WCI objects to Icahn's plan to hand-pick board as company considers strategic alternatives

By Lisa Kerner

Charlotte, N.C., Feb. 16 - Icahn Associates Corp., led by Carl Icahn, and its affiliated companies put WCI Communities, Inc. on notice that they intend to nominate directors to the company's board at the annual meeting, according to a schedule 13D filing with the Securities and Exchange Commission.

But the move was opposed by the company.

"The board believes that Mr. Icahn's plan to run a hand-picked slate of directors to further his personal objectives would be highly disruptive to our company and not in the best interests of all our shareholders," WCI chairman Don E. Ackerman responded in a company news release.

"We are disappointed by Mr. Icahn's decision to pursue this hostile approach following our extensive dialogue with him over the past several weeks, including an invitation to join the board and participate in the discussions of how to maximize shareholder value, which he rejected. Mr. Icahn has repeatedly asked us to give him preferential treatment and provide him with advantages not offered to other shareholders."

Ackerman noted the company's recent engagement of Goldman Sachs to help evaluate strategic alternatives is a step in the right direction.

"Our company's primary objective is to collect its large contracts receivable balance, which is the primary contributor to WCI's expectation of $1 billion of free cash flow to be generated in 2007," Ackerman added.

"This large inflow of cash will allow our company to reduce debt and possibly buy back stock, and is expected to reduce WCI's net debt to capital ratio to 50% from its current level of 66%."

Icahn's list of nominees is: Carl C. Icahn; David Schechter, director and senior investment analyst for Icahn Management LP; Jonathan R. Macey, Sam Harris Professor of Corporate Law, Corporate Finance and Securities Law at the Yale Law School, and Professor in the Yale School of Management; Peter C. Clapman, senior vice president and chief counsel for TIAA-CREF; Auguste E. Rimpel, Jr., a retired partner of PricewaterhouseCoopers LLP; Horward Lorber, president and chief executive officer of Vector Group Ltd.; Michael L. Ashner, chairman and chief executive officer of Winthrop Realty Trust; Jerome M. Becker, Special Disciplinary Referee for the Appellate Division of the First and Second Judicial Departments and a mediator for the Supreme Court of the State of New York; Sumner Baye, president and partner of International Hotel Network; and Hugh F. Culverhouse, owner of Palmer Ranch Holdings Ltd.

WCI is a Bonita Springs, Fla., developer of master-planned lifestyle communities

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