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Captec Net Lease Realty, Inc.
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Logo
August 1, 2000
Dear Fellow Captec Shareholder:
Over the last few weeks, our shareholders have been subject to numerous
sarcastic letters and phone calls as a result of Phil Goldstein's failing
attempt to take control of your company. As his campaign winds down and it
becomes clearer that his efforts are not succeeding, Mr. Goldstein is now
resorting to personal attacks and blatantly false and misleading statements in a
desperate attempt at last-second electioneering.
TIME IS RUNNING SHORT. VOTE TO PROTECT YOUR INVESTMENT
After reading his letters to shareholders, there are three things you now know
about Goldstein:
- - GOLDSTEIN HAS NO EXPERIENCE IN THE REIT INDUSTRY
- - GOLDSTEIN HAS NO BUSINESS PLAN FOR CAPTEC
- - GOLDSTEIN IS NOT TELLING THE TRUTH
We would like to take this opportunity to set the record straight on Goldstein's
misstatements:
CAPTEC IS NOT CONSIDERING REINTRODUCING THE PLAN OF MERGER OR CONVERSION FROM
ITS CURRENT REIT STATUS We have asked Goldstein several times to describe his
plans for Captec. In his July 31 letter, Goldstein finally states one reason to
vote for him. He says you should vote for him so that we don't "de-REIT" Captec.
As we have said before, we listened to our investors and decided not to proceed
with the plan of merger because it did not enjoy broad-based support. CAPTEC HAS
NO INTENTION TO REVIVE THE RESTRUCTURING PLAN OR TO ELIMINATE OR REDUCE THE
DIVIDEND. Given that he has no other platform, there is simply no reason to vote
for Goldstein.
THE PLAN OF MERGER WOULD ONLY HAVE BEEN ADOPTED WITH YOUR SUPPORT
Goldstein wants you to think that the Board's proposed plan was somehow cloaked
in scandal and demonstrated a lack of integrity. Decide for yourself. The plan
was approved by the Board, based on the recommendation of an independent,
special committee of directors not affiliated with Captec's management.
J.C. Bradford & Co, an investment banking firm that has no other business
relationship with Captec, advised the special committee.
Had we decided to go forward with the plan, you, the shareholders, had complete
power to decide the fate of that plan through your right to vote. MANAGEMENT
AGREED NOT TO PARTICIPATE IN THE VOTE. ONLY SHAREHOLDERS UNAFFILIATED WITH
CAPTEC NET LEASE REALTY AND CAPTEC FINANCIAL GROUP MANAGEMENT WOULD DECIDE THE
OUTCOME OF THE MERGER. We cannot imagine a process that is fairer to
shareholders or more democratic. It is not a surprise that Goldstein doesn't
mention this in his letters. Goldstein knows the facts don't support his
campaign to steal Captec.
CAPTEC HAS RESPONDED TO ALL INQUIRIES FROM POTENTIAL BUYERS
Goldstein's statement is simply false. The Board has responded to each and every
legitimate expression of interest by potential buyers, and in fact has met with
some of those potential buyers. WE CHALLENGE GOLDSTEIN TO BACK UP HIS STATEMENT
WITH FACT AND IDENTIFY HIS SOURCES.
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CAPTEC'S BOARD IS OPEN TO A SALE OF THE COMPANY AT THE RIGHT PRICE. Goldstein
says Captec is not serious about a potential sale of the company because we
haven't redeemed our shareholder rights plan (referred to by Goldstein as a
"poison pill"). This statement is simply ludicrous and reflects Goldstein's
willingness to deceive shareholders with a phony argument in order to gain
votes. Goldstein doesn't want you to know that the Board doesn't need to redeem
the rights plan to sell the company, and that boards of directors rarely ever
redeem their pills before negotiating and completing a sale. Most of the
available research indicates that companies with rights plans are sold for
higher prices than companies that do not have such plans.
GOLDSTEIN OFFERS YOU NOTHING AND PUTS YOUR SHARES AT RISK
Mr. Goldstein's agenda should be clear to you by now. His goal is to take
control of Captec for a miniscule investment. In most takeover attempts,
shareholders are offered a premium cash or stock payment in return for their
shares. Instead, Goldstein is asking you to give him control of Captec in
exchange for nothing but sarcasm, innuendo and falsehoods. Even worse, Goldstein
still refuses to tell you what his plans are or how he will manage to run Captec
despite his complete lack of experience in the real estate industry.
What do you think will happen to the price of our stock if Goldstein and his
cronies get hold of Captec's operations? Do you think that the market will wait
around for Goldstein and his inexperienced slate as they flounder around trying
to develop a business plan and hire new management and employees while Captec's
business deteriorates?
VOTE TO PROTECT THE VALUE OF YOUR SHARES
Phil Goldstein says this election is about honesty. We agree. That's why we have
put our position on the issues on the table. Why is Goldstein telling
half-truths and hiding his intentions from you? There is still time to tell Phil
Goldstein you don't want to be part of his deceptive self-promotion campaign.
VOTE THE WHITE PROXY CARD FOR THE RE-ELECTION OF YOUR DIRECTORS (PROPOSAL 1).
VOTE AGAINST THE SHAREHOLDER PROPOSALS (PROPOSALS 2 AND 3).
Note that neither Captec management nor Mr. Goldstein recommends voting in favor
of Proposal 2. If you have voted a green proxy card and wish to change your
vote, you may do so by voting the WHITE proxy card today. If you need assistance
in voting your shares you may contact Georgeson Shareholder Communications Inc.
at 1-800-223-2064. If you cannot send your shares by regular mail in time to be
received by August 8, 2000, you may fax your card to 212-440-9009.
Sincerely,
Patrick L. Beach
Chairman and CEO
Captec Net Lease Realty, Inc.