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 [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
j2 GLOBAL COMMUNICATIONS, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
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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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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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[LOGO] J2 Logo
j2 Global Communications, Inc.
6922 Hollywood Boulevard
8th Floor
Hollywood, California 90028
Telephone: 323-860-9200
November 26, 2001
Dear stockholder:
On behalf of the board of directors, I cordially invite you to attend the
special meeting of stockholders to be held on December 20, 2001. At the meeting
we will be asking stockholders to approve both a charter amendment that would
reduce j2 Global's authorized common stock, and an amendment to its stock
option plan that would increase the maximum number of shares of common stock
that may be issued under the plan. We hope you will be able to attend the
meeting.
Starting today, we are sending the enclosed proxy statement to all of our
stockholders. Please read it carefully before deciding how to vote.
Your vote is very important. Even if you plan to attend the meeting in
person, please complete, sign, and date the enclosed proxy card and promptly
return it to us in the postpaid envelope also enclosed.
Sincerely,
/s/ Richard S. Ressler
Richard S. Ressler
Chairman of the Board
J2 Global Communications, INC.
-----------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 20, 2001
-----------------
TO ALL STOCKHOLDERS:
A special meeting of stockholders of j2 Global Communications, Inc., a
Delaware corporation, will be held at the Hollywood Roosevelt Hotel, 7000
Hollywood Boulevard, Los Angeles, California 90028, on December 20, 2001 at
10:00 a.m., Pacific time, to consider and act on two proposals:
. To adopt an amendment of Article FOURTH of j2 Global's certificate of
incorporation that would reduce the number of authorized shares of our
common stock from 200 million to 50 million.
. To approve an amendment of our Second Amended and Restated 1997 Stock
Option Plan increasing the total number of shares of common stock that may
be used for purposes of the plan from 2 million to 2.5 million.
The attached proxy statement contains a more complete description of each
proposal.
Only record holders of j2 Global common stock at the close of business on
November 19, 2001 are entitled to notice of and to vote at the meeting. Action
may be taken on the proposals, either at the meeting, or on any date to which
the meeting properly is postponed or adjourned. You may vote in person at the
meeting even if you return a proxy.
By Order of the Board of Directors,
/s/ Jeffrey D. Adelman
Jeffrey D. Adelman
Secretary
November 26, 2001
Hollywood, California
YOUR VOTE IS IMPORTANT. IN ORDER TO ENSURE YOUR REPRESENTATION AT THE
MEETING, WE ASK THAT YOU COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY AS
PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED ENVELOPE.
1
j2 GLOBAL COMMUNICATIONS, INC.
Proxy Statement
November 26, 2001
GENERAL
The board of directors of j2 Global Communications, Inc. is soliciting
proxies to be voted at a special meeting of our stockholders to be held at
10:00 a.m., Pacific Time, on December 20, 2001 at the Hollywood Roosevelt
Hotel, 7000 Hollywood Boulevard, Los Angeles, California 90028, and at any
adjournment of that meeting. This proxy statement contains information that may
help you decide whether to return the enclosed proxy and how to vote.
Please read this proxy statement carefully. You can obtain more information
about j2 Global from the annual and quarterly reports and other public
documents we file with the SEC.
Quorum, Voting, and Proxy Procedures
At the close of business on November 19, 2001 (the record date for the
meeting), shares of our common stock (our only outstanding class of voting
stock) were outstanding. Only holders of record of common stock at the close of
business on the record date will be entitled to vote, with each outstanding
share of common stock entitled to one vote. To have a quorum, holders of a
majority of our common stock outstanding on the record date must be present at
the meeting--either in person or by proxy.
The proposal to adopt the amendment of our certificate of incorporation
requires the affirmative vote of holders of a majority of all shares of common
stock outstanding on the record date for the meeting. If you choose to
"abstain" on the proposal or otherwise do not vote on the proposal, in effect
you will be voting against the proposal.
The proposal to approve the amendment of our stock option plan requires the
affirmative vote of holders of a majority of the shares of common stock present
or represented and entitled to vote at the meeting. For purposes of this
proposal, if you are present or represented at the meeting but formally abstain
from voting on the proposal, this will have the same effect as voting against
the proposal. However, otherwise not voting (including by broker non-vote) will
have no effect on the outcome of the vote on the proposal.
If you complete, sign, and date the enclosed proxy and return it before the
meeting, the persons named will vote your shares as you specify in the proxy.
If you sign, date, and return your proxy but do not indicate how you wish your
shares voted, they will be voted FOR both of the proposals. If you do not
return a signed proxy, then unless you attend the meeting and vote in person,
your shares will not be voted. You may revoke a proxy any time before the
voting begins in any of the following ways:
. Giving written notice to j2 Global's corporate secretary;
. Signing a later dated proxy; or
. Appearing in person and voting at the meeting.
Cost of Solicitation
We are paying the expenses of this solicitation. We also will reimburse
brokerage houses and other custodians, nominees, and fiduciaries for their
reasonable expenses in sending proxy material to principals and seeking their
instructions. Our directors, officers, and employees may solicit proxies in
person or by telephone, fax, e-mail, or similar means, in addition to
soliciting by mail.
1
Principal Stockholders
The table that follows shows the number of shares of j2 Global common stock
beneficially owned at the record date for the meeting by persons we know to be
beneficial owners of more than 5% of our outstanding common stock as of the
record date.
Number of Percentage
Name and Address Shares of Class
---------------- --------- ----------
Richard S. Ressler............................ 3,365,144(1)
c/o Orchard Capital Corporation
6922 Hollywood Boulevard, 9th Floor
Los Angeles, CA 90028
Citadel Limited Partnership................... 1,141,282(2)
225 W. Washington
9/th/ Floor
Chicago, Illinois 60606
Boardrush Media LLC........................... 732,830
972 Putney Road, Suite 299
Brattleboro, VT 05301
Michael J.G. Gleissner........................ 643,029
12340 NE 6/th/ Court
Miami, FL 33161
--------
(1) Consists of 3,187,379 outstanding shares owned by Orchard/JFAX Investors,
LLC, 97,561 outstanding shares owned by The Ressler Family Foundation,
77,079 shares that Orchard/JFAX Investors may purchase pursuant to warrants
exercisable in full at this time, and 41,667 shares subject to options
owned by Mr. Ressler exercisable currently or within 60 days of the record
date for the meeting. Mr. Ressler is the manager of Orchard/JFAX Investors
and a trustee of The Ressler Family Foundation, but disclaims beneficial
ownership of any shares of stock in which he has no pecuniary interest.
(2) Citadel Limited Partnership is part of a group having shared voting and
dispositive power over 1,141,282 outstanding shares of our common stock.
These shares are owned by two members of the group: Fisher Capital Ltd.,
which owns 742,223 shares, and Wingate Capital Ltd, which owns 399,059
shares. Fisher Capital Ltd. also has the right to acquire 426,724 shares
upon the exercise of warrants exercisable for $0.04 per share and 12,968
shares upon the exercise of warrants exercisable for $209.76 per share, and
Wingate Capital Ltd. also has the right to acquire 229,526 shares upon the
exercise of warrants exercisable for $0.04 per share and 6,983 shares upon
the exercise of warrants exercisable for $209.76 per share. In general,
these warrants are exercisable, in whole or in part, today. However,
neither warrant holder may exercise its warrants if after giving effect to
the exercise the warrant holder (together with its affiliates) (i) would
beneficially own 10% or more of our common stock following the warrant
exercise or (ii) would have acquired, through exercise of warrants or
otherwise, during the 60-day period ending on and including the warrant
exercise date, a number of shares of common stock that, when added to the
number of shares beneficially owned by it (together which its affiliates)
at the beginning of that 60-day period, would exceed 10% of the outstanding
shares of common stock following the exercise. The shares subject to the
warrants are not included in the table above.
2
Management's Beneficial Ownership
The table that follows shows the beneficial ownership of our common stock as
of the record date by each of our directors, by each current or former
executive officer who was named in the Summary Compensation Table of the proxy
material for our annual meeting held on June 26, 2001, and by all of our
directors and current executive officers as a group, including Scott M. Jarus,
who has served as our President (our principal executive officer) since July
2001. Each individual named in the table, except Steven Hamerslag, has an
address c/o j2 Global Communications, Inc., 6922 Hollywood Blvd., Suite 800,
Los Angeles, CA 90028. Mr. Hamerslag's address is c/o Fortuna Ventures, P.O.
Box 730, Rancho Santa Fe, CA 92067.
Number of
Shares
Beneficially Percentage
Name Owned of Class
---- ------------ ----------
Richard S. Ressler............................ 3,365,144(1) %
John F. Rieley................................ 46,875(2) *
Michael P. Schulhof........................... 278,901(3) %
Robert J. Cresci.............................. 3,125(4) *
Douglas Y. Bech............................... 0 0.0%
Scott M. Jarus................................ 12,249 *
Steven J. Hamerslag........................... 92,000 %
Nehemia Zucker................................ 135,508(5) %
R. Scott Turicchi............................. 116,418(6) *
Leo D'Angelo.................................. 15,000(7) *
All directors and current executive officers
as a group (10 persons)..................... 3,966,970(8) %
--------
* Less than 1%.
(1) We provide more information about shares shown for Mr. Ressler in note (1)
to the table under "Principal Stockholders."
(2) Consists of 43,750 outstanding shares and 3,125 shares subject to options
currently exercisable or that will become exercisable within the next 60
days.
(3) Consists of 65,776 outstanding shares, 210,000 shares subject to currently
exercisable warrants, and 3,125 shares subject to options currently
exercisable or that will become exercisable within the next 60 days.
(4) Consists entirely of shares subject to options currently exercisable or
that will become exercisable within the next 60 days.
(5) Consists of 65,435 outstanding shares and 70,073 shares subject to options
currently exercisable or that will become exercisable within the next 60
days.
(6) Consists of 500 outstanding shares, 35,918 shares subject to currently
exercisable warrants, and 80,000 shares subject to options currently
exercisable or that will become exercisable within the next 60 days.
(7) Consists of 7,500 outstanding shares and 7,500 shares subject to options
currently exercisable or that will become exercisable within the next 60
days.
(8) Includes all outstanding shares reported except those for Mr. Hamerslag,
and includes all reported shares subject to warrants or options exercisable
or that will become exercisable within the next 60 days.
3
PROPOSAL TO ADOPT AMENDMENT OF CERTIFICATE OF INCORPORATION THAT WOULD REDUCE
TOTAL SHARES OF AUTHORIZED COMMON STOCK FROM 200 MILLION TO 50 MILLION
Currently, j2 Global's certificate of incorporation authorizes us to issue
up to 201 million shares of capital stock-200 million shares as common stock
and one million as preferred stock. At the record date for the meeting, shares
of the authorized common stock were issued and outstanding, shares of
common stock were issued and held in our treasury, and 2,405,171 shares of
common stock were reserved for future issuance, either from the authorized but
unissued shares or from the treasury, pursuant to the exercise of warrants or
stock options or pursuant to share purchases under the 2001 j2 Global
Communications Employee Stock Purchase Plan. No shares of preferred stock are
outstanding, held in our treasury, or reserved for future issuance for any
purpose.
Because we are incorporated in Delaware, we must pay that state an annual
franchise tax. The amount of that tax partly depends on the value of our assets
and the number of shares of authorized stock we have issued, but it also
depends on the total number of shares of capital stock we are authorized to
issue. In general, the higher the total number of shares of our authorized
capital stock, the higher the tax will be.
The four-to-one reverse split of our common stock that became effective last
February reduced the number of issued shares of our common stock, as well as
the number of shares reserved for future issuance, but it did not reduce the
total number of shares of our authorized common stock. After considering
effects of the reverse stock split and the potential tax savings that would be
realized by reducing the amount of our authorized common stock, our board of
directors has determined that reducing the authorized common stock on a
four-for-one basis also would be appropriate and in the best interests of our
stockholders. We expect that by reducing our authorized shares of common stock
from 200 million to 50 million will reduce our Delaware franchise taxes by
approximately $100,000 per year beginning calendar year 2002. However, because
the amount of franchise tax payable for any given year also depends on asset
value and on the number of shares issued, both of which likely will change over
time, we cannot estimate the extent to which the amendment would reduce
franchise taxes for any other year. However, the amendment would not increase
franchise taxes otherwise payable for any year, and we expect it will result in
annual savings for the foreseeable future.
Reducing our authorized common stock requires an amendment to Article FOURTH
of j2 Global's certificate of incorporation, which must be approved by the
board of directors and adopted by the stockholders. Accordingly, the board has
unanimously approved an amendment to Article FOURTH and recommends it to the
stockholders for adoption at the meeting. The proposed amendment would change
the first sentence of Article FOURTH to read, in its entirety, as follows:
"The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 51,000,000, of which 50,000,000 shares
of the par value of $0.01 shall be designated as Common Stock and 1,000,000
shares of the par value of $0.01 shall be designated as Preferred Stock."
Amending Article FOURTH as proposed would have no effect on our authorized
preferred stock and would not affect any already-issued shares of common stock,
any shares of common stock reserved for future issuance, or any shares of
common stock that could become reserved for future issuance if the other
proposal on the agenda for the meeting also is approved. If the stockholders
adopt the proposed amendment, it will become effective as soon as we file a
certificate of amendment embodying it with the appropriate Delaware
authorities, which we plan to do as soon as practicable after the meeting.
The Board of Directors recommends a vote "FOR" adoption of the proposed
amendment to Article Fourth of our certificate of incorporation.
4
PROPOSAL TO APPROVE AMENDMENT OF SECOND AMENDED AND RESTATED 1997 STOCK OPTION
PLAN INCREASING TOTAL SHARES OF COMMON STOCK PERMITTED FOR PLAN USES FROM 2
MILLION TO 2.5 MILLION
As it currently is in effect, j2 Global's 1997 stock option plan gives the
Compensation Committee of our board of directors discretionary authority from
time to time to grant employees of j2 Global or a subsidiary selected by the
committee "incentive stock options" on our common stock (options entitled to
special tax treatment under Section 422 of the Internal Revenue Code) and to
grant "nonstatutory stock options" on our common stock (options that are not
incentive stock options) to consultants to j2 Global or a subsidiary and
members of our board of our directors selected by the committee, as well as to
selected employees. Since the most recent amendment of the plan, which occurred
last May, the plan also gives the committee discretionary authority to make
grants of "restricted shares" (shares of common stock subject to transfer
restrictions and risk of forfeiture for specified time periods) to the same
kinds of persons that may be granted nonstatutory stock options under the plan.
In addition, the plan permits grants of options under it in substitution for
options held by employees of other companies who become eligible to receive
options under the plan as a result of a merger, consolidation, reorganization
or similar event. The terms and conditions of those sorts of plan options may
vary from the terms and conditions otherwise contemplated by the plan, to the
extent deemed appropriate by the committee in order to conform the terms and
conditions of the new options with those of the options they replace.
Subject to adjustment for recapitalization events, Section 3.2 of the plan
currently sets the maximum number of shares of common stock that may be used
for purposes of the plan at two million. (The former maximum of eight million
shares was adjusted downward after the four-to-one reverse stock split, as
contemplated by the adjustment provisions of the plan.) Available shares can be
used for any of the purposes authorized by the plan.
In connection with our recently completed exchange offer for employee and
director stock options, we expect to grant replacement options under the plan
covering 257,128 shares of our common stock and have reserved that number of
shares for future issuance under the plan. Currently, in addition to those
reserved shares, 408,165 other shares of common stock are reserved for future
issuance in settlement of other outstanding options granted under the plan and
(after giving effect to the reverse stock split), 54,868 shares have been
issued in settlement of already exercised plan options. This leaves 710,425
shares currently available for future option or restricted share grants under
the plan.
The plan provides that any shares subject to plan options that expire or are
cancelled unexercised, and any restricted shares that are forfeited on which no
dividends have been paid (or on which dividends have been paid if the dividends
also are forfeited) again would become available for plan purposes, but we
cannot predict in advance how many additional shares may become available due
to expirations, cancellations, or forfeitures. Also, in the event j2 Global
were to engage in an acquisition, the maximum number of shares currently
specified in our plan may prove insufficient to enable us to use the plan for
replacing outstanding options held by employees of an acquired company.
With these matters in mind, our board of directors has determined that it is
in the best interests of j2 Global and its stockholders to extend continued
availability of the plan by further amending it to increase the number of
shares available for plan use by 500,000. Generally, the board may amend the
plan without stockholder approval, but the plan provides that an amendment
shall be subject to stockholder approval if required by applicable laws,
regulations, or rules. In this case, the board has been advised that
stockholder approval is required by federal tax provisions relating to
incentive stock options and by NASD rules that apply to j2 Global.
5
Accordingly, subject to stockholder approval at the meeting, the board of
directors has amended the first sentence of Section 3.2 of the plan to read, in
its entirety, as follows:
"The aggregate number of shares of Common Stock which may be issued upon the
exercise of Options granted under the Plan and which may be issued in the
form of Restricted Stock shall not exceed 2,500,000 million of the
authorized shares of Common stock, all or any part of which may be issued
pursuant to Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock grants, or any combination thereof."
This amendment makes no other change in the existing plan, and the only
change in the sentence above from the same sentence in the existing plan is to
increase the aggregate number of shares permitted for plan use from 2 million
to 2.5 million.
Although our board adopted the amendment primarily for the reasons discussed
above, you should keep in mind that any or all of the additional half million
shares that the amendment would authorize also could be used for grants to any
of our current executive officers, other officers, or directors, as well as to
other employees or consultants. Due to the discretionary nature of the plan, we
cannot predict the extent of additional benefits that any individual or
category of eligible individual ultimately will receive under it, whether or
not the amendment is approved, but, if it is approved, it may be that some or
all of them may receive some additional benefits.
If the amendment is not approved by the stockholders at the meeting, it will
not become effective, and the maximum shares available for plan use will remain
at two million.
The board of directors recommends a vote "For" approval of the amendment of
the 1997 stock option plan described above.
6
OTHER MATTERS
We do not intend to bring any matters before the meeting other than the two
matters discussed above, and we know of no other matters to be brought before
the meeting by others. If any other matters properly come before the meeting,
the persons named in the accompanying proxy will have authority to vote on them
in their discretion.
By Order of the Board of Directors,
/s/ Richard S. Ressler
Richard S. Ressler
Chairman of the Board
Dated: November 26, 2001
7
PROXY
j2 GLOBAL COMMUNICATIONS, INC.
SPECIAL MEETING OF STOCKHOLDERS--December 20, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of j2 Global Communications Inc., a
Delaware corporation, hereby acknowledge(s) receipt of the Proxy Statement
dated November 26, 2001, and hereby appoint(s) Nehemia Zucker and Jeffrey
D. Adelman, 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 j2 Global Communications Inc., to be held December 20,
2001 at 10:00 a.m., local time, at the Hollywood Roosevelt Hotel, 7000
Hollywood Boulevard, Los Angeles, California 90028, and at any
continuation or adjournment thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present, on all matters set forth below.
This proxy will be voted as directed on each proposal set out below and,
unless a contrary direction on a proposal is given, will be voted "For"
approval of each proposal. If any other matters properly come before the
meeting, the proxy holders may vote on those matters as they deem
advisable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" BOTH PROPOSALS BELOW
(Continued and to be signed on the reverse side)
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. To adopt an amendment to Article Fourth of j2 Global's certificate of
incorporation that would reduce the number of authorized shares of j2
Global common stock from 200 million to 50 million.
[_] FOR [_] AGAINST [_] ABSTAIN
2. To approve an amendment to Section 3.2 of j2 Global's Second Amended
and Restated 1997 Stock Option Plan increasing the total number of
shares of common stock that may be used for purposes of the Plan from 2
million to 2.5 million.
[_] FOR [_] AGAINST [_] ABSTAIN
[_] Mark here for address change and note in the space provided.
Signature(s): _
Date: _________
Note: 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 in a
fiduciary
capacity should
so indicate. If
shares are held
by joint
tenants or as
community
property, each
person should
sign.
Please date, sign and mail your proxy card back as soon as possible!