SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
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))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
PENTECH INTERNATIONAL INC.
(Name of Registrant as Specific in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee 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:
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[LOGO OF PENTECH INTERNATIONAL INC.]
195 CARTER DRIVE
EDISON, NEW JERSEY 08817
July 17, 2000
Dear Stockholder:
I am writing to update you on some developments regarding the
upcoming Special Meeting of Stockholders (the "Meeting") of Pentech
International Inc. (the "Company") scheduled to be held on July 28,
2000 at 10:00 A.M., local time, at the offices of Camhy Karlinsky
& Stein LLP, 1740 Broadway, Sixteenth Floor, New York, NY 10019-4315.
On June 28, 2000, I wrote you explaining about the Meeting and
advising you that you would be asked to consider and vote upon a
proposal to approve and adopt an Agreement of Merger, dated as of
May 22, 2000 (the "Merger Agreement"), a copy of which was attached
as Appendix A to the Proxy Statement dated June 28, 2000 previously
sent to you (the "Proxy Statement").
On July 7, 2000, after the Proxy Statement was sent out, the
Company received an unsolicited proposal from RoseArt Industries,
Inc. ("RoseArt") to acquire all of the Common Stock of the Company
for $1.60 per share, subject to limited legal and financial due
diligence and accompanied by a commitment letter from a bank which
contained certain qualification and contingencies. On July 10,
2000, JAKKS Pacific, Inc. ("JAKKS") increased to $1.60 per share
its offer to purchase such shares, provided our stockholder meeting
is held and a vote of our stockholders is taken with respect to its
proposal on or before July 28, 2000 (the date the Meeting was
originally scheduled) or such later date as to which JAKKS may
consent. If such vote is not taken on or before such date, JAKKS'
offer, unless JAKKS otherwise agrees, would revert to $1.40 per
share.
THE BOARD OF DIRECTORS HAS CAREFULLY CONSIDERED AND APPROVED
THE REVISED MERGER OFFER OF JAKKS AND THE AMENDED MERGER
AGREEMENT
AS BEING IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS.
THE BOARD OF DIRECTORS, BY THE UNANIMOUS VOTE OF ALL DIRECTORS,
RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE "FOR" THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT AT THE MEETING.
If you have not done so, please sign, date and return the
proxy card sent to you with the Proxy Statement in the envelope
provided. You may vote by signing the enclosed proxy card, whether
or not you plan to attend the Meeting. If you attend the Meeting,
you may vote in person, even if you have previously mailed in your
proxy. If you need an additional proxy card or have any questions,
please contact Richard Kalin or Jenifer Land at (212) 239-8900.
We look forward to seeing you at the Meeting.
Sincerely,
/s/Norman Melnick
NORMAN MELNICK
Chairman
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PENTECH INTERNATIONAL INC.
195 Carter Drive
Edison, NJ 08817
Telephone Number: (732) 287-6640
SUPPLEMENT TO
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
With respect to Special Meeting of Stockholders
To be Held on July 28, 2000
To the Stockholders of Pentech International Inc.:
Reference is made to the Notice of Special Meeting of
Stockholders of Pentech International Inc. ("Pentech" or the
"Company") dated June 28, 2000 (the "Original Notice") with respect
to the Special Meeting of Stockholders of Pentech to be held on
July 28, 2000 (the "Meeting"), and the proxy statement of the
Company with respect to the Meeting which accompanied the Original
Notice. Capitalized terms herein have the meaning ascribed to them
in the Original Notice, unless otherwise noted herein.
The purpose of this Supplement is to advise you of the
following changes to certain matters concerning the Meeting from
the description thereof in the Original Notice.
1. On July 7, 2000, the Company received an unsolicited
proposal to acquire its Common Stock from RoseArt Industries, Inc.,
of Livingston, NJ ("RoseArt"), a private company. The proposal was
for $1.60 per share in cash and is subject to limited legal and
financial due diligence on the part of RoseArt and was accompanied
by a commitment letter from a bank which contains certain
qualifications and contingencies. Such proposal was to remain open
by its terms until the close of business on July 17, 2000.
2. On July 10, 2000, the Company received a revised offer
from JAKKS Pacific, Inc. ("JAKKS"), with whom it had entered into
a Merger Agreement dated as of May 22, 2000 (the "Merger
Agreement") providing for the merger of a wholly-owned subsidiary
of JAKKS with and into Pentech for a Merger Consideration of $1.40
per share (the "Merger Consideration"). The revised offer
increased the Merger Consideration to $1.60 per share of Common
Stock, in cash, provided the Meeting, presently scheduled for July
28, 2000, is held and a vote taken with respect to the Merger
Agreement on or before July 28, 2000, the date it is presently
scheduled, or such later date as to which JAKKS may consent. The
revised offer further provides that if a vote of Stockholders is
not taken on or before such date, the Merger Consideration will,
unless JAKKS otherwise agrees, revert to $1.40 per share.
3. On July 12, 2000, Pentech's Board of Directors (the
"Board of Directors") met in New York with representatives of
Camhy, Karlinsky & Stein LLP, its outside counsel, to discuss the
Merger. At that meeting, counsel reported on the impact of the
proposal from RoseArt and the revised proposal from JAKKS. Counsel
advised the directors as to their duties in considering the matter.
Counsel also highlighted the various termination provisions
including the fiduciary obligations of the Board of Directors and
the Company's right to terminate the Merger Agreement under certain
conditions. The Board of Directors evaluated the matter and
determined that accepting the revised proposal from JAKKS was in
the best interests of the Stockholders and unanimously approved
accepting the revised proposal from JAKKS. The basis for this is,
among other things, the advanced state of the transaction between
the Company and JAKKS and the fact that the Merger Agreement with
JAKKS has no contingency for financing. On the other hand, the
proposal from RoseArt was subject to legal and financial due
diligence on the part of RoseArt and its lender and was to be
financed by a bank pursuant to a commitment letter which contained
qualifications and contingencies. Moreover, there is no reason to
believe that RoseArt will increase its offer to more than $1.60 per
share. In considering this matter, the Board of Directors also
considered the prior history of negotiations with RoseArt and its
status as a key competitor. As a result, the Board of Directors
determined that the closeness in time to complete the Merger, the
certainty of the Merger and the similarity in price of the two
proposals favored the JAKKS proposal. Following the Meeting, the
Company executed an amendment to the Merger Agreement, dated July
13, 2000 (the "Amendment"), a copy of which is attached hereto as
Exhibit A.
4. In light of the increased Merger Consideration, the
following additional changes to the Original Notice will occur:
(a) In addition to any compensation Messrs. Norman
Melnick, David Melnick and Kalin are to receive for their services
as employees or consultants under their respective agreements,
pursuant to the Merger Agreement, the Melnick Family and Mr. Kalin
and his wife will receive approximately an aggregate of $6,170,000
for their shares of Common Stock and cancellation of their Options
to purchase Common Stock. In connection with the cancellation of
their Options, Messrs. Norman Melnick, David Melnick, and Kalin
will receive $48,000, $24,000 and $16,850, respectively, which
amounts are included in the $6,170,000 referred to above.
(b) The total amount of funds required by JAKKS or
Merger Sub to pay the aggregate Merger Consideration due to the
Stockholders and Option holders of the Company at the closing of
the Merger, assuming there are no dissenting Stockholders, is
expected to be approximately $20,500,000.
(c) In the event the Meeting presently scheduled for
July 28, 2000 is not held on such date, or no vote on the Merger is
taken at the Meeting on or before July 28, 2000 or such later date
as to which JAKKS may consent, the Merger Consideration will,
unless JAKKS otherwise agrees, revert to $1.40 per share. In such
event, the amount the Melnick Family and Mr. Kalin and his wife
will receive as a result of consummation of the Merger and for
cancellation of their Options will revert to the amounts set forth
in the Original Notice.
THE PROXY CIRCULATED WITH THE ORIGINAL NOTICE WILL BE DEEMED
A VOTE WITH RESPECT TO THE MERGER AGREEMENT AS AMENDED. IF YOU
WISH TO CHANGE YOUR VOTE, YOU MAY DO SO IN ACCORDANCE WITH THE
INSTRUCTIONS SET FORTH IN THE ORIGINAL NOTICE OR AS SET FORTH
BELOW.
You are cordially invited to attend the Meeting. It is
important that your shares be represented at the Meeting, whether
or not you plan to attend in person. If you do not expect to
attend in person, we ask that you complete the proxy card which was
mailed to you with the Original Notice with respect to the
proposals listed therein (the "Proposals") and return it in the
envelope that was included therewith. In the event you returned
your proxy card prior to the receipt of this Supplement and you do
not want to change your vote with respect to any of Proposals, you
need not take any further action. You may revoke your proxy at any
time before the proxy holder votes it at the Meeting in one of
three ways: by giving notice of your revocation either personally
or in writing to the Secretary of the Company at our corporate
office, by executing and delivering another proxy, or by voting in
person at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Richard S. Kalin
Richard S. Kalin
Secretary
Edison, New Jersey
July 17, 2000
<PAGE>
EXHIBIT A
FIRST AMENDMENT
TO
AGREEMENT OF MERGER
FIRST AMENDMENT dated as of July 13, 2000 to the Agreement of
Merger of JAKKS Acquisition II, Inc. with and into Pentech
International Inc. (the "Merger Agreement").
The parties hereto desire to amend the Merger Agreement to
increase the Merger Consideration (as defined in the Merger
Agreement) as follows:
1. Capitalized terms, not otherwise defined herein, are used
herein as defined in the Merger Agreement.
2. If the Stockholder's Meeting is held and the Stockholder
approval is obtained on July 28, 2000 or on or before such later
date as to which JAKKS may, in its sole discretion, consent, (a)
the Merger Consideration payable, pursuant to Section 5.2 of the
Merger Agreement, in respect of each share of Pentech Common Stock
outstanding at the Effective Time shall be $1.60 per share, and (b)
the Merger Consideration payable, pursuant to Section 5.4 of the
Merger Agreement, in respect of each share of Pentech Common Stock
subject to an Eligible Option shall be in an amount equal to the
excess of $1.60 over the exercise price of such Eligible Option
with respect to such share (and Section 1.21 of the Merger
Agreement shall be amended by replacing "$1.40" by "$1.60"). If
the Stockholder Approval is not obtained on or before such date,
unless JAKKS otherwise agrees, the increase of the Merger
Consideration (and the amendment to Section 1.21 of the Merger
Agreement) provided in the foregoing sentence shall terminate and
the Merger Consideration shall be determined as initially provided
in the Merger Agreement.
3. In all other respects, the Merger Agreement shall remain
in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the undersigned, by their duly authorized
officers, have duly executed this First Amendment as of July 13,
2000.
PENTECH INTERNATIONAL INC. JAKKS PACIFIC, INC.
By:/s/ David Melnick By:/s/ Jack Friedman
Name: David Melnick Name: Jack Friedman
Tile: Chief Executive Officer Title: Chairman (Chief Executive
Officer)
JAKKS ACQUISITION II, INC.
By:/s/ Jack Friedman
Name: Jack Friedman
Title: President (Chief Executive
Officer)
