-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CjTaWl/1hYtfDRNJWigGW7+Dfln5sHU8L5zo2yLbRmrwTa07FkTWLpCa6/n+1okF crvWAdgjDnkTiKYPHQLmdA== 0000853102-98-000002.txt : 19980122 0000853102-98-000002.hdr.sgml : 19980122 ACCESSION NUMBER: 0000853102-98-000002 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19980121 EFFECTIVENESS DATE: 19980121 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAY RUNNER INC CENTRAL INDEX KEY: 0000853102 STANDARD INDUSTRIAL CLASSIFICATION: BLANKBOOKS, LOOSELEAF BINDERS & BOOKBINDING & RELATED WORK [2780] IRS NUMBER: 953624280 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-8 SEC ACT: SEC FILE NUMBER: 333-44627 FILM NUMBER: 98510474 BUSINESS ADDRESS: STREET 1: 15295 ALTON PARKWAY CITY: IRVINE STATE: CA ZIP: 92718 BUSINESS PHONE: 714/680-3500 MAIL ADDRESS: STREET 1: 15295 ALTON PARKWAY CITY: IRVINE STATE: CA ZIP: 92718 S-8 1 S8 REGISTRATION STATEMENT 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
CALCULATION OF REGISTRATION FEE 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 ======
(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. 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. 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.
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
INDEX TO EXHIBITS 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.......................................
EX-23 2 CONSENT OF COUNSEL 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 EX-99 3 AMENDMENT TO 1995 STOCK OPTION PLAN 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 EX-99 4 AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN 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 EX-99 5 WARRANT 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 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. EX-23 6 CONSENT OF AUDITORS 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 -----END PRIVACY-ENHANCED MESSAGE-----