SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)*
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)
October 21, 1997
(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 thereto 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)
1 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). <PAGE>
<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
________________________________________________________________________
7. Sole Voting Power: 5,122,143 (But see
Items 4 and 5)
Number of ________________________________________________
Shares
Beneficially 8. Shared Voting Power: 0
Owned By ________________________________________________
Each
Reporting 9. Sole Dispositive Power: 5,122,143 (But
Person see Items 4 and 5)
With ________________________________________________
10. Shared Dispositive Power: 0
________________________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
5,122,143 (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):16.1% (But see
Items 4 and 5)
________________________________________________________________________
14. Type of Reporting Person: CO
________________________________________________________________________<PAGE>
<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
________________________________________________________________________
7. Sole Voting Power: 0
________________________________________________
Number of
Shares 8. Shared Voting Power: 5,122,143(1) (But
Beneficially see Items 4 and 5)
Owned By ________________________________________________
Each
Reporting 9. Sole Dispositive Power: 0
Person ________________________________________________
With
10. Shared Dispositive Power:
5,122,143(1) (But see Items 4 and 5)
________________________________________________________________________
11. Aggregate Amount Beneficially Owned by Each Reporting Person:
5,122,143(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): 16.1% (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>
<PAGE>
This statement constitutes Amendment No. 5 to the Statement on
Schedule 13D (the "Schedule 13D") filed March 22, 1995 by
Montgomery Ward & Co., Incorporated, an Illinois
corporation, and Montgomery Ward Holding Corp., a Delaware
corporation in connection with the beneficial ownership of
shares of common stock, $.01 par value, of ValueVision
International, Inc., a Minnesota corporation. Capitalized
terms used herein but not otherwise defined herein shall
have the meanings ascribed thereto in the Schedule 13D, as
amended through Amendment No. 4 thereto.
Item 2. Identity and Background.
The first two paragraphs of Item 2 are hereby amended
and restated as follows:
(a) The undersigned, Montgomery Ward and Co.,
Incorporated, an Illinois corporation ("MW") and Montgomery
Ward Holding Corp., a Delaware corporation ("Holding")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.
Item 4. Purpose of Transaction.
Item 4 is hereby amended and restated as follows:
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 which, 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. The
Warrants were subject to the terms and provisions of a
Warrant Agreement (the "Warrant Agreement") dated August 8,
1995 between the Company and MW, which provided terms with<PAGE>
<PAGE>
respect to vesting of the Warrants, their expiration,
certain termination rights, certain adjustment mechanisms
and pre-emptive rights.
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.
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.
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 September 5, 1996, MW and the Company entered into a
Restructuring Agreement dated as of July 27, 1996 (the
"Restructuring Agreement") with respect to a restructuring
of the relationship between the Company and MW. The
consummation of such restructuring occurred on September 27,
1996 (the "1996 Closing Date"), and on such date the parties
entered into, among other agreements, amendments and
restatements of the Operating Agreement, the Warrant
Agreement and the Registration Rights Agreement. The
foregoing description is qualified in its entirety by
reference to the Restructuring Agreement (including the
exhibits thereto) filed as Exhibit 10 hereto and
incorporated herein by reference.
On the 1996 Closing Date, pursuant to the Restructuring
Agreement, in connection with certain revisions to the terms
of the Operating Agreement and the Related Agreements and
the acquisition by the Company of the assets of Direct, all
of the Warrants, other than 7,000,000 Warrants which were
currently exercisable, were replaced with new "Series P"
warrants to purchase 1,484,467 Shares at an exercise price
of $0.01 per Share ("New Warrants") and Direct received New
Warrants with respect to 1,484,993 Shares. All New Warrants
expire on August 8, 2003 and are fully exercisable.
The Operating Agreement, as amended and restated, now
provides that during the period commencing on the 1996
Closing Date and ending on the first to occur of (x) the
date on which MW owns or has the right to own less than 10%
of the outstanding common stock of the Company (computed on
a fully diluted basis) and (y) the date on which the
Operating Agreement terminates, MW will have the right to
designate one nominee on the Company's slate of nominees for
the Company's Board of Directors. MW, the Company and
Messrs. Robert Johander and Nicholas Jaksich agreed in the
amended and restated Operating Agreement to vote all shares
over which they have voting power for the election of the<PAGE>
<PAGE>
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 amended and restated Operating
Agreement. John L. Workman, who was originally elected as a
director of the Company on August 8, 1995, served as MW's
nominee on the Company's board of directors.
On September 4, 1996, MW, the Company and Merchant
Advisors, Limited Partnership ("MALP") entered into an
agreement dated as of July 27, 1996 (the "MPLP Agreement")
with respect to a contribution to be made by each of MW, the
Company and MALP to Merchant Partners, Limited Partnership
("MPLP"). Each of MW and the Company were, at the time,
limited partners of MPLP and MALP is the sole general
partner of MPLP. Pursuant to the MPLP Agreement, on the
1996 Closing Date, MW contributed to MPLP New Warrants with
respect to 1,327,317 Shares and the Company contributed to
MPLP New Warrants with respect to 199,097 Shares. MALP
concurrently contributed to MPLP cash and a promissory note
in an amount determined pursuant to the MPLP Agreement. The
foregoing description is qualified in its entirety by
reference to the MPLP Agreement filed as Exhibit 11 hereto
and incorporated herein by reference.
Also on the 1996 Closing Date, Direct and its partners
made a liquidating distribution of the New Warrants received
on the 1996 Closing Date by Direct, and such New Warrants
are, therefore, now held directly by MW.
On September 28, 1996, pursuant to an Exchange
Agreement dated as of September 28, 1996 between MW and the
Company (the "Exchange Agreement"), MW exchanged the
7,000,000 exercisable Warrants held by it with the Company
for 2,200,000 New Warrants. Following such transaction, MW
no longer held any Warrants, but held New Warrants with
respect to an aggregate of 3,842,143 Shares. In connection
with this exchange, the parties entered into a Second
Amended and Restated Warrant Agreement and a Second Amended
and Restated Registration Rights Agreement, each of which
contained amendments reflecting the exchange of all
remaining original Warrants. The foregoing description of
the Exchange Agreement is qualified in its entirety by
reference to the text of the Exchange Agreement, which is
filed as Exhibit 12 hereto and incorporated herein by
reference.
On October 21, 1997, the Company and MW entered into a
letter of understanding, pursuant to which the Company and
MW agreed that they would negotiate in good faith definitive
agreements regarding a restructuring of the relationship
between the Company and MW and seek in good faith approval
of such restructuring by the United States Bankruptcy Court,
District of Delaware (the "Court"). In the letter, MW also
agreed that it would not exercise, sell, transfer or
otherwise dispose of any New Warrants nor sell, transfer or
otherwise dispose of any of the Purchased Shares, without
approval of the Court prior to February 15, 1998 and that it
would not seek approval of the Court to do any of the
foregoing. The letter contemplates that as a part of the<PAGE>
<PAGE>
restructuring of the relationship between the Company and
MW, MW would return to the Company all of the New Warrants
held by MW, that the Company would acquire from MW all of
the Purchased Shares for an aggregate consideration of
$4,864,000 and that MW's rights to designate a director of
the Company would terminate (and, in expectation of such
restructuring, Mr. Workman has resigned as a director of the
Company). The provisions of the letter of understanding
which relate to securities of the Company are attached
hereto as Exhibit 17 and incorporated herein by reference.
The foregoing descriptions of the Amended and Restated
Operating Agreement, the Second Amended and Restated Warrant
Agreement, the Second Amended and Restated Registration
Rights Agreement and the New Warrants are qualified in their
entirety by reference to the texts of such documents, which
are filed as Exhibits 13, 14, 15 and 16 hereto,
respectively, 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, if any,
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.
Item 5 is hereby amended and restated as follows:
According to the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended July 31, 1997, as of
September 8, 1997, 28,020,778 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 3,842,143 Shares subject to the New
Warrants held by MW, MW may be deemed to beneficially own
(pursuant to Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended) directly 5,122,143 Shares,
which constitutes approximately 16.1% of the Shares
outstanding including such 5,122,143 Shares. Holding,
through its relationship with MW, may be deemed to
beneficially own all of the Shares beneficially owned by MW.
(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 <PAGE>
<PAGE>
direct the disposition of, the Shares reported herein as
owned by it. Holding, as the sole stockholder of MW, may be
deemed to share voting and dispositive power with respect to
all Shares beneficially owned by MW.
(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 7. Material to be filed as Exhibits.
Item 7 is hereby amended by adding thereto the
following:
Exhibit 17 Excerpts from October 21, 1997 Letter
Agreement <PAGE>
<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: October 23, 1997
MONTGOMERY WARD & CO., INCORPORATED
By: /s/ JOHN L. WORKMAN
John L. Workman, Executive Vice
President
MONTGOMERY WARD HOLDING CORP.
By: /s/ JOHN L. WORKMAN
John L. Workman, Executive Vice
President <PAGE>
<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: October 23, 1997
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 <PAGE>
<PAGE>
EXHIBIT 17
Excerpts from October 21, 1997 Letter Agreement
VALUEVISION INTERNATIONAL, 6740 Shady Oak Road,
Minneapolis, Minnesota 55433
David T. Quinby
Vice President, General Counsel
and Secretary
October 21, 1997
VIA FACSIMILE AND
FEDERAL EXPRESS
Mr. John Workman
Mr. Phillip Delk
Montgomery Ward & Co.,
Incorporated
535 West Chicago Ave.
Chicago, IL 60671
Dear John and Phil:
This letter confirms our understanding reached at the
meeting in New York on Tuesday, October 7, 1997 (the
"Meeting"), that in consideration of Value Vision
International, Inc. ("VV") agreeing to (i) negotiate in good
faith definitive agreements regarding the restructuring (the
"Restructuring") of its relationship with Montgomery Ward &
Co., Incorporated ("MW"), as proposed at the Meeting and set
forth on Exhibit A hereto, and (ii) seek in good faith
approval of the Restructuring by the United States
Bankruptcy Court, District of Delaware (the "Court"), MW
agrees as follows:
1. MW will negotiate in good faith definitive agreements
regarding the Restructuring;
2. MW will seek in good faith approval of the
Restructuring by the Court;
3. MW will not (i) exercise, sell, transfer or otherwise
dispose of any warrants to purchase Common Stock, $.01
par value (the "VV Common Stock"), of VV, nor (ii)
sell, transfer or otherwise dispose of any shares of
the VV Common Stock, without approval of the Court or
prior to February 15, 1998; and
<PAGE>
4. MW will not seek approval of the Court to (i) exercise,
sell, transfer or otherwise dispose of any warrants to
purchase the VV Common Stock, nor (ii) sell any shares
of the VV Common Stock, prior to February 15, 1998.
* * *
Very truly yours,
VALUEVISION INTERNATIONAL, INC.
/s/DAVID T. QUINBY
David T. Quinby
The foregoing is agreed to and accepted this 22nd day of
October, 1997.
MONTGOMERY WARD & CO., INCORPORATED
By /s/ PHILIP D. DELK
Its Vice President<PAGE>
