<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D AMENDMENT
Under the Securities Exchange Act of 1934
CONE MILLS CORPORATION
----------------------
(Name of Issuer)
Common Stock, $.10 par value
------------------------------
(Title of Class of Securities)
206814 10 5
-----------
(CUSIP Number)
Albert A. Woodward, Esq.
Maun & Simon, PLC
2000 Midwest Plaza Building West
801 Nicollet Mall
Minneapolis, Minnesota 55402
(612) 904-7400
--------------
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
June 7, 1999
------------
(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
[ ].
(Cover page continued on next 16 pages)
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons................ MARC H. KOZBERG
I.R.S. Identification Nos. of above persons
(entities only)...............................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..............................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization...... USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power........................ 70,000
(8) Shared voting power...................... 250,000
(9) Sole dispositive power................... 70,000
(10) Shared dispositive power................ 250,000
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 320,000
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions)........
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).......................................... 1.3%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).. IN
- --------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons.................... BRUCE E. HENDRY
I.R.S. Identification Nos. of above persons
(entities only)...................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.......... USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power........................ 1,122,700
(8) Shared voting power...................... -0-
(9) Sole dispositive power................... 1,122,700
(10) Shared dispositive power................ -0-
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 1,122,700
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11)......................................... 4.4%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).. IN
- --------------------------------------------------------------------------------
</TABLE>
Page 3
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons........................... DR. DEMETRE NICOLOFF
I.R.S. Identification Nos. of above persons
(entities only)..........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each reporting
person with:
(7) Sole voting power................................ 151,000
(8) Shared voting power.............................. 250,000
(9) Sole dispositive power........................... 151,000
(10) Shared dispositive power........................ 250,000
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by each
reporting person. 401,000
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.6%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 4
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ G. JAMES SPINNER
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ 80,200
(8) Shared voting power.............................. 250,000
(9) Sole dispositive power........................... 80,200
(10) Shared dispositive power........................ 250,000
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 330,200
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.3%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 5
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ ROBERT H. PAYMAR
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ 150,000
(8) Shared voting power.............................. 250,000
(9) Sole dispositive power........................... 150,000
(10) Shared dispositive power........................ 250,000
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 400,000
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.6%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 6
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ STANLEY I. BARENBAUM
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ 55,000
(8) Shared voting power.............................. 250,000
(9) Sole dispositive power........................... 55,000
(10) Shared dispositive power........................ 250,000
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 305,000
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.2%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 7
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
(1) Names of reporting persons............................ SUMMIT CAPITAL APPRECIATION FUND LP
I.R.S. Identification Nos. of above persons
(entities only)........................................... 41-1822728
- -------------------------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- -------------------------------------------------------------------------------------------------
(3) SEC use only..........................................
- -------------------------------------------------------------------------------------------------
(4) Source of funds (see instructions) WC
- -------------------------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- -------------------------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. MINNESOTA
- -------------------------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ 250,000
(8) Shared voting power.............................. -0-
(9) Sole dispositive power........................... 250,000
(10) Shared dispositive power........................ -0-
- -------------------------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 250,000
- -------------------------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- -------------------------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.0%
- -------------------------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... PN
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 8
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
(1) Names of reporting persons............................ SCA MANAGEMENT PARTNERS, L.L.P.
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- ---------------------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- ---------------------------------------------------------------------------------------------
(3) SEC use only..........................................
- ---------------------------------------------------------------------------------------------
(4) Source of funds (see instructions) HC
- ---------------------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- ---------------------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. MINNESOTA
- ---------------------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 250,000
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 250,000
- ---------------------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 250,000
- ---------------------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- ---------------------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 1.0%
- ---------------------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... PN
- ---------------------------------------------------------------------------------------------
</TABLE>
Page 9
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
(1) Names of reporting persons............................ DEEPHAVEN OPPORTUNITY TRADING FUND LP
I.R.S. Identification Nos. of above persons
(entities only)........................................... (NONE)
- ---------------------------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- ---------------------------------------------------------------------------------------------------
(3) SEC use only..........................................
- ---------------------------------------------------------------------------------------------------
(4) Source of funds (see instructions) WC
- ---------------------------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- ---------------------------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. BRITISH VIRGIN ISLANDS
- ---------------------------------------------------------------------------------------------------
Number of shares beneficially owned by
each reporting person with:
(7) Sole voting power................................ 180,000
(8) Shared voting power.............................. -0-
(9) Sole dispositive power........................... 180,000
(10) Shared dispositive power........................ -0-
- ---------------------------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 180,000
- ---------------------------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- ---------------------------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11)............................................... 0.7%
- ---------------------------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... PN
- ---------------------------------------------------------------------------------------------------
</TABLE>
Page 10
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------------------------
(1) Names of reporting persons............................ DEEPHAVEN INVESTMENT ADVISORS, LLC
I.R.S. Identification Nos. of above persons
(entities only)........................................... 41-1903933
- -------------------------------------------------------------------------------------------------
(2) Check the appropriate box if a member of
a group (see instructions) (a) / X /
(b)
- -------------------------------------------------------------------------------------------------
(3) SEC use only..........................................
- -------------------------------------------------------------------------------------------------
(4) Source of funds (see instructions) HC
- -------------------------------------------------------------------------------------------------
(5) Check 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................................ 180,000
(8) Shared voting power.............................. -0-
(9) Sole dispositive power........................... 180,000
(10) Shared dispositive power........................ -0-
- -------------------------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by each
reporting person. 180,000
- -------------------------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- -------------------------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 0.7%
- -------------------------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... PN
- -------------------------------------------------------------------------------------------------
</TABLE>
Page 11
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------
(1) Names of reporting persons............................ ARBITRADE HOLDINGS LLC
I.R.S. Identification Nos. of above persons
(entities only)........................................... 41-1890776
- ------------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- ------------------------------------------------------------------------------------
(3) SEC use only..........................................
- ------------------------------------------------------------------------------------
(4) Source of funds (see instructions) HC
- ------------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- ------------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. ILLINOIS
- ------------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ 516,500
(8) Shared voting power.............................. -0-
(9) Sole dispositive power........................... 516,500
(10) Shared dispositive power........................ -0-
- ------------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- ------------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- ------------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... PN
- --------------------------------------------------------------------------------
</TABLE>
Page 12
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ IRVIN KESSLER
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by
each reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 516,500
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 516,500
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 13
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ EFRAIM GILDOR
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings
is required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 516,500
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 516,500
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 14
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ PETER HAJAS
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of
a group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 516,500
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 516,500
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in Row (11)... 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 15
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ MARK LYONS
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 516,500
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 516,500
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 16
<PAGE>
SCHEDULE 13D
------------
CUSIP NO. 206814 10 5
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
(1) Names of reporting persons............................ MERRILL FERGUSON
I.R.S. Identification Nos. of above persons
(entities only)...........................................
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a
group (see instructions) (a) / X /
(b)
- --------------------------------------------------------------------------------
(3) SEC use only..........................................
- --------------------------------------------------------------------------------
(4) Source of funds (see instructions) PF
- --------------------------------------------------------------------------------
(5) Check if disclosure of legal proceedings is
required pursuant to Items 2(d) or 2(e).
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization.................. USA
- --------------------------------------------------------------------------------
Number of shares beneficially owned by each
reporting person with:
(7) Sole voting power................................ -0-
(8) Shared voting power.............................. 516,500
(9) Sole dispositive power........................... -0-
(10) Shared dispositive power........................ 516,500
- --------------------------------------------------------------------------------
(11) Aggregate amount beneficially owned by
each reporting person. 516,500
- --------------------------------------------------------------------------------
(12) Check if the aggregate amount in Row (11)
excludes certain shares (see instructions).
- --------------------------------------------------------------------------------
(13) Percent of class represented by amount in
Row (11).................................................. 2.0%
- --------------------------------------------------------------------------------
(14) Type of reporting person (see instructions).......... IN
- --------------------------------------------------------------------------------
</TABLE>
Page 17
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement relates to the voting Common Stock, par value $.10 of
Cone Mills Corporation (the "Issuer"), a North Carolina corporation, having its
principal place of business at 3101 North Elm Street, Greensboro, North Carolina
27415-6540.
ITEM 2. IDENTITY AND BACKGROUND
This statement is filed jointly by the individuals and entity
identified below (collectively the "Holders"). There have been no changes in the
background, occupations, or addresses of the Holders since the filing of the
last Schedule 13D Amendment to which this filing is an amendment.
<TABLE>
<S> <C>
1. Marc H. Kozberg
2. Bruce E. Hendry
3. James A. Potter
4. Susan N. Potter
5. Dr. Demetre Nicoloff
6. G. James Spinner
7. Robert H. Paymar
8. Stanley I. Barenbaum
9. Summit Capital Appreciation Fund LP
10. SCA Management Partners, L.L.P.
11. The Temple Company, L.L.P.
12. Charmel Limited Partnership
13. Charmel Enterprises, Inc.
14. Richard Fitzgerald
15. Charles Barry
16. Melanie Barry
17. Arbitrade LLC
18. Arbitrade Holdings LLC
19. Deephaven Opportunity Trading Fund LP
20. Deephaven Investment Advisors LLC
21. Irvin Kessler
22. Efraim Gildor
23. Peter Hajas
24. Mark Lyons
25. Merrill Ferguson
</TABLE>
None of the above-referenced Holders has, during the past five years,
been convicted in a criminal proceeding, excluding traffic violations or similar
misdemeanors, nor have any of the Holders been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction where, as a result
of such proceeding, any of the Holders became subject to a judgment, decree, or
final order enjoining future violations of, or prohibiting or mandating
activities subject to federal or state securities laws or finding any violation
with respect to such laws.
Page 18
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The shares of Common Stock of the Issuer were purchased by each Holder
from available cash resources or working capital.
ITEM 4. PURPOSE OF TRANSACTION.
See Item 3. The Holders have acquired the Common Stock of the Issuer
for investment purposes. The Holders may acquire additional shares of Common
Stock of the Issuer and specifically reserve the right to sell all or any
portion of the Common Stock if they deem it to be in their best interest. The
Holders intend to explore opportunities to enhance shareholder value and to that
end intend to explore the retention of an investment banking firm. While the
Holders do not have any specific plans respecting extraordinary corporate
transactions effecting the Issuer, the sale of its assets, changes in its
management, capitalization, dividend policy, business or corporate structure,
charter or bylaws, or the delisting of the issuer's securities or similar
actions, they intend to consider all possibilities of enhancing shareholder
value, including but not limited to possible sale of the Issuer, acquisition of
the Issuer or acquisition of a controlling interest in the Issuer. The Holders,
through Mr. Kozberg and Mr. Hendry, intend to actively monitor the management
and business of the Issuer and specifically reserve the right to communicate
with management and other shareholders of the Issuer regarding matters of common
concern, including consideration of transactions such as those outlined above.
On May 27, 1999, Marc H. Kozberg, on behalf of the Holders, wrote to
John L. Bakane, President of the Issuer, proposing that management consider a
transaction whereby shareholders of the Company other than management, the 401K
plan of the Company, and the Holders would be offered the opportunity to receive
$8.25 in cash for each share of the Issuer's Common Stock. The letter states
that a higher offer may be considered if justified by the Holders' due diligence
review. The Holders indicated that their financial advisors were highly
confident that financing to complete the transaction on acceptable terms could
be obtained. The Holders expressed the belief that the transaction would be in
the best interests of both the public shareholders and the Company. The proposal
contemplated that management would not be changed and that the Board of
Directors would consist of an equal number of representatives of management and
the Holders. A copy of the correspondence is attached hereto as Exhibit B.
On June 11, 1999, Dewey L. Trogdon, Chairman of the Issuer, advised Mr.
Kozberg that management of the Issuer did not wish to pursue the proposal.
Nevertheless, the Holders intend to continue to pursue further discussions with
management and may consider other alternatives consistent with their goal of
enhancing shareholder value.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Page 19
<PAGE>
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Information with respect to the aggregate number, and percentage, of
all outstanding Common Stock beneficially owned as of June 11, 1999 by each of
the Holders is set forth below:
<TABLE>
<CAPTION>
Number of Shares Percentage of
Name of Common Stock Outstanding Shares
---- --------------- ------------------
<S> <C> <C>
Marc H. Kozberg* 320,000 1.3%
Bruce E. Hendry 1,122,700 4.4%
Dr. Demetre Nicoloff* 401,000 1.6%
G. James Spinner* 330,200 1.3%
Robert H. Paymar* 400,000 1.6%
Stanley I. Barenbaum* 305,000 1.2%
James A. Potter** 30,000 0.1%
Susan N. Potter 4,500 LESS THAN 0.1%
Summit Capital
Appreciation Fund LP 250,000 1.0%
SCA Management
Partners, L.L.P.* 250,000 1.0%
The Temple Company,
L.L.P. 135,000 0.5%
Charmel Limited Partnership 442,900 1.7%
Charmel Enterprises, Inc.^ 442,900 1.7%
Richard Fitzgerald# 135,000 0.5%
Charles Barry#^ 582,900 2.3%
Melanie Barry^ 442,900 1.7%
Arbitrade LLC 336,500 1.3%
Arbitrade Holdings LLC+@ 516,500 2.0%
Deephaven Opportunity
Trading Fund LP 180,000 0.7%
Deephaven Investment
Advisors LLC@ 180,000 0.7%
Irvin Kessler+@ 516,500 2.0%
Efraim Gildor+@ 516,500 2.0%
Peter Hajas+@ 516,500 2.0%
Mark Lyons+@ 516,500 2.0%
Merrill Ferguson+@ 516,500 2.0%
</TABLE>
* Includes 250,000 shares of Common Stock owned by Summit Capital
Appreciation Fund LP
** Includes 6,000 shares of Common Stock controlled as custodian f/b/o minor
children
# Includes 135,000 shares of Common Stock owned by The Temple Company, L.L.P.
^ Includes 442,900 shares of Common Stock owned by Charmel Limited
Partnership
+ Includes 336,500 shares of Common Stock owned by Arbitrade LLC
@ Includes 180,000 shares of Common Stock owned by Deephaven Opportunity
Trading Fund LP
Page 20
<PAGE>
The Holders' response to Items 7 through 13 of the cover pages of the
statement are incorporated herein by reference. Cover pages have been included
in this filing only to the extent a Holder's beneficial ownership in the
securities of the Issuer has changed since the most recent filing of a Schedule
13D amendment to which this statement is an amendment.
According to the Issuer's most recent Form 10-Q filing with the SEC,
the Issuer has 25,432,233 shares of Common Stock outstanding. The Holders, as of
June 11, 1999, collectively own 3,005,300 shares of the Issuer's Common Stock,
constituting approximately 11.7% of all of the outstanding voting Common Stock.
Transactions by the Holders in Common Stock of the Issuer not previously
reported by the Holders in a Schedule 13D filing relating to the securities of
the Issuer are as follows:
<TABLE>
<CAPTION>
TYPE OF NUMBER OF PRICE/
NAME DATE TRANSACTION SHARES SHARE
---- ---- ----------- --------- -------
<S> <C> <C> <C> <C>
SCAF 03/12/99 Buy 5,000 4.7500
Demetre Nicoloff 03/12/99 Buy 2,000 4.6366
Demetre Nicoloff 03/17/99 Buy 10,000 4.65625
G. James Spinner 03/18/99 Buy 5,200 4.6875
Demetre Nicoloff 04/20/99 Buy 5,000 5.3250
Stanley I. Barenbaum 05/04/99 Buy 19,000 6.0000
Stanley I. Barenbaum 05/05/99 Buy 21,000 6.0000
Deephaven Opp Fund 05/06/99 Buy 28,500 5.8969
Stanley I. Barenbaum 05/07/99 Buy 10,000 5.9463
Stanley I. Barenbaum 05/13/99 Buy 5,000 6.0000
The Temple Company 05/26/99 Buy 6,000 6.0000
Charmel L. P. 05/27/99 Buy 42,200 6.0880
Charml L. P. 06/04/99 Buy 60,700 6.0401
The Temple Company 06/04/99 Buy 25,000 6.0401
Demetre Nicoloff 06/07/99 Buy 12,000 5.8802
Charmel L. P. 06/07/99 Buy 30,000 5.9792
James A. Potter 06/08/99 Buy 2,000 6.1250
Susan N. Potter 06/08/99 Buy 2,000 6.1250
James A. Potter** 06/08/99 Buy 6,000 6.1250
Deephaven Opp Fund 06/10/99 Buy 60,000 5.9200
Bruce E. Hendry 06/11/99 Buy 62,000 5.8196
</TABLE>
* Summit Capital Appreciation Fund, LP
** Puchased in custodial account for benefit of minor children
<TABLE>
<S> <C>
TOTAL PURCHASES 418,600
TOTAL SALES (0)
NET 418,600
</TABLE>
Page 21
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
None.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A -- Agreement as to joint filing pursuant to Regulation
Section 240.13d-1(f)(1)(iii).
Exhibit B -- Letter to John L. Bakane from Marc H. Kozberg dated May
27, 1999.
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.
Dated: June 11, 1999
/s/ Bruce E. Hendry
---------------------------
Bruce E. Hendry
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.
Dated: June 11, 1999
/s/ Mark H. Kozberg
------------------------------
Marc H. Kozberg
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.
Dated: June 11, 1999
/s Demetre Nicoloff
------------------------------
Dr. Demetre Nicoloff
Page 22
<PAGE>
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.
Dated: June 11, 1999
/s/ James Spinner
------------------------------
G. James Spinner
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.
Dated: June 11, 1999
/s/ Robert H. Paymar
------------------------------
Robert H. Paymar
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.
Dated: June 11, 1999
/s/ Stanley I. Barenbaum
------------------------------
Stanley I. Barenbaum
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.
Dated: June 11, 1999
/s/ James A. Potter
------------------------------
James A. Potter
Page 23
<PAGE>
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.
Dated: June 11, 1999
/s/ Susan N. Potter
------------------------------
Susan N. Potter
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.
Dated: June 11, 1999
SUMMIT CAPITAL APPRECIATION
FUND LP
By: SCA Management Partners L.L.P.
By: /s/ Marc H. Kozberg
--------------------------
Marc H. Kozberg, a partner
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.
Dated: June 11, 1999
SCA MANAGEMENT PARTNERS, L.L.P.
By: /s/ Marc H. Kozberg
---------------------------
Marc H. Kozberg, a partner
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.
Dated: June 11, 1999
THE TEMPLE COMPANY, L.L.P.
By: /s/ Charles Barry
--------------------------
Charles Barry, a partner
Page 24
<PAGE>
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.
Dated: June 11, 1999
CHARMEL LIMITED PARTNERSHIP
By: Charmel Enterprises, Inc.
By: /s/ Charles Barry
--------------------------
Charles Barry, President
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.
Dated: June 11, 1999
CHARMEL ENTERPRISES, INC.
By: /s/ Charles Barry
------------------------
Charles Barry, President
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.
Dated: June 11, 1999
/s/ Richard Fitgerald
------------------------------
Richard Fitzgerald
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.
Dated: June 11, 1999
/s/ Charles Barry
------------------------------
Charles Barry
Page 25
<PAGE>
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.
Dated: June 11, 1999
/s/ Melanie Barry
------------------------------
Melanie Barry
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.
Dated: June 11, 1999
ARBITRADE LLC
By: /s/ Gary Sobczak
----------------------
Gary Sobczak
Chief Financial Officer
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.
Dated: June 11, 1999
ARBITRADE HOLDINGS LLC
By: /s/ Gary Sobczak
---------------------------
Gary Sobczak
Chief Financial Officer
Page 26
<PAGE>
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.
Dated: June 11, 1999
DEEPHAVEN OPPORTUNITY TRADING
FUND LP
By: Deephaven Investment Advisors LLC
Its General Partner
By: /s/ Gary Sobczak
---------------------------------
Gary Sobczak
Chief Financial Officer
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.
Dated: June 11, 1999
DEEPHAVEN INVESTMENT
ADVISORS LLC
By: /s/ Gary Sobczak
------------------------------
Gary Sobczak
Chief Financial Officer
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.
Dated: June 11, 1999
/s/ Irvin Kessler
------------------------------
Irvin Kessler
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.
Dated: June 11, 1999
/s/ Efraim Gildor
------------------------------
Efraim Gildor
Page 27
<PAGE>
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.
Dated: June 11, 1999
/s/ Peter Hajas
------------------------------
Peter Hajas
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.
Dated: June 11, 1999
/s/ Mark Lyons
------------------------------
Mark Lyons
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.
Dated: June 11, 1999
/s/ Merrill Ferguson
------------------------------
Merrill Ferguson
Page 28
<PAGE>
EXHIBIT A
AGREEMENT AS TO JOINT FILING
Pursuant to Regulation Section 240.13d-1(f)(1)(iii), the undersigned
acknowledge and agree that the attached Schedule 13D Amendment relating to Cone
Mills Corporation is being filed on behalf of each of the undersigned.
/s/ Bruce E. Hendry
------------------------------
Bruce E. Hendry
/s/ Marc H. Kozberg
------------------------------
Marc H. Kozberg
/s/ Demetre Nicoloff
------------------------------
Dr. Demetre Nicoloff
/s/ G. James Spinner
------------------------------
G. James Spinner
/s/ Robert H. Paymar
------------------------------
Robert H. Paymar
/s/ Stanley I. Barenbaum
------------------------------
Stanley I. Barenbaum
/s/ James A. Potter
------------------------------
James A. Potter
/s/ Susan N. Potter
------------------------------
Susan N. Potter
SUMMIT CAPITAL APPRECIATION
FUND LP
By: SCA Management Partners L.L.P.
By: /s/ Marc H. Kozberg
----------------------------
Marc H. Kozberg, a partner
SCA MANAGEMENT PARTNERS, L.L.P.
By: /s/ Marc H. Kozberg
------------------------------
Marc H. Kozberg, a partner
Page 29
<PAGE>
THE TEMPLE COMPANY, L.L.P.
By: /s/ Charles Barry
------------------------------
Charles Barry, a partner
CHARMEL LIMITED PARTNERSHIP
By: Charmel Enterprises, Inc.
By: /s/ Charles Barry
------------------------
Charles Barry, President
CHARMEL ENTERPRISES, INC.
By: /s/ Charles Barry
------------------------------
Charles Barry, President
/s/ Richard Fitzgerald
------------------------------
Richard Fitzgerald
/s/ Charles Barry
------------------------------
Charles Barry
/s/ Melanie Barry
------------------------------
Melanie Barry
ARBITRADE LLC
By: /s/ Gary Sobczak
--------------------------
Gary Sobczak
Chief Financial Officer
ARBITRADE HOLDINGS LLC
By: /s/ Gary Sobczak
--------------------------
Gary Sobczak
Chief Financial Officer
Page 30
<PAGE>
DEEPHAVEN OPPORTUNITY TRADING
FUND LP
By: Deephaven Investment Advisors LLC
Its General Partner
By: /s/ Gary Sobczak
----------------------------
Gary Sobczak
Chief Financial Officer
DEEPHAVEN INVESTMENT
ADVISORS LLC
By: /s/ Gary Sobczak
----------------------------
Gary Sobczak
Chief Financial Officer
/s/ Irvin Kessler
------------------------------
Irvin Kessler
/s/ Efraim Gildor
------------------------------
Efraim Gildor
/s/ Peter Hajas
------------------------------
Peter Hajas
/s/ Mark Lyons
------------------------------
Mark Lyons
/s/ Merrill Ferguson
------------------------------
Merrill Ferguson
Page 31
<PAGE>
EXHIBIT B
Summit Capital Appreciation Fund
A Limited Partnership
900 Second Avenue South
Suite 500
Minneapolis, MN 55402
May 27, 1999
PERSONAL & CONFIDENTIAL
Mr. John L. Bakane
President and Chief Executive Officer
Cone Mills Corporation
Cone Corporate Center
3101 North Elm Street
Greensboro, NC 27415-6540
Dear John:
Over the past several months, our investment group has become convinced
that the securities markets are unlikely in the foreseeable future to recognize
the full enterprise value of Cone Mills. In our view, the market's inability to
appropriately value Cone Mills will inhibit its future growth. As a corollary,
your shareholders are unlikely to obtain returns that could be achieved through
investment opportunities that more closely mirror overall market performance. As
you and I have discussed on several occasions, we believe that the textile
industry in general and Cone Mills in particular have not benefited from public
ownership. We and our advisors believe that a transaction that would permit the
Company to revert to private ownership would be a very substantial benefit to
the Company, its management and employees and will provide liquidity to all of
your shareholders at a value that will provide a significant premium over the
current market capitalization of the Company.
When we last discussed this subject, you indicated that you would not
be prepared to further discuss this subject in the absence of a specific
proposal and until the major components of your restructuring plan were in
place. As a next step before making a formal proposal, I thought it appropriate
to summarize the terms and benefits of a possible transaction. Given the
importance of the matters discussed in this letter, I ask that you share this
letter with members of your Board.
PRICE. We are prepared to discuss with you a transaction whereby public
shareholders of the Company would receive $8.25 per share in cash. We believe
this price would be very attractive to your shareholders, representing a 37.5%
premium over the closing price of your common stock on May 26th 1999. We may
consider a greater consideration if justified by our due diligence review.
Page 32
<PAGE>
FORM. The form of the transaction would be subject to negotiation, but
in any event would be structured to comply with Cone Mills Restated Articles of
Incorporation and Bylaws. Current management of the Company and the Company's
employees through the 401K program would remain shareholders of the surviving
entity together with our group. The preferred stock also would remain in place.
Based upon current information, we understand that approximately 4,100,000
common shares are owned by management and employees directly or through the 401K
program. Our group owns approximately 2,800,000 common shares. We are prepared
to inject sufficient additional capital to equalize ownership with employees and
management. This would leave approximately 17,200,000 shares to be acquired from
the remaining shareholders.
CONTINUITY OF MANAGEMENT AND OPERATIONS. We envision that your
management would remain in place. In our transaction, all employment agreements,
benefit plans and other commitments to employees, including your stock option
plan and 401K plan, would remain in place and would be fully respected. The
Board of Directors would be equally divided between management and employees on
the one hand and our group on the other hand.
FINANCING. Our advisors, Dougherty Financial, Inc. and its affiliate,
Dougherty Funding, LLC have provided us with a letter in which they have
expressed to us that they are highly confident of obtaining financing for the
transaction sufficient to replace existing bank debt and to pay shareholders. We
have conducted an extensive analysis of Cone Mills based on publicly available
information and have concluded that the additional debt incurred as a result of
the transaction could be adequately serviced from the Company's cash flow from
operations without consideration of any asset sales. Obviously, asset sales
could significantly improve the Company's balance sheet, but would not be a
prerequisite to the transaction.
BENEFITS OF THE TRANSACTION. As discussed above, we believe this
transaction affords your existing shareholders with a substantial premium over
the current market capitalization of the Company. Presently, your largest
shareholders do not have a ready exit strategy. This lack of liquidity is
unlikely to change in the foreseeable future. We believe that the risks and
rewards associated with a continuing equity interest in the Company should be
shouldered by your most substantial investors and those having the greatest
stake in the Company's future, i.e. management, your employees and long-term
investors. We further believe that our proposal is more likely to result in a
long-term recognition of the true enterprise value of Cone Mills. We have
substantial confidence in the ability of your management team to achieve these
goals and we would like to participate with you as partners in that endeavor.
While our proposal, when formally made, would be subject to
confirmation through appropriate due diligence, we expect that such due
diligence will confirm our view of Cone Mills and its prospects. Of course, we
recognize that you will want to conduct a due diligence examination of our
proposal. We also recognize that the proposal will, of course, be conditioned
upon the negotiation of definitive agreements and your Board's conclusion that
the transaction is fair from a financial standpoint to your shareholders.
We strongly believe that this proposal does represent an extraordinary
opportunity for your shareholders. We also believe that a privately owned Cone
Mills will be able to achieve long-term benefits for its remaining shareholders
that could not otherwise be achieved as a public corporation. We look forward to
meeting with you and your Board of Directors to discuss presenting our proposal
at your earliest convenience.
Page 33
<PAGE>
We have made no public announcement relating to our proposal and we
would hope to be able to discuss our ideas with you and your Board on a
"confidential, non-public" basis. To that end, we and our advisors are prepared
to meet with you as soon as possible. We request your response by no later than
June 11, 1999.
Please feel free to call me at the office (612) 376-7035 or at my home
at [omitted].
I look forward to hearing from you.
Very truly yours,
/s/ Marc H. Kozberg
---------------------
Marc H. Kozberg
Page 34
