Tile Shop (TTSH) Proxy Filing summary

Executive summary

• A special meeting is called to approve a reverse stock split (1-for-2,000 to 1-for-4,000) followed by a forward stock split, aiming to reduce the number of record holders below 300 and deregister from the SEC, delist from Nasdaq, and suspend public reporting obligations.

• Stockholders with fewer than the minimum number of shares will be cashed out at $6.60 per share; those with more will retain their holdings post-split.

• The Board and an independent Transaction Committee recommend the transaction, citing high public company costs, limited trading liquidity, and lack of public company benefits.

• Estimated annual cost savings are $2.4 million, with total transaction costs (including cash out and fees) around $5.3 million.

• The transaction is expected to have no material effect on ongoing business operations, but will reduce public information available to shareholders.

Voting matters and shareholder proposals

• Proposal 1: Amend the certificate of incorporation to effect the reverse and forward stock splits at a ratio set by the Board.

• Proposal 2: Approve adjournment of the special meeting if more time is needed to solicit votes.

• Both proposals require a majority of votes cast at the meeting for approval.

Board of directors and corporate governance

• The Transaction Committee, composed of independent directors, led the review and recommendation process.

• The Board and Committee considered alternatives, including maintaining public status and seeking strategic transactions, but found the proposed transaction most beneficial.

• Directors and executive officers own approximately 36.9% of outstanding shares and intend to vote in favor.