PROXY STATEMENT IN OPPOSITION TO THE SOLICITATION BY THE BOARD OF
DIRECTORS OF THE FIRST YEARS, INC.
ANNUAL MEETING OF STOCKHOLDERS (To be held on May 17, 2001)
My name is Phillip Goldstein. I am a shareholder of The
First Years, Inc. (the "Company"). I am an investment manager
presently managing investment portfolios with assets totaling
more than $60 million. I am sending this proxy statement and
the enclosed GREEN proxy card to all stockholders of record on
March 20, 2001 (the "Record Date") of the Company. I am
soliciting a proxy to vote your shares at the 2001 Annual Meeting
of Stockholders of the Company (the "Meeting") and at any and all
adjournments or postponements of the Meeting. Please refer to
the Company's proxy soliciting material for additional
information concerning the Meeting and the matters to be
considered by the shareholders.
This proxy statement and the enclosed GREEN proxy card are
first being sent to shareholders of the Company on or about April
25, 2001.
INTRODUCTION
There are two matters that the Company has scheduled to be
voted upon at the meeting:
1. The election of two persons to serve as Class III Directors of
the Company.
2. The ratification of the appointment of Deloitte & Touche LLP
as independent accountants of the Company for the fiscal year
ending December 31, 2001.
In addition, I intend to introduce the following proposals
at the meeting.
3. The Company shall be sold to the highest bidder at a price of
at least 25% above its April 9, 2001market value.
4. The following bylaw shall be adopted: "The Company shall not
take any action that is reasonably calculated to impede or
prevent a shareholder vote including but not limited to
initiating any lawsuit. This bylaw may only be changed or
rescinded by the stockholders."
With respect to these matters, I am soliciting a proxy to
vote your shares FOR the election of my nominees
and FOR Proposals 3 and 4. I am making no recommendation with
respect to Proposal 2.
How Proxies Will Be Voted
All of the proposals scheduled by the Company to be voted
upon at the meeting are included on the enclosed GREEN proxy
card. If you will not attend the meeting and you wish to vote
FOR the election of my nominees and/or FOR my proposals, you may
do so by completing and returning a GREEN proxy card.
If you return a GREEN proxy card to me or to my agent, your
shares will be voted on each matter as you indicate. If you do
not indicate how your shares are to be voted on a matter, they
will be voted FOR the election of my nominees to the Board, FOR
Proposals 3 and 4 and will NOT VOTE on Proposal 2. If you return
a GREEN proxy card, you will be granting the proxy holder(s)
discretionary authority to vote on any other matters of which
they are not now aware that may come before the meeting including
matters relating to the conduct of the meeting.
Voting Requirements
If a quorum is not present at the meeting, or if a quorum is
present but sufficient votes to approve any of the proposals are
not received, the proxy holder(s) may propose one or more
adjournments of the meeting to permit further solicitation of
proxies, consideration of matters of which I am not aware at this
time, or negotiations with the incumbent directors. If an
adjournment of the meeting is proposed, the proxy holder(s)s will
vote for or against such adjournment in their discretion. The
proxies may also temporarily decline to attend the meeting (which
I believe is permitted under state law), thereby possibly
preventing a quorum to solicit additional proxies, if they
reasonably determine that management has taken or will take any
illegal action to impede the voting rights of the shareholders.
Please refer to the Company's proxy statement for the quorum
requirements and the voting requirements for Proposals 1 and 2.
Proposals 3 and 4 each require a majority of the votes cast for
approval.
Revocation of Proxies
You may revoke any proxy
prior to its exercise by (i) delivering a written revocation of
your proxy to the Company; (ii) executing and delivering a later
dated proxy to me or to the Company or to our respective agents;
or (iii) voting in person at the meeting. (Attendance at the
meeting will not in and of itself revoke a proxy.) There is no
limit on the number of times you may revoke your proxy prior to
the meeting. Only the latest dated, properly signed proxy card
will be counted.
Information Concerning the Soliciting Shareholder
I, Phillip Goldstein, am the Soliciting Shareholder. My
address is 60 Heritage Drive, Pleasantville, NY 10570. I am an
investment manager who presently manages investment portfolios
with assets in excess of $60 million. Since December 1, 1992, I
have been the president and 50% shareholder of Kimball &
Winthrop, Inc., the general partner of Opportunity Partners L.P.,
a private investment partnership. I am also the portfolio
manager of Opportunity Partners. Since 1996, I have taken an
active role in urging the management of certain companies to take
various actions that I believe would benefit those companies and
their shareholders. My actions have included discussions with
management, submitting shareholder proposals, conducting a proxy
contest and filing a lawsuit.
I am deemed to be the beneficial owner of 62,200 shares of
Common Stock held in brokerage accounts by my clients (including
Opportunity Partners) and me. Exhibit 1 to this proxy statement
contains a schedule showing my purchases and sales of Common
Stock within the past two years.
REASONS FOR THE SOLICITATION
I believe that the market price of the Company's stock is
undervalued and that the Company can be sold at a significant
premium to its market value. Therefore, I wish to afford
shareholders an opportunity to (1) determine whether they want to
seek a sale of the Company to the highest bidder and (2) elect
directors that have no ties to management and who are committed
to pursuing such a sale.
OTHER CONSIDERATIONS
If my nominees are elected, they will constitute a minority
of the board and there is no assurance that the entire board will
agree to seek a sale of the Company. In addition, a sale of the
Company may require shareholder approval, and no assurance can be
given that such approval will be obtained. Finally, various
costs, including but not limited to those related to holding a
special meeting of shareholders, which would be borne indirectly
by shareholders, may be associated with such actions. I believe
that such costs are far outweighed by the benefit of a sale at a
premium to the market price of the Company's stock.
I believe that all shareholders of the Company will benefit
if actions are taken to improve shareholder value. However, I
also have personal financial incentives to increase the Company's
stock price because my clients who hold shares of the Company pay
me fees that are based upon the realized and unrealized gains
that they earn. Thus, these fees may partially depend on the
value of the Company's shares.
PROPOSAL 1: ELECTION OF DIRECTORS
At the meeting, I will nominate the following persons for
election as a director for a term expiring in 2004.
Name, Address, Age Principal Business/ Occupation
Phillip Goldstein
(Age 56)
60 Heritage Drive
Pleasantville, NY
10570
Andrew Dakos (Age
35)
14 Mill Street
Lodi, NJ 07644
Since 1992, Mr.
Goldstein.has
managed
investments for a
limited number of
clients and has
served as the
portfolio manager
and president of
the general
partner of
Opportunity
Partners, a
private investment
partnership. From
1998-2000, he was
a director of
Clemente Strategic
Value Fund and was
elected a director
of Mexico Equity &
Income Fund in
February 2000, The
Italy Fund in May
2000 and Dresdner
RCM Global
Strategic Income
Fund in November
2000.
Private investor.
Vice President --
Sales, UVitec
Printing Ink,
Inc., April 2001.
Director of
Dresdner RCM
Global Strategic
Income Fund since
November 2000.
Mr. Goldstein beneficially owns 62,200 shares of the
Company. Mr. Dakos does not own any shares. Other than fees
that may be payable by the Company to its directors, none of my
nominees have any arrangement or understanding with any person
with respect to any future employment by the Company or by any
affiliate of the Company.
The persons named as proxies on the enclosed GREEN proxy
card intend, in the absence of contrary instructions, to vote all
proxies they are entitled to vote IN FAVOR of the election of the
above persons, each of whom have consented to stand for election
and to serve if elected. If any nominee is unable to serve, an
event not now anticipated, the proxies will be voted for such
other person, if any, as is designated by the proxy holder(s).
PROPOSAL 2: RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE
LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY
I am making no recommendation with respect to this proposal.
In the absence of contrary instructions, the proxy holder(s) will
NOT VOTE your shares on this proposal.
PROPOSAL 3: A STOCKHOLDER PROPOSAL THAT THE COMPANY BE SOLD TO
THE HIGHEST BIDDER AT A PRICE OF AT LEAST 25% ABOVE ITS APRIL
9, 2001 MARKET VALUE.
After reaching a price of $20 per share during the second
quarter of 1998 our Company's stock price fell more than 50% in
value. On April 9, 2001, the price stood at $10.35. Meanwhile,
sales and earnings have been stagnant for the past few years. I
think a strategic buyer might pay a sizeable premium to acquire
the Company and that pursuing such a sale is the best way to
maximize shareholder value particularly since current management
has been unable to increase sales and earnings. In the absence
of contrary instructions, the proxies will vote your shares FOR
this proposal.
PROPOSAL 4: A STOCKHOLDER PROPOSAL TO ADOPT THE FOLLOWING
BYLAW: "THE COMPANY SHALL NOT TAKE ANY ACTION REASONABLY
CALCULATED TO IMPEDE OR PREVENT A SHAREHOLDER VOTE INCLUDING BUT
NOT LIMITED TO INITIATING ANY LAWSUIT. THIS BYLAW MAY ONLY BE
CHANGED OR RESCINDED BY THE SHAREHOLDERS."
When faced with a proxy challenge, a board of directors may
act to impede a shareholder vote, e.g., by initiating a lawsuit.
We think that such actions benefit only the incumbent managers
and the lawyers who advise them - not the shareholders. Here,
five of the Company's directors are related to one another. The
incumbent directors and our highly compensated managers have
presided over a company whose abysmal stock price performance
over the past few years reflects its poor operating performance.
I think a lawsuit or other action reasonably calculated to impede
a shareholder vote would only benefit management while allowing
shareholders to continue to suffer with a depressed stock price.
The adoption of this bylaw will act to protect shareholders from
such self-serving actions. In the absence of contrary
instructions, the proxy holder(s)s will vote your shares FOR this
proposal.
THE SOLICITATION
I am making this solicitation personally. Persons affiliated
with or employed by affiliates of Opportunity Partners may assist
me in the solicitation of proxies. They will not receive any
special compensation for their services. Banks, brokerage houses
and other custodians, nominees and fiduciaries will be requested
to forward this proxy statement and the enclosed GREEN proxy card
to the beneficial owners of shares of Common Stock for whom they
hold shares of record. I will reimburse these organizations for
their reasonable out-of-pocket expenses.
Initially, I will personally bear all of the expenses related
to this proxy solicitation. Because I believe that the
shareholders will benefit from this solicitation, I intend to
seek reimbursement of these expenses from the Company.
Shareholders will not be asked to vote on the reimbursement of
solicitation expenses incurred by either the incumbent directors
or me. I estimate that my expenses will be about $30,000. As of
April 25, 2001, my expenses have been approximately $---------.
If the Company does not reimburse me, I may seek reimbursement
from one or more of my clients or from their affiliates. There
is no assurance that I will be reimbursed.
There is no arrangement or understanding involving me or any
affiliate of mine that relates to future employment by the
Company or any future transaction with the Company.
ADDITIONAL PROPOSALS
I know of no business that will be presented for consideration
at the meeting other than that set forth in this proxy statement
and in the Company's proxy statement. Unless instructed
otherwise, if any other matters are properly presented for
consideration at the meeting, it is the intention of the persons
named as proxies in the enclosed GREEN proxy card to vote in
accordance with their own best judgment on such matters.
DATED: April 23, 2001
EXHIBIT 1: SECURITIES OF THE COMPANY PURCHASED OR SOLD
WITHIN THE PAST TWO YEARS BY THE SOLICITING SHAREHOLDER
Except as disclosed in this proxy statement, I have not had
any interest, direct or indirect in the Company. The following
table sets forth certain information with respect to purchases
and sales of shares of Common Stock of the Company within the
past two years by me and by accounts holding shares as to which I
am deemed to be the beneficial owner (the "Accounts"). Some of
the shares are held in margin accounts, together with other
securities. Therefore, a portion of the purchase price and
market value of the shares may from time to time be represented
by margin borrowings, depending upon the net debit balances, if
any, of the margin accounts, which fluctuate daily.
1/25/01 2,500
2/1/01 50,000
2/8/01 5,200
2/15/01 3,000
3/30/01 1,500
PROXY CARD
PROXY SOLICITED IN OPPOSITION TO THE BOARD OF DIRECTORS OF THE
FIRST YEARS, INC. BY PHILLIP GOLDSTEIN FOR THE ANNUAL MEETING OF
STOCKHOLDERS ON MAY 17, 2001
The undersigned hereby appoints Andrew Dakos and Phillip
Goldstein, and each of them, as the undersigned's proxies, with
full power of substitution, to attend the Annual Meeting of
Shareholders of The First Years, Inc. at 10:30 a.m. on May 17,
2001, (the "Meeting"), and any adjournment or postponement
thereof, and to vote on all matters that may come before the
Meeting and any such adjournment or postponement the number of
shares that the undersigned would be entitled to vote if present
in person, as specified below.
(INSTRUCTIONS: Mark votes by placing an "x" in the appropriate [
].)
1. ELECTION OF TWO DIRECTORS
FOR all of the nominees listed below [ ] WITHHOLD
AUTHORITY [ ]
(except as indicated to the contrary below)
to vote for all of the nominees listed below
PHILLIP GOLDSTEIN AND ANDREW DAKOS
To withhold authority to vote for one or more nominees,
enter the name(s) of the nominee(s) below.
____________________________________________________________
2. RATIFICATION OF THE SELECTION OF DELOITE & TOUCHE LLP AS
INDEPENDENT ACCOUNTANTS
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. A STOCKHOLDER PROPOSAL THAT THE COMPANY BE SOLD TO THE
HIGHEST BIDDER AT A PRICE AT LEAST 25% ABOVE ITS APRIL 9,2001
MARKET VALUE.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. PROPOSAL 4: A STOCKHOLDER PROPOSAL TO ADOPT THE FOLLOWING
BYLAW: "THE COMPANY SHALL NOT TAKE ANY ACTION REASONABLY
CALCULATED TO IMPEDE OR PREVENT A SHAREHOLDER VOTE INCLUDING
BUT NOT LIMITED TO INITIATING ANY LAWSUIT. THIS BYLAW MAY ONLY
BE CHANGED OR RESCINDED BY THE SHAREHOLDERS."
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please sign and date below. Your shares will be voted as
directed. If no direction is made, this proxy will be voted FOR
the election of the nominees named above in Proposal 1, FOR
Proposals 3 AND 4 and will NOT VOTE on Proposal 2. The
undersigned hereby acknowledges receipt of the proxy statement
dated April 23, 2001 of Phillip Goldstein and revokes any proxy
previously executed. (Important - Please be sure to enter date.)
.
SIGNATURE (S)_________________________ Dated: _______________