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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 1)
The Elder-Beerman Stores Corp.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
284470101
(CUSIP Number)
Neil J. Koren, Esq.
Shartsis Friese & Ginsburg LLP
One Maritime Plaza, 18th Floor
San Francisco, CA 94111
(415) 421-6500
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
July 19, 2000
(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 Sections 240.13d-1(e), 240.13d-
1(f) or 240.13d-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 Section
240.13d-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).
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 2 of 25 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Snyder Capital Management, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /XX/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF and WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,791,900
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
3,118,150
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,118,150
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.8%
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14 TYPE OF REPORTING PERSON*
PN and IA
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 3 of 25 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Snyder Capital Management, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /XX/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ---------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 2,791,900
REPORTING ---------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
---------------------------------------
10 SHARED DISPOSITIVE POWER
3,118,150
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,118,150
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.8%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 4 of 25 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to shares of Common Stock (the "Stock") of The
Elder-Beerman Stores Corp. (the "Issuer"). The principal executive
office of the Issuer is located at 3155 Elbee Road, Dayton, Ohio
45439.
ITEM 2. IDENTITY AND BACKGROUND.
The persons filing this statement and the persons enumerated in
Instruction C of Schedule 13D and, where applicable, their respective
places of organization, general partners, directors, executive
officers and controlling persons, and the information regarding them,
are as follows:
(a) The names of the persons filing this statement are Snyder
Capital Management, L.P. ("SCMLP") and Snyder Capital Management, Inc.
("SCMI") (collectively, the "Filers"). Persons enumerated in
Instruction C of Schedule 13D are Alan Barry Snyder ("Snyder"),
Walter Niemasik, Jr. ("Niemasik"), Margot Thorington Murtaugh
("Murtaugh"), Robert John Stanton ("Stanton"), Steven James Block
("Block"), Peter Stuart Voss ("Voss"), Susan Roberta Katz-Snyder
("Katz-Snyder") and Sherry Ann Umberfield ("Umberfield")
(collectively, with the Filers, the "Named Persons").
SCMI is the sole general partner of SCMLP. Both SCMLP and SCMI
are wholly owned by Nvest Companies, L.P. ("Nvest Companies"), a
limited partnership affiliated with Nvest, L.P., a publicly traded
limited partnership. The general partner of Nvest, L.P. and the
managing general partner of Nvest Companies is an indirect, wholly
owned subsidiary of Metropolitan Life Insurance Company ("MetLife").
As of June 30, 1998, MetLife beneficially owned all of the general
partner interests in Nvest Companies and Nvest, L.P. and, in the
aggregate, general partner and limited partner interests of Nvest
Companies and Nvest, L.P. representing approximately 47% of the
economic interests in the business of Nvest Companies.
SCMI and Nvest Companies operate under an understanding that all
investment and voting decisions regarding advisory accounts managed by
SCMLP are to be made by SCMI and SCMLP and not by Nvest Companies or
any entity controlling Nvest Companies. Accordingly, SCMI and SCMLP
do not consider Nvest Companies or any entity controlling Nvest
Companies to have any direct or indirect control over the securities
held in managed accounts.
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SCHEDULE 13D/A
CUSIP No. 284470101 Page 5 of 25 Pages
(b) The business address of SCMLP, SCMI, Snyder, Niemasik,
Murtaugh, Stanton, Block and Katz-Snyder is 350 California Street, San
Francisco, CA 94104. The business address of Voss, Umberfield, Nvest
Companies and Nvest, L.P. is 399 Boylston Street, Boston, MA 02116.
The business address of MetLife is One Madison Avenue, New York, New
York 10010.
(c) SCMLP is an investment adviser registered under the
Investment Advisers Act of 1940. SCMI is the sole general partner of
SCMLP. Snyder is the President of SCMI. Niemasik, Murtaugh, Stanton
and Block are the Vice Presidents of SCMI. Snyder, Niemasik, Voss,
Katz-Snyder and Umberfield are the directors of SCMI. Voss and
Umberfield are also the President and Executive Vice President,
respectively, of Nvest Companies.
(d) During the last five years, none of the Named Persons has
been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors).
(e) During the last five years, none of the Named Persons was a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is
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.
(f) SCMLP is a Delaware limited partnership. SCMI is a Delaware
corporation. Snyder, Niemasik, Murtaugh, Stanton, Block, Voss, Katz-
Snyder and Umberfield are all citizens of the United States of
America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds used in purchasing the Stock were as
follows:
Purchaser Source of Funds Amount
SCMLP Funds Under Management approximately $1,900,000,000
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 6 of 25 Pages
ITEM 4. PURPOSE OF TRANSACTION.
SCMLP acquired the Stock on behalf of its advisory clients for the
purpose of investment. None of the Filers has any present plans or
intentions to acquire or dispose of any securities of the Issuer other
than on behalf of SCMLP's advisory clients for the purpose of
investment.
SCMLP may purchase at any time or times on behalf of its advisory
clients additional shares of the Stock or other securities of the
Issuer. SCMLP may at any time or times cause its advisory clients to
dispose of any or all securities of the Issuer in any lawful manner.
SCMLP's advisory clients reserve all of their rights as stockholders
of the Issuer and may exercise those rights in any manner that they or
SCMLP consider to be in the interests of such clients.
On July 19, 2000, PPM America Special Investments Fund, L.P., PPM
America Special Investments CBO II, L.P. and PPM America, Inc. (the
"PPM Group"), the Issuer, all but one of the Issuer's directors and
SCMI entered into the Settlement Agreement to end the PPM Group's
pending proxy contest with the Issuer. The following is a summary of
the material terms of the Settlement Agreement. This summary is
qualified in its entirety by references to the Settlement Agreement
attached hereto as Exhibit A.
The Issuer agreed, pursuant to the Settlement Agreement, to nominate
Mark F.C. Berner, Dennis S. Bookshester, Eugene I. Davis and Charles
H. Turner (the "New Nominees") for election to the Board of Directors
at the Issuer's 2000 Annual Meeting (the "2000 Annual Meeting").
Messrs. Bookshester and Turner were recommended by SCMI. Messrs.
Berner and Davis were recommended by the PPM Group. At a meeting of
the Board of Directors held on July 21, 2000, the Issuer's Board of
Directors approved the nomination of the New Nominees and recommended
such New Nominees for approval by the shareholders at the 2000 Annual
Meeting.
Pursuant to the Settlement Agreement, the Issuer further agreed,
subject to the requisite approval of the shareholders at the 2000
Annual Meeting, (a) to amend Article X of the Issuer's Amended
Articles of Incorporation (the "Articles") to reduce from seventy-two
percent to a simple majority the shareholder approval required to
amend or repeal any section of the Articles, (b) to amend Article IX
of the Articles to eliminate classification of the Board of Directors,
(c) to adopt a new Article XIV to the Articles pursuant to which the
Issuer would opt out of Ohio state law provisions that restrict an
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 7 of 25 Pages
Ohio corporation's ability to engage in certain transactions with
shareholders holding ten percent or more of the corporation's voting
power, (d) to amend Regulation 34 of the Issuer's Amended Code of
Regulations (the "Regulations") to reduce from seventy-two percent to
a simple majority the shareholder approval required to amend or repeal
any regulation, (e) to amend Regulation 3(a) of the Regulations to
permit special meetings of shareholders to be called by a shareholder
or shareholders owning ten percent rather than fifty percent of the
outstanding Stock, (f) to amend Regulation 7(c) of the Regulations to
relax the advance notice provisions in connection with shareholder
business to be brought before an annual meeting of the Issuer's
shareholders, (g) to amend Regulation 12 of the Regulations to relax
the advance notice provisions in connection with shareholder
nominations of candidates for election to the Issuer's Board of
Directors, (h) to amend Regulation 9 of the Regulations to reduce from
seventy-two percent to a simple majority the shareholder approval
required to alter the size of the Board of Directors and (i) to adopt
a new Regulation 35 to the Regulations pursuant to which the Issuer
would opt out of the provisions of the Ohio Control Share Acquisition
Act.
At a meeting of the Board of Directors held on July 21, 2000, the
Issuer's Board of Directors approved the amendments to the Issuer's
Articles and Regulations and recommended such amendments for approval
by the shareholders at the 2000 Annual Meeting.
Pursuant to the Settlement Agreement, each party thereto (other than
the Issuer) also agreed to cause all shares of Stock beneficially
owned by such party to be voted at the 2000 Annual Meeting in favor of
(a) the amendments to the Articles, (b) the amendments to the
Regulations and (c) the election of the New Nominees to the Board of
Directors. Furthermore, each party to the Settlement Agreement (other
than the Issuer) agreed that, besides the proposed amendment to the
Issuer's Equity and Performance Plan to increase by 500,000 the number
of shares of Stock available under such plan, it would not bring any
business before the 2000 Annual Meeting, except as expressly
contemplated by the Settlement Agreement.
SCMI agreed pursuant to the Settlement Agreement (a) to not solicit
directly or indirectly and proxies or participate in any solicitation
of any proxy with respect to matters to be presented at the 2000
Annual Meeting, other than solicitations in favor of the amendments
and director nominations set forth in the Settlement Agreement, (b) to
not become a participant in any election contest relating to the 2000
Annual Meeting, (c) to promptly file an amendment to SCMI's Schedule
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 8 of 25 Pages
13D to reflect the termination of the proxy contest and the other
provisions of the Settlement Agreement, and (d) to refrain from taking
any other actions inconsistent with the matters contemplated by the
Settlement Agreement.
Each party to the Settlement Agreement (other than the Issuer) also
agreed pursuant to the terms of the Settlement Agreement that during
the period commencing on the date of the Settlement Agreement and
ending on the date that is seventy-five days prior to the first
anniversary of the 2000 Annual Meeting, such party (a) shall cause all
shares of capital stock that have the right to vote generally in the
election of directors and that are beneficially owned by such party:
(i) to be present, in person or by proxy, at the 2000 Annual Meeting
so that all such shares may be counted for the purpose of determining
if a quorum is present at the 2000 Annual Meeting, (ii) to be voted in
favor of all of the proposed amendments to the Issuer's Articles and
Regulations set forth in the Settlement Agreement and in favor of the
election of the New Nominees to the Board of Directors at the 2000
Annual Meeting; (b) shall not directly or indirectly (except through
the Issuer pursuant to due authorization) solicit any proxies or
consents or in any way participate in any solicitation of any proxy
with respect to shares of Stock in any election contest with respect
to the Issuer's Board of Directors or become a participant in any
election contest with respect to the Issuer's Board of Directors or
request or induce or attempt to induce any other person to take any
such actions with respect to an election contest related to the
Issuer's Board of Directors; (c) shall not (i) form, join or otherwise
participate in any "group" (within the meaning of Section 13(d)(3) of
the Exchange Act or Rule 13d-5 thereunder) or (ii) otherwise act in
concert with any other person for the purpose of holding or voting
Stock in order to circumvent any of the provisions of the Settlement
Agreement; (d) shall not call, request the call of, or seek to call,
any special meeting of shareholders for the purpose of an election
contest with respect to the Issuer's Board of Directors; (e) shall not
enter into any discussions, negotiations, arrangements or
understandings with any other person with respect to any of the
foregoing matters; and (f) shall not make any public announcement
critical of the composition of the Board of Directors. In addition,
the parties to the Settlement Agreement (other than the Issuer) agreed
to refrain from calling a special meeting of shareholders during the
seventy-five days leading up to the Issuer's 2001 annual meeting of
shareholders (the "2001 Annual Meeting). The Settlement Agreement
provides that the parties thereto will seek to cause the 2001 Annual
Meeting to be held between twelve and thirteen months from the date of
the 2000 Annual Meeting.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 9 of 25 Pages
The Board of Directors of the Issuer has agreed that the transactions
contemplated by the Settlement Agreement will not trigger the
provisions of the Rights Agreement, dated as of December 30, 1997, as
amended, by and between the Issuer and Norwest Bank Minnesota, N.A.,
as Rights Agent.
The Settlement Agreement shall automatically terminate in the event
that the shareholders fail to elect each of the New Nominees to the
Board of Directors at the 2000 Annual Meeting or in the event that the
Issuer or any of the directors party to the Settlement Agreement fails
to exercise good faith in fulfilling its obligations to actively seek
shareholder approval of the amendments to the Articles and to the
Regulations and election of the New Nominees. The Settlement
Agreement may be amended or modified only by the written agreement of
each party thereto.
Other than as described above, none of the Filers has any present
plans or proposals that relate to, or would result in, any of the
transactions or events described in Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
To the knowledge of the Filers, the beneficial ownership of the Stock
by the Filers is reflected on the cover pages of each Filer and the
other Named Persons do not beneficially own any Stock.
The persons filing this statement have not effected any transactions
in the Stock in the past sixty days.
SCMLP is a registered investment adviser whose clients have the right
to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, the Stock. No individual client's
holdings of the Stock are more than five percent of the class.
ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
SCMLP is a registered investment adviser. SCMLP's clients have the
right to receive or the power to direct the receipt of dividends from,
or the proceeds from the sale of, the various securities in which
their assets are invested, including the Stock. Depending on SCMLP's
agreement with each advisory client, the client may have no right, a
shared right or an exclusive right to direct the voting of the Stock.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 10 of 25 Pages
See the description of the Settlement Agreement in Item 4 above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Agreement, dated as of July 19, 2000, by and among The
Elder-Beerman Stores Corp., an Ohio corporation; PPM America Special
Investments Fund, L.P., a Delaware limited partnership; PPM America
Special Investments CBO II, L.P., a Delaware limited partnership; PPM
America, Inc., a Delaware corporation; Snyder Capital Management,
Inc., a Delaware corporation; Dennis S. Bookshester; Stewart M. Kasen;
Charles Macaluso; Steven C. Mason; Frederick J. Mershad; Thomas J.
Noonan, Jr.; Bernard Olsoff; Laura H. Pomerantz; Jack A. Staph and
John J. Wiesner.
SIGNATURES
After reasonable inquiry and to the best of my knowledge, I
certify that the information set forth in this statement is true,
complete and correct.
DATED: July 25, 2000
SNYDER CAPITAL MANAGEMENT, L.P.
By: Snyder Capital Management, Inc.
General Partner
By: /s/ Margot Murtaugh
Margot Murtaugh
Vice President
SNYDER CAPITAL MANAGEMENT, INC.
By: /s/ Margot Murtaugh
Margot Murtaugh
Vice President
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 11 of 25 Pages
Exhibit A
AGREEMENT
THIS AGREEMENT, dated as of July __, 2000 (this "Agreement"), is
made by and among The Elder-Beerman Stores Corp., an Ohio corporation
("Elder-Beerman"); PPM America Special Investments Fund, L.P., a
Delaware limited partnership ("SIF I"); PPM America Special
Investments CBO II, L.P., a Delaware limited partnership ("CBO II");
PPM America, Inc., a Delaware corporation ("PPM America" and,
collectively, with SIF I and CBO II, "PPM"); Snyder Capital
Management, Inc., a Delaware corporation ("Snyder"); Dennis S.
Bookshester; Stewart M. Kasen; Charles Macaluso; Steven C. Mason;
Frederick J. Mershad; Thomas J. Noonan, Jr.; Bernard Olsoff; Laura H.
Pomerantz; Jack A. Staph and John J. Wiesner (Bookshester, Kasen,
Macaluso, Mason, Mershad, Noonan, Olsoff, Pomerantz, Staph and Wiesner
are collectively referred to herein as the "Directors").
WHEREAS, PPM currently beneficially owns, in the aggregate,
approximately 13.15% of Elder-Beerman's outstanding common shares,
without par value (the "Common Shares"), Snyder currently beneficially
owns, in the aggregate, approximately 20.87% of the outstanding Common
Shares, and the Directors currently beneficially own, in the
aggregate, approximately 2.85% of the outstanding Common Shares;
WHEREAS, Elder-Beerman and PPM have been engaged in a proxy
contest, which they desire to end; and
WHEREAS, Elder-Beerman and the Directors have agreed to support
four nominees selected by PPM and Snyder for election to Elder-
Beerman's Board of Directors (the "Board of Directors") and to support
certain proposals of PPM to be acted upon by Elder-Beerman's
shareholders at Elder-Beerman's 2000 Annual Meeting (as defined
below); and
WHEREAS, Elder-Beerman, PPM, Snyder and the Directors desire to
provide for certain agreements with respect to the voting by PPM,
Snyder and the Directors of the Common Shares they own and regarding
other matters.
NOW, THEREFORE, in consideration of the covenants and agreements
set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 12 of 25 Pages
Section 1. Special Meeting of the Board of Directors. Elder-
Beerman and the Directors represent and warrant that the Board of
Directors of Elder-Beerman has heretofore duly and validly approved
the following items:
(a) the nomination at the 2000 Annual Meeting of the Shareholders
of Elder-Beerman to be held on August 24, 2000, or such later date as
shall be determined by Elder-Beerman solely in order to facilitate
effectuation of the provisions of this Agreement (the "2000 Annual
Meeting") of new candidates for election to the Board of Directors
(the "New Nominees"), which New Nominees will consist of Mark F.C.
Berner, Dennis S. Bookshester, Eugene I. Davis and Charles H. Turner,
each of whom will serve for an initial term of three years and until
such time as his successor has been duly elected and qualified (unless
the amendment to Article IX of Elder-Beerman's Amended Articles of
Incorporation (the "Articles") is approved by the shareholders at the
2000 Annual Meeting, in which case the entire Board of Directors must
be re-elected at the annual meeting of shareholders in 2001 (the "2001
Annual Meeting")), and the submission of the New Nominees at the 2000
Annual Meeting with the recommendation of the Board of Directors for
election as directors by the shareholders; provided, however, that in
the event that any of the New Nominees is unable at the 2000 Annual
Meeting to stand for election for any reason, his replacement shall be
designated as follows: (i) Snyder shall have the right to designate a
replacement for Mr. Bookshester and/or for Mr. Turner, and (ii) PPM
shall have the right to designate a replacement for Mr. Berner and/or
for Mr. Davis;
(b) the amendment of Article X of Elder-Beerman's Articles to
reduce from 72% to a simple majority the shareholder approval required
to amend or repeal any section of the Articles including those dealing
with cumulative voting rights, preemptive rights to acquire shares,
share repurchases by Elder-Beerman, the classification of and
staggered election system for the Board of Directors and the amendment
of Article X of the Articles itself, and submission of the proposed
amendment for approval to Elder-Beerman's shareholders at the 2000
Annual Meeting;
(c) the amendment of Article IX of Elder-Beerman's Articles to
eliminate classification of the Board of Directors, which currently is
divided into three separate classes and elected on a staggered basis
and to replace this structure with a single class board of directors
under which all directors of Elder-Beerman are elected by the
shareholders on an annual basis, and submission of the proposed
amendment for approval to Elder-Beerman's shareholders at the 2000
Annual Meeting;
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 13 of 25 Pages
(d) the adoption of a new Article XIV to Elder-Beerman's Articles
pursuant to which Elder-Beerman would opt out of the provisions of
Chapter 1704 of the Ohio Revised Code, which Chapter sets forth
certain restrictions on the ability of an Ohio corporation to engage
in certain business combinations and other transactions that involve
shareholders that have the ability to exercise 10% or more of the
voting power of such corporation, and submission of the proposed
adoption for approval to Elder-Beerman's shareholders at the 2000
Annual Meeting;
(e) the amendment of Regulation 34 of Elder-Beerman's Amended
Code of Regulations (the "Code of Regulations") to lower from 72% to a
simple majority the shareholder approval required to amend or repeal
any Regulation in the Code of Regulations including those dealing with
the time and place of shareholder meetings, who may call special
meetings of shareholders, the order of business (including advance
notice of business to be brought) at shareholder meetings, the size of
the Board of Directors, the filling of newly-created directorships and
Board of Directors vacancies, the removal of directors, the nomination
of directors (including advance notice of the intent to nominate
directors) and the amendment of the Code of Regulations, and
submission of the proposed amendment for approval to Elder-Beerman's
shareholders at the 2000 Annual Meeting;
(f) the amendment of Regulation 3(a) of Elder-Beerman's Code of
Regulations to permit a shareholder or shareholders who own 10% rather
than 50% of the outstanding Common Shares to call special meetings of
shareholders, and submission of the proposed amendment for approval to
Elder-Beerman's shareholders at the 2000 Annual Meeting;
(g) the amendment of Regulation 7(c) of Elder-Beerman's Code of
Regulations to provide that any shareholder who desires to bring
business before an annual meeting of Elder-Beerman's shareholders must
notify Elder-Beerman not more than 90 days, but not less than 45 days
(rather than not less than 60 days), in advance of such meeting of its
intent to do so and of the nature of such business, and submission of
the proposed amendment for approval to Elder-Beerman's shareholders at
the 2000 Annual Meeting;
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 14 of 25 Pages
(h) the amendment of Regulation 12 of Elder-Beerman's Code of
Regulations to provide that any shareholder who desires to propose any
nominees for election to Elder-Beerman's Board of Directors must
notify Elder-Beerman not more than 90 days, but not less than 45 days
(rather than not less than 60 days), in advance of such meeting of its
intent to do so and of the identity of its proposed nominees, and
submission of the proposed amendment for approval to Elder-Beerman's
shareholders at the 2000 Annual Meeting;
(i) the amendment of Regulation 9 of Elder-Beerman's Code of
Regulations to lower from 72% to a simple majority the shareholder
approval required to alter the size of the Board of Directors, and
submission of the proposed amendment for approval to Elder-Beerman's
shareholders at the 2000 Annual Meeting;
(j) the adoption of a new Regulation 35 to Elder-Beerman's Code
of Regulations, pursuant to which Elder-Beerman would opt out of the
provisions of the Ohio Control Share Acquisition Act, which Act sets
forth certain restrictions on the ability of persons to acquire 20% or
more of the stock of an Ohio corporation, and submission of the
proposed adoption for approval to Elder-Beerman's shareholders at the
2000 Annual Meeting;
(k) the execution, delivery and performance of this Agreement by
Elder-Beerman; and
(l) the agreement and confirmation of the Board of Directors
that, under the Company's Rights Agreement, dated as of December 30,
1997, as amended by Amendment No. 1 dated as of November 11, 1998, by
and between Elder-Beerman and Norwest Bank Minnesota, N.A. (the
"Rights Agreement"), (i) none of the parties to this Agreement is an
Acquiring Person (as defined in the Rights Agreement) and (ii) a
Distribution Date, a Triggering Event or a Share Acquisition Date (as
such terms are defined in the Rights Agreement ) will not occur by
reason of either the execution of this Agreement or the consummation
of the transactions contemplated hereby.
PPM and Snyder shall have the right to review and reasonably
approve the forms of the proposed amendments to Elder-Beerman's
Articles and Code of Regulations described in Sections 1(b) through
1(j) hereof.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 15 of 25 Pages
Section 2. Joint Press Release. Elder-Beerman, PPM and Snyder
agree that, as promptly as practicable after the execution of this
Agreement, they shall issue a joint press release regarding the
matters contemplated in this Agreement, which press release is
substantially in the form attached hereto as Annex A. Until the date
of the 2000 Annual Meeting, the parties agree that no other public
release or announcement concerning the matters contemplated herein
shall be issued without the prior consent of Elder-Beerman, PPM and
Snyder, and any such announcement shall be a joint announcement.
Section 3. Revised Proxy Materials. Elder-Beerman agrees that,
as promptly as practicable after the date of this Agreement, it shall
prepare and file with the Securities and Exchange Commission (the
"SEC") revised proxy materials pursuant to which the Board of
Directors will: (a) propose and recommend for approval of the
shareholders at the 2000 Annual Meeting the amendments to Elder-
Beerman's Articles and Code of Regulations described in Sections 1(b)
through 1(j) hereof, and (b) nominate and recommend the New Nominees
for election to the Board of Directors at the 2000 Annual Meeting.
Elder-Beerman agrees that PPM and Snyder shall have the right to
review and reasonably approve the revised proxy materials, including
without limitation the text and order of presentation of the proposed
amendments to Elder-Beerman's Articles and Code of Regulations, prior
to the filing thereof with the SEC. Elder-Beerman shall have the
right to adjourn or postpone the 2000 Annual Meeting for such
reasonable period of time not to exceed 30 days as may be necessary to
permit clearance of revised proxy materials with the SEC and/or to
permit adequate opportunity for the timely mailing of such revised
proxy materials to the shareholders of Elder-Beerman. If the 2000
Annual Meeting is so adjourned or postponed in accordance with the
immediately preceding sentence, Elder-Beerman, PPM and Snyder agree
that they shall issue a joint press release regarding the reason for
the adjournment or postponement and the date the 2000 Annual Meeting
will be re-convened or held. All parties hereto agree to actively
seek shareholder approval of each of the items set forth in Section 1
hereof. The Directors agree to vote their respective shares in favor
of each of the items set forth in Section 1 hereof. If asked to do so
by Elder-Beerman, the Directors agree to make telephone calls in order
to solicit and otherwise support the amendments to Elder-Beerman's
Articles and Code of Regulations described in Sections 1(b) through
1(j) hereof and the election of the New Nominees. During the term of
this Agreement, the Directors shall refrain from making any negative
or critical comments, oral or written, regarding the amendments
described in Sections 1(b) through 1(j) hereof or about the New
Nominees.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 16 of 25 Pages
Section 4. 2000 Annual Meeting of Shareholders.
(a) Each party to this Agreement (other than Elder-Beerman) (i)
shall cause all Common Shares beneficially owned (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated
thereunder) by such party to be voted at the 2000 Annual Meeting in
favor of (x) the amendments to Elder-Beerman's Articles and Code of
Regulations described in Sections 1(b) through 1(j) hereof, and (y)
the election as aforesaid of the New Nominees to the Board of
Directors and (ii) other than the proposed amendment to Elder-
Beerman's Equity and Performance Plan to increase by 500,000 the
number of Common Shares available under such plan, shall not bring any
business before the 2000 Annual Meeting except as expressly
contemplated hereby.
(b) Elder-Beerman agrees that it shall as promptly as practicable
either during or after the 2000 Annual Meeting (i) duly file with the
Secretary of State of the State of Ohio a Certificate of Amendment to
its Articles setting forth such of the amendments to the Articles
referred to in Sections 1(b) through 1(d) hereof that have been
approved by the shareholders at the 2000 Annual Meeting and (ii)
implement such of the amendments to its Code of Regulations referred
to in Sections 1(e) through 1(j) hereof.
Section 5. Termination of Proxy Contest; Other Activities Related
to 2000 Annual Meeting. Except as otherwise permitted in this Section
5, PPM agrees that it shall immediately terminate all activities with
respect to its solicitation of proxies in connection with the 2000
Annual Meeting or any adjournment thereof. PPM and Snyder each agrees
that it (a) shall not solicit, directly or indirectly, any proxies or
participate in any "solicitation" of any "proxy" (as such terms are
defined in Rule 14a-1 under the Exchange Act) with respect to matters
to be presented at the 2000 Annual Meeting, other than solicitations
in favor of the approval of each of the matters set forth in Sections
1(a) through 1(j) hereof, (b) shall not become a "participant" (as
such term is used in Rule 14a-11 under the Exchange Act) in any
election contest relating to the 2000 Annual Meeting, (c) shall
promptly file an amendment to its Schedule 13D to reflect the
termination of PPM's proxy contest and the provisions of this
Agreement and (d) shall not take any other actions inconsistent with
the matters contemplated hereby. Elder-Beerman shall bear the
reasonable, documented costs and expenses incurred by PPM and its
representatives in connection with (w) PPM's activities with respect
to its solicitation of proxies in connection with the 2000 Annual
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 17 of 25 Pages
Meeting prior to the date hereof, (x) PPM's activities with respect to
the review and revision of Elder-Beerman's proxy materials prior to
the date on which Elder-Beerman files final, definitive proxy
materials with the SEC, (y) the execution and delivery of this
Agreement and (z) the consummation of the transactions contemplated
hereby, such costs and expenses not to exceed $250,000. Such amounts
shall be paid by Elder-Beerman within five business days after receipt
of appropriate evidence of such costs and expenses.
Section 6. No Proxy Contests; Limitations on Other Shareholder
Actions. During the period commencing on the date hereof and ending
on the date that is 75 days prior to the first anniversary of the date
of the 2000 Annual Meeting, each party to this Agreement (other than
Elder-Beerman):
(a) shall cause all shares of capital stock of Elder-Beerman that
have the right to vote generally in the election of directors, that
are beneficially owned (within the meaning of Regulation 13D and Rules
13d-3 and 13d-5 under the Exchange Act) by such party (i) to be
present, in person or by proxy, at the 2000 Annual Meeting so that all
such shares may be counted for the purpose of determining if a quorum
is present at the 2000 Annual Meeting and (ii) to be voted in favor of
the New Nominees and in favor of each of the proposals set forth in
Sections 1(a) through 1(j) hereof at the 2000 Annual Meeting;
(b) shall not (i) form, join or otherwise participate in any
"group" (within the meaning of Section 13(d)(3) of the Exchange Act or
Rule 13d-5 thereunder) or (ii) otherwise act in concert with any other
person for the purpose of holding or voting Common Shares if the
purpose of such action is to circumvent any provisions of this
Agreement;
(c) shall not directly or indirectly (except through Elder-
Beerman pursuant to due authorization) solicit any proxies or consents
or in any way participate in any "solicitation" of any "proxy" (as
such terms are defined in Rule 14a-11 under the Exchange Act) with
respect to Common Shares in any election contest with respect to the
Board of Directors of Elder-Beerman or become a "participant" (as such
term is used in Rule 14a-1 under the Exchange Act) in any election
contest with respect to the Board of Directors of Elder-Beerman or
request or induce or attempt to induce any other person to take any
such actions with respect to an election contest related to the Board
of Directors of Elder-Beerman;
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 18 of 25 Pages
(d) shall not call, request the call of, or seek to call, any
special meeting of shareholders for the purpose of an election contest
with respect to the Board of Directors of Elder-Beerman, and, if a
shareholder not party to this Agreement calls any special meeting of
shareholders for the purpose of an election contest with respect to
the Board of Directors of Elder-Beerman, shall oppose such
shareholder's election contest efforts;
(e) shall not enter into any discussions, negotiations,
arrangements or understandings with any other person with respect to
any of the foregoing matters referred to in this Section 6; and
(f) shall not make any public announcement critical of the
composition of the Board of Directors (including, without limitation
by means of a press release or commentary in a Schedule 13D or other
SEC filings).
During the period commencing on the date that is 75 days prior to
the first anniversary of the date of the 2000 Annual Meeting and
ending on the date of the 2001 Annual Meeting, each party to this
Agreement (other than Elder-Beerman) shall refrain from calling,
requesting the call of, or seeking to call, any special meeting of
shareholders.
Section 7. 2001 Annual Meeting. Each of the parties hereto
agrees that it shall seek to cause the 2001 Annual Meeting to be held
no less than twelve months from the date of the 2000 Annual Meeting,
but no more than thirteen months from the date of the 2000 Annual
Meeting.
Section 8. Termination of the Agreement. In the event that the
shareholders fail to elect of each of the New Nominees to the Board of
Directors at the 2000 Annual Meeting or in the event that Elder-
Beerman or any of the Directors fails to exercise good faith in
fulfilling the obligations (as set forth in Section 3) to actively
seek shareholder approval of each of the items set forth in Sections
1(a) through (j) hereof, all obligations of the parties hereunder
(other than the obligations set forth in Section 4(b) hereof) shall
automatically terminate immediately after the 2000 Annual Meeting.
Section 9. Waiver. Elder-Beerman hereby waives the notice
requirements set forth in Regulation 7(c) of Elder-Beerman's
Regulations so that the New Nominees can stand for election to Elder-
Beerman's Board of Directors at the 2000 Annual Meeting.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 19 of 25 Pages
Section 10. Miscellaneous.
(a) All notices, requests or instruction hereunder shall be in
writing and delivered personally or sent by registered or certified
mail, postage prepaid or by telecopy (or like transmission), as
follows:
(1) if to Elder-Beerman:
The Elder-Beerman Stores Corp.
3155 El-Bee Road
Dayton, OH 45439
Attention: Secretary
Fax: (937) 296-4625
with a copy to:
Lyle G. Ganske, Esq.
Jones Day Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, OH 44114
Fax: (216) 579-0212
(2) if to PPM:
Stuart J. Lissner
Managing Director
PPM America, Inc.
225 West Wacker Drive
Suite 1200
Chicago, IL 60606
Fax: (312) 634-0741
(3) if to Snyder:
Margot Murtaugh
Snyder Capital Management, Inc.
350 California Street
Suite 1460
San Francisco, CA 94104
Fax: (415) 391-9437
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 20 of 25 Pages
with copies to:
Eugene I. Davis
Pirinate Consulting Group, L.L.C.
5 Canoe Brook Drive
Livingston, NJ 07039
Fax: (973) 535-1843
J. Andrew Rahl, Jr., Esq.
Anderson Kill & Olick, P.C.
1251 Avenue of the Americas
New York, NY 10020-1182
Fax: (212) 278-1733
(4) if to any other party hereto, at its address set forth in
the records of Elder-Beerman.
Any of the above addresses may be changed at any time by notice
given as provided above; provided, however, that any such notice of
change of address shall be effective only upon receipt. All notices
and other communications given to any party hereto in accordance with
the provisions hereof shall be deemed to have been given on the date
of receipt, provided that any notice or other communication that is
received other than during regular business hours of the recipient
shall be deemed to have been given at the opening of business on the
next business day of the recipient.
(b) This Agreement contains the entire agreement between the
parties hereto with respect to the transactions contemplated hereby
and supersedes and amends all prior understandings, arrangements and
agreements with respect to the subject matter hereof. No modification
hereof shall be effective unless in writing and signed by the party
against which it is sought to be enforced. The parties hereto, by
written agreement, may make any modification or amendment of this
Agreement, but no such modification or amendment will be effective
unless signed by all of the parties hereto. The captions appearing
herein are for the convenience of the parties only and shall not be
construed to affect the meaning of the provisions of this Agreement.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 21 of 25 Pages
(c) Each of the parties hereto shall use such party's reasonable
best efforts to take such actions as may be necessary or reasonably
requested by the other parties hereto to carry out and consummate the
transactions contemplated by this Agreement. No party to this
Agreement directly or indirectly shall (i) challenge the validity or
enforceability of any provision of this Agreement or the matters
contemplated hereby or (ii) commence any lawsuit or other legal
proceeding, or take any other action, that seeks to frustrate the
performance of this Agreement in accordance with its terms.
(d) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio applicable in the case
of agreements made and to be performed entirely within such State.
(e) Each of the parties hereto recognizes that any breach of the
terms of this Agreement may give rise to irreparable harm for which
money damages would not be an adequate remedy, and accordingly agree
that, in addition to other remedies, any non-breaching party shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce the terms and provisions
of this Agreement by a decree of specific performance in any action
instituted in any court of the United States or any state hereof
having jurisdiction without the necessity of proving the inadequacy as
a remedy of money damages.
(f) This Agreement and all of the provisions hereof shall be
binding upon and shall inure to the benefit of the parties hereto and
their respective successors, heirs, legal representatives and
permitted assigns, but neither this Agreement nor any of the rights,
interests, or obligations hereunder may be assigned by any of the
parties hereto without the prior written consent of the other parties
and any such attempted assignment without consent shall be void.
(g) This Agreement is not intended, and shall not be construed,
to confer any rights or remedies hereunder upon any party other than
the parties hereto, and those parties designated as directors pursuant
to Section 1(a), which parties shall be entitled to enforce their
rights under such provisions to which they are entitled to benefits.
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 22 of 25 Pages
(h) Any term or provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability
without rendering invalid or unenforceable the remaining terms and
provisions of this Agreement, or any such terms in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad
as is enforceable.
(i) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
(j) Each party hereto (other than Elder-Beerman) is signing this
Agreement in its or his/her capacity as a shareholder and not in a
capacity as a director or officer (except on behalf of Elder-Beerman),
it being understood that this Agreement is not intended to limit or
abridge the fiduciary responsibility of the directors of Elder-
Beerman.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
THE ELDER-BEERMAN STORES CORP.
By: ___________________________
Name: Frederick J. Mershad
Title: Chairman of the Board and Chief Executive Officer
________________________________
Dennis S. Bookshester
________________________________
Stewart M. Kasen
________________________________
Charles Macaluso
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 23 of 25 Pages
________________________________
Steven C. Mason
________________________________
Frederick J. Mershad
________________________________
Thomas J. Noonan, Jr.
________________________________
Bernard Olsoff
________________________________
Laura H. Pomerantz
________________________________
Jack A. Staph
________________________________
John J. Wiesner
PPM AMERICA, INC.
By: ________________________________
Name: Stuart J. Lissner
Title: Managing Director
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 24 of 25 Pages
PPM AMERICA SPECIAL INVESTMENTS
CBO II, L.P.
By: PPM America CBO II Management Company
its General Partner
By: _______________________________
Name: Stuart J. Lissner
Title: Vice President
PPM AMERICA SPECIAL INVESTMENTS
FUND, L.P.
By: PPM America Fund Management GP, Inc.
its Managing General Partner
By: _______________________________
Name: Stuart J. Lissner
Title: Vice President
SNYDER CAPITAL MANAGEMENT, INC.
By: ________________________________
Name: Alan Snyder
Title:
<PAGE>
SCHEDULE 13D/A
CUSIP No. 284470101 Page 25 of 25 Pages
ANNEX A
FORM OF JOINT PRESS RELEASE
NJK\3321\002\1108194
