UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
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1934
(Amendment
No. )
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Material Under Rule 14a-12
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CHEMED
CORPORATION
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|
(Name
of Registrant as Specified in Its Charter)
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|
MMI
INVESTMENTS, L.P.
MCM
CAPITAL MANAGEMENT, LLC
JOHN
S. DYSON
CLAY
B. LIFFLANDER
SCOTT
J. CROMIE
JAMES
FOY
PETER
A. MICHEL
CARROLL
R. WETZEL, JR.
|
|
(Name
of Persons(s) Filing Proxy Statement, if Other Than the
Registrant)
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MMI Investments, L.P. (“MMI”), together
with the other participants named herein, is filing materials contained in this
Schedule 14A with the Securities and Exchange Commission (the “SEC”) in
connection with the solicitation of proxies for the election of five nominees as
directors at the 2009 annual meeting of stockholders of Chemed Corporation (the
“Annual Meeting”). MMI has not yet filed a proxy statement with the
SEC with regard to the Annual Meeting.
Item 1: On March 19, 2009,
MMI issued the following press release:
MMI
Investments to Nominate Slate of Directors for Chemed Corporation
Board
Thursday
March 19, 2009, 8:30 am EDT
Chemed's
Board Acknowledges the Value Creation Potential of MMI's Proposed Split-Up, Yet
Postpones Action Indefinitely;
Stockholder
Representation and
Greater Independence on
Chemed's Board Is Necessary to Maximize Value for Chemed
Stockholders.
NEW YORK,
March 19 /PRNewswire/ -- MMI Investments, L.P. ("MMI") today announced it has
nominated five director candidates for election at the 2009 Annual Meeting of
Chemed Corporation (NYSE: CHE - News; the "Company" or "Chemed")
to be held May 18, 2009. Due to the Chemed Board's extraordinary lack of
independence and unwillingness to take strategic action to unlock the
significant hidden value in the company's assets, as demonstrated by its recent
rejection of MMI's proposal to split Chemed into two separate companies, MMI has
determined significant changes in the Chemed Board's composition are urgently
required.
On
February 12, 2009, MMI publicly released its analysis of a potential tax-free
spin off of Chemed's Vitas or Roto-Rooter division to maximize value for its
stockholders. In a letter to MMI dated March 16, 2009, the Company clearly
acknowledged the potential for value creation of MMI's proposed transaction, but
deemed the time was not right to explore a tax-free spin-off transaction,
stating it would take no further action at this time.
MMI
President Clay Lifflander stated: "Five years ago, upon the acquisition of
Vitas, Chemed CEO Kevin McNamara declared that 'You certainly get maximum value
from a pure play...Long term separation is inevitable.' For most of the five
years since, he and other members of Chemed management have indicated repeatedly
that a split-up was out of the question, stating as recently as November, 2008
that 'long term perspective is that it looks like the two companies will remain
joined at the hip.' Now, presented with our analysis suggesting that Chemed's
conglomerate structure is inhibiting significant value creation potential, Mr.
McNamara and Chemed's Board have acknowledged once again that 'a separation
could create substantial shareholder value', even going so far as to say 'the
Board has already positioned Chemed's businesses to facilitate such a
separation.' Despite this, the Chemed Board has decided to maintain Chemed's
absurd conglomerate structure indefinitely, using the current market environment
as an excuse to avoid taking this long-term step which they acknowledge can
create value but would also render unnecessary Chemed's holding company
infrastructure. Despite this record of conflicting statements and shifting
positions on this issue, Chemed's owners are being asked simply to trust that
this Board, which clearly lacks independence, will revisit this transaction in
earnest on their own and execute it at the right time, in spite of their
previous statements to the contrary. We believe Chemed's stockholders deserve
better representation than this and a true voice and watchful eye for
stockholders in the Board room."
"MMI's
five director nominees bring significant operational experience in both of
Chemed's two industries: healthcare and residential services, 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. On the other hand, Chemed's
eleven-member Board contains three current company employees, five former
employees of Chemed or its affiliates, and two members whose employers have
received significant recent funding from Chemed (including the newly-named
'non-executive' Chairman). We greatly look forward to supporting our director
candidates, who we believe are objectively superior to the incumbent Board in
both credentials and independence, and strongly urge our fellow stockholders to
ensure that their shares, if loaned, are recalled prior to the March 31, 2009
record date so they can vote all their shares on this important
matter."
The full
text of the letter advising the Company of MMI's nomination
follows:
March 19,
2009
The Board
of Directors
c/o
Chairman George J. Walsh III
Chemed
Corporation
2600
Chemed Center
255 East
Fifth Street
Cincinnati,
Ohio 45202-4726
Dear
Members of the Board,
We are
pleased by your acknowledgment in your March 16, 2009 letter that a separation
of Vitas and Roto-Rooter would be relatively simple and could create substantial
stockholder value for Chemed Corporation ("Chemed"). We are confused and
dismayed however by the Board's decision, in spite of the acknowledged merits of
a spin-off, to maintain Chemed's incongruent conglomerate structure
indefinitely. This confirms our suspicion that the lack of independent voices on
the Chemed Board of Directors is preventing a reasoned debate of what is best
for stockholders. Therefore please accept this as notification that MMI
Investments, L.P. ("MMI") will be nominating five persons for election as
directors at Chemed's 2009 annual meeting of stockholders, or any other meeting
of stockholders held in lieu thereof, and any adjournments, postponements,
reschedulings or continuations thereof (the "2009 Annual Meeting"). As of the
date of this letter, MMI is the beneficial owner of 800,000 shares of Chemed's
common stock including 500 shares held of record. MMI intends to remain a holder
of record as of the record date for the 2009 Annual Meeting.
We are
not seeking to control the Chemed Board of Directors. We are nominating a slate
of five independent directors (constituting a minority of the Board) to obtain
better representation for stockholders and enhance stockholder value. MMI's
nominees for election as directors at the 2009 Annual Meeting, each having given
their consent to be nominated, are Scott J. Cromie, James Foy, Clay B.
Lifflander, Peter A, Michel and Carroll R. Wetzel, Jr. This highly qualified and
independent slate combines operational experience in both of Chemed's two
industries: healthcare and residential services, a strong track record of public
company board service and effective governance and strategic alternatives review
and execution expertise. More detailed information on the nominees is provided
below:
Scott J.
Cromie (52)
Mr.
Cromie is an independent management consultant. He was a Group President of The
ServiceMaster Company, a provider of outsourced services for residential and
commercial buildings from March 2006 to August 2007. As Group President, Mr.
Cromie was responsible for American Home Shield, AmeriSpec, ServiceMaster Clean,
Furniture Medic, Merry Maids and InStar Services. Mr. Cromie also served as CEO
(February 2006-August 2007) and as President & COO of American Home Shield
(1996-2006), a subsidiary of ServiceMaster, which provides home inspections and
home warranties to consumers. From 1986 to 1996 he served in a number of
progressively responsible leadership positions in finance and operations at
American Home Shield. Mr. Cromie is a former Member of the Memphis Chamber of
Commerce Board of Directors and is currently a Director of the RISE
Foundation.
James Foy
(57)
Mr. Foy
is the President and CEO of The Riverside Healthcare System, a $250 million
healthcare network including three hospital sites, multiple clinics, a skilled
nursing facility and a nursing school, and has served in that role since 1993.
Prior to joining Riverside, Mr. Foy served as Executive Vice President & COO
(1990-1993) and Vice President (1986-1990) at the Catholic Medical Center of
Brooklyn and Queens, a multi-institutional medical center encompassing four
hospitals, two skilled nursing facilities, two home health agencies and multiple
satellite clinics. Mr. Foy currently serves as the Chairman of the Greater New
York Hospital Association, Member of the Business Development Board of Hudson
Valley Bank (OTCBB: HUVL - News) and is a
Faculty Member of the Mercy College Healthcare Management Program.
Clay B.
Lifflander (46)
Mr.
Lifflander has been President of Millbrook Capital Management, Inc. a
diversified private investment firm since 1995 and President of MMI since 1996.
Mr. Lifflander has served on the Board of Unisys Corp., a provider of
information technology solutions since 2008. Mr. Lifflander served on the Board
of Dendrite International, Inc., a supplier of sales force software products and
support services to the pharmaceutical industry from 2006 until its acquisition
in 2007 by Cegedim SA (Euronext: CGM). Mr. Lifflander served, at various times,
as Co-Chairman of the Board, Chief Executive Officer, President and Director of
Key Components, Inc. (1998-2004), a diversified manufacturing corporation (SEC
registrant from 1999 through 2004). From 1994 to 1995, Mr. Lifflander served as
President of the New York City Economic Development Corporation under then Mayor
Rudolph Giuliani. Prior to this Mr. Lifflander was a Managing Director in the
M&A Group at Smith Barney, where he worked from 1984 to 1994. He is a former
Director of the United Nations Development Corporation and currently serves on
the Board of the Hudson River Museum.
Peter A.
Michel (66)
Mr.
Michel is a recognized leader in the security services industry, and was
formerly CEO of Brink's residential security monitoring subsidiary, Brink's Home
Security ("BHS") from 1988 to 2001. During his tenure as CEO, Mr. Michel
transformed BHS from a $26 million security firm to a $258 million leader in
high-tech home protection services. Under Mr. Michel, BHS grew from a company of
66,000 customers in 22 U.S. markets to over 700,000 customers in 100+ markets
covering 42 U.S. states and two Canadian provinces, and achieved record
operating profit every year of his tenure. Mr. Michel currently serves as
President, CEO and Director of iSECUREtrac Corp. (OTCBB: ISEC - News), a
producer of electronic monitoring products for, and service provider to, the
corrections market using Global Positioning Satellite (GPS) technology.
Previously, Mr. Michel was Chairman of the Homeland Security Advisory Council, a
think tank sponsored by the Security Industry Association, from 2002 to
2005.
Carroll
R. Wetzel, Jr. (65)
Mr.
Wetzel is a retired investment banker. Mr. Wetzel has served as a member of the
Board of Directors of Exide Technologies, a manufacturer of batteries used in
transportation, motive power, network power, and military applications since
2005, and Brink's Home Security Holdings, Inc., a provider of residential and
commercial security alarm monitoring services since October 2008. Mr. Wetzel was
previously a Director of The Brink's Company, a provider of security services
(May 2008-October 2008), of Laidlaw International, Inc., a North American
transportation services company (2004-2007), and Chairman of the Board of Safety
Components International, Inc., a supplier of automotive airbag fabric and
cushions and technical fabrics (2000-2005). Mr. Wetzel was selected to serve as
Chairman of Safety Components International by that company's major
stockholders. From 1988 to 1996, Mr. Wetzel was a Managing Director with the
Merger & Acquisition Group of Chemical Bank/Chase Manhattan. From 1981 to
1988, he was a Managing Director in Smith Barney's Mergers and Acquisitions
Group. Mr. Wetzel is a member of the Board of Directors and head of the Finance
Committee of the Henry L. Stimson Center, a Washington based non-profit,
non-partisan think tank, concentrating on international issues.
Additional
information regarding these nominees will be included in MMI's forthcoming proxy
statement. If there are any questions regarding this please contact me at (212)
586-4333.
Sincerely,
Clay
Lifflander
CERTAIN
INFORMATION CONCERNING THE PARTICIPANTS
MMI
Investments, L.P., a Delaware limited partnership ("MMI"), together with the
other participants named below, intends to make a preliminary 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 its director nominees at
the 2009 Annual Meeting of Stockholders of Chemed Corporation (the
"Company").
MMI
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 AND IF 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.
The
participants in the proxy solicitation are MMI, MCM Capital Management, LLC,
which is the general partner of MMI, John S. Dyson, Clay B. Lifflander, Scott J.
Cromie, James Foy, Peter A. Michel and Carroll R. Wetzel, Jr. (the "Group"). As
of March 18, 2009, MMI beneficially owned 800,000 shares of common stock, $1 par
value per share (the "Common Stock"), of the Company, which shares represent
approximately 3.6% of the outstanding Common Stock, and Mr. Cromie beneficially
owned one share of Common Stock. Except for the shares owned by MMI 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 and the other
members of the Group will be included in the Proxy Statement.