sec document
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /_/
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/_/ Preliminary Proxy Statement
/_/ Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/X/ Soliciting Material Under Rule 14a-12
THE TOPPS COMPANY, INC.
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(Name of Registrant as Specified in Its Charter)
PEMBRIDGE VALUE OPPORTUNITY FUND LP
PEMBRIDGE CAPITAL MANAGEMENT LLC
CRESCENDO PARTNERS II L.P. SERIES Y
CRESCENDO INVESTMENTS II, LLC
CRESCENDO ADVISORS LLC
ERIC ROSENFELD
TIMOTHY E. BROG
ARNAUD AJDLER
JOHN J. JONES
TOPPS FULL VALUE COMMITTEE
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On May 17, 2006, the Topps Full Value Committee (the "Committee"),
together with the other participants (as defined below), made a preliminary
filing with the Securities and Exchange Commission ("SEC") of a proxy statement
and accompanying GOLD proxy card to be used to solicit votes for the election of
its slate of director nominees and certain non-binding business proposals at the
2006 annual meeting of stockholders (the "2006 Annual Meeting") of The Topps
Company, Inc., a Delaware corporation (the "Company").
Item 1: On May 18, 2006, the Committee issued the following press
release:
FOR IMMEDIATE RELEASE
Thursday, May 18, 2006
THE TOPPS FULL VALUE COMMITTEE FILES PROXY STATEMENT
SEEKS SUPPORT OF STOCKHOLDERS TO ELECT ITS THREE NOMINEES AND
APPROVE ITS NON-BINDING PROPOSALS
New York, NY, May 18, 2006 - The Topps Full Value Committee (the "Committee")
announced today that it has filed a preliminary proxy statement with the
Securities and Exchange Commission in connection with its intended solicitation
of proxies for the 2006 Annual Meeting of Stockholders of The Topps Company,
Inc. (Nasdaq: TOPP). Pembridge Value Opportunity Fund LP ("Pembridge") and
Crescendo Partners II L.P., Series Y ("Crescendo"), members of the Committee,
collectively own 5.8% of Topps' outstanding shares of common stock.
The Committee is seeking support from stockholders to elect three highly
qualified nominees to the Topps' Board of Directors -- Timothy E. Brog, Arnaud
Ajdler and John J. Jones. The Committee does not believe that the Company's
current Board is acting in the best interests of stockholders as evidenced by:
o A Deterioration of Topps Financial Performance: Over the last five
years, income from operations fell significantly from $36.6
million in fiscal year 2002 to a LOSS of $2.3 million in fiscal
year 2006. IN FACT, TOPPS HAS BEEN SO POORLY MANAGED THAT IN
FISCAL YEAR 2006 ITS GROSS MARGIN WAS AT A TEN-YEAR LOW WHILE SG&A
EXPENSES AS A PERCENTAGE OF SALES WERE AT A TEN-YEAR HIGH.
o Excessive Compensation to Management: As an example, Topps
Chairman and Chief Executive Officer, Mr. Arthur T. Shorin, has
received an average salary of approximately $980,000 over the last
three years. Mr. Shorin's salary is in line with the salary
received by the chief executive officers of multi-billion dollar
companies such as Kraft Foods, Hershey and Wrigley's.
o Failure to Properly Allocate Capital: Over the past five years,
Topps has had an average of Cash and Short Term Investments of
$103 million, representing on average 35% of sales during this
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period. Since Topps has not had a good use for its cash, it should
be returned to the owners of the Company, its stockholders.
o Lack of Accountability and Sub-standard Corporate Governance
Practices.
o Poor Stock Performance: Topps common stock has lagged indices and
its peers.
The Committee is also asking stockholders to support non-binding proposals in
the interest of good corporate governance. These non-binding proposals ask
stockholders to vote to:
> Eliminate the classification of the Topps Board of Directors
> Allow stockholders holding at least 15% of Topps outstanding
shares to call a special meeting
Eric Rosenfeld, President of Crescendo, stated, "Our highly qualified nominees
are committed to exploring all strategic alternatives to maximize Topps
stockholder value and to encourage Topps' Board to adopt corporate governance
initiatives that will benefit all stockholders."
Mr. Rosenfeld continued, "We are not surprised that Topps initial response to
our nomination and stockholder proposals has been focused on personal attacks
rather than defending the Company's financial performance. We hope that the
proxy contest will be focused on the real issue, which is whether stockholders
want a continuation of the status quo of poor operating performance and a
lagging stock price, or whether they want to elect nominees committed to
improving stockholder value."
Timothy Brog, President of Pembridge, said, "We believe that our nominees will
bring a fresh perspective to the Topps' Board of Directors, which is sorely in
need of change. We are committed to explore ALL strategic alternatives to
maximize stockholder value, which include, among many things, exploring the sale
of all or part of the Company in a tax efficient manner, repurchasing a
significant amount of Topps' common stock either in the open market or as part
of a self-tender offer, and significantly reducing the Company's cost
structure."
Mr. Brog continued, "The Topps' Board of Directors has erected a virtual arsenal
of stockholder-unfriendly defense provisions including a staggered board and the
requirement of a supermajority vote of Topps stockholders to amend certain of
the Company's certificate of incorporation and bylaw provisions. If the Topps'
Board was more accountable to the stockholders, perhaps they would not have
allowed SG&A expenses to increase by approximately 30% over the last five years
despite a 2% decline in sales during the same time period. We look forward to
discussing our proposals with Topps stockholders and, if our Nominees are
elected, to improving Topps' abysmal record of corporate governance practices."
IT IS TIME FOR A CHANGE
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CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The Topps Full Value Committee filed with the Securities and Exchange
Commission ("SEC") on May 17, 2006 a preliminary proxy statement and
accompanying GOLD proxy card to be used to solicit votes for the election of its
slate of director nominees and certain business proposals for use at the 2006
Annual Meeting. The Committee strongly advises all Topps stockholders to read
the proxy statements and other proxy materials as they become available because
they contain important information.
STOCKHOLDERS WILL BE ABLE TO OBTAIN FREE COPIES OF THE PROXY STATEMENT FILED
WITH THE SEC BY THE TOPPS FULL VALUE COMMITTEE THROUGH THE WEBSITE MAINTAINED BY
THE SEC AT WWW.SEC.GOV. IN ADDITION, INVESTORS WILL BE ABLE TO OBTAIN FREE
COPIES OF THE PROXY STATEMENT FROM THE TOPPS FULL VALUE COMMITTEE BY CONTACTING
TIMOTHY BROG, PEMBRIDGE CAPITAL, 708 THIRD AVENUE, NEW YORK, NY 10017 OR BY
CALLING D.F. KING & CO., INC. AT (800) 628-8532.
THE PARTICIPANTS IN THE PROXY SOLICITATION ARE PEMBRIDGE VALUE OPPORTUNITY FUND
LP, A DELAWARE LIMITED PARTNERSHIP, PEMBRIDGE CAPITAL MANAGEMENT LLC, A DELAWARE
LIMITED LIABILITY COMPANY, TIMOTHY E. BROG, CRESCENDO PARTNERS II, L.P., SERIES
Y, A DELAWARE LIMITED PARTNERSHIP, CRESCENDO INVESTMENTS II, LLC, A DELAWARE
LIMITED LIABILITY COMPANY, CRESCENDO ADVISORS LLC, A DELAWARE LIMITED LIABILITY
COMPANY, ERIC ROSENFELD, ARNAUD AJDLER AND JOHN J. JONES.
INFORMATION CONCERNING THE PARTICIPANTS AND THEIR INTERESTS IN THE SOLICITATION
IS SET FORTH IN THE PROXY STATEMENT FILED WITH THE SEC.
* * * * *
Contacts:
Timothy Brog Eric Rosenfeld
Pembridge Value Opportunity Fund LP Crescendo Partners II L.P, Series Y
(212) 557-6150 (212) 319-7676
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