| | (d) As previously announced, effective September 26, 2005, Richard C. Perry, the co-founder of investment management firm Perry Capital LLC, was elected to the Registrant's Board of Directors. Mr. Perry will hold office until the 2006 annual meeting of the Registrant's stockholders, or until his successor is duly elected and qualified. Mr. Perry was not named to any committees of the Board of Directors in connection with his election. On May 3, 2005, investment affiliates of Perry Capital LLC, through Capital Factors LLC, acquired the business and assets of Capital Factors, Inc. Perry Capital LLC is controlled by Perry Corp., which in turn is controlled by Mr. Perry. Capital Factors LLC and its predecessor (collectively, "Capital Factors") provide factoring services to companies in various industries, including those that sell into the retail industry. From time to time, Capital Factors has factored receivables (payables of the Registrant) for certain of the Registrant's vendors, who sell the receivables to Capital Factors on a nonrecourse basis for collection by Capital Factors. As a result of Capital Factors having provided factoring services to vendors of Sears, Roebuck and Co. ("Sears") and Kmart Corporation ("Kmart"), amounts were paid to Capital Factors by Sears and Kmart in respect of payables of those companies aggregating approximately $60 million in 2004 and $12 million in 2005 (through August 20 05). The Registrant expects that Capital Factors will continue to factor receivables for certain of the Registrant's vendors. The Registrant believes that Capital Factors handles approximately $3 billion in factoring volume. |
