-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FfSWn/8nIS5UslCRHlm6iciTvDDzv4IK8Hm/v9dEVw4+78CvqfGl3N6lHtebVgzf vN17rqFuEjdeTFOJ+dpFPw== 0001013594-01-000020.txt : 20010123 0001013594-01-000020.hdr.sgml : 20010123 ACCESSION NUMBER: 0001013594-01-000020 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20010122 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: EDGEWATER TECHNOLOGY INC/DE/ CENTRAL INDEX KEY: 0001017968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 710788538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-49699 FILM NUMBER: 1512323 BUSINESS ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVILLE STATE: AR ZIP: 72703 BUSINESS PHONE: 5019736000 MAIL ADDRESS: STREET 1: 302 EAST MILLSAP ROAD CITY: FAYETTEVETTE STATE: AR ZIP: 72703 FORMER COMPANY: FORMER CONFORMED NAME: STAFFMARK INC DATE OF NAME CHANGE: 19960702 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CHAP CAP PARTNERS L P CENTRAL INDEX KEY: 0001017766 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 521965409 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CONTINENTAL GRAND PLAZA #411 STREET 2: 300 NORTH CONTINENTAL BLVD. CITY: EL SEGUNDO STATE: CA ZIP: 90245 BUSINESS PHONE: 3105466701 MAIL ADDRESS: STREET 1: 725 SOUTH FIGUERORA ST STREET 2: STE 2369 CITY: LOS ANGELES STATE: CA ZIP: 90017 SC 13D/A 1 0001.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* Edgewater Technology, Inc. (Name of Issuer) Common Stock (Title of Class of Securities) 280358102 (CUSIP Number) Robert L. Chapman, Jr., Chapman Capital L.L.C. Continental Grand Plaza, 300 N. Continental Blvd. El Segundo, California 90245 Tel: (310) 563-6900 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 18, 2001 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (Continued on the following pages) (Page 1 of 9) EWAGNE\37668.1 - 1/22/01 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Chap-Cap Partners, L.P., a Delaware Limited Partnership 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,076,300 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,076,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,076,300 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8% 14. TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Chapman Capital L.L.C., a Delaware Limited Liability Company 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,076,300 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,076,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,076,300 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8% 14. TYPE OF REPORTING PERSON* OO *SEE INSTRUCTIONS BEFORE FILLING OUT! 1. NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Robert L. Chapman, Jr. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[x] (b)[ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH 7. SOLE VOTING POWER 0 8 SHARED VOTING POWER 1,076,300 9. SOLE DISPOSITIVE POWER 0 10. SHARED DISPOSITIVE POWER 1,076,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,076,300 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.8% 14. TYPE OF REPORTING PERSON* IN *SEE INSTRUCTIONS BEFORE FILLING OUT! This statement is filed pursuant to Rule 13d-2(a) with respect to the shares of common stock (the "Common Stock") of Edgewater Technology, Inc. (the "Issuer") beneficially owned by Chap-Cap Partners, L.P., Chapman Capital L.L.C. and Robert L. Chapman, Jr. (collectively, the "Reporting Persons") as of January 19, 2001 and amends and supplements the Schedule 13D dated December 28, 2000 (the "Schedule 13D"). Except as set forth herein, the Schedule 13D is unmodified. ITEM 3. Source and Amount of Funds or Other Consideration. The source and amount of funds used by the Reporting Persons in making their purchases of the shares of Common Stock beneficially owned by them are set forth below: SOURCE OF FUNDS AMOUNT OF FUNDS Working Capital $6,875,534 ITEM 4. Purpose of Transaction. The Reporting Persons acquired the Common Stock beneficially owned by them in the ordinary course of their trade or business of purchasing, selling, trading and investing in securities. The Reporting Persons intend to review their investment in the Issuer on a continuing basis and, depending on various factors, including the Issuer's business, affairs and financial position, other developments concerning the Issuer, the price level of the Common Stock, conditions in the securities markets and general economic and industry conditions, as well as other investment opportunities available to them, may in the future take such actions with respect to their investment in the Issuer as they deem appropriate in light of the circumstances existing from time to time. Such actions may include, without limitation, the purchase of additional shares of Common Stock in the open market and in block trades, in privately negotiated transactions or otherwise, the sale at any time of all or a portion of the Common Stock now owned or hereafter acquired by them to one or more purchasers, or the distribution in kind at any time of all or a portion of the Common Stock now owned or hereafter acquired by them. Robert L. Chapman Jr. has spoken with management of the Issuer regarding the possibility of, or seeking to influence the management of the Issuer with respect to, board representation, business strategies, legal strategies, tax strategies, mergers, business combinations, recapitalizations, sales of assets, negotiated or open-market stock repurchases or other extraordinary corporate transactions. The Reporting Persons' beneficial ownership of the Issuer's common shares has fallen below 5% as a result of open market sales. Such sales were driven by Mr. Chapman's growing concern over his views of the financial health of the Issuer's residual (ex-divestiture) primary customers and potential conflicts of interest of the Issuer's management and board of directors. In particular, Homeruns.com, a business-to-consumer provider of groceries and other items, accounted for approximately 11% of the Issuer's fiscal third quarter revenues, while Synapse Group, Inc., a provider of customer acquisition and management services for publishers of consumer magazines, accounted for approximately 14% of the Issuer's fiscal third quarter revenues and a disproportionate 24% of the Issuer's accounts receivable as of September 30, 2000. The Reporting Persons' concerns were heightened by the fact that Mr. Clete T. Brewer, Chairman and Chief Executive Officer of the Issuer, apparently was not aware during a recent conversation that Homeruns.com was no longer the captive subsidiary of multi-billion dollar supermarket and wholesale company Hannaford Bros. Co. but instead was principally owned by a private equity firm which had taken control of Homeruns.com in February 2000, near the peak of the "dot-com bubble." In addition, the Reporting Persons were extremely disconcerted by the fact that the Issuer's largest trade receivable (which, as stated above, comprised 24% of all accounts receivable balances as of September 30, 2000) was from private company Synapse Group, Inc., headed by Michael R. Loeb, a member of the Issuer's own board of directors, and associated with both the founder and Chairman of loss-ridden Priceline.com. Furthermore, after reviewing conversations with board members of the Issuer, particularly those with Bob L. Martin, William J. Lynch and Michael R. Loeb, Mr. Chapman believes that the management and board of directors, despite their fiduciary duties, appear to lack either the ability or motive to take actions which the Reporting Persons believe would result in the maximization of shareholder value. As described in the Reporting Persons' original Schedule 13D filing dated December 28, 2000, Mr. Chapman has articulated repeatedly to Mr. Brewer, several other senior officers of the Issuer, and the entire Board of Directors of the Issuer Chapman Capital's belief that all but $5-10 million of the Issuer's cash and equivalents should be distributed to the Issuer's shareholders as soon as practical. Mr. Chapman has communicated the Reporting Persons' disenchantment with the Issuer's highly-dilutive employee and officer stock option programs and announced intention to utilize only $130 million of the Issuer's currently-held cash and equivalents in the Issuer's $8 per share self tender offer, particularly since it has been reported that the Issuer will be receiving an additional $31 million from the sale of its Clinforce division plus an estimated $15 million through a tax refund. Chapman Capital has communicated that it does not support the retention by the Issuer of an estimated $55 million in cash and equivalents ($145 million in existing cash/equivalents less $130 million self-tender plus $31 million Clinforce sale proceeds plus estimated $15 million tax refund less $6 million transaction-related expenses) for working capital use by the residual e-solutions division which a) is estimated to have approximately $30 million in revenues in 2000, b) has purported to be cash flow positive, and thus self-funding, and c) has purported not to be interested in non-organic growth through cash-funded acquisitions and significant new office openings. In addition, Mr. Chapman has communicated to Mr. Brewer that should the Reporting Persons, at any time and under any circumstances, be asked to vote for the approval of any sale of the Issuer's assets (e.g., Clinforce), it is the Reporting Persons' current intention to vote "NO" (i.e., against such asset sale) unless the Issuer is legally bound to distribute at least 95% of the proceeds from such asset sale immediately upon the sale's consummation. The Reporting Persons may in the future consider a variety of different alternatives to achieving their goal of maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, communications with other shareholders or other actions. However, it should not be assumed that the Reporting Persons will take any of the foregoing actions. The Reporting Persons reserve the right to participate, alone or with others, in plans, proposals or transactions of a similar or different nature with respect to the Issuer. Chapman Capital L.L.C. has initiated a "victims fund" for the families of the Issuer's employees killed during the tragedy that fell upon the Issuer's e-solutions subsidiary on December 26, 2000. Contributions will help satisfy the needs of families placed into both financial and emotional distress due to the loss of a loved one in the horrific incident. Except as set forth above, as of the date of this filing none of the Reporting Persons has any plans or proposals, which relate to or would result in any of the actions set forth in parts (a) through (j) of Item 4. Such persons may at any time reconsider and change their plans or proposals relating to the foregoing. ITEM 5. Interest in Securities of the Issuer. (a) Together, the Reporting Persons beneficially own a total of 1,076,300 shares of Common Stock constituting 3.8% of all of the outstanding shares of Common Stock. (b) The Reporting Persons have the shared power to vote or direct the vote of, and to dispose or direct the disposition of, the shares of Common Stock beneficially owned by them. (c) The following transactions, when incorporated with those reported in the Reporting Persons' original Schedule 13D dated December 28, 2000, were effected by the Reporting Persons during the past sixty (60) days: Approximate Price per Share Amount of (exclusive of Date Security Shares Sold commissions) - ---- -------- ----------------- ------------ 01/10/01 Common 6,100 $6.62 01/10/01 Common 10,000 $6.62 01/11/01 Common 12,500 $6.62 01/11/01 Common 15,000 $6.62 01/11/01 Common 85,000 $6.62 01/12/01 Common 1,300 $6.62 01/12/01 Common 10,000 $6.62 01/16/01 Common 5,100 $6.62 01/16/01 Common 12,500 $6.62 01/17/01 Common 94,000 $6.62 01/17/01 Common 17,500 $6.62 01/17/01 Common 20,000 $6.62 01/18/01 Common 11,000 $6.62 01/18/01 Common 20,500 $6.70 01/18/01 Common 27,700 $6.72 01/18/01 Common 55,000 $6.70 The above transactions were effected by the Reporting Persons on the NASDAQ National Market. Other than the transactions described above and those described in the Reporting Persons' original Schedule 13D dated December 28, 2000, no other transactions with respect to the Common Stock were effected by the Reporting Persons during the past sixty (60) days. (d) No person other than the Reporting Persons has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock beneficially owned by the Reporting Persons. (e) Not applicable. ITEM 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. None other than those described in the Reporting Persons' original Schedule 13D dated December 28, 2000. SIGNATURES After reasonable inquiry and to the best of its knowledge and belief, the undersigned each certifies that the information with respect to it set forth in this statement is true, complete and correct. Dated: January 19, 2001 CHAP-CAP PARTNERS, L.P. By: Chapman Capital L.L.C., as General Partner By: /s/ Robert L. Chapman, Jr. -------------------------- Robert L. Chapman, Jr. Managing Member CHAPMAN CAPITAL L.L.C. By: /s/ Robert L. Chapman, Jr. -------------------------- Robert L. Chapman, Jr. Managing Member /s/ Robert L. Chapman, Jr. - ------------------------------ Robert L. Chapman, Jr. -----END PRIVACY-ENHANCED MESSAGE-----