U.S. Securities and Exchange Commission
Washington, D.C. 20549
NOTICE OF EXEMPT SOLICITATION
Submitted pursuant to Rule 14a-6(g)
1. Name of the Registrant:
Piedmont Office Realty Trust, Inc.
2. Name of person relying on exemption:
Lex-Win Acquisition LLC
3. Address of person relying on exemption:
Two Jericho Plaza
Wing A, Suite 111
Jericho, New York 11753
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a-6(g)(1):
The attached letter was issued on November 20, 2007.
LEX-WIN ACQUISITION LLC
Two Jericho Plaza
Wing A, Suite 111
Jericho, New York 11753
November 20, 2007
SHARE REDEMPTION PROGRAM OR LISTING,
WHICH PROVIDES GREATER LIQUIDITY?
To our fellow Piedmont stockholders, banks, brokers and financial advisors:
In recommending in favor of a vote to extend the listing or liquidation
date of Piedmont Office Realty Trust, Inc. for up to three more years,
management states "we are able to offer liquidity to our stockholders who desire
it through our Share Redemption Program and other liquidity programs." This
statement is repeated by management in their recommendation against Madison
Liquidity Investors' most recent $7.50 per share tender offer. Management fails,
however, to disclose a number of reasons which make this statement clearly
disingenuous. In Piedmont's Quarterly Report on Form 10-Q filed with the SEC
last week, management freely acknowledges that "our share redemption program is
currently suspended and even if reinstated, includes numerous restrictions that
limit a stockholder's ability to sell his or her shares to us, and our board of
directors may amend, suspend or terminate our share redemption program at any
time upon 30 days' notice and may suspend it without notice in certain
circumstances. Therefore, it will be difficult for our stockholders to sell
their shares promptly or at all. If a stockholder is able to sell his or her
shares, it may be at a discount to the price he or she originally paid for such
shares... Our shares of common stock should only be viewed as a long-term
investment due to the illiquid nature of our shares." (emphasis added)
Add to their telling admission these compelling considerations regarding
the Share Redemption Program:
o From September 1, 2006 through December 31, 2006, redemptions
under the plan were deferred until January 1, 2007. The plan
was then suspended on April 20, 2007 and remains so to date.
Also troubling was the fact that restrictions were imposed on
the number of shares which could be purchased from estates, so
as to favor living stockholders. How will our fellow elderly
stockholders feel knowing that not only are there restrictions
on their ability to sell their shares, but those restrictions
may also affect their estates in the future, if management so
elects?
o Management neglects to mention that the funding for the Share
Redemption Plan is dependent on Piedmont's ability to sell new
shares under its dividend reinvestment program, with the
maximum number of shares that can be redeemed capped at 5% of
the outstanding shares. In fact, in 2006 the dividend
reinvestment plan only provided funding sufficient to enable
Piedmont to redeem approximately 3.5% of the outstanding
shares, thereby failing to provide liquidity to all
stockholders who desired liquidity. Further, any event,
whether external or internal to the Company, which reduces the
dividend reinvestment plan sale program will, of course,
reduce funding and as a result the availability of the
redemption plan to stockholders. Consequently, not only could
the plan be suspended by management and not only could it be
modified to the detriment of one group of stockholders over
another (e.g., living stockholders vs. estate stockholders)
but the absence of available funding could result in an
indefinite suspension of the plan.
o Bear in mind that Piedmont is the purchaser of the shares.
Consequently, if the price, which is arbitrarily determined by
management, is set too high, all non-selling stockholders are
hurt by a dilution to the value of the shares they continue to
hold. Conversely, if the price is set too low, stockholders
who wish to and are able to redeem their shares will receive a
truly inadequate price.
o Most troubling and most obvious is that their position lacks
the "beef" - management fails to state what plans are behind
the proposed price. Is it better or worse than the current
offer by Madison? How about the previous offer by Madison of
$8.50 per share? What about our offer for $9.30 per share? We
note that the most recent price under the Share Redemption
Plan was $8.38 per share, $.55 less than Piedmont's most
recently published net asset value, and $.92 less than our
$9.30 per share offer, which management recommended that
stockholders not accept.
o Finally, how much credibility can management now possibly
expect to receive in light of their repeated promises that
they would list the shares: first stating it in the
registration statement by which shares were sold to your
clients; then again when it sought the approval of
stockholders, by way of a vote, to pay Leo Wells $175 Million
in stock for his worthless advisory contract? Fool me once,
shame on you - Fool me twice, shame on me.
If management is truly concerned about protecting stockholders from
so-called "inadequate" offers, there is but one solution - LIST THE SHARES AS
PROMISED. By doing so, the interests of both stockholders who wish to hold and
stockholders who wish to sell their shares will not conflict. There will be no
limitation on the number of shares that can be bought or sold, and the price for
shares will be a true market price known daily through the free market rather
than one set by a small group of self-interested individuals. After all, the
continued absence of liquidity is what creates the problem management seeks to
solve.
Given the importance of the matter management is requesting stockholders
vote on, demand that management provide answers to the issues we have raised so
that you and your clients can make a fully informed decision based on all the
facts.
If you have any questions, please contact Mackenzie Partners, Inc.
toll-free at (800) 322-2885 or (212) 929-5500 (collect).
Sincerely,
LEX-WIN ACQUISITION LLC
/s/ Michael L. Ashner
Michael L. Ashner
Chief Executive Officer