As filed with the Securities and Exchange Commission on January 21, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
DAY RUNNER, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3624280
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15295 Alton Parkway
Irvine, California 92618
(Address of Principal Executive Offices) (Zip Code)
1995 STOCK OPTION PLAN
EMPLOYEE STOCK PURCHASE PLAN
WARRANTS TO PURCHASE COMMON STOCK
(Full titles of the plans)
MARK A. VIDOVICH
Chief Executive Officer
Day Runner, Inc.
15295 Alton Parkway
Irvine, California 92718
(714) 680-3500
(Name, address and telephone number of agent for service)
Copy to:
RONALD W. BUCKLY, ESQ.
KATHERINE F. ASHTON, ESQ.
Bryan Cave LLP
120 Broadway, Suite 500
Santa Monica, California 90401
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title Proposed
Of Amount Proposed Maximum
Securities of Shares Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered per Share Price Fee
---------- ---------- --------- ----- ---
Common Stock,
$0.001 par value 350,000 (1) $38.00(2) $13,300,000(2) $3,924
Common Stock,
$0.001 par value 25,000 (3) $25.625 $ 640,625 $ 189
------
TOTAL $4,113
======
</TABLE>
(1) Represents 275,000 shares issuable upon the exercise of options granted or
to be granted under the Company's 1995 Stock Option Plan and 75,000 shares
issuable under the Company's Employee Stock Purchase Plan.
(2) Estimated pursuant to Rule 457(h) solely for the purpose of calculating
the amount of the registration fee on the basis of the average of the high
and low reported sales prices of a share of the Company's Common Stock on
January 14, 1998, as reported by The Nasdaq Stock Market in The Wall
Street Journal.
(3) Represents shares issuable upon the exercise of outstanding warrants.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document(s) containing the information specified in Items 1 and 2
of Part I of Form S-8 will be sent or given to plan participants as specified in
Rule 428(b)(1) and, in accordance with the instructions to Part I, are not filed
with the Commission as part of this Registration Statement.
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents and information previously filed with
the Securities and Exchange Commission are hereby incorporated by reference:
Item 3(a)
The Registrant's Annual Report on Form 10-K for the
year ended June 30, 1997.
Item 3(b)
The Registrant's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997.
Item 3(c)
The description of the Registrant's Common Stock
contained in the Registrant's Registration Statement
on Form S-1 (Registration No. 33-45391), as amended
by the Registrant's Current Report on Form 8-K filed
with the Commission on August 5, 1993, including any
amendments or reports filed for the purpose of
updating such description.
All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be part hereof from the date of filing such
documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Sections 145(a) and 145(b) of the Delaware General Corporation
Law permit a corporation to indemnify any person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement or actually
and reasonably incurred by such person in connection with any threatened,
pending or completed nonderivative action and against expenses (including
attorneys' fees) actually and reasonably incurred in connection with any
threatened, pending or completed derivative action if such person was or is a
party or was threatened to be made a party to such action by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation. Any indemnification shall be made if a determination in each
instance is made either by a majority vote of the Board of Directors (other than
directors who are parties to such action) even though less than a quorum, by the
stockholders, or by independent legal counsel in a written opinion, that such
indemnification is proper because the director, officer, employee or agent acted
in good faith and in a manner that such person reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, that such person had no reasonable cause to
believe that his conduct was unlawful. However, no indemnification may be made
with respect to a derivative action if such person is adjudged to be liable to
the corporation, unless and only to the extent that the Delaware Court of
Chancery or the court in which the action was brought determines upon
application that, despite the adjudication of liability but in view of all the
circumstances, such person is fairly and reasonably entitled to indemnity for
such expenses as the court deems proper. To the extent that a person has been
successful in defense of any action, suit or proceeding, Section 145(c) provides
that such person shall be indemnified against expenses actually and reasonably
incurred by such person in connection therewith. A corporation may also advance
expenses incurred in defending proceedings against an officer or a director upon
receipt of an undertaking by or on behalf of such officer or director to repay
such expenses to the corporation if it is ultimately determined that such
officer or director is not entitled to be indemnified for such expenses. The
indemnification and advancement of expenses provided under the Delaware General
Corporation Law are not exclusive of any other rights to indemnification or
advancement of expenses a person may be entitled to under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise.
Under the terms of Article VIII of the Registrant's Bylaws,
the Registrant is required to indemnify any person who is or was a director or
officer of the Registrant (or is or was serving at the request of the Registrant
as a director, officer, trustee or partner of another corporation, partnership,
joint venture, trust or other enterprise) in the manner and to the fullest
extent permitted under Section 145 of the Delaware General Corporation Law
against expenses, liabilities and other matters covered by or referred to in
Section 145.
As permitted by paragraph (7) of subsection (b) of Section 102
of the Delaware General Corporation Law, Article VIII of the Registrant's
Certificate of Incorporation provides that no director of the Registrant shall
be liable to the Registrant or its stockholders for monetary damages for breach
of his or her fiduciary duty as a director except for liability (a) for breach
of the director's duty of loyalty to the corporation or its stockholders; (b)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (c) under Section 174 of the Delaware General
Corporation Law (relating to unlawful declarations or payments of dividends or
unlawful stock purchases or redemptions); or (d) for any transaction from which
the director derived an improper personal benefit.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit
Number
5.1 Opinion of Bryan Cave LLP
10.1 Amendment No. 2 dated as of September 19, 1997 to 1995 Stock
Option Plan
10.2 Amendment No 2 dated as of September 19, 1997 to Employee
Stock Purchase Plan
10.3 Warrant to purchase 25,000 shares of the Registrant's Common
Stock issued to Alan R. Rachlin on April 22, 1997
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Bryan Cave LLP (included in Exhibit 5.1)
24.1 Power of Attorney (see page 5 of this Registration Statement)
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on January 21, 1998.
DAY RUNNER, INC.
By: Mark A. Vidovich
-------------------------------
Mark A. Vidovich,
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Mark A. Vidovich his or her
attorney-in-fact and agent, with full power of substitution for him or her and
in his or her name, place and stead, in any and all capacities, to sign any or
all amendments to this Registration Statement, and to file the same with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do so and perform each and every act and thing
requisite and necessary to be done in connection with this Registration
Statement, as fully to all intents and purposes as he or she might or could do
in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- ----
Mark A. Vidovich Chairman of the Board and Chief January 21 , 1998
- ----------------------------------------------- Executive Officer (Principal
Mark A. Vidovich Executive Officer
Dennis K. Marquardt Executive Vice President, Finance & January 21 , 1998
- ----------------------------------------------- Administration and Chief Financial
Dennis K. Marquardt Officer (Principal Financial and
Accounting Officer)
James E. Freeman, Jr. Director, President and Chief January 21 , 1998
- ----------------------------------------------- Operating Officer
James E. Freeman, Jr.
James P. Higgins Director January 21 , 1998
- -----------------------------------------------
James P. Higgins
Jill Tate Higgins Director January 21 , 1998
- -----------------------------------------------
Jill Tate Higgins
Charles Miller Director January 21 , 1998
- -----------------------------------------------
Charles Miller
Alan R. Rachlin Director January 21 , 1998
- -----------------------------------------------
Alan R. Rachlin
Boyd I. Willat Director January 21 , 1998
- -----------------------------------------------
Boyd I. Willat
Felice Willat Director January 21 , 1998
- -----------------------------------------------
Felice Willat
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
<S> <C> <C>
Sequentially
Exhibit Numbered
Number Exhibit Page
5.1 Opinion of Bryan Cave LLP..............................................
10.1 Amendment No. 2 dated as of September 19, 1997 to
1995 Stock Option Plan.................................................
10.2 Amendment dated as of September 19, 1997 to
Employee Stock Purchase Plan...........................................
10.3 Warrant to purchase 25,000 shares of the Registrant's
Common Stock issued to Alan R. Rachlin on April 22, 1997...............
23.1 Consent of Deloitte & Touche LLP.......................................
</TABLE>
<PAGE>
Exhibit 5.1
BRYAN CAVE LLP
120 BROADWAY, SUITE 500
SANTA MONICA, CALIFORNIA 90401
(310) 576-2100
FACSIMILE (310) 576-2200
January 21, 1998
Day Runner, Inc.
15295 Alton Parkway
Irvine, California 92618
Re: Day Runner, Inc. - Registration Statement on Form S-8
Gentlemen:
We have acted as securities counsel for Day Runner, Inc., a
Delaware corporation (the "Company"), in connection with the preparation of a
registration statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933 to be filed with the Securities and Exchange Commission
(the "Commission") on January 21, 1998, in connection with the registration of
an aggregate of 375,000 shares of Common Stock, par value $0.001 per share (the
"Shares"), comprising (i) 275,000 shares of Common Stock of the Company issuable
upon the exercise of options granted or to be granted pursuant to the Company's
1995 Stock Option Plan, (ii) 75,000 shares of Common Stock of the Company
issuable under the Company's Employee Stock Purchase Plan and (iii) 25,000
shares of Common Stock of the Company issuable upon exercise of warrants granted
to a consultant to the Company (such 1995 Stock Option Plan, Employee Stock
Purchase Plan and warrants are collectively referred to herein as the "Plans").
In connection with the preparation of the Registration
Statement and the proposed issuance and sale of the Shares in accordance with
the Plans and the Form S-8 prospectuses to be delivered to participants in the
Plans, we have made certain legal and factual examinations and inquiries and
examined, among other things, such documents, records, instruments, agreements,
certificates and matters as we have considered appropriate and necessary for the
rendering of this opinion. We have assumed for the purpose of this opinion the
authenticity of all documents submitted to us as originals and the conformity
with the originals of all documents submitted to us as copies, and the
genuineness of the signatures thereon. As to various questions of fact material
to this opinion, we have, when relevant facts were not independently
established, relied, to the extent deemed proper by us, upon certificates and
statements of officers and representatives of the Company.
Based on the foregoing and in reliance thereon, it is our
opinion that the Shares have been duly authorized and, after the Registration
Statement becomes effective and after any post-effective amendment required by
law is duly completed, filed and becomes effective, and when the applicable
provisions of "Blue Sky" and other state securities laws shall have been
complied with, and when the Shares are issued and sold in accordance with the
Plans and the Form S-8 prospectuses to be delivered to the participants in the
Plans, the Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the inclusion of our opinion as Exhibit
5.1 to the Registration Statement and further consent to the reference to this
firm in the Registration Statement. In giving this consent, we do not hereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Securities Act of 1933 or the rules and regulations of the
Commission thereunder.
This opinion is rendered solely for your benefit in connection
with the subject transaction and is not to be otherwise used, circulated, quoted
or referred to without our prior written consent. We are opining herein as to
the effect on the subject transaction only of United States federal law and the
internal laws of the State of Delaware, and we assume no responsibility as to
the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction.
Very truly yours,
BRYAN CAVE LLP
BRYAN CAVE LLP
Exhibit 10.1
AMENDMENT NO. 2 TO
DAY RUNNER, INC.
1995 STOCK OPTION PLAN
Section 3 of the Day Runner, Inc. 1995 Stock Option Plan
is hereby amended to read in its entirety as follows:
"3. Shares Reserved. The maximum aggregate number of
Shares reserved for issuance pursuant to the Plan shall be
775,000 Shares or the number of shares of stock to which such
Shares shall be adjusted as provided in Section 10 of the
Plan. Such number of Shares may be set aside out of authorized
but unissued Shares not reserved for any other purpose, or out
of issued Shares acquired for and held in the treasury of the
Company from time to time.
Shares subject to, but no sold or issued under, any
Option terminating, expiring or canceled for any reason prior
to its exercise in full, shall again become available for
Options thereafter granted under the Plan, and the same shall
not be deemed an increase in the number of Shares reserved for
issuance under the Plan. Any Shares which may be tendered,
actually or by attestation, by an Optionee as full or partial
payment in connection with the exercise of any Option under
the Plan shall again be available for Options thereafter
granted during the remainder of the term of the Plan."
Dated: September 19, 1997
Exhibit 10.2
AMENDMENT NO. 2 TO
DAY RUNNER, INC.
EMPLOYEE STOCK PURCHASE PLAN
Section 12(a) of the Day Runner, Inc. Employee Stock Purchase
Plan is hereby amended to read in its entirety as follows:
"(a) The maximum number of shares of the Company's
Common Stock which shall be made available for sale under the
Plan shall be One Hundred Seventy-Five Thousand (175,000)
shares, subject to adjustment upon changes in capitalization
of the Company as provided in Section 18. The shares to be
sold to participants in the Plan will be authorized but
unissued shares. If the total number of shares which would
otherwise be subject to options granted pursuant to Section
7(a) hereof at the offering date exceeds the number of shares
then available under the Plan (after deduction of all shares
for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of
the shares remaining available for option grant in as uniform
and equitable a manner as is practicable. In such event, the
Company shall give written notice of such reduction of the
number of shares subject to the option to each participant
affected thereby and shall reduce the rate of payroll
deductions, if necessary."
Dated: September 19, 1997
Exhibit 10.3
WARRANT TO PURCHASE COMMON STOCK
OF
DAY RUNNER, INC.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
Warrant to Purchase
25,000 Shares of Common Stock
DAY RUNNER, INC.
INCORPORATED UNDER THE LAWS OF THE STATE
OF DELAWARE
Void after April 21, 2007
THE WARRANTS evidenced by this certificate have been issued for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
THIS CERTIFICATE evidences the right of Alan R. Rachlin to purchase
25,000 shares of Common Stock, without par value (the "Shares"), of Day Runner,
Inc., a Delaware corporation (the "Company"), at the Warrant Price (as defined
below), subject, however, to the terms and conditions hereinafter set forth.
1. Term of Warrants. The Warrants may be exercised only during the
period commencing on May 22, 1997 through the close of business on April 21,
2007 (the "Warrant Term"), and may be exercised only in accordance with the
terms and conditions hereinafter set forth.
2. Exercise of Warrants.
(a)......Right to Exercise. The Warrants shall vest and become
exercisable cumulatively in 24 equal monthly installments, as long as the
Consulting Agreement between the Company and Alan R. Rachlin ("Consultant")
effective as of April 22, 1997 (the "Consulting Agreement") has not terminated,
with the first monthly installment vesting on May 22, 1997 and one additional
monthly installment vesting on the 22nd day of each of the 23 calendar months
thereafter; provided, however, that notwithstanding the foregoing, in the event
that Consultant has performed a total of:
(i) 30 days of consulting services under the Consulting Agreement
prior to April 22, 1998, then (A) the Warrants shall vest and become
exercisable immediately as to such number of additional shares as shall
make the Warrants then vested and exercisable as to a total of 12,500
shares less that number of shares, if any, previously issued upon exercise
of the Warrants, and (B) the Warrants as to the remaining 12,500 shares
subject thereto, subject to earlier vesting as provided in subpart (ii) of
this Section 2(a), shall vest and become exercisable in 12 equal monthly
installments, as long as the Consulting Agreement has not terminated, with
the first such monthly installment vesting on May 22, 1998 and one
additional monthly installment vesting on the 22nd day of each of the 11
calendar months thereafter; or
(ii) 60 days of consulting services under the Consulting Agreement
prior to April 22, 1999, then the Warrants shall vest and become
exercisable immediately as to all remaining shares as to which the Warrants
are not then vested.
(b) Method of Exercise; Payment; Issuance of New Warrants;
Transfer and Exchange. The Warrants may be exercised by the holder of the
Warrants, in whole or in part, by the surrender of this Certificate, properly
endorsed, at the principal office of the Company, and by the payment to the
Company by certified or cashier's check of the then applicable Warrant Price. In
the event of any exercise of the Warrants, certificates for the Shares so
purchased shall be delivered to the holder of the Warrants within a reasonable
time after the Warrants shall have been so exercised, and unless the Warrants
have expired, a new certificate representing the right to purchase the number of
Shares, if any, with respect to which this Certificate shall not then have been
exercised shall also be issued to the holder within such time. All such new
certificates shall be dated the date hereof and shall be identical with this
Certificate except as to the number of Shares issuable pursuant thereto.
(c) Restrictions on Exercise. The Warrants may not be
exercised if the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or other laws or
regulations. As a condition to the exercise of the Warrants, the Company may
require the holder of the Warrants to make such representations and warranties
to the Company as may be required by applicable law or regulation.
3. Stock Fully Paid; Reservations of Shares. The Company covenants and
agrees that all Shares will, upon issuance and payment in accordance herewith,
be fully paid, validly issued and nonassessable. The Company further covenants
and agrees that during the Warrant Term the Company will at all times have
authorized and reserved for the purpose of the issue upon exercise of the
Warrants at least the maximum number of Shares as are issuable upon the exercise
of the Warrants.
4. Adjustment of Purchase Price and Number of Shares. The number and
kind of securities purchasable upon the exercise of the Warrants and the Warrant
Price shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) Consolidation, Merger or Reclassification. If the Company
at any time while the Warrants remain outstanding and unexpired shall
consolidate with or merge into any other corporation, or sell all or
substantially all of its assets to another corporation, or reclassify or in any
manner change the securities then purchasable upon the exercise of the Warrants
(any of which shall constitute a "Reorganization"), then lawful and adequate
provision shall be made whereby this Certificate shall thereafter evidence the
right to purchase such number and kind of securities and other property as would
have been issuable or distributable on account of such Reorganization upon or
with respect to the securities which were purchasable under the Warrants
immediately prior to the Reorganization. The Company shall not effect any such
Reorganization unless prior to or simultaneously with the consummation thereof
the successor corporation (if other than the Company) resulting from such
Reorganization shall assume by written instrument executed and mailed or
delivered to the holder of the Warrants, at the last address of the holder
appearing on the books of the Company, the obligation to deliver to the holder
such shares of stock, securities or assets as, in accordance with the foregoing
provisions, the holder may be entitled to purchase. Notwithstanding anything in
this Section 4(a) to the contrary, the prior two sentences shall be inoperative
and of no force and effect and those Warrants which are unexercised shall expire
on the completion of such Reorganization if upon the completion of any such
Reorganization the stockholders of the Company immediately prior to such event
do not own at least 50% of the equity interest of the corporation resulting from
such Reorganization, the notice required by Section 4(e) hereof has been duly
given and the Warrants were fully exercisable at the time such notice was
provided.
(b) Subdivision or Combination of Shares. If the Company at
any time while the Warrants remain outstanding and unexpired shall subdivide or
combine its Common Stock, the Warrant Price shall be adjusted to that price
determined by multiplying the Warrant Price in effect immediately prior to such
subdivision or combination by a fraction (i) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such
subdivision or combination and (ii) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such subdivision
or combination.
(c) Certain Dividends and Distributions. If the Company at any
time while the Warrants are outstanding and unexpired shall take a record of the
holders of its Common Stock for the purpose of:
(i) Stock Dividends. Entitling them to receive a dividend payable in,
or other distribution without consideration of, Common Stock, then the
Warrant Price shall be adjusted to that price determined by multiplying the
Warrant Price in effect immediately prior to each dividend or distribution
by a fraction (A) the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to such dividend or
distribution, and (B) the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such dividend or
distribution; or
(ii) Distribution of Assets, Securities, etc. Making any distribution
without consideration with respect to its Common Stock (other than a cash
dividend) payable otherwise than in its Common Stock, the holder of the
Warrants shall, upon the exercise thereof, be entitled to receive, in
addition to the number of Shares receivable thereupon, and without payment
of any additional consideration therefor, such assets or securities as
would have been payable to him as owner of that number of Shares receivable
by exercise of the Warrants had he been the holder of record of such Shares
on the record date for such distribution, and an appropriate provision
therefor shall be made a part of any such distribution.
(d) Adjustment of Number of Shares. Upon each adjustment in
the Warrant Price pursuant to Subsections (b) or (c) (i) of this Section 4, the
number of Shares purchasable hereunder shall be adjusted to that number
determined by multiplying the number of Shares purchasable upon the exercise of
the Warrants immediately prior to such adjustment by a fraction, the numerator
of which shall be the Warrant Price immediately prior to such adjustment and the
denominator of which shall be the Warrant Price immediately following such
adjustment.
(e) Notice. In case at any time:
(i) The Company shall pay any dividend payable in stock upon its
Common Stock or make any distribution, excluding a cash dividend, to
the holders of its Common Stock; (ii) The Company shall offer for
subscription pro rata to the holders of its Common Stock any
additional shares of stock of any class or other rights;
(iii) There shall be any reclassification of the Common Stock of
the Company, or consolidation or merger of the Company with, or sale
of all or substantially all of its assets to, another corporation; or
(iv) There shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of such cases, the Company shall give to the holder of
the Warrants at least 10 days' prior written notice (or, in the event of notice
pursuant to Section 4(e)(iii), at least 30 days' prior written notice) of the
date on which the books of the Company shall close or a record shall be taken
for such dividend, distribution or subscription rights or for determining rights
to vote in respect to any such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up. Such notice in accordance with the
foregoing clause shall also specify, in the case of any such dividend,
distribution or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
dissolution, liquidation or winding up, as the case may be. Each such written
notice shall be given by first-class mail, postage prepaid, addressed to the
holder of the Warrants at the address of the holder as shown on the books of the
Company.
(f) No Change in Certificate. The form of this Certificate
need not be changed because of any adjustment in the Warrant Price or in the
number of Shares purchasable on its exercise. The Warrant Price or the number of
Shares shall be considered to have been so changed as of the close of business
on the date of adjustment.
5. Fractional Shares. No fractional Shares will be issued in connection
with any subscription hereunder but, in lieu of such fractional Shares, the
Company shall make a cash payment therefor upon the basis of the fair market
value of the Shares.
6. Transfer and Exchange of Warrants. Subject to the terms hereof,
including, without limitation, Section 7, the Warrants and all rights hereunder
are transferable, in whole or in part, on the books of the Company maintained
for such purpose at its principal office referred to above by the registered
holder hereof in person or by its duly authorized attorney, upon surrender of
the Warrants properly endorsed and upon payment of any necessary transfer tax or
other governmental charge imposed upon such transfer. Upon any partial transfer,
the Company will issue and deliver to such holder a new Warrant or Warrants with
respect to the shares of Common Stock not so transferred. Each taker and holder
of the Warrants, by taking or holding the same, consents and agrees that the
Warrants when endorsed in blank shall be deemed negotiable and that when the
Warrants shall have been so endorsed, the holder hereof may be treated by the
Company and all other persons dealing with the Warrants, as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company, any
notice to the contrary notwithstanding; but until such transfer on such books,
the Company may treat the registered holder hereof as the owner for all
purposes.
The Warrants are exchangeable at such office for Warrants for
the same aggregate number of shares of Common Stock, all new Warrants to
represent the right to purchase such number of shares as the holder hereof shall
designate at the time of such exchange.
7. Restrictions on Transfer of Warrants. The holder of the Warrants, by
acceptance hereof, agrees that, absent an effective notification under
Regulation A or a registration statement, in either case under the Securities
Act of 1933, covering the disposition of the Warrants or Common Stock issued or
issuable upon exercise hereof, such holder will not sell, transfer, pledge or
hypothecate any or all of such Warrants or Common Stock, as the case may be,
unless such sale or transfer will be exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933 and applicable state
securities laws, and such holder consents to the Company making a notification
on its records or giving instructions to any transfer agent of the Warrants or
such Common Stock in order to implement such restriction on transferability.
8. No Rights as Shareholder. The holder of the Warrants, as such, shall
not be entitled to vote or receive dividends or be considered a stockholder of
the Company for any purpose, nor shall anything in this Certificate be construed
to confer on such holder, as such, any rights of a stockholder of the Company or
any right to vote, give or withhold consent to any corporate action, to receive
notice of meetings of stockholders, to receive dividends or subscription rights
or otherwise.
9. Definitions. As used in this Certificate:
(a) "Warrants" shall mean the rights evidenced by this
Certificate.
(b) "Warrant Price" shall mean the per share closing sales
price of the Company's Common Stock as quoted on The Nasdaq Stock Market on
April 22, 1997, as adjusted in accordance with Section 4 hereof.
Dated as of April 22, 1997.
DAY RUNNER, INC.
By: /s/ Mark A. Vidovich
-------------------------
Mark Vidovich,
Chief Executive Officer
Attest:
/s/ Dennis K. Marquardt
- --------------------------
Dennis K. Marquardt
<PAGE>
DAY RUNNER, INC.
SUBSCRIPTION FORM
(To be completed and signed only upon exercise of the Warrant)
TO: Day Runner, Inc.
15295 Alton Parkway
Irvine, CA 92618
Attention: Secretary
The undersigned, the holder of the attached Warrant, hereby irrevocably
elects to exercise the right of purchase represented by such Warrant for, and to
purchase thereunder, _______* shares of Day Runner, Inc. Common Stock and
herewith makes payment of $___________ for those shares, and requests that the
certificate(s) for those shares be issued in the name of and delivered to:
(Please print name and address)
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Dated:
Signature
Print Name
- --------
* Insert here the number of shares called for on the face of the Warrant
(or in the case of partial exercise, that portion as to which the Warrant is
being exercised), without making any adjustment for additional Common Stock or
any other securities or property which, under the adjustment provisions of the
Warrant, may be deliverable upon exercise.
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Day Runner, Inc. on Form S-8 of our report dated August 15, 1997 appearing in
the Annual Report on Form 10-K of Day Runner, Inc. for the year ended June 30,
1997.
/s/ Deloitte & Touche
Long Beach, California
January 19, 1998
