SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
VALUEVISION INTERNATIONAL, INC.
(Name of Issuer)
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
92047K10
(CUSIP Number)
Montgomery Ward & Co., Incorporated
Montgomery Ward Plaza
Chicago, Illinois 60671
ATTN: John L. Workman
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 7, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1(b)(3) or (4), check the following box._____
Check the following box if a fee is being paid with the statement._____ (A fee
is not required only if the Reporting Person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent there-
to reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1 (a) for other parties to whom copies are to
be sent.
(Continued on following pages)
<PAGE>
1.
Name of Reporting Person:
Montgomery Ward & Co., Incorporated
2.
Check the Appropriate Box if a Member of a Group:
(a)
(b) X
3.
SEC Use Only
4.
Source of Funds: WC
5.
Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f):____
6.
Citizenship or Place of Organization: Illinois
Number of Shares Beneficially Owned By Each Reporting Person With:
7.
Sole Voting Power: 27,079,860 (But see Items 4 and 5)
8.
Shared Voting Power: 0
9.
Sole Dispositive Power: 27,079,860 (But see Items 4 and 5)
10.
Shared Dispositive Power: 0
11.
Aggregate Amount Beneficially Owned by Each Reporting
Person: 27,079,860 (But see Items 4 and 5)
12.
Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares:
13.
Percent of Class Represented by Amount in Row (11): 49.1%
(But see Items 4 and 5)
14.
Type of Reporting Person: CO
<PAGE>
1.
Name of Reporting Person:
Montgomery Ward Holding Corp.
2.
Check the Appropriate Box if a Member of a Group:
(a)
(b) X
3.
SEC Use Only
4.
Source of Funds: WC
5.
Check box if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f):
6.
Citizenship or Place of Organization: Delaware
Number of Shares Beneficially Owned By Each Reporting Person With:
7.
Sole Voting Power: 0
8.
Shared Voting Power: 27,079,860(1) (But see Items 4 and 5)
9.
Sole Dispositive Power: 0
10.
Shared Dispositive Power: 27,079,860(1) (But see Items 4 and 5)
11.
Aggregate Amount Beneficially Owned by Each Reporting
Person:
27,079,860 (But see Items 4 and 5)
12.
Check Box if the Aggregate Amount in Row (11) Excludes
Certain Shares:
13.
Percent of Class Represented by Amount in Row (11): 49.1%
(But see Items 4 and 5)
14.
Type of Reporting Person: CO
(1) Solely in its capacity as the sole stockholder of Montgomery Ward & Co.,
Incorporated, an Illinois corporation.
<PAGE>
1.
Name of Reporting Person:
Bernard F. Brennan
2.
Check the Appropriate Box if a Member of a Group:
(a)
(b) X
3.
SEC Use Only
4.
Source of Funds: WC
5.
Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(e) or 2(f):
6.
Citizenship or Place of Organization: United States
Number of Shares Beneficially Owned By Each Reporting Person With:
7.
Sole Voting Power: 0
8.
Shared Voting Power: 27,079,860(1) (But see Items 4 and 5)
9.
Sole Dispositive Power: 0
10.
Shared Dispositive Power:
27,079,860(1) (But see Items 4 and 5)
11.
Aggregate Amount Beneficially Owned by Each Reporting
Person:
27,079,860 (But see Items 4 and 5)
12.
Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares:
13.
Percent of Class Represented by Amount in Row (11): 49.1%
(But see Items 4 and 5)
14.
Type of Reporting Person: IN
(1) Mr. Brennan is Chairman of the Board and Chief Executive Officer of each of
Montgomery Ward & Co., Incorporated, an Illinois corporation, and
Montgomery Ward Holding Corp., a Delaware corporation, and Designator
under that certain Stockholders' Agreement dated as of June 17, 1988, as
amended and restated to date, applicable to shares of common stock of Mont-
gomery Ward Holding Corp. As Designator, Mr. Brennan has the right to
designate a majority of the board of directors of Montgomery Ward Holding
Corp. In addition, Mr. Brennan has the right to vote approximately 38% of
the outstanding shares of common stock of Montgomery Ward Holding Corp.
<PAGE>
This statement constitutes Amendment No. 2 to the Statement on
Schedule 13D (the "Schedule 13D") filed March 22, 1995 by the
Reporting Persons (as defined below) in connection with the
beneficial ownership of Shares (as defined below) of ValueVision
International, Inc. Pursuant to Item 101(a)(2)(ii) of Regulation
S-T, the entire text of the Schedule 13D is hereby amended and
restated as set forth below. Exhibits 1-8 hereto, which have
been previously filed in paper format, are not restated
electronically herein.
Item 1. Securities and Issuer.
This Statement relates to the Common Stock, $.01 par
value (the "Shares"), of ValueVision International, Inc., a
Minnesota corporation (the "Company"). The principal executive
offices of the Company are located at 6740 Shady Oak Road,
Minneapolis, Minnesota 55344-3433.
Item 2. Identity and Background.
(a) The undersigned, Montgomery Ward and Co., Incorporated,
an Illinois corporation ("MW"), Montgomery Ward Holding Corp., a
Delaware corporation ("Holding"), and Bernard F. Brennan
("Brennan"), hereby file this Statement on Schedule 13D. The
foregoing persons and entities are sometimes collectively
referred to herein as the "Reporting Persons".
(b)(c) MW is an Illinois corporation whose principal
business is that of retail merchandising and direct response
marketing (including insurance). All of the outstanding shares
of MW are owned by Holding. Brennan serves as Chairman of the
Board and Chief Executive Officer of both MW and Holding.
Pursuant to that certain Stockholders' Agreement dated as of June
21, 1988, as amended and restated to date, with respect to shares
of common stock of Holding, the Designator (as defined therein)
has the right to designate six of the eleven members of the Board
of Directors of Holding. Brennan is currently Designator for
that purpose. In addition, Brennan has the right to vote
approximately 38% of the outstanding shares of common stock of
Holding.
The principal business address (which also serves as the
principal office) of each of MW, Holding and Brennan is
Montgomery Ward Plaza, Chicago, Illinois 60671. Pursuant to
Instruction C to Schedule 13D under the Act, the directors and
executive officers of both MW and Holding and their respective
business addresses and principal occupations are listed below.
Each of the individuals listed below serves as a director or
executive officer of both MW and Holding. There are currently
two vacancies on the Board of Directors of each of MW and
Holding. Messrs. Brennan, Heine, Workman and Reddington, who are
executive officers of MW and Holding, also serve as directors of
MW and Holding, and are listed below under the heading
"Directors" and not under the heading "Executive Officers".
Directors Address Occupation
Bernard F. Brennan Montgomery Ward Chairman of the
Plaza, Chicago, Board and Chief
Illinois 60671 Executive Officer
of MW and Holding<PAGE>
Spencer H. Heine Montgomery Ward Executive Vice
Plaza, Chicago, President,
Illinois 60671 Secretary and
General Counsel of
MW and Holding;
President,
Montgomery Ward
Properties
John L. Workman Montgomery Ward Executive Vice
Plaza, Chicago, President and
Illinois 60671 Chief Financial
Officer of MW and
Holding
G. Joseph Reddington 200 N. Martingale Chairman and Chief
Road, 11th Flr. Executive Officer,
Schaumburg, Signature
Illinois 60173 Financial/
Marketing, Inc.
Myron Lieberman Suite 4000 Attorney,
10 S. Wacker Dr. Altheimer & Gray
Chicago, Illinois
60606
Silas S. Cathcart 222 Wisconsin Retired
Avenue, Suite 103
Lake Forest,
Illinois 60045
Denis J. Nayden c/o General President and
Electric Capital Chief Operating
Corporation Officer of General
260 Long Ridge Electric Capital
Road, Stamford, Corporation
Connecticut 06902 ("GECC")
James A. Parke c/o General Senior Vice
Electric Capital President -
Corporation Finance of General
260 Long Ridge Electric Financial
Road, Stamford, Services, Inc.
Connecticut 06902
Daniel W. Porter c/o General President and
Electric Capital Chief Executive
Corporation Officer of
260 Long Ridge Retailer Financial
Road, Stamford, Services, Inc.
Connecticut 06902
Executive Officers Address Occupation
Alan E. DiGangi Montgomery Ward Executive Vice
Plaza, Chicago, President of
Illinois 60671 Holding; Executive
Vice President,
Electric Avenue,
Rooms & More /
Soft Home of MW
Robert A. Kasenter Montgomery Ward Executive Vice
Plaza, Chicago, President of
Illinois 60671 Holding; Executive
Vice President,
Human Resources of
MW
Frederick E. Meiser Montgomery Ward Chairman and Chief
Plaza, Chicago, Executive Officer
Illinois 60671 of Lechmere, Inc.,
a wholly-owned
subsidiary of MW
Edwin G. Pohlmann Montgomery Ward Executive Vice
Plaza, Chicago, President of
Illinois 60671 Holding; Executive
Vice President,
Merchandise and
Store Operations
of MW
Richard C. Rusthoven Montgomery Ward Executive Vice
Plaza, Chicago, President of MW
Illinois 60671 and Holding
Robert J. Stevenish Montgomery Ward Executive Vice
Plaza, Chicago, President of
Illinois 60671 Holding; Executive
Vice President -
Operations of MW
Michael Searles Montgomery Ward Executive Vice
Plaza, Chicago, President of
Illinois 60671 Holding; Executive
Vice President -
Apparel and Gold
'N Gems of MW
Carol J. Harms Montgomery Ward Vice President and
Plaza, Chicago, Treasurer of MW
Illinois 60671 and Holding
(d) None of the entities or persons identified in this
Item 2 has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the entities or persons identified in this Item
2 has during the last five years been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to
such laws.
(f) All of the persons identified in this Item 2 are
citizens of the United States of America.
Item 3. Source and Amount of Funds or Other Consideration.
The source and amount of funds or other consideration used
by the Reporting Persons to purchase the Purchased Shares (as
defined herein) consisted solely of working capital of MW. MW
has not yet determined the source of funds or other consideration
to be used to exercise any Warrants (as defined herein).
Item 4. Purpose of Transaction.
The Shares to which this statement relates have been
acquired for investment purposes and to influence the direction
and management of the Company.
On March 13, 1995, the Company and MW entered into each of
an Operating Agreement (the "Operating Agreement"), a Credit Card
License and Receivables Sales Agreement, and a Servicemark
License Agreement (collectively, the "Related Agreements"),
pursuant to which MW provides the Company with certain
operational support, including merchandise sourcing and
permitting the use of MW credit cards by the Company's customers.
Also on March 13, 1995, the Company and MW entered into a
Securities Purchase Agreement (the "Securities Purchase
Agreement"). Pursuant to the Securities Purchase Agreement, on
August 8, 1995 (the "Closing Date"), the Company issued and sold
to MW 1,280,000 Shares (the "Purchased Shares") at a price of
$6.25 per share, or $8,000,000 in the aggregate. Also pursuant
to the Securities Purchase Agreement, on the Closing Date the
Company issued and sold to MW non-transferable warrants (the
"Warrants") to purchase an aggregate of 25,000,000 Shares with
exercise prices ranging from $6.50 to $17.00 per Share, and an
average exercise price of $9.16 per Share.
Subject to the terms and provisions of a Warrant Agreement
(the "Warrant Agreement") dated August 8, 1995 between the
Company and MW, which applies to the Warrants, the Warrants
vested and are to become vested in the following series:
Series Number of Shares Vesting Date Exercise Price Per Share<PAGE>
A 4,000,000 Closing Date $6.50
B 3,000,000 Closing Date $6.75
first
anniversary
C 3,000,000 25 months $7.00
after the
Closing Date
D 3,000,000 Closing Date $7.25
third
anniversary
E 2,000,000 Closing Date $7.50
fourth
anniversary
F 1,000,000 Closing Date $8.00
fourth
anniversary
G 1,000,000 Closing Date $9.00
fifth
anniversary
H 1,000,000 Closing Date $10.00
fifth
anniversary
I 1,000,000 Closing Date $11.00
fifth
anniversary
J 1,000,000 (1) $12.00
K 1,000,000 (1) $13.00
L 1,000,000 (1) $14.00
M 1,000,000 (1) $15.00
N 1,000,000 (1) $16.00
O 1,000,000 (1) $17.00
TOTAL 25,000,000 Average
Price: $ 9.16
(1) Vesting is immediate following the exercise of all, but not
less than all, of the Warrants in Series A through Series I.
Upon the termination of the Operating Agreement, for any
reason other than an Event of Default (as defined in the
Operating Agreement) by the Company, no Warrants which are not
then vested shall thereafter vest. MW may only exercise vested
Warrants, except as provided below. All of the Warrants will
expire on the eighth anniversary of the Closing Date, or, if such
day is not a business day, the next succeeding day which is a
business day.
At any time prior to the termination of the Operating
Agreement, subsequent to the second anniversary of the Closing
Date, and provided that an Event of Default (as defined in the
Operating Agreement) with respect to MW shall not have occurred
and be continuing, MW may simultaneously exercise all, but not
less than all, of the Warrants, whether or not such Warrants have
vested.
In addition, at any time prior to the termination of the
Operating Agreement, if any person other than MW or an affiliate
of MW becomes the beneficial owner, directly or indirectly, of
25% or more of the voting power of the Company's then outstanding
securities (a "Change of Control"), provided that an Event of
Default (as defined in the Operating Agreement) by MW shall not
have occurred and be continuing, MW may exercise any or all
Warrants, whether or not vested, at any time within 90 days after
such Change of Control.
The number of Shares subject to the Warrant and the exercise
price thereunder are subject to certain adjustments, including in
connection with certain issuances by the Company of additional
Shares of common stock after December 4, 1994 (including in
connection with exercise of certain then-outstanding options and
warrants), the repurchase by the Company of Shares, certain non-
cash dividends as provided in the Warrant Agreement or the
consummation of certain actions, including, without limitation, a
stock split, stock dividend, recapitalization or reclassification
with respect to the Company's common stock. As of the date of
the event for which this Amendment No. 2 to Schedule 13D is being
filed, additional Shares of common stock had been issued by the
Company subsequent to December 4, 1994 such that the number of
Shares of common stock subject to the Warrants will, upon
adjustment at the times specified in the Warrant Agreement, be
adjusted upward from 25,000,000 to 25,799,860. The vesting of
such additional shares is proportionate with the schedule above.
Pursuant to the Warrant Agreement, MW has certain pre-
emptive rights in the event that the Company issues and sells
additional shares of capital stock of the Company or any options,
warrants or other rights to subscribe for or to purchase any such
stock (with certain enumerated exceptions).
On the Closing Date, the Company and MW entered into a
Registration Rights Agreement pursuant to which MW has certain
demand and so-called "piggyback" registration rights.
In the Operating Agreement, MW has agreed that, prior to the
second anniversary of the Closing Date, MW and its affiliates
will not buy or sell any Shares (including, without limitation,
through the exercise of the Warrants), provided, however, that
this restriction does not apply (i) to the purchase of the
Purchased Shares, (ii) during the period between commencement of
a tender offer for Shares by a party other than MW or any of its
affiliates or announcement of a merger, either of which could
result in a Change of Control, and the termination of such tender
offer or completion of such merger, and (iii) to purchases
pursuant to MW's pre-emptive rights described above.
The "cross-ownership" rules of the Federal Communications
Commission limit the number of television stations in which
related persons and entities may own attributable interests. The
ownership of television stations by affiliates of MW and the
Company may require a waiver of such rules to prevent violations
of such rules in the event of an exercise by MW of the Warrants.
The Operating Agreement requires the Company to take steps to
permit MW to exercise the Warrants without violating such rules,
which steps may include a spin-off or divestiture of the
Company's television stations.
Pursuant to the Operating Agreement, the Company expanded
its board of directors from five members to seven and agreed to
nominate and recommend to the stockholders of the Company in the
Company's Proxy Statement for its annual meeting of stockholders
two individuals designated by MW to fill the two new
directorships. During the period commencing on the Closing Date
and ending on the first to occur of (x) the date on which all of
the Warrants are exercised by MW and (y) the date on which the
Operating Agreement terminates, the Operating Agreement provides
that MW will have the right to designate two nominees on the
Company's slate of nominees for the Company's Board of Directors.
Pursuant to the Operating Agreement, MW shall also have the right
to designate one of its two designees as Vice Chairman of the
Company's Board of Directors. MW, the Company and Messrs. Robert
Johander and Nicholas Jaksich have agreed in the Operating
Agreement to vote all shares over which they have voting power
for the election of the slate of directors nominated by the
Company, including the MW designees. MW's right to designate
individuals to serve as directors of the Company is subject to
certain limitations provided in the Operating Agreement. The two
original MW designees, Gene C. McCaffery and John L. Workman,
were elected as directors of the Company on August 8, 1995.
Since such time, Mr. McCaffery resigned from his positions with
MW and Holding and also as a director of the Company. As of the
date of the event for which this Amendment No. 2 to Schedule 13D
is filed, MW has not designated a replacement for Mr. McCaffery
to the Company's board of directors.
The foregoing descriptions of the Securities Purchase
Agreement, the Operating Agreement, the Warrant Agreement, the
Registration Rights Agreement and the Warrants are qualified in
their entirety by reference to the texts of such documents, which
are filed as Exhibits 1, 2, 6, 7 and 8 hereto, respectively, and
incorporated herein by reference.
On June 7, 1996, MW, the Company, Merchant Partners, Limited
Partnership ("MPLP") and Signature Financial/Marketing, Inc., a
wholly-owned subsidiary of MW executed non-binding memoranda of
understanding with respect to a restructuring of the relationship
between the Company and MW. On June 10, 1996, the Company issued
a press release with respect to such memoranda. In connection
with certain proposed revisions to the terms of the Operating
Agreement and the proposed acquisition by the Company of the
assets of Montgomery Ward Direct, L.P. (which is currently
indirectly owned by MW), the memoranda of understanding
anticipate that the Warrants which have not yet become
exercisable would be replaced with new warrants ("New Warrants")
to purchase approximately 3.2 million Shares at an exercise price
of $0.01 per Share. The total number of New Warrants would be
that number of New Warrants which has an aggregate value (based
upon the value of the underlying Shares) of $22.36 million. The
value of the underlying Shares would be determined on the basis
of the average closing prices of the Company's Shares during the
20 trading days ending on June 6, 1996. Certain of the vesting
provisions, the termination rights, the adjustments and the pre-
emptive rights described above with respect to the Warrants would
be inapplicable to the New Warrants. In addition, MW's right to
designate two directors to the Company's board would be reduced
to the right to designate one director. In addition, the
Company's obligation under the Operating Agreement with respect
to the "cross-ownership rules" discussed above would be
eliminated, although the Company would nevertheless remain
obligated to cooperate with MW and act in good faith to assist in
avoiding a violation of such rules. The memoranda also provide
that following any such restructuring, MW would contribute to
MPLP New Warrants having a value of $10 million and the Company
would contribute to MPLP New Warrants having a value of $1.5
million. Each of MW and the Company is a limited partner of
MPLP. The memoranda are not intended to be legally binding
documents and the Reporting Persons anticipate that the final
terms of any such restructuring will be set forth in definitive
binding written agreements which the Reporting Persons anticipate
will be executed by July 15, 1996. The foregoing description is
qualified in its entirety by reference to the understandings
filed as Exhibit 9 hereto and incorporated herein by reference.
The Reporting Persons intend to review continuously their
investment in the Company and, on the basis of such review and
such market and other factors as they may deem relevant, may,
subject to the limitations contained in the agreements described
above, determine to increase or decrease their investment in the
Company. In addition, the designees of MW on the Company's board
of directors may make proposals and take such other actions as
are commensurate with their rights and duties as directors.
Except as described herein, the Reporting Persons have no
plans or proposals with respect to the Company that relate to or
would result in any of the actions specified in clauses (a)
through (j) of Item 4 of Schedule 13D.
Item 5. Interests in Securities of the Issuer.
According to the Company's Annual Report on Form 10-K for
the fiscal year ended January 31, 1996, as of April 23, 1996,
29,371,748 Shares were outstanding. The calculations made
pursuant to this Item 5 assume that the application of Rule 13d-
3(d)(1)(i) promulgated under the Act could result in beneficial
ownership by the Reporting Persons of all of the Shares subject
to the Warrants.
(a) Including the 25,000,000 Shares subject to the
Warrants, MW may be deemed to beneficially own directly
26,280,000 Shares, which constitutes approximately 48.3% of the
Shares outstanding including such 26,280,000 Shares. As set
forth in Item 4 above, adjustments under the Warrants will be
made pursuant to the Warrant Agreement. Assuming such adjustment
to increase the Shares of Common Stock subject to the Warrants to
25,799,860, MW may be deemed to beneficially own approximately
49.1% of the Shares outstanding (including such 25,799,860
Shares). Both Holding and Brennan, through their relationship
with MW, may be deemed to beneficially own all of the Shares
beneficially owned by MW. If the transactions proposed in the
memoranda of understanding referenced in Item 4 occur, it is
anticipated that MW will beneficially own (pursuant to Rule 13d-3
promulgated under the Act) approximately 26% of the Shares
outstanding.
(b) Except as limited by the agreement contained in the
Operating Agreement with respect to the election of directors as
described in Item 4 above, MW will have the sole power to vote or
direct the vote of, and the sole power to dispose or direct the
disposition of, the Shares reported herein. Holding, as the sole
stockholder of MW, and Brennan, as the Chairman of the Board and
Chief Executive Officer of MW and as Designator, may each be
deemed to share voting and dispositive power with respect to all
of such Shares.
(c) Except as set forth above, the Reporting Persons do not
beneficially own any Shares and, except as set forth herein, have
effected no transactions in Shares during the preceding 60 days.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
Except as set forth in Item 4 above, the Reporting Persons
do not have any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to
any securities of the Company, including but not limited to
transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees
of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be filed as Exhibits.
Exhibit A. Agreement pursuant to Rule 13d-
1(f)(1)(iii)
Exhibit 1. Securities Purchase Agreement dated
March 13, 1995 between Montgomery Ward &
Co., Incorporated and ValueVision
International, Inc.
Exhibit 2. Operating Agreement dated March 13, 1995
between Montgomery Ward & Co.,
Incorporated and ValueVision
International, Inc.
Exhibit 3. Servicemark License Agreement dated
March 13, 1995 between Montgomery Ward &
Co., Incorporated and ValueVision
International, Inc.
Exhibit 4. Credit Card License and Receivables Sale
Agreement dated March 13, 1995 between
Montgomery Ward & Co., Incorporated and
ValueVision International, Inc.
Exhibit 5. Power of Attorney executed by Bernard F.
Brennan.
Exhibit 6. Warrant Agreement dated August 8, 1995
between ValueVision International, Inc.
and Montgomery Ward and Co.,
Incorporated.
Exhibit 7. Registration Rights Agreement dated
August 8, 1995 between ValueVision
International, Inc. and Montgomery Ward
and Co., Incorporated.
Exhibit 8. Warrants to purchase common Stock of
ValueVision International, Incorporated
under the laws of the state of
Minnesota, Series A through Series O.
Exhibit 9. Non-binding understandings relating to
securities of the Company and changes in
the board of directors of the Company.
<PAGE>
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.
Dated: June 10, 1996
MONTGOMERY WARD & CO., INCORPORATED
By: /s/ JOHN L. WORKMAN
John L. Workman, Executive Vice
President and Chief Financial
Officer
MONTGOMERY WARD HOLDING CORP.
By: /s/ JOHN L. WORKMAN
John L. Workman, Executive Vice
President and Chief Financial
Officer
/s/ MYRON LIEBERMAN
Myron Lieberman, as
attorney-in-fact for
Bernard F. Brennan
<PAGE>
EXHIBIT INDEX
Exhibit No. Document Description Page No.
Exhibit A. Agreement pursuant to
Rule 13d-1(f)(1)(iii)
Exhibit 9. Non-binding understandings
relating to securities of the
Company and changes in the board
of directors of the Company
<PAGE>
EXHIBIT A
Pursuant to Rule 13d-1(f)(1)(iii) of Regulation 13D-G of the
General Rules and Regulations of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended,
the undersigned agree that the statement to which this Exhibit is
attached is filed on behalf of each of them in the capacities set
forth herein below.
Dated: June 10, 1996
MONTGOMERY WARD & MONTGOMERY WARD HOLDING CORP.
CO., INCORPORATED
By: /s/ JOHN L. WORKMAN By: /s/ JOHN L. WORKMAN
John L. Workman, John L. Workman,
Executive Vice President Executive Vice President
and Chief Financial Officer and Chief Financial
Officer
/s/ MYRON LIEBERMAN
Myron Lieberman, as
attorney-in-fact for
Bernard F. Brennan
<PAGE>
EXHIBIT 9
Non-Binding Understandings among Montgomery Ward & Co.,
Incorporated ("MW"), ValueVision International, Inc. ("VVI") and
Merchant Partners, Limited Partnership ("MPLP") relating to
securities of VVI and changes in the board of directors of VVI:
1. The existing 18,000,000 unvested VVI warrants, as adjusted,
held by MW would be replaced with new warrants ("New Warrants").
All New Warrants would be exercisable at any time on or prior to
August 8, 2003, and would have an exercise price of $.01 per
share. All New Warrants would have the same registration rights
as are set forth in the existing Registration Rights Agreement.
All New Warrants would be fully transferable, subject to a right
of first offer in favor of VVI in the event of a non-public
disposition.
2. Following the withdrawal by Fingerhut from Montgomery Ward
Direct, L.P. ("MWD"), VVI or a subsidiary of VVI would acquire
all of the assets of MWD, including not less than $4,000,000 in
cash. VVI (or such subsidiary) would assume (x) all liabilities
of MWD of a type which would normally be reflected on or reserved
against on a balance sheet of MWD as of the Closing Date,
prepared in accordance with GAAP, consistently applied, and (y)
all executory liabilities of MWD under contracts, leases and
other agreements which are assigned to VVI.
3. The total number of New Warrants to be issued to MW would be
that number of New Warrants which has an aggregate value (based
upon the value of the underlying shares) of $22.36 million. The
value of underlying shares, for the purpose of the preceding
sentence, would be determined on the basis of the average closing
prices of VVI's shares during the 20 trading days ending on June
6, 1996.
4. VVI's obligation under the Operating Agreement to take so-
called "Remedial Actions" in the event of the acquisition by MW
of additional shares of VVI which would result in a violation of
the so-called "Combined Ownership Rules" of the Federal
Communications Commission would be eliminated, although VVI would
nevertheless remain obligated to cooperate with MW and act in
good faith, short of taking Remedial Actions, to assist MW,
General Electric Company and General Electric Capital Corporation
in avoiding a violation of the Combined Ownership Rules.
5. MW's right to elect two members of VVI's board of directors,
set forth in the Operating Agreement, would be modified to reduce
the number of MW directors to one. The "standstill" imposed with
respect to the shares of VVI which MW currently owns, contained
in the Operating Agreement, would be eliminated.
6. The Warrant Agreement would be modified to eliminate the so-
called Reserved Shares Adjustment, the so-called Repurchased
Shares Adjustment, and MW's preemptive right to purchase
additional shares of VVI.
7. Following the closing of the transactions hereunder, MW would
make a contribution of New Warrants received by it from VVI
having a value of $10 million to MPLP. Concurrently with this
transfer, VVI would transfer to MPLP New Warrants having a value
of $1,500,000.
