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Frank StantonFrank Stanton
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Session:         Page of 755

Stanton:

--that's part of the deal. If it's a family company--I know of one where we bought the whole company, but we insisted in the buying of it that the family buy twenty per cent back at the price we paid for our shares and that they manage the company. They have a contract to management, but with a stake. That's the way to lock them into getting the best. It's a motivational device to keep them interested in the company.

Then, of course, they profit two ways. They get the original eighty per cent, let's say, and then the twenty per cent, if it appreciates--and we wouldn't buy it unless we thought it was going to appreciate--then they appreciate on their twenty per cent the same as we do. But no, no, the management has to be locked in. We wouldn't take something over and put in new management.

Now, there are some exceptions. There's one under consideration now that I don't want to identify, where, if we buy it--and it's a rather large enterprise--if we buy it from a foundation, we would insist on putting new management in, because it's in the sad state that it's in because management just isn't up to the requirements.

But Loehmann's is a good example. George Greenberg was part of the package, and he benefited from the deal, and benefited to such an extent that he wanted to become part of AEA. That is, an investor, not on the staff. And he is in the group. But for the most part people who come in as part of a purchase don't come into the investment group. They're simply management for that particular enterprise.

Q:

You mentioned that Lazarus was one of the people who was able to provide some





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