<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
Pacer Technology
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
PACER TECHNOLOGY
9420 Santa Anita Avenue,
Rancho Cucamonga, CA 91730
(909)987-0550
November 1, 1999
Dear Fellow Shareholder:
As you know, the Annual Meeting of Shareholders of Pacer Technology is
scheduled to be held at 9:00 a.m. on Tuesday, November 16, 1999 at the
DoubleTree Hotel, 222 North Vineyard Avenue, Ontario California. At the Annual
Meeting the shareholders will elect six persons to serve as directors of Pacer
Technology for the ensuing year. The nominees are the four of us, Tom
Nightingale, Carl Hathaway, John Hockin and Larry Reynolds, and Geoffrey Tirman
and John Merriman. This year, in addition to the election of directors, we will
be sharing exciting news about the recent improvements in our operating
performance and steps we are taking to enhance shareholder value. As always, you
are cordially invited to attend the Annual Meeting and we hope to see you there.
Earlier this year we made some difficult decisions, including changes in
our senior management. With our new management team in place and having
implemented a number of corrective actions to overcome problems left by the
prior management team, we are starting to see improved results. On October 15,
1999 we announced the highest quarterly earnings and revenues in our
history -- $1.0 million of net income, equal to $0.06 per share, and total
revenues of $14.3 million -- in the first quarter of fiscal 2000, which ended
September 30, 1999. We are pleased to start off the new fiscal year in such a
strong fashion and we believe we are again on the right track.
Unfortunately, two of your directors who we recently added to our board,
Messrs. Tirman and Merriman, apparently believe that now is a good time to bring
back the old management team of James Munn, Howard Bloom and Robert Cavazos and
try to break up and sell your Company. YES, THE SAME MANAGEMENT TEAM WHICH
FAILED TO DELIVER ANY RETURN ON SHAREHOLDER'S EQUITY FOR OVER 10 YEARS. To
accomplish their ends, Tirman and Merriman misled us into believing that they
would be supporting the re-election of all of the incumbent directors. Then,
only after we mailed our Proxy Statement to you, they launched a sneak attack
to:
(1) Oust us from the Board of Directors and elect individuals to the Board
that include Munn and Bloom and two other individuals, Allen D. Barnes and
Claude M. Ballard, who own NO shares of and have NO financial stake in our
Company and therefore have nothing in common with the shareholders.
(2) Replace members of our new management team, possibly with members of
the failed management team that we fired earlier this year, despite the fact the
our new management team, in a matter of a few short months, has led the Company
to the highest quarterly revenues and earnings in its history.
FOR THE REASONS DESCRIBED BELOW, THE BOARD OF DIRECTORS HAS DECIDED TO
CUMULATE AND CAST THE VOTES REPRESENTED BY ALL PROXIES WE HAVE RECEIVED OR MAY
RECEIVE AND TO CAST AND ALLOCATE ALL OF THOSE VOTES SOLELY AMONG MESSRS.
NIGHTINGALE, HATHAWAY, HOCKIN AND REYNOLDS, IN SUCH PROPORTIONS AS WE DEEM
APPROPRIATE TO OBTAIN THE ELECTION OF AS MANY OF OUR FOUR CANDIDATES AS IS
POSSIBLE.
IF, AFTER READING THIS LETTER, YOU DECIDE TO SUPPORT OUR REELECTION TO THE
BOARD, AND YOU ALREADY HAVE SENT US YOUR PROXY CARD, YOU NEED NOT SEND US BACK
ANOTHER PROXY CARD. IF YOU WANT YOUR SHARES VOTED IN A DIFFERENT MANNER, YOU
STILL HAVE THE RIGHT TO REVOKE ANY PROXY YOU MAY HAVE PREVIOUSLY SENT US, BY
COMPLETING AND SENDING THE ENCLOSED PROXY CARD BACK TO US CONTAINING YOUR NEW
VOTING INSTRUCTIONS. SUCH A LATER DATED PROXY CARD WILL SUPERSEDE YOUR EARLIER
ONE.
Set forth below is important information about Tirman and the members of
his Committee that we believe will lead you to agree with us that, by their own
actions and statements, Tirman and the Committee's other nominees have
demonstrated that they lack the character and qualifications to represent you on
the Board of Directors.
<PAGE> 3
Setting the Record Straight. In his effort to oust us as directors and
replace our current management team, Tirman and his Committee has sent a letter
to the shareholders and filed proxy materials that distort and misrepresent our
record as directors of your Company. Therefore, we want to begin by setting the
record straight.
- TIRMAN'S CLAIMS THAT YOUR BOARD OF DIRECTORS SUMMARILY REJECTED A $1.95
CASH OFFER FOR THE COMPANY ARE FALSE AND MISLEADING. Here is what Tirman
was afraid to tell you:
- The prospective buyer had originally agreed to pay $2.15 per share in
cash for your shares. We obtained an opinion from an independent
valuation firm that the price of $2.15 was fair, from a financial
standpoint, to the shareholders, and YOUR BOARD OF DIRECTORS THEN
APPROVED THE SALE AT THAT PRICE.
- The prospective buyer later reneged and told us that it would proceed
with the transaction only if we would accept a price of $1.80. The Board
carefully considered the reduced price and all six Board members,
including Munn, voted unanimously to reject that lower price, based on,
among other things, the comments of the valuation firm that a price
below $2.00 per share was probably less than our liquidation value; that
is, the cash we could expect to net if we were to liquidate and sell off
the assets of the Company piecemeal. After our rejection, the buyer
reluctantly proposed to increase the price to $1.95, which was still no
higher than the liquidation value of your shares.
- The buyer was structuring the transaction so as to permit Munn, Bloom
and Cavazos, and other management employees, to retain shares in the
Company, thereby giving them the opportunity to share in any future
profits of the Company. By contrast, none of the other shareholders of
the Company were to be permitted to retain any of their shares and, as a
result, would be denied any participation in its future profits.
- Upon learning of the unilateral price reduction by the buyer, Tirman
contacted the buyer. Tirman then urged the Board to reject the $1.95
offer, claiming that, with his knowledge and contacts, he could get the
price of Pacer's shares above $2.00. Since Tirman represented one of our
largest shareholders, his recommendation was given considerable weight
in the Board's decision.
- After further deliberations, the Board members (with the exception of
Munn who abstained) unanimously voted to reject the $1.95 offer because
in their opinion (i) a price that did not exceed liquidation value was
still inadequate, (ii) as structured, the sale would unfairly benefit
management, and (iii) there was no assurance that the buyer would not
later seek to lower the price.
- TIRMAN'S ASSERTIONS ABOUT THE GRANT OF WARRANTS TO DIRECTORS ARE
MISLEADING. What Tirman is afraid to tell you is that:
- The Warrants were granted to three directors, in 1985 and 1986, nearly
15 years ago, at a time when the Company was near bankruptcy. IN ORDER
TO OBTAIN A BANK CREDIT LINE, WHICH THE COMPANY NEEDED IN ORDER TO STAY
IN BUSINESS, THESE THREE DIRECTORS VOLUNTARILY PUT THEIR PERSONAL ASSETS
AT RISK, FOR THE BENEFIT OF THE COMPANY AND ALL OF THE SHAREHOLDERS, BY
AGREEING, ON THREE OCCASIONS, TO PERSONALLY GUARANTEE THE COMPANY'S
BORROWINGS FROM THE BANK. By contrast, Munn, who is one of Tirman's
nominees, refused to guarantee the Company's debt. By unanimous vote
(including Munn's), the Warrants were awarded to these three directors
in return for their having personally guaranteed the Company's debt and
saving it from bankruptcy.
- The Warrants did no more than entitle these directors to purchase
additional Company shares for a price equal to the market value of the
shares when the warrants were issued.
- The Board publicly disclosed all of this information to the shareholders
in our proxy statements.
- No options or warrants have been granted to any non-management directors
in the past three years.
We believe that, before casting any votes for Tirman and his group, you
should consider whether you want to trust your investment to individuals who
have so little regard for the Shareholders that they are willing to withhold the
whole truth from you just to further their own personal agendas.
2
<PAGE> 4
WHAT YOU SHOULD KNOW ABOUT THE TIRMAN GROUP NOMINEES. Tirman is claiming
that his nominees will place the interests of Pacer's shareholders first, and
that they have the skills needed to improve the Company's stock price. We urge
you, our shareholders, to consider the following facts when determining whether
these claims are genuine and whether to place the future of your investment in
the hands of Tirman and his nominees:
- TIRMAN GREENMAIL PROPOSAL. Although Tirman claims that he will place the
interests of the Shareholders first, HE RECENTLY INFORMED US THAT HE IS
PREPARED TO ABANDON THE PROXY CONTEST IF THE COMPANY WOULD PURCHASE HIS
STOCK FOR $2.00 PER SHARE. IN SHORT, TIRMAN IS PREPARED TO SELL YOU OUT
"IF THE PRICE IS RIGHT" FOR HIM PERSONALLY. We unequivocally rejected his
proposal. Also, we believe that Tirman has initiated the proxy contest to
rid himself of his Pacer shares for personal profit, even if it means
abandoning the shareholders whose interests he claims to be championing.
- ALLIANCE WITH FAILED MANAGEMENT TEAM. Tirman's nominees include Munn and
Bloom and one of his supporters is Roberto Cavazos, the members of the
failed management team. Tirman is claiming that they have the skills to
increase shareholder value. However, at a Board Meeting in February 1999,
Munn advised the Board that he was at a loss as to what actions
management might take that could lead to an improvement in the Company's
stock price. Also, in early 1999 Tirman, who is now extolling the record
of this failed management team, strongly urged the Board to fire Munn. As
a result, we think that Tirman should explain why he now believes Munn
and Bloom have the skills to improve our share price, when they had
failed to do so during their multi-year tenure as the senior officers
and, just earlier this year, Tirman had urged the Board to fire Munn.
- LONG-DISTANCE DIRECTORS. Two other of Tirman's nominees, Ballard and
Barnes, own NO shares of stock of Pacer and reside and work more than
2,000 miles from our offices. It is difficult to understand how they can
contribute to the Company's performance when they lack any financial
stake in our Company, know little if anything about our business and are
likely to participate in Board proceedings by telephone.
- THE TIRMAN AND MERRIMAN PERFORMANCE RECORD. Tirman and Merriman became
directors of Pacer in April 1999. We believe that their record brings
into question their commitment to your Company and you, the shareholders,
and their ability to achieve an improvement in our stock price:
- Since becoming directors, neither Tirman nor Merriman has proposed a
single concrete initiative that might lead to improved profitability or
increases in our share price, despite Tirman's claims in December 1998
that he could help to get our stock price up.
- Neither Tirman nor Merriman has thought it important enough to
personally attend any of the Board meetings or to meet personally with
management. Instead their participation in Board meetings has been
solely via the telephone.
- Of the 4 Board meetings held since he became a director, Merriman has
attended only 2 meetings, all via the telephone; and in 1 of those 2
meetings he hung up the phone shortly after the meeting was convened.
Also, on more than one occasion we had to postpone scheduled Board
meetings to enable Tirman to participate because apparently he had more
important matters to attend to on the originally scheduled meeting
dates. If Tirman's nominees are elected to the Board, four of your six
directors will reside at substantial distances from the Company's
headquarters. We wonder whether these nominees will follow the example
of Tirman and Merriman and be absentee or long-distance directors. Maybe
they think they are smart enough to, as the saying goes, "just call it
in."
- In September 1999 Tirman requested a copy of our shareholder list. He
was asked by one of the directors whether he intended to use it to wage
a proxy contest. He stated, unequivocally, that he would not be using
the list for the purpose. Tirman later admitted that, at the time of
this request, he had intended to use the list to wage his proxy contest.
- TIRMAN'S THREAT TO FIRE PACER'S NEW MANAGEMENT TEAM. Although our new
management team of Tom Nightingale, Roger Vanderlaan, Laurance Huff,
Amanda Searcy and James Gallagher, has accomplished, in a period of six
months, what the failed management team of Munn, Bloom and Cavazos was
unable to do over a period of nearly ten years, Tirman and his group
have stated that, if
3
<PAGE> 5
elected, they will fire at least some members of the new management
team. Tirman has not said who he has in mind to replace them and, for
all we know, he might select the failed team of Munn, Bloom and Cavazos.
Tirman also appears to be indifferent to the fact that threats such as
these only serve to undermine morale and create uncertainties within our
Company, which could imperil our future success. His actions, therefore,
are hardly consistent with his claims that he intends to put the
shareholders first. Rather, it appears to us that his threatened actions
are intended to "repay" Munn, Bloom and Cavazos for their support and to
put pressure on management to accept his greenmail proposal.
WE ARE BUILDING VALUE. Like you, we are long time shareholders of Pacer and
we have devoted countless hours of our time to achieve improvements in Pacer's
operating results. As our most recent quarterly results demonstrate, we have
assembled a management team that is capable of producing the kinds of
improvements in profitability that we believe will result in increases in the
price of our shares. WE ARE EXCITED ABOUT THE FUTURE AND BELIEVE THAT, AS A
RESULT OF OUR EFFORTS AND THOSE OF OUR NEW MANAGEMENT TEAM, WE ARE POSITIONED TO
CREATE AND TAKE ADVANTAGE OF OPPORTUNITIES TO BUILD REAL VALUE FOR OUR
SHAREHOLDERS. However, we are concerned that the election of Tirman and his
nominees to the Board will undermine the progress we already have made, imperil
those opportunities and put your investment in Pacer at risk.
HOWEVER, YOU HAVE THE POWER TO PREVENT TIRMAN AND HIS NOMINEES FROM
EXPLOITING AND PUTTING YOUR INVESTMENT IN PACER AT RISK. We have enclosed a new
WHITE Proxy Card, and ask that you mark that Card in favor of the election of
Messrs. Nightingale, Hathaway, Hockin and Reynolds and that you sign, date and
return it to us in the postage paid return envelop that is also enclosed, even
if you have already sent us a proxy card, because, under the rules governing
proxy contests, only the latest dated proxy cards are counted.
WE ALSO URGE YOU NOT TO RETURN ANY PROXY CARD THAT YOU MAY RECEIVE FROM THE
TIRMAN GROUP, EVEN AS A PROTEST VOTE. DOING SO WILL HAVE THE EFFECT OF
NULLIFYING YOUR EARLIER VOTE IN FAVOR OF THE ELECTION OF OUR CANDIDATES.
If you have any questions or need assistance in completing the WHITE Proxy
Card, please call our solicitor: MacKenzie Partners, Inc., toll free, at
1-800-322-2885.
Thank you for your support.
W. T. Nightingale, III Carl E. Hathaway
John G. Hockin, II Larry K. Reynolds
DISCRETIONARY AUTHORITY. THE WHITE PROXY CARD CONFERS DISCRETIONARY
AUTHORITY ON THE INDIVIDUALS NAMED AS PROXIES THEREON (I) TO CUMULATE VOTES CAST
ON THE ELECTION OF DIRECTORS AND TO ALLOCATE THOSE VOTES AMONG THE BOARD'S
NOMINEES IN SUCH PROPORTIONS AS THOSE INDIVIDUALS DEEM APPROPRIATE, AND (II) TO
VOTE AS THEY DEEM APPROPRIATE ON ANY OTHER MATTERS THAT MAY COME BEFORE THE
ANNUAL MEETING. IF NO VOTING INSTRUCTION IS GIVEN ON A PROXY CARD, IT WILL BE
VOTED IN ACCORDANCE WITH THAT DISCRETIONARY AUTHORITY.
As a result of the decision of Tirman and his Shareholder's Committee to
conduct a proxy contest, Pacer now estimates that it will incur fees in
connection with its solicitation of approximately $60,000, which includes fees
of $30,000 to Mackenzie Partners Inc. for assistance in soliciting proxies for
the Annual Meeting. In addition, Pacer will reimburse Mackenzie Partners for its
reasonable expenses.
Pacer is soliciting proxies for the election of W. T. Nightingale, III,
Carl E. Hathaway, John G. Hockin II, and Larry K. Reynolds at the Annual Meeting
of Shareholders to be held on November 16, 1999 and may solicit revocations of
any proxies delivered to Tirman's Committee. Pacer and the following individuals
may be deemed to be "participants" in this solicitation of proxies: W. T.
Nightingale, III, Carl E. Hathaway, John G. Hockin II, Larry K. Reynolds, James
F. Gallagher, Roger R. Vanderlaan, Laurence Huff and DeVere McGuffin. As of
September 27, 1999, those individuals beneficially owned, in the aggregate,
2,862,090 shares of Pacer Common Stock (inclusive of options to purchase shares
of Common Stock that were exercisable as of that date or were to become
exercisable within 60 days thereafter).
4
<PAGE> 6
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF PACER TECHNOLOGY
1999 Annual Meeting of Shareholders
The undersigned shareholder of Pacer Technology, a California
corporation (the "Company"), hereby appoints Larry K. Reynolds and John G.
Hockin, II and, and each of them acting singly, as proxies and attorneys-in-fact
with full power of substitution, on behalf and in the name of the undersigned,
to represent the undersigned at the Annual Meeting of Shareholders of the
Company to be held on Tuesday, November 16, 1999, at 9:00 a.m., California time,
at the DoubleTree Hotel, Ontario, 222 North Vineyard Avenue, Ontario,
California, and at any adjournment or adjournments or postponements thereof, and
to vote all Common Shares to which the undersigned would be entitled, if then
and there personally present, on the matters set forth on the reverse side.
SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 7
<TABLE>
<S> <C>
1. ELECTION OF DIRECTORS. 2. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
NOMINEES: Carl E. Hathaway, W. T. Nightingale,
III, John G. Hockin, II, Larry K. Reynolds, THIS PROXY CONFERS DISCRETIONARY AUTHORITY ENTITLING THE NAMED PROXY
Geoffrey Tirman and D. Jonathon Merriman HOLDERS TO CUMULATE VOTES AND ALLOCATE THOSE VOTES AMONG ANY NUMBER OF
THE NAMED NOMINEES IN SUCH PROPORTIONS AS THE PROXY HOLDER OR
For Withhold HOLDERS DEEMS APPROPRIATE AND IN THEIR DISCRETION ON ANY OTHER MATTERS
[ ] [ ] THAT MAY PROPERLY COME BEFORE THE MEETING. UNLESS A CONTRARY INSTRUCTION
IS GIVEN, THE PROXY HOLDERS INTEND TO VOTE ALL PROXIES RECEIVED BY THEM
[ ]______________________________________ SOLELY FOR THE ELECTION OF ANY OR ALL OF MESSRS. NIGHTINGALE, HATHAWAY,
For Hathaway, Nightingale Hockin and HOCKIN AND REYNOLDS, EVEN IF THE SHAREHOLDER DOES NOT WITHHOLD HIS OR HER
Reynolds, except as noted above VOTE FOR MESSRS. TIRMAN AND MERRIMAN. SHAREHOLDERS THAT DESIRE TO HAVE
THEIR SHARES VOTED IN A DIFFERENT MANNER MAY COMPLETE AND RETURN A PROXY
THAT CONTAINS DIFFERENT VOTING INSTRUCTIONS, WHICH WILL SUPERSEDE ANY
EARLIER PROXY FROM THE SHAREHOLDER.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
DO NOT FOLD, STAPLE OR MUTILATE
(This Proxy should be marked, dated, signed by the shareholders)
exactly as his name appears hereon and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so
indicate. If shares are held by joint tenants or as community property,
both should sign.)
Signature:__________________________________ Date __________ Signature:__________________________________ Date:__________
</TABLE>
