Pages 8-9 of the Glass Lewis Proxy Paper present an analysis of the shareholder “Proposal 3.”  Glass Lewis expresses a favorable view of the proposal’s purpose but has reservations about the restrictive form of the provisions, and therefore recommends that shareholders vote against it.

Alternative Views:

Another proxy advisory firm, Institutional Shareholder Services ("ISS"), in its August 11, 2004 “Proxy Analysis,” stated essentially the same favorable view of the proposal’s purpose and negative view of its specific form, but noted that the proposal was non-binding and therefore recommended voting for rather than against it as “a signal for the company to take action.”

The company’s largest institutional shareholder, Private Capital Management, in its SEC filing of a letter to the company dated August 6, 2004, had expressed the same views about the positive purpose and restrictive form of the proposal, and based on that stated its intent to vote against the proposal.

Pages 4-6 of the Proxy Paper present Glass Lewis’ analysis of the independence and other qualifications of director nominees.

On pages 4-6, particular attention is focused on a question raised by the Forum about the independent status of the audit committee chairman, Walter P. Schuetze, in the context of the company’s proxy statement disclosure of a $125,000 additional payment to him for “extraordinary services” relating to the recent investigation of the company's prior revenue recognition practices.  (Glass Lewis had initially classified Mr. Schuetze as an “affiliated” director but in a revision this afternoon changed his classification to “independent.” There were no changes, however, in the Proxy Paper’s original review of Mr. Schuetze’s consulting relationship which had continued until April 2002 or his past year’s additional services.)  Specifically in relation to the 2004 additional compensation, Glass Lewis has stated its opinion that

(a) the compensation seems fair, or even modest, for the work;

(b) there appears to be no question of Mr. Schuetze's integrity being compromised;

(c) although the company does not explain his "extraordinary services," it is reasonable to assume that they could be categorized as additional services in his capacity as a board member rather than as a consultant for purposes of an NYSE or SEC determination of his regulatory qualification as an "independent" director; and

(d) whether he is considered "independent" or not, Mr. Schuetze is a highly qualified and valuable director.

Page 6 includes comparatively brief recommendations to withhold votes for the incumbent director nominees Russell M. Artzt and Alfonse M. D'Amato because they had been serving on the board during the period in which admitted misconduct took place, referring specifically the misreporting of revenues during the 2000 and 2001 fiscal years.  (Glass Lewis has not, however, recommended voting against other nominees who served as directors during later periods of admitted misconduct, prior to the board’s recent response to SEC demands for corrective actions.)

Alternative Views:

The other proxy advisory firm, ISS, did not address any issues relating to Mr. Schuetze’s additional compensation or his prior consulting relationship, and classified him as an “independent outside” director.  No other issues of independence or conflicts were addressed by ISS, in relation to Mr. Schuetze or any of the other directors, even though ISS’s August 11, 2004 “Proxy Analysis” reviewed the history of management misconduct and summarized three shareholder lawsuits seeking recovery of damages from current directors.  ISS simply recommended voting for all of the nominees.

On page 7 of its Proxy Paper, Glass Lewis raises the issue of KPMG’s suitability as the company’s independent auditor.  The firm notes that although the company’s proxy statement presents only the required disclosure of recent history for the years back to 2002, KPMG had in fact been appointed to serve as auditor starting in fiscal year 2000.  Glass Lewis states that KPMG’s responsibility for periods during which restatements were required “raises serious concerns about the auditor's performance.” Based on that, Glass Lewis expresses its view that “rotation” of auditors would be appropriate and therefore recommended that shareholders vote against KPMG’s ratification.

Alternative Views:

ISS did not address any issues relating to the auditor’s suitability, other than to observe that “the auditor's report contained in the annual report is unqualified,” and recommended voting for ratification of KPMG’s continuing engagement.