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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registration [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] 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 Pursuant to ss.240.14a-12
CELEBRATE EXPRESS, INC.
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(Name of Registrant as Specified In Its Charter)
The Celebrate Express Shareholder Value Committee
Kenneth H. Shubin Stein, MD, CFA
Spencer Capital Management, LLC
Spencer Capital Opportunity Fund, LP
Spencer Capital Partners, LLC
Spencer Capital Offshore Opportunity Fund, Ltd.
Spencer Capital Offshore Partners, LLC
Stephen Roseman, CFA
Thesis Capital Management, LLC
Thesis Capital, LP
Thesis Capital Master Fund Limited
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(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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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):
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5) Total fee paid:
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[ ] 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
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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On August 7, 2006, The Celebrate Express Shareholder Value Committee issued
the following letter to Celebrate Express, Inc. shareholders.
***
THE CELEBRATE EXPRESS SHAREHOLDER VALUE COMMITTEE
c/o Spencer Capital Management, LLC
1995 Broadway, Suite 1801
New York, New York 10023
August 7, 2006
Dear Fellow Celebrate Express Shareholder:
As you may be aware from our recent Schedule 13D filings, members of The
Celebrate Express Shareholder Value Committee collectively own approximately 19%
of the shares outstanding. As the largest shareholders of Celebrate Express, we
are very concerned about the Company's future.
Over the last several months, we have had numerous discussions with management
and members of the Board about the direction of the Company. In those
discussions, we requested two Board seats in order to provide to the Board, on
an ongoing basis, perspectives that would benefit all shareholders equally.
Despite our owning almost one-fifth of the Company's stock, this request was
squarely rejected, as was a suggestion by a current member of the Board - which
we were prepared to consider at the time - that we be given just a single Board
seat.
We are now convinced, however, that we must have even greater Board
representation than we previously requested in order to influence the Company's
strategic direction in a meaningful way. Recent Board actions alarm us as
shareholders: only last month, in an apparent response to our efforts, the Board
unilaterally implemented a poison pill and adopted several bylaw amendments
aimed at limiting shareholder rights. Significantly, the Board changed the
Company's bylaws so that a majority of the Company's shareholders can no longer
amend them. Rather, a supermajority of 66 2/3% of the outstanding stock is now
required.
As a result, we have notified the Company that we intend to propose a slate of
three nominees for election to the Board at the 2006 Annual Meeting of
Shareholders, which we expect will be held in October. Currently, there are six
directors on the Board, and we believe that three of the six directors must be
put up for election at the Annual Meeting.
If elected, our nominees will push to establish a Board committee to consider
and pursue strategic alternatives for the Company, including a possible sale of
the Company. We believe this is a necessary step toward maximizing value for all
shareholders, and a process that should be undertaken immediately. However, even
if the Board heeds our call for an immediate process of exploring strategic
alternatives, we believe additional shareholder representatives must be added to
the Board. We think that a strategic alternatives process would benefit greatly
both from the input of our nominees and from the mandate that the election of
our nominees
would represent. We hope you will support us in this endeavor.
Once our preliminary proxy materials are filed with the SEC, we will seek to
communicate with many of you directly, with the help of our proxy solicitors at
D.F. King & Co., Inc.
Sincerely,
/s/ Kenneth H. Shubin Stein, MD, CFA /s/ Stephen Roseman, CFA
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Kenneth H. Shubin Stein, MD, CFA Stephen Roseman, CFA
Spencer Capital Management, LLC Thesis Capital Management, LLC
THE CELEBRATE EXPRESS SHAREHOLDER VALUE COMMITTEE STRONGLY ADVISES ALL
STOCKHOLDERS OF THE COMPANY TO READ ITS PROXY STATEMENT WHEN IT IS AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION RELATING TO
THE PARTICIPANTS IN ANY SUCH PROXY SOLICITATION. ANY SUCH PROXY STATEMENT, WHEN
FILED, AND ANY OTHER RELEVANT DOCUMENTS WILL BE AVAILABLE AT NO CHARGE ON THE
SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, STOCKHOLDERS MAY ALSO OBTAIN A
COPY OF ANY SUCH PROXY STATEMENT, WHEN FILED, WITHOUT CHARGE, BY CONTACTING OUR
PROXY SOLICITOR, D.F. KING & CO., INC., AT ITS TOLL-FREE NUMBER: (800) 735-3591,
OR AT CESVC@DFKING.COM.
The following persons are anticipated to be, or may be deemed to be,
participants in any such proxy solicitation: The Celebrate Express Shareholder
Value Committee; Kenneth H. Shubin Stein, MD, CFA; Stephen Roseman, CFA; Matthew
C. Diamond; Spencer Capital Management, LLC ("SCM"); Spencer Capital Opportunity
Fund, LP ("SCF"); Spencer Capital Partners, LLC ("SCP"); Spencer Capital
Offshore Opportunity Fund, Ltd. ("SCOF"); Spencer Capital Offshore Partners, LLC
("SCOP"); Thesis Capital Management, LLC ("TCM"); Thesis Capital, LP ("TC"); and
Thesis Capital Master Fund Limited ("TCMF"). Certain of these persons hold
direct or indirect interests through the beneficial ownership of common stock as
follows: Dr. Shubin Stein and SCM - 1,200,697 shares; SCF and SCP - 718,995
shares; SCOF and SCOP - 481,702 shares; Mr. Roseman and TCM - 286,099 shares; TC
- - 53,147 shares; and TCMF - 232,952 shares. Except as set forth above, none of
the participants has any direct or indirect interests, by security holdings or
otherwise, required to be disclosed herein, other than the interests of Dr.
Shubin Stein and Messrs. Roseman and Diamond in being nominated and elected as
directors of the Company.