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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
MDT Corporation
(Name of Issuer)
Common Stock
- ---------------------------------------------------------------------------
(Title of Class of Securities)
552687105
(CUSIP Number)
Christopher J. Rupright, Esq.
Shartsis Friese & Ginsburg
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)
May 24, 1996
(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(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with the statement / /. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) 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).
SEC 1746 (12-91)
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 2 of 14 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Lawndale Capital Management, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / X /
(b) / /
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3 SEC USE ONLY
- ---------------------------------------------------------------------------
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) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 494,600
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
494,600
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
494,600
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO 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>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 3 of 14 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Andrew E. Shapiro
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
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3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF and PF
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- ---------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 5,100
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 494,600
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 5,100
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
494,600
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
499,700
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.4
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
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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>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 4 of 14 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Diamond A Partners, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
- ---------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- ---------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 421,000
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
421,000
- ---------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
421,000
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
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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>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 5 of 14 Pages
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1 NAME OF REPORTING PERSON
SS OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Diamond A Investors, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X /
(b) / /
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3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ---------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(E) / /
- ---------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- ---------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY --------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 73,600
REPORTING --------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
73,600
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
73,600
- ---------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
- ---------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.1
- ---------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
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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>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 6 of 14 Pages
ITEM 1. SECURITY AND ISSUER.
This statement relates to Common Stock (the "Stock") of MDT Corporation, a
Delaware corporation ("MDT"). The principal executive office of MDT is
located at Stratford Hall, Suite 200, 1009 Slater Road, Morrisville, NC
27560.
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) Lawndale Capital Management, LLC, a California limited liability company
("LCM"); Diamond A Partners, L.P., a California limited partnership
("DAP"); Diamond A Investors, L.P., a California limited partnership
("DAI"); and Andrew E. Shapiro ("Shapiro").
(b) The business address of LCM, DAP, DAI and Shapiro is One Sansome Street,
Suite 3900, San Francisco, California 94104.
(c) LCM is the investment adviser to and the general partner of DAP and DAI,
which are investment limited partnerships. Shapiro is the sole manager
of LCM.
(d) During the last five years, none of such persons has been convicted in
a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, none of such 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) Shapiro is a citizen of the United States of America.<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 7 of 14 Pages
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
LCM Funds Under Management(1) $2,557,199.80
DAP Working Capital $2,178,675.00
DAI Working Capital $ 378,524.80
Shapiro Personal Funds $ 30,294.00
(1) Includes funds of DAP and DAI invested in Stock.
ITEM 4. PURPOSE OF TRANSACTION.
In connection with MDT's recently announced merger agreement with Getinge
Industrier AB (Publ) (the "Proposed Transaction"), the Reporting Persons have
advised MDT's Board of Directors and its advisors in a letter dated May 29,
1996 (attached hereto as Exhibit B), that, based on the current disclosure by
MDT, the Reporting Persons do not intend to tender their Stock.
The Reporting Persons have been in contact with and may contact and solicit
other shareholders regarding the proposed transaction.
The Reporting Persons have also been in contact with and continue to be in
contact with other unaffiliated parties expressing interest in alternative
transactions involving all or part of MDT. The Reporting Persons have
referred those other parties to MDT's investment adviser, Lehman Brothers.
The Reporting Persons may acquire additional shares of Stock in the open
market from time to time, and may acquire shares representing more than 10%
of the outstanding shares of MDT. The Reporting Persons have been in contact
with management and members of the board of directors of MDT to discuss
acceleration of strategies MDT plans to employ to maximize the value of the
Stock, which the Reporting Persons continue to believe to be undervalued.
The Reporting Persons have also been in contact with other significant
shareholders of MDT regarding these issues. The Reporting Persons may
continue such activities.
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 8 of 14 Pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The beneficial ownership of the Stock of the persons named in Item 2 of this
statement is as follows at the date hereof:
Aggregate
Beneficially
Owned Voting Power Dispositive Power
Name Number Percent Sole Shared Sole Shared
LCM 494,600 7.4 -0- 494,600 -0- 494,600
Shapiro 499,700 7.4 5,100 494,600 5,100 494,600
DAP 421,000 6.2 -0- 421,000 -0- 421,000
DAI 73,600 1.1 -0- 73,600 -0- 73,600
The persons filing this statement effected the following transactions in the
Stock on the dates indicated, and such transactions are the only transactions
in the Stock by the persons filing this statement since March 25, 1996.
Purchase Number Price Broker
Name or Sale Date of Shares Per Share Used
DAP P 3/27/96 1,300 4.563 INST
DAI P 3/27/96 700 4.563 INST
DAI P 3/29/96 1,000 4.563 INST
DAP P 4/30/96 1,000 4.500 INST
DAI P 5/7/96 1,000 4.375 INST
DAP P 5/13/96 1,600 4.453 INST
DAI P 5/13/96 400 4.453 INST
DAP P 5/24/96 4,300 4.375 INST
DAI P 5/24/96 700 4.375 INST
DAI P 5/28/96 10,000 4.438 CANT
DAI P 5/28/96 3,000 4.375 INST
DAP P 5/28/96 1,000 4.375 INST
INST - Instinet Corporation
CANT - Cantor Fitzgerald<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 9 of 14 Pages
ITEM. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
LCM is the general partner of DAP and DAI pursuant to limited partnership
agreements providing to LCM the authority, among other things, to invest the
funds of DAP and DAI in Stock, to vote and dispose of Stock and to file this
statement on behalf of DAP and DAI. Pursuant to such limited partnership
agreements, the general partner of DAP and DAI is entitled to allocations
based on assets under management and realized and unrealized gains.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
A. Agreement Regarding Joint Filing of Statement on Schedule 13D or 13G
(previously filed).
B. Letter referred to in Item 4.
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: May __, 1996.
DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P.
By: ____/s/ Andrew E. Shapiro___ By: ____/s/ Andrew E. Shapiro___
Andrew E. Shapiro Andrew E. Shapiro
General Partner General Partner
LAWNDALE CAPITAL MANAGEMENT, INC.
By: ___/s/ Andrew E. Shapiro_____ _____/s/ Andrew E. Shapiro______
Andrew E. Shapiro Andrew E. Shapiro
President
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 10 of 14 Pages
EXHIBIT A
AGREEMENT REGARDING JOINT FILING
OF STATEMENT ON SCHEDULE 13D OR 13G
The undersigned agree to file jointly with the Securities and Exchange
Commission (the "SEC") any and all statements on Schedule 13D or Schedule 13G
(and any amendments or supplements thereto) required under section 13(d) of
the Securities Exchange Act of 1934, as amended, in connection with purchases
by the undersigned of Common Stock of MDT Corporation, a California
corporation. For that purpose, the undersigned hereby constitute and appoint
Lawndale Capital Management, Inc., a California corporation, as their true
and lawful agent and attorney-in-fact, with full power and authority for and
on behalf of the undersigned to prepare or cause to be prepared, sign, file
with the SEC and furnish to any other person all certificates, instruments,
agreements and documents necessary to comply with section 13(d) and
section 16(a) of the Securities Exchange Act of 1934, as amended, in
connection with said purchases, and to do and perform every act necessary and
proper to be done incident to the exercise of the foregoing power, as fully
as the undersigned might or could do if personally present.
DATED: December 6, 1995.
DIAMOND A PARTNERS, L.P. DIAMOND A INVESTORS, L.P.
By: ___/s/ Andrew E. Shapiro____ By: ___/s/ Andrew E. Shapiro____
Andrew E. Shapiro Andrew E. Shapiro
General Partner General Partner
LAWNDALE CAPITAL MANAGEMENT, INC.
By: ____/s/ Andrew E. Shapiro______ ______/s/ Andrew E. Shapiro______
Andrew E. Shapiro Andrew E. Shapiro
President
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 11 of 14 Pages
EXHIBIT B
Lawndale Capital Management, LLC
Andrew E. Shapiro
President
Mr. J. Miles Branagan
Chairman
MDT Corporation
Stratford Hall #200 1009 Slater Road
Morrisville, North Carolina
Dear Miles,
Lawndale Capital Management has been an investor in MDT Corp. (MDT or the
Company) for several years and is currently the Company's second largest
shareholder. MDT is a company with substantial tangible and intangible asset
value and market position. We have been critical of MDT's management and
certain members of its Board for dragging their feet in maximizing the value
of these underutilized assets. Our dissatisfaction was expressed when we led
a special proxy action in June 1994 to prod the Board basically to "do its
job". The Company's announcement on December 20, 1995 of the retirement of
Miles Branagan and the search for a new CEO and President led us to believe
that significant positive actions were being taken. Thus, the Board's
decision to sell the Company to Getinge Industrier AB (Getinge) for
$4.50/share, and more importantly the method under which our Company is being
given away, is appalling!
We find the sale of our Company for a discount to both market and book value
UNACCEPTABLE absent greater evidence that this is the best price a full and
fair auction would bring. The process by which an agreement to sell MDT came
about raises serious questions in our mind as to whether the Board has
abrogated to management its fiduciary duty to maximize shareholder value.
For the past few years, MDT's marketplace has been undergoing consolidation
and has presented the Company with a number of opportunities which include
among others:
* #2 market share behind Amsco, which for almost the past two years has been
banned by the FDA from introducing new products,
* an enormous installed base of users to service and sell consumables to,
and,
* leading edge technology to address certain growing niches of sterilization.
But these opportunities have gone largely unrealized. Instead, MDT
shareholders have suffered the Company's poor financial and stock price
performance at the hands of a management team that has seemed <PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 12 of 14 Pages
incapable of capitalizing on the Company's actual and intrinsic assets.
Management's response to these disappointments has been to blame external
forces. Meanwhile, until recently, the Company's Board acted too slowly to
remove the root of the problem and get our Company back on track to exploit
its changing marketplace.
At the 1994 annual meeting, shareholders sent a resounding "wake-up" call to
the Board with their overwhelming 32% response to our last minute "vote no"
proxy campaign. We were initially pleased when the Board agreed to bring on
new members and committed to make major cost cuts to expand operating
margins on MDT's $135 million in annual sales.
However, the new Board members weren't named until 1995 and cost cuts have
yet to find their way to the Company's bottom line. The savings purportedly
were spent on moving the Company's headquarters and senior management to
North Carolina, severance costs, various other "restructuring" charge-offs,
protecting our valuable plasma sterilization patents and preserving our
market share position.
By December 1995, our frustration again piqued, we demanded greater actions,
increased our holdings and filed a schedule 13-D with the SEC. Soon
thereafter, the Company announced that Miles Branagan, Chairman, CEO and
President would be stepping down and a new leader would be hired quickly.
Again it seemed the Board was ready to focus MDT on its market opportunities
and its challenges.
Unfortunately, our optimism was again short lived. Suddenly, this last
month, the CEO hiring process ceased and this "great sell-out" was announced.
Our first impression is that management's decision to sell our Company comes
closer to the bottom of its cyclical market than the top and may be motivated
by other factors not clearly present. But deferring to the Board's business
judgement on this point, before we can approve this transaction we at
Lawndale and presumably all shareholders want answers to the following
questions.
* WHY AGREE TO A PRICE THAT IS BELOW MDT'S RECENT AVERAGE CLOSING PRICE?
We believe MDT's stock price underperformance has been more a reflection of
shareholders lack of confidence in management's, and in particular Mr.
Branagan's, abilities to lead MDT rather than any reflection of low Company
value. Had the Company completed the replacement of Mr. Branagan and
installed a more capable management team before negotiating the Company's
sale, MDT's stock price would likely have been much higher than $4.875/share
price it was when the Getinge deal was announced. For example, just on the
December announcement of a search for a new CEO and President, MDT stock
traded at $6 a share.
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 13 of 14 Pages
* WHY RECOMMEND A PRICE THAT IS SUBSTANTIALLY BELOW THE NET BOOK VALUE OF
MDT'S ASSETS?
By our calculations, after writing off all that Getinge and presumably what
MDT's auditors dug up at this March year-end, MDT's book value is $5.82 a
share. Absent a full and fair auction, what justifies almost a 30% discount
to this value?
* IF THE BOARD DECIDED TO SELL THE COMPANY WHY DIDN'T IT CONDUCT A FULL AND
FAIR AUCTION?
Only weeks earlier, MDT's main competitor, AMSCO, was acquired for a price
that is arguably DOUBLE the purchase multiple MDT is being offered.
Amsco's price was derived after Amsco's advisor, Goldman Sachs, brought not
one but FIVE potential acquirors in. Both Goldman Sachs and Steris's
advisor, First Boston, performed Comparable Acquisitions Analysis and
Comparable Companies Analysis with respect to more than 20 companies. Lehman
Brothers' approach to one "Other Party " late in the process is simply "smoke
and mirrors" to "bless" the deal. We are curious as to which companies and
transactions Lehman Brothers "deemed relevant" in its "fairness" opinion.
Based on the inquiries we have received and referred to Lehman Brothers, a
higher bid may emerge. But how can MDT expect to get the highest bid without
providing for a full and fair auction? The fact is the Board did NOT conduct
a full and fair auction. And we are at a loss to know why!
* IF MDT DIDN'T CONDUCT AN AUCTION, HOW CAN THE BOARD MAXIMIZE VALUE BY
SIGNING AWAY THE RIGHT TO SOLICIT COMPETING BIDS?
Maybe a "no shop" provision would be appropriate if the Company had retained,
and announced to shareholders it had retained, an investment advisor to
provide multiple choices before the Board decided. But MDT didn't.
In addition, we are concerned about these other points.
* WHY AREN'T SHAREHOLDERS GETTING PAID FOR MDT'S NEW PLASMA STERILIZATION
TECHNOLOGY?
A sale at or below book value appears to give away this technology for free.
If the original reason for discussions with Getinge were for distribution of
MDT's new plasma sterilization technology presumably there is some value
here. Why d id the Company continue years of patent litigation with Abtox
protecting such technology at a cost of millions only to give it away now?
* ARE THE SEVERANCE PAYMENTS THAT CAUSED GETINGE TO DROP ITS BID PRICE
PAYABLE TO SENIOR MANAGEMENT?
Would these payments have been made if the Company followed through on its
announced plans to replace Mr. Branagan with a new president and CEO? We
find it disheartening that rather than go gracefully, management has put the
Company on the sales block to possibly ensure activation of the change of
control "golden parachute" provisions in their contracts.
<PAGE>
<PAGE>
SCHEDULE 13D
CUSIP No. 552687105 Page 14 of 14 Pages
* WHY WAS THERE NO MENTION OF THE SEARCH FOR A NEW CEO/PRESIDENT IN THE
COMPANY'S RECOMMENDATION STATEMENT?
The shareholders have a right to know that the choice is not between Mr.
Branagan and the cash. Either the Board has a new leader or candidates in
the wings or it has a duty to get one in the eventuality that the minimum 66
2/3% of all shares outstanding do not tender.
Until we have answers to these questions, why shouldn't shareholders vote no
on the deal? Until there is a full and fair auction, why shouldn't
shareholders vote no on the deal? We believe the Board must do more to
demonstrate that it is exercising its fiduciary duties to all shareholders to
maximize the value of our investment.
As I have always said to you, if our facts are wrong, let us know. We have
always been open to be educated on the issues. But as it stands now, the
proposed deal, and the manner in which it was cut, doesn't smell right. We
are not about to tender our shares for $4.50 a share and are considering
other actions as well.
Sincerely
Andrew E. Shapiro
President
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