<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
SHOP AT HOME, INC.
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(Name of Registrant as Specified In Its Charter)
C. Michael Norton, Wyatt, Tarrant & Combs, 1500 Nashville City Center,
Nashville, Tennessee 37219
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
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SHOP AT HOME, INC.
5388 HICKORY HOLLOW PARKWAY
ANTIOCH, TENNESSEE 37230
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 28, 1999
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Notice is hereby given that a Special Meeting of Shareholders of Shop
at Home, Inc. (hereinafter called the "Company"), will be held at the principal
executive offices of the Company, located at 5388 Hickory Hollow Parkway,
Antioch, Tennessee, on April 28, 1999, at 10:00 a.m. local time, for the
following purposes:
(1) To consider and to vote upon the approval of an amendment to
the Charter of the Company in order to increase the number of
authorized shares of Common Stock, $.0025 par value, of the
Company from 30,000,000 shares to 100,000,000 shares.
(2) 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 Special
Meeting is contained in the Proxy Statement accompanying this Notice. The
Special Meeting may be adjourned from time to time without notice, other than
the announcement of the adjournment at the Special Meeting or any adjournment or
adjournments thereof, and any and all business for which notice is hereby given
may be transacted at any such adjourned Special Meeting.
The Board of Directors has fixed the close of business on March 16,
1999, as the record date for the determination of shareholders entitled to
notice of, and to vote at, the meeting.
By Order of the Board of Directors
George J. Phillips, Secretary
Nashville, Tennessee
March 27, 1999
YOUR REPRESENTATION AT THE SPECIAL MEETING IS IMPORTANT. TO ENSURE YOUR
REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL 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
Security Ownership of Management and Directors.....................................................2
PROPOSAL NO. 1 -- AMENDMENT OF CHARTER - INCREASE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK......4
PROPOSAL NO. 2 -- OTHER BUSINESS...................................................................5
Other Information..................................................................................5
Interests of Company Affiliates...........................................................5
Cost of Solicitation of Proxies...........................................................5
</TABLE>
i
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SHOP AT HOME, INC.
5388 HICKORY HOLLOW PARKWAY
ANTIOCH, TENNESSEE 37013
(615) 263-8000
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PROXY STATEMENT
FOR
SPECIAL 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 Special Meeting of Shareholders to
be held on April 28, 1999, and any adjournments thereof, notice of which is
attached hereto.
This Proxy Statement has been mailed on or about March 27, 1999, to all
shareholders of record on March 16, 1999.
The purposes of the Special Meeting are: [1] to consider and to vote
upon the approval of an amendment to the Charter of the Company in order to
increase the number of authorized shares of Common Stock from 30,000,000 to
100,000,000; and [2] 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 Special 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 Special 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 amendment to the Charter of the Company to increase the number of authorized
shares of Common Stock.
The Board of Directors knows of no other matters which are to be
brought to a vote at the Special 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 March 16,
1999 (the "Record Date") as the record date for the Special 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 24,296,782 shares of Common Stock. Only shareholders of record at
the close of business on the Record Date will be entitled to vote at the Special
Meeting. Shareholders will be entitled to one vote for each share held, which
vote 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 Common Stock is necessary to establish a quorum of the
Company's shareholders for the purpose of taking action at the Special Meeting.
For these purposes, shares which are present or represented by a proxy at the
Special 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 his discretionary voting
authority with respect to any particular matter.
1
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The approval of the amendment to the Charter of the Company to increase
the number of authorized shares of Common Stock 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 or not any action has been approved.
None of the proposals will give any shareholder of the Company the
right to dissent from such action, and to obtain thereby payment in cash of the
fair value of that shareholder's shares.
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 by the Company
to be the beneficial owners of more than five percent (5%) of the Common Stock,
as of March 16, 1999. Unless otherwise noted, the named persons have sole voting
and investment power with respect to the shares indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP CLASS
------------------------------------------------- -------------------- ----------
<S> <C> <C>
J.D. Clinton and SAH Holdings, L.P.(2)........... 5,328,076 20.1%
</TABLE>
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(1) In addition to shares over which the person has voting power or
investment power, a person is deemed to be the beneficial owner of
securities that can be acquired by such person within 60 days from the
date of this Proxy Statement upon the exercise of options and warrants.
Each beneficial owner's percentage ownership is determined by assuming
that options and warrants that are held by such person (but not those
held by any other person) and that are exercisable within 60 days from
the date of this Proxy Statement have been exercised.
(2) Mr. Clinton's address is 400 Fifth Avenue South, Suite 205, Naples,
Florida 34102. The address of SAH Holdings, L.P. ("SAH") is 111 South
Washington, Brownsville, Tennessee 38012. SAH is a Tennessee limited
partnership with Gatehouse Equity Management Corporation (formerly
Global Network Television, Inc.), a Tennessee corporation ("GEM"), as
its sole general partner. Mr. Clinton is chairman, a director and the
sole shareholder of GEM. SAH currently owns 2,676,850 shares of Common
Stock of the Company and holds warrants to purchase up to 1,650,000
shares of Common Stock from the Company. Clinton Investments, L.P., a
limited partnership for which GEM is the sole general partner, owns
378,381 shares of Common Stock, and holds warrants to purchase an
additional 542,500 shares of Common Stock. Mr. Clinton holds options to
purchase 25,000 shares of Common Stock from the Company. Mr. Clinton's
wife owns, individually, 7,400 shares of Common Stock. Two trusts, the
beneficiaries of whom are members of Mr. Clinton's immediate family,
own 29,945 shares of Common Stock in the aggregate. GEM owns 9,000
shares of Common Stock of the Company. All of the listed shares are
assumed to be beneficially owned by Mr. Clinton.
SECURITY OWNERSHIP OF MANAGEMENT AND DIRECTORS
The following information presents the beneficial ownership of the
Common Stock of the Company, as of March 16, 1999, by the Company's directors,
the chief executive officer and three additional named executive officers, other
than the chief executive officer, and by all directors and executive officers as
a group The three named executive officers, along with the chief executive
officer, are the only officers of the Company whose total salary and bonus
during the most recently completed fiscal year exceeded $100,000.
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<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER(1) TITLE BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------- --------------------------- -------------------- --------
<S> <C> <C> <C>
J.D. Clinton(2)...................... Chairman of the Board 5,328,076 20.13%
Kent E. Lillie(3).................... President and CEO, Director 1,048,000 4.21%
A.E. Jolley(4)....................... Director 526,092 2.16%
Joseph I. Overholt(5)................ Director 455,000 1.87%
J. Daniel Sullivan(6)................ Director 161,000 ***
Frank A. Woods(7).................... Director 25,000 ***
Donna Hilley (8)..................... Director 10,000 ***
Everit A. Herter..................... Executive Vice President for 0 0.00%
Affiliate Relations
Joseph Nawy(9)....................... Vice President of Finance 43,000 ***
Henry I. Shapiro(10)................. Vice President of Merchandise 40,100 ***
All executive officers and
directors as a group (19 persons).... 7,807,968 28.57%
</TABLE>
*** Less than 1.0%.
(1) In addition to shares over which the person has voting power or investment
power, a person is deemed to be the beneficial owner of securities that can
be acquired by such person within 60 days from the date of this Proxy
Statement upon the exercise of options and warrants. Each beneficial
owner's percentage ownership is determined by assuming that options and
warrants that are held by such person (but not those held by any other
person) and that are exercisable within 60 days from the date of this Proxy
Statement have been exercised.
(2) See Notes in preceding section entitled "SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS."
(3) Includes options to purchase 625,000 shares of Common Stock from the
Company, and also includes 9,000 shares of Common Stock held in a
retirement account controlled by Mr. Lillie.
(4) 5715 Superior Drive, Morristown, Tennessee 37814. Includes options to
purchase 25,000 shares of Common Stock from the Company.
(5) 213 Abbey Road, Newport, Tennessee 37821. Includes options to purchase
25,000 shares of Common Stock from the Company.
(6) 4431 Dyke Bennet Road, Franklin, Tennessee 37064. Includes an option to
purchase 15,000 shares of Common Stock from the Company.
(7) 631 2nd Avenue South, Nashville, Tennessee 37210. Mr. Woods holds options
to purchase 25,000 shares of Common Stock from the Company.
(8) 8 Music Square West, Nashville, Tennessee 37203. Ms. Hilley holds options
to purchase 10,000 shares of Common Stock from the Company.
(9) Includes options to purchase 2,000 shares of Common Stock from the Company.
(10) Includes options to purchase 37,000 shares of Common Stock from the
Company.
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PROPOSAL NO. 1
AMENDMENT OF CHARTER
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Company's charter currently authorizes the issuance of 30,000,000
shares of Common Stock, par value $.0025 per share ("Common Stock"), 30,000,000
shares of Non-Voting Common Stock, par value $.0025 per share, and 1,000,000
shares of Preferred Stock, par value $10.00 ("Preferred Stock").
As of March 16, 1999, 24,296,782 shares of the Company's Common Stock
were outstanding, no shares of Non-Voting Common Stock outstanding, and 104,878
shares of Series A Preferred Stock outstanding.
The proposed amendment to the Company's Charter will increase the
number of authorized shares of Common Stock from 30,000,000 to 100,000,000. No
change will be made in the number of authorized shares of Non-Voting Common
Stock or Series A Preferred Stock.
Shares of Common Stock may be issued at such time or times and for such
consideration (but not less than par value) as the Board of Directors of the
Company deems advisable, subject to limitations set forth in the laws of the
State of Tennessee, or the Company's Charter or Bylaws. Holders of Common Stock
are not entitled to preemptive or other subscription rights, and are not subject
to assessment or further call. Each share of Common Stock is entitled to one
vote on all matters on which holders of Common Stock are entitled to vote.
Holders of Common Stock are not entitled to convert the shares to any other
securities of the Company. Holders of the Common Stock are entitled to receive
such dividends as may be declared, from time to time, by the Board of Directors
of the Company out of funds legally available therefor. The Company has the
right to, and may from time to time, enter into borrowing arrangements or issue
other debt instruments, the provisions of which may contain restrictions on
payment of dividends and other distributions on the Common Stock. In the event
of the voluntary or involuntary liquidation, dissolution, distribution of assets
or winding-up of the Company, holders of Common Stock are entitled to receive
ratably in proportion to the number of shares held, those amounts or assets
available after payment or provision for payment of amounts due to holders of
any outstanding Preferred Stock and of all indebtedness or other liabilities to
any other person.
In addition to the 24,253,517 shares currently issued and outstanding,
the Company has reserved approximately 5,608,000 shares for the satisfaction of
the Company's obligations with respect to certain warrants and options
outstanding, or which may be issued under the Company's Omnibus Stock Option
Plan. In addition, as of March 16, 1999, the Company had 104,878 shares of
Common Stock reserved for issuance upon the exercise of the right of each holder
of the Company's 104,878 shares of Series A Preferred Stock issued and
outstanding to convert such shares to Common Stock on a one-for-one share basis.
As a result, the total of the Company's issued and outstanding shares,
including shares reserved to satisfy the Company's obligations under the option,
warrants and convertible capital stock which the Company has issued, is
approximately 29,989,460 shares, leaving approximately 10,540 available shares
for issuance from the 30,000,000 shares currently authorized for issuance.
The Company believes that the amendment is necessary to provide
additional shares which may be issued from time to time by the Company as
incentive stock options to its employees. When the Company's Omnibus Stock
Option Plan was first adopted in 1991, the Company reserved a total of 1,500,000
shares for issuance under the Plan. At the present time, the Company has issued
options for 957,600 shares which remain unexercised. Employees of the Company
have previously exercised options to purchase a total of 410,000 shares. This
leaves a total of 132,400 shares which remain unissued under the Plan. The
Company has grown dramatically since 1991, and it believes that it will be
appropriate and desirable to increase the number of shares of Common Stock
permitted to be covered by options issued under the Plan. In addition, the
Company has elected to provide options to its President and Chief Executive
Officer as incentive compensation from time to time, and may continue to do so
in the future. These options are issued outside of the Plan.
4
<PAGE> 8
The Company also deems it advisable to have additional shares of its
Common Stock available for future public offerings or private placements which
the Company plans to pursue in order to raise additional funds for its working
capital and expansion needs. The Company has recently announced the planned
expenditure of approximately $10,000,000 to upgrade and replace its existing
computer system, and to expand the sales efforts of the Company over the
Internet. In addition, on February 18, 1999, the Company entered into an
agreement to purchase the assets of WBPT(TV), a full-power television station in
Bridgeport, Connecticut, for a cash purchase price of up to $21,000,000,
depending upon the satisfaction by the seller of certain contingencies,
including the number of cable households receiving the programming of the
station and the approval of the Federal Communications Commission. The proceeds
of sale of shares of Common Stock of the Company could be used to provide funds
for some or all of these expenditures. The Company has also announced its
intention from time to time to seek additional television properties that are
consistent with its corporate strategy and at attractive prices.
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. 2
OTHER BUSINESS
The Board of Directors of the Company currently is unaware of any
proposal to be presented at the Special Meeting other than the matters specified
in the Notice of Special Meeting accompanying this Proxy Statement. Should any
other proposal properly come before the Special 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 Special Meeting.
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 also may 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.
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EXHIBIT A
PROPOSED AMENDMENT TO THE CHARTER
OF SHOP AT HOME, INC.
Subparagraph 6.1 of the Charter is amended to read as follows:
6.1 Capital Stock
The aggregate number and designation of the classes of shares of capital
stock that the Corporation shall have authority to issue are as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
CLASS AUTHORIZED PAR VALUE
- ----- ---------- ---------
<S> <C> <C>
Common Stock 100,000,000 $.0025
Non-Voting Common 30,000,000 $.0025
Stock
Preferred Stock 1,000,000 $10.00
</TABLE>
A-1
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Appendix A
SHOP AT HOME, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF SHOP AT HOME, INC. FOR THE
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 28, 1999.
The undersigned hereby appoints George J. Phillips and Theodore H.
Engle III, 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 Special
Meeting of Shareholders of Shop at Home, Inc. to be held at the offices of Shop
at Home, Inc., located at 5388 Hickory Hollow Parkway, Antioch, Tennessee, on
April 28, 1999, at 10:00 a.m., local time, and any adjournments thereof.
(1) AMEND THE CHARTER OF THE COMPANY:
To approve an amendment to the Charter of the Company to increase the
number of authorized shares of Common Stock, $.0025 par value, of the
Company from 30,000,000 shares to 100,000,000.
[ ] FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY (ABSTAIN)
(2) 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.)
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Your shares will be voted in accordance with your instructions. If no
choice is specified, shares will be voted FOR the proposed amendment to the
Charter to increase the number of authorized shares of Common Stock.
Date , 1999. PLEASE SIGN HERE AND RETURN PROMPTLY
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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.
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IF you have changed your address, please PRINT your new address on this line.
