NEW YORK, July 19, 2016 /PRNewswire/ -- Western
Investment LLC ("Western Investment"), which together with certain
affiliates and other members of its group, beneficially owns
approximately 5.7% of the outstanding shares of common stock of
Deutsche Multi-Market Income Trust (NYSE: KMM) ("KMM") and
approximately 5.8% of the outstanding common stock of Deutsche
Strategic Income Trust (NYSE: KST) ("KST" and together with KMM,
the "Deutsche Funds"), announced that it has submitted proposals,
pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as
amended, to each of the Deutsche Funds to be considered at their
2016 annual meetings of stockholders, which provide that the funds
shall take the necessary steps to declassify their boards so that
all members are elected on an annual basis. Western
Investment has also nominated candidates for election as directors
to the boards of each of the Deutsche Funds, and will be filing a
proxy statement and proxy card with the Securities and Exchange
Commission ("SEC") in connection with such proxy solicitation.
Western Investment believes that these proposals, if approved
and implemented, would represent a crucial step in providing
greater accountability of each fund's board to stockholders.
Declassification of the boards would also bring the Deutsche Funds'
corporate governance practices more in-line with the recommended
governance practices adopted by the two leading proxy advisory
firms, Institutional Shareholder Services (ISS) and Glass Lewis and
with those of the vast majority of domestic companies in the
S&P 500 and Russell 1000 indexes.
Western Investment is dismayed that the Deutsche Funds have
wasted shareholder assets in multiple failed efforts to seek to
block or change the proposals and/or statements submitted by
Western Investment. Fortunately, all of the Deutsche Funds'
efforts were rejected by the Securities and Exchange
Commission. The trend over the past several years has been
towards greater board accountability, however, the Deutsche Funds
have continued to fight to keep their shareholder-unfriendly
classified boards in place.
Deutsche Investment Management is an affiliate of Deutsche Bank
AG. Deutsche Bank AG's stock closed today at $14.01, down sharply from its high of
$160 in 2008.
Below are the full texts of the declassification proposals which
have been submitted to KMM and KST:
KMM Proposal:
Proposal
RESOLVED, that the shareholders of
Deutsche Multi-Market Income Trust ("KMM") hereby request that the
Board of Directors of KMM (the "Board") take the necessary steps to
declassify the Board so that all directors are elected on an annual
basis. Such declassification shall be completed in a manner
that does not affect the unexpired terms of the previously elected
directors.
Supporting Statement:
We believe the annual election of all directors encourages board
accountability to its shareholders and when directors are held
accountable for their actions, they perform better. This view
is shared by most, who believe it to be the standard for corporate
governance best practices. According to FactSet Research
Systems, the vast majority of companies in the S&P 500 and
Russell 1000 indexes elect all directors annually, with only
approximately 10.5% and 25%, respectively, of companies retaining
classified boards.
Currently, the KMM Board is divided into three classes serving
staggered three-year terms. It is our belief that the
classification of the Board is strong proof that the Board is not
acting in the best interests of shareholders. A classified
board protects the incumbents, which in turn limits accountability
to shareholders.
KMM's investment manager, Deutsche Investment Management
Americas Inc. ("DIM"), has further blocked shareholder rights by
requiring that directors be elected by a near-impossible absolute
majority of shares outstanding, rather than a majority of shares
voting, thereby enabling losing incumbents to remain in office
following a contested election.
Further, KMM's Board has a long history of acting in an
undemocratic manner by failing to recognize all votes cast, failing
to seat dissident directors who won the overwhelming majority of
votes cast at annual meetings and failing to hold timely annual
meetings.
Subsequently, the director of the SEC's Division of Investment
Management has publicly criticized all of these
shareholder-unfriendly behaviors.
We remain committed to improving corporate governance at KMM for
the benefit of all shareholders. Declassification of the Board is a
positive step which will allow more productive shareholder
engagement and will help KMM achieve its optimal valuation.
In this challenging economic environment, accountability for
performance must be given to the shareholders whose capital has
been entrusted in the form of share investments in KMM.
Sadly, KMM's shares have consistently traded at a persistent
discount to its per share net asset value. For example, on
September 29, 2015, the discount was
an abysmal 17.76%.
DIM has overseen significant losses in KMM and its seven taxable
sister funds. Due to shareholder pressures (including
overwhelming losses in proxy contests), six of the seven funds
have, or are scheduled to be, liquidated or converted into open-end
funds.
KMM's classified board and majority voting requirements also
violate DIM's own corporate governance voting standards, an
embarrassing contradiction.
If this proposal is approved and adopted by the Board, all
directors would be subject to annual election after the phase-in
period.
For a greater voice in KMM's corporate governance and to
increase the accountability of the Board to shareholders, we urge
you to vote FOR this proposal.
KST Proposal:
Proposal
RESOLVED, that the shareholders of
Deutsche Strategic Income Trust ("KST") hereby request that the
Board of Directors of KST (the "Board") take the necessary steps to
declassify the Board so that all directors are elected on an annual
basis. Such declassification shall be completed in a manner
that does not affect the unexpired terms of the previously elected
directors.
Supporting Statement:
We believe the annual election of all directors encourages board
accountability to its shareholders and when directors are held
accountable for their actions, they perform better. This view
is shared by most, who believe it to be the standard for corporate
governance best practices. According to FactSet Research
Systems, the vast majority of companies in the S&P 500 and
Russell 1000 indexes elect all directors annually, with only
approximately 10.5% and 25%, respectively, of companies retaining
classified boards.
Currently, the KST Board is divided into three classes serving
staggered three-year terms. It is our belief that the
classification of the Board is strong proof that the Board is not
acting in the best interests of shareholders. A classified
board protects the incumbents, which in turn limits accountability
to shareholders.
KST's investment manager, Deutsche Investment Management
Americas Inc. ("DIM"), has further blocked shareholder rights by
requiring that directors be elected by a near-impossible absolute
majority of shares outstanding, rather than a majority of shares
voting, thereby enabling losing incumbents to remain in office
following a contested election.
Further, KST's Board has a long history of acting in an
undemocratic manner by failing to recognize all votes cast, failing
to seat dissident directors who won the overwhelming majority of
votes cast at annual meetings and failing to hold timely annual
meetings.
Subsequently, the director of the SEC's Division of Investment
Management has publicly criticized all of these
shareholder-unfriendly behaviors.
We remain committed to improving corporate governance at KST for
the benefit of all shareholders. Declassification of the Board is a
positive step which will allow more productive shareholder
engagement and will help KST achieve its optimal valuation.
In this challenging economic environment, accountability for
performance must be given to the shareholders whose capital has
been entrusted in the form of share investments in KST.
Sadly, KST's shares have consistently traded at a persistent
discount to its per share net asset value. For example, on
August 25, 2015, the discount was an
abysmal 18.56%.
DIM has overseen significant losses in KST and its seven taxable
sister funds. Due to shareholder pressures (including
overwhelming losses in proxy contests), six of the seven funds
have, or are scheduled to be, liquidated or converted into open-end
funds.
KST's classified board and majority voting requirements also
violate DIM's own corporate governance voting standards, an
embarrassing contradiction.
If this proposal is approved and adopted by the Board, all
directors would be subject to annual election after the phase-in
period.
For a greater voice in KST's corporate governance and to
increase the accountability of the Board to shareholders, we urge
you to vote FOR this proposal.
CONTACT:
Arthur D. Lipson
Western Investment LLC
(801) 942-7803
CERTAIN INFORMATION CONCERNING THE
PARTICIPANTS
Western Investment ("Western Investment"), together with the
other participants named herein (collectively, the "Western Group")
intends (i) to make a preliminary filing with the Securities and
Exchange Commission (the "SEC") of a proxy statement and an
accompanying proxy card to be used to solicit votes for the
election of its nominees and certain business proposals at the 2016
Annual Meeting of Stockholders (the "KMM Annual Meeting") of
Deutsche Multi-Market Income Trust, a Massachusetts business trust ("KMM") and (ii)
to make a preliminary filing with the SEC of a proxy statement and
an accompanying proxy card to be used to solicit votes for the
election of its nominees and certain business proposals at the 2016
Annual Meeting of Stockholders (the "KST Annual Meeting") of
Deutsche Strategic Income Trust, a Massachusetts business trust ("KST").
The participants in the proxy solicitation at KMM and KST are:
Western Investment Hedged Partners L.P., a Delaware limited partnership ("WIHP"), Western
Investment Total Return Partners L.P., a Delaware limited partnership ("WITRP"),
Western Investment LLC, a Delaware
limited liability company ("WILLC"), Arthur
D. Lipson, Benchmark Plus Institutional Partners, L.L.C., a
Delaware limited liability company
("BPIP"), Benchmark Plus Management, L.L.C., a Delaware limited liability company ("BPM"),
Robert Ferguson, Neil R. Chelo and Matthew S. Crouse.
THE WESTERN GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF KMM AND
KST TO READ THE RESPECTIVE PROXY STATEMENT AND OTHER PROXY
MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO THE
PARTICIPANTS IN SUCH PROXY SOLICITATION. SUCH PROXY
STATEMENTS AND OTHER PROXY MATERIALS WITH RESPECT TO KMM AND KST,
WHEN FILED, WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT
HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THE
SOLICITATION WILL PROVIDE COPIES OF DEFINITIVE PROXY MATERIALS,
WITHOUT CHARGE, UPON REQUEST.
As of the close of business on July 19,
2016, WIHP beneficially owned directly 603,200 shares of
common stock, $0.01 par value (the
"KMM Common Stock"), of KMM. As of the close of business on
July 19, 2016, WITRP beneficially
owned directly 411,880 shares of KMM Common Stock. As of the close
of business on July 19, 2016, WILLC
beneficially owned directly 900 shares of KMM Common Stock and as
the general partner of WIHP and WITRP may be deemed the beneficial
owner of the (i) 603,200 shares of KMM Common Stock owned by WIHP
and (ii) 411,880 shares of KMM Common Stock owned by WITRP.
As of the close of business on July 19,
2016, Mr. Lipson beneficially owned directly owned 9,713
shares of KMM Common Stock and as the managing member of WILLC, may
be deemed the beneficial owner of the (i) 900 shares of KMM Common
Stock owned by WILLC, (ii) 603,200 shares of KMM Common Stock owned
by WIHP and (iii) 411,880 shares of KMM Common Stock owned by
WITRP. As of the close of business on July 19, 2016, BPIP beneficially owned directly
271,263 shares of KMM Common Stock. BPM, as the managing
member of BPIP, may be deemed the beneficial owner of the 271,263
shares of KMM Common Stock owned by BPIP. Mr. Ferguson, as a
managing member of BPM, may be deemed the beneficial owner of the
271,263 shares of KMM Common Stock owned by BPIP. As of the
close of business on July 19, 2016,
Mr. Chelo, did not beneficially own any shares of KMM Common
Stock. As of the close of business on July 19, 2016, Mr. Crouse, did not beneficially
own any shares of KMM Common Stock.
As of the close of business on July 19,
2016, WIHP beneficially owned directly 106,722 shares of
common stock, $0.01 par value (the
"KST Common Stock"), of KST. As of the close of business on
July 19, 2016, WITRP beneficially
owned directly 89,268 shares of KST Common Stock. As of the close
of business on July 19, 2016, WILLC
beneficially owned directly 900 shares of KST Common Stock and as
the general partner of WIHP and WITRP may be deemed the beneficial
owner of the (i) 106,722 shares of KST Common Stock owned by WIHP
and (ii) 89,268 shares of KST Common Stock owned by WITRP. As
of the close of business on July 19,
2016, Mr. Lipson, as the managing member of WILLC, may be
deemed the beneficial owner of the (i) 900 shares of KST Common
Stock owned by WILLC, (ii) 106,722 shares of KST Common Stock owned
by WIHP and (iii) 89,268 shares of KST Common Stock owned by
WITRP. As of the close of business on July 19, 2016, BPIP beneficially owned directly
61,427 shares of KST Common Stock. BPM, as the managing
member of BPIP, may be deemed the beneficial owner of the 61,427
shares of KST Common Stock owned by BPIP. Mr. Ferguson, as a
managing member of BPM, may be deemed the beneficial owner of the
61,427 shares of KST Common Stock owned by BPIP. As of the
close of business on July 19, 2016,
Mr. Chelo, did not beneficially own any shares of KST Common
Stock. As of the close of business on July 19, 2016, Mr. Crouse, did not beneficially
own any shares of KST Common Stock.
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SOURCE Western Investment LLC