To the Fellow Shareholders of PICO Holdings, Inc.:
This Consent Statement, the enclosed Special Meeting Request Form attached as Exhibit A‑1, the accompanying WHITE Request Card attached as Exhibit A‑2 and the Additional Information Form attached as Exhibit A-3 are being furnished to you as a shareholder of PICO Holdings, Inc., a California corporation (which we refer to as the “Company” or “PICO”), by Leder Holdings, LLC, a Delaware limited liability company. The purpose of our sending you these materials is to solicit your revocable proxy in the form of the accompanying WHITE Request Card to authorize us to deliver to the Company the Special Meeting Request Form on your behalf in order to call a Special Meeting of the Company’s shareholders in order to remove and replace the current directors of the Company.
Under the California Corporations Code and the Company’s Amended and Restated Bylaws, holders of shares of the Company’s common stock entitled to cast not less than 10% of the votes at a special meeting are entitled to call a special meeting, subject to certain requirements set forth in Article II of the Bylaws.
We are seeking your support to call the Special Meeting to consider and vote upon the following proposals:
Proposal 1: to amend the Bylaws to allow for the election of directors at a special meeting of shareholders without the prior authorization of the Board of Directors;
Proposal 2: if Proposal 1 prevails, to remove five of the Company’s seven current directors; and
Proposal 3: if Proposals 1 and 2 prevail, to elect directors to fill the vacancies on the Board created by the removal of directors under Proposal 2.
If we succeed in calling the Special Meeting, we expect to solicit proxies to vote in support of each the Proposals at the Special Meeting, and the proxy materials that we distribute will identify the candidates that we propose to fill the vacancies created by the removal of directors, if Proposal 2 is approved. We expect that one of those candidates will be Sean M. Leder, the principal of Leder Holdings.
As discussed in more detail in this Consent Statement, and as we expect to discuss with greater particularity in the proxy materials in connection with the Special Meeting, we believe that the current Board has presided over enormous destruction in shareholder value and must be changed if shareholders are to realize value on their investment in the Company. Because the PICO Board is staggered, shareholders will have the ability to elect at most three directors at the 2016 annual meeting, which would be insufficient to effect a change in the control of the Board. The Special Meeting would give shareholders the opportunity to remove and replace a majority of the Board, and thereby, in our view, to improve the prospects for change and for the creation of shareholder value.
In accordance with the Company’s Bylaws, if a special meeting is duly requested by shareholders, the Company is required to cause notice to be given that a meeting will be held at the time requested by the shareholders, not less than 35 nor more than 60 days after the receipt of the shareholders request. It is our intention to submit the request for the Special Meeting promptly after receiving WHITE Request Cards authorizing us to request the Special Meeting from shareholders holding the required percentage of shares. By executing a WHITE Request Card authorizing us to request the Special Meeting, shareholders will also be authorizing us to select the date for the Special Meeting, within the time period set forth in the Bylaws.
Consent Statement pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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☒ Preliminary Consent Statement
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☐ Soliciting Material Pursuant to §240.14a-12
PICO HOLDINGS, INC.
(Name of Registrant as Specified in Its Charter)
Leder Holdings, LLC
LH Brokerage, LLC
Leder Holdings Opportunity Fund LLC
Sean M. Leder
(Name of Person(s) Filing Consent Statement, if other than the Registrant)
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