<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Amendment No. 1)
Under the Securities Exchange Act of 1934*
On Command Corporation
--------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
-------------------------------------------------------------------------------
(Title of Class of Securities)
682160106
----------------------
(CUSIP Number)
Jerome H. Kern
On Command Corporation
6331 San Ignacio Avenue
San Jose, California 95119
(408) 360-4500
________________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
August 4, 2000
----------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [_].
Note. Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter the disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 9
<PAGE>
SCHEDULE 13D
CUSIP NO. 682160106
------------------------------------------------------------------------------
NAMES OF REPORTING PERSONS
(1) I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Jerome H. Kern
------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(2) (a) [_]
(b) [X]
------------------------------------------------------------------------------
SEC USE ONLY
(3)
------------------------------------------------------------------------------
SOURCE OF FUNDS
(4)
SC, BK, PF
------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [_]
(5)
------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
(6)
United States of America
------------------------------------------------------------------------------
SOLE VOTING POWER
(7)
NUMBER OF 3,574,155 shares
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY (8)
0 shares
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
(9)
REPORTING 3,574,155 shares
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH (10)
0 shares
------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(11)
3,574,155 shares
------------------------------------------------------------------------------
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(12)
[X]
------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
(13)
Approximately 11.2%
------------------------------------------------------------------------------
TYPE OF REPORTING PERSON (See Instructions)
(14)
IN
------------------------------------------------------------------------------
Page 2 of 9
<PAGE>
This Amendment No. 1 (this "Amendment") to the Statement on Schedule 13D
amends and supplements the Statement on Schedule 13D originally filed on April
17, 2000 (the "Original Statement"), with respect to the beneficial ownership of
shares of common stock, par value $.01 per share (the "Common Stock"), of On
Command Corporation (the "Issuer") by Jerome H. Kern.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Original Statement is hereby amended and supplemented as
follows:
The information set forth in Item 6 is incorporated herein in its
entirety.
Mr. Kern funded the purchase price for the open market purchases
described in clause (c)(i) of Item 5 from personal funds.
Mr. Kern funded the purchase price for the purchase of 2,224,155 shares
of Common Stock from Hilton Hotels Corporation described in clause (c)(ii) of
Item 5 from the proceeds of a margin loan from The Bank of New York on August 4,
2000.
Item 4. Purpose of Transaction.
Item 4 of the Original Statement is hereby amended and supplemented as
follows:
The information set forth in Item 6 is incorporated herein in its
entirety.
As disclosed in the Original Statement, on April 6, 2000 the Board of
Directors of the Issuer approved in principle the terms of Mr. Kern's purchase
of equity securities of the Issuer and directed the Compensation Committee of
the Issuer's Board of Directors and other representatives of the Issuer to
negotiate the terms of such equity purchase by Mr. Kern. Thereafter, Mr. Kern
and representatives of the Issuer engaged in discussions relating to the
structure of Mr. Kern's equity purchase. On August 4, 2000, the Issuer and Mr.
Kern entered into a definitive agreement regarding Mr. Kern's equity purchase,
and that equity purchase was consummated on August 10, 2000. The definitive
agreement and other documents relating to Mr. Kern's equity purchase are
described in more detail in Item 6.
Other than as set forth herein, Mr. Kern does not have any present plans
or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the
Issuer, or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction such as a merger,
reorganization or liquidation, involving the Issuer or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or
of any of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board;
Page 3 of 9
<PAGE>
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control
of the Issuer by any person;
(h) A class of securities of the Issuer being delisted from a national
securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities
association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; or
(j) Any action similar to any of those enumerated in this paragraph.
Item 5. Interest in Securities of the Issuer.
Item 5 of the Original Statement is hereby amended and supplemented as
follows:
(a) Mr. Kern beneficially owns an aggregate of 3,574,155 shares of
Common Stock. The shares of Common Stock beneficially owned by Mr. Kern
represent approximately 11.2% of the issued and outstanding shares of Common
Stock (based upon 30,491,070 shares of Common Stock issued and outstanding at
June 30, 2000, as disclosed in the Issuer's Quarterly Report on Form 10-Q for
the three months ended June 30, 2000, and assuming the conversion of the 13,500
shares of Series A Preferred Stock (as defined below) held by Mr. Kern into an
aggregate of 1,350,000 shares of Common Stock).
(b) Pursuant to the terms of the Stock Purchase Agreement (as defined
below), Mr. Kern has agreed that if the shares of Series A Preferred Stock held
by him become entitled to vote as a separate class on any matter presented to
the stockholders of the Issuer he will cause such shares of Series A Preferred
Stock to be voted for or against such matter in the same proportion as the vote
upon such matter by the holders of Common Stock. Except as otherwise set forth
herein, Mr. Kern has the sole power to vote, or direct the voting of, and to
dispose of, or direct the disposition of, the shares of Common Stock and Series
A Preferred Stock beneficially owned by him.
(c) Mr. Kern has effected the following transactions in shares of Common
Stock in the last 60 days:
(i) During July 2000, Mr. Kern purchased an aggregate of 21,000
shares of Common Stock in the open market as follows: (A) on
July 11, 2000, Mr. Kern purchased 3,500 shares at $13.062 per
share, (B) on July 12, 2000, Mr. Kern purchased 6,500 shares
at $13.625 per share, (C) on July 13, 2000, Mr. Kern
purchased 7,500 shares at $13.708 per share, (D) on July 13,
2000, Mr. Kern purchased 2,500 shares at $14.125 per share,
and (E) on July 21, 2000, Mr. Kern purchased 1,000 shares at
$12.125 per share.
Page 4 of 9
<PAGE>
(ii) On July 28, 2000, Mr. Kern purchased 2,224,155 shares of
Common Stock at $10.50 per share from Hilton Hotels
Corporation in a private transaction for an aggregate
purchase price of $23,353,627.50.
(iii) Effective July 28, 2000, Mr. Kern made a gift of 10,000
shares of Common Stock to his spouse. Mr. Kern expressly
disclaims beneficial ownership of such shares of Common
Stock.
(iv) Effective July 28, 2000, Mr. Kern made a gift of 1,000 shares
of Common Stock to his stepson. Mr. Kern expressly disclaims
beneficial ownership of such shares of Common Stock.
(v) Effective August 2, 2000, Mr. Kern made a gift of 10,000
shares of Common Stock to his spouse. Mr. Kern expressly
disclaims beneficial ownership of such shares of Common
Stock.
(vi) On August 10, 2000, Mr. Kern purchased from the Issuer 13,500
shares of the Series A Preferred Stock for a purchase price
of $1,562.50 per share, or an aggregate of $21,093,750. Each
share of Series A Preferred Stock is convertible at any time
into 100 shares of Common Stock (subject to adjustment),
resulting in an imputed purchase price of $15.625 per share
for the 1,350,000 shares of Common Stock underlying such
shares of Series A Preferred Stock.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Item 6 of the Original Statement is hereby amended and supplemented as
follows:
The information set forth in Items 3 and 4 is incorporated herein in its
entirety.
On August 4, 2000, the Issuer and Mr. Kern entered into a Stock Purchase
and Loan Agreement (the "Stock Purchase Agreement") relating to the purchase by
Mr. Kern of shares of a newly issued series of the Issuer's preferred stock
designated as Convertible Participating Preferred Stock, Series A, par value
$.01 per share (the "Series A Preferred Stock"). Pursuant to the Stock Purchase
Agreement, on August 10, 2000, Mr. Kern purchased 13,500 shares of Series A
Preferred Stock at a purchase price of $1,562.50 per share, or an aggregate of
$21,093,750. Mr. Kern funded the purchase price for such shares of Series A
Preferred Stock by payment of $13,500 in cash (drawn from Mr. Kern's personal
funds) and the execution of a promissory note, dated August 10, 2000 (the
"Secured Note"), payable to the order of the Issuer and bearing an initial
principal amount of $21,080,250. The payment of the principal of and interest
on the Secured Note is secured by a pledge of the 13,500 shares of Series A
Preferred Stock issued to Mr. Kern, and any proceeds thereof, pursuant to the
terms of a Pledge and Security Agreement, dated August 10, 2000 (the "Pledge and
Security Agreement"), between the Issuer and Mr. Kern.
Page 5 of 9
<PAGE>
The terms of the Secured Note and the Pledge and Security Agreement are
described in more detail below.
Pursuant to the terms of the Certificate of Designations for the Series A
Preferred Stock (the "Certificate of Designations"), each share of Series A
Preferred Stock may be converted at any time, at the option of the holder
thereof, into 100 shares of Common Stock (subject to certain customary
adjustments) (the "Conversion Rate"). In addition, each share of Series A
Preferred Stock will, subject to the receipt of any required governmental
consents and approvals, automatically be converted into shares of Common Stock
at the then effective Conversion Rate upon the satisfaction of all of Mr. Kern's
obligations under the Secured Note. Shares of Series A Preferred Stock will
participate in any dividends or distributions on the Common Stock on an as-
converted basis. Shares of Series A Preferred Stock are entitled to a
preference on liquidation equal to $.01 per share, and thereafter will
participate with the shares of Common Stock in any liquidating distributions on
an as-converted basis. Shares of Series A Preferred Stock vote together with
the Common Stock on all matters presented to a vote of the stockholders of the
Issuer, and holders of Series A Preferred Stock are entitled to one vote per
share of Series A Preferred Stock held. Pursuant to the terms of the Stock
Purchase Agreement, Mr. Kern has agreed that if the shares of Series A Preferred
Stock held by him become entitled to vote as a separate class on any matter
presented to the stockholders of the Issuer he will cause such shares of Series
A Preferred Stock to be voted for or against such matter in the same proportion
as the holders of shares of Common Stock vote upon such matter.
The Secured Note has an initial principal amount of $21,080,250 and,
unless accelerated earlier, will mature and become payable, together with
accrued interest, on August 1, 2005. Interest on the Secured Note will accrue
at a rate of 7% per annum, compounded quarterly. Upon the occurrence of certain
events of default, the interest rate will increase to 9% per annum. The Secured
Note is nonrecourse against Mr. Kern personally except for an amount equal to
25% of the principal of and accrued interest on the Secured Note. In
determining Mr. Kern's personal liability under the Secured Note, the Issuer
must first proceed against the shares of Series A Preferred Stock (or proceeds
thereof) held as collateral for the Secured Note to extinguish all amounts for
which Mr. Kern may be personally liable under the Secured Note. Except upon the
repurchase of shares of Series A Preferred Stock, or shares of Common Stock
issued upon conversion thereof, as described below Mr. Kern does not have the
right to prepay any principal of or interest on the Secured Note. In the event
of such a repurchase, Mr. Kern is obligated to apply the proceeds thereof to the
repayment of principal of and interest on the Secured Note. Pursuant to the
Pledge and Security Agreement, Mr. Kern has pledged the shares of Series A
Preferred Stock purchased pursuant to the Stock Purchase Agreement, any shares
of Common Stock or other property or securities issuable upon conversion of such
shares of Series A Preferred Stock, or any proceeds thereof, to secure payment
of amounts owing under the Secured Note.
The Stock Purchase Agreement provides that Mr. Kern and the Issuer will
enter into a mutually acceptable registration rights agreement having customary
terms and conditions and providing Mr. Kern with two demand registration rights
(each of which may be a "shelf" registration) in respect of shares of Common
Stock issuable upon conversion of shares of Series A Preferred Stock, but will
not provide any rights to participate in registrations initiated by the Issuer
or others. If Mr. Kern's employment with the Issuer is terminated before April
6, 2005 by the Issuer for cause (as defined in the Stock Purchase Agreement) or
by Mr. Kern without good reason (as defined in the Stock Purchase Agreement),
the Issuer shall have the right to
Page 6 of 9
<PAGE>
repurchase all or a specified portion (depending upon the date on which Mr.
Kern's employment is terminated) of the shares of Series A Preferred Stock, or
shares of Common Stock issued upon conversion thereof, for a purchase price
equal to $2,209 per share of Series A Preferred Stock or $22.09 per share of
Common Stock, subject to certain adjustments. As described above, Mr. Kern will
be required to apply the proceeds from any such repurchase to the repayment of
principal of and interest on the Secured Note.
The Stock Purchase Agreement and the Pledge and Security Agreement
provide that Mr. Kern may not directly or indirectly sell, exchange or otherwise
dispose of, or grant any option or other right with respect to, or create or
suffer any lien or other encumbrance on, any of the collateral under the Pledge
and Security Agreement (including the shares of Series A Preferred Stock issued
to Mr. Kern or shares of Common Stock issued upon conversion thereof) except
that (a) to the extent that the Issuer's repurchase right under the Stock
Purchase Agreement has expired, Mr. Kern may direct the Issuer to effect a sale
of the portion of the collateral with respect to which such repurchase right has
expired, provided that the proceeds of any such sale are held in an escrow
account pending the date all amounts under the Secured Note become due and owing
and (b) Mr. Kern is entitled to assign his rights to the pledged collateral to
an entity if (i) Mr. Kern holds at least 50% of the equity interests of such
entity, (ii) Mr. Kern "controls" (as that term is defined in the Stock Purchase
Agreement) such entity, (iii) the financial obligations of such entity under the
Secured Note and the Pledge and Security Agreement have been personally
guaranteed by Mr. Kern and (iv) such entity becomes a party to and bound by Mr.
Kern's obligations under the Pledge and Security Agreement. In addition, the
shares of Series A Preferred Stock issued to Mr. Kern are "restricted
securities" within the meaning of Rule 144 promulgated under the Securities Act
of 1933, as amended (the "Securities Act"), and accordingly may not be sold,
transferred or otherwise disposed of unless such sale, transfer or other
disposition is effected pursuant to an effective registration statement under
the Securities Act or pursuant to a valid exemption from the registration
requirements of the Securities Act.
The foregoing description of the Stock Purchase Agreement, the
Certificate of Designations, the Secured Note and the Pledge and Security
Agreement is qualified in its entirety to the full text of such documents,
copies of which are attached hereto as Exhibits 1, 2, 3 and 4, respectively.
Item 7. Material to Be Filed as Exhibits.
Exhibit Number Exhibit Title
-------------- -------------
1 Stock Purchase and Loan Agreement, dated as of August 4,
2000, by and between Jerome H. Kern and On Command
Corporation.
2 Certificate of Designations establishing Convertible
Participating Preferred Stock, Series A, par value $.01 per
share, of On Command Corporation.
3 Secured Note, due August 1, 2005, made by Jerome H. Kern to
the order of On Command Corporation.
4 Pledge and Security Agreement, dated as of August 10, 2000,
by and between Jerome H. Kern and On Command Corporation.
Page 7 of 9
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: August 18, 2000
/s/ Jerome H. Kern
-------------------------------------
Jerome H. Kern
Page 8 of 9
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit Title
-------------- -------------
1 Stock Purchase and Loan Agreement, dated as of August 4,
2000, by and between Jerome H. Kern and On Command
Corporation.
2 Certificate of Designations establishing Convertible
Participating Preferred Stock, Series A, par value $.01
per share, of On Command Corporation.
3 Secured Note, due August 1, 2005, made by Jerome
H. Kern to the order of On Command Corporation.
4 Pledge and Security Agreement, dated as of August 10,
2000, by and between Jerome H. Kern and On Command
Corporation.
Page 9 of 9
