SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant 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 toss.240.14a-11(c) orss.240.14a-12
DAY RUNNER, INC.
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(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 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:
<PAGE>
DAY RUNNER, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
APRIL 25, 2000
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (the
"Special Meeting") of Day Runner, Inc., a Delaware corporation (the "Company"),
will be held Tuesday, April 25, 2000, at 9:00 a.m., California time, at the
Holiday Inn, Buena Park Hotel and Conference Center located at 7000 Beach Blvd.,
Buena Park, California for the following purposes, as more fully described in
the attached Proxy Statement:
1. To amend the Certificate of Incorporation of the Company to effect
a reverse stock split of the outstanding shares of the Company's Common Stock.
2. To transact such other business as may properly come before the
Special Meeting and any adjournment(s) thereof.
Only record holders of Common Stock at the close of business on March
15, 2000 are entitled to notice of, and to vote at, the Special Meeting and at
any adjournment(s) thereof.
All stockholders are cordially invited to attend the Special Meeting in
person. Whether or not you expect to attend the Special Meeting in person, in
order to ensure your representation at the Special Meeting, please mark, sign
and date the enclosed proxy card and return it as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Special Meeting may vote in person even if such stockholder has returned a
proxy.
By Order of the Board of Directors
Catherine F. Ratcliffe
Secretary
Fullerton, California
March 27, 2000
<PAGE>
DAY RUNNER, INC.
2750 W. Moore Avenue
Fullerton, CA 92633
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Day Runner, Inc. ("Day Runner" or the "Company") for use at the
Special Meeting of Stockholders (the "Special Meeting") to be held Tuesday,
April 25, 2000 at 9:00 a.m., California time, and at any adjournment(s) thereof,
for the purposes set forth herein and in the accompanying Notice of Special
Meeting of Stockholders. The Special Meeting will be held at the Holiday Inn,
Buena Park Hotel and Conference Center located at 7000 Beach Blvd., Buena Park,
California.
These proxy solicitation materials are first being mailed on or about
March 27, 2000 to stockholders entitled to vote at the Special Meeting.
Only stockholders of record at the close of business on March 15, 2000
(the "Record Date") are entitled to notice of, and to vote at, the Special
Meeting. At the Record Date, 11,910,845 shares of Common Stock were issued and
outstanding and no Preferred Stock was outstanding.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Special Meeting and voting in person.
VOTING AND SOLICITATION
On all matters, each share of Common Stock has one vote. Except as
otherwise required by law or the Company's Certificate of Incorporation or
Bylaws, the affirmative vote of a majority of shares present, in person or by
proxy, and entitled to vote at the Special Meeting is required for the approval
of matters submitted to the stockholders for a vote. Abstentions are counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. Abstentions, however, do not constitute a vote "for" or
"against" any matter and thus will be disregarded in the calculation of a
plurality or of "votes cast." Broker non-votes are counted as shares that are
present and entitled to vote for purposes of determining a quorum. If a broker
indicates on the proxy that it does not have discretionary authority to vote on
a particular matter as to certain shares, those shares will be counted for
purposes of determining the presence of a quorum but will not be treated as
present and entitled to vote with respect to that matter (even though such
shares are considered present and entitled to vote for quorum purposes and may
be entitled to vote on other matters).
The costs of this solicitation will be borne by the Company. The
Company has retained the services of Corporate Investor Communications, Inc. to
assist in distributing proxy materials to brokerage houses, banks, custodians
and other nominee holders. The estimated cost of such services is $4,500 plus
certain out-of-pocket expenses. Although there are no formal agreements to do
so, the Company may reimburse brokerage houses and other persons representing
beneficial owners of shares for their expenses in forwarding proxy materials to
such beneficial owners. Proxies may be solicited personally or by telephone or
telegram by certain of the Company's directors, officers and regular employees,
without additional compensation.
<PAGE>
COMMON STOCK OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 10, 2000 by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of the Company's Common Stock, (ii) each of the Company's directors,
(iii) the Company's Chief Executive Officer and each of the four other most
highly compensated executive officers for the fiscal year ended June 30, 1999
(iv) all current directors and officers of the Company as a group:
<TABLE>
<CAPTION>
NAME OF BENEFICIAL OWNER(1) SHARES BENEFICIALLY PERCENT OF CLASS
OWNED
<S> <C> <C> <C>
Jill Tate Higgins(2).................................. 1,717,913 14.4
10153 1/2Riverside Drive, #598
Toluca Lake, CA 91602
KAIM Non-Traditional, L.P.(3)......................... 1,264,583 10.6
1800 Avenue of the Stars, 2nd Floor
Los Angeles, CA 90067
Mark A. Vidovich(4)................................... 1,053,588 8.8
15295 Alton Parkway
Irvine, CA 92718
David L. Babson & Co. Inc.(5)......................... 649,700 5.5
One Memorial Drive
Cambridge, MA 02142-1300
Alan R. Rachlin(4)(6)................................. 528,914 4.4
Boyd I. Willat(7)..................................... 243,362 2.0
James E. Freeman, Jr.(4)(8)........................... 285,850 2.4
Dennis K. Marquardt(4)................................ 92,161 *
Ronald M. Bianco(4)................................... 118,332 *
James P. Higgins(9)................................... 52,916 *
Charles Miller(4)..................................... 38,416 *
Donald E. Bottinelli(4)............................... 36,675 *
All current directors and officers as a group
(13 persons)(2)(4)(6)(7)(8)(9).......................
4,212,175 35.4
.........
* Less than one percent. (FOOTNOTES FOLLOW ON NEXT PAGE)
</TABLE>
<PAGE>
(1) Such persons have sole voting and investment power with respect to all
shares of Common Stock shown as being beneficially owned by them, subject
to community property laws, where applicable, and the information contained
in the footnotes to this table.
(2) Includes 50,416 shares for which warrants held by Ms. Higgins are
exercisable or become exercisable within 60 days after March 10, 1999; (ii)
1,609,869 shares held by O.S. II, Inc., a California corporation of which
Ms. Higgins, along with one of her minor children, is the sole owner; and
(iii) 47,728 shares held by Lakeside Enterprises, L.P., a California
limited partnership of which Ms. Higgins is the general partner and a
limited partner and of which O.S. II, Inc. is a limited partner. Does not
include 43,333 shares beneficially owned by James P. Higgins, Ms. Higgins'
husband, and 2,500 shares held by James P. Higgins as custodian for his two
minor children, as to which shares Ms. Higgins disclaims beneficial
ownership (see footnote 9 below).
(3) Based on a Form 13F dated August 12, 1999, wherein KAIM Non-Traditional,
L.P. reported that, as of June 30, 1999 and as an institutional investment
manager, it had sole investment discretion and voting authority as to such
shares.
(4) Includes 929,162, 300,416, 36,000, 269,750, 97,500, 36,675, 38,416 and
1,961,263 shares for which options or warrants beneficially owned by
Messrs. Vidovich, Rachlin, Marquardt, Freeman, Bianco, Bottinelli and
Miller and all current directors and officers as a group, respectively, are
exercisable or become exercisable within 60 days after March 10, 2000.
Although Messrs. Marquardt and Bianco were among the five most highly
compensated executive officers during the Company's fiscal year ended June
30, 1999, both of them resigned as executive officers and left the Company
prior to March 10, 2000.
(5) Based on a Form 13G dated January 27, 2000, wherein David L. Babson &
Company, Inc. reported that, as of December 31, 2000 and as an
institutional investment manager, it had sole investment discretion and
voting authority as to such shares.
(6) Does not include 8,620 shares held by a custodian for the benefit of Mr.
Rachlin's minor children.
(7) Includes (i) 50,416 shares for which warrants held by Mr. Willat are
exercisable or become exercisable within 60 days after March 10, 2000; and
(ii) 60,000 shares held by Mr. Willat and his former wife as trustees of
trusts for the benefit of their minor children and as to which shares Mr.
Willat and his former wife share voting and investment power.
(8) Includes 4,000 shares held by Mr. Freeman's wife for the benefit of their
minor children.
(9) Includes (i) 50,416 shares for which warrants held by Mr. Higgins are
exercisable or become exercisable within 60 days after March 10, 2000; and
(ii) 2,500 shares held by Mr. Higgins as custodian for his two minor
children. Does not include 1,717,913 shares beneficially owned by Ms.
Higgins as to which shares Mr. Higgins disclaims beneficial ownership (see
footnote 2 above).
<PAGE>
PROPOSAL 1 - APPROVAL OF AMENDMENT TO CERTIFICATE
OF INCORPORATION EFFECTING REVERSE STOCK SPLIT OF THE
OUTSTANDING SHARES OF COMMON STOCK
GENERAL
On March 10, 2000 and subject to the approval of the Company's
stockholders, the Board of Directors of the Company approved an amendment to
Article IV of the Company's Certificate of Incorporation (the "Amendment"). If
approved by the Company's stockholders at the Special Meeting, the Amendment
would effect a reverse stock split (the "Reverse Stock Split") of the
outstanding shares of the Company's Common Stock, par value $0.001 per share, on
a basis to be determined by the Board of Directors as fully described below.
As of the Record Date, the Company was authorized to issue a total of
30,000,000 shares of capital stock, consisting of 29,000,000 shares of Common
Stock and 1,000,000 shares of Preferred Stock. Of the authorized shares and as
of the Record Date, 11,910,845 shares of Common Stock were issued and
outstanding, 787,858 shares were held as treasury shares and an aggregate of
approximately 4,148,658 shares were reserved for issuance under the Company's
1986 Amended and Restated Stock Option Plan, 1995 Stock Option Plan, the
Non-Employee Director Option Plan and Employee Stock Purchase Plan and upon the
exercise of outstanding warrants and other options, and no shares of Preferred
Stock were outstanding. On March 23, 2000, the closing sales price of the
Company's Common Stock on The Nasdaq Stock Market was $2.03125 per share.
PRINCIPAL PURPOSES AND EFFECTS OF THE STOCK SPLIT
The Company's Common Stock is presently listed on the Nasdaq National
Market. In order to maintain its listing, the Company's Common Stock must
maintain a minimum bid price of $5.00. Over the last few weeks, the Company's
Common Stock has not consistently maintained such required minimum bid price. To
regain compliance with the Nasdaq National Market listing requirements, the
Company's Common stock must maintain a minimum bid price of $5.00 per share for
ten consecutive trading days prior to May 17, 2000. The Reverse Stock Split is
intended to raise the price of the Company's Common Stock in order to meet the
Nasdaq listing requirements and avoid delisting. The Board of Directors, in its
discretion, will determine the appropriate number of outstanding shares of
Common Stock (the "Reverse Split Number") to be combined into a single share of
Common Stock at the time the amended Certificate of Incorporation is filed and
the Reverse Stock Split becomes effective. The Reverse Stock Split Number will
be between two (2) and five (5), inclusive. The actual Reverse Stock Split
Number will be determined in a manner intended to ensure that the Company
complies with the Nasdaq Listing requirements to maintain its current listing on
the Nasdaq National market.
Upon filing of the proposed Amendment, each fixed number of shares of
Common Stock of the Company (the "Old Common Stock") equal to the Reverse Split
Number issued and outstanding or held in the treasury of the Company shall be
combined, reclassified and changed into one fully paid and nonassessable share
of Common Stock (the "New Common Stock"). Each holder of record of a certificate
for one or more shares of the Old Common Stock shall be entitled to receive upon
surrender of such certificate, a certificate representing the number of shares
of Common Stock to which the holder shall be entitled pursuant to the Reverse
Stock Split, rounded to the nearest whole number, with .5 being rounded up. No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon the combination of the Old Common Stock into shares of the New
Common Stock. Any certificates for shares of Old Common Stock not so surrendered
shall be deemed to represent one share of New Common Stock for each such fixed
number equal to the Reverse Split Number of Old Common Stock previously
represented by such certificate. Although the number of each stockholder's
shares of Common Stock will be reduced as a result of the Reverse Stock Split,
such stockholder's pro rata interest in the Company and in its shares of
outstanding Common Stock will not be reduced.
Similarly, the aggregate number of shares of Common Stock reserved for
issuance upon exercise of warrants and options will decrease proportionately.
Each outstanding option or warrant will automatically become an option or
warrant to purchase the number of shares subject to the option or warrant
immediately prior to the Reverse Stock Split divided by the Reverse Split
Number, and the exercise price will be proportionately adjusted to reflect the
Reverse Stock Split. In addition, the shares available for issuance under the
Company's stock option and stock purchase plans will be reduced to reflect the
Reverse Stock Split, and the other relevant terms and provisions of the
Company's stock option and stock purchase plans will be appropriately adjusted.
The Reverse Stock Split will reduce the number of issued and
outstanding shares of the Company's Common Stock. The Reverse Stock Split will
not change the equity interests of the stockholders in the Company and would not
affect the relative rights of any stockholder or result in a dilution or
diminution of any stockholder's proportionate interest in the Company. Since the
Reverse Stock Split will result in each stockholder's interest being represented
by a fewer number of shares, it is possible that lower brokerage commissions may
be payable after the Reverse Stock Split upon a sale or transfer of a
stockholder's same relative interest in the Company's Common Stock because that
interest would be represented by a fewer number of shares.
The Amendment to effect the Reverse Stock Split would not affect the
number of shares of Common Stock or Preferred Stock which the Company is
authorized to issue and would not adjust the $0.001 par value of the Company's
Common Stock and Preferred Stock. Upon effectiveness of the Reverse Stock Split,
however, an amount equal to the par value of the shares of Common Stock combined
into one share as a result of the Reverse Stock Split would be transferred for
financial accounting purposes from the Company's paid-in capital account to the
Company's additional paid-in capital account.
SURRENDER OF OLD COMMON STOCK CERTIFICATES AND DELIVERY OF
NEW SHARE CERTIFICATES
If the Amendment is approved by the stockholders at the Special
Meeting, the Board, in its discretion, will determine the Reverse Split Number
and the Company intends to file the Certificate of Amendment as soon as
practicable after such approval is obtained and expects that the filing would be
made on or about April 28, 2000. The Amendment would become effective upon the
filing with the Delaware Secretary of State. Each stockholder of record as of
the close of business on the date of such filing (the "Effective Date") would be
entitled to receive upon surrender of a certificate for one or more shares of
Old Common Stock a new stock certificate representing the number of shares of
the Company's New Common Stock to which the holder shall be entitled pursuant to
the Reverse Stock Split, rounded to the nearest whole number, with .5 being
rounded up. For example, if the Reverse Split Number determined by the Board is
3, and a stockholder owned 500 shares of the Company's Common Stock on the
Effective Date, upon surrender of the certificate for 500 shares, the Company
would mail to the stockholder a share certificate for 167 shares of the
Company's New Common Stock. Any certificates for shares of Old Common Stock not
so surrendered after the effective date shall be deemed to represent one share
of New Common Stock for each such fixed number equal to the Reverse Split Number
of Old Common Stock previously represented by such certificate. If the Amendment
is approved, stockholders will receive instructions on how to surrender their
Old Common Stock certificates and receive New Common Stock certificates shortly
after the Effective Date.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
If the Amendment is approved by the stockholders at the Special
Meeting, the first paragraph of Article IV of the Company's Certificate of
Incorporation, as amended, would read as follows with the blank filled in as
appropriate after the Board determines the Reverse Split Number:
"The total number of shares of all classes of stock
which the corporation is authorized to issue is 30,000,000
shares, consisting of 29,000,000 shares of Common Stock having
a par value of $0.001 per share (the `Common Stock') and
1,000,000 shares of Preferred Stock having a par value of
$0.001 per share (the `Preferred Stock'). Upon amendment of
this Article IV, each ___outstanding shares of Common Stock is
combined and converted into one share of Common Stock. No
fractional shares or scrip shall be issued in connection with
the combination and all calculations that would result in the
issuance of fractional shares shall be rounded to the nearest
whole share (with .5 being rounded up)."
AT THE SPECIAL MEETING, THE STOCKHOLDERS WILL BE REQUESTED TO CONSIDER
AND APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
EFFECTING THE REVERSE STOCK SPLIT. THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL
OF THE PROPOSED AMENDMENT IS IN THE BEST INTERESTS OF THE COMPANY AND ITS
STOCKHOLDERS AND RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT. APPROVAL OF
THE PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATION REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF
COMMON STOCK ENTITLED TO VOTE AT THE SPECIAL MEETING.
<PAGE>
DEADLINE FOR RECEIPT OF STOCKHOLDER
PROPOSALS FOR 2000 ANNUAL MEETING
As previously disclosed to stockholders, proposals of stockholders of
the Company which are intended to be presented by such stockholders at the
Company's annual meeting of stockholders to be held in 2000 must be received by
the Company no later than July 13, 2000 in order that they may be considered for
inclusion in the proxy statement and form of proxy relating to that annual
meeting. It is recommended that stockholders submitting proposals direct them to
the Secretary of the Company via certified mail, return receipt requested, in
order to ensure timely delivery.
OTHER MATTERS
The Company currently knows of no matters to be submitted at the
Special Meeting other than the matter described herein. If any other matters
properly come before the Special Meeting, it is the intention of the persons
named on the enclosed proxy card to vote the shares they represent as the Board
of Directors may recommend.
By Order of the Board of Directors
Catherine F. Ratcliffe
Secretary
Fullerton, California
March 27, 2000
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
DAY RUNNER, INC.
2000 SPECIAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Day Runner, Inc., a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of
Special Meeting of Stockholders and Proxy Statement, each dated March 27, 2000,
and hereby appoints James E. Freeman, Jr. and David A. Werner, and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Special Meeting of Stockholders of the Company to be held Tuesday, April 25,
2000, at 9:00 a.m., California time, at the Holiday Inn, Buena Park Hotel and
Conference Center located at 7000 Beach Blvd., Buena Park, California, and at
any adjournment(s) thereof, and to vote all shares of Common Stock to which the
undersigned would be entitled, if then and there personally present, on the
matters set forth below:
1. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION EFFECTING A REVERSE STOCK SPLIT OF THE
OUTSTANDING SHARES OF COMMON STOCK
__ FOR __ AGAINST __ ABSTAIN
To approve an amendment to the Company's Certificate of Incorporation
which would effect a reverse stock split of the outstanding shares of the
Company's Common Stock as described in the Proxy Statement.
2. OTHER BUSINESS
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment(s) thereof.
Any one of such attorneys-in-fact or substitutes as shall be present
and shall act at said meeting or any adjournment(s) thereof shall have and may
exercise all powers of said attorneys-in-fact hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR PROPOSAL 1 AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated: , 2000
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(Signature)
(Signature)
(This Proxy should be marked, dated and signed by the
stockholder(s) EXACTLY as his or her 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.)
DO NOT FOLD, STAPLE OR MUTILATE
