ValueVision Sends Letter to Clinton Group
Offers Clinton Group Opportunity to Remedy Apparent Disclosure
Defects in Notice of Annual Meeting Proposals Under the Company's
By-laws
MINNEAPOLIS, MN--(Marketwired - May 20, 2014) - ValueVision
Media, Inc. (NASDAQ: VVTV) ("ValueVision" or the "Company"), a
multichannel electronic retailer via TV, Internet and mobile, is
today sending a letter to Clinton Relational Opportunity Master
Fund, L.P. (together with its affiliates, "Clinton"). ValueVision
is also filing a copy of the letter with the Securities and
Exchange Commission.
Clinton is seeking to take control of ValueVision's Board of
Directors by nominating six people for election to the Company's
eight-member Board at the Company's upcoming June 18 Annual
Meeting. Based on a review of Clinton's recent SEC filings and
other public disclosures, it appears that Clinton has not satisfied
the requirement under the Company's By-laws to provide updated
information to the Company about, among other things, Clinton's
beneficial ownership of ValueVision shares and its derivative
positions as of the record date for the Annual Meeting.
In its letter, ValueVision informs Clinton that although the
Company's By-laws (in place since 2010) require ValueVision to
invalidate Clinton's nominations and proposals, ValueVision's Board
of Directors is willing to consider amending the Company's By-laws
to provide Clinton with a special exception for the June 18 Annual
Meeting so that its nominees may stand for election and its
proposals may be presented at the meeting. This exception
would only be granted if Clinton promptly provides any required
updates by 5:00 p.m. Eastern Time on Thursday, May 22, 2014 and
continues to comply with all other requirements of ValueVision's
By-laws through the Annual Meeting.
The ValueVision Board of Directors notes that this is the second
time it has attempted to accommodate Clinton following a failure by
Clinton to comply with clear requirements under ValueVision's
By-laws. In November 2013, Clinton neglected to comply with
ValueVision's By-laws in connection with its request for a Special
Meeting of Shareholders. Despite the numerous substantive
defects in Clinton's Special Meeting notice, the Company
nevertheless scheduled a Special Meeting to give its shareholders
an opportunity to express their opinions on Clinton's proposals,
only to see Clinton abandon its proposals and refuse to participate
in the Special Meeting that had been scheduled for March 2014.
In the event of any further non-compliance or in the event
Clinton does not timely provide all information required under the
By-laws, the Company and its Board of Directors reserve the right
to take any actions and to carry out their obligations under the
By-laws, including declaring Clinton's nominations and proposals
not properly brought before the Annual Meeting.
The full text of the letter is below:
Clinton Relational Opportunity Master Fund, L.P. c/o Clinton
Group, Inc. Attn: John Hall and Gregory Taxin 601 Lexington Avenue,
51st Floor New York, New York 10022
Schulte Roth & Zabel LLP Attn: Marc Weingarten and David
Rosewater 919 Third Avenue New York, New York 10022
RE: ValueVision Media,
Inc. Annual Meeting
Dear Messrs. Hall and Taxin:
We write to follow-up on our earlier correspondence concerning
the "Stockholder Notice of Intent to Present Proposals and Nominate
Persons for Election as Directors at an Annual Meeting of
Shareholders of ValueVision Media, Inc." (the "Notice Letter") sent to
ValueVision Media, Inc. (the "Company") by Clinton Relational
Opportunity Master Fund, L.P. (together with its affiliates,
"Clinton") on
February 24, 2014, in which Clinton notified the Company of its
intent to nominate six people for election to the Company's Board
of Directors and to present certain proposals to amend the
Company's By-laws (the "By-laws") at the Company's
upcoming 2014 Annual Meeting of Shareholders (the "Annual Meeting"). As you
know, the Company raised no objections to the Notice Letter based
on the information available to us at the time.
Today, we write because it appears that Clinton may not have
supplemented certain material information that it is required to
provide to the Company under the By-laws. In this letter, we
offer a path that will allow Clinton to supplement its Notice
Letter in order to ensure that the Company and its shareholders
have materially complete information in advance of the Annual
Meeting while remaining compliant with the Company's
By-laws.
Sections 3.2(d) and 4.3(d) of the Company's By-laws, which have
been in place since 2010, required Clinton to deliver notice of any
updates or supplements necessary to make the Notice Letter true and
correct as of the May 2, 2014, record date for the Annual Meeting
to the Company's Secretary no later than the fifth business day
after such record date, which was May 9, 2014. The Company
received no such notice. Based on our review of the proxy
solicitation materials that Clinton recently filed with the
Securities and Exchange Commission (the "SEC") and posted to its proxy
campaign website, together with other publicly available
information, it appears that certain of the information included in
the Notice Letter -- information that could be material to our
shareholders -- may need to be updated or supplemented.
Among other purposes, the Company's By-laws provide for full,
correct and complete disclosure of relevant information by
shareholders that intend to nominate directors at, or bring
proposals before, a meeting of the Company's shareholders. We
believe updated information from Clinton may be material to a
shareholder's consideration of Clinton's nominations and proposals
at the Annual Meeting, but we have no way of confirming this
because the required updates and supplements have not been provided
to the Company, as required by the By-laws.
Although the deadline for delivering the updated information
required by Sections 3.2(d) and 4.3(d) of our By-laws has already
passed and the By-laws now expressly require the Company to declare
Clinton's nominations and proposals invalid "[w]ithout
qualification," the Company's Board of Directors is prepared to
work with Clinton to explore legally permissible avenues for
Clinton to present its nominations and proposals at the Annual
Meeting (including amending the By-laws to retroactively extend the
deadline for Clinton's delivery of the requisite updated
information), but only if (i) Clinton promptly delivers any updates
or supplements required under Sections 3.2(d) and 4.3(d) of our
By-laws no later than 5:00 p.m. Eastern Time on Thursday, May 22,
2014, (ii) Clinton timely provides any further updates or
supplements required under Sections 3.2(d) and 4.3(d) of our
By-laws, and (iii) Clinton continues to comply in all other
respects with the requirements of our By-laws pertaining to the
Annual Meeting.
Set forth below is a list of information that, based on our
review of Clinton's proxy solicitation materials filed with the SEC
and posted to its proxy campaign website, appears Clinton may need
to update or supplement so that the Notice Letter shall be true and
correct as of the May 2, 2014 record date for the Annual Meeting,
as required by our By-laws:
- Any "Synthetic Equity Interests" or "Short Interests"
(including any interests in ValueVision options or other
derivatives) pursuant to Sections 3.2(c)(ii) and 4.3(c)(ii) of the
By-laws. In its definitive proxy statement, Clinton
generically states that it has entered into options contracts with
expiration dates as late as June 21, 2014, but only discloses a
range of strike prices and a range of the number of open options
contracts at different times throughout the year. No options
with June 2014 expiration dates were disclosed to the Company in
the Notice Letter. In addition, our By-laws require disclosure
to the Company of more meaningful information about Clinton's
"Synthetic Equity Interests" and "Short Interests," so that the
Company and its shareholders can understand and assess the net
impact of these arrangements on Clinton's economic interest in the
Company.
- Any investment relationships (or any other material
arrangements) among Clinton and its nominees pursuant to Sections
3.2(c)(iii)(C) and 4.3(c)(iii)(C) of the By-laws. On its
campaign website, Clinton states that its nominees "are not
affiliated in any way" with Clinton. However, the Notice
Letter, as well as Clinton's prior SEC filings, disclosed various
limited partnership, capital contribution and feeder fund
arrangements among Clinton and two of its director nominees, Mr.
Bozek and Mr. Beers. It is unclear to us whether these
arrangements are still in place. By omitting any reference to
these arrangements, Clinton's definitive proxy statement and
campaign website certainly leave the impression that they no longer
exist; however, the Notice Letter has not been appropriately
updated if this is the case.
- Beneficial ownership information pursuant to Sections 3.2(c)(i)
and 4.3(c)(i) of the By-laws. Clinton's beneficial ownership
of shares in the Company included in the Notice Letter (2,261,445
shares as of February 21, 2014), as well as the beneficial
ownership information included in Clinton's letter to the Company
dated May 1, 2014 demanding access to certain books and records
(2,447,629 shares as of May 1, 2014), was significantly greater
than Clinton's beneficial ownership disclosed in its recent
preliminary and definitive proxy statement filings with the SEC
(most recently, 1,976,090 shares as of May 9, 2014). Also,
none of Clinton's proxy statement filings with the SEC disclose
beneficial ownership information as of the record date for the
Annual Meeting, as required by the By-laws.
Only Clinton is in a position to determine whether the list
above is exhaustive. However, as before, we are happy to make our
counsel available to discuss this situation with you in more detail
at your convenience. We are willing to work with you quickly
in order to communicate any material or otherwise pertinent
information to our shareholders well in advance of the Annual
Meeting while ensuring Clinton's complete compliance with the
Company's By-laws. In the event of any further non-compliance
by Clinton with our By-laws, or in the event that Clinton does not
timely provide all required information, the Company and its Board
of Directors reserve the right to take any actions and to carry out
their obligations under the By-laws, including declaring Clinton's
nominations and proposals not properly brought before the Annual
Meeting.
Sincerely,
/s/ Teresa Dery
Teresa Dery Senior Vice President, General Counsel and Corporate
Secretary ValueVision Media, Inc.
cc: Board of Directors, ValueVision Media, Inc.
Advisors Jefferies LLC is acting as financial advisor and
Simpson Thacher & Bartlett LLP and Barnes & Thornburg LLP
are acting as legal advisors to ValueVision.
Your Vote Is Important, No Matter
How Many Or How Few Shares You Own
If you have questions about how to
vote your shares, or need additional assistance, please contact the
firm assisting us in the solicitation of proxies:
INNISFREE M&A INCORPORATED
Shareholders Call Toll-Free: (888) 750-5834 Banks and Brokers May
Call Collect: (212) 750-5833
REMEMBER: We urge you NOT
to sign any Gold proxy card sent to you by Clinton. If you
have already done so, you have every right to change your vote by
signing, dating and returning the enclosed WHITE proxy card TODAY
in the postage-paid envelope provided. If you hold your shares
in Street-name, your custodian may also enable voting by telephone
or by Internet -- please follow the simple instructions provided on
your WHITE proxy card.
About ValueVision Media
ValueVision Media, Inc. is a multichannel retailer that enables
customers to shop and interact via TV, phone, Internet and mobile
in the merchandise categories of Home & Consumer Electronics,
Beauty, Health & Fitness, Fashion & Accessories, and
Jewelry & Watches. ValueVision transitioned its consumer brand
to ShopHQ from ShopNBC in fiscal 2013. ValueVision's television
network reaches over 86 million cable and satellite homes and is
also available nationwide via live streaming at www.shophq.com.
Please visit www.shophq.com/ir for more investor information.
Forward-Looking Information
This release may contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Any statements contained herein that are not statements of
historical fact may be deemed forward-looking statements. These
statements are based on management's current expectations and
accordingly are subject to uncertainty and changes in
circumstances. Actual results may vary materially from the
expectations contained herein due to various important factors,
including (but not limited to): consumer preferences, spending and
debt levels; the general economic and credit environment; interest
rates; seasonal variations in consumer purchasing activities; the
ability to achieve the most effective product category mixes to
maximize sales and margin objectives; competitive pressures on
sales; pricing and gross sales margins; the level of cable and
satellite distribution for our programming and the associated fees;
our ability to establish and maintain acceptable commercial terms
with third-party vendors and other third parties with whom we have
contractual relationships, and to successfully manage key vendor
relationships; our ability to manage our operating expenses
successfully and our working capital levels; our ability to remain
compliant with our long-term credit facility covenants; our ability
to successfully transition our brand name; the market demand for
television station sales; our management and information systems
infrastructure; challenges to our data and information security;
changes in governmental or regulatory requirements; litigation or
governmental proceedings affecting our operations; significant
public events that are difficult to predict, or other significant
television-covering events causing an interruption of television
coverage or that directly compete with the viewership of our
programming; and our ability to obtain and retain key executives
and employees. More detailed information about those factors is set
forth in the Company's filings with the Securities and Exchange
Commission, including the Company's annual report on Form 10-K,
quarterly reports on Form 10-Q, and current reports on Form 8-K.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this announcement.
The Company is under no obligation (and expressly disclaims any
such obligation) to update or alter its forward-looking statements
whether as a result of new information, future events or
otherwise.
Important Information
This release may be deemed to be solicitation material in
respect of the solicitation of proxies from shareholders in
connection with one or more meetings of the Company's shareholders,
including the Company's 2014 Annual Meeting of Shareholders. On May
9, 2014, the Company filed with the Securities and Exchange
Commission ("SEC") a proxy statement and a WHITE proxy card in
connection with the Company's 2014 Annual Meeting of Shareholders.
The Company, its directors and certain of its executive officers
and employees may be deemed to be participants in the solicitation
of proxies from shareholders in connection with the Company's 2014
Annual Meeting of Shareholders. Information concerning the
interests of these directors and executive officers in connection
with the matters to be voted on at the Company's 2014 Annual
Meeting of Shareholders is included in the proxy statement filed by
the Company with the SEC in connection with such meeting. In
addition, the Company files annual, quarterly and special reports,
proxy and information statements, and other information with the
SEC. The proxy statement for the 2014 Annual Meeting of
Shareholders is available, and any other relevant documents and any
other material filed with the SEC concerning the Company will be,
when filed, available, free of charge at the SEC website at
http://www.sec.gov. SHAREHOLDERS ARE URGED TO READ CAREFULLY THE
PROXY STATEMENT FILED BY THE COMPANY AND ANY OTHER RELEVANT
DOCUMENTS FILED WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION, INCLUDING INFORMATION WITH RESPECT
TO PARTICIPANTS.
Contacts Media: Dawn Zaremba ShopHQ dzaremba@shophq.com (952)
943-6043 O Tim Lynch / Jed Repko Joele Frank, Wilkinson Brimmer
Katcher (212) 355-4449 Investors: David Collins / Eric Lentini
Catalyst Global LLC vvtv@catalyst-ir.com (212) 924-9800 O (917)
734-0339 M Arthur Crozier / Scott Winter / Jonathan Salzberger
Innisfree M&A Incorporated (212) 750-5833
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