SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
FINGERHUT COMPANIES, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
317867-10-1
(CUSIP Number)
Theodore Deikel
4400 Baker Road, Minnetonka, MN 55343
612-932-3100
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 3, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement of Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check
the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for
other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
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Schedule 13D/A
CUSIP No. 317867-10-1
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Theodore Deikel
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
7) SOLE VOTING POWER
NUMBER 3,282,194
OF 8) SHARED VOTING POWER
SHARES -0-
BENEFICIALLY 9) SOLE DISPOSITIVE POWER
OWNED BY 203,211
EACH 10) SHARED DISPOSITIVE POWER
REPORTING -0-
PERSON
WITH
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
3,282,194
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.5%
14. TYPE OF REPORTING PERSON*
IN
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Item 1. Security and Issuer.
This statement relates to shares of Common Stock, par value $.01
per share (the "Common Stock"), of Fingerhut Companies, Inc. (the
"Company"). The address of the principal executive office of the Company is
4400 Baker Road, Minnetonka, MN 55343.
Item 2. Identity and Background.
(a) Name: Theodore Deikel
(b) Business Address:
4400 Baker Road
Minnetonka, MN 55343
(c) Present principal employment:
Chairman and Chief Executive Officer
Fingerhut Companies, Inc.
4400 Baker Road
Minnetonka, MN 55343
(d) None.
(e) None.
(f) Citizenship: USA.
Item 3. Source and Amount of Funds or Other Consideration.
The acquisition of additional shares which required this filing
was accomplished by means of option exercises which are more fully
described in Item 5(c). Payment of the exercise prices was financed in part
by a margin loan made by Smith Barney Inc. as detailed in Item 6. In
addition, Mr. Deikel tendered, and the Company withheld, shares of Common
Stock to cover a portion of the exercise price and taxes, as detailed in
Item 5(c).
Item 4. Purpose of Transaction.
The shares were purchased for investment.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Deikel beneficially owns 3,282,194 shares of the
Company's Common Stock. This constitutes 6.54% of the 50,154,164 shares of
the Company's Common Stock outstanding. In addition, 6,191 shares of Common
Stock are owned by Mr. Deikel's son. Mr. Deikel disclaims beneficial
ownership of these shares. If, however, these shares were added to his
beneficial holdings, Mr. Deikel would beneficially own a total of 3,288,385
shares, which would constitute 6.56% of the total number of outstanding
shares of the Company's Common Stock. 3,078,983 of the shares beneficially
owned by Mr. Deikel are pledged as security for a margin loan, as more
fully described in Item 6 hereof.
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(b) Mr. Deikel has the sole power to direct the vote of all of
his shares of the Company's Common Stock. Mr. Deikel's dispositive power
over the shares is subject to the pledge of certain shares as described
in Item 6.
(c) The following transactions were effected by Mr. Deikel during
the past sixty days:
1. On September 1, 1998, Mr. Deikel exercised options for 3,000,000
shares with an exercise price of $5.455 per share. The market price of
Common Stock on September 1, 1998 was $24.25. The exercise price was
paid in cash. In addition, 847,519 shares were withheld by the Company
to cover taxes.
2. On September 3, 1998, Mr. Deikel exercised options for a total of
1,481,534 shares with exercise prices as set forth in the table below.
The market price of Common Stock on September 3, 1998 was $27.50. Mr.
Deikel conveyed to the Company 609,499 shares of Common Stock to cover
the exercise price. In addition, 317,857 shares of Common Stock were
withheld by the Company to cover taxes.
Number of Shares Exercise Price
620,820 $5.455
773,382 $15.00
87,332 $20.3125
3. On September 3, 1998, the Company repurchased from Mr. Deikel 528,331
shares.
4. On July 21, 1998, Mr. Deikel made a charitable contribution consisting
of 10,000 shares of Common Stock.
(d) Not Applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
Mr. Deikel has Stock Option Agreements with the Company dated
as of June 16, 1995, February 14, 1996 and August 20, 1997, and an
Option Exercise Agreement dated as of December 24, 1992. Mr. Deikel also
is party to a Pledge Agreement dated as of September 1, 1998 (the
"Pledge Agreement") with Smith Barney Inc., pursuant to which 3,078,983
of Mr. Deikel's shares of Common Stock are pledged as collateral against
a margin loan which was incurred to finance the share acquisitions
described in Item 5(c). Note that, while Section 3 of the Pledge
Agreement contemplates a pledge of 3,127,750 shares of Common Stock, the
parties thereto have subsequently agreed based on revised calculations
that only 3,078,983 shares are subject to the pledge.
Item 7. Material to be Filed as Exhibits.
A copy of the Pledge Agreement is attached hereto as Exhibit
99.1.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
October 13, 1998
/s/ Theodore Deikel
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Theodore Deikel
PLEDGE AGREEMENT
SMITH BARNEY INC.
388 GREENWICH STREET--18TH FL.
NEW YORK, NY 10013
ATTN: LOUIS A. KOKAHAIS, SVP
EXECUTIVE FINANCIAL SERVICES DEPARTMENT
This agreement made the 1st day of September 1998, between Ted Deikel
residing at 27960 Smithtown Road, Shorewood, MN 55331 (the Pledgor), and
Smith Barney Inc. (the Pledgee).
In consideration of Pledgee's initial extension of the loan made by
the Pledgee to the Pledgor in the sum of $16,365,000.00 and in
consideration of the Pledgee accepting for the Pledgor one or more accounts
in Smith Barney Inc., at the election of the Pledgee, the Pledgor agree(s)
to the following:
1. PLEDGE AGREEMENT CONTROLLING
A form of "client agreement" between the Pledgor and the Pledgee dated
September 1, 1998 and executed by the Pledgor is hereby incorporated by
reference as a part of this agreement ("Pledge Agreement") except that in
the event
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of conflict, the express terms of the Pledge Agreement shall prevail over
any contrary terms in the customer agreement.
2. PLEDGE
The Pledgor agrees to pledge the securities hereinafter mentioned to
the Pledgee as security for the repayment of the aforementioned loan.
3. DELIVERY OF THE SECURITIES PLEDGED
The Pledgor herewith delivers to the Pledgee the following collateral,
duly endorsed in blank:
3,127,750 shares of the common .01 par value (class) of Fingerhut
Companies (the Corporation) represented by certificate(s) _________
(the Collateral).
4. MANNER IN WHICH THE PLEDGED SECURITIES WERE OBTAINED
AND FULLY PAID FOR
The Pledgor represents that he obtained the securities pledged herein
as follows:
(a) acquired on 2,203,146 9/1/98; 1,113,866 12/24/92
(b) fully paid for on 9/1/98 and 12/24/92
(c) nature of acquisition--option exercise
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5. NUMBER OF SHARES OWNED BY PLEDGOR
The Pledgor represents that:
(a) the total number of shares that he owns of the class of
security of the Corporation hereby being pledged is 6.015%; and
(b) the total number of all other classes of the securities of
the Corporation owned by the Pledgor is 189,262, common stock
239-43941-1-4 167,444, common stock 239-46722-1-2 21,818.
6. DIVIDENDS AND SPLITS
The Pledgor:
(a) shall be entitled to receive all cash dividends paid by the
Corporation to its security holders during the term of the loan,
unless such cash dividend or payment represents a dividend or payment
resulting from a corporate restructuring, reorganization or like
corporate event; and
(b) shall not be entitled to receive any stock dividends or stock
split of any type declared, granted or made by the Corporation during
the term of the loan and Pledgor shall pay over and deliver such
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distribution to the Pledgee unless Pledgee shall have received such
distribution directly from the Corporation.
7. SALES BY PLEDGOR
The Pledgor represents to the Pledgee that during the last three
months he, or any person(s) who Pledgor must aggregate his sales with under
applicable SEC regulations,
(a) has sold 533,853 shares of Corporation to Fingerhut for taxes
on 9/1/98 exercise; and
(b) has sold 0 convertible securities which are convertible into
the shares of the Corporation.
In addition, the Pledgor and such person(s) currently have no sale
orders open with any broker and that he and they will not place any such
sale orders to sell shares of the Corporation or such convertible
securities without the express written consent of the Pledgee.
8. NO SHARES PLEDGED ELSEWHERE
The Pledgor further represents that there are no shares of the
Corporation that the Pledgor, or any person(s) whose sales must be
aggregated with Pledgor's under applicable SEC
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regulations, which are currently pledged as security for the payment of a
loan elsewhere, and that he and they will not pledge any shares of the
Corporation as security for the repayment of a loan elsewhere without the
express written consent of the Pledgee.
9. REDUCED LINE OF CREDIT
In the event of a sale of any class of security of the Corporation by
or on behalf of the Pledgor or a party specified in paragraph 8, the
Pledgor agrees and acknowledges that the Pledgee may reduce the line of
credit given pursuant to this Pledge Agreement in the same proportion as
the number of shares sold bears to the number of shares carried in all
accounts with the Pledgee to secure a line of credit immediately prior to
such sale. However, the preceding sentence, notwithstanding, if the
applicable margin maintenance requirements would preclude such a line of
credit after such sale, the line of credit shall be reduced below the
maximum line of credit permitted by such margin maintenance requirements.
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10. ADDITIONAL COLLATERAL TO MEET MARGIN CALLS
The Pledgor may not meet margin calls by depositing additional Rule
145, control, restricted or shelf registered securities into the account
without the prior express written consent of the Pledgee. The Pledgor
guarantees that all pledged shares sold to satisfy outstanding margin calls
will readily transfer into "street name" in good deliverable form.
11. INTERCHANGEABLE TERMS
Wherever the term "his" or "he" is used herein, it shall be deemed to
refer to "her", "she" or "they" where applicable.
12. HEADINGS ARE DESCRIPTIVE
The heading of each provision hereof is for descriptive purposes only
and shall not be deemed to modify or qualify any of the rights or
obligations set forth in each such provision.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hand(s)
the day and year first above written.
DATED: ACCOUNT NO:
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BY:
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ACCEPTED & AGREED:
SMITH BARNEY INC.
BY:
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