PITTSBURGH & WEST VIRGINIA RAILROAD
LETTER TO SHAREHOLDERS AND
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held May 26, 2011
April 29, 2011
Dear Shareholders,
Pittsburgh & West Virginia Railroad (the "Trust") is the
country's oldest public infrastructure-focused real-estate
investment trust ("REIT") with ownership of 112 miles of main line
railroad that has been leased to Norfolk Southern Corporation since
1964. Unlike most corporations, a REIT does not pay federal
corporate income taxes on ordinary taxable income that is
distributed to shareholders. The lack of double taxation is a
significant advantage of the REIT corporate structure and a core
part of the Trust's strategy to create value and increase long-term
distributions for its shareholders.
Historically, the Trust's operations have been limited to its
existing railroad assets all of which are leased pursuant to a long
term lease that has no income growth. As a result, the Trust faces
risks associated with constraints on its revenue while the Trust's
expenses continue to rise, including in particular, its public
market compliance costs. To address this issue, the Trust made the
strategic decision in early 2011 to broaden its business plan and
acquire new sources of revenue.
As a means of providing working capital to commence its business
expansion, the Trust recently completed a rights offering. The
trust is actively pursuing a number of new investments with a focus
on infrastructure assets in the United States. Such investments
may include railroad, transportation and energy infrastructure
assets that are consistent with the Trust's public REIT status.
Such acquisitions, if consummated, are intended to create
substantial value through growth in funds from operations (FFO) and
dividends which should also lead to share price appreciation.
In connection with the broadening of its business, the Trust
recently inducted Mr. William S. Susman as a Trustee and has
nominated Mr. Susman on this year's trustee ballot. Mr. Susman has
20 years of investment banking experience, including significant
experience in the railroad industry having advised some of the
largest railroad companies including CSX and Norfolk Southern
Corporation on M&A and other advisory transactions. The Trust
believes Mr. Susman is an excellent addition to the Board of
Trustees and that his advice and guidance will benefit the Trust as
it seeks to expand its business.
The Trust also recently launched its corporate website at
www.pwreit.com to establish an online presence and assist it with
sourcing infrastructure investment opportunities. The Trust
encourages its shareholders to periodically visit its website to
monitor the Trust's progress.
The Trust believes its public REIT structure is an important
asset that has been underutilized in the past by limiting
operations to a single asset. Although there is no assurance that
the Trust will be successful in expanding its business, the Trust
believes it is uniquely positioned to invest in infrastructure
assets due to its REIT structure. We are confident that this is an
exciting opportunity for the Trust and its shareholders as we
embark on implementing a strategy to increase profitability, grow
dividends and build long term value.
Notice of Annual Meeting
The annual meeting of shareholders of Pittsburgh & West Virginia
Railroad will be held on May 26, 2011 at 11:00 A.M., at the offices
of Morrison Cohen LLP, 909 Third Avenue, New York, NY 10022, for
the following purposes:
(1) To elect four trustees to serve until the next annual
meeting of shareholders and until their successors have been
elected and qualified;
(2) To ratify Gibbons & Kawash A.C. (a member of the BDO Seidman
Alliance) as the Trust's independent audit firm;
(3) To transact such other business as may properly come
before the meeting.
The Board of Trustees has fixed the close of business on April 7,
2011 as the record date for the determination of stockholders
entitled to notice of and to vote at the meeting or any adjournment
thereof.
The Trust's Annual Report with is enclosed with this proxy
statement.
By order of the Board of Trustees,
/s/ David H. Lesser
CEO and Chairman of the
Board of Trustees
If you do not expect to attend in person please fill in, date, sign
and return the enclosed proxy in the envelope provided. No postage
is necessary if mailed in the United States. You may also cast
your ballot on-line by following the instructions included with
your proxy.
Forward-Looking Statements
This letter and notice to shareholders ("Letter") may contain
include forward-looking statements within the meaning of the
Securities Act of 1933, as amended, and Securities Exchange Act of
1934, as amended. Forward-looking statements are those that predict
or describe future events or trends and that do not relate solely
to historical matters. You can generally identify forward-looking
statements as statements containing the words "believe," "expect,"
"will," "anticipate," "intend," "estimate," "project," "plan,"
"assume" or other similar expressions, or negatives of those
expressions, although not all forward-looking statements contain
these identifying words. All statements contained in this Letter
regarding the Trust's future strategy, future operations, projected
financial position, estimated future revenues, projected costs,
future prospects, the future of the Trust's industries and results
that might be obtained by pursuing management's current or future
plans and objectives are forward-looking statements.
All forward-looking statements reflect the Trust's good faith
beliefs, assumptions and expectations, but they are not guarantees
of future performance. You should not place undue reliance on any
forward-looking statements because the matters they describe are
subject to known and unknown risks, uncertainties and other
unpredictable factors, many of which are beyond our control. Our
forward-looking statements are based on the information currently
available to us and speak only as of the date of this Letter. New
risks and uncertainties arise from time to time, and it is
impossible for us to predict these matters or how they may affect
us. Over time, our actual results, performance or achievements will
likely differ from the anticipated results, performance or
achievements that are expressed or implied by our forward-looking
statements, and such difference might be significant and materially
adverse to our security holders.
For a further discussion of these and other factors that could
cause the Trust's future results to differ materially from any
forward-looking statements, see the section entitled "Risk Factors"
in the Trust's final amended prospectus relating to the Trust's
rights offering filed with the Securities and Exchange Commission
on February 25, 2011, and other risks described in documents
subsequently filed by the Trust from time to time with the
Securities and Exchange Commission.
PITTSBURGH & WEST VIRGINIA RAILROAD
55 Edison Avenue
West Babylon, NY 11704
PROXY SOLICITATION STATEMENT
This proxy statement is furnished in connection with the
solicitation of proxies by the Board of Trustees of Pittsburgh &
West Virginia Railroad (the "Trust") to be used at the annual
meeting of shareholders to be held on May 26, 2011 in New York, NY,
and at any adjournments thereof. This proxy statement and the
accompanying form of proxy will be mailed to shareholders on or
about April 29, 2011.
At the close of business on April 7, 2011, the record date, there
were outstanding and entitled to vote 1,623,250 shares of
beneficial interest. Each share is entitled to one vote on each
matter brought before the meeting. However, for the election of
trustees, shareholders are entitled to cumulative voting; that is,
each shareholder will have a number of votes equal to the number of
his shares multiplied by the number of trustees to be elected, and
may cast all such votes for a single nominee or may distribute them
among the nominees in any manner. A proxy may be revoked at any
time prior to the voting thereof, by giving notice to the Secretary
of the Trust, in writing or in open meeting.
The cost of soliciting proxies will be borne by the Trust.
Solicitation may be made by mail or by telephone, facsimile, and
electronic mail, by officers of the Trust without extra
compensation. The Trust will reimburse brokerage firms and others
for their reasonable expenses in forwarding solicitation material
to the beneficial owners of stock.
Voting
If you hold our beneficial shares in your own name as a holder of
record, you may instruct the proxies to vote your shares through
any of the following methods:
* using the internet, logging on to
http://www.proxyvote.com/ to gain access to the voting site to
authorize the proxies to vote your shares;
* using any touch-tone telephone, dial 1-800-690-6903 and follow
the instructions;
* signing, dating, and mailing the proxy card in the postage-
paid envelope provided.
Notice of Electronic Availability of Proxy Materials
As permitted by rules adopted by the SEC in 2007, this proxy
statement and our 2010 annual report are being furnished to our
shareholders by posting them online and are accessible through
http://www.proxyvote.com/.
The Board of Trustees' Voting Recommendations
The Board of Directors recommends that you vote your shares "FOR"
each of the Board's four nominees that are standing for election to
the Board of Trustees (Proposal No. 1) and "FOR" the ratification
of Gibbons & Kawash A.C. as our independent accountants (Proposal
No. 2).
Proposal Number 1: Election of Trustees
The persons named in the proxy card intend to vote the proxy for
the election of the nominees listed below, each to hold their
respective office until the next annual meeting of shareholders, or
until their successors are elected and qualified, unless you
indicate on the proxy card that your vote should be withheld from
any or all of the nominees. Four of the nominees are members of the
present Board of Trustees, and other than Patrick R. Haynes, III
and William S. Susman, were elected at the last Annual Meeting of
Shareholders. If any nominee becomes unavailable for any reason,
the proxies will be voted for the election of such substitute as
may be designated by management.
Trustee
Nominee Name Age Since Position
David H. Lesser 45 2009 Chairman and CEO
Virgil E. Wenger 80 1991 Trustee
Chair, Audit Committee
Patrick R. Haynes, III 27 2010 Trustee,
Member, Audit Committee
William S. Susman 47 2011 Trustee
Nominee Biographies
Mr. David H. Lesser has been Chairman of the Board of Trustees
since December 2010 and has been Chief Executive Officer since
February 14, 2011. Mr. Lesser does not currently have an employment
contract and does not currently receive remuneration at this time
other than Trustee Fees. Mr. Lesser, whose career began in
investment banking, has over 25 years of experience in real estate
investment and finance. Mr. Lesser has previously held leadership
roles with public real-estate investment trusts (REITs), having
served as a Senior Vice President of Crescent Real Estate Equities
and as a Director of Keystone Property Trust. Mr. Lesser's
investment firm sponsored the merger of two real estate companies
into a small capitalization REIT (American Real Estate Investments)
to ultimately form Keystone Property Trust which was listed on the
American Stock Exchange (ticker: KTR). Prior to Crescent, Mr.
Lesser was a Director in Merrill Lynch's real-estate investment
banking group. Mr. Lesser is currently, and has been for the past
15 years, president of Hudson Bay Partners, LP, an investment firm
focused on real estate, real estate-related situations and
alternative energy. He also serves as a trustee of the Town Hall
in New York City. Mr. Lesser holds an M.B.A. from Cornell
University and a B.S. in Applied Management and Economics from
Cornell University.
Mr. Virgil E. Wenger, CPA, is currently, and has been for the
past eight years, an independent consultant who primarily works
with new start up ventures needing accounting services and
financial planning assistance to determine investment and working
capital needs. He also serves as chief financial officer for two
private companies: Shareholder Intelligence Services, a provider of
information to publically traded client companies of shareholder
ownership, broker activity, and related analytics; and Econergy
Corporation, a manufacturer and marketer of proprietary air
conditioning systems. Mr. Wenger was previously a partner at Ernst
& Young LLP. He is a graduate of the University of Kansas, with a
B.S. in Business Administration and of the Harvard Business School
Advanced Management Program. Mr. Wenger has been Audit Committee
Chairman since 2005, and is considered to be an independent trustee
in accordance with the NYSE Amex Company Guide.
Mr. Patrick R. Haynes, III joined the Board of Trustees in 2010.
Mr. Haynes is currently employed by the Rockefeller Group
Investment Management Corp. ("RGIM") as a senior associate. At
RGIM, Mr. Haynes is responsible for financial analysis, RGI's
corporate acquisitions initiatives, and institutional fundraising.
Mr. Haynes began his career at Lehman Brothers in 2007 in the Real
Estate Private Equity Group where he performed financial analysis,
market research and due diligence for over $2.0 billion in
potential real estate acquisitions across all asset classes
nationally. Mr. Haynes also worked on the successful management
buyout of Lehman's equity funds' advisory business, responsible for
the management of approximately $18 billion in real estate assets
globally. Mr. Haynes received a BA in U.S. History from Brown
University. Mr. Haynes is a member of the Audit Committee and is
considered to be an independent trustee in accordance with the NYSE
Amex Company Guide.
Mr. William S. Susman joined the Board of Trustees in 2011. Mr.
Susman has 20 years of investment banking experience, including
significant experience in the transportation and railroad industry.
As the former head of Merrill Lynch's Transportation and Consumer
Group, Mr. Susman advised numerous railroad clients, including
Burlington Northern, CSX, Kansas City Southern, Norfolk Southern
Railways, TMM and Union Pacific. Mr. Susman is currently the CEO of
a boutique investment bank, William Susman Advisory, which is
affiliated with Milestone Advisors. Prior to founding William
Susman Advisory, he was President of Financo, an investment bank
focused on retail and consumer goods. Mr. Susman began his
investment banking career at Salomon Brothers within their
transportation group. Mr. Susman sits on the boards of two
private companies: Major Brands and Jonathan Adler Enterprises.
Mr. Susman is a graduate of the University of Michigan, with a B.S.
in Business Administration and earned a Masters from the Kellogg
Graduate School of Management at Northwestern. Mr. Susman is
considered to be an independent trustee in accordance with the NYSE
Amex Company Guide.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ELECTION
OF THE NOMINEES AS TRUSTEES OF THE TRUST
Proposal Number 2: Ratification of Independent Accountants
The persons named in the proxy card intend to vote the proxy to
ratify Gibbons & Kawash A.C. (a member of the BDO Seidman Alliance)
as the Trust's independent audit firm. The firm of Gibbons & Kawash
A.C. has served as the Trust's independent auditors since 1995 and
was selected by the Audit Committee to perform the audit of the
financial statements as of and for the year ending December 31,
2010.
During fiscal years 2010 and 2009, respectively, the Trust paid
Gibbons & Kawash, A.C. $39,090 and $62,292 for professional
services rendered for the annual audit of the Trust's financial
statements and for reviews of the Trust's financial statements
filed in quarterly reports on Form 10-Q filed with the SEC.
A representative of Gibbons & Kawash will be in attendance via
conference call at the annual meeting to answer appropriate
questions concerning the audit of the financial statements.
THE BOARD OF TRUSTEES RECOMMENDS RATIFICATION OF GIBBONS & KAWASH
A.C. AS THE TRUST'S INDEPENDENT ACCOUNTING FIRM
Remuneration
The aggregate remuneration for services in all capacities paid or
accrued in 2010 to all trustees and officers of the Trust as a
group was $23,400. This consisted entirely of fees for accounting
services performed by the Trust's secretary-treasurer of $12,000
and trustees fees of $11,400.
On April 1, 2011, the Trust entered into a consulting agreement
with Arun Mittal, its new Vice President of Business Development
and Secretary-Treasurer, pursuant to which, Mr. Mittal is paid
$7,500 per month for his services. The Trust accepted the
resignation of Robert McCoy, with an effective date of March 31,
2011. The Trust also terminated its existing office lease,
effective March 31, 2011. The compensation to Robert McCoy and the
office lease amounted to $30,000 per annum.
The Trust does not currently have any equity pension, profit-
sharing or deferred compensation plans.
Common Share Ownership of Certain Beneficial Owners and Management
The following table sets forth as of the Record Date certain
information regarding the ownership of common shares of beneficial
interest, no par value ("Common Shares") by (i) each person who, to
the knowledge of the Trust, beneficially owns more than 5% of the
outstanding shares of Common Shares, (ii) each nominee for trustee
of the Trust, (iii) each officer of the Trust and (iv) nominee
trustees and officers as a group.
Owned at March 31, 2011
Name of Beneficial HoldeRS # of Shares % Outstanding
David H. Lesser (i) (ii) 120,995 7.45%
Virgil E. Wenger 1,000 0.06%
Patrick R. Haynes, III 1,037 0.06%
Arun Mittal, Secretary-Treasurer &
VP Business Development 4,000 0.25%
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Nominee trustees &
officers as a group (ii) 127,032 7.83%
(i) David H. Lesser has beneficial ownership of 120,995 Common
Shares as follows: (a) 1,075 directly; (b) 85,210 indirectly
through Hudson Bay Partners, LP, a wholly-owned affiliate of Mr.
Lesser; and (c) 34,710 indirectly through HBP PW, LLC, an
affiliate managed by Mr. Lesser.
(ii) In addition to the shareholdings disclosed above, the MEL
Generation Skipping Trust, a trust set up for the children of
David H. Lesser, (the "MEL Trust") owns 10,383 shares of the
Trust. David H. Lesser disclaims any beneficial, or pecuniary or
residual interest in the shares owned by the MEL Trust, does not
serve as Trustee and does not have the power to revoke the MEL
Trust.
Related Party Transactions
Please see "Remuneration" for information regarding compensation
of our officers and trustees. There have been no other related
party transactions during fiscal year 2010.
Shareholder Proposals
Any shareholder proposal proposed to be presented at the next
annual meeting must be received by the Trust no later than December
17, 2011. The Trust suggests that such proposals be addressed to
David H. Lesser, CEO and Chairman, Pittsburgh & West Virginia
Railroad, c/o Richard Baumann, Morrison & Cohen LLP, 909 Third
Avenue, New York, NY 10022, and sent by certified mail, return
receipt requested.
Audit Committee
The Audit Committee's responsibilities include: (a) selection of
the Trust's independent auditors, (b) discussing the arrangements
for the proposed scope and the results of the annual audit with
management and the independent auditors, (c) reviewing the scope of
any non-audit professional services provided by the independent
auditors, and (d) obtaining from both management and the
independent auditors their observations on the Trust's system of
internal accounting controls. The Trustees have adopted a written
charter setting forth the responsibilities of the Audit Committee.
A copy of that charter is attached to this Proxy Statement.
The Audit Committee consists currently of two Trustees, Virgil E.
Wenger, Chairman and Patrick R. Haynes, III. Mr. Wenger is an
audit committee financial expert as that term is defined by the
United States Securities and Exchange Commission (SEC). Each member
is able to read and understand basic financial statements,
including a balance sheet, income statement and statement of cash
flows. The Audit Committee met five times during 2010.
Audit Committee Report
The Audit Committee has reviewed and discussed the financial
statements with management and the auditors, including the critical
accounting policies on which the financial statements are based.
The Committee discussed with the auditors their independence,
received the letter from the independent auditors required by PCAOB
Rule 3520, and discussed the matters required to be discussed by
Statement on Auditing Standards No. 61. The Committee recommended
to the Trustees that the audited financial statements for the year
ended December 31, 2010 be included in the Trust's annual report on
Form 10-K for that year.
Other Matters
The Trust's Code of Conduct and Ethics, with which all officers
and trustees must comply, are available in print by writing to the
Company's Secretary-Treasurer at Pittsburgh & West Virginia
Railroad, 55 Edison Avenue, West Babylon, NY 11704.
The Board held one regularly scheduled meeting during 2010 and on
five occasions during the year, the trustees, after conferring,
adopted Board resolutions by unanimous written consent. All of the
trustees were in attendance at those meetings.
The Board of Trustees does not have a standing compensation
committee; however in 2010, the Board of Trustees established a
nominating committee meeting consisting of David Lesser and Virgil
Wenger to fill a board seat. In addition, the Board of Trustees
established an Executive Committee in January 2011. The Executive
Committee consists of David H. Lesser, Patrick R. Haynes, III and
Virgil E. Wenger.
Management knows of no other matters which are likely to be
brought before the meeting, but if any such matters properly come
before the meeting, the persons designated as proxies will vote
thereon in accordance with their best judgment.
This statement incorporates by reference the Trust's current
Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission (SEC) and available from the SEC's website. If
desired, a copy is available to shareholders, without charge, upon
written request to the Secretary-Treasurer of the Trust at 55
Edison Avenue, West Babylon, NY 11704.
/s/ Arun Mittal
Arun Mittal
Secretary-Treasurer &
VP of Business Development
Dated: April 29, 2011
PITTSBURGH & WEST VIRGINIA RAILROAD
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known
as the audit committee. The audit committee shall be composed of at
least two directors who are independent of the management of the
corporation and are free of any relationship that, in the opinion
of the board of directors, would interfere with their exercise of
independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate
directors in fulfilling their responsibility to the shareholders,
potential shareholders, and investment community relating to
corporate accounting, reporting practices of the corporation, and
the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit
committee to maintain free and open means of communication between
the directors, the independent auditors, and the financial
management of the corporation.
Responsibilities
In carrying out its responsibilities, the audit committee
believes its policies and procedures should remain flexible, in
order to best react to changing conditions and to ensure to the
directors and shareholders that the corporate accounting and
reporting practices of the corporation are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
* Review and recommend to the directors the independent auditors
to be selected to audit the financial statements of the
corporation.
* Review written disclosures regarding independence from the
independent auditors required by Independent Standards Board
Standard No. 1.
* Meet with the independent auditors and financial management of
the corporation to review the scope of the proposed audit for
the current year and the audit procedures to be utilized, and
at the conclusion thereof review such audit, including any
comments or recommendations of the independent auditors.
* Review with the independent auditors and accounting personnel
the critical accounting policies on which the financial
statements are based, the adequacy and effectiveness of the
accounting and financial controls of the corporation, and
elicit any recommendations for the improvement of such
internal control procedures or particular areas where new or
more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal
controls to expose any payments, transactions, or procedures
that might by deemed illegal or otherwise improper. Further,
the committee periodically should review company policy
statements to determine their adherence to the code of
conduct.
* Review the financial statements contained in the annual report
to shareholders with management and the independent auditors
to determine that the independent auditors are satisfied with
the disclosure and content of the financial statements to be
presented to the shareholders. Any changes in accounting
principles should be reviewed.
* Provide sufficient opportunity for the independent auditors to
meet with the members of the audit committee without members
of management present. Among the items to be discussed in
these meetings are the independent auditors' evaluation of the
corporation's accounting, personnel, and the cooperation that
the independent auditors received during the course of the
audit.
* Review accounting and financial human resources and succession
planning within the company.
* Submit the minutes of all meetings of the audit committee to,
or discuss the matters discussed at each committee meeting
with, the board of directors.
* Investigate any matter brought to its attention within the
scope of its duties, with the power to retain specialists and
outside counsel for this purpose if, in its judgment, that is
appropriate.
Trustees
David H. Lesser
President of Hudson Bay Partners, LP
Virgil E. Wenger
Independent Consultant
Patrick R. Haynes, III
Associate of The Rockefeller Group Investment Management
Corporation
William Susman
Chief Executive Officer of William Susman Advisory
Larry R. Parsons
Chairman and Chief Executive Officer of Wheeling & Lake Erie
Railway Company
Officers
David H. Lesser
Chairman of the Board and Chief Executive Officer
Arun Mittal
Vice President of Business Development and Secretary-Treasurer
Transfer Agent and Registrar
Mellon Investor Services, L.L.C.
500 Ross Street
Pittsburgh, PA 15262
Attn: Mitzi Shannon
(800) 756-3353
http://www.melloninvestor.com/
Stock Listing
American Stock Exchange Ticker Symbol "PW"
Number of Shareholders of Record at December 31:
2010 - 607
2009 - 632
2008 - 657
2007 - 685