Trian Partners Comments On General Electric $GE

Trian Fund Management, L.P., one of the largest stockholders of General Electric Company (NYSE:GE), with beneficial ownership of approximately 66.8 million shares, issued the following statement regarding its recent discussions with GE as detailed in the company’s Form 8-K filed today:

“Trian invested in GE in 2015 because we liked its industrial businesses, appreciated the initiative to separate GE Capital, and believed management would meet its public commitment to shareholders to earn $2.00 per share in 2018. Over the past month, Trian has intensified its dialogue with senior management regarding new initiatives to help ensure that GE can meet its financial commitments. We are pleased with the new framework that GE announced today.

Trian believes GE’s commitment to reduce Industrial structural costs1 ratably over the next two years from $24.9 billion in 2016 to $22.9 billion in 2018 will help to improve long-term operating performance by further simplifying and streamlining the organization and is critical to ensuring that the company achieves its financial goals. We also believe that the 2017 Industrial operating profit target announced today is important because it requires management to achieve its EPS targets in a high quality manner (i.e. via Industrial operating profit growth). Furthermore, we believe that the changes to the executive management team’s existing compensation packages along with the company’s commitment to review its framework for 2018 compensation (with a goal to align incentives around the financial metrics that most directly impact the creation of long-term shareholder value) is positive for shareholders. At this critical juncture, Trian believes that today’s announcements better position GE for the long-term and help to ensure GE will achieve its financial goals. We will continue to hold management accountable to its commitments.”

Land & Buildings Letter About Forest City Realty Trust

We believe two things are crystal clear to investors following yesterday’s Forest City fourth quarter earnings results and conference call:

1. Net Asset Value (NAV) estimates should be higher, towards $31 per share, based on new Company disclosures, versus current estimates around $28 and yesterday’s closing price of $22.88; and

2. Nothing has changed at Forest City since shareholders agreed to pay off the Ratner family with ~$120 million, or a 31% premium, to give up their super voting B shares and there is no meaningful change in sight under the current leadership.

When asked by an analyst on the Company’s earnings call yesterday what has changed since the December 6th, 2016 announcement that the dual-share class structure would be collapsed, CEO David LaRue offered investors little hope of real change: “Well, the sun still comes up every day and still sets every day.” Then Mr. LaRue went on to articulate the same board-approved approach and strategy that has existed for the past several years.

It is clearly business as usual at Forest City. What Forest City's Board apparently fails to realize is that the dual-class share structure was not itself an impediment to NAV realization, but an impediment to the changes necessary to realize NAV. Getting rid of the B shares is a means to an end, not the end.

Substantial changes remain necessary at the Company:

  • First and foremost, the Ratners should get their hands out of the cookie jar. By our last count at least ten Ratners remain on the payroll and continue to feed at the Company trough in addition to the Company providing tax protections for Bruce Ratner.
  • Second, the Board continues to lack independence. The two new independent directors, who have not been identified and may not be directors shareholders would choose, are outgunned by the eleven Ratner legacy directors. A substantial number of new independent directors should be added to the Board with input from shareholders, including Land and Buildings.
  • Additional oversight is desperately needed by a new invigorated Board as the Company redeploys $2.2 billion of shareholder capital from the pending retail portfolio sales given that under the current Board the Company recognized a similar amount of write downs in the past decade.
  • The Board should fully explore distributing proceeds from the $2.2 billion retail assets sales to shareholders utilizing tax efficient strategies we have communicated to the Board.
  • Forest City has suffered for decades from poor operating margins and bloated general and administrative expenses. To date, management appears to be conflating true margin improvements with asset sales and mix shift. How can the bloated costs be truly improved when the Ratners continue to feed at the trough?

We reiterate our strong belief that significant corporate governance enhancements are necessary at Forest City.

Elliott Management Sends Another Letter To Arconic

Three weeks ago, Elliott announced its nomination of five new independent directors to serve on Arconic’s Board of Directors. We also suggested the Board consider hiring Larry Lawson as the Company’s next Chief Executive Officer.

Since that announcement, Arconic’s equity value has increased by more than 39%.1 Investors clearly want a change in leadership and have told us they hope to see someone of Larry’s caliber at the helm – sooner rather than later. The purpose of this letter is to carry forward that message to the Board: Arconic needs a new CEO. To that end, the Board should form a search committee and conduct a full search without delay. Larry Lawson should be a lead candidate.

Why are investors excited about Larry Lawson?

Larry has a proven track record of delivering outstanding results in the aerospace industry. Most recently, Larry served as Spirit Aerosystems’ Chief Executive Officer. When Larry took over Spirit in 2013, the Company was beset by operating problems. Spirit was losing money on the 787 program, was saddled with unprofitable contracts on Gulfstream business jets, had failed to properly manage its supply chain, and possessed a facility footprint poorly matched to its future needs. For investors, Spirit had produced nothing but frustration and losses. From the date of its IPO on November 20th, 2006, to the day Larry took over on April 6th, 2013, Spirit had produced a cumulative total return of -28% vs. a gain of 13% for its former parent Boeing, and a 27% gain for the S&P 500.2

To right the ship, Larry undertook a comprehensive strategic review. He reorganized Spirit around key programs, installed a firm-wide focus on free cash flow, recruited key additions to the executive team, and made the tough decision to divest unprofitable businesses. Above all else, Larry began to change the culture. From the executive suite to the shop floor, Larry insisted that Spirit achieve world-class performance. He demanded “rigor and discipline” and he delved into the details. Larry summed it up on Spirit’s Q4 2013 earnings call: “And so today, we have a very by-program, by-product, week-to-week, did you earn your hours, did you hit your productivity?”3

Larry’s efforts bore fruit almost immediately. In less than a year, Spirit’s adjusted free cash flow improved from negative $84 million to positive $57 million.4 The firm hit its build rate targets and the quality of the product delivered to customers improved.

Over the next few years, Larry continued to drive the organization forward relentlessly. In May of 2014, about a year into the job, Larry was complimented by an analyst on Spirit’s rapidly improved performance and asked if he was pleased. His response: “[T]o be honest with you, for me to say I’m pleased, that’s a hard thing … as opposed to saying I’m pleased, let me just say that, well, this is a transformation and we’re moving along smartly in that transformation. We’re not where we need to be. We’ve got a lot of room to improve.”5

So Spirit improved further:

  • Adjusted free cash flow improved from negative $84 million in the year prior to his arrival to $420 million in 2016, and $738 million in his final full year, 20156
  • In Larry’s first year, EBIT was negative $364 million. In 2016, EBIT was positive $725 million7
  • The year Larry took over, 2013; Spirit produced the worst earnings in its history. The next year, Larry’s first full year, Spirit generated its highest earnings ever and then repeated the feat in 2015
  • The Company repurchased nearly 10 million shares of Common Stock in 2014 and 2015
  • Over the course of his tenure, Returns on Invested Capital improved dramatically from -5% to 22%8
  • Under Larry, Spirit shares increased from under $19 to more than $47 – producing a total shareholder return (TSR) of 153%9

(Follow this link for a graphic illustration of Spirit’s TSR with Mr. Lawson as CEO: http://newarconic.com/content/uploads/2017/01/Spirit-TSR-under-CEO-Lawson-1024x695.jpg)

Don’t Take Our Word for It

Here’s how analysts have described Larry’s performance at Spirit:

“The company greatly improved its operations under the leadership of CEO Larry Lawson, and customer perception of SPR recovered where it is now more of a valued partner in the aero supply chain”. – Wolfe Research, 6/22/1610

“Simply put, shareholders love Larry Lawson. Why? Probably because he delivers results and that’s almost all that shareholders care about.” – Barclays, 6/9/16

“Having significantly improved SPR's internal structure, management, processes and financial performance, we think Mr. Lawson sees his mission as largely accomplished and the timing appropriate to pass the baton.” – Credit Suisse, 6/8/2016

“Over the past three years SPR, under the leadership of CEO Larry Lawson, has dramatically turned around the business. – Wolfe Research, 4/29/16

“In what has become a regular pattern for the company under CEO Larry Lawson, SPR posted another good quarter led by better-than-expected margins.” – Barclays, 10/27/15

“SPR has returned nearly 200% since naming Larry Lawson CEO in March 2013 vs. nearly 40% for the S&P 500…” – JP Morgan, 7/14/15

“Considering the changes Larry Lawson and his management team have implemented at SPR, we expect continued strength in execution to be attainable.” – BAML, 4/30/15

“SPR stock is up over 160% since Larry Lawson was named president and CEO of the company on March 19, 2013 effective April 6, 2013. Sentiment for SPR has improved as the company focused on controlling costs, generating positive free cash flow, and divesting the problematic G650 and G280 wing programs in Tulsa. In our view, market expectation for performance is now significantly higher for SPR than with the previous management team.” – BAML, 4/30/2015

“[H]e is a tough change agent with unrelenting demands on performance improvements. As such, we’re beginning to conclude that he might be just what SPR always needed.” – Barclays, 12/18/13

“SPR shares are up strongly since new CEO Larry Lawson’s arrival, a pattern we’ve seen elsewhere in the industry whenever investors seem to believe that a management change is the best possible catalyst for a turnaround in performance.” – Barclays, 8/13/2013

Mr. Lawson is well regarded for his experience with high rate aerostructures manufacturing. He has fostered good relations with large sophisticated customers, understands the needs of a unionized workforce, and has run highly profitable programs.” – Jefferies, 3/19/13

Why is a leader like Larry the right fit for Arconic?

Our assessment of Arconic is straightforward: Arconic has world-class assets and a world-class workforce, but it is run by a subpar management team which has failed to make the most of its capabilities. In contrast to Arconic’s management team, Larry understands the task at hand. Discussing Spirit, Larry said: “[I]t’s not easy to find 15,000 skilled people. And certainly, it isn’t easy to find 15 million square feet that’s capitalized with property – PPE and capital. So our job is to get the most out of that.”11For three years, Larry did just that. He got more out of Spirit than anyone ever had.

Arconic is bedeviled by operational issues similar to (although perhaps worse) than those faced by Spirit when Larry took over. By management’s own estimates, the process of rationalizing the Firth Rixson operation is three to four years (!) behind schedule.12 Arconic is having trouble delivering key parts to customers. Asset turns and labor productivity lag industry peers. Targets have been regularly missed and missed again. Free cash flow has been almost non-existent historically and is projected to be anemic in the future. Culturally, Arconic is a bureaucratic organization, run by management consultants, prioritizing image over substance, marketing over engineering. Its management team has lost the confidence of its shareholders and, worse, has surrendered its credibility with employees. Critical talent is leaving for competitors. Valued executives are retiring, exhausted not by the rigor of the job but by the frustration of dealing with a senior leadership with no aerospace experience that would rather appear at conferences or on TV than on the factory floor.

Larry is an operator’s operator. He is an engineer, not a salesman. Before Larry took over Spirit, he ran Aeronautics at Lockheed Martin. He was the General Manager of the F-35 program and before that the F-22. Larry was Lockheed’s Mr. Fix-It. When a program was at-risk of going adrift, Larry was brought in to steer the ship. To the most demanding customers (the armed forces of various nations) and with aircraft designed for the most critical roles (national defense), Larry produced. We do not expect Larry to make fancy films (see Arconic’s remake of the Jetsons), but we have confidence that Larry will deliver fan blades and more.

What is Arconic’s Board doing?

This isn’t a close call.

Imagine Arconic did not have a CEO today. To pick a new leader, the Board would consider certain key facts. More than 40% of revenue is from aerospace and aerospace is an even higher percentage of EBITDA. The rest of the sales are from automotive and other industrial applications. Operational issues abound. A recent acquisition is three to four years behind schedule. Key aerospace platforms have been spec’d out, and what matters most looking forward is disciplined execution.

To fill the CEO role, the Board is presented with two choices.

The first choice is a former marketing executive. He is charismatic and intellectually impressive. But he has no aerospace experience. He has never run a plant or worked on a factory floor. Most recently, in his current role, he has failed to hit any of his three-year targets. At his current company, under his leadership, his shareholders have the seen the value of their holdings plummet by nearly 70%.13 His TSR vs. Proxy Peers is dead last. Of the current S&P 500 companies that have been public since his tenure started, his TSR is the worst of any continuously-tenured CEO.14 Capital expenditures have soared, acquisitions have been made at rich prices, and returns at his organization have plummeted.

The second choice is a proven operator and exceptional capital allocator. He has 37 years of aerospace experience. He has built the most advanced airplanes in the world – the 787 at Spirit, the F-35 and the F-22 at Lockheed. In his last stint running a public company, his shareholders saw the value of their equity increase by 153%. His TSR vs. Proxy Peers is top quartile. During his tenure, record earnings were produced consistently and free cash flow improved from negative $84 million to $420 million.

Presented with these two options, the choice is obvious. Isn’t this in fact the decision before this Board today? CEOs do not hold the job by right. The Board must continually evaluate who should be running the company. Each day, the CEO is effectively hired by the Board. Unfortunately, a majority of Arconic’s Board seems to have forgotten this. We recognize there are extensive ties between some members of the Board and Dr. Kleinfeld. Not counting the directors added in the past two years, this Board has served a collective 40-plus years together. To each of you, Dr. Kleinfeld is not merely an agent or employee, but also a friend. However your obligations require objectivity unclouded by personal relationships.

Before this Board is an extraordinary opportunity – the chance to bring in someone of Larry Lawson’s caliber and turn Arconic around. He turned around Spirit and, if entrusted with this organization, he can be expected to produce world-class results.

We have now written you four letters. Many other large shareholders have weighed in echoing our assessment. By the rapid ascent of Arconic’s share price, even those shareholders who have said nothing have sent a similar message. If it wasn’t clear enough, let us reiterate: Do the right thing. Change is needed.

Lion Point Letter To Arconic

Lion Point Capital, LP (together with its affiliates, “Lion Point”) has been a shareholder in Alcoa since 2015 and we continue to be invested in Arconic Inc. (“Arconic”, or the “Company”) post the spin-off of the primary products businesses. Lion Point believes that the intrinsic value of Arconic materially exceeds the Company’s current stock price, and we welcome and support Elliott Management Corporation’s (“Elliott”) plan to unlock this value.

Lion Point Capital

Over the last couple of years, Lion Point has spent significant time and resources to understand the Company, including evaluating its historical operating performance and competitive position. While we see tremendous value and potential in Arconic’s world class assets, the market applies a persistent discount to what our analysis indicates to be fair value based on both private and public peer valuations.

We believe that the discount and consequent sub-par shareholder returns witnessed overtime are attributed to what objectively (both on a relative and absolute basis) can be described as poor capital allocation, significant and recurring execution missteps, undisciplined spending and miscommunication with the investment community. There is a stark dichotomy between the potential of the underlying assets and the results to date from their management. The burden and cost of this dichotomy have been borne by shareholders.

Lion Point believes that prudent capital allocation, disciplined cost control, focused execution and clear communication about the path forward are key to charting a new course for Arconic, and can drive substantial shareholder returns from here. Lion Point believes that Elliott’s plan for value creation can reverse the past and set new Arconic on a better path to creating shareholder value.

Unfortunately, the Company has engaged in a counterproductive (and ill-advised) PR campaign to defend against ideas that can dramatically improve the Company. Shareholders should not bear any longer the burden of such a purpose-defeating and value-destructive distraction, and we recommend that the Board promptly engage with Elliott in discussions to implement a plan to enhance shareholder value – much work lies ahead.

Mantle Ridge Letter to $CSX

I read with interest your press release announcing a special meeting to poll shareholders on their views about our proposals.

Hunter and I are committed exclusively to finding ways to maximize shareholder value here. We know that the Board shares this objective.

Because every day’s delay in beginning to implement Precision Scheduled Railroading (PSR) under conditions that enable its success costs the Company dearly, it is in the shareholders’ best interest that we promptly resolve this through negotiation rather than wait months. Continuing the exploration for common ground makes sense. As I have said in my earliest communications with you, and in each correspondence since, I am convinced there is ample room for agreement. We have been standing by since last week for constructive counterproposals and we are ready to discuss them as they arrive.

Early on in this process, I explained that we were looking to you to help us shape a solution that the Board would embrace, and that would best advance the shareholders’ objective of a swift and certain transformation. I made that clear in my January 24thletter to the Board. The relevant passage is below:

“You Are Necessarily the Leader of this Process

For a variety of reasons, you are uniquely positioned to lead: you know the Company, the people, and the dynamics at the Board and in the executive ranks; you have had dealings with me, and you know Hunter by reputation; you have engineered countless deals; and you have been through a somewhat similar (but the differences are greater than the similarities) experience in the past. We seek your guidance in supporting your leadership.”

We remain hopeful, Ned, that you and we can together craft a solution that works for all. If so the shareholder wins big.

In the spirit of continuing to engage with you pending the special meeting, I thought it would be useful for me to give you some high-level input on what you said in the press release, to discuss process, and a proposed path forward.

Governance

The press release suggests that Mantle Ridge is looking for “substantial board representation.” In fact, we are requesting only a single Mantle Ridge representative on the Board (me). Neither Hunter nor the other Board slots we discussed represents Mantle Ridge in any way.

The press release goes on to say that Mantle Ridge wants to designate six directors and suggests that granting our ask would grant us effective control. In fact, you and I were engaged in a process to identify high quality independent people that the Board and Mantle Ridge could embrace. As part of that process, I gave you a list (including lengthy bios) of 11 exceptional individuals with broad and relevant experience. None of them has any relationship with me outside of my efforts to recharge the CSX Board. Each one is entirely independent of me and is committed to acting in the best interests of all of the shareholders. Each one would make a superb board member.

You indicated to me that you were impressed with the list. You agreed that the Board would not consider any of the people on the list surrogates of mine, or anything but truly independent and qualified. I offered to arrange for you and the governance committee to meet any or all of the candidates. You assured me that there was no need to do that, since you were confident that together we could settle on people from that list once we settled on the other issues.

Why are we asking that new directors be added? As we’ve discussed, Precision Scheduled Railroading requires dramatic operational and cultural change. Change like that starts at the top, with significant new blood on the Board not wed to the old ways or legacy decisions and with no ties to any previous strategy or any one. The messaging to all concerned constituencies that the external change agent – Hunter – is coming in with very substantial support empowers Hunter. Conversely, without enormous board support, the outcome and rate of the transformation will be at risk. As Hunter said in our own press release, “if we create the right conditions for success, we have the best chances for success.”

When I mentioned “conditions for success,” you asked what that means. I explained to you and the rest of the Board that the conditions at CP were ideal (from early on during the transformation, new independent directors comprised a majority of the board). But I also said I think that something less than that would be workable at CSX and that I was open to exploring any proposals that you suggested could work. More generally, I have said repeatedly, that my view of how well a proposed governance deal will affect Hunter’s ability to succeed is based on an assessment of roll-offs, additions, and board roles/committees. No one of these dimensions can be considered on its own. They are a package. It is a balancing act. And different packages and permutations can work. The question before us is which package or permutation is acceptable to the Board, and sufficiently empowers Hunter to deliver for the shareholders.

I must confess, however, I was made somewhat cautious during this process. The Board’s letter to Hunter proposed that he be hired for only two years, not the four we explained was necessary. This raised concerns relating to the Board’s commitment to the transformation. That lack of commitment could create material risk to the timely and successful implementation of PSR. Having lived this, I cannot overemphasize the risk this brings to our delivering to shareholders the swift and certain transformation they want and expect.

With that in mind, I told you that the addition of three independent directors the Board offered was better than its initial offer of two. I suggested you take four back for consideration.

I also made clear that I was open to different approaches concerning how quickly the Board size comes down. I note that Tuesday’s press release could be read to say we were looking for the Board to drop down to 12 after John Breaux ages out in 2018. I never made that ask, and in fact I had just assumed that the reconstituted Board would find a replacement when he chooses to step down. I said that I considered Mr. Breaux a valuable member of the Board and explicitly said more than once that a retirement age cap should not get in the way of his continuing to serve for many years if that was his preference. I continue to hope he stays for a while.

Similarly, when we discussed committee composition and leadership, I gave you my thoughts but made clear that when the time comes we would sit down and agree on a list. I said that it made sense for the new directors to occupy a minority of the committee chairs. I explained that the committees that were most important for the transformation to succeed were Governance and Compensation and that it made sense that two of the independents occupy those.

For avoidance of doubt, Mantle Ridge has been seeking to add to the Board only one representative, plus Hunter, plus independent people. The sole prism through which we should evaluate the number of new directors that should be added to the Board is the best interests of the Company. That the board restructuring we are discussing comes in connection with an activist whose holdings are 5% of the Company, or 1%, or 15% is irrelevant. The size and nature of the restructuring should be solely a function of the shareholders’ best interests, which I think you agree requires installing Hunter and creating the conditions for him to succeed. No other consideration – the size of the proposing shareholder or otherwise – should be a factor. Mantle Ridge is in no way seeking or gaining control, and remains open to discussions about the details. This is not a “battle for control”.

Compensation

The press release suggests that Hunter is asking for a $300 million compensation package. In our view, that’s a major mischaracterization. Regrettably, it has confused the shareholders.

Hunter’s compensation package adds up to approximately $32 million per year for four years, of which approximately $20 million per year is explicitly performance based and should therefore be discounted in the customary and substantial way performance based grants normally get discounted for compensation and accounting purposes.

In addition to Hunter’s compensation package, there is a one-time cost of extraction from CP (i.e., the value Hunter forfeited in order to free him up from his two-year non-compete and allow him to work at CSX), which should not be viewed as compensation. That cost is $84 million plus a gross up of somewhere between $0 and $23 million (depending on Hunter’s tax position). Importantly, as you know, in no way does Mantle Ridge receive any economic gain from this arrangement. As a matter of fact, Mantle Ridge’s investors assumed this liability to effect the release of Mr. Harrison from his non-compete and make him available to solve CSX’s succession problem. This just covers that cost.

Aside from our different ways of characterizing the one-time cost of extraction, the main difference between our number and yours is the value of the option grant. The $160 million referenced in the Company’s press release confuses the matter. That figure does not fairly represent the economic cost of this package to the Company, or its value to Hunter. And it should not be the basis for evaluating the package.

As you and I discussed, in our view the proper way to think about that value is to view it against the unaffected stock price of $36.88 rather than today’s “Hunter rally” price. The market has already baked in anticipated strong execution by Hunter worth $10 per share and, since his strike price will be based on the inflated date-of-grant price, Hunter will receive no in-the-money value for that first $10 per share of his value creation. For this reason, we believe the economically correct view is that he was granted an option that is $10 per share out of the money on the day of grant. Viewed that way, the Black-Scholes value of the grant is only $78 million, and half of that grant is performance based (based on goals that no other CEO in this industry has reached) and as such should be accounted for at a large discount. It only has meaningful value if Hunter knocks the cover off the ball, in which case the magnitude of the package would be de minimis relative to the value he uniquely could create. And it would certainly be deserved.

This is the correct characterization of the economic cost of the package to shareholders and the economic value to Hunter. We had discussed this verbally a couple of times and you seemed to follow the analysis and accept the conclusion.

Importantly, because under the proposal Hunter’s options are so far out of the money relative to the pre-Hunter price, it is important that we never lose sight of the fact that his package is worth very little unless he performs spectacularly.

As with the governance proposal, we are looking for your guidance in shaping a deal that works for all.

Process

Ned, a lot of the points you raised in the press release could easily have been addressed through continued back and forth, but the back and forth stopped. Hunter and I (and our counsel) repeatedly asked for a counter on the compensation and governance terms, but we never received one. Instead, we have a special meeting that will distract current management and – more importantly – will delay roll out of PSR and disrupt the Company’s operations. When you compare this cost with the cost of the questions at issue, it becomes clear that the Board should redouble its effort to get a settlement. Again, you are clearly the best party to get us there, and we continue to look to you for guidance on proposals that would work.

With that in mind, as you and I gear up for the special meeting, I remain open to engaging constructively with you in a way that could bring this to a more rapid and satisfactory close for the shareholders.

Proposal

Over the last 24 hours, I have spoken to many shareholders of the Company. Without exception, they share our eagerness to get Hunter into the seat as quickly as possible under conditions for success that would enable him replicate the CP transformation. They agree that the cost to the Company of delaying this outcome until a Special Meeting gets scheduled in April, or possibly later, is dear. None of us wants to wait.

I would ask the Board to consider the clarification of the underlying economics of Hunter’s compensation package we provide above and to reconsider whether they can consider accepting it, or at least providing a counter proposal.

Concerning the governance proposal, this is a soft and tricky exercise in judgment that balances additions, roll-offs, and roles/committees. If the Board can commit to a process that promptly gets us to a four-year deal with Hunter, that will in my mind be a sufficient gesture of commitment that we can go forward with the addition of me and Hunter and three of the independent directors (rather than the four in our last proposal), with continued discussion concerning roll-offs, committee composition, and roles.

Ned, we have come a long way. We are close. We owe it to the shareholders to get a deal done promptly. Let’s do it. If you are willing, we are glad to meet in person and hammer this out this weekend, hopefully delivering good news to the shareholders early next week.

As before, I've taken the liberty of copying the other members of the Board as well as Ms. Fitzsimmons. Ms. Fitzsimmons, please pass on copies of this letter to every other Board member.