<PAGE> 1
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:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
SHOP AT HOME, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
JOSEPH NAWY
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
SHOP AT HOME, INC.
5210 SCHUBERT ROAD
P.O. BOX 12600
KNOXVILLE, TENNESSEE 37912
______________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, OCTOBER 26, 1995
______________________________
Notice is hereby given that the Annual Meeting of Shareholders of Shop
at Home, Inc. (hereinafter called the "Company"), will be held at the LaQuinta
Inn, located at 5634 Merchants Center Boulevard, Knoxville, Tennessee, on
Thursday, October 26, 1995 at 5:00 p.m., local time, for the following
purposes:
(1) To elect six (6) directors to serve until the next Annual
Meeting and until their successors are duly elected and
qualified.
(2) To approve the selection of Coopers & Lybrand L.L.P.,
Certified Public Accountants, Knoxville, Tennessee as the
Company's independent auditors for the 1996 fiscal year.
(3) To transact such other business as may properly come before
the meeting or any adjournment thereof.
Information regarding the matters to be acted upon at the Annual
Meeting is contained in the Proxy Statement accompanying this Notice. The
Annual Meeting may be adjourned from time to time without notice, other than
the announcement of the adjournment at the Annual Meeting or any adjournment or
adjournments thereof. Any and all business for which notice is hereby given
may be transacted at any such adjourned Annual Meeting.
The Board of Directors has fixed the close of business on September
22, 1995, as the record date for the determination of those shareholders
entitled to notice of, and to vote at, the meeting.
By Order of the Board of Directors
A. E. Jolley, Secretary
Knoxville, Tennessee
October 5, 1995
YOUR REPRESENTATION AT THE MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY. SHOULD YOU DESIRE TO REVOKE YOUR
PROXY, YOU MAY DO SO AS PROVIDED IN THE ACCOMPANYING PROXY STATEMENT, AT ANY
TIME BEFORE IT IS VOTED.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
INFORMATION CONCERNING THE SOLICITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Security Ownership of Certain Beneficial Owners . . . . . . . . . . . . . . . . . . . . . . . . 2
PROPOSAL NO. 1 -- ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Director Nominees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Security Ownership of Management and Directors . . . . . . . . . . . . . . . . . . . . . . . . 5
Other Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Remuneration of Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Omnibus Stock Incentive Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transactions with Management and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Compensation Committee Interlocks and Insider Participation . . . . . . . . . . . . . 9
Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Report on Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Compensation Philosophy and Policies for Executive Officers . . . . . . . . . . . . 10
Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Annual Bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Long-Term Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Chief Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Stockholder Return Comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PROPOSAL NO. 2 -- APPROVAL OF APPOINTMENT OF AUDITORS . . . . . . . . . . . . . . . . . . . . 14
PROPOSAL NO. 3 -- OTHER BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Interests of Company Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Proposals of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Cost of Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Annual Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
i
<PAGE> 4
SHOP AT HOME, INC.
5210 SCHUBERT ROAD
P.O. BOX 12600
KNOXVILLE, TENNESSEE 37912
_______________________________________________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
_______________________________________________________
INFORMATION CONCERNING THE SOLICITATION
The accompanying proxy is solicited by the Board of Directors of Shop
At Home, Inc. (the "Company"), for use at the Annual Meeting of Shareholders to
be held on October 26, 1995, and any adjournments thereof, notice of which is
attached hereto.
This Proxy Statement and the Annual Report of the Company for the
fiscal year ended June 30, 1995, have been mailed on or about October 5, 1995,
to all shareholders of record on September 22, 1995.
The purposes of the Annual Meeting are: [1] to elect six (6)
directors; [2] to approve the selection of Coopers & Lybrand L.L.P., Certified
Public Accountants, Knoxville, Tennessee, as the Company's independent auditors
for the fiscal year ended June 30, 1996; and [3] to consider such other
business as may properly come before the meeting or any adjournment thereof.
A shareholder of record who signs and returns a proxy in the
accompanying form may revoke that proxy at any time before the authority
granted thereby is exercised (i) by attending the Annual Meeting and electing
to vote in person, (ii) by filing with the Secretary of the Company a written
revocation, or (iii) by duly executing and filing with the Secretary of the
Company a proxy bearing a later date. Unless so revoked, the shares
represented by the proxy will be voted at the Annual Meeting. Where a choice
is specified on the proxy, the shares represented thereby will be voted in
accordance with that specification. If no specification is made, all shares
will be voted: FOR the election of all director nominees; and FOR ratification
of the selection of Coopers & Lybrand L.L.P., Certified Public Accountants,
Knoxville, Tennessee, as the Company's independent auditors for the fiscal year
ended June 30, 1996.
The Board of Directors knows of no other matters which are to be
brought to a vote at the Annual Meeting. If, however, any other matter does
come before the meeting, the persons appointed in the proxy, or their
substitutes, will vote in accordance with their best judgment on such matters.
The Board of Directors has fixed the close of business on September
22, 1995 (the "Record Date") as the record date for the Annual Meeting. The
Company's only class of securities entitled to vote is its Common Stock, $.0025
par value per share ("Common Stock"). On the Record Date, the Company had
outstanding 10,246,114 shares of Common Stock. Only shareholders of record at
the close of business on the Record Date will be entitled to vote at the Annual
Meeting. Shareholders will be entitled to one vote for each share held, which
may be given in person or by proxy authorized in writing.
Under the Tennessee Business Corporation Act (the "Act") and the
Company's Bylaws, the presence, in person or by proxy, of a majority of the
outstanding shares of Shop at Home Common Stock is necessary to establish a
quorum of the Company's shareholders for the purpose of taking action at the
1
<PAGE> 5
Annual Meeting. For these purposes, shares which are present or represented by
a proxy at the Annual Meeting will be counted for quorum purposes, regardless
of whether the holder of the shares or proxy fails to vote on any particular
matter or whether a broker with discretionary authority fails to exercise its
discretionary voting authority with respect to any particular matter.
The directors standing for election must be elected by a majority of
the votes cast at the Annual Meeting. Any other action to be taken at the
Annual Meeting, including the approval of the Company's independent auditors,
must be approved by a majority of the votes cast. For these voting purposes,
abstentions and broker non-votes will not be counted in determining whether the
directors standing for election have been elected or whether any other action
has been approved.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information relates to the Common Stock of the Company
beneficially owned, directly or indirectly, by all persons known to be the
beneficial owners of more than five percent (5%) of the Common Stock as of
September 22, 1995. Unless otherwise noted, the named persons have sole voting
and investment power with respect to the shares indicated.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP(7)
<TABLE>
<CAPTION>
Sole Investment Shared Investment
Sole Voting Power Shared Voting Power Power Power
Name and address of
beneficial owner
Number of % Number of % Number of % Number of %
Shares Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.D. Clinton(1), (2)
Naples, Florida
SAH Holdings, L.P.
Global Network Television, Inc.
Mortgage Funding Corporation 1,514,166 13.0 5,588,099(5) 47.0 5,444,411 40.9 969,755 9.5
Brownsville, TN
W. Paul Cowell(4)
Knoxville, TN 0 0 5,588,099(5) 47.0 503,155 4.9 1,154,699 11.3
MediaOne,Inc.(3)
Frank A. Woods
Nashville, TN 0 0 825,000 7.5 0 0 825,000 7.5
Joseph I. Overholt,
Morristown, TN 607,495 5.9 0 0 607,495 5.9 0 0
Kent E. Lillie(6)
Knoxville, Tennessee 600,000 5.5 0 0 600,000 5.5 0 0
</TABLE>
- - --------------------------------------
(1) SAH Holdings, L.P. ("SAH") is a Tennessee limited partnership with
Global Network Television, Inc., a Tennessee corporation ("Global") as its sole
general partner. J.D. Clinton is chairman, a director and the sole shareholder
of Global.
(2) SAH currently owns 2,280,245 shares of Common Stock (22.2% of shares
issued and outstanding). Mr. Clinton's wife owns, individually, 5,000 shares
of Common Stock that are assumed to be beneficially owned by Mr. Clinton.
Mortgage Funding Corporation, a corporation wholly owned by Mr. Clinton, owns
100,000 shares of Common Stock that are assumed to be beneficially owned by Mr.
Clinton. SAH holds warrants to purchase up to 1,650,000 shares of Common Stock
from the Company. Global holds warrants to purchase up to 742,500 shares of
Common Stock from the Company which is assumed to be beneficially owned by Mr.
Clinton. SAH owns an option to purchase
2
<PAGE> 6
969,755 shares of Common Stock from W. Paul Cowell. Global also holds the
Company's $2,000,000 Variable Rate Convertible Secured Note, Due 2000, which it
may convert to a total of 666,666 shares of Common Stock. If these warrants
and options were exercised, and the note converted to stock, Mr. Clinton would
beneficially own 6,414,166 shares (or 48.2%) of the 13,305,280 shares of Common
Stock that would then be outstanding.
(3) MediaOne, Inc. is a Tennessee corporation of which Frank A. Woods
serves as an executive officer and director. Members of Mr. Woods' immediate
family own MediaOne, Inc. MediaOne owns warrants to purchase up to 825,000
shares of Common Stock.
(4) Mr. Cowell presently owns 1,472,910 shares of Common Stock (14.4% of
the shares issued and outstanding). Mr. Cowell has granted an option to
purchase 969,755 of those shares to SAH. Mr. Cowell also is considered the
beneficial owner of 184,944 shares held in a trust for which he is the income
beneficiary.
(5) Mr. Cowell and SAH have agreed that so long as the options granted to
SAH remain outstanding, Mr. Cowell and SAH will vote all of their shares
together with respect to the composition and election of directors. For the
purposes of calculating Shared Voting Power, SAH, and Mr. Cowell are deemed to
own the following shares of Shop at Home Common Stock: SAH -- 4,900,000 shares
(including 969,755 now owned by Mr. Cowell), and W. Paul Cowell -- 688,099
shares.
(6) Mr. Lillie owns options to purchase up to 600,000 shares of Common
Stock subject to certain vesting requirements and other restrictions.
(7) The shares subject to warrants, options, or conversion rights
described in Notes (2) and (3) are deemed to be outstanding for the purposes of
computing the percentage of outstanding Common Stock beneficially owned by Mr.
Clinton and W. Paul Cowell. The shares subject to options described in Note
(6) are deemed to be outstanding for the purposes of computing the percentage
of outstanding Common Stock beneficially owned by Kent E. Lillie.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The terms of all present directors will expire upon the election of
new directors at the Annual Meeting. The Board of Directors proposes the
election of the nominees listed below to serve until the next Annual Meeting,
and until their successors are duly elected and qualified. Unless contrary
instructions are received, it is intended that the shares represented by the
Proxy solicited by the Board of Directors will be voted in favor of the
election as directors of all the nominees named below. If for any reason any
of the nominees is not available for election, the persons named in the Proxy
have advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose. The Board of Directors has no reason to
expect that any of these nominees will fail to be candidates at the meeting,
and therefore, does not at this time have any substitute nominee under
consideration. The information relating to the six (6) nominees set forth
below has been furnished to the Company by the individuals named. All of the
nominees are presently directors of the Company, having been elected at the
Company's Annual Meeting held on February 8, 1995. The Company's Bylaws
specify that the Company's President shall be a member of its Board of
Directors.
The Directors shall be elected by a plurality of the votes cast by the
shares entitled to vote in the election at the Annual Meeting. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES LISTED BELOW.
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE LISTED
NOMINEES.
DIRECTOR NOMINEES
J.D. Clinton. Shop At Home Director and Chairman of the Board since
1993. Chairman, President and Chief Executive Officer, Independent Southern
Bancshares, Inc., Brownsville, Tennessee, a diversified
3
<PAGE> 7
financial institutions holding company. Chairman and Director, Brownsville
Bank, Brownsville, Tennessee. Chairman and Director, Tennessee Bank & Trust,
Millington, Tennessee. Director, Union Savings Bank, Covington, Tennessee.
Director, Southern Financial, Inc., Nashville, Tennessee. Director, Memphis
Development Foundation. Director, Orpheum Theater of Memphis. Member,
University of Tennessee Development Board. Age 51. Graduate of the University
of Memphis.
W. Paul Cowell. Shop At Home Director since 1988, and Chairman of the
Board from 1990 through 1993. President and Chief Executive Officer, Warren &
William, Inc. (formerly National Book Warehouse, Inc.,) a discount bookstore
chain since 1989. President and Owner, Book Ends Discount Book Stores, Inc.,
since 1987. Director, Global Christian Ministries, Inc. Age 54.
A.E. Jolley. Shop At Home Director and Secretary/Treasurer since
1986. President, Lakeway Containers, Inc., Morristown, Tennessee, a corrugated
container manufacturer, since 1975. Director, Franklin Federal Savings Bank.
Director, Kingwood School, Morristown, Tennessee. Commissioner, Morristown City
Planning Commission. Member, Board of Trustees, Walters State Community
College. Age 56.
Kent E. Lillie. Shop at Home Director since 1993. Shop At Home
President and Chief Executive Officer since September, 1993. Vice President
and General Manager, WATL-TV, Atlanta, Georgia, 1992-1993. Vice President and
General Manager, WPTY-TV, Memphis, Tennessee, 1987-1992. Age 49. Graduate of
Sacramento City College.
Joseph I. Overholt. Shop At Home Director since 1986. President and
Owner of Planet Systems, Inc., a computer software development company engaged
in the satellite delivery of computer data, since 1992. President and Owner of
Skylink Communications since 1989. Shop At Home Vice President from 1986
through August, 1993. Age 47. Graduate of University of Tennessee.
Frank A. Woods. Shop At Home Director since 1993. Chairman of the
Board and Director of MediaOne, Inc., Nashville, Tennessee, a communications
consulting and strategic planning firm since 1991. Partner, The Woods Group,
Nashville, Tennessee. President and Director of SunGroup, Inc., an owner of
radio broadcast stations from 1985 to 1991. Consultant, Country Music
Television Network, 1985 to 1988. Consultant, Americana Television Network,
Branson, Missouri, since 1991. Consultant, Nostalgia Television Network, since
1992. In May, 1991, two subsidiaries of SunGroup, Inc., each of which owned
and operated radio stations, filed a petition for relief under Chapter 11 of
Title 11 of the United States Code with the U.S. Bankruptcy Court in the Middle
District of Tennessee. Age 53. Graduate of Vanderbilt University and
Vanderbilt University College of Law.
The principal business activity of each of the above Directors has
been as shown above during the past five years, except that in some cases the
individual has been employed by a predecessor organization or has undertaken
greater responsibilities with the same employer, a parent company, or a
successor organization.
The Board of Directors has no standing audit, nominating or
compensation committees. The Board of Directors has appointed A.E. Jolley,
J.D. Clinton and Frank A. Woods to serve as an administrative committee to
administer the Company's Omnibus Stock Incentive Plan.
During the fiscal year ended June 30, 1995 the Board of Directors held
five (5) meetings. No incumbent director attended fewer than 75% of the Board
meetings during the year, except A.E. Jolley, who attended two (2) of the five
(5) meetings.
The Company is required to identify any director or officer who did
not file timely with the Securities and Exchange Commission a required report
relating to ownership and changes in ownership
4
<PAGE> 8
of the Company's equity securities. Based on material provided to the Company,
Kent Kurtz failed to file a Form 3 following his employment by the Company in
January, 1995. Mr. Kurtz subsequently filed a Form 5 following the end of the
fiscal year. Mr. Kurtz does not own any equity securities of the Company.
SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following information presents the beneficial ownership of the
Common Stock of the Company as of September 22, 1995, of the Company's
directors, the executive officers named in the Remuneration of Directors and
Officers, and by all directors and executive officers as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
BY DIRECTORS AND EXECUTIVE OFFICERS(4)
<TABLE>
<CAPTION>
NAME OF Sole Investment Shared Investment
BENEFICIAL OWNER Sole Voting Power Shared Voting Power Power Power
Number of Number of Number of Number of %
Shares % Shares % Shares % Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.D. Clinton(1),(3),(4) 1,514,166 13.0 5,588,099 47.0 5,444,411 40.9 969,755 9.5
W. Paul Cowell (3),(4) 0 0 5,588,099 47.0 503,155 4.9 1,154,699 11.3
A.E. Jolley 501,092 4.9 0 0 501,092 4.9 0 0
Kent E. Lillie (4) 600,000 5.5 0 0 600,000 5.5 0 0
Joseph I. Overholt 607,495 5.9 0 0 607,495 5.9 0 0
Frank A. Woods(2) 0 0 825,000 7.5 0 0 825,000 7.5
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF SHARES BENEFICIALLY OWNED % OF OUTSTANDING STOCK
<S> <C> <C>
DIRECTORS AND EXECUTIVE
OFFICERS AS A GROUP (14 9,729,402 65.7%
PERSONS)(5)
</TABLE>
- - --------------------------------------
(1) J.D. Clinton is deemed to be the beneficial owner of the shares,
warrants and options to acquire shares, and the right to convert debt to
shares, owned by SAH Holdings, L.P., Mortgage Funding Corporation, and Global
Network Television, Inc.
(2) Frank A. Woods is an executive officer and director of MediaOne, Inc.,
and MediaOne owns warrants to purchase up to 825,000 shares of Common Stock.
(3) For the purposes of calculating Shared Voting Power, Mr. Clinton, Mr.
Woods and Mr. Cowell are deemed to own beneficially the following shares of
Shop at Home Common Stock: J.D. Clinton -- 4,900,000 shares (including 969,755
now owned by Mr. Cowell), and W. Paul Cowell -- 688,099 shares.
(4) The shares subject to warrants or options described in Notes (1) and
(3) are deemed to be outstanding for the purposes of computing the number of
shares and percentage of outstanding of Common Stock beneficially owned by J.D.
Clinton and W. Paul Cowell.
(5) For the purposes of computing the number of shares and percentage of
outstanding Common Stock beneficially owned by all Directors and Executive
Officers as a Group, all shares subject to warrants or options held by members
of the Group, which may be exercised within sixty (60) days, were assumed to be
outstanding.
5
<PAGE> 9
OTHER EXECUTIVE OFFICERS
The following information relates to the executive officers of the
Company as of the date of this Proxy Statement, other than those executive
officers who also serve as directors of the Company, as noted above. With the
exception of the President and Chief Executive Officer who has an employment
agreement with a term of five (5) years, and Mr. Sutula, Mr. Nawy, Mr. Shapiro,
and Mr. Gratteau, each of whom has an employment agreement, the remaining
executive officers serve at the discretion of the Board:
<TABLE>
<CAPTION>
Name AGE POSITION
- - ---- --- --------
<S> <C> <C>
OTHER EXECUTIVE OFFICERS:
Thomas C. Sutula . . . . . . . . . . . . . . . . 51 Executive Vice President and Chief
Operating Officer
Joseph Nawy . . . . . . . . . . . . . . . . . . . 52 Vice President of Finance
H. Wayne Lambert . . . . . . . . . . . . . . . . 45 Vice President of Operations
Henry I. Shapiro . . . . . . . . . . . . . . . . 49 Vice President of Merchandise
Kent Kurtz . . . . . . . . . . . . . . . . . . . 37 Vice President of Sales
Kent H. Gratteau, Jr. . . . . . . . . . . . . . . 52 Vice President of Broadcasting &
Engineering
M. Kathyrn Campbell . . . . . . . . . . . . . . . 37 Vice President of Human Relations
Sandra B. Emery . . . . . . . . . . . . . . . . . 50 Vice President of Customer Relations
</TABLE>
OTHER EXECUTIVE OFFICERS
Thomas C. Sutula, Executive Vice President and Chief Operating Officer.
Mr. Sutula joined the Company in July, 1995, and has extensive experience in
marketing, merchandising and operations, in both large and small companies.
Prior to joining the Company, Mr. Sutula served as Vice President - Sales &
Marketing for Great Bay Tool Corporation, a development stage company, and as
Vice President - Marketing of Hitachi Home Electronics, Inc. Prior to that
time, Mr. Sutula held numerous management positions with Sear, Roebuck and Co.,
including National Logistics Manager, National Marketing Manager and General
Merchandise Manager. Mr. Sutula is a graduate of Villanova University.
Joseph Nawy, Vice President of Finance. Mr. Nawy has served as the
Vice President of Finance since September 8, 1994. Mr. Nawy possesses extensive
experience in direct mail computer operations and distribution operations.
Prior to joining the Company, from 1990 to 1993 Mr. Nawy was the Chief Operating
Officer and Chief Financial officer of LP Music Group, a manufacturer and
importer of percussion musical instruments. From 1987 to 1990, Mr. Nawy was the
Chief Financial Officer of American Direct Industries, Inc., a direct mail
retailer. Prior to that, Mr. Nawy served in a variety of positions, including
with Ernst & Young. Mr. Nawy is a certified public accountant and has an
accounting degree from New York University.
H. Wayne Lambert, Vice President of Operations. Mr. Lambert has served
as the Vice President of Operations for the Company since March, 1992.
Immediately before joining the Company, he served as Operations Officer for
National Book Warehouses, Inc., Knoxville, Tennessee. Prior to that employment
he served as Assistant Controller for the Knoxville News-Sentinel, Knoxville,
Tennessee. Retired, Captain, Tennessee Air National Guard, Base Budget Officer.
Graduate of University of Tennessee.
6
<PAGE> 10
Henry I. Shapiro, Vice President of Merchandise. Mr. Shapiro has
served as the Vice President of Merchandise for the Company since January of
1994. Immediately prior to joining the Company, Mr. Shapiro designed and
manufactured jewelry for leading jewelry retailers, Home Shopping Network and
QVC Manufacturing Company. Mr. Shapiro attended the Fashion Institute of
Technology and Maryland University. He served as a consultant for jewelry
manufacturers with special emphasis on the television markets in Thailand,
Czechoslovakia, Hong Kong, Switzerland and Italy.
Kent Kurtz, Vice President of Sales. Mr. Kurtz joined the Company in
January, 1995, and prior to that has 15 years of retail and direct sales
experience. Mr. Kurtz has developed and coordinated sales and merchandise
plans for Richman Goodman, Pioneer and Gibson, and has developed marketing
strategies and products for large retailers, including Target, Sam's Warehouse,
Dillards, and Wolf Camera and Video.
Kent Gratteau, Vice President of Broadcasting and Engineering. Mr.
Gratteau joined the Company in August, 1995. Prior to that, he served for ten
years as Engineering Manager for KWGN(TV), Denver, Colorado. He is member of
the Society of Motion Picture and Television Engineers and has served that
organization as Section Chairman and on the Board of Managers for the Rocky
Mountain Section. Mr. Gratteau attended the University of Utah and Florida
State University.
M. Kathyrn Campbell, Vice President of Human Relations. Ms. Campbell
has served as the Vice President of Human Relations for the Company since
January, 1994. Immediately prior to joining the Company, she served as
Principal of Campbell Consulting Services. She served as Human Resources
Manager for Eagle Bend Manufacturing from 1988 to 1993 and Employee Relations
Manager, for Furtex Corporation, from 1981 through 1988. She is an Instructor
at Roane State Community College, and is certified as a Senior Professional in
Human Resources (SPHR). Ms. Campbell is a graduate of the University of
Tennessee.
Sandra B. Emery, Vice President of Customer Relations. Ms. Emery has
served as the Vice President of Customer Relations for the Company since June,
1994. From 1992 until 1994, she served as Operations Manager of Order Entry
and Customer Service for the Company. Prior to that time, she served as
Operations Director for National Book Warehouse, Inc. Her other experience
includes positions with Jostens' Printing and Publishing Company, R.V. Emery
Company and Carousel of Curios.
REMUNERATION OF DIRECTORS AND OFFICERS
The following table sets forth the compensation received by the
individual serving as Chief Executive Officer of the Company, during the fiscal
year ended June 30, 1995. The compensation of no other executive officers
exceeded $100,000.
7
<PAGE> 11
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compen-
sation
----------
AWARDS ALL OTHER
ANNUAL COMPENSATION COMPEN-
------------------------------------------------------ SATION
($)
SECURITIES
OTHER ANNUAL UNDERLYING
COMPEN- OPTIONS
NAME AND PRINCIPAL SALARY BONUS SATION /SAR
POSITION YEAR ($) ($) ($) (#)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kent E. Lillie(1), 1995 120,000 25,000 30,000(2) 600,000 --
President/CEO,
1994 98,128 -- 8,000(3) 600,000 24,000(4)
1993 -- -- -- -- --
</TABLE>
- - ------------------------------------------
(1) Mr. Lillie commenced his employment with the Company in
September, 1993.
(2) Additional compensation consists of a housing allowance of
$18,000 and an automobile allowance of $12,000.
(3) Additional compensation consists of an automobile allowance of
$8,000.
(4) Other compensation consists of a relocation allowance.
No stock options were granted to Mr. Lillie during the fiscal year
ended June 30, 1995, and Mr. Lillie did not exercise any of his options to
purchase Shop at Home Common Stock during the fiscal year ended June 30, 1995,
or through the date of this Proxy Statement.
EMPLOYMENT AGREEMENT
On September 25, 1993, the Company executed an employment agreement
with Kent E. Lillie to serve as the Company's President and Chief Executive
Officer. Under the terms of the agreement, Mr. Lillie will be employed for an
initial term of five (5) years with a base salary of $120,000 per year and an
annual bonus of ten percent (10%) of the increase in the Company's net
operating profit after taxes, over the previous fiscal year. Mr. Lillie will
receive moving, car and other fringe benefits and allowances. The agreement
provides that Mr. Lillie will be granted options to purchase up to 600,000
shares of Shop at Home Common Stock at an exercise price of $1.00 per share
during the term of the agreement. Of those options, options to purchase
100,000 shares vested immediately, and additional options to purchase 100,000
shares will vest on each anniversary date of the agreement. The options expire
on the earlier of (a) five years after the date of vesting or (b) thirty days
after termination of his employment with the Company. In the event of a
"change of control" of the Company, as defined in the agreement, the agreement
grants Mr. Lillie certain rights, including the right to resign at any time
during the twelve months following the occurrence of the event and to receive
his base salary and monthly allowances for an additional twelve (12) months.
In addition, any options to purchase stock not yet vested shall automatically
vest on the date of termination.
8
<PAGE> 12
COMPENSATION OF DIRECTORS
The Company pays no remuneration to its directors for their service as
directors.
OMNIBUS STOCK INCENTIVE PLAN
The Company's Omnibus Stock Incentive Plan (the "Plan") was adopted by
the Company's Board of Directors on October 15, 1991, and approved by the
Company's shareholders at the 1991 Annual Meeting of Shareholders.
A special administrative committee of the Board of Directors was
appointed to administer the plan. All employees of the Company are eligible to
receive stock options and/or stock appreciation rights ("SARs") under the plan.
Options granted under the plan can be either incentive stock options or
nonqualified stock options. Incentive stock options to purchase Common Stock
may be granted at not less than 100% of fair market value of the Common Stock
on the date of the grant.
SARs generally entitle the participant to receive the excess of the
fair market value of a share of Common Stock on the date of exercise over the
initial value of the SAR. The initial value of the SAR is the fair market
value of a share of Common Stock on the date of the grant.
Options and SARs granted under the plan become exercisable immediately
in the event 80% or more of the Company's outstanding stock or substantially
all of its assets are acquired by a third party.
A maximum of 1,500,000 shares of Common Stock may be issued upon the
exercise of options and SARs.
No option or SAR may be granted after October 15, 2001. No option
that is an incentive stock option and any corresponding SAR that related to
such option shall be exercisable after the expiration of ten years from the
date such option or SAR was granted or five years after the expiration in the
case of any such option or SAR that was granted to a 10% shareholder.
From its adoption through June 30, 1995, stock options for 380,000
shares of Common Stock have been granted under the Plan.
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors of the Company does not have a Compensation
Committee. All directors of the Company participate in executive compensation
decisions. The members of the Board of Directors during the fiscal year ended
June 30, 1995, were J.D. Clinton, W. Paul Cowell, A.E. Jolley, Joseph I.
Overholt, Frank A. Woods, and Kent E. Lillie.
TRANSACTIONS WITH RELATED PARTIES
The Company leases its Knoxville office and studio space from William
and Warren, Inc., an entity owned by Mr. Cowell and paid total lease payments
of approximately $132,592 during the fiscal year ended June 30, 1995.
Management of the Company determined that these terms and conditions were
competitive with comparable commercial space being leased in the Knoxville
market.
At June 30, 1994, the Company was indebted to Franklin Federal Savings
Bank, of which A.E. Jolley is a director, in the amount of $225,000 under the
terms of a note dated May 2, 1994, with interest
9
<PAGE> 13
at the rate of 8.5% and payable in ten (10) monthly payments or on demand. The
note was collateralized by equipment, furniture, accounts receivable and
inventory. Based upon management's knowledge of the commercial lending market,
these terms and rates were considered competitive. This loan was paid in full
during the fiscal year ended June 30, 1995.
By its note dated December 7, 1994, the Company obtained a loan in the
approximate amount of $320,000 from Franklin Federal Savings Bank, with an
interest rate of 10.0%, payable in monthly installments. The note was
collateralized by equipment and inventory. Based upon management's knowledge
of the commercial lending market, these terms and rates were considered
competitive. This loan was paid in full on August 17, 1995.
On August 16, 1995, the Company issued its $2,000,000 Variable Rate
Convertible Secured Note Due 2000 to Global Network Television, Inc. J.D.
Clinton is the sole shareholder and Chairman of Global Network Television, and
that corporation is the general partner of SAH Holdings, L.P., a principal
shareholder of the Company. See "Security Ownership of Certain Beneficial
Owners" herein. The loan bears interest at the prime rate plus 2% and is
payable in 60 monthly installments. The loan is secured by a security interest
in the inventory, accounts, and certain equipment, furniture and fixtures of
the Company, as well as the stock of MFP, Inc., a subsidiary of the Company,
and an assignment of the proceeds of any sale of the Federal Communications
Commission license of Television Station WMFP, Lawrence, Massachusetts. Based
upon management's knowledge of the commercial lending market, these terms and
rates are considered competitive.
In the year ended June 30, 1995, the Company contracted with MediaOne,
Inc., to provide certain consulting services to the Company. In addition,
MediaOne, Inc., acted as the commission broker for MFP, Inc., a Delaware
corporation, from whom the Company acquired Television Station WMFP, Lawrence,
Massachusetts. In consideration of its services as the commission broker,
MediaOne was owed a commission at the closing of the acquisition of the
station, which occurred on February 24, 1995. As a part of its acquisition,
the Company agreed to assume responsibility for the payment of this commission.
In August, 1995, the Company paid MediaOne $115,000 as payment in full for
these consulting services and the brokerage commission. Frank A. Woods serves
as an executive officer and director of MediaOne, Inc., and members of Mr.
Woods' immediate family own that company.
In the opinion of management, the terms of the above transactions were
as fair to the Company as terms which could have been obtained or made with
unaffiliated persons.
REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the Company's executives are made by the
Company's Board of Directors. Each member of the Board, except for Kent E.
Lillie, is a non-employee director. It is the responsibility of the Board to
assure that the executive compensation programs are reasonable and appropriate,
meet their stated purpose and effectively service the interests of the Company
and its stockholders. Pursuant to rules of the Securities and Exchange
Commission designed to enhance disclosure of corporate policies toward
executive compensation, set forth below is the report of the Board of Directors
with respect to executive compensation.
COMPENSATION PHILOSOPHY AND POLICIES FOR EXECUTIVE OFFICERS
The Company believes that the most effective executive compensation
program aligns the interest of the Company's executives with the interests of
its shareholders. The Company's primary corporate mission is to achieve
profitability on a consistent basis and thereby enhance long-term stockholder
value. In pursuit of that mission, the Board seeks to maintain a strong
positive nexus between this mission and its compensation and benefit goals.
10
<PAGE> 14
The Company's executive compensation program exemplifies the Board's
commitment to that nexus. The Company provides only minimal perquisites to its
executive officers, relying instead upon compensation methods that emphasize
overall Company performance. In addition, the Company maintains no contractual
arrangements with any executive officer, other than its agreement with its
President, its Executive Vice President, its Chief Financial Officer, its Vice
President of Merchandise, and its Vice President of Broadcasting & Engineering,
thereby enhancing the opportunities for performance-based rewards to
individuals.
The Company's executive compensation program supports the Company's
mission by:
- Directly aligning the interests of executive officers with the
long-term interests of the Company's stockholders by making
Company stock appreciation over the long term the cornerstone
of executive compensation through awards that can result in
the ownership of substantial amounts of the Company's Common
Stock.
- Providing compensation opportunities that create an
environment that attracts and retains talented executives on a
long-term basis.
- Emphasizing pay for performance by having a meaningful portion
of executive compensation "at risk."
At present, the Company's executive compensation program is comprised
of three primary components: base salary, annual cash incentive (bonus) and
long-term incentive opportunity in the form of stock options. Two of the three
components of the Company's executive compensation plan -- bonus and stock
options -- directly relate to overall performance by the Company. With respect
to the third component -- salary -- the Company seeks to be at or below market,
placing primary emphasis on the opportunities for greater reward through the
availability of performance-based reward mechanisms.
BASE SALARY
The base salary of the Company's President is listed in the Summary
Compensation Table found on page 8 of this Proxy Statement and is governed by
an Employment Agreement with the Company. As a part of its search, the Board
determined that in order to attract an individual with knowledge and experience
necessary to implement the Company's mission, the Company needed to provide
that individual with a certain level of compensation. The Board also
determined to place a greater portion of the compensation package in
performance-based compensation (i.e., performance bonus and stock options),
thereby providing an incentive for outstanding performance and minimizing the
amount of guaranteed compensation. The Board believes that the Employment
Agreement with Mr. Lillie contains an appropriate mix of guarantied and
performance-based compensation.
The Company has no other employment agreements with any other
employees, with the exception of Mr. Sutula, Mr. Nawy, Mr. Shapiro and Mr.
Gratteau. All other executive officer salaries are evaluated on an annual
basis. In determining appropriate salary levels and salary increases, the
Board considers achievement of the Company's mission, level of responsibility,
individual performance, internal equity and external pay practices. In this
regard, the Board attempts to set base salaries of all executive officers at
rates at or below the rates of other individuals in equivalent positions in the
market area. The Board determines those rates from information gathered by its
members.
ANNUAL BONUS
The Board believes that annual bonuses to executive officers encourage
management to focus attention on key operational goals of the Company, and
corporate and business earnings are the main
11
<PAGE> 15
performance measure for awards of bonuses. In that regard, the agreement with
the Company's President provides a bonus of ten (10%) percent of the increase
in the Company's net operating profit after taxes over the previous year. With
respect to the other executive officers of the Company, the Board does not have
a formal annual incentive plan. Instead, the Board has elected to review the
corporate and business performance of the Company on a periodic basis, and make
awards to executive officers if appropriate. In determining appropriate annual
bonuses, the Board considers achievement of the Company's mission, level of
responsibility, individual performance, internal equity, and external pay
practices. In the fiscal year ended June 30, 1995, the Board elected not to
award any cash bonuses to any executive officers.
LONG-TERM INCENTIVES
The Company's only current long-term incentive compensation is stock
options that are directly related to improvement in long-term stockholder
value. The Board believes that stock option grants provide an incentive to
executive officers that focuses each officer's attention on managing the
Company from the perspective of an owner with an equity stake in the business.
In addition, the Board believes that stock option grants provide the Company
with a mechanism for recruiting individuals by providing an opportunity for
those officers to profit from the results of their contributions to the
Company. These grants also help ensure that operating decisions are based on
long-term results that benefit the Company and ultimately the Company's
stockholders.
The option grants to executive officers provide the right to purchase
shares of Common Stock usually at the fair market value on the date of grant.
Usually, each stock option becomes vested and exercisable over a period of
time; generally five years. The number of shares covered by each grant
reflects the Board's assessment of the executive's level of responsibility, and
his or her past and anticipated contributions to the Company. The size of
option grants to individual executives is designed to reflect the impact the
individual has on decisions that affect the overall success of the Company.
The Company granted stock options for no shares of its Common Stock to
its executive officers in the fiscal year ended June 30, 1993, and the Company
granted stock options, for 210,000 shares of its Common Stock to its executive
officers, other than the President, in the fiscal year ended June 30, 1994. In
the fiscal year ended June 30, 1995, the Company awarded executive officers
options to purchase up to 170,000 shares of Common Stock. The exercise price
of those options granted in the fiscal year ended June 30, 1995 ranges from
$2.125 to $2.44 per share. Those options vest on schedules over five (5)
years.
CHIEF EXECUTIVE COMPENSATION
The regulations of the Securities Exchange Commission require the
Board to disclose the basis for the compensation of the Company's chief
executive officer relative to the Company's performance. The Company's chief
executive officer is its President, Mr. Kent E. Lillie. Mr. Lillie's
compensation is governed by the terms of an Employment Agreement dated
September 25, 1993.
The Board's general approach in establishing Mr. Lillie's compensation
was to provide a base salary below market, augmented by an annual bonus based
upon specific corporate-wide performance criteria, and stock options reflective
of the value of that performance. The Board approved a base salary of $120,000
as provided by the Employment Agreement, and an annual bonus of ten (10%)
percent of the increase in the Company's net operating profits after taxes over
the previous year. The Board determined, based upon the information available,
that the base salary and annual bonus was below the market rate and within the
Company's overall internal compensation goal. Mr. Lillie received a bonus of
$25,000 for the fiscal year ended June 30, 1995. Consistent with the goals
stated above, that fact reflects the Company's overall performance during that
fiscal year and not Mr. Lillie's performance.
12
<PAGE> 16
As a part of the Employment Agreement, Mr. Lillie was granted options
to purchase up to 600,000 shares of stock of the Company at an exercise price
of $1.00 per share. Those options vest over a period of five (5) years, with
100,000 shares vesting immediately upon employment. There was no grant of any
other stock options during the fiscal year ended June 30, 1995, as the Board
felt that the existing stock options provided sufficient long-term incentive to
Mr. Lillie.
THE FOREGOING REPORT IS SUBMITTED BY ALL MEMBERS OF THE COMPANY'S BOARD OF
DIRECTORS WHOSE MEMBERS ARE AS FOLLOWS:
J.D. Clinton Kent E. Lillie
W. Paul Cowell Joseph I. Overholt
A.E. Jolley Frank A. Woods
STOCKHOLDER RETURN COMPARISONS
The following line-graph compares the cumulative stockholder returns
for the Company over the past five (5) years with a broad market equity index
and a published industry or line-of-business index. For these purposes, the
Company has chosen the Nasdaq Market Index and the MG Group Index. The MG
Group Index is composed of companies classified as "Other Importers,
Wholesalers and Retailers" by Media General Financial Services, Inc. The
chart uses as a beginning price $1.50 which was the average of the high and low
bid of the Company's Stock on June 30, 1990 (the last trading day prior to
fiscal year 1991), and assumes $100 invested on that date.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
COMPANY 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
SHOP AT HOME, INC. 100 146.46 68.92 192.00 261.54 338.46
INDUSTRY INDEX 100 116.63 150.36 177.26 183.22 205.61
BROAD MARKET 100 94.22 101.52 124.62 136.66 160.27
</TABLE>
13
<PAGE> 17
PROPOSAL NO. 2
APPROVAL OF APPOINTMENT OF AUDITORS
On August 24, 1995, the Board of Directors determined to recommend the
appointment of Coopers & Lybrand L.L.P., Certified Public Accountants,
Knoxville, Tennessee, as the independent auditors of the Company for the fiscal
year ended June 30, 1996, subject to approval by the shareholders. Coopers &
Lybrand served as the Company's independent auditors for the fiscal year ended
June 30, 1995. The Company does not anticipate that representatives of Coopers
& Lybrand will be present at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE PROPOSAL.
PROPOSAL NO. 3
OTHER BUSINESS
The Board of Directors of the Company currently is unaware of any
proposal to be presented at the Annual Meeting other than the matters specified
in the Notice of Annual Meeting accompanying this Proxy Statement. Should any
other proposal properly come before the Annual Meeting, the persons named in
the enclosed proxy will vote on each such proposal in accordance with their
discretion.
OTHER INFORMATION
INTERESTS OF COMPANY AFFILIATES
None of the Company's directors, executive officers or principal
shareholders, including any of their affiliates, has any interest in the
matters to be acted upon at the Annual Meeting, other than the election of
directors.
PROPOSALS OF SHAREHOLDERS
Shareholders intending to submit proposals for presentation at the
1995 Annual Meeting of Shareholders of the Company for inclusion in the proxy
statement and form of proxy relating to that meeting should forward those
proposals to A.E. Jolley, Secretary, Shop At Home, Inc., 5210 Schubert Road,
P.O. Box 12600, Knoxville, Tennessee 37912. Proposals must be in writing and
must be received by the Company prior to June 28, 1996. Proposals should be
sent to the Company by certified mail, return receipt requested.
COST OF SOLICITATION OF PROXIES
The cost of solicitation of proxies, including expenses in connection
with preparing, assembling and mailing this Proxy Statement, will be borne by
the Company. That solicitation will be made by mail, and may also be made by
the Company's regular officers or employees, personally or by telephone or
telegram. The Company may reimburse brokers, custodians and nominees for their
expenses in sending proxies and proxy material to beneficial owners.
14
<PAGE> 18
ANNUAL REPORT
The Company's 1995 Annual Report accompanies this Proxy Statement.
The Annual Report does not form any part of the material for the solicitation
of proxies.
15
<PAGE> 19
APPENDIX A
SHOP AT HOME, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF SHOP AT HOME, INC. FOR
THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON THURSDAY, OCTOBER 26, 1995.
The undersigned hereby appoints A. E. JOLLEY AND JOSEPH I. OVERHOLT,
and each of them, as proxies, with full power of substitution, to vote all
shares of the undersigned as shown below on this proxy at the Annual Meeting of
Shareholders of Shop at Home, Inc. to be held at the LaQuinta Inn, located at
5634 Merchants Center Boulevard, Knoxville, Tennessee, on Thursday, October 26,
1995, at 5:00 o'clock, p.m., local time, and any adjournments thereof.
(1) ELECTION OF DIRECTORS:
[ ] FOR all the following nominees (except as indicated to the
contrary below):
J.D. Clinton, W. Paul Cowell, A. E. Jolley, Kent E. Lillie,
Joseph I. Overholt, Frank A. Woods
[ ] AGAINST THE FOLLOWING NOMINEE(S) (PLEASE PRINT NAME(S)):
---------------------------------------------------------------
[ ] WITHHOLD AUTHORITY (ABSTAIN) TO VOTE FOR THE FOLLOWING
NOMINEES (PLEASE PRINT NAME):
---------------------------------------------------------------
[ ] AGAINST ALL NOMINEES.
[ ] WITHHOLD AUTHORITY (ABSTAIN) to vote for all nominees.
(2) To approve the selection of Coopers & Lybrand L.L.P., Knoxville,
Tennessee, as the Company's independent auditors for the fiscal year
1996.
[ ] FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY (ABSTAIN)
(3) In their discretion, to transact such other business as may properly
be brought before the meeting or any adjournment thereof.
[ ] FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY (ABSTAIN)
(Please date and sign this proxy on the reverse side.)
<PAGE> 20
Your shares will be voted in accordance with your instructions. If no
choice is specified, shares will be voted FOR the nominees in the election of
directors, and FOR the selection of Coopers & Lybrand.
<TABLE>
<S> <C> <C>
Date , 1995. PLEASE SIGN HERE AND RETURN PROMPTLY
------------------------------------
---------------------------------------------------------
---------------------------------------------------------
Please sign exactly as your name appears at left. If
registered in the names of two or more persons, each
should sign. Executors, administrators, trustees,
guardians, attorneys, and corporate officers should show
their full titles.
</TABLE>
- - --------------------------------------------------------------------------------
IF you have changed your address, please PRINT your new address on this line.
