-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PcXAoJSvef3txCLIrKdrjo9ALqHP7RiY0m+YM/v9oSUvyKKKLPzZ8l/ZJKIbe0rw /e1qa8VR/gwsvjmwKgBgtA== /in/edgar/work/20000721/0000950130-00-003997/0000950130-00-003997.txt : 20000921 0000950130-00-003997.hdr.sgml : 20000920 ACCESSION NUMBER: 0000950130-00-003997 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000721 GROUP MEMBERS: PPM AMERICA CBO II MANAGEMENT COMPANY GROUP MEMBERS: PPM AMERICA FUND MANAGEMENT GP, INC. GROUP MEMBERS: PPM AMERICA INC/IL GROUP MEMBERS: PPM AMERICA SPECIAL INVESTMENTS CBO II, L.P. GROUP MEMBERS: PPM AMERICA SPECIAL INVESTMENTS FUND, L.P. GROUP MEMBERS: PPM AMERICA, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ELDER BEERMAN STORES CORP CENTRAL INDEX KEY: 0000032020 STANDARD INDUSTRIAL CLASSIFICATION: [5311 ] IRS NUMBER: 310271980 STATE OF INCORPORATION: OH FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-53669 FILM NUMBER: 677069 BUSINESS ADDRESS: STREET 1: 3155 ELBEE RD CITY: DAYTON STATE: OH ZIP: 45439 BUSINESS PHONE: 9372962700 MAIL ADDRESS: STREET 1: 3155 EL BEE ROAD CITY: DAYTON STATE: OH ZIP: 45439 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PPM AMERICA INC/IL CENTRAL INDEX KEY: 0000898417 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 363714794 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 225 W WACKER DR STREET 2: STE 1200 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3126342500 MAIL ADDRESS: STREET 1: 225 W WACKER DR STREET 2: SUITE 1200 CITY: CHICAGO STATE: IL ZIP: 60606 SC 13D/A 1 0001.txt AMENDMENT NO. 5 TO SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 5)* THE ELDER-BEERMAN STORES CORP. ________________________________________________________________________________ (Name of Issuer) Common Stock, no par value per share ________________________________________________________________________________ (Title of Class of Securities) 284470101 _______________________________________________________________ (CUSIP Number) Stuart J. Lissner, Managing Director, PPM America, Inc. 225 West Wacker Drive, Suite 1200, Chicago, IL 60606 (312) 634-2501 ________________________________________________________________________________ (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 Rule 13d-1(c), 13d-1(f) or 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 Rule 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 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). SCHEDULE 13D - ----------------------- CUSIP NO. 284470101 - ----------------------- - -------------------------------------------------------------------------------- NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PPM America Special Investments Fund, L.P. 36-4086949 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware, USA - -------------------------------------------------------------------------------- SOLE VOTING POWER 7 NUMBER OF None SHARES ------------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 1,231,244 OWNED BY ------------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ------------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 1,231,244 - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,231,244 - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 8.25% - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 IN - -------------------------------------------------------------------------------- SCHEDULE 13D - ----------------------- CUSIP NO. 284470101 - ----------------------- - -------------------------------------------------------------------------------- NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PPM America Fund Management GP. Inc. 36-4086845 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware, USA - -------------------------------------------------------------------------------- SOLE VOTING POWER 7 NUMBER OF None SHARES ------------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 1,231,244/1/ OWNED BY ------------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ------------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 1,231,244/1/ - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,231,244/1/ - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 8.25% - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 CO - -------------------------------------------------------------------------------- __________________________ /1/ All of the securities covered by this report are owned legally by PPM America Special Investments Fund, L.P. ("SIF I"), and none are owned directly or indirectly by PPM America Fund Management GP, Inc. ("SIF I GP"). SIF I GP is the general partner of SIF I. As permitted by Rule 13d-4, the filing of this statement shall not be construed as an admission that SIF I GP is the beneficial owner of any of the securities covered by this statement. SCHEDULE 13D - ----------------------- CUSIP NO. 284470101 - ----------------------- - -------------------------------------------------------------------------------- NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PPM America Special Investments CBO II, L.P. 98-0179401 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - ------------------------------------------------------------------------------ SOURCE OF FUNDS* 4 OO - ------------------------------------------------------------------------------ CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - ------------------------------------------------------------------------------ CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware, USA - ------------------------------------------------------------------------------ SOLE VOTING POWER 7 NUMBER OF None SHARES ----------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 735,624 OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 735,624 - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 735,624 - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 4.93% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 PN - ------------------------------------------------------------------------------ SCHEDULE 13D - ----------------------- CUSIP NO. 284470101 - ----------------------- - -------------------------------------------------------------------------------- NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PPM America CBO II Management Company 98-0179391 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware, USA - -------------------------------------------------------------------------------- SOLE VOTING POWER 7 NUMBER OF None SHARES ------------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 735,624/2/ OWNED BY ------------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ------------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 735,624/2/ - -------------------------------------------------------------------------------- AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 735,624/2/ - -------------------------------------------------------------------------------- CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - -------------------------------------------------------------------------------- PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 4.93% - -------------------------------------------------------------------------------- TYPE OF REPORTING PERSON* 14 CO - -------------------------------------------------------------------------------- ______________________ /2/ All of the securities covered by this report are owned legally by PPM America Special Investments CBO II, L.P. ("CBO II"), and none are owned directly or indirectly by PPM America CBO II Management Company ("CBO II GP"). CBO II GP is the general partner of CBO II. As permitted by Rule 13d-4, the filing of this statement shall not be construed as an admission that CBO II GP is the beneficial owner of any of the securities covered by this statement. SCHEDULE 13D - ----------------------- CUSIP NO. 284470101 - ----------------------- - -------------------------------------------------------------------------------- NAMES OF REPORTING PERSONS 1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PPM America Inc. 36-3714794 - -------------------------------------------------------------------------------- CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* 2 (a) (b) [X] - -------------------------------------------------------------------------------- SEC USE ONLY 3 - -------------------------------------------------------------------------------- SOURCE OF FUNDS* 4 OO - -------------------------------------------------------------------------------- CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [_] 5 - -------------------------------------------------------------------------------- CITIZENSHIP OR PLACE OF ORGANIZATION 6 Delaware, USA - -------------------------------------------------------------------------------- SOLE VOTING POWER 7 NUMBER OF None SHARES ------------------------------------------------------------- SHARED VOTING POWER BENEFICIALLY 8 1,966,868/3/ OWNED BY ----------------------------------------------------------- EACH SOLE DISPOSITIVE POWER 9 REPORTING None PERSON ----------------------------------------------------------- SHARED DISPOSITIVE POWER WITH 10 1,966,868/3/ - ------------------------------------------------------------------------------ AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11 1,966,868/3/ - ------------------------------------------------------------------------------ CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* 12 [_] - ------------------------------------------------------------------------------ PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 13 13.18% - ------------------------------------------------------------------------------ TYPE OF REPORTING PERSON* 14 IA - ------------------------------------------------------------------------------ ______________________ /3/ All of the securities covered by this report are owned legally by SIF I or CBO II, and none are owned directly or indirectly by PPM America, Inc. PPM America, Inc., is the investment manager/adviser of both SIF I GP and CBO II GP. As permitted by Rule 13d-4, the filing of this statement shall not be construed as an admission that PPM America, Inc., is the beneficial owner of any of the securities covered by this statement. This is Amendment No. 5 to a Statement on Schedule 13D with respect to the common stock, without par value (the "Common Stock"), of The Elder-Beerman Stores Corp., an Ohio corporation (the "Company"), filed by a group comprised of PPM America Special Investments Fund, L.P. ("SIF I"); PPM America Fund Management GP, Inc. ("SIF GP"); PPM America Special Investments CBO II, L.P. ("CBO"); PPM America CBO II Management Company ("CBO GP"); and PPM America, Inc. ("PPM America" and, collectively with SIF I, SIF GP, CBO and CBO GP, the "Reporting Persons;" PPM America, SIF I and CBO II, collectively, the "PPM Group"). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Schedule 13D, as amended. Item 2. Identity and Background ----------------------- On July 19, 2000, the members of the PPM Group, the Company, all but one of its directors and Snyder Capital Management, Inc. (the Company's largest shareholder) ("Snyder"), entered into the Settlement Agreement to end the PPM Group's pending proxy contest with the Company. 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 1. The Company 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 Company's 2000 Annual Meeting. Messrs. Bookshester and Turner were recommended by Snyder. Messrs. Berner and Davis were recommended by the PPM Group. At a meeting thereof held on July 21, 2000, the Company's Board of Directors approved the nomination of the New Nominees and recommended such New Nominees for approval by the shareholders at the Annual Meeting. Pursuant to the Settlement Agreement, the Company further agreed, subject to the requisite approval of the shareholders at the Annual Meeting, (i) to amend Article X of the Company's Amended Articles of Incorporation (the "Articles") to reduce from 72% to a simple majority the shareholder approval required to amend or repeal any section of the Articles, (ii) to amend Article IX of the Articles to eliminate classification of the Board of Directors, (iii) to adopt a new Article XIV to the Articles pursuant to which the Company would opt out of Ohio state law provisions that restrict an Ohio corporation's ability to engage in certain transactions with shareholders holding 10% or more of the corporation's voting power, (iv) to amend Regulation 34 of the Company's Amended Code of Regulations (the "Regulations") to reduce from 72% to a simple majority the shareholder approval required to amend or repeal any regulation, (v) to amend Regulation 3(a) of the Regulations to permit special meetings of shareholders to be called by a shareholder or shareholders owning 10% rather than 50% of the outstanding Common Stock, (vi) 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 Company's shareholders, (vii) to amend Regulation 12 of the Regulations to relax the advance notice provisions in connection with shareholder nominations of candidates for election to the Company's Board of Directors, (viii) to amend Regulation 9 of the Regulations to reduce from 72% to a simply majority the shareholder approval required to alter the size of the Board of Directors, and (ix) to adopt a new Regulation 35 to the Regulations pursuant to which the Company would opt out of the provisions of the Ohio Control Share Acquisition Act. At a meeting thereof held on July 21, 2000, the Company's Board of Directors approved the amendments to the Company's Articles and Regulations and recommended such amendments for approval by the shareholders at the Annual Meeting. Pursuant to the Settlement Agreement, each party thereto (other than the Company) also agreed to cause all shares of Common Stock beneficially owned by such party to be voted at the Annual Meeting in favor of (i) the amendments to the Articles, (ii) the amendments to the Regulations and (iii) the election of the New Nominees to the Board of Directors, all as set forth therein. Furthermore, each party to the Settlement Agreement (other than the Company) agreed that, besides the proposed amendment to the Company's Equity and Performance Plan to increase by 500,000 the number of Common Shares available under such plan, it would not bring any business before the Annual Meeting except as expressly contemplated by the Settlement Agreement. The PPM Group agreed pursuant to the Settlement Agreement (i) to immediately terminate all activities with respect to its solicitation of proxies in connection with the Annual Meeting, (ii) to not solicit directly or indirectly any proxies or participate in any solicitation of any proxy with respect to matters to be presented at the Annual Meeting, other than solicitations in favor of the amendments and director nominations set forth in the Settlement Agreement, (iii) to not become a participant in any election contest relating to the Annual Meeting, (iv) to promptly file an amendment to the PPM Group's Schedule 13D to reflect the termination of the proxy contest and the other provisions of the Settlement Agreement, and (v) 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 Company) 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 75 days prior to the first anniversary of the Annual Meeting, such party (a) shall cause all shares of capital stock of the Company 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 Annual Meeting so that all such shares may be counted for the purpose of determining if a quorum is present at the Annual Meeting, (ii) to be voted in favor of all of the proposed amendments to the Company'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 Annual Meeting; (b) shall not directly or indirectly (except through the Company 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 Common Stock in any election contest with respect to the Company's Board of Directors or become a participant in any election contest with respect to the Company'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 Company'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 Common 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 Company'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 Agreement (other than the Company) agreed to refrain from calling a special meeting of shareholders during the 75 days leading up to the Company'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. The Board of Directors of the Company 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 Company 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 Annual Meeting or in the event that the Company 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. Item 6. Contracts, Arrangements, Undertakings or Relationships with Respect to ---------------------------------------------------------------------- Securities of the Issuer. ------------------------ See Item 4 above. Item 7. Material to be Filed as Exhibits. -------------------------------- 1. Agreement, dated as of July 19, 2000, by and among The Elder- Beerman Stores Corp., PPM America, Inc., PPM America Special Investments Fund, L.P., PPM America Special Investments CBO II, L.P., Snyder Capital Management, Inc., and certain directors of the Company. Signature After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: July 20, 2000 PPM America, Inc. By: /s/ Stuart J. Lissner ------------------------------ Name: Stuart J. Lissner Title: Managing Director PPM America Special Investments Fund, L.P. By: PPM America Fund Management GP, Inc. its managing general partner By: /s/ Stuart J. Lissner ------------------------------ Name: Stuart J. Lissner Title: Managing Director PPM America Fund Management GP, Inc. By: /s/ Stuart J. Lissner ------------------------------ Name: Stuart J. Lissner Title: Managing Director PPM America Special Investments CBO II, L.P. By: PPM America CBO II Management Company, its General Partner By: PPM MGP (BERMUDA), LTD. As Managing General Partner of the General Partner By: /s/ Stuart J. Lissner ------------------------------- Name: Stuart J. Lissner Title: Vice President PPM America CBO II Management Company By: PPM MGP (BERMUDA), LTD. its Managing General Partner By: /s/ Stuart J. Lissner ------------------------------- Name: Stuart J. Lissner Title: Vice President EX-1 2 0002.txt AGREEMENT DATED AS OF JULY 19, 2000 Exhibit 1 --------- AGREEMENT --------- THIS AGREEMENT, dated as of July 19, 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: 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; (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; -2- (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; (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. -3- 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. 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. Elder-Beerman, PPM and Snyder 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. 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 -4- 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 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 -5- 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; (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 -6- 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. 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 -7- (3) if to Snyder: Margot Murtaugh Snyder Capital Management, Inc. 350 California Street Suite 1460 San Francisco, CA 94104 Fax: (415) 391-9437 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. -8- (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. (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 -9- 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: /s/ Frederick J. Mershad ---------------------------------------- Name: Frederick J. Mershad Title: Chairman of the Board and Chief Executive Officer /s/ Dennis S. Bookshester ----------------------------------------- Dennis S. Bookshester /s/ Stewart M. Kasen ----------------------------------------- Stewart M. Kasen /s/ Charles Macaluso ----------------------------------------- Charles Macaluso /s/ Steven C. Mason ----------------------------------------- Steven C. Mason /s/ Frederick J. Mershad ----------------------------------------- Frederick J. Mershad /s/ Thomas J. Noonan, Jr. ----------------------------------------- Thomas J. Noonan, Jr. -10- /s/ Bernard Olsoff ----------------------------------------- Bernard Olsoff /s/ Laura H. Pomerantz ----------------------------------------- Laura H. Pomerantz /s/ Jack A. Staph ----------------------------------------- Jack A. Staph /s/ John J. Wiesner ----------------------------------------- John J. Wiesner -11- PPM AMERICA, INC. By: /s/ Stuart J. Lissner ------------------------------- Name: Stuart J. Lissner Title: Managing Director PPM AMERICA SPECIAL INVESTMENTS CBO II, L.P. By: PPM America CBO II Management Company its General Partner By: /s/ Stuart J. Lissner ----------------------------- 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: /s/ Stuart J. Lissner ----------------------------- Name: Stuart J. Lissner Title: Vice President SNYDER CAPITAL MANAGEMENT, INC. By: /s/ Alan Snyder ------------------------------- Name: Alan Snyder Title: President -12- ANNEX A ------- FORM OF JOINT PRESS RELEASE -13- -----END PRIVACY-ENHANCED MESSAGE-----