-----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, JD/CDSnM/Cc9U5Cyq4lDcIjivSnTJv33FKGzC57d3w+8TTS9s8covDvY+i9VpIAw KJBrGPHQMHn9lqpX0fUslw== /in/edgar/work/20000804/0001025894-00-000218/0001025894-00-000218.txt : 20000921 0001025894-00-000218.hdr.sgml : 20000921 ACCESSION NUMBER: 0001025894-00-000218 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000804 GROUP MEMBERS: HAREDALE, LTD. GROUP MEMBERS: JAMES HENRY HILDEBRANDT GROUP MEMBERS: NIERENBERG DAVID GROUP MEMBERS: THE NIERENBERG FAMILY 1993 TRUST GROUP MEMBERS: TOXFORD CORPORATION SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ELDER BEERMAN STORES CORP CENTRAL INDEX KEY: 0000032020 STANDARD INDUSTRIAL CLASSIFICATION: [5311 ] IRS NUMBER: 310271980 STATE OF INCORPORATION: OH FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-53669 FILM NUMBER: 685787 BUSINESS ADDRESS: STREET 1: 3155 ELBEE RD CITY: DAYTON STATE: OH ZIP: 45439 BUSINESS PHONE: 9372962700 MAIL ADDRESS: STREET 1: 3155 EL BEE ROAD CITY: DAYTON STATE: OH ZIP: 45439 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NIERENBERG DAVID CENTRAL INDEX KEY: 0001040899 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 19605 N E 8TH STREET CITY: CAMAS STATE: WA ZIP: 98607 BUSINESS PHONE: 3606048600 SC 13D/A 1 0001.txt SCHEDULE 13D, AMENDMENT NO. 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 4 )* ----- THE ELDER-BEERMAN STORES CORP. - -------------------------------------------------------------------------------- (Name of Issuer) COMMON - -------------------------------------------------------------------------------- (Title of Class of Securities) 284 470-10-1 ------------------------------ (CUSIP Number) David Nierenberg, The D3 Family Fund, 19605 NE 8th St., Camas, WA 98607 360-604-8600 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) 8/3/00 ------------------------------- (Date of Event which Requires Filing of this Statement) *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 the disclosures provided in a prior cover page. The information required in 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). 1 of 12 SCHEDULE 13D ------------ CUSIP No. 284 470-10-1 Page 2 of 12 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The D3 Family Fund, L.P. (David Nierenberg is President of the General Partner, which is Nierenberg Investment Management 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 Washington -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 820,500 common shares (5.5%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 820,500 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 900,000 shares (6.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------- SCHEDULE 13D ------------ CUSIP No. 284 470-10-1 Page 3 of 12 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Haredale, Ltd. -------------------------------------------------------------------------- 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 The Bahamas -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 20,000 common shares (0.1%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 20,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 900,000 shares (6.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- SCHEDULE 13D ------------ CUSIP No. 284 470-10-1 Page 4 of 12 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON James Henry Hildebrandt -------------------------------------------------------------------------- 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 Canada -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 6,500 common shares (0.0%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 6,500 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 900,000 shares (6.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------- SCHEDULE 13D ------------ CUSIP No. 284 470-10-1 Page 5 of 12 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Toxford Corporation -------------------------------------------------------------------------- 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 Channel Islands, British Isles -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 3,000 common shares (0.0%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 3,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 900,000 shares (6.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* CO -------------------------------------------------------------------------- SCHEDULE 13D ------------ CUSIP No. 284 470-10-1 Page 6 of 12 1) NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Nierenberg Family 1993 Trust -------------------------------------------------------------------------- 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 Washington -------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF 50,000 common shares (0.3%) SHARES -------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY 0 -------------------------------------------------- EACH 9) SOLE DISPOSITIVE POWER REPORTING 50,000 PERSON -------------------------------------------------- WITH 10) SHARED DISPOSITIVE POWER 0 -------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON Aggregate amount owned is 900,000 shares (6.0%) -------------------------------------------------------------------------- 12) CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] -------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.0% -------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------- Page 7 of 12 Item 1. Security and Issuer Common stock of The Elder-Beerman Stores Corp. (EBSC), 3155 El-Bee Road, Dayton, Ohio 45439. Item 2. Identity and Background The D3 Family Fund, L.P., a Washington State partnership, whose principal business is investing in the equities of undervalued public micro-cap companies. Located at 19605 N.E. 8th St., Camas, Washington 98607. No convictions or administrative proceedings as described in Item 2(d) and (e). Item 3. Source and Amount of Funds or Other Consideration Source of funds is money invested in the partnership by its limited partners. Aggregate amount invested in EBSC shares purchased by the partnership is $4,787,989. Item 4. Purpose of Transaction We intend to vote all of our shares in favor of the four directors nominated in the company's amended proxy statement of July 31, 2000 and in favor of all of the resolutions contained therein. But our impatience with the company's lagging operating, financial, and stock performance continues. Therefore we have sent the attached letter to the company's board of directors today, calling on them to do five things to maximize shareholder value: 1. To resume and expand the company's share repurchase program. 2. To require all insiders to buy and hold meaningful amounts of the company's stock. 3. To separate the positions of Chairman of the Board and CEO. 4. To hinge all senior management incentive compensation on sharp improvement in the company's operating, financial, and stock performance. 5. To replace the current CEO and the CFO immediately. If not satisfied with the company's performance in meeting these goals, D3 will seek to unseat all remaining pro-management directors at the company's 2001 annual meeting. Item 5. Interest in Securities of the Issuer (a,b) D3 owns, and has sole voting and dispositive power over, 820,500 common shares of EBSC (5.5%). In addition, 29,500 more common shares of EBSC are owned by three foreign investors whose funds are managed by Mr. Nierenberg: Haredale, a Bahamian corporation which owns 20,000 shares; James Henry Hildebrandt, a Canadian citizen who owns 6,500 shares; and Toxford Corporation, a Channel Islands corporation which owns 3,000 shares. In addition, The Nierenberg Family 1993 Trust, of which Mr. Nierenberg is trustee, owns 50,000 EBSC shares. (c) No transactions during the last 60 days. (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer N/A for D3. Item 7. Material to be Filed as Exhibits Copy of Letter to Elder-Beerman Stores Corporation dated August 3, 2000. Page 8 of 12 Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 4, 2000 DAVID NIERENBERG - ------------------ ------------------------------------ Date David Nierenberg President Nierenberg Investment Management Company, Inc., the General Partner Of The D3 Family Fund, L.P. Page 9 of 12 Item 1. Security and Issuer Common stock of The Elder-Beerman Stores Corp. (EBSC), 3155 El-Bee Road, Dayton, Ohio 45439. Item 2. Identity and Background (a) Haredale Ltd., a Bahamian corporation. (b) P.O. Box N-4465, Nassau, New Providence, The Bahamas. (c) Haredale is in the investment business at the address above. (d) None (e) None (f) The Bahamas. Item 3. Source and Amount of Funds or Other Consideration Haredale owns, and Mr. Nierenberg has sole voting and dispositive power over, its 20,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 7. Item 5. Interest in Securities of the Issuer (a,b) Haredale owns, and Mr. Nierenberg has sole voting and dispositive power over, its 20,000 shares. (c) None (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Haredale pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits Copy of Letter to Elder-Beerman Stores Corporation dated August 3, 2000. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 4, 2000 DAVID NIERENBERG - ------------------ ------------------------------------ Date David Nierenberg Authorized to trade for Haredale, Ltd. Page 10 of 12 Item 1. Security and Issuer Common stock of The Elder-Beerman Stores Corp. (EBSC), 3155 El-Bee Road, Dayton, Ohio 45439. Item 2. Identity and Background (a) James Henry Hildebrandt, an individual who is a citizen of Canada, resident in Hong Kong. (b) c/o Bain & Company, 33rd Floor The Center, 99 Queen's Road Central Hong Kong. (c) Mr. Hildebrandt is in the management consulting business. (d) None (e) None (f) Canada Item 3. Source and Amount of Funds or Other Consideration Mr. Hildebrandt owns, and Mr. Nierenberg has sole voting and dispositive power over, his 6,500 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 7. Item 5. Interest in Securities of the Issuer (a,b) Mr. Hildebrandt owns, and Mr. Nierenberg has sole voting and dispositive power over, his 6,500 shares. (c) None (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Mr. Hildebrandt pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits Copy of Letter to Elder-Beerman Stores Corporation dated August 3, 2000. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 4, 2000 DAVID NIERENBERG - ------------------ ------------------------------------ Date David Nierenberg Authorized to trade for James Henry Hildebrandt Page 11 of 12 Item 1. Security and Issuer Common stock of The Elder-Beerman Stores Corp. (EBSC), 3155 El-Bee Road, Dayton, Ohio 45439. Item 2. Identity and Background (a) Toxford Corporation, a Channel Islands corporation. (b) P.O. Box 3048, St. Andrews House, Le Bordage, St. Peter Port, Guernsey, Channel Islands, British Isles. (c) Toxford Corporation is in the investment business at the address above. (d) None (e) None (f) Channel Islands, British Isles. Item 3. Source and Amount of Funds or Other Consideration Toxford Corporation owns, and Mr. Nierenberg has sole voting and dispositive power over, its 3,000 shares. Item 4. Purpose of Transaction Same as Item 4 on Page 7. Item 5. Interest in Securities of the Issuer (a,b) Toxford Corporation owns, and Mr. Nierenberg has sole voting and dispositive power over, its 3,000 shares. (c) None (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Toxford Corporation pays Mr. Nierenberg an annual management fee and a share of its net profits for his personal management of its accounts. Item 7. Material to be Filed as Exhibits Copy of Letter to Elder-Beerman Stores Corporation dated August 3, 2000. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 4, 2000 DAVID NIERENBERG - ------------------ ------------------------------------ Date David Nierenberg Authorized to trade for Toxford Corporation Page 12 of 12 Item 1. Security and Issuer Common stock of The Elder-Beerman Stores Corp. (EBSC), 3155 El-Bee Road, Dayton, Ohio 45439. Item 2. Identity and Background (a) The Nierenberg Family 1993 Trust, a revocable trust. (b) 19605 N.E. 8th Street, Camas, Washington 98607 (c) A Trust (d) None (e) None (f) United States Item 3. Source and Amount of Funds or Other Consideration Shares were purchased using bank borrowings. Item 4. Purpose of Transaction Same as Item 4 on Page 7. Item 5. Interest in Securities of the Issuer (a,b) The Nierenberg Family 1993 Trust owns, and Mr. Nierenberg has sole voting and dispositive power over, its 50,000 shares. (c) None (d) N/A (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer N/A Item 7. Material to be Filed as Exhibits Copy of Letter to Elder-Beerman Stores Corporation dated August 3, 2000. Signature After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. August 4, 2000 DAVID NIERENBERG - ------------------ ------------------------------------ Date David Nierenberg Authorized to trade for The Nierenberg Family 1993 Trust Exhibit - Letter to Elder-Beerman Stores Corporation August 3, 2000 The Directors of Elder-Beerman Stores Corporation C/o Frederick J. Mershad, Chairman and Chief Executive Officer 3155 El-Bee Rd. Dayton, Ohio 45401 Dear Directors: I will vote all 900,000 shares which I either control or own in favor of the four designated board nominees and in favor of all of the resolutions contained in your most recent amended proxy statement. I appreciate the practical spirit which you brought to the recent negotiations with PPM and Snyder Capital. I must inform you, however, that I and numerous other shareholders continue to be unhappy with and impatient about the operating, financial, and stock market performance of the company. The announcement just this morning of the unexpectedly large loss for the second quarter is shocking and disappointing. It has driven the share price to a new all-time low. I will continue to push to hold you and management accountable. I am tired of management's excuses that the department store business is a tough business. If Kohl's and Target have been able to fashion and roll out successful business models, why can't we? It is high time that we benchmark this company against the winners in its industry, not against the losers. Therefore I want you to know that I will continue to press you, and the four new directors, for the following things: 1. Renew and enlarge the share repurchase program. It has been dormant for too long. If doing so requires stopping Wasserstein Perella's moribund efforts to sell the company, so be it. It is not a good time to be selling EB anyway. Logical acquirers are distracted and the merchandise we have been peddling is shopworn. It is inexcusable that a company with EB's cash flow and balance sheet has not been aggressively repurchasing shares when they have been trading at over a 70% discount from book value. 2. In the same spirit, I am troubled that none of you, other than the two newest directors, have purchased shares for your own accounts since Fred Mershad last bought shares in a filing reported on September 7, 1999. No insider buying for a year! For a stock trading at more than a 70% discount from book value and an enterprise value, excluding securitized credit card receivables, of less than two times EBITDA! I hope you recognize how loudly your collective silence on this subject has spoken to the capital markets and to the outside shareholders. It expresses a stunning lack of confidence in the management of this company, a team which you have doggedly protected from attack from shareholders like myself. I think that each board member, and each member of senior management, should be required to make open market purchases of the stock and to hold the shares during their time of service to the company. Set a number, say $50,000 worth of stock, which is non-trivial and which will begin to make each of you as impatient as your outside shareholders have become about the unacceptable performance of EB. 3. To improve the quality of corporate governance, I urge you to separate the positions of Chairman and CEO by selecting someone other than Fred Mershad to be Chairman beginning with your next board meeting. 4. Senior executive compensation should be changed so that cash bonuses, stock options, and all other forms of incentive compensation should be driven only by meeting MBO's for dramatic improvement in operating performance, financial performance, and share price, especially the latter. If you were to do this, rather than rewarding management for treading water, management too might begin to share the impatience of your outside shareholders with the unacceptable performance of EB. 5. Finally, Fred Mershad and Scott Davido should be replaced immediately. Step up to the plate finally and do your job as directors. Stop tolerating management's constant excuses and stop being afraid of the devil you don't know. Focus, instead, on what you do know: this accident prone, stumbling, bumbling team is not up to the task. Today's shocking preannouncement is one more example of the team's inadequacies. Their comps are terrible. They lag industry averages consistently, even during a period of unprecedented macro-economic prosperity. The financial results are unacceptable. The team has no credibility with shareholders or with the Street. They cannot even meet their own guidance. They must be replaced right away. As far as this shareholder is concerned, unless you replace current senior management with more capable executives, I will be back at your annual meeting in 2001 seeking to unseat all outside directors who have continued to support incumbent management. And if the unacceptable performance of the last several years continues for another year, I am confident that I will win once again. Sincerely yours, David Nierenberg General Partner, The D3 Family Fund, L. P. -----END PRIVACY-ENHANCED MESSAGE-----