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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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Pacer Technology
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[PACER LETTERHEAD]
November 9, 1999
DEAR FELLOW SHAREHOLDERS:
You will soon be receiving another letter from Tirman and his Committee,
making misleading statements about his commitment to place the interests of our
Shareholders first and spiteful and misleading accusations against your Board of
Directors. Tirman's letter represents another attempt by him to divert your
attention from his own dismal record, which demonstrates that he does not have
the interests of you, the shareholders, at heart.
As the saying goes: "Actions speak louder than words." Let us, therefore,
compare Tirman's actions (or inaction) to his words:
WHAT TIRMAN CLAIMS: Tirman claims that he will put the interests of the
shareholders first.
WHAT TIRMAN HAS DONE: At the same time as he was making this claim,
Tirman offered to abandon his proxy contest, and
you, the shareholders, if Pacer would pay him $2.00
per share in cash, a fact that he has never denied.
WHAT TIRMAN CLAIMS: Tirman claims that he and his nominees have the
skills to improve the price of Pacer's shares. He
also claims that he does not intend to replace your
new management team; only CERTAIN members of
management, who he refuses to identify.
WHAT TIRMAN HAS DONE: Tirman is attempting to bring back the failed
management team of Munn and Bloom, and possibly
also Cavazos, despite the fact that:
- Munn told the Board in February 1999 that he and
his management team could come up with NO IDEAS
for improving the value of your shares.
- By Tirman's own admission, the Company's share
price declined by 11% while Munn, Bloom and
Cavazos were the senior officers of Pacer.
- The Munn led management team recommended to the
Board that Pacer pay more than $15 million and
borrow heavily to acquire Cook-Bates. The Board
rejected that
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proposal and, as a result of its actions, Pacer
was ultimately able to acquire Cook Bates for
$5.6 million, or one-third of what Munn and his
failed management team wanted to pay for it.
- Since March of this year, Munn and Cavazos have
sold a total of more than 560,000 of their Pacer
shares, which placed downward pressure on Pacer's
share price.
WHAT TIRMAN CLAIMS: Tirman claims that the Board of Directors has acted
in its own interests.
WHAT TIRMAN HAS DONE: Tirman is willing to MISLEAD you about the true
facts because he is afraid that, if you were to
know the truth, he would not be able to take
control of your Company.
- The Swander Pace (SPC) Offer. Although Tirman
criticizes the Board, Tirman advised the Board
that the $1.95 offer was inadequate and that,
with his connections, he could get Pacer's stock
price up above $2.00. However, he made that
statement nearly a year ago, and by his own
admission, the stock price has not increased.
Tirman also fails to tell you what else happened
after Mr. Reynolds' August 26 letter:
- Pacer -- BY UNANIMOUS VOTE OF THE BOARD -- and
SPC entered into an agreement in principle
providing for ALL SHAREHOLDERS, INCLUDING ALL
OF THE DIRECTORS, to receive the SAME AMOUNT
for their shares: $2.15 per share in cash.
- IT WAS SPC, AND NOT PACER'S BOARD, THAT
"DRAGGED ITS FEET." Although the agreement in
principle was signed on September 23, 1998, SPC
did not deliver the deal agreements to Pacer's
attorneys, for their review, until November 16,
1998.
- Although we sent our comments on those
agreements back to SPC within 1 week, on
December 1, 1998 SPC unilaterally revoked its
$2.15 offer, offering instead to pay $1.80 per
share.
- Star Nails. Although Tirman criticizes the Board
concerning its actions, he fails to tell you the
following important facts:
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- At the time of the Star Nails proposal, the
Board was having a particularly difficult time
with the management team of Munn, Bloom and
Cavazos, who did not share the Board's view of
what needed to be done to improve Pacer's share
value.
- The owner of Star Nails, one of Pacer's
customers, informed us that he believed he
could resolve Pacer's management problems and
help get the stock price up; but that he was
not prepared to step in unless he could acquire
a substantial number of the existing shares in
a relatively short period of time. Since we
thought that his involvement might prove
beneficial to Pacer and its shareholders, we
asked Mr. Reynolds to send him a letter as to
the number and the prices at which shares might
be available for purchase.
- Contrary to what Tirman would have you believe,
his rejection of the Cuccio proposal had
nothing to do with protecting the interests of
the shareholders. INSTEAD, TIRMAN TOLD US THAT
HE WOULD SELL HIS SHARES TO CUCCIO, IF HE COULD
GET A PRICE OF $2.25 PER SHARE FOR THEM.
- In the end, the Board decided that the solution
to management's dismal performance was to
replace them with a more competent and
committed management team, which the Board did
a few months later and Star Nails proposal was
not pursued.
- Stock Options. Tirman has failed to tell you
that the 1995 stock options were granted to
replace expiring stock purchase warrants issued
in exchange for the directors' personal
guarantees that saved Pacer from bankruptcy; the
exercise price of the options was 33% higher than
the exercise price of the expiring stock purchase
warrants that those options replaced.
WHAT TIRMAN CLAIMS: Tirman claims to have the relationship skills
needed to serve as Chairman of the Board and
improve Pacer's stock price.
WHAT TIRMAN HAS DONE: Tirman made these same claims to the Board when he
convinced its members to appoint him to the Board
in April 1999. However, it is difficult to
understand what Tirman means by relationship
skills, when:
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- He has NEVER made any effort to meet personally
with the management team or to personally attend
a single Board meeting.
- He betrayed the trust of both the Board and
management by not being truthful when questioned
about his reasons for requesting Pacer's
shareholder list.
- Prior to his proxy contest, he never once had the
strength of conviction to express his purported
concerns to the Board or to seek their
cooperation to address those purported concerns.
Instead, he withheld his true intentions in order
to gain the advantage of surprise in his proxy
contest.
WHAT TIRMAN CLAIMS: Although Tirman claims that he does not intend to
sell off Pacer as a whole, Tirman wants to take
credit for presenting to the Board a number of
proposals involving sales of many of Pacer's
businesses that will have essentially the same
effect.
WHAT TIRMAN HAS DONE: TIRMAN TALKS A LOT, BUT "TALK IS CHEAP." Although
Tirman has identified companies that might be
interested in purchasing some of our operating
divisions, TIRMAN HAS NEVER BROUGHT TO THE BOARD,
FOR ITS CONSIDERATION, A SINGLE SUBSTANTIVE
PROPOSAL FOR SUCH A PURCHASE. His statement about a
$10 million proposal for Cook Bates is also
misleading. All that his efforts generated was a
letter from the prospective buyer, addressed to
Tirman, indicating an interest in such a purchase
at a price range of $8 to $10 million. At the time,
Tirman expressed his disappointment with these
numbers to Mr. Reynolds and Tirman never presented
this proposal to the Board.
We agreed to appoint Tirman and Merriman to the Board of Directors because
Tirman assured us that they were interested in working with us to improve
Pacer's operating results and the price performance of our shares. Instead,
Tirman's actions and the lack of any contributions made by him, cause us to
believe that he never really intended to work with us or to make any significant
contributions to Pacer. IN SHORT, WE BELIEVE HE BETRAYED OUR TRUST AND THE TRUST
OF OUR MANAGEMENT TEAM AND THAT HIS PROXY CONTEXT, WHATEVER THE OUTCOME, WILL
SERVE TO DAMAGE, RATHER THAN TO STRENGTHEN, YOUR COMPANY. AS A RESULT, IT IS
IMPORTANT FOR EACH OF YOU TO ASK YOURSELVES: WILL HE ALSO BETRAY THE TRUST OF
PACER'S SHAREHOLDERS, WITH WHOM HE HAS HAD LITTLE CONTACT AND WITH WHOM HE HAS
LITTLE IN COMMON?
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YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN. EACH
OF US URGES YOU TO MARK, SIGN, DATE AND RETURN THE WHITE PROXY CARD TO VOTE FOR
ELECTION OF MESSRS. HATHAWAY, NIGHTINGALE, HOCKIN AND REYNOLDS.
WE ALSO URGE YOU TO DISCARD, AND NOT TO SIGN, ANY PROXY CARD SENT TO YOU BY
TIRMAN OR HIS COMMITTEE. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PROXY
BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE
ANNUAL MEETING TO MACKENZIE PARTNERS, INC. OR TO THE SECRETARY OF PACER
TECHNOLOGY OR BY VOTING IN PERSON AT THE ANNUAL MEETING. ONLY YOUR LATEST DATED
PROXY WILL COUNT AT THE ANNUAL MEETING.
IMPORTANT -- IF YOU VOTE TIRMAN'S GREEN PROXY CARD OR FAIL TO VOTE THE
WHITE PROXY CARD, YOU WILL BE HELPING TIRMAN AND THE FAILED MANAGEMENT TEAM OF
MUNN, BLOOM AND CAVAZOS, TAKE CONTROL OF PACER AND UNDERMINE THE MOMENTUM AND
PROGRESS MADE BY OUR NEW MANAGEMENT TEAM. BY CONTRAST, IF YOU DO SIGN AND RETURN
THE WHITE PROXY CARD, AT LEAST TWO OF TIRMAN'S NOMINEES WILL STILL BE ELECTED TO
THE BOARD. AS A RESULT, VOTING THE WHITE PROXY CARD PROVIDES A REASONABLE
COMPROMISE FOR THOSE OF YOU THAT MAY WANT TO SEND A MESSAGE TO THE BOARD AND AT
THE SAME TIME ENCOURAGE YOUR NEW MANAGEMENT TEAM TO CONTINUE ITS NEW BUSINESS
INITIATIVES.
Thank you for your support and please feel free to contact any of us at
(800) 538-3091 if you have any questions or any suggestions. We look forward to
seeing you at the Annual Meeting.
Sincerely,
W. T. Nightingale, III Carl E. Hathaway
John G. Hockin, II Larry K. Reynolds
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IMPORTANT
IF YOUR SHARES ARE HELD BY A BROKERAGE FIRM OR BANK, ONLY YOUR BROKER OR
BANK CAN VOTE ON YOUR BEHALF. IF YOU DO NOT GIVE YOUR BROKER OR BANK SPECIFIC
INSTRUCTIONS, YOUR SHARES WILL NOT BE VOTED AT THIS YEAR'S ANNUAL MEETING.
PLEASE CONTACT YOUR BROKER OR BANK AND INSTRUCT THEN TO VOTE A WHITE PROXY
TODAY ON YOUR BEHALF AS RECOMMENDED BY THE BOARD OF DIRECTORS.
IF YOU HAVE SENT A GREEN PROXY CARD TO THE TIRMAN-LED PACER SHAREHOLDER
COMMITTEE, YOU HAVE THE RIGHT TO REVOKE IT BY SIGNING, DATING AND MAILING THE
ENCLOSED WHITE PROXY CARD OR BY INSTRUCTING YOUR BROKER OR BANK TO VOTE A WHITE
PROXY TODAY ON YOUR BEHALF, AS RECOMMENDED BY THE BOARD OF DIRECTORS.
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE COMPLETING THE WHITE PROXY
CARD OR CONTACTING YOUR BROKER, PLEASE CALL OUR SOLICITORS: MACKENZIE PARTNERS,
INC., TOLL-FREE, AT 1-800-322-2885.
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 DeVere McGuffin and Amanda
Searcy. 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).
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