STAMFORD, Conn., June 30 /PRNewswire/ -- Dolphin Limited Partnership I, L.P., a Stamford, CT based private investment partnership and an affiliate which hold approximately 330,000 shares, or 4%, of the Class A common stock of Johnson Outdoors Inc. (Nasdaq: JOUT), today issue the following letter to all JOUT shareholders:
Dolphin Limited Partnership I, L.P.
Ninety-Six Cummings Point Road
Stamford, Ct 06902
Fax E-Mail
(203) 348-3715 partners@dol-fin.com
June 30, 2005
Dear Fellow JOUT Shareholder:
Dolphin Limited Partnership I, LP, with an affiliate, is now the fourth largest shareholder of Johnson Outdoors Inc., with approximately 330,000 shares of Class A common stock. We have been a shareholder since March 8, 2004 . Although we last communicated with you on May 4, 2005 , we have been busy on behalf of all JOUT shareholders. Specifically --
* we are introducing a shareholder proposal at the Company's annual
meeting requesting the board to take steps necessary to provide for
cumulative voting for the Class A common stock in accordance with
Wisconsin law;
* we are pursuing a document request under Wisconsin law to assist us in
determining whether the JOUT board has and is effectively focused on
generating shareholder value; and
* we have been pressing for a meeting with the Company's chairwoman and
chief executive officer so that we can review the Company's direction
and strategic priorities.
Unfortunately, our efforts to obtain information and to obtain an audience with the CEO have been met with inexplicable resistance and delay, as we describe for you below.
We do not believe that the board of directors of the Company has earned or is entitled to our confidence or support. ACCORDINGLY, WE INTEND TO CAST OUR VOTES FOR THE CUMULATIVE VOTING PROPOSAL AND TO WITHHOLD OUR VOTES FOR THE COMPANY'S INCUMBENT NOMINEES FOR THE CLASS A DIRECTORS. WE URGE ALL UNAFFILIATED HOLDERS OF CLASS A COMMON STOCK TO DO THE SAME.
Dolphin's Shareholder Proposal
As you know, JOUT recently issued its proxy statement for its annual shareholders' meeting. Included in this statement is Dolphin's proposal calling upon the board to take steps to implement cumulative voting for the Class A common stock to elect a representative to the Company's board. Although the Class A shareholders have been entitled to elect 25% of the board since JOUT became a public company, as a practical matter, public shareholders have not been in a position to elect even a single director.
The Company had scheduled the annual meeting for June 2, 2005 ; however, shortly after Dolphin delivered its proxy proposal to JOUT, the Company announced a nearly two month delay in the annual meeting date. Delay seems to us to be a consistent theme at JOUT.
Dolphin's Demand for Books and Records
On March 4, 2005 , under Wisconsin law, Dolphin delivered a formal request for certain minute books and accounting records of the Company. The purpose of this request was to inform the exercise of Dolphin's rights as a significant JOUT shareholder to evaluate whether this board has been and is now actively seeking to generate shareholder value. Under law, the Company was required to fulfill this request within five business days.
We have been informed that the Company will not provide the requested records, so that we must bring an action to enforce our rights. We have invited the Company to provide us with any basis in the Wisconsin statutes or its case law in support of the Company's refusal to comply with its obligations to produce the requested records. It has chosen not to do so.
DOLPHIN WILL BE COMMENCING AN ACTION IN WISCONSIN TO OBTAIN THE BOOKS AND RECORDS THAT WE REQUESTED NEARLY TWO MONTHS AGO AND THAT WE BELIEVE WE ARE CLEARLY ENTITLED TO UNDER LAW.
In our view, this board has recently wasted two years, millions of dollars in corporate assets and management energies on a failed inadequate going private transaction. These energies and funds could have been applied to the business of the Company and its strategic direction. The Company now seems bent on dissipating additional corporate funds to obstruct our valid information requests made in compliance with Wisconsin law and causing further delay.
Dolphin's Request for Dolphin Had Sought a Meeting with JOUT's CEO to Review the Company's Direction
For the past two months, prior to the release of the Company's proxy statement, we have earnestly sought an in-person one-hour meeting with chief executive officer, Helen Johnson-Leipold, in order to review the Company's direction and strategic objectives. For Ms. Johnson-Liepold's convenience, we offered to go to the Company's headquarters in Racine, Wisconsin. First we tried to reach Ms. Johnson-Leipold through the Company's proxy solicitor. We received no answer. Next, we attempted to make arrangements through the Company's outside counsel. Again, we received no satisfactory response. Then, we tried to reach out to Ms. Johnson-Liepold through the Company's investor relations contact. Again, we were met with delay. Finally, several weeks ago, I called Ms. Johnson-Liepold myself. She did not take or return my call.
Ultimately, the investor relations contact offered us a meeting with Ms. Johnson-Liepold in July, months after our initial request. Apparently, Ms. Johnson-Liepold could not find an hour in her schedule before mailing the Company's annual proxy to meet with us. This is not only incredible; it is also not credible.
The Company Has Failed to Generate Value for Shareholders
With the current share price approximately $17.50 /share (the Company has never had a stock split, or paid a cash or stock dividend), we believe JOUT has failed to provide any real value for its shareholders since its initial IPO at $15.50 /share 18 years ago and a secondary offering at $19.50 /share in 1998.
As you also know, between March 31, 2005 and May 4, 2005 we made two financial proposals, not subject to financing, to purchase approximately 1.5 million Class B common shares at $21.10 /share and $21.75 /share. Both these proposals were at a significant premium to the current market price of the Company's stock and the failed $20.10 going private transaction led by Ms. Johnson-Liepold. We invited any unaffiliated financially capable shareholder to participate pro rata in these offers, so that these proposals were made to benefit all unaffiliated shareholders. As we have already told you, the Company quickly dismissed both of these proposals without explanation.
Where This Leaves Shareholders
We believe the Company remains substantially undervalued in the marketplace. Unaffiliated shareholders have no elected advocate on the board and the results show it! The CEO appears to believe that it is appropriate to simply ignore or put off one of its largest shareholders. As far as we can tell, management neither has a strategic plan to create value for all shareholders nor is it receptive to a genuine exchange with its shareholders as to how such value can be created.
We know of the 'just say no defense'; this appears to be a different twist -- 'SAY NOTHING, DO NOTHING' -- for which there can be no defense or excuse.
WE INTEND TO VOTE OUR SHARES FOR OUR PROXY PROPOSAL TO INSTALL CUMULATIVE VOTING. If this proposal receives the support of a majority of the unaffiliated shareholders and the board carries out their will, the 54% of unaffiliated Class A shareholders would at long last have the opportunity to elect a representative to what we believe has thus far proven to be an ineffectual board. With the current nomination of yet another director affiliated with from the Johnson family of companies, this board continues to become even more insular.
WE ALSO INTEND TO WITHHOLD OUR VOTES FROM THE COMPANY'S INCUMBENT NOMINEES FOR THE CLASS A DIRECTORS. We believe that the board and top management need to receive the message that the Company's unaffiliated shareholders believe that the Company's performance and governance is unsatisfactory.
WE URGE ALL UNAFFILIATED SHAREHOLDERS TO JOIN WITH US IN MAKING THEIR
VOICES HEARD.
Very Truly Yours,
Donald T. Netter
Senior Managing Director
Contact: L. Bolster
(203) 358-8000
SOURCE Dolphin Limited Partnership I, L.P.
