ARLINGTON, Va., May 26, 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. This letter and other
materials regarding the Arlington
Board of Directors' recommendation for the 2016 Annual Meeting can
be found on the Company's website at www.arlingtonasset.com.
The full text of the letter is below:
VOTE TO CONTINUE ARLINGTON'S STRONG AND STABLE DIVIDEND
VOTE "FOR ALL" OF THE ARLINGTON
BOARD NOMINEES ON THE WHITE PROXY CARD
May 26, 2016
Dear Fellow Arlington Shareholder:
The Arlington 2016 Annual
Meeting of Stockholders is rapidly approaching and your vote is
extremely important. You are being asked to choose between: the
election of Arlington's highly
qualified and experienced nominees who have a track record of
delivering robust, consistent dividends to our shareholders OR the
election of candidates nominated by Imation Corp., a legacy
technology company, and the Clinton Group, a New York City-based hedge fund (collectively,
the "Imation Group") with a track record of value destruction on a
massive scale and who we believe intend to turn Arlington into an arm of their hedge fund
business.
We urge you to protect your Arlington dividend and the value of your
Arlington investment by voting the
enclosed WHITE proxy card today "FOR ALL" eight of Arlington's highly qualified and experienced
nominees to the Arlington
Board.
Your vote for the Arlington
nominees on the WHITE proxy card is a vote FOR:
- Strong, consistent dividends: Arlington's current leadership has delivered
consistent strong performance that has facilitated our payment of a
robust dividend to shareholders each quarter for 25 consecutive
quarters – totaling $19.40 per share.
Independent analysts with many decades of experience covering our
industry1 agree that Arlington's dividend is sustainable under
our current strategy.
- Ensuring Arlington remains aligned with shareholder
interests: Your Board collectively owns more than 684,000
shares of Arlington stock2, which is more than 60x
the amount owned by the Imation Group. In fact, our
Chief Executive Officer is so confident in the value and potential
of Arlington and of our strategy,
that last week he purchased an additional $216,425 worth of Arlington stock, which on its own is a larger
investment in Arlington stock than
the Imation Group's.
- Overseeing an efficient internally managed structure and
responsible compensation practices: Arlington's internally managed structure is
efficient, lacks conflicts and is aligned with shareholder
interests. Further, given the Board's focus on controlling
expenses, Arlington's operating
expenses were less than half of the median of its compensation
peers in 2015 as a percentage of equity. In fact, Arlington management's five-year total
compensation is lower than the majority of its peers.
A vote for the Imation Group's nominees is a vote for value
destruction, self-dealing and a plan that we believe puts your
dividend at risk. The Imation Group has:
- A track record of value destruction: Though they
are trying to take control of Arlington's Board, Imation Corp. and the
Clinton Group have delivered only value destruction to Imation's
shareholders. Since the Clinton Group won its proxy contest at
Imation last year, Imation's stock has lost approximately 65% of
its value. And this disastrous trend is continuing: in its recent
first quarter earnings, Imation posted a net loss of $91.1 million – representing a more than 500%
deterioration of Imation's results year-over-year – and Imation's
independent auditor declined to stand for re-election.
- Conducted shameless and shameful self-dealing transactions,
all paid for at the expense of Imation's public stockholders:
As Imation investors have lost value in their stock and received no
dividends, the Imation board – controlled by the Clinton Group
nominees and directors chosen and elected by the Clinton Group
nominees – approved self-dealing transactions with the Clinton
Group and other board members involving more than $50 million, representing more than 80% of the
market capitalization of Imation today! In only 8 months,
these insider deals include:
- Deploying a plan to liquidate most of Imation's assets while
authorizing an investment of up to $35
million of Imation's cash into a hedge fund managed by the
Clinton Group;
- Imation board approval of top-of-market performance fees for
the Clinton Group (payable quarterly, even on unrealized gains);
and
- Millions of dollars in special consulting and compensation
deals for Clinton Group nominees.
- A plan that puts your dividend at risk: The Imation
Group has disclosed a scheme for Arlington that is frighteningly similar to its
self-serving and value destroying agenda at Imation, including:
- Taking over Arlington's Board,
management and capital;
- Terminating management; and
- Hinting that it will turn Arlington into an externally managed hedge
fund business, a practice that independent analysts recognize would
significantly increase Arlington's
operating expenses, lead to management conflicts and give rise to
exorbitant external management fees payable regardless of
Arlington's performance.
Given its track record at Imation and very small investment in
Arlington (less than 0.05% of our
stock) – which was made only in March
2016 – we believe that the Imation Group has nominated its
controlling slate to appoint itself as Arlington's external manager and extract value
from Arlington at the expense of
all other shareholders.
INDEPENDENT ANALYST RESEARCH CONTINUES TO
SUPPORT THE ARLINGTON BOARD
AND RAISES SIGNIFICANT CONCERNS ABOUT THE IMATION GROUP'S TRACK
RECORD AND THE IMATION GROUP'S RISKY PLANS
"In 2015, the Clinton Group won a proxy fight
against Imation and took over its Board of Directors. Based on
the decline in [Imation] shares post-proxy fight (down more than
60%), there appears to be a risk that the insurgents' taking
control of AI could be negative for AI shareholders. In our
view:
(1) AI has an impressive independent Board of
Directors;
(2) AI management had one of the best records
of preserving book value among all mortgage REITs during the
difficult 2Q13 "taper tantrum"; and
(3) while AI's
record more recently has not been as strong, AI appears
to be well positioned for the rising-rate environment that is most
likely to transpire.
Therefore, keeping the
current Board and management appears to us to be less risky than
voting for the insurgents."3
(Maxim Group Analyst Report, 5/24/16
– emphasis added)
PROTECT YOUR ARLINGTON DIVIDEND—VOTE THE WHITE PROXY CARD
TODAY
We urge shareholders to avoid the excessive risk posed by the
Imation Group. Vote "FOR ALL" of your Board's experienced and
highly qualified director nominees by telephone, over the internet,
or by signing, dating and returning the enclosed WHITE proxy card
today.
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
Your Vote Is Important, No Matter How Many or How
Few Shares You Own
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If you have any
questions or need assistance voting, please contact the firm
assisting us in the solicitation of proxies:
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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.
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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.
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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 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/.
This document contains quotes and excerpts from certain
previously published material. Consent of the authors or
publications has not been obtained to use the material as proxy
soliciting material.
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.
1 See, for example Wunderlich Analyst Report,
5/11/16; Ladenburg Thalmann Analyst Report, 5/11/16; Maxim Group
Analyst Report, 5/24/16.
2 Includes vested restricted stock units and restricted
stock.
3 Permission to use quotations neither sought nor
obtained.
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SOURCE Arlington Asset Investment Corp.