Petters Group Magazine Winter 2006 by goodwida

:: T A B L E

of CONTENTS

: :: :: :: ::: :: :: :: ::: :: :: features 40 : : INSIDE GLANCE PETTERS HOSPITALITY Peek inside Petters Hospitality as they introduce Polaroid LCD televisions to a new industry.

42 : : PETTERS MEDIA GROUP Leveraging Petters Group resources to build stronger companies.

galleries 22 : : JOHN T. PETTERS FOUNDATION Party of the Year! See pictures and details from the first annual Legacy Gala.

26 : : CHARITABLE GIVING GALLERY A summer of fun charitable events is captured in pictures.

50 : : PEOPLE & PLACES From pets to parties, see events across the country.

ON THE COVER POLAROID : : Known worldwide for its instant film,

Polaroid is now re-emerging as a brand to contend with in the consumer electronics industry.

26 IN

every

22 ISSUE

letter from tom

:: 6

letter from andrea

:: 8

around the companies

: : 28

connecting points

:: ::: :: :: :: ::: :: :: :: ::: :: :: :: ::: :: ::

departments 30 : : MAKING A DIFFERENCE

35 : : VALUES

JIM WEMHOFF Taxes, a dreaded word for many but for Jim Wemhoff he finds it a means to educate people.

LARRY HARMER Running a company is like balancing on a ball.

38 : : THE LEARNING CENTER Summer internships go beyond filing and answering phones.

32 : : EXECUTIVE PROFILE RICK ENGLES A deep dive is more than just a hard look at the numbers for CFO Rick Engels.

where in the world is tom?

: : 53

48 : : CORNERSTONES

the petters matrix

Process – Ask, Don’t Guess, What Would Legal Do?

: : 54

reality bytes

WINTER

2006

:: PETTERSGROUP

LETTER from TOM

fter the first edition of Petters Group magazine came out, I often heard people say “I didn’t know all of these companies even existed!” If you know more now, the magazine is doing its job. Bringing you information about our diverse collection of companies is one reason this magazine exists. We have investments in more than 60 businesses and we actively manage more than 20. The more you know about them, the better equipped you’ll be to help us act on opportunities to connect them in mutually beneficial ways and leverage their respective strengths. A new addition to the family – too new, in fact, to be a major feature in this issue – is Sun Country Airlines. With our partner Whitebox Advisors, we completed the purchase of Sun Country at the end of October. Sun Country is a terrific business, just beginning to be recognized as a gem in the airline industry. The opportunities for growth here are outstanding. We’ll act on growth opportunities at Sun Country as we do in all of our businesses: by leveraging capital, technology, brands, innovation and – most of all – our collective minds and talents. One way we’re keeping our minds open, engaged and challenged is through our continuous learning programs. One of them is the Learning Lunches organized by human resources. These lunches offer opportunities to expand our knowledge on a variety of topics. Among the topics we can’t know enough about is how to work better across borders and cultures. Many of you are already working with people globally as product distribution and manufacturing have now extended beyond the United States and China. Trips to Mexico,

Spain, Italy, Austria, Germany, Brazil, Japan, Central America and other countries are becoming more common as the call for our products and services grows. Another way we emphasize learning at Petters Group is through our internship program, now in its fourth year. Nearly 50 students joined us this past summer in Minnetonka and, for the first time, at the Boston and China offices. The feedback from the interns was terrific. When you hear, “This is an experience that will

“I not only use all the brains that I have, but all that I can borrow.” — WOODROW WILSON

stay with me for the rest of my life,” you realize how important the program is to the students and to the company. We are looking to expand the intern program into fall, winter and summer sessions. As Petters Group grows in both scope and scale, having the right person at the helm is critical. While we will always be an entrepreneurial and opportunistic enterprise, we also want to be one that is disciplined about decision-making, operationally excellent and financially sound. Since joining Petters Group, Mary Jeffries has become the champion and driving force for establishing controls, processes and systems that enable us to act on our opportunities and strategies. We’re recognizing her influence, contributions and commitment by naming her President of Petters Group Worldwide. Congratulations to Mary – and to all of you – for a terrific 2006. I’m looking forward to 2007 with more excitement and confidence than ever.

TOM PETTERS

WINTER 2006

LETTER from ANDREA

THE SEASON

OF CHANGE

ne would have a hard time convincing me there is a more beautiful location in the world than Minnesota during the peak of fall. Mother Nature has painted our landscape with brilliant, indescribable shades of yellow, orange and red. Then as quickly as they appear they are gone as the grays of winter set in. As with many aspects

of our lives, we anticipate the change, we are excited to see it happen and then we are leery about what will come next. Many of the portfolio companies of Petters Group Worldwide are in one of these stages of change right now. Throughout this issue of the Petters Group magazine you will see stories about some companies that are re-launching, some that are reorganizing and others that are combining their efforts to create something new. Accepting change for some of us is easy while others need to know exactly what all of this means. It is especially at these times where the Core Values of Petters Group â&#x20AC;&#x201C; Innovation, Agility, Caring, Humility, Execution and Integrity â&#x20AC;&#x201C; are called upon from our people. It is our goal to help you make these more than just words you see on plaques around our offices but to help bring them into how you do business both internally and externally. We have made changes to two sections of the magazine this time in order to include stories focusing on the Core Values and the Cornerstones. As foundations of how Petters Group operates, we wanted to share the stories of how people and ideas have incorporated them into their everyday lives.

ANDREA MILLER

:: PETTERSGROUP

VOLUME 1 ISSUE 2 PUBLISHER Thomas J. Petters

EDITORIAL EDITOR Andrea Miller

andrea.miller@pettersgroup.com ASSISTANT EDITORS & WRITERS

Tiffany Nash, Mollie O’Brien CONTRIBUTING EDITOR Laura Putzer

Laura Bartlett, Bud Fisher, Tristan Galvan, Tom Gilgenbach, Kristen Hamilton, Larry Harmer, Sheryl Hirsch, Ann Karsh, Ann Kieren, Elizabeth Millard, Liz Orenstein, Lorrie Parent, Kathy Radley, Sharleen Reyes, Joe Schmit, Nurlan Urazbaev

CONTRIBUTING WRITERS

ART DESIGN/ART DIRECTION Heather Nelson CONTRIBUTING DESIGNERS

Jenna Akre, Yola Hartmann, Dave Koehler, Jess Lowenberg, Dana Oelfke, Emily Sederstrom, Sarah Sucansky CONTRIBUTING PHOTOGRAPHERS

Todd Buchanan, Tate Carlson

CIRCULATION CIRCULATION DIRECTOR Corey McMahon

ADVISORY BOARD Bill Dunlap, Rick Engles, Mary Jeffries, Patty Hamm, Steve Harper

Special Thank You to the staff of Metropolitan Media Group for all their assistance in producing Petters Group magazine. —————————————————————————— HOW TO REACH US ADDRESS >

Petters Group Worldwide

4400 Baker Rd., Minnetonka, MN 55343 Provide feedback, story ideas and events to cover to magazine@pettersgroup.com REPRINTS >

Contact Tiffany Nash at

Petters Group is published by Metropolitan Media Group exclusively for Petters Group Worldwide.

UPFRONT

around the companies

Sun Country’s CEO Shaun Nugent conveyed messages of growth during the news conference with Tom Petters of Petters Group and Andy Redleaf of Whitebox Advisors.

WELCOME TO THE FAMILY Sun Country Airlines Joins Petters Group

s Sun Country Airlines continues its growth, the need for additional capital to fuel the expansion became apparent. Petters Group Worldwide and Whitebox Advisors have stepped forward and purchased Sun Country. At a news conference held at the Sun Country hangar near the Minneapolis/St. Paul airport on October 31st, more than 200 employees, guests and media gathered to hear from the new Chairman, Tom Petters and CEO, Shaun Nugent. “Our entire organization is very excited to Sun Country employees at the news be a part of the Petters conference Ronnie Tallen, Amy Group family of compaJungwirth and Michael Wielinski nies,” Nugent said. “This is a significant move for the future of Sun Country.” The acquisition will provide Sun Country with the

:: PETTERSGROUP

capital to continue the growth momentum of expanding the airline’s offerings. Plans to expand the airline include continued development of a strong consumer product focused on service targeted at both leisure and business travelers while maintaining the high level of customer service that has made Sun Country a consumer favorite for the past 25 years. Sun Country currently offers scheduled service to more than 31 destinations in the United States, Mexico and the Carribean. Their amenities such as low cost upgrades to first class, comfortable leather seats on new Boeing aircraft and easy access from the Humphrey Terminal, have attracted many loyal Sun Country customers. The exceptional service provided by the Sun Country team continues to be the guiding principal for the company’s success. Clearly the formula is working…Sun Country Airlines was recently ranked as one of the top ten domestic airlines in both Travel+Leisure’s World’s Best list and Conde Nast Traveler’s Top 100 reader poll. Look for a feature on Sun Country in the next Petters Group magazine.

DID YOU KNOW?

Great Place to Work MINNETONKA OFFICE

PRODUCT SPOTLIGHT

Viewing Digital Photos Made Easy

VOTED INTO TOP TEN

NEW POLAROID FRAME HITS MARKETS

he Minneapolis/ St. Paul Business Journal conducts a survey of employ-

olaroid is making it easier than ever to enjoy digital photos with a line of

ees every year to find the

Polaroid Digital Photo Frames. The new

“Great Places to Work”

frames look just like picture frames, but that’s

in Minnesota. This

where the similarities end. They read flash memory cards to display hundreds of digital pho-

year, the employees in

tos in customized slide shows. And they’re versatile because they can use a variety of flash

the Minnetonka office

memory cards commonly used by digital cameras. The frames come in 5”, 7” and 10” sizes

voted Petters Group as one of the “Great Places to Work.” “To get the call that we were in the top ten of mediumsized companies was a great day,” Patty Hamm, EVP of Human Resources and Learning Center said. “We try very hard to create a special culture for the employees, so to hear their feedback in this manner shows us we are right on target.” The announcement came out August Aug. 18th in a special section of the Business Journal and was announced to employees with an executive served breakfast. The luncheon honoring the 45 companies who

and are available at CVS, Wal-Mart and Circuit City. Zak Kroschel, Consumer Electronics Product Manager for Polaroid Consumer Electronics, said the digital photo frame is sure to be a big hit. “We’re making it incredibly easy to view and share digital images that otherwise might stay on a computer, never to be seen again. A flash memory card can hold hundreds of images so your view is always changing.” Basic features include the ability to create slide shows and select intervals between photos. Some even come with a remote control for the ultimate in viewing convenience. Other features on the larger 10.4” model include the ability to watch video formats or play MP3 music files, allowing the viewer to match music to the photo album. Future goals are to include a subscription service that adds value and makes the product even more interesting. “Digital imaging advancements will let users send or receive personal photo albums via the Internet to friends or family with a photo frame and an Internet connection. The service is extremely affordable so it should encourage the purchase of additional units to be used as gifts. Time will tell, but this could be the hottest Christmas present for 2006,” Kroschel said.

had won was not held until September 21st which was perfect timing to coincide with Employee Appreciation

YEARS OF HOME RUNS : :

Week. Eight employees, nominated for

Red Sox Tickets Awarded

their demonstration of their Core Values, attended the luncheon at the Hilton downtown with the executive team of Petters Group and Polaroid. With an approval rating of 91.08, Petters Group ranked fourth in companies with 200-1000 employees in Minnesota. “This was quite an honor. We want to thank everyone who voted and for their important feedback about the company,” Hamm said.

POLAROID IS FORTUNATE to have so many employees with more than 30 years of experience, and many of them entered a drawing for Red Sox tickets. We appreciate their interest and their service to the company. By chance, both of the winners are from the R-5 Battery Plant, and both have 33 years of service with Polaroid. Congratulations to Donna Barry, Materials Technician IV and Tom Crittenden, Senior Evaluation Technician for winning the Red Sox tickets. A special thank you to all our employees with extensive years of service. WINTER 2006

UPFRONT

around the companies

Polaroid Donates Corporate Archives To Harvard Business School

he Polaroid Corporation Archives, a unique collection of materials that document the evolution of the company and its innovations, have been donated to the Harvard Business School’s Baker Library. Housed in the library’s Historical Collections, the Polaroid Corporation Archives include approximately 1.5 million items dating from the company’s founding in 1937 to the present. The collection also chronicles the invention of instant photography by Polaroid founder Dr. Edwin H. Land, as well as company press clippings, packaging, employee newsletters, and annual reports. Artifacts within the collection include sunglasses, military goggles, 3D glasses, and examples of many of the camera models and accessories Polaroid produced from the early 1950s to the late 1990s. Portions of the collection will be available for research use in mid-2007.

The Polaroid Corporation Archives also contain a vast and comprehensive set of photographs taken by Polaroid employees and professional photographers from 1937 to the 1990s. These images were taken for research purposes during the testing of new Polaroid products and as part of the company’s advertising campaigns. The donation, with all expenses funded by Harvard Business School, was the result of discussions led by Brad Kullberg, VP Corporate Business Development, with the Baker Library which culminated in an agreement signed earlier this year. Tom Petters, Chairman of Polaroid, said the archives reflect Polaroid’s dynamic evolution. “We’re committed to honoring and preserving the legacy of Dr. Land and the evolution of Polaroid as the company continues to grow its successful consumer electronics and eyewear businesses, and looks to expand in other categories.” “We are very pleased that these materials, which capture a vital part of American innovation, will be preserved at Harvard Business School,” Tom Beaudoin, Polaroid CFO/COO said. “By sharing the archives, Polaroid hopes to inform students of history and inspire generations of entrepreneurs.”

PARTY IN MALIBU : :

Polaroid Beach House Hosts the Stars IT WAS PARTY TIME AT THE POLAROID BEACH HOUSE IN MALIBU this summer as Alist celebrities gathered at the exclusive ocean-front estate for a series of high-profile events. The project took place over six weeks in July and August and included naming rights for the residence. The Polaroid Beach House proved to be the hot hangout, but the real success can be measured by the astonishing amount of publicity Polaroid received from the caliber of events held there. The lavishly decorated California home was decked out with large flat panel TVs, digital and instant cameras, and portable DVD players allowing the Hollywood “it” crowd to interact with Polaroid’s latest gadgets. In addition to Polaroid, several other companies

:: PETTERSGROUP

sponsored products for the events. A sampling of those products included Lia Sophia jewelry, Alterna hair care products, 267 Infusions flavored vodka, and Restoration Hardware home furnishings. The first and largest event, Lindsay Lohan’s 20th birthday bash, drew such celebrities as Owen Wilson, Woody Harrelson, Nicole Richie, Courtney Love and Ivanka Trump. Other Polaroid Beach House events included a World Cup viewing party, a dinner hosted by Molly Simms, Mommy-and-Me Day, and a clam bake attracting celebrities Leonardo DiCaprio, Jeremy Piven, Paris Hilton, and Kate Bosworth, to name a few. The high-profile functions were coordinated by Fingerprint Communications, a Los Angeles-based public relations firm, in conjunction with

the internal marketing team at Polaroid. The Polaroid Beach House was the place to see and be seen this summer, resulting in an outstanding coverage in national magazines, including People, InTouch, Life & Style, and US Weekly. In addition, the Polaroid Beach House was featured on Access Hollywood, E! News and The Insider. The media exposure garnered from these events translates to great publicity for the Polaroid brand as the company looks to connect with a younger generation of people who may not be as familiar with Polaroid as their parents.

PETTERS GIVES INSIGHT INTO DOING RIGHT : :

FLYING IN STYLE : :

First Airbus A318 purchased

ASK TOM PETTERS about

PriceWaterhouseCoopers, Robert

his business model and you

Kierlin, Fastenal Company and Warren

are sure to hear a firm set

Staley of Cargill. As the world contin-

of ethics running through

ues to globalize, this issue has become

PETTERS GROUP WORLDWIDE has entered into an agreement with Airbus to acquire an Airbus A318 Elite private corporate jet, becoming the first US customer for such aircraft type. Based in Minnetonka, Minn., Petters

everything he does. Although this comes

ever present and increasingly impor-

naturally to him in this day and age, it is

tant. The authors gave CEOs like

Group plans to use its subsidiary Petters Aviation to

a lesson that must be taught to many

Petters the opportunity to share their

manage the A318 Elite for private corporate domestic

others with the drive to become success-

experiences with ethical issues that

and international flights.

ful in a profit-driven world.

have challenged them over the years

“Airbus’ A318 Elite is a best-in-it’s class corporate jet.

and how they dealt with them. Former

We look forward to an on-going partnership with Airbus

book written by Louis DeThomasis

CEO of Federal Signal Corporation,

in developing the North America business jet market,”

and Neal St. Anthony, was released in

Joseph J. Ross said of the book, “I

Tom Petters, Chairman and CEO of Petters Group said.

August on this controversial topic and

think this book should be on the desk

includes an interview with Tom Petters,

of every corporate leader, student,

member of the Airbus corporate jetliners. It delivers

and several other top corporate CEOs

entrepreneur, not-for-profit manager

more in features such as fuel-saving wingtip-fences,

including Brad Anderson from Best

—basically anyone who is involved in

cost-saving centralized maintenance and weight-saving

Buy Co., Nicholas Moore,

the free enterprise system.”

composites.

Doing Right in a Shrinking World, a

The Airbus A318 Elite is the newest and smallest

PARTY WITH THE STARS Polaroid Lounge at MTV Awards Draws Much Attention In-between sipping champagne and Godiva coffee drinks, enjoying foot massages by Dr. Scholl’s, and signing up for YFly, guests made their way through the Polaroid Lounge and indulged themselves with the hottest denim, sunglasses, jewelry, accessories and, of course, Polaroid electronics. The PDX-0074 blue Polaroid DVD player was a hit with both Snoop Dogg and Christian Slater. Panic! at the Disco, the band that took home the Best Video of the Year, will now be

olaroid rolled out the red carpet and played host to a pre-

snapping their photos in style with their new m635 digital cameras. In

party to MTV’s Video Music Awards at the exclusive

exchange for a digital camera, Carson from Queer Eye for the Straight Guy

Marquee nightclub in New York City on August 29th and

shared a bit of unsolicited, but much needed, fashion insight with

30th. The event attracted up-and-coming as well as established

Polaroid’s Zak Kroschel. Among other celebrities who flocked to the

musicians and actors who were treated to a little pampering lead-

party were Nick Lachey, Vanessa Minnillo, Wyclef Jean, and Dylan

ing up to the big night.

McDermott. WINTER 2006

UPFRONT

around the companies

20 YEARS OF RUNNING T

he Polaroid 10K Road Race Series in the United Kingdom marked its 20th Anniversary with yet another record breaking year. The series of four 10K road races attracted in excess of 1,000 entrants, including a large number of Polaroid Scotland employees, both past & present! Participants who entered all four events, which took place over a three week time period, were given Polaroid sport sunglasses and a Polaroid branded T-shirt. The series, sponsored by the Polaroid Vale of Leven site, promotes health through active participation not only for Polaroid employees, but also for the surrounding communities where they live and work. The event has grown from its humble beginnings in 1987, when a group of Polaroid employees started the event with 150 participants, to have over 1,000 racers in 2006. Today, the event is recognized as the Premier Road Race Series in Scotland. With the support of Polaroid over the years, thousands of pounds have been donated to enable growth in athletics at grass roots level within the 13 local primary schools. Many students participated in the ‘Fun Run’ at the Vale of Leven event which started and finished at Loch Lomond Shores this year and attracted more than 3,000 visitors. To view the history and best selection of images over the years, visit www.polaroid-10k.co.uk.

10K Road Race Marks 20th Anniversary

FOURTH ANNIVERSARY MARKED WITH RECORD SALES

IN EARLY NOVEMBER, FINGERHUT

contributes nearly 10% of the total company

DIRECT MARKETING celebrated

sales for the year, so strong Big Book

the fourth anniversary of its first

performance is critical to success.

catalog mailing amid excellent sales and sales growth. The 2006 sales are promising

from this year’s Big Book already in, we expect

tions and when the year comes

to exceed last year’s record Big Book sales of

to a close in early February,

over $25 million,” he said. It’s not only the Big Book that is doing well. “It

to exceed last year’s level by a

seems we’re breaking records every day. We just

substantial margin.

enjoyed our biggest day ever with over $2.5 million

Fingerhut was already

in sales. We’ve broken records on the web, and

enjoying record growth when

we’ve reached new heights in our distribution

this year’s holiday season

center with record levels of packages,” Safford said.

kicked off in early October

:: PETTERSGROUP

so far. “With over half the sales that will result

to exceed everyone’s expecta-

they expect growth for the year

Bob Safford, Fingerhut’s Chief Marketing Officer is extremely pleased with Big Book sales

As Fingerhut enters the 2006 home stretch,

with the Holiday Big Book.

they are looking forward to their first-ever

This one catalog

$3 million dollar day just after Thanksgiving.

PRODUCT SPOTLIGHT

: : Back-to-School, Back to Color

POLAROID LAUNCHES THREE COLORED PORTABLE DVD PLAYERS BACK-TO-SCHOOL MEANS STOCKING

“Colored portable DVD players offer a devi-

more than pencils, notebooks, and glue

ation from the standard black or silver

sticks for Target stores; this fall it also

units customary on store shelves.” These

means stocking the new Polaroid red, blue,

three portables will also make for a great

and orange portable DVD players.

companion to the 7” portable DVD player

“As we see portable DVD players com-

with wireless headphones already on Target

moditizing, Polaroid is finding another way

shelves. “We feel our ability to differentiate

to differentiate from what other brands are

our product from the rest of the pack adds

offering,” Jim Koestler, VP Products said.

great value for the Target guest,” Steve Ratliff, SVP Polaroid Domestic Sales said. In addition, the trendy colors illustrate Polaroid’s trust in Target’s ability to know its guest, their interests, and what will sell. Not only do the players come in three colors, they also feature soft-touch paint – a smooth, softer finish, popular with customers. “With today’s fastpaced families always on the go,

KEY MANAGEMENT NEWS : : Joe Schmit

Joins PMG BORN IN WISCONSIN, JOE SCHMIT IS A GREEN BAY PACKERS FAN WHO “SAW THE LIGHT AND BECAME A VIKINGS FAN” when he moved to Minneapolis in 1985 to be a sportscaster. Schmit spent 20 of his 21 years in broadcast news at KTSP Channel 5 in Minneapolis/St. Paul as a sportscaster, and the last year as news anchor. He describes doing the sports as his “dream job,” covering Superbowls and Finals Fours. However, he realized he was missing moments, family moments, and that he needed a change. Petters Media Group was formed to connect the companies and offerings within the companies of Petters Group as well as to outside customers. Tom Petters wanted Schmit to be a part of it and seeing a

the addition of soft-touch rub-

great opportunity, he came onboard.

berized exterior provides sure

“The sky is the limit! There is no

grip, extra protection, and

question that we have lots of venues to

added durability,” Koestler said.

go after, from companies Petters

The colored portables were

Group owns to companies they have

featured in a Target circular

business relationships with to poten-

advertisement, as well as dis-

tially new business partners. We want

played on a large colorful end

a ‘full court press’ on media and mar-

cap in Target stores. “This is

keting, involving TV, internet, airlines

great business for Polaroid,”

and our own companies at Petters

Ratliff explained. “With Target’s

Group,” Schmit said.

back-to-school season and

Schmit said that in the TV world

push into the fall months, we

you’ve got to be a salesman and it’s

could not have won this busi-

“all about relationships,” which deliver

ness at a better time.”

every time.

WINTER 2006

UPFRONT

around the companies

RIDING THE WAVES Aaron Chang Promotes Local Surf Tournaments

aron Chang is supporting the lifestyle of surfing by attending local surf competitions and photographing all the action at the events. In June, Chang attended the Folly Beach Wahine Classic in South Carolina, a surf tournament for wahines (women surfers) of all ages and skill levels. More than 90 female contestants entered and Chang captured memorable shots of the surfers during their best moments in the water. Following the event, Chang autographed posters and presented a special slide show called “Living in the Light” featuring his most prominent photographs from his travels. “Grassroots marketing opportunities such as the Folly Beach Wahine Classic are a means for Aaron Chang International to reach out to up and coming women surfers with hopes to organically build a following of dedicated surf enthusiasts,” Norm Zwail, President of Aaron Chang International said. He added, “The recent addition of Kristen Hamilton

A VICTORY FOR PROJECT MANAGMENT : : CARRIE MASSINE, PROJECT OFFICE MANAGER for Petters Group Worldwide, received the “Project Manager of the Year” award at eProject, Inc.’s user conference in Seattle on October 26th. Massine was selected from a global group of nominees, all of whom are customers of eProject’s project management software. Her participation in the development of Petters Group’s “Streetwize Project Management” program was a key reason for her

:: PETTERSGROUP

as Director of Marketing and PR will further expose the brand in the action sports world, as well as increase awareness to a broader fashion audience through her years of experience in the fitness and fashion industry.” Aaron Chang International, a portfolio company of Petters Group, is looking to host and attend more competitions like the Folly Beach Wahine Classic in the future to show support for the core surf culture and promote the company’s new collections of swimwear and lifestyle activewear. The Aaron Chang Spring 2007 Collection, to debut in stores later this year, is being regarded as its finest to date with the recent launch of Fluid Soul, a surf inspired active lifestyle brand.

selection. The program emphasizes practical just-in-time training linked to capabilities rather than heavy methodology training sometimes called for in traditional project management programs. Founded in 1997, eProject provides web-based project management software that allows geographically diverse managers and team members to share information and show progress against objectives. eProject is used by more than 475 customers worldwide including BASF, BP, Dow Chemical, Honeywell, RealNetworks and Petters Group Worldwide.

KEY MANAGEMENT NEWS : : Mike Peterson

Leads PCE European Ventures

GUARANTEED ADS

Transforming Digital Signage into a Mass Medium number of major deployments in

unveiling a BroadSign-powered digital video

North America and Europe in the

wall at the brand new Playboy Club in Las

first three quarters of 2006 has

Vegas. Other high-profile networks are to be

solidified BroadSign’s position as a leading dig-

announced soon. Intellimats, LLC has started

(PCE) TEAM in the spring as

ital signage software provider. The BroadSign

a pilot program to test its network of innova-

Vice President of the

Suite software has been enhanced to give

tive digital display mats in 10 Source by

European Product Group. His back-

clients more versatile functionality and media

Circuit City stores in Canada.

ground is uniquely diverse; he first

power. It creates and operates large digital sig-

“In televison broadcasting, the stations

went into engineering and designed

nage networks, manages media space invento-

can only guarantee the signal left the trans-

ry, and executes advertising, promotional and

mitter. It is very expensive to determine

information campaigns.

which televisions were on during a specific

MIKE PETERSEN JOINED THE POLAROID CONSUMER ELECTRONICS

automobiles at Ford, including the Mustang Cobra, and spent weekends on the race track. After business

school at the University of Michigan,

The release of BroadSign

Petersen went to Dell designing and

Suite 5.0 has companies around

marketing Dell notebooks. He moved

the world turning to BroadSign

back to Minnesota this spring to join

Suite for their advertising and

PCE, working closely with Scott Hardy and Larry Harmer. Petersen is bullish on Polaroid’s

signage needs. This summer the 5.0 version finally resolved the

exciting future and said that Polaroid

advertising industry’s concerns

is “truly leading the curve in the way

over accountability in digital

global business is successfully run.

signage, promoting it into the

We are able to act globally, yet respond

same class of efficiency as online marketing.

locally, as we leverage the dynamic

commercial. We can now guarantee not only

The latest company to sign up with

that the ad was scheduled and uploaded to

BroadSign Suite is Netherlands’ largest in-

the playback device, but also that the screen

pany that is ahead of the game

store network, operated by POSTV, which

was on and showed the right content,” Brian

because their thin line strategy enables

signed on early this year. Neo Advertising is

Dusho, EVP Sales and Marketing of BroadSign

them to keep costs down, yet at the

using BroadSign’s software to run its Swiss

International said. “This gives the industry

same time improve customer satisfac-

retail networks and is expanding into the

unprecedented accountability and eliminates

Spanish and German markets. The Hess

any debates about what digital signage net-

Petroleum gas station network, operated by

works should bill advertisers.”

changes that are occurring daily.” He believes that PCE is a truly global com-

tion. By building products in the territories where they are sold, it enables a reduction in product costs and

DynaTek Media, is deploying it to multiple

The latest edition of the software was

Petersen recently moved his family to

locations in Florida, with the aim of ensuring

deployed remotely and seamlessly from the

Vienna, Austria to be closer to our man-

1,000 sites are online by the end of 2007.

Network Operations Center in Montreal. One

ufacturing facilities and spend more

Manhattan-based NightVision Network LLC

of the key features is how it facilitates meas-

has replaced its software with BroadSign Suite

urement of sales uplift resulting from ad cam-

as part of a nationwide expansion into pre-

paigns, so retailers can analyze detailed play

portfolio and lead part of our European

mier nightclubs and bars. PlayNetwork has

logs against the point-of-sale data. BroadSign

sales organization.

marked its move into the digital signage field,

is a portfolio company of Petters Group.

improves customer delivery flexibility.

time with our European customers. He will be there for the next two to three years to manage our European product

WINTER 2006

UPFRONT

around the companies

MOVE OVER HAMMER AND NAILS : :

Element Electronics Debuts at Home Depot

MAKING WI-FI WAVES Soniqcast To Reveal New Products

s the Wi-Fi technology industry catapults forward, Soniqcast is making sure they maintain a competitive edge with their products as they collaborate with Fortune 100 companies to create a never-before-seen technologies for the marketplace. They have created a product with wi-fiWi-Fi technology, enabling direct-to-device download of audio and video content to portable MP3 products. The product also features Bluetooth technology, enabling users to listen to audio with wireless headsets or transmit audio to an automotive receiver stereo without wires. The SoniqCast’s customer, a Fortune 100 wireless technology company has also been very involved in developing designs and content partners for the product and technology. In fact, Soniqcast’s customer has made, a deal with a content provider-another Fortune 100 media company-has been made to allow users to discover new music on their device based on their personal music preferences. A monthly subscription will enable users to listen to 2 million songs, choose their favorites, and use the device to search for more music similar to those songs. Kurt Thielen, Soniqcast CEO, said, “This will completely enhance the music discovery process. The technology will continue pushing music to your device based on your preferences, and you can sort the music and put it into any playlist you desire, without the help of a computer.”

:: PETTERSGROUP

BY ANN KIEREN

The new device will have a soft launch the 1st quarter of 2007 to get the product into the hands of the press and receive industry reviews. Thielen said, “This is a huge opportunity for Soniqcast, with the potential to generate 100,000 of units of sale per year, and the possibility of selling 1,000,000 down the road.” Soniqcast is also working with Polaroid to develop a next generation portable media player that enables the consumer to watch movies “on the go”. The device will be similar to a portable DVD player, without the DVD, and also will be much smaller and lighter than a portable DVD player, with the ability to store much more content. The two companies are working to develop a product line with screens that will range from 2.8 inches all the way up to 10 inches. Soniqcast is working with a number of content providers to find content for their devices. They are also working with Polaroid to provide unique value added integration capabilities between their products so that the Soniqcast’s product can work seamlessly with Polaroid’s other products. The objective between the two companies is to develop a very easy to use product that enables consumers to leverage free digital content on their device. Thielen said, “The existing synergies between Soniqcast and Polaroid, and the fact that they have similar objectives, provides a very good opportunity for the two companies to leverage on Petters Group’s investments.”

ELEMENT ELECTRONICS is hitting Home Depot store shelves with a couple of hot products just in time to kick off the 4th quarter holiday season. Element Electronics, a portfolio company of Petters Consumer Brands, is introducing an LCD TV and portable DVD player at select Home Depot locations across the country. “As Home Depot plans for the holiday selling season, it’s looking to Petters Consumer Brands for a broader, deeper product assortment. Element Electronics is the answer,” Jim Koestler, VP Products said. The PDZ081E, a new 8” portable DVD player with red exterior, and the FLX-3202, a 32” high definition widescreen LCD TV, are sure to turn the heads of Home Depot customers with their dramatically clear picture and bold stereo sound. Scott Hardy, Executive Vice President of Petters Consumer Brand’s Product Group said, “In preparation for Black Friday and the holiday season, Home Depot will have the shelves stocked with Element Electronics branded products because of their sleek designs, impressive specs, superb usability, and hot price points. Although Element Electronics is new to consumers, we are confident that introducing this brand before the holidays will bring significant awareness and recognition.” More information on Element Electronics can be found at www.elementelectronics.com.

EXTENDING THEIR REACH uBid.com Extends its Reach with SkyAuction.com, uBidShopper, and Bidville.com

Bid Holdings, Inc. announced a partnership in May with SkyAuction.com, providing new travel auction and sales deals. The travel services offered through this partnership are unique because of the uBid.com platform, which has proven to provide exceptional value for consumers in other product categories. Both companies offer a significant competitive advantage compared to other popular online travel retailers such as Orbitz or Expedia, which offer auction formats. Robert Tomlinson, Jr., CEO of uBid.com said, “We are pleased to announce a partnership with SkyAuction.com that will enhance our customer’s experience by offering quality auctionrelated travel vacations and packages in addition to our other offerings.” The uBid.com-SkyAuction.com partnership will offer “Bid On” or “Buy Now” airline tickets, hotel rooms, tours, cruises, and all-inclusive

PRODUCT SPOTLIGHT

vacations. The new partnership will offer unprecedented deals on leading airlines, hotels, resorts, and cruise lines, bringing customers brands they know and trust, while offering the most amazing travel bargains available on the internet. uBid has not stopped there, launching uBidShopper with SmartShopper.com. The new uBidShopper is a downloadable, comparison shopping software service designed for uBid.com customers. The software is free to use and is based on SmartShopper.com’s proprietary comparison shopping tool. When users search for products or new travel deals online, the uBidShopper tool conveniently appears in a separate browser pane with a list of relevant offers from uBid.com’s related product categories. If an item is not available from uBid.com, the tool uses SmartShopper.com’s technology to scour thousands of other online

BY ANN KIEREN

merchants and present a broad selection of product, travel and merchant information. The final move by uBid.com, a public company in which Petters Group invests, was to strengthen their position with the purchase of Bidville, Inc.’s key assets in order to expand uBid.com’s customer base and technology platform. The purchase of the online auction company’s assets includes Bidville’s customer file, brand name, URL and related online auction technologies. Tomlinson said, “Bidville’s consumer-to-consumer platform is complimentary to uBid.com’s current business-toconsumer and business-to-business marketplace. It not only provides us with a new marketplace to expand our business but it also represents a great opportunity to cross-sell our current business to new customer prospects.”

Polaroid Puts GPS on its Radar 5.6” LCD PREMIERES WITH THE MARKET FOR GPS (Global Positioning Satellite) growing faster than ever, Polaroid is cashing in by introducing its own GPS. A portable Polaroid GPS with 5.6” LCD and a built-in DVD player has already debuted at Target, and will soon appear at three more stores: Sam’s Club, Wal-Mart and CircuitCity.com. GPS uses satellites in the Earth’s orbit to pinpoint your location to within ten feet. With built-in maps and sophisticated routing software, the Polaroid GPS shows you the fastest route to get where you’re going, even offering voice prompts to tell you when and where to turn. Polaroid GPS units will also offer millions of points of interest including restaurants, airports, gas stations, hotels and more. Carl Alleman, Product Manager for GPS said, “The entire GPS category Destinator MGM-0550 has more than doubled in the past year and I’m optimistic we will also succeed. Even with skyrocketing gas prices, people continue to drive more than ever which in turn drives the need for a unit that keeps them pointed in the right direction.” Alleman said this unit should be a compelling niche play because it has a large, bright LCD screen and a built-in DVD player. “Our 2-in-1 GPS/DVD not only keeps customers pointed in the right direction, it keeps passengers entertained. That should make long trips for road-weary families a lot more fun,” Alleman said. His team is already making plans for additional GPS units that are sleeker, smaller and have even more features for 2007. One unit on the drawing board will even include voice command technology. That unit should find its way to store shelves in the near future.

WINTER 2006

around the companies

UPFRONT

The contract is for the evaluation of technologies that could mitigate security vulnerabilities at airports. The AACPP will allow Unisys to identify the operational benefits achievable through increased use of biometrics, surveillance and other security measures. This project will evaluate and demonstrate a wireless credential that would be used to verify the identities of truck drivers bringing loose cargo to an air cargo warehouse. “Conclusive identification of registered shippers is critical to transportation security,” Robert Allen, Vice President of Business Development Fidelica Develops Biometric Badge of Fidelica Microsystems said. “Our fingerprint imaging technology was designed to enable biometric authentication in s airports work to satisfy the security expectations of its customers, employers credentials as thin as a credit card.” SpringWorks, a division of Petters Group and policy makers, biometrics is rapidly becoming the most practical and ubiquitous invests in Fidelica whose fingerprint imaging authentication method for conclusive identity ver- devices have been considered by the TSA for ification. Unisys Corporation has selected Fidelica their unique attributes which facilitate personal Microsystems, Inc. and Abeo Corporation to biometrics privacy as well as enable biometric deliver a biometric badge for their Wireless authentication deployments which take advanPersonal Identification Credential project. This tage of investments already made. AACPP is overseen by TSA’s Office of the project, part of the Transportation Security Administration’s sponsored Airport Access Chief Information Officer. The WPIC project is Control Pilot Program (AACPP), will be conduct- in the final stages of its development and is ed at the Washington Dulles International Airport. scheduled to be demonstrated in the fall of 2006.

ID PLEASE

CHAT IT UP

: : YFly Adds Celebrity Chats to Website

YFLY.COM CO-FOUNDERS DREW LEVIN and

tures; and delivering the ultimate connection

Danny Perkins re-launched their new and

point between real athletes, actors, and musi-

improved social networking site Oct. 1st.

cians to their fans,” Perkins said.

Partnering with singer/celebrity Nick Lachey,

YFly, a portfolio company of Petters Group

they created a site for teenagers to provide

based in Los Angeles, feels both the celebrities

users with the most entertaining networking

and Generation Y users benefit from the plat-

experience available online. This puts users in

form. The fans on the site know they are not

the prime position to socialize with their

interacting with an imposter and the celebrities

favorite celebrities all on a secure platform.

are able to update them from a personal level,

“We took a good look at our competition of

dispelling tabloid rumors and giving a behind

MySpace and Facebook and knew we could

the scenes look at their lives. “The opportunity

raise the bar for online networking. We focused

for celebrities to break their own news and get

our attention in 3 areas: making the site fast

direct feedback from their fans is extremely

and easy to use; developing entertaining fea-

valuable,” Lachey said.

:: PETTERSGROUP

KEY MANAGEMENT NEWS : : Graeme Ogle

Oversees Polaroid Eyewear POLAROID HAS WELCOMED GRAEME OGLE to the team as the new Human Resources Senior Account Manager for Polaroid Worldwide Eyewear. A new position for Polaroid Eyewear, Ogle was brought in to partner with the Eyewear Leadership, where he will continue to develop the Eyewear culture, drive change and ensure they have the right people, in the right jobs, in the right structure. He will also be working with Polaroid Consumer Electronics in Europe to expand the business development capacity to firmly establish themselves as an important player in the European consumer electronics marketplace. Ogle is strongly suited to lead the HR function and ensure Human Resources is well positioned to support these growing businesses. He has extensive experience in business partnerships, employee relations, performance management and compensation and benefits. A graduate of the Strathclyde Business School in the UK with a BA (Honors) in Industrial Relations, he is a member of the Charted Institute of Personnel and Development since 1996. Previous positions include working as a Recruitment Consultant for Melville Craig and serving as HR Manager for CIGNA International, European Region. At CIGNA, he was the Business Partner for two Pan-European businesses and partnered with CIGNA’s shared service functions, including actuarial, IT, legal and finance. “It was a wonderful experience and gave me the opportunity to significantly expand my professional knowledge and personal development, which I hope to be able to apply and continue to develop within Polaroid,” Ogle said.

ET CETERA

: : Values Message: CARING

THIS YEAR WAS THE FIRST YEAR FOR PETTERS GROUP to offer internships abroad. Jay Dillon jumped at the chance to stay in China to work for Petters International after his semester abroad program through NYU ended. His assignment was to work at their Wanlida factory in Xiamen. Jay went out to dinner the first night of the move with the Vice President of Wanlida before heading back to his apartment in Xiamen where he was living alone. Feeling ill the next day, Jay went into work hoping that it would pass. After two days, the symptoms were getting worse so he decided he had to call Whitney Clayton, Vice President of Production for Petters International. The two had never even met, but Whitney decided to board a plane to Xiamen to help Jay. At the hospital, it was apparent Jay would not receive the care he

needed as the doctors gave him bug repellent for their first diagnosis of malaria. The pair took off for Hong Kong to receive better treatment. “Whitney was the greatest; he stayed with me the whole time, going to the hospital in Hong Kong with me everyday for tests,” Jay said. He now attests to the strong friendship that was formed from unlikely circumstances. Jay Dillon on one of his many After four days and continuous adventures around China before concerned calls from Tom Petters and coming home. Patty Hamm, they decided Jay needed to get home. Once home, Jay got a proper diagnosis of Salmonella and Giardia and was treated accordingly. He rounded out his summer internship in the Petters Group finance department in Minnetonka, safe from food borne bacteria.

TIME TO SHOOT HOOPS : :

DESIGNED TO SELL : :

Brax Capital Group forms Strategic Partnership with American Basketball Association

MinnesotaBusiness Wins Top Awards

BRAX CAPITAL GROUP, an investment banking and financial consulting firm based in Beverly Hills, CA and founded by AJ Discala and Tom Petters, has formed a strategic partnership with the American Basketball Association in order to maximize the potential of ABA licensing, entertainment, leasing, Internet and other ABA strategic initiatives. Brax Capital Group has additionally reserved five ABA markets and will operate its own teams, as well as work at the corporate levels. AJ Discala, CEO and Co-Founder of Brax Capital Group, has extensive industry connections and business relationships that he will use. The Brax-ABA partnership is the first of many deals in Brax Capital Group’s pipeline as they focus on creating market leaders through their role as a valueadded investor, providing strategic advisory, financial expertise as well as execution guidance and operational oversight to their clients. “We believe in the ABA,” AJ Discala said. “Professional sports have priced themselves out of middle America. The ABA offers wonderful entertainment at a fraction of the cost of a professional game.” “The ABA is excited to have AJ Discala and Brax Capital Group as our new strategic partners,” Joe Newman, ABA CEO said. “With their support, we can maximize the potential of the league with exciting new initiatives all with the goal of offering exciting, fast-paced sports and quality entertainment for fans and families at affordable prices.”

METROPOLITAN MEDIA GROUP has been honored by two organizations with top awards. The Alliance of Area Business Publications (AABP) at its annual national awards to newspapers and magazine business periodicals gave the Gold Award in the design category for “Best Feature Layout” for MinnesotaBusiness Magazine. There were 680 entries from a record-breaking 61 publications in 28 categories for the 2006 Alliance Editorial Excellence Awards. At the Minnesota Magazine and Publishers Association awards Metropolitan Media Group took home 12 awards for their lifestyle publications and Minnesota Business Magazine. As a non-profit trade association, the MMPA is a forum for the top companies involved in the Minnesota magazine publishing arena. “I’m thrilled to see MinnesotaBusiness Magazine given these awards from the AABP and MMPA. It’s a testament to the level of talent and the constant dedication that our creative graphic design team puts forth every day,” Kenan Aksoz, Publisher said. “Over the last few years, they’ve been making their mark by being recognized on both national and local levels.” Metropolitan Media Group has used a strategic investment from Petters Group to continue expansion of their 18 publications and other products in Minnesota and beyond which include Eden Prairie, Lake Minnetonka, Edina and Woodbury Magazines as well as their direct mail division. WINTER 2006

UPFRONT

around the companies

¡HOLA OSTER, WELCOME TO MEXICO! : :

Petters Consumer Brands Launches Oster Major Appliances in Mexico PETTERS CONSUMER BRANDS (PCB) launched Oster major appliances in Mexico this fall, with plans to expand into the remainder of Latin America in 2007. The Mexico launch of Oster branded major appliances follows the successful launch of Sunbeam major appliances in the United States. Like Sunbeam, the Oster brand is licensed from Jarden Consumer Solutions. According to Annie Karsh, PCB New Product Analyst, their new line of Oster major appliances is bound to be a successful extension of this Tier I brand. “Oster major appliances will uphold the highly regarded brand image this small appliance line has already established in Mexico,” Karsh said. Currently, Oster’s line of small appliances includes categories such as blenders, stand mixers, toasters, coffeemakers, and many more. Because Oster is already a leader in small appliance brands in Mexico, PCB chose to use Oster for its major appliances rather than Sunbeam, which already has an expanding major appliance line in the United States. “We are bringing a great value proposition with a wellknown brand to the market,” Geoff Pollak, COO of PCB said. “Oster major appliances will result in accelerated growth for both Petters Consumer Brands and our business partners in Mexico.” Phase I of the Oster Mexico launch will include a full line of 20” and 30” gas ranges, full-size refrigerators, and countertop microwaves. PCB also has its sights set on future Oster Mexico product lines in laundry and air conditioning. With a sparkling product line and wellrecognized name, Oster major appliances are sure to find themselves in homes all over Mexico. 20

:: PETTERSGROUP

PRODUCT SPOTLIGHT

LiTESTAR™’s Away from the Competition IPS REPRESENTS THE FUTURE IN MICRO-BATTERY SOLUTIONS

ince its conception in 2001, Infinite Power Solutions, Inc. (IPS) has focused on commercializing its thin-film battery (TFB) technology. Now, backed by a venture technology company, Dr. Bernd Neudecker, CTO of IPS, and his team of battery experts are continuing to perfect the technology in order to mass-produce TFBs on a thin, inexpensive, flexible substrate, which no one has been able to do until now. A capital raise of $34.7 million completed in Aug. is primarily to build new facilities for high-volume manufacturing. The machinery to produce the substrate is being produced by Symmorphix. IPS and Symmorphix are both investments of SpringWorks, a Petters Group company. Alex Wong of the D.E. Shaw group, one of the investment companies in IPS, said, “Infinite Power Solutions has clearly shown their capability to manufacture a new generation of powerful, ultrathin, micro-batteries to meet a growing demand

for smaller, flexible and rechargeable power sources.” Bob Metcalfe of Polaris, another investor in the company, said, “We’ve seen many start-ups with new battery chemistries. The IPS solid-state TFB technology, with its postage-stamp size, extreme durability, high power, flexibility, and virtually infinite rechargeability, is truly remarkable. In 2007, a projected 10 billion embedded microcontrollers will be shipped worldwide in a vast variety of applications. Many new applications of micro-controllers, sensors, and tags will be enabled by IPS’ rechargeable TFBs. Produced under its LiTE*STAR™ brand, IPS batteries serve applications within the military, aerospace, smart card, active RFID, implantable medical device, embedded microcontroller and wireless sensor markets. The IPS rechargeable thin-film battery technology provides industry-leading performance, yet remains safe and environmentally friendly.

COOLING AIR, ONE ROOM AT A TIME

Holmes, Bionaire added to the PCB mix THIS SUMMER PETTERS CONSUMER BRANDS (PCB) launched three Sunbeam room air conditioners at Circuit City just in time for a nationwide heat wave. The air conditioners - a 5,000 BTU manual room air conditioner, a 6,000 BTU electronic room air conditioner, and a 10,000 BTU electronic room air conditioner sold nearly 10,000 units. They all have built-in air filters and were a great introduction to PCB’s new room air business. Since Sunbeam air conditioners have been successful with Circuit City, PCB is gearing up to launch two new brands of air conditioners: Holmes and Bionaire. These brands, licensed through Jarden Consumer Solutions like Sunbeam, will provide a broader spectrum of air conditioning solutions for a larger demographic. “PCB’s strategy of using three brands will allow the company to expand across the market,” Annie Karsh, PCB New Product Analyst said. “PCB will have air conditioners to fit the needs of each target audience.” The Holmes brand, already a leader in the home environment industry, will serve as PCB’s mid-level air conditioners. They will also

YESVIDEO PARTNERS WITH KEY RETAILERS

launch a line of dehumidifiers under the Holmes brand. Currently, Holmes’s line includes heaters, humidifiers, fans, air purification systems, and lighting. Holmes air conditioners will attract customers looking for a reliable room air conditioner with greater air flow. Bionaire, which currently carries a product line of air purification systems, dehumidifiers, humidifiers, fans, and heaters, will be PCB’s high-end brand of air conditioners. “Bionaire is a brand that redefines home comfort through innovative solutions, and will attract families seeking high performance, comfort, and style. Karsh said the target market places a greater importance on a clean-air environment, as Bionaire air conditioners are equipped with HEPA filters built to purify and cool air simultaneously. Bionaire units will also be EnergyStar ® compliant, attracting environmentally-conscious customers. PCB’s investment to enlarge and enhance the appliance business is indeed paying off with air conditioners. With three brands aimed at different demographics, each brand is sure to be a hit – cooling homes, one room at a time.

Brooks Eckerd Pharmacy and FujiFilm Portugal Sign On

esVideo has expanded distribution of the YesDVD product line by offering it through all Brooks Eckerd Pharmacies in the United States and through FujiFilm

Disk and case for Brooks Eckerd DVDs

Portugal LCD. Brooks Eckerd Pharmacies, a large drugstore chain primarily located in the Eastern and Southeastern US, serves millions of customers each week through their 1,000 retail locations. FujiFilm Portugal LCD is a large wholesale photofinishing company located in Porto, Portugal that provides photo products and services to Portuguese consumers through such retail locations as Fnac, Auchan, and Worten. “Consumers are quickly learning that YesDVD technology offers superior viewing quality, easy access to the content through indexed chapters, and enhanced preservation due to the durability of DVDs,” Greg Ayres, COO of YesVideo said. “Both Brooks Eckerd and FujiFilm Portugal are taking advantage of this new digital service opportunity as mainstream consumers are beginning to demand a DVD solution that is

both convenient and affordable.” To capitalize on this promising market, YesVideo is continuing to expand their distribution network with the photofinishing industry. The photofinishing industry and photo dealers have established a trusting relationship with consumers over the years by processing billions of rolls of film. Consumers now have a practical solution for transforming videotapes to DVDs by simply dropping their camcorder tapes and movie reels at these photo dealers for processing to YesDVD. SpringWorks, division of Petters Group, invests in YesVideo because it believes this approach addresses a majority of the video market. Globally, our society and economy are “Going Digital” with almost everything. YesVideo and their strong network of international photo dealers provide the most suitable way to transform old and new memories into a better way to view and share: DVD.

WINTER 2006

GALLERY

john t. petters foundation

A Successful Opening Night Legacy Gala Raises Over One Million Dollars

special night of glitz, glamour and fun greeted over eight hundred friends, family, and business associates of Petters Group Worldwide who gathered to raise funds for the John T. Petters Foundation on Aug. 12th, at the Hilton Hotel in Minneapolis. The Legacy Gala’s “A Night in Las Vegas” was the inaugural fundraiser for the Foundation to raise money for scholarships that assist deserving students to study abroad. As the guests entered the event, they felt like they had left the Hilton Hotel in Minneapolis, Minn. and entered a Las Vegas nightclub,

complete with VIP seating and a stage show. The event was no doubt a who’s who of Minneapolis, but it also brought in guests from as far away as China. The sponsor donations and silent and live auctions brought in over $1.2 million which will be used to expand the scholarship program. The 2007 Legacy Gala planning is already underway so watch the Petters Group magazine and the johntpettersfoundation.org website for more details. More pictures and video from the 2006 event can currently be seen on the website. PG

[1] The centerpiece of the silent auction area, the Lexus Bar, featured one of the premiere live auction items, a 2 year lease on a Lexus SC430 convertible. [2] Mike O’Shaughnessy, Polaroid; Tom Petters; Dean Vlahos, Redstone; Mike Wood, Headquarter Marketing [3] Four elaborately dressed showgirls helped guests feel like they had just stepped into a Las Vegas show. [4] Beautifully decorated VIP tables illuminated the room

3 22

4 :: PETTERSGROUP

6 [5] A high energy performance by The Rat Pack Revue set the mood for the program. [6] Jon McGaunn, Petters Hospitality and his wife Tam with comedian and headliner David Spade [7] Former Channel 5 news anchor Joe Schmit emceed the evening one week after coming to Petters Media Group.

BY THE NUMBERS : : Attending Guests: 823 Auction Items: 260 Money Raised: $1,295,167

TITLE SPONSORS $50,000 • Lancelot Investment Management

• Bob & Janet Sabes • Dean & Michelle Vlahos/Redstone American Grill

• Polaroid Consumer Electronics $25,000 • Camille Chee-Awai • Deanna & Allen Munson • Fredrikson & Byron, P.A. • Michael & Lisa O’Shaughnessy • Circuit City • Proview International Holdings Limited

• Bill Dunlap • Steven & Lisa Ratliff

• Jack Young & Steven Young • Ted & Pamala Deikel • Harris-Homeyer Company $10,000 • Piper Jaffray • GMAC Commercial Finance/ Andrew Moser • Zink/Bob White • Brad & Mary Dennis • Minnesota Timberwolves • Novak & Nelson • Larry & Lynn Raymond • Larry & Toni Reynolds • Neal, Gerber, Eisenberg • The Traub Family • Stuart & Marie Cohen • The Waitt Family Foundation • Strategic, LLC • Crystal Capital • C.H. Robinson

$5,000 • Best Buy • space 150

• Schlegel Horizon Foundation • David & Naomi Baer • CSM Corporation • Andcor Companies, Inc. • Flextronics • Cherry Tree • Jim Wehmhoff • CMO • ST Microelectronics • Universal Electronics Inc. • Mary Jeffries • Co-Rect Products Inc. • Rafiki Partners & Kes Air Technologies

• Dorsey & Whitney LLP • Patty Hamm • Business Impact Group • Crown Bank • Coldwell Banker Burnet • Free Agent Consulting • Service Craft Logistics • Miami University • College of Saint Benedict/

• Shyan & Partners • Steven Bennett • Strategic Talent Partners • Nazca Solutions • Almo Corporation INDIVIDUAL DONATIONS $50,000 • Greg Bell & Inna Goldman $15,000 • uBid $10,000 • Acorn Capital Group $5,000 • AJ Discala • Joe Carey • Dan Lagermeier • Harold & Ruth Roitenberg • Joe & Laura Schmit • John Morgan • Tom & Regina Hudson • Geoff & Gabrielle Pollak

St. John’s University

WINTER 2006

GALLERY

john t. petters foundation

GOOD MORNING TOM; WOW!!! WHAT AN EVENT!!! First time ever 1000 people in attendance. Please notify the Hilton Hotel! Notify the Governor! Notify the World!! – Within four years the Metrodome will be needed to house “The John T. Petters Legacy Gala.” As you know, the first event you have is the toughest to produce. Seriously, Tom, I have been involved in producing large charitable functions for over 20 years and from my perspective, your first event was a huge success in every way possible. If I may, I will list all the positives in numerical order which I think made your event so spectacular. 1. VOLUNTEERS: Magnificent job; theirs was truly a labor of love and it was so evident, just talking to them and watching them go about their duties as if they had been working together for years. And it was apparent how devoted they were to your cause. 2. DECORATIONS: Unbelievable, absolutely spectacular. From the centerpieces to the silent auction room 3. A NIGHT IN LAS VEGAS: The theme was very well done! The entertainment was superb, from the Rat Pack to David Spade. Oftentimes this type of theme can be overdone – but not in this case. 4. FOOD: Great – really, so much better than expected at a hotel feeding 1000 people. Whoever planned your menu gets an extra pat on the back. 5. SERVICE: The hotel staff did an excellent job of serving both hors d’oeuvres and dinner. They went about their tasks with the same zeal as your volunteers. Now Tom, for the negatives; also in numerical order: 1. 2. 3. Well, forgive me if I can’t think of a one. Tom, the John T. Petters Foundation is a great cause and I’m sure John had the best seat in the house, looking down on all of us and saying “What a wonderful, wonderful family I have!” WARM PERSONAL REGARDS, RAYMOND E. IMPERIAL CHAIRMAN EXCALIBUR CLASSIC

:: PETTERSGROUP

9 [8] Tom Petters and Jamie Hagan, John’s parents, and Jenny Petters, John’s sister, took a moment to remind guests what the night was all about. [9] Ted Deikel; Mike Hatch, Tom Petters; Wendell Anderson, former Governor of Minnesota [10] Geoff Pollak, Petters Consumer Brands and wife Gabby; Lorrie Parent, Polaroid Consumer Electronics; Legacy Gala Guest, Vanessa Gollin

REDSTONE PARTIES WITH PURPOSE

: : Grand Opening

VIP Party Proceeds Benefit the Foundation

REDSTONE AMERICAN BAR AND GRILL brought its fun atmosphere and excellent cuisine to a new location in Marlton, New Jersey on Sept. 9th. The guests celebrated with much zeal as they enjoyed a VIP party that had a special twist. Owners Dean and Michelle Vlahos dedicated the opening night liquor proceeds to the John T. Petters Foundation. The evening was a special tribute to John himself, recalling

Foundation Mission The John T. Petters Foundation awards scholarships on a need-basis to students who display John’s characters of leadership, motivation, and the overall passion to study international business.

his fun personality and love of life. They also dedicated the

back patio bar to John with a plaque at the entrance reading “John Boy’s Bar”. Tom Petters, as an investor in Redstone and more importantly a close friend to the Vlahos family, flew to Philadelphia with members of the Petters Group team to celebrate the expansion of the restaurant. The evening brought in over $5,000 for the Foundation.

Dean Vlahos, one of the Foundation’s largest donors, said, “I wish it could have been more,” once again showcasing his support for the cause. The lucky student who receives that scholarship will be able to tell him, “It was enough to change my life.” [1] David Baer & Deanna Munson [2] Dean Vlahos, Michelle Vlahos, Tom Petters, and Jenny Petters [3] Tom Petters, Mike Wood, Dean Vlahos, Guest

More Students Traveling Abroad Rollins College in Winter Park, Florida and Wallin Scholars, based in Minneapolis, are two new partners for the John T. Petters Foundation’s 2006 round of scholarships. Rollins is a private liberal arts college that has ties to Petters Group through its many other educational initiatives.

St. Olaf Memorializes John Petters THE ST. OLAF CATHOLIC CHURCH in downtown Minneapolis has dedicated the altar cross, baptismal font and other sacramentals of the church’s chapel room to the life of John T. Petters. Donated by Bill Dunlap, John’s memory has been memorialized with a plaque containing John’s name and an Irish prayer.

Wallin Scholars encourages and supports deserving students throughout the greater Minneapolis area who might not otherwise attend or graduate from college. They work closely with high school guidance counselors who recognize students with great academic ability and drive but lack the support to get to the next step. In addition to these new partners, the Foundation will be awarding up to 10 open scholarships in 2006 to students who are traveling on programs through any accredited college or university in the state of Minnesota. This new step acts as a way to enhance the name recognition of the Foundation in Minnesota but more importantly impact the lives of students across this state.

WINTER 2006

GALLERY

charitable giving gallery

Polaroid and Petters Group Worldwide Donate $120,000 to Fund Cancer Research

t a special ceremony in New York’s General Motors Plaza, in support of Breast Cancer Awareness Month, Mike O’Shaughnessy of Polaroid presented a check for $60,000 to Elizabeth Hurley, spokesperson for The Breast Cancer Research Foundation (BCRF). Tom Petters surprised the crowd when he took a pen, crossed out the $60,000 and made it $120,000, with the matching donation coming from Tom Petters. The event included Elizabeth Hurley and The BCRF lighting the General Motors Plaza, the Pulitzer Fountain and Bergdorf Goodman lanterns pink in recognition of October as Breast Cancer Awareness Month. In addition, Polaroid launched a line of pink digital cameras to increase awareness and benefit breast cancer research funded by BCRF. These pink cameras debuted at Target, Circuit City, and Wal-Mart in October and early November. Polaroid’s partnership with The BCRF is only natural given the company’s (l) Elizabeth Hurley displays the Polaroid “Pink” camera, developed to long-standing relationship with women and families. This is the initial step bring awareness to breast cancer research. (r) Elizabeth Hurley received on a journey to support the valuable work of The BCRF to prevent and cure the Polaroid donation from Mike O’Shaughnessy and Tom Petters. breast cancer. PG

JOE SCHMIT CELEBRITY GOLF EVENT RAISES MONEY FOR BBBS Polaroid Sponsors Trent Tucker Celebrity Golf & Poker Tournament THE 8TH ANNUAL TRENT TUCKER CELEBRITY GOLF & POKER TOURNAMENT, presented by Polaroid and Petters Group Worldwide, attracted some of the biggest sports and poker legends including Michael Jordan, Scott Pippen and Phil Ivey. Along with the Polaroid/Petters Group Worldwide sponsorship of $100,000, the event raised over $300,000 to benefit the Trent Tucker Youth Program. Founded in 2001, the Trent Tucker Youth Program works one-on-one with at-risk Twin Cities middle school students to help them develop good character and leadership skills and to build self-respect.

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THERE WERE NO GOLDEN BEAR, Walrus or Tiger sightings at the 15th annual Joe Schmit Celebrity Golf Event in June, but there were plenty of birdies and a few eagles for all animal and golf lovers. Petters Group Worldwide was once again a major sponsor of this event that raises money for Big One of Petters Group’s foursomes (George Danko, Patty Hamm, Brothers Big Sisters of Paul Traub & Rick Engels) the Twin Cities. The three day event included 700 people attending Joe’s Grand Party at the Minneapolis Convention Center. Then, over 375 golfers took part in the two-day event which had golfers testing their skills on two of Minnesota’s premier courses, Hazeltine National Golf Club and Bunker Hills. Hazeltine has hosted two US Opens, the PGA Championship and is a future sight of the Ryder Cup. This year’s event raised over $400,000. The event itself, after all expenses are paid, has raised over 3-million dollars for kids in need in our community. Joe has left broadcasting after 21 years to join the Petters Group team, but he still plans on holding his 16th annual event this spring.

One Foot In Front of the Other Polaroid Team Raises $25,000

BY KATHY RADLEY

(photos l to r) [1] Team Polaroid walkers Anne Slein and Bob Schrandt [2] Janet Cumming and Doug Stanley [3] Steve Karampalas, Theresa Flynn and Deb Whalen

ongratulations to Team Polaroid on another successful year of fundraising for the Jimmy Fund and Dana Farber Cancer Institute. Although pledge money is still coming in, it appears that Team Polaroid will exceed its goal of $25,000! The team of 24 walkers consisted of 9 Polaroid employees, 5 former employees and 10 family members. Team Polaroid is grateful for the overwhelming support they received from employees, former employees, friends and family. In addition to sponsorships, the team received contributions from the Matching Gifts Program, corporate raffle, t-shirt sale at R5, bake sale and the land fund. The Team would also like to thank the Polaroid leadership team for participating in the fundraising events and enthusiastically cheering on the walkers. Everyone appreciated having Tom Beaudoin, CFO/COO of Polaroid, at the walk. Beaudoin was a speaker at the 3-mile Boston start and walked with his wife, Cheryl, and 1,200 others to the Copley finish line. He also participated in festivities at the Polaroid photography tent where 5,000 walkers received free instant photos. The event’s success was also due to the work of many volunteers. 55 volunteers helped on walk day – 16 at the Harvard medical quad and 39 at the Copley finish line. In addition, nearly 3,000 gift bags were prepared by a team of 15 volunteers prior to the event. Additional photos from the walk can be seen at http://corp.polaroid.com/pol_information/intcomm/photos/2006news/Slide_show_JFWalk.pps.

HOOPS AROUND THE WORLD : :

Howard Pulley Program Sends Students to Belgium THE TOM PETTERS FAMILY FOUNDATION and Sabes Foundation were two large sponsors of the Howard Pulley Basketball Program again this year. The Sabes/Petters team, made up of students ages 15-18, finished 8-0 as they traveled throughout Europe this summer playing primarily against National Junior teams. The Howard Pulley Basketball Program is considered one of the top summer programs in the nation. This represented its 21st year of providing opportunities for a diverse group of deserving youth. “Our trip was very successful in more ways than just basketball,” Errol F. Carlstrom of the Howard Pulley Program said. “Our players stayed with local families and formed relationships that will last a lifetime.” To learn more about this program, visit their website at http://eteamz.active.com/howardpulley/index

THANK YOU! : : Dear Mr. Petters, How thrilled I was to hear about the wonderful gift that is coming to The Breast Cancer Research Foundation from you in addition to the generous donation from Polaroid. We are delighted that you share our passion and drive to beat this disease. — EVELYN H. LAUDER, FOUNDER AND CHAIRMAN Dear Petters Group, With your support, we’re making a BIG difference for more kids in our community than ever before. Thanks for your important contribution for a brighter future for our Twin Cities area kids. BBBS couldn’t do it without you! — BIG BROTHERS BIG SISTERS Dear Mr. Petters, Thanks in part to your donation, we were able to raise over $14,000 for our BOLT program. We are fortunate to have Bill Mondale as an esteemed member of our Advisory Board. We pray God’s blessings and peace be with you always. —THE SALVATION ARMY Thank you for sharing Junior Achievement’s vision for tomorrow’s youth and recognizing the value of our far-reaching programs. — JUNIOR ACHIEVEMENT Dear Petters Group, On behalf of Bridging’s Annual Gala Celebration “Off to the Races,” we want to thank you for your generous donation. As of this date, we have netted over $143,000 that will help purchase twin beds, build dressers, and procure other product that will help us serve 4,000 families annually. — BRIDGING Dear Petters Group Worldwide, Thank you very much for your generous auction gift to the Minnesota Zoo Foundation in support of the 2006 Beastly Ball. We cannot thank you enough for your partnership in this important effort! — MINNESOTA ZOO

WINTER 2006

CONNECTING POINTS

operational excellence

Simple Processes Mary Jeffries, Petters Group Worldwide President/COO

PETTERS GROUP WORLDWIDE CORNERSTONES

INVESTMENT PROCESS

STRATEGY

We follow discplined investment processes in making and managing investments

We use a focused business strategy making leveraged acquisitions in companies that generate superior investment returns

OPERATIONAL EXCELLENCE

hope you read the profile of Tom in the first issue of Petters Group magazine. If you did, you know that critical to the company’s successful growth has been an emphasis on being entrepreneurial and opportunistic and all that goes hand-inhand with those traits – being fast, responsive, innovative, agile, risk-tolerant and more. These are all attributes by which Petters Group will always want to be known. The success derived from these qualities has transformed the company dramatically. Petters Group today is a broadly diversified enterprise with significant ownership positions and, in some cases, operating responsibility, for major businesses in merchandising and sourcing, emerging technologies, hospitality, media and marketing and now aviation and capital management. Across this diverse group of businesses, a common trait is our customers’ expectation that we will be a reliable partner, a quality supplier and a company they can

:: PETTERSGROUP

Our infrastructure provides consistent delivery of a high level of performance and portfolio support with a focus on quality and continuous improvement

count on to fulfill commitments consistently. To meet these expectations, we must be an operationally excellent business. In fact, being operationally excellent is part of what enables us to be fast, responsive, innovative and agile in bringing to bear on business opportunities and challenges our capabilities, services, talent, capital and other resources. This is particularly so as the scope and scale of our interests grow. That’s precisely why Operational Excellence is one of the four cornerstones that we have identified as fundamental to the way we will conduct business. Operational Excellence, joined with Strategy, Investment Process and Relationship Management create discipline, structure and operating principles that pro-

RELATIONSHIP MANAGEMENT We develop, grow and leverage superior relationships and networks to enhance our effectiveness in meeting strategic goals

vide a platform for sustaining our entrepreneurial and opportunistic culture. Given our heritage, Tom’s vision, the kind of opportunities we seek and the kind of business leaders we align ourselves with, a bias for the entrepreneurial and opportunistic will always characterize Petters Group. A primary part of my job is using our four cornerstones to build an environment where that entrepreneurial and opportunistic spirit is nurtured, supported and sustained by good processes, systems and structures. I’m honored to have the opportunity to serve Petters Group as president and chief operating officer and look forward to working with everyone in the Petters Group family as we take the company to new levels of prosperity and growth. PG

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MAKING A DIFFERENCE

:: j i m W E H M H O F F

The Taxman Cometh Strategy and Vision WRITTEN BY ANDREA MILLER PHOTO BY TODD BUCHANAN

ax season for most CPAs is early in the year and is forgotten about by April 15th. For Jim Wehmhoff, EVP Corporate Taxes for Petters Group Worldwide, the tax season is year round. “By advising on the structuring of potential sales, purchases, investments or the development of a product, we are able to help determine the best approach from a tax structure standpoint,” Wehmhoff said. Doing this advance research for all the companies within the Petters Group portfolio is just one of the many tasks Wehmhoff and his assistant, Carol Hove, CPA, tackle each day in the Corporate Tax department. Handling the required income tax filings for all the partnerships, corporations, foundations, trusts and certain individuals also falls into their arena. We have four controlling entities Petters Group Worldwide, Petters Company, Inc, Thomas Petters, Inc and Thomas J. Petters individually and all the portfolio companies and investments fall into one of them. Keeping track of where they are and determining if they are strategically positioned in the best place is why Wehmhoff relies heavily upon proper communication. “Legal, finance and the executive team work very closely with us so we have a clear vision of what is coming next for the company,” he said. This was a different story when he came to Petters Group in 2004. Wehmhoff was Co-Founder of a local CPA firm and, after 30 years practicing public accounting, he retired. Tom Petters, having been a client since 1988, asked Wehmhoff to join Petters Group and form a corporate tax department for his organization. “When I first arrived, people were not aware of all the information I could provide to them, so they did not come to me with questions,” he said. After a few surprises people realized that the corporate tax structure was important to more than just the business they were working on, and the lines of communication started opening up. “It’s so easy to discuss projects with Jim,” Rick Engels, CFO for Petters Group said. “He has a vast knowledge of all the interworkings across all the investments and will often give you great insight into your project.” By advising on the structure of a purchase, sale or investment, our objective is to take full advantage of any tax attributes available to the company. Proper structuring the portfolio of

companies and investments within the four controlling entities is how we strive to take advantage of research, investment, energy or foreign tax credits and/or loss carry forwards to offset potential profits and enhance the company’s cash flow. Wehmhoff explained that the Internal Revenue Code clearly states that it is everyone’s right to pay the lowest possible tax provided under the law. This is why advance research and strategizing becomes critical to all the companies. Wehmhoff and his assistant comprise the tax department for the Minnetonka office but work closely with the Polaroid tax team in Waltham. The Boston office is responsible for the foreign tax work, which is growing quickly, and the consumer electronics line. They combined their efforts for the filing of the consolidated return for Polaroid and its entities. “Jim’s knowledge of

“Keeping the lines of communication open saves us all from surprises.” — JIM WEHMHOFF all the workings within the Petters Group investments has made the transition into one company much easier,” Tom Beaudoin, COO/CFO of Polaroid said. When asked why, after retiring from public accounting, he decided to come to work for Petters Group, Wehmhoff said, “I wanted to stay busy, felt this would be a challenge and was just too young to quit completely.” Although this definitely cuts into his fishing time, he said he still makes his two trips a year to Canada to fish and spends as much free time as possible at their cabin in Aikin County. He likes to go up there to just do nothing. When their five kids and six grandchildren are around, Wehmhoff and his wife, Bonnie, definitely have their hands full. “I wouldn’t have it any other way. Grandkids keep you young,” he added. Now that the October 15th deadline for individual tax returns under extension is past, his focus is back on the investments and monitoring what is coming next. “Keeping the lines of communication open saves us all from surprises, and, when it comes to taxes, surprises are usually difficult to overcome,” Wehmhoff said. PG

WINTER 2006

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EXECUTIVE PROFILE

:: r i c k E N G E L S

Rick Engels Diving into Entrepreneurialism WRITTEN BY ELIZABETH MILLARD PHOTO BY TODD BUCHANAN

any people cultivate their leadership skills and teamwork focus while in business school, or during an internship, but Rick Engels, Petters Group Worldwide CFO, took a different route — he discovered a love of operational excellence as soon as he put on a wetsuit. Although he’d planned to go the usual business school route after high school, a freak car accident that claimed the life of his little brother changed Engels’ outlook on the future. Instead of college after his high school graduation, he decided to become a Navy diver. “My parents flipped,” he recalled. “There was no way they wanted their son in the military, and even I didn’t know what to expect. But, as I was going through the grieving process for my younger brother, it just seemed like the right path for me.” Since his aunt and uncle were divers, and — RICK often went diving for wrecks in Lake Superior, Engels had some experience, but he had no idea that what he would learn during 7 years in the Navy would prepare him for every endeavor after the military. “Whether you’re on a submarine or part of a diving team, there’s the concept for doing things together, and there’s no task too big to overcome,” he said. “You have to look out for each other, and work under pressure. Mainly, I learned that when you see opportunity, you need to go after it.” Engels spent two years in Japan and five in Hawaii, where he married his wife, Linda, and began doing undergraduate work in finance and accounting at Chaminade University of Honolulu. He also became a Navy instructor, teaching special forces teams how to dive. Even that experience prepared him for high stress moments at Petters Group, he noted. “People get anxious and I just think back to that time, when mistakes in the Navy meant that someone could die,” he said. “That makes it easy to assess a situation now and say, hey, we can work on this. No one’s life is on the line.” After getting his degree, Engels and his wife moved back to his native Minnesota because they felt it was a good place to start a family. Although he missed the ocean, he was eager to get into an

accounting firm that specialized in retail, and joined Touche Ross, which later became Deloitte Touche. Retail gave him an opportunity to explore his entrepreneurial side, but also to satisfy his passion for shopping. “Yes, it’s true, I’m not your typical male,” he said, laughing. “I love to shop. I am a treasure hunter, always looking for deals.” Consolidation in the accounting industry came just after Engels left Touche Ross, and he ended up as Corporate Controller at the Deluxe Corporation, best known for its check printing operations. To learn the nuances of the industry, Engels went on sales calls, and when a new CEO joined the company in 1995, the firm went on an acquisition spree. It was then that Engels felt his entrepreneurial drive kick into high gear. “To know how to buy a company, you have to understand the seller’s perspective, and ENGELS that’s what I learned at Deluxe,” he said. “I began to get passionately interested in acquisition deals.” After being made CFO at the company, Engels went to St. Thomas University and got an executive MBA, which helped broaden his strategic education and gave him a better grasp of organizational structure. During a stint at a conglomerate called IMI, he drew on his shopping mania once more by working in the retailing side, helping to launch marketing efforts for the Toyota Scion, among other efforts. When he joined Petters Group last year, Engels felt that all his past experience — from Navy teamwork to Deluxe’s hands-on acquisition training — came together. “All that learning allowed me to come into an environment like Petters Group and not feel overwhelmed by the challenges,” he said. “Tom Petters has invested in more than 60 companies, after all. Talk about entrepreneurial.” As well as working with 10 Petters Group investments, Engels has also put in processes that boost operational excellence, he noted. But don’t think he’s hung up his wetsuit for good. “Aaron Chang International, one of the companies in the portfolio, is a surfing company,” he said. “So, when I visit them, I invariably get a call from Tom asking if I’m surfing or working, and I can honestly say: both!” PG

“I learned that when you see opportunity, you need to go after it.”

WINTER 2006

WHERE IN THE WORLD IS TOM?

october 17-october 25

As a man who is constantly on the move, Tom Petters is often asked, “Where in the world are you?” This is a little snapshot of one of Tom’s weeks.

TUESDAY, OCTOBER 17TH

At the NBAA tradeshow in Orlando, FL with Jay Salmen, President of Petters Aviation, the final details for the purchase of an Airbus A318 corporate jet are finalized as Petters Aviation expands it fleet to three planes.

back to Minnesota pulls together members Petters Media Group and Sun Country to initiate plans for the deal closing and news conference. That night they all attend a celebration for Paul Traub, a Petters Group Strategic Partner, because his law firm joins with Dreier, LLP, a New York fall service law firm.

WEDNESDAY, OCTOBER 18TH A quick flight into an island has Tom arriving just in time for meetings on a new land deal. Talks initiated calls to several leaders of Petters Group companies as ideas were flying all around on ways to connect them with the new projects. Tom tried to get them on flights to the Bahamas that night.

SATURDAY, OCTOBER 21ST A flight into West Palm Beach where the Florida Petters Group office is located allows Tom to catch up on over 200 emails since he hasn’t had access to a computer or BlackBerry since Tuesday.

TUESDAY, OCTOBER 24TH A morning of meetings is cut short, partially because Tom had gotten a slight case of food poisoning from the oysters he ate the night before and so they could catch a flight back to Minnesota. They land at 1 pm which allows him a few hours to take a nap and convince his assistant DeAnne he’s well enough to go to the University of Minnesota Carlson School of Business at 5 pm to deliver a keynote speech and participate on a panel discussion about leadership. Patty Hamm, EVP of HR and Learning Center was there ready to take over if he had a relapse.

SUNDAY, OCTOBER 22ND & MONDAY, OCTOBER 23RD Sunday brings a flight into New York, where he meets up with Mary Jeffries, President/COO of Petters Group for meetings all day Monday. She had been in the city shopping with her daughter all weekend so he said the meetings would give her credit cards time to rest. David Baer arrives in New York with the news the Department of Transportation had given initial approval of the Sun Country purchase. A call

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WEDNESDAY, OCTOBER 25TH A flight to Miami University in Oxford, OH with Patty Hamm, EVP Human Resources and Learning Center, kicks off the summer intern interviewing process. As a member of the Board of Visitors for Miami he attends a reception where he avoided the seafood bar and than attended a board meeting on Thursday. PG

VALUES

balancing goals

DO NOT FALL

Off the Ball Understanding the Forces of Business

WRITTEN BY LARRY HARMER ILLUSTRATIONS BY WHOLONICS LEADERSHIP AND LARRY HARMER

ike north, south, east and west or top, bottom, left and right, there are four forces of business. They support one another by their direct opposition to each other. All organizations are bound by these four forces, and, if the correct tension exists between them, they are the institutions of opportunity. They are Create, Compete, Collaborate and Control, the four “C’s”. Each of these four quadrants is associated with specific characteristics to help identify what kind of organizations fit within the perimeters. When I was teaching at the University of Michigan’s EMBA program I had the opportunity to work with two incredibly talented professors. The first is Robert E. Quinn, Professor in Business Administration, Professor of Management and Organizations, and author of many wonderful books, including Deep Change – a great read for anyone interested in learning new ways of thinking and behaving in business. The second professor is Anjan V. Thakor, former Professor of Banking and Finance, Chairman of the Finance area, Ross School of Business, University of Michigan and currently the Senior Associate Dean and Professor of Finance, Olin School of Business, Washington University in St. Louis, MO. He has also been a deciding vote for the Nobel Prize in Economics for many years. During one of the lectures, they presented an organizational design concept that helped me more than any other. That concept was the “Four Forces Model”. All organizations are grounded in the principles of this model. Whether or not they intentionally follow this specific framework, they are affected by it nonetheless. Understanding this framework, within which all firms must operate, had a profound effect on me early in my work life. I spent

years working with these professors and also with organizations such as Whirlpool, DowCorning, NASA, Reuters, Motorola and GM learning to identify and make organizational change based on these four forces.

CREATIVE ORGANIZATIONS are focused on building the “New”. Their components are Innovation, Growth, Experimentation, Speculation, Creativity and Vision. Advertising and marketing firms have this organizing force at their very core. The risk for creative organizations is if they do not temper their direction they create a state of chaos. CONTROLLING ORGANIZATIONS are in direct opposition to “Create” companies. Their focus is on building the “Better”. Their components are Quality, Efficiency, Systemization, Compliance, Process, and Administration. Accounting and auditing firms are traditional examples of this organizing force. The risk for controlling organizations is that they can become a paralyzing bureaucracy. COMPETITIVE ORGANIZATIONS are focused on short term performance. Their roots are Profit, Speed, Discipline, Challenge, Goals, and Performance. Sports teams and commodity producers are most often associated with this organizing force. The risk for highly competitive organizations is becoming a sweat shop that runs itself and its employees into burn-out. COLLABORATIVE ORGANIZATIONS are a direct opposite to competitive force companies. Their focus is on long term development. Their descriptions are Community, Knowledge, Cooperation, Learning, Values and

Larry Harmer

Communication. Political organizations and universities are classical examples of this force. The risk of these types of associations is that they become country clubs and are so driven to consensus that they never accomplish anything.

ATTENTION TO THE TENSION: Like the cable of a suspension bridge, each opposing force helps to support the other. Some organizations are more heavily weighted on one quadrant than another. It doesn’t make much sense for an accounting firm to spend most of it’s time on delivering creative services to its customers when the customer hired them specifically to be a control mechanism for the organization. Likewise, a professional football team, which falls squarely in the “compete” quadrant, would not want to meet with the opposing team and “collaborate” on the game plan. Ultimately, the WINTER 2006

balancing goals

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Adaptability

good outside as the matches themselves. I was waiting for a train one afternoon and a young boy was trying a trick he had most likely seen one of his favorite players do in warm ups.He was trying to stand on top of the ball and then, by rolling it and walking on top of it like a circus clown, he moved from place to place in the train station. If he stayed in one place he would inevitably lose his balance and fall off, potentially leading to injury. However, if he continually moved on top of the ball and never focused on just one spot, he maintained his balance. By moving his feet from place to place he wowed the crowd of commuters. I thought about how much this boy’s performance is similar to the four forces. If we just focus on one area we will do alright for a while but will inevitably fall off, which could be unhealthy. If we are a primarily creative organization, moving the ball and focusing on the aspects of Control, Compete, and Collaborate allows us to keep up the balance to be successful and we then remain healthy.

Stability

IDENTIFYING

If we are a primarily creative organization, moving the ball and focusing on the aspects of Control, Compete, and Collaborate allows us to keep up the balance to be successful and we then remain healthy. most successful companies are those that know who they are and when they need to focus on which quadrant. The ability to move from force to force is the purpose behind the identification tools below. So while it doesn’t make sense for the Minnesota Golden Gophers to collaborate with the Michigan Wolverines before a game, it might make sense for the coaching staff to collaborate with other coaches or even professional teams to improve on offensive formations, defensive stunts or drills to run in practice. Keeping tension between the forces allows for a healthy operation. A real world example is Polaroid Consumer Electronics. After 3 years of incredible success in the “create” quadrant (experimentation, speculation, creativity, etc.),

:: PETTERSGROUP

the organization must spend more time on the “control” force (efficiency, compliance, process, etc.) if it is to maintain its successful growth.

BALANCING ACT: While in Vienna earlier this year as we prepared for the production of Polaroid electronics products in the European market, the World Cup was going on. You couldn’t walk down the street or turn on the TV without seeing a soccer ball. Most impressive to me was not the scoring of all the “GOOOOOOALS” but watching all the tricks performed with the ball. They could bounce it on their heads and spin it on the top of their foot like the Harlem Globetrotters spin a basketball on their finger. The entertainment was just as

AND

ADAPTING:

Action Planning Tips are to help identify what type of organization you are in and the direction you want to go. I have broken down each of the four forces by what groups can do to help their organization make changes. Whether it’s the tip sheet for groups or individual leaders, focusing on the specific components of each quadrant and using these tools will help to move “toward” or “away” from those organization behaviors. Think of it as the company’s two feet moving around on the top of the ball to help keep its balance. Every once in a while when time permits, I get to see an episode of the Simpson’s. I get a real kick out of Homer’s one liners. One of my favorites is when Homer falls out of Bart’s tree house and plummets to the ground. He clenches his fist, shakes it mid-air and then curses the law of gravity as if he was somehow expecting to not be effected by its force. Every organization is bound by these Four Forces. Even if we clench our fist and shake it mid-air we are still bound by these effects. Understanding what these forces are, the nature that makes up each force, and then organizing ourselves around the forces, all while staying balanced on top of the ball, is the goal of the game. PG

GROUP ACTION PLANNING TIPS

If you want your organization to operate through ... Move toward ... follow these tips. A Cooperation

B Learning

C Experimentation

D Speculation

E Challenge

F Discipline

G Compliance

H Systemization

• systemize cultural orientation of employees • emphasize people skills • continue conflict resolution efforts • train in teams skills • use impactful training programs • mentor with effective methods • emphasize development • invest in education and development • allocate resources for innovation • celebrate past risk takers • view failure as learning • adjust budgets to accommodate emergent ideas • anticipate customer needs • continuously reinvent current products • test drive prototypes in sophisticated markets • maintain capacity to continually change the organization • emphasize immediate results • continually reduce time cycles • acquire outside competencies quickly • focus on speed • create intense orientation toward achievement • implement an “exel or exit” policy • excalate emphasis on profit continually • base individual power on results • adhere to the budget • monitor expenses closely • do more with less • allocate resources uniformly • document procedures • emphasize quantitative process controls • emphasize technical problems • maintain rigorous operational standards

INDIVIDUAL LEADER ACTION PLANNING TIPS If you want to lead through ... A Values

B Communication

C Creativity

D Vision

E Performance

F Goals

G Administration

H Process

Move away from ... follow these tips. • emphasize immediate results • continually reduce time cycles • acquire outside competencies quickly • focus on speed • create intense orientation toward achievement • implement an “exel or exit” policy • escalate emphasis on profit continually • base individual power on results • adhere to the budget • monitor expenses closely • do more with less • allocate resources uniformly • document procedures • emphasize quantitative process controls • emphasize technical problems • maintain rigorous operational standards • systemize cultural orientation of employees • emphasize people skills • continue conflict resolution efforts • train in teams skills • use impactful training programs • mentor with effective methods • emphasize development • invest in education and development • allocate resources for innovation • celebrate past risk takers • view failure as learning • adjust budgets to accommodate emergent ideas • anticipate customer needs • continuously reinvent current products • test drive prototypes in sophisticated markets • maintain capacity to continually change the organization

Move toward ... follow these tips.

Move away from ... follow these tips.

• establish shared values between people • develop a sense of committed community • generate a common group mindset • create a sense of cohesion in the organization • communicate trust • listen with concern • establish mutual understanding • create open communication • encourage creativity • support people with innovative notions • reward new ideas • stimulate people to think originally • envision ambitious, strategic change efforts • conceive significant new ventures • design bold organizational initiatives • propose dramatic strategies • model decisive action • confront problems as soon as they occur • quickly address new difficulties • provide fast responses to new issues • emphasize goals • see that the objectives are achieved • focus on intended results continually • drive for continuous achievement • conserve fiscal resources • find ways to save money • make disciplined financial allocations • prevent people from making costly mistakes • make work processes routine • stabilize work systems • get work processes under control • ensure smooth internal work processes

• model decisive action • confront problems as soon as they occur • quickly address new difficulties • provide fast responses to new issues • emphasize goals • see that the objectives are achieved • focus on intended results continually • drive for continuous achievement • conserve fiscal resources • find ways to save money • make disciplined financial allocations • prevent people from making costly mistakes • make work processes routine • stabilize work systems • get work processes under control • ensure smooth internal work processes • establish shared values between people • develop a sense of committed community • generate a common group mindset • create a sense of cohesion in the organization • communicate trust • listen with concern • establish mutual understanding • create open communication • encourage creativity • support people with innovative notions • reward new ideas • stimulate people to think originally • envision ambitious, strategic change efforts • conceive significant new ventures • design bold organizational initiatives • propose dramatic strategies WINTER 2006

THE LEARNING CENTER

summer internships expand

Summer School in Session Interns Bring Enthusiasm and Ideas INITIATING PROJECTS FOR THE FUTURE : : Polaroid

Interns Tackle the To-Do List

he first morning of the John T. Petters summer internship program for 2006 had 26 interns arriving at the doors of the Minnetonka headquarters overwhelmed with thoughts of, “What will this summer hold for me?” As soon as they arrived in the Learning Center, nerves were calmed as the friendly smiles of Patty Hamm and Amy Waara greeted them. Glancing around the room, the other interns were anxious to get to know one another, anxious to meet their managers, and anxious to find out what they were going to do for the rest of the summer. During the intern orientation, the interns had the pleasure of meeting CEO and Chairman Tom Petters who lit up the room instantly and greeted everyone with a smile. “It was great to meet Mr. Petters on the first day and to be able to listen to him speak of the company and the values and cornerstones of which Petters Group stands behind. It was a motivational kick-off to the summer,” Laura Bartlett, Intern for Corporate Communications said. The interns would all agree that the first

:: PETTERSGROUP

(clockwise from top) [1] Interns in the Waltham office Rebecca Ross, (HR/Legal), Rachel Welsh (Ecommerce Marketing), Alan Simonian (Finance/IT), Aysegul Topcu (Manufacturing) and Lacy Bradley-Storey (Marketing) [2] Belinda Fleming, Intern for PCE Marketing [3] Nic Younghans, Intern for PCE Product Development

week flew by. New projects were beginning and appetites were increasing. Projects involving the Circuit City product line, development of a product line for Mexico and business development research were just a few. “The amount of responsibility I received through this internship challenged me to develop quickly and to think critically about

THE POLAROID OFFICES in Waltham, Mass. had five interns participating this summer in the John T. Petters Internship Program. The Polaroid office strived to provide meaningful projects for their summer interns. They were spread out within the company and assigned a mentor/manager to provide them with support and guidance on very diverse projects. Alan Simonian created new management reporting templates and processes that reduced the time needed to get corporate financials to senior management. Rebecca Ross made recommendations for future records retention. She also designed the Wellness Month activities for Waltham and a strategy for continued wellness activities. Aysegul Topcu developed a new warehousing plan for all US manufacturing raw and work-in-process materials as well as a strategy to minimize storage risk. Lacey Bradley-Storey developed a business plan and implementation strategy for expanding our ecommerce customer base. Rachel Welsh redesigned and updated the company information section that appears on www.polaroid.com to better articulate and reflect Polaroid’s brand history and its future direction. On August 23rd, the interns presented overviews of their projects to Bob Gregerson, Polaroid President, Instant Division, Tom Beaudoin, Polaroid CFO/COO, and their mentor/managers. All the projects are currently in some stage of implementation. The summer internship program was clearly valuable to the interns, as well as to Polaroid.

“I will use the skills and knowledge I gained here for the rest of my life.” Patty Hamm, EVP of Human Resources and Andy Michelides, Intern for PCE marketing

the practical application of my schoolwork,” John Lee, Intern for Polaroid Product Development said. Work Then Play… There is also a fun side to being an intern with Petters Group. One of the events they attended in was the Joe Schmit’s Big Brothers and Big Sisters fundraiser, of which Petters Group was a major sponsor. Another event was a St. Paul Saint’s game in late June. The interns and employees were invited onto the field by the Saint’s promotion group to be in a “Rock N’ Roll” contest to win a five pound Salted Nut Roll – and yes, they did win! The summer ended with a special evening event and a two hour cruise on Lake Minnetonka.

WAKE UP CALL AT 8:00 PM

Final Evaluations… To complete the internship, each intern gave a 15 minute presentation to their fellow interns and all the managers. They shared successes and failures related to goals that were submitted at the beginning of the summer. “This internship proved to be a remarkable experience for me. I will use the skills and knowledge I gained here for the rest of my life,” Matthew Logering, Intern for Polaroid Operations said. Many interns found that they loved working in the fast paced environment at Petters Group, many discovered tasks that they excelled at, and many said it helped them gain a focus for studies going forward. A large

— MATTHEW LOGERING

number of interns commented on how this internship had challenged them. They had to face obstacles and now can walk with confidence to any job interview upon graduation. All in all, it was a life experience for everyone. “I think the interns somewhat embody what makes Petters Group so successful – an intelligent, energetic, and unique group of people working together to accomplish great things. You simply can’t get that kind of training and experience in a classroom. My experience at Petters Group has significantly prepared me for any career path I might choose,” Adam Barvels, Intern for Polaroid Finance said. PG

: : Miami of Ohio Students Help to Launch Program

TAG TEAMING WITH COUNTERPARTS around the globe, communicating in Mandarin, and staying attuned to changing client priorities were among the skills learned this summer by 21 students from Miami of Ohio’s Interactive Media Studies (IMS) Program. Polaroid Consumer Brands needed help on a new product launch idea and the students from IMS were looking for an international work/study opportunity to enrich their summer project experience. Krystal Anderson and Terri O’Shaughnessy of Petters Consumer Brands traveled to Shanghai, China to kick off the students’ 6week educational project. The project

involved helping to develop an innovative product that uses a unique website user interface, developing a business plan, online/offline strategy and new product development for the venture. To ensure maximum efficiency and communication, their efforts had to be coordinated with the company’s Minnetonka office. When one office was closing for the day, the other office was opening. “There is a totally different dynamic when you are halfway around the world from your client,” team member Lacey Hopkins said. “It makes you regulate your communication more and forces you to be more conscious of using

your time with the client effectively.” Faculty and students say they received tremendous support from Petters Group, which reached far beyond the financial support into the extra effort to minimize the challenges posed by time and location differences. The project itself was exciting and challenging, but the international aspect made the endeavor even more valuable. “I think any country would have been a good experience, but I can’t imagine a better place to work than China,” she said. “With China’s emergence as a front-runner in business, this experience will be invaluable to us as we continue to study at Miami and as we leave here in search of our careers.”

WINTER 2006

F E AT U R E

inside glance

Tuning into the

Hospitality Market Petters Hospitality Bringing Polaroid to a New Market

lot of time and hard work goes into creating a successful business and no one knows that better than Petters Hospitality Group. As a portfolio company of Petters Group Worldwide, Petters Hospitality, based in West Palm Beach, FL, builds relationships with global manufacturers to develop state of the art entertainment technologies, commercial LCD TVs, appliances and brand extensions for distribution through commercial venues, including hotels/motels, restaurants, cruise lines, healthcare, digital signage and other specialty channels. This year has been a tremendous growing process for the tight knit Florida team. They are busy working on building relationships within the industry and developing quality products and services that are specifically designed to meet and exceed current commercial industry standards. What started as a one-woman show in the summer of 2005 with Kim Honig, current

:: PETTERSGROUP

Director Business Development, has now become an office of 4, with the recent addition of Steve Hollington, Director Product Management. Dove Carter, who has been with Petters Group for nine years and was instrumental in the early efforts of Polaroid Consumer Electronics, will transition to Petters Hospitality by the end of the year as Vice President Operations. When Honig came to work for Petters Group after graduating from Miami University, she began working with Tom Petters on a vision he had of merging the Polaroid brand into the hospitality and commercial industry. Honig began researching market potential around this new industry, in addition to exploring the vastly different manufacturing requirements involved in the business, and began building relationships with partners and potential customers. Today, with the expertise of Jon McGaunn,

WRITTEN BY TIFFANY NASH

President/COO, Greg Kandare, Vice President Products, Hollington, and Carter, Petters Hospitality offers customized programs; fast, on-time solutions; advanced technologies and innovative systems; worldwide recognized brands; and aggressive pricing. Petters Hospitality prides itself on being agile when building programs and products by working closely with their customers to provide the highest quality product that is specifically designed to meet the needs and exceed the expectations of guests. The company will offer a full line of hospitality ready products with systems interface and DVD player option, including 15”, 19”, 26”, 32”, 37”, 40” and, coming soon, 46” LCDs. This breadth of product is more comprehensive than its competitors and is quickly gaining positive exposure with recent ads in Lodging Hospitality, Hotels, Hotel Business, and show dailies for the International

JULY 11, 2005 Kim Honig begins working on hospitality and commercial business development research NOV. 13-15, 2005 IH/M&RS 2005 tradeshow in NY JAN. 5 Jon McGaunn joins the company FEB. 2 Petters Hospitality and Entertainment Group, LLC is formed FEB. 27 Pro:Idiom contract effective (photos l to r) [1] Greg Kandare, Kim Honig, Jon McGaunn, and Anastasia Dorsey in the HD Boutique booth [2] Jon McGaunn, Kim Honig, and Greg Kandare in front of the HITEC booth [3] Greg Kandare and Nic Younghans setting up for HITEC

MARCH 31 Greg Kandare joins the company JUNE 20-22

Motel/Hotel & Restaurant Show (IH/M&RS) in New York City. This latest tradeshow was the first place Petters Hospitality premiered and marks the fourth industry show the company has done thus far, behind HITEC and HD Boutique. “Our product has been very well received at these shows, and we have seen a major increase in traction within the industry, building relationships with key strategical partners,” Jon McGaunn said. Among these key strategical partners are LodgeNet and On Command. On Command Video Corporation is a leading provider of inroom entertainment technology to the lodging and cruise ship industries and will work with Petters Hospitality to provide Polaroid televisions with On Command’s in-room video entertainment system. “With HD content beginning to make a presence in the hotel rooms, it is important that we know quality systems like Polaroid are present to enhance the programming we are providing to guests,” David Simpson, CTO and SVP of R&D of On Command said. LodgeNet Entertainment Corporation, the world leader in interactive TV and broadband solutions to

hotels, has partnered with Petters Hospitality to integrate Polaroid’s high-definition displays with LodgeNet’s HDTV platform for high-definition free-to-guest and video-ondemand services. Petters Hospitality has also adopted Pro:Idiom™ content security technology that will enable LodgeNet and OnCommand served hotels with Polaroid flat panel screens that are enabled with Pro:Idiom protected HD premium satellite and VOD entertainment. For the past 6 months, the team has focused on the back-end operations and integrating technology into the product. Now, with the industry buzzing in anticipation of the deployment of the Polaroid hospitality LCD line the future for Petters Hospitality looks brighter and more promising than ever. “We would never have been able to move as quickly into manufacturing as we have without utilizing the infrastructure, people and business relationships already in place due to the success of the retail product at PBC and PCE,” Kim Honig said. To learn more about Petters Hospitality and their product line, you can visit their new website at www.pettershospitality.com. PG

HITEC tradeshow in Minneapolis JUNE 21 HD On Command contract effective SEPT. 18-19 HD Boutique tradeshow in Miami OCT. 16 Standard Definition and HD LodgeNet contract effective OCT. 23 Steve Hollinger joins the company NOV. 12-14 IH/M&RS tradeshow in NY JAN. 1, 2007 Dove Carter joins the company Q1, 2007 1st product with Pro:Idiom technology scheduled for delivery

WINTER 2006

F E AT U R E

inside glance

Connecting TO THE

“W

Customer

e like to call it full metal jacket media.” That was how Petters Media Group (PMG) Chairman Bill Dunlap described the newly formed company within Petters Group Worldwide. Based on the theory that you can’t live by traditional advertising and marketing alone, PMG is a leader in the “New Media” arena. Bill should know. He ran Campbell Mithun for over two decades, one of the largest advertising firms in the Midwest. PMG excels in four areas: data management, content management, new media distribution and creative customer connections. PMG can build massive force by connecting with customers using world class data and innovative new media distribution such as airline, internet and digital media. This new media will be applied to the Petters Group portfolio and to outside companies creating a new content universe. “Each competency can stand on its own, but when you bring them together and put them in the Petters Group machine, it gives us a very unique competitive advantage,” Joe Schmit, President of PMG said. “The goal of this group is to make relevant, meaningful connections with the customer, and guess what, that leads to market growth.” PMG begins by analyzing and understanding the desired business outcomes of the client. Then, based on the intelligence they gather through their data research, PMG is able to build a customized strategy to achieve outcomes that have impact. They not only understand the demographics and movements of the targeted market, but they study cognitive behaviors so they can identify the new media channels that will pinpoint these people. “Traditional advertising still works,” Dunlap said, “but businesses that are not moving into the new experiential media area are going to get left at the bus stop.” Dunlap is talking about media that reaches people when they travel,

:: PETTERSGROUP

Petters Media Group Leveraging Relationships

shop, play or are on-line. Advertising agencies don’t need to be concerned because PMG works closely with client’s agencies that are focusing on more traditional media. A division of Petters Group Worldwide, PMG has access to unique resources to build business with minimum disruption while generating maximum impact. By connecting the dots with the many existing channels and advertising opportunities, they can leverage core competencies and synergies across portfolio investments including brand development, content, merchandising, sourcing and technology. It’s leverage with a capital “L”. PMG can create a digital communications network by just using the power of Petters Group. Polaroid can supply the hardware, Broadsign the software, and PMG the creative and content. We become a one-stop shop into

LEVERAGE with a capital “ L” the future. PRN or Walmart TV are just the start of the digital era. Forester Research predicts that 90 percent of retail outlets will have in-store media by 2011. “Hotels, banks, restaurants and all retailers will have a digital network in the near future and they are poised to catch the wave,” Schmit said. “It’s the biggest breakthrough in the advertising industry in the last 25 years.” PMG has the technology to change the digital signage not only in each store, but in each isle in the store. In other words, if you are in the cereal area of the grocery store, you will see the special for Lucky Charms™, not an ad for Tidy Bowl™. Here’s the beauty of the system; the return on investment will be measurable and in real time. When Google buys MySpace for 1.65 billion dollars, you know that someone realizes the

(l to r) Bill Dunlap and Joe Schmit

power and value of the internet. It’s not only internet traffic that is valuable, but the data that can be mined and how you react with that data can be invaluable. PMG’s internet plan is to be able to use the data to fuel targeted, strategic communications with customers by producing videos that are personalized. With a production house in the building, these videos can be produced quickly and inexpensively. The customer realizes they are not being spammed; just the opposite, they are being courted and it can lead to a connection. Petters Media Group is also poised to be the leader in the next genre of personalized marketing: mobile content. PMG is working on a mobile content strategy to stay ahead of the next contextual marketing waves. While focusing on core competencies, Petters Media Group will also live by the core values of Petters Group. Agility: Pertinent in an ever changing technology marketplace. Caring: A quality that resonates throughout the entire company. Execution: A great plan with average execution is invisible. A great plan with great execution is something the companies of Petters Group strive toward for real impact. Humility: Don’t get too high on your horse even when you exceed the goals set prior. Innovation: As Bill Dunlap said, “Cash follows creativity.” Integrity: It’s not only demanded, it’s expected at PMG. PG

COVER STORY

POLAROID

//////////// // // // // // // // // // // /\ /\ /\ /\ /\ /\ /\ \\ \\ \\ \\ \\\\\\\\\\ \ \ \ \ \ ////////////////\ /\ /\ /\ /\ /\ /\ // / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \

/ / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ ///////////////// / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ The / / / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ Transformation \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / / / / / / / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ / / / / / / / / ///// / / / / / / / / / / / / / / / \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \\\\/////////////////////////////\\\

of Polaroid

Taking the Pixel Digital WRITTEN BY ANDREA MILLER /////////////////////// ///////////////////////// PHOTOS BY TATE CARLSON

uilding on a heritage of Innovation, Dr. Edward Land was a great visionary and innovator who, in 1937, formed the Polaroid Corporation. His goal: to develop and market ground-breaking inventions, which included polarized sunglasses, 3D photographs, and the first stereoscopic motion picture viewers. Capitalizing on its successful research, Polaroid launched instant photography in 1948. Superior technology, creative marketing, and exemplary business

:: PETTERSGROUP

practices have always been the foundation of Polaroid’s success. “Innovation is one of Petters Group’s core values, and it will be an important ingredient in Polaroid’s transformation and future growth as the brand approaches its 70th anniversary,” Tom Petters, Chairman of Polaroid and Petters Group said. At the heart of Polaroid’s evolution is its successful consumer electronics business. Building on the respected Polaroid brand, and its innova-

tive business model, the company is rapidly expanding its leadership in the market. In the US, Polaroid has made extraordinary strides, achieving sales into 8 of the top 10 big box retailers within its first three years. The Polaroid LCD TV has jumped into the #1 sales position for many of the retailers. This is building off strong sales of the portable DVD players which were ranked #1 and digital cameras ranked #7 in 2005 by NPD Group and Twice Magazine. “It is an exciting time for Polaroid. We

are able to leverage the strength of this great brand as we grow a successful consumer electronics business. Building on our success in the United States, we now have the opportunity to take advantage of Polaroid’s presence in other countries and expand globally,” Mike O’Shaughnessy Polaroid CEO said. Part of this building process is also the expansion of product offerings and brand marketing. The Polaroid brand has expanded to GPS systems, PMPs, digital photo frames,

and SD memory cards. Product development teams led by Scott Hardy, SVP Product Management and Jim Koestler, VP Products, are working with retailers to create customized products their customers are demanding. On the brand awareness front, Polaroid’s marketing machinery is seeking brand opportunities more than ever with Polaroid’s products regularly appearing in gift guides and product spotlights of several national print publications. In addition,

Polaroid is appearing all over the media. The Polaroid Beach House, decked in Polaroid LCD televisions, hosted start-studded parties, while Polaroid also hosted the Polaroid Lounge at the Video Music Awards in New York City. But it doesn’t stop there. Polaroid also sponsored the second season of the “The Contender” and did a large campaign with The Breast Cancer Research Foundation and Elizabeth Hurley, providing a line of pink digital cameras with proceeds going to The BCRF.

WINTER 2006

COVER STORY

POLAROID

“We now have the opportunity to take advantage of Polaroid’s presence in other countries and expand globally.” — MIKE O’SHAUGHNESSY, POLAROID CEO

With the help of individuals from the instant business and the addition of others with strong consumer electronics backgrounds, the international offices are able to service both the instant and consumer electronics businesses. “Instant remains key to our growth strategy as the profits from its high margins generates significant fuel for Polaroid’s future growth,” Tom Beaudoin, Polaroid CFO/COO said. Helping facilitate the global expansion in the UK is Steve Smith, VP, Sales and Marketing. Smith is working closely with Mike Petersen, Vice President of the European Product Group, to leverage existing Polaroid relationships to introduce and sell consumer electronics in the UK. “By integrating consumer electronics across all functions in our international offices, we are able to pave the way for new sales channels,” O’Shaughnessy said. A great example of this is Polaroid UK which will wrap up a very productive 2006. The team has successfully sold several product lines to Dixons Stores Group International. Dixons is one of the largest consumer electronic retailers in Europe, with interests in France, Spain, Greece and Russia, as well as a very strong presence in the UK. Not only has Polaroid sold 4 portable DVD SKUs to Currys, a division of Dixons with 550 stores, it has also sold 26” and 32” LCD TVs to Dixons’ fastest growing chain, PC World, which has 150 stores in the UK. Polaroid is also making progress in Asia Pacific with significant wins in Japan and Australia due to the efforts of Yuto Ito, President of Polaroid Japan, Richard Lim, Marketing/Sales Director, Asia Pacific Region and Scott Bayles, VP Sourcing. The Mexican market is the second largest geographic area in consumer electronics.

:: PETTERSGROUP

This region, led by Manuel Madriz, VP International Sales and Operations, leverages Polaroid’ strong market presence. Petters Group Worldwide’s purchase of Polaroid in 2005 provided the ideal opportunity to build on its heritage. Although combining the two companies presented some early challenges, the strength of the new enterprise is proving to be a powerful advantage. “It has taken a period of time to get here, but we now know our strengths and we are taking the steps to expand on them. We are in a better position to leverage our combined global employee talent to address areas that need improvement,” Beaudoin said. While Polaroid’s name has been synonymous with instant photography for decades, today the company’s three core businesses are Instant Imaging, Eyewear and Consumer Electronics. Though a market for instant products still exists, demand has continued to decline with the advent of digital photography. “We have a loyal customer base for instant film, so we will extend its life for as long as possible,” Beaudoin said. “Unfortunately, as sales decline, it becomes more expensive to procure the raw materials and to operate our unique production facilities cost effectively.” Thus, to remain profitable, Polaroid has sought out innovative solutions for some of its underutilized assets. In recent years, three businesses units have emerged from the core Polaroid business to become new companies with exciting opportunities. Wideblue Ltd. was created when Polaroid’s design and manufacturing center in Vale of Leven, Scotland (Vale) was established. An independent company that provides design services

for manufacturing companies, Wideblue possesses the expertise necessary to take an idea from concept through to manufacturing, and is proficient in several areas including industrial, product, mechanical and automation design. In the US, ZINK Imaging, LLC, the inventor of ZINK “zero ink” paper, a break-through technology that will fundamentally change the way people print digital images, is another spin out from Polaroid Corporation. ZINK Imaging, headquartered in Waltham, Mass, is partnering with worldwide development and go-to-market partners, who are leaders in their respective fields, to bring ZINK enabled products to market. In addition, Multilayer Coating Technologies, LLC (MTC) was established with Polaroid’s sale of its New Bedford, Mass coating manufacturing operations. MCT will continue to supply Polaroid with its instant film components and will work to build its contract coating business by providing services to other companies. By finding a company to take over its coating business, Polaroid was able to maintain an essential component of its instant film manufacturing, while facilitating employment for 250 workers. Wideblue, ZINK Imaging and MCT have promising futures, and their talented and experienced employees are sure to make significant contributions to their success. In addition to creating outside businesses where it makes sense, Polaroid is also evaluating its instant film facilities and exploring their use by other Polaroid businesses. The facility in Vale, which has served as a manufacturing hub for the instant business, is one example. Polaroid Eyewear has also used the facility to manufacture sunglass lenses and over the last several months, have centralized much of the European warehouse, logistics and administration operations to Vale. The leadership team of Paul Sheerin, VP, Global Operations, Benjamin Kolher, VP & General Manager, Sales & Marketing, Katie Dugan, VP, Finance, and Graeme Ogle, VP Human Resources, has been spearheading this effort together with their teams and have established Vale as the global design, development and supply chain center for Eyewear. These efforts are yielding significant improvements in operations by reducing manu-

A BRIEF TIMELINE OF

POLAROID

“We have a loyal customer base for instant film, so we will extend its life for as long as possible.” — TOM BEAUDOIN, POLAROID CFO/COO

facturing and inventory costs and improving customer responsiveness. Synergies between Polaroid’s core businesses-- Instant, Consumer Electronics and Eyewear-- continue to be explored and the progress done thus far would not have been possible without the work of the information technology team led by Cindy Micavich, SVP/CIO. “It was critical that we leverage our IT resources so that we could provide innovative solutions throughout the organization,” O’Shaughnessy said. “We are excited about the progress the IT teams have made in bringing our systems together in order to help us effectively move forward.” “It’s an exciting time for Polaroid as they experience another transformation,” Petters said. Innovative technology and business practices are once again leading the way as the company moves forward in enhancing customer relationships and developing new products as the Polaroid brand strengthens itself around the world. PG

1937: The Polaroid Corporation is formed.

and Life Magazine features the camera and Land on its cover.

1939: Polaroid products include glasses, ski goggles, stereoscopic motion picture viewers, a redesigned desk lamp, fog-free and dark-adapter goggles for the Army and Navy. The company receives a contract to develop heat-seeking missiles equipped with miniature computers.

1977: Land is awarded his 500th patent. The OneStep Land camera is introduced. This inexpensive fixed-focus camera becomes the best-selling camera in the US, instant or conventional.

1944: Land conceives the one-step photographic system while on vacation in New Mexico with his family.

1991: Edwin Land dies at the age of 82.

1948: The first Land camera, the Model 95, is sold in Boston at Jordan Marsh department store on November 26th for $89.50. This model is the prototype for all Polaroid Land cameras produced for the next 15 years. 1963: Polaroid introduces Polacolor, as instant color film is invented. The Model 100 Land camera, the first fully automatic pack film camera to include automatic exposure control, and Type 48 and Type 38 Polacolor Land roll films, is introduced. 1972: Polaroid SX-70 Land Camera, the first automatic, motorized, folding, single-lens reflex camera that makes self-developing instant color prints, is introduced. Lawrence Olivier acts as an advertising spokesman for the camera,

1987: Polaroid Corporation celebrates its 50th Anniversary.

1998-1999: Digital camera sales make Polaroid the number one digital camera seller in the United States. Introduction of the I-zone, JoyCam, and PopShots cameras and films is successful. 2003: Polaroid Portable DVD player is introduced at Best Buy. 2005: April 27th, Petters Group Worldwide purchases Polaroid making it a wholly owned subsidiary. 2005: Polaroid LCD’s are ranked #9, Portable DVD players #1 and 35 mm Digital Cameras #7 by NPD Group and Twice Magazine. 2006: Polaroid launches CE products to Europe, Japan and Asia, continues to ship millions of packs of Instant film and launches the 2007 collection of sunglasses in Antalya, Turkey.

WINTER 2006

CORNERSTONES

investment process

Partner with Legal Putting Strategy into Your Business

n more than one project, we have all heard the dreaded words, “You better check with legal.” That is a conversation you assume will end in numerous unanswered questions, red marks all over your document and a trip back to the planning committee. The Petters Group Worldwide Legal Department wants those words to take on a new meaning for the companies of Petters Group. “We want to get involved on day one of a project to help give guidance and strategic support. Making the right decisions early can save time and money down the road,” David Baer, Chief Legal Officer said. Questions and issues come up on a daily basis whether relating to products, contracts, negotiations, transactions, acquisitions, investments or intellectual property matters. Guessing the right answer often takes you down the wrong path, and getting back on track can be time consuming and expensive. “We have seen deals die because a simple question was not addressed early on,” Baer said. With staffing in Minnetonka, Minn. and Waltham, Mass., the legal team is just down the hall or a quick phone call to the legal hotline. Most of the work is done in-house, which could lead one to assume the Legal Department is too busy for a question. Michael Phelps, Deputy Chief Legal Officer of Petters Group Worldwide, LLC said, “I would rather answer 100 simple questions than have to go to court because someone was afraid to ask a question.” When an issue does arise outside their area of expertise, the Legal Department has several resources available to call upon. They have developed relationships with outside law firms and advisors who have a good understanding of our companies and their specific needs. In most cases, using outside counsel is the only time a portfolio company will see an additional charge for

:: PETTERSGROUP

WRITTEN BY ANDREA MILLER

PETTERS GROUP WORLDWIDE CORNERSTONES INVESTMENT PROCESS

STRATEGY We use a focused business strategy making leveraged acquisitions in companies that generate superior investment returns

OPERATIONAL EXCELLENCE Our infrastructure provides consistent delivery of a high level of performance and portfolio support with a focus on quality and continuous improvement

We follow discplined investment processes in making and managing investments

RELATIONSHIP MANAGEMENT We develop, grow and leverage superior relationships and networks to enhance our effectiveness in meeting strategic goals

The legal team in Waltham front row: Kim Goslant, Bill Boyd, Michael Traister. Back Row: Elisa Terrasi, Lynne Labanara, Jan Neville, Liane Osborne.

photo by Todd Buchanan

(l to r) Thomas Ting, Michael Phelps, Colleen Sarenpa, Sarah Marquis and Lois Kruse. Missing from photo Kristy Torgrimson. (below) David Baer, Chief Legal Officer.

AREAS OF PRIMARY RESPONSIBILITY OF THE LEGAL TEAM : : • PGW : : David Baer & Michael Phelps • Polaroid : : Bill Boyd, Kim Goslant & Michael Traister • PCE : : David Baer, Bill Boyd & Tom Ting • PCB : : David Baer & Tom Ting • Petters Aviation : : David Baer • Petters Capital : : David Baer • Petters Hospitality : : Michael Phelps & Tom Ting • PMG : : David Baer &

“Making the right decisions early can save time and money down the road.” — DAVID BAER legal services. The in-house staff’s time is covered in a monthly Petters Group allocation charge. “The legal expertise and business savy we have in our legal department is not often found in a company our size. They are a critical element to our success at Petters Group,” Mary Jeffries, COO for Petters Group said. Seven attorneys, an intellectual property manager, three paralegals and four administrative assistants staff the two offices. Finding them all in their offices at one time is rare as they are often flying off to be a part of a negotiation or evaluating product matters first hand. “If we need to be there to make sure the matter is handled properly, we do not hesitate to take the next flight out. Making sure the companies are comfortable with their decisions is our job so they can keep moving forward,” Bill

Boyd, Senior Vice President and General Counsel for Polaroid Corporation said. Allowing companies to keep their focus on their business strategies is just one of the many ways the Petters Group Worldwide Legal Department assists in moving companies forward. The Legal Department wants to partner with each Petters company to assist in its growth and help ensure success for every client. Soon, you will see the initial launch of a marketing campaign to help remind people to bring their questions to the Legal Department. Ask, Don’t Guess, What Would Legal Do? is the theme being designed into collateral pieces to be distributed throughout the companies. So the next time that little voice in the back of your head says, “I better check with legal,” do not dread it; view it as a partnership to help move your project forward. PG

Michael Phelps • SpringWorks Companies : : Michael Phelps • Soniqcast : : Michael Phelps • Aaron Chang : : Michael Phelps • Real Estate : : Kim Goslant • Litigation : : Michael Traister • Trademarks : : Colleen Sarenpa • Domain Names : : Colleen Sarenpa • Human Resources : : Michael Phelps & Michael Traister • Corporate Records : : Lois Kruse & Jan Neville

Please feel free to contact anyone in the legal department at any time. If you are not sure where to direct your questions or concerns, call the new Legal Hotline at 952-936-5200.

WINTER 2006

GALLERY

people and places

Not So Itsy Bitsy for Aaron Chang : : Aaron Chang International made a big splash at SwimShow 2007, July 15-19 in Miami, FL. Presented by The Swimwear Association of Florida, SwimShow is the largest swimwear tradeshow in the world. For a full 5 days, SwimShow enables retailers to interact with reps and manufacturers to discuss designs, trends, pricing, terms, meet with favorite manufacturers and preview new lines, place orders and network with industry peers. Over 2000 buyers from the US and 39 different countries spanning the globe come to the show to view the very latest in swimwear, beachwear and resortwear from 350 exhibitors representing nearly 2000 lines. [1] Rick Engels, Petters Group CFO, & Aaron Chang [2] Aaron Chang models in booth [3] Teresa Gewedik, Midwest

Sales Rep for ACI, & Norm Zwail, ACI CEO

Petters Group Celebrates Employee Appreciation Week : : Employee Appreciation Week, Sept. 17-22, was a chance for Petters Group Worldwide to give back to its hard working, dedicated employees. Each day centered around a particular company Core Value. For examples, Sunday (Innovation) kicked off the week in a

new way, with Family Day at the Minnesota Zoo. Other daily events included a book drive, a â&#x20AC;&#x153;Great Places to Workâ&#x20AC;? luncheon at the Hilton downtown Minneapolis, and guest speakers Stevie Ray and Brother Louie DeThomasis. The most excitement, however, came Friday (Agility) with Office Olympics. Employees competed in a team event and 4 individual games. [1] Collating gives Courtney Jacks the chuckles [2] David McGee binding books

:: PETTERSGROUP

Petters Group Goes to the Dogs : : On June 23rd, Petters Group Worldwide went to the dogs, literally. In conjunction with National Take Your Pet to Work Day, the Minnetonka office opened its doors and facilities to the employees’ best friends. Pets were asked to check-in to take photos, receive treats and sport the “Official Petters Group Worldwide Banana.” Awards such as “Best Tail Wager” and “Best Dressed” were given out. The day also included such events as American Pet Idol, Build Your Own Hot Dog lunch, and as part of a commitment to Charitable Giving, donations were taken throughout the day for Pleading Paws Pet Rescue who had staff on site with homeless pets available for adoption. [1] American Pet Idol Judges Rick

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“Randy” Engels, Patty “Paula” Hamm, and Tom “Simon” Kelly [2] Rick Engels and Rex [3] Amy Waara and Dudley [4] Rachel LeTendre and Ben [5] Melanie Martin and Sydney

3 [3] Sandy Indahl aiming for David Baer in the stress ball executive toss [4] John Clinton stapler toss [5] Michelle Montazeri, winner of Pin the Blackberry on Tom

5 WINTER 2006

GALLERY

people and places

Petters Hospitality Throws After Party : : The evening of June 21st was a cause of great celebration for Petters Hospitality. In the midst of a successful HITEC tradeshow at the Minneapolis Convention Center, Petters Hospitality and Guest-Tek, the largest single global provider of hospitality broadband services, presented “The After Party” at Bellanotte. This event was a chance for Petters Hospitality to really spread its wings and connect

with other hospitality industry leaders. Among the guests that night were Petters Group Worldwide executives, business partners and local celebrities who enjoyed hors d’oeuvres, brandy tasting, and cigar rolling. [1] Greg Kandare, Mark Laumann, George Danko [2] Guests are provided complimentary transportation in vintage automobiles [3] Jon McGaunn, Mollie O’Brien, Mike O’Shaughnessy [4] Governor Tim Pawlenty, Bill Dunlap, David Baer [5] Mary Jeffries and Larry Harmer

PCB & Polaroid Show in Vegas : : From Aug. 21-22, the Nationwide PrimeTime! tradeshow was held at the Venetian hotel in Las Vegas, NV. Sunbeam and Polaroid showed the latest in their lines of home appliances and consumer electronics, respectively, in neighboring booths. [1] Sunbeam booth [2] 1st day of PrimeTime! [3] Polaroid booth

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2 :: PETTERSGROUP

THE PETTERS GROUP MATRIX

AARON CHANG INTERNATIONAL, LLC 5600 Avenida Encinas Suite 130 Carlsbad, CA 92011 www.aaronchang.com BRAX CAPITAL GROUP 9440 S. Santa Monica Blvd. Suite 710 Beverly Hills, CA 90210 BROADSIGN 827 S. Bridgeway Pl. Suite 200 Eagle, ID 83616-6097 www.broadsign.com CAMPUS 1 HOUSING 4400 Baker Rd. Minnetonka, MN 55343 www.campus1housing.com COLLEGEVILLE DEVELOPMENT GROUP 1015 W. St. Germain St. Suite 340 St. Cloud, MN 56301 www.collegeville communitities.com

INFINITE POWER SOLUTIONS 14998 West Sixth Avenue Building E, Suite 600 Golden, Colorado 80401 www.infinitepower solutions.com INTEGRITY MARKETING AND SALES 4400 Baker Rd. Minnetonka, MN 55343 JOHN T. PETTERS FOUNDATION 4400 Baker Rd. Minnetonka, MN 55343 www.johntpetters foundation.org METROPOLITAN MEDIA GROUP 5001 American Blvd. W. Ste 400 Bloomington, MN 55437 PETTERS AVIATION 4400 Baker Rd. Minnetonka, MN 55343 www.pettersgroup.com

FIDELICA MICROSYSTEMS, INC. 1585 McCandless Drive Milpitas, California 95035 www.fidelica.com

PETTERS CAPITAL Flagler Center Tower 505 S. Flagler Dr. Ste 700 West Palm Beach, FL 33401 www.pettersgroup.com

FINGERHUT DIRECT MARKETING 7777 Golden Triangle Dr. Eden Prairie, MN 55344 www.fingerhut.com

PETTERS COMMERCIAL REAL ESTATE GROUP 4400 Baker Rd. Minnetonka, MN 55343 www.pettersgroup.com

FINGERHUT FULFILLMENT 6250 Ridgewood Road St. Cloud, MN 56303 www.fingerhut.com

PETTERS CONSUMER BRANDS 4400 Baker Rd. Minnetonka, MN 55343 www.pettersgroup.com

IMPACT MARKETING GROUP 18760 Lake Drive East Chanhassen, MN 55317

PETTERS HOSPITALITY Flagler Center Tower 505 S. Flagler Dr. Ste 700 West Palm Beach, FL 33401 www.pettershospitality.com

PETTERS MEDIA GROUP 4400 Baker Rd. Minnetonka, MN 55343 www.pettersgroup.com

SPRINGWORKS 4400 Baker Rd. Minnetonka, MN 55343 www.pettersgroup.com

PETTERS WAREHOUSE DIRECT (CORPORATE) 4400 Baker Rd. Minnetonka, MN 55343

SUN COUNTRY AIRLINES 1300 Mendota Heights Rd. Mendota Heights, MN 55120 www.suncountry.com

PETTERS WAREHOUSE MALL OF AMERICA North Garden Level 3 (N356) Bloomington, MN 55425

SYMMORPHIX 1278 Reamwood Avenue Sunnyvale, CA 94089-2233 www.symmorphix.com

PETTERS WAREHOUSE MOUNDSVIEW SQUARE 2537 Hwy 10 West Moundsview, MN 55112

TAM O’SHANTER LODGE & CONFERENCE CENTER 89405 Jack Pine Trail Cornucopia, WI 54827 www.tamoshanterlodge.com

PETTERS WAREHOUSE WAITE PARK / ST. CLOUD 306 2nd Street Quad Waite Park, MN 56387 www.petterswarehouse.com POLAROID CONSUMER ELECTRONICS 4400 Baker Rd. Minnetonka, MN 55343 www.polaroid.com POLAROID INSTANT IMAGING 1265 Main Street Waltham, MA 02451 www.polaroid.com POLAROID EYEWEAR Polaroid Eyewear AG Max Högger-Strasse 2 8048 Zurich Switzerland www.polaroideyewear.com QUBIC LIGHT 1 Harbor Drive Suite 200 Sausalito, CA 94965 www.qubiclight.com

TRIO MARKETING 4400 Baker Rd. Minnetonka, MN 55343 UBID

8550 W Bryn Mawr Ste 200 Chicago, IL 60631 www.ubid.com WIDEBLUE Vale of Leven Industrial Estate Dumbarton, Scotland G82 3PW www.wide-blue.com YES VIDEO 3281 Scott Blvd. Santa Clara, CA 95054 www.yesvideo.com YFLY.COM 12100 Wilshire Boulevard Ste. 800 Los Angeles, CA 90049 www.yfly.com Actively managed Petters Group investments.

SONIQCAST 4400 Baker Rd. Minnetonka, MN 55343 www.soniqcast.com WINTER 2006

REALITY BYTES

jon mcgaunn

Jon McGaunn COO and President Petters Hospitality WHAT IS YOUR FAVORITE ELECTRONIC GADGET? It has to be TIVO - the convenience of watching what you want, when you want.

WHAT WAS THE LATEST DESTINATION ON YOUR VACATION LIST? I have two answers: the kids want to go to Colorado to ski, which will happen later this year, and my wife and I are planning to go to England where she was born but has not been back to since she was a baby.

WHAT WOULD YOUR WIFE SAY IS YOUR WORST HABIT? It is tough to go out to eat or stay at a hotel with me. I worked at the Ritz-Carlton so I have been trained on luxury service. I tend to over analyze the service because I expect the highest level of service and you don’t always get this at Wendy’s. I can always tell if the person really cares about their job or if they are just picking up a pay check.

WHAT IS YOUR FAVORITE RESTAURANT/MEAL? Prime 112 in South Beach. It is the most amazing modern steakhouse, with incredible food, a great atmosphere and, best of all, it has great service.

WHAT IS YOUR DREAM CAR AND WHY? This is tough. I change my mind often because there is always something new coming out. If it is a dream car, I would have to say the Ferrari F430 Spider. It has all of the power you need and the latest and greatest technology, with a classic look.

:: PETTERSGROUP

WHAT IS YOUR FAVORITE ELECTRONIC GADGET?

It has to be TIVO - the convenience of watching what you want, when you want. IF YOU COULD DO ANYTHING FOR A JOB, WHAT WOULD IT BE? I would love to operate an NFL franchise. I think the amount of time, effort, strategy and passion it takes to building a winning team and eventually a dynasty is enticing. In that atmosphere, no matter what barriers you have, the end result is that you stick together as a team and you win. It is very similar to what I am doing right now, and I

love the fact that you can plan the strategy, execute it and see the results.

HOW DO YOUR KIDS DESCRIBE YOU TO THEIR FRIENDS? Friendly, fun, and energetic. I have a lot of fun with my kids. JP just turned 9 and Hannah is 7. Both play sports and have fun doing them. Our house is always filled with the neighborhood kids who are swimming, playing and just hanging out.