in this section.
[1] Percentages if dividends not reinvested.
[2] Based on May 5, 2016 closing
price.
[3] Source: Imation SEC filings, including preliminary
proxy statement filed on April 29,
2016
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/arlington-asset-investment-corp-highlights-shareholder-value-creation-under-current-board-of-directors-300264263.html
SOURCE Arlington Asset Investment Corp.