<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________
FORM 10-K/A No. 1
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------- ------------
Commission File No. 0-20243
VALUEVISION INTERNATIONAL, INC.
(Exact Name of Issuer in Its Charter)
Minnesota 41-1673770
---------------------------------------------------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
6740 Shady Oak Road, Minneapolis, MN 55344 - 3433
---------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
612-947-5200
----------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$0.01 par value
Indicate by check mark whether the registrant: (1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers in response to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of May 19, 1997, 27,976,112 shares of the Registrant's common stock were
outstanding. The aggregate market value of the common stock held by
non-affiliates of the registrant on such date, based upon the closing sale
price of the common stock as reported by Nasdaq on May 19, 1997, was
approximately $99,488,000. For purposes of this computation, affiliates of
the registrant are deemed only to be the registrant's executive officers and
directors.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE> 2
VALUEVISION INTERNATIONAL, INC.
ANNUAL REPORT ON FORM 10-K/A NO. 1
FOR THE FISCAL YEAR ENDED
JANUARY 31, 1997
TABLE OF CONTENTS
PART III
Page
Item 10. Directors and Executive Officers of the Registrant;
Section 16(a) Beneficial Ownership Reporting Compliance 3
Item 11. Executive Compensation 6
Item 12. Security Ownership of Certain Beneficial Owners and Management 11
Item 13. Certain Relationships and Related Transactions 13
SIGNATURES
2
<PAGE> 3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
COMPLIANCE WITH SECTION 16(A)
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Set forth below are the names, ages, titles at ValueVision International,
Inc., principal occupations and employment for the past five years of the
persons serving as executive officers and directors of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION(S) HELD
- ------------------------- ------ -------------------------------------------------
<S> <C> <C>
Robert L. Johander 51 Chairman of the Board and Chief Executive Officer
Nicholas M. Jaksich 52 President, Chief Operating Officer and Director
Edward A. Karr 50 Executive Vice President, Merchandising and Programming
Stuart R. Romenesko 34 Senior Vice President Finance, Chief Financial Officer, Treasurer and
Assistant Secretary
David T. Quinby 36 Vice President, General Counsel and Secretary
Michael L. Jones 39 Vice President, Television Broadcasting
Scott A. Lindquist 50 Vice President, Administration
Robert J. Korkowski 56 Director
Marshall S. Geller 58 Director
Paul D. Tosetti 42 Director
John Workman 45 Director
</TABLE>
Robert L. Johander, a founder of the Company, has served as Chairman of
the Board and Chief Executive Officer of the Company since June 1990. Mr.
Johander's experience in television home shopping began in 1984 as president of
Telethon Marketing Company, where he was responsible for the creation,
production, and management of national cable television home shopping programs,
which were subsequently acquired by C.O.M.B. Co. ("C.O.M.B."), a
Minneapolis-based mail-order liquidator of consumer merchandise. In early
1986, Mr. Johander, as General Manager of C.O.M.B.'s Value Network, conceived
and managed the launch of Cable Value Network, Inc., a joint-venture television
home shopping network formed by C.O.M.B. and several national cable television
system operators. In 1987, C.O.M.B. changed its name to CVN Companies, Inc.
("CVN"), which was subsequently acquired by QVC Network, Inc.
Nicholas M. Jaksich, a founder of the Company, has served as President and
Chief Operating Officer and as a director of the Company since June 1990. From
February 1984 to June 1986, Mr. Jaksich was Vice President, Distribution and
Operations for Lillian Vernon Corporation, a national direct-mail merchandising
firm. In July 1986, Mr. Jaksich joined C.O.M.B. to assist in the launch of its
television activities. His responsibilities included the direct day-to-day
supervision of television production and merchandising activities; the
development of various television order response, inventory, and sales tracking
systems, and supervision of on-air hosts. In 1987, Mr. Jaksich succeeded Mr.
Johander as divisional Senior Vice President of CVN-Television, a division of
CVN.
3
<PAGE> 4
Edward A. Karr has served as the Company's Executive Vice President,
Merchandising and Programming since July 1993. Mr. Karr served as the Senior
Vice President of Sales and Marketing for Ravel Inc., a manufacturer of gold
jewelry from June 1992 to July 1993. Mr. Karr was the Senior Vice President of
Merchandising for QVC from March 1989 to June 1992, and prior to that was the
Vice President of Merchandising for QVC from March 1987 to March 1989.
Stuart R. Romenesko has served the Company as Senior Vice President
Finance, Chief Financial Officer, Treasurer and Assistant Secretary since
August 1995. Mr. Romenesko joined the Company in March 1994 as Vice President,
Chief Accounting Officer. From December 1991 to March 1994, Mr. Romenesko, a
Certified Public Accountant, was a Senior Manager in the Accounting and Audit
Division of Shinners, Hucovski & Company, S.C. From July 1985 to November
1991, Mr. Romenesko served in a variety of capacities at Arthur Andersen LLP,
an international accounting firm, leaving in 1991 as an experienced manager in
the firm's Audit and Business Advisory Practice.
David T. Quinby joined the Company as Vice President, General Counsel
and Secretary in February 1997. From May 1993 to February 1997, Mr. Quinby was
an attorney with the law firm of Maslon Edelman Borman & Brand PLLP. From
August 1990 to May 1993, Mr. Quinby was an attorney with the law firm of Faegre
& Benson, LLP. Mr. Quinby, a 1990 University of Minnesota Law School graduate
and a Certified Public Accountant, served in a variety of capacities at Arthur
Andersen LLP, in the firm's Audit and Business Advisory Practice, from August
1983 to August 1987.
Michael L. Jones joined the Company as Vice President, Television
Broadcasting in September 1993. From September 1992 to July 1993, Mr. Jones
served as Vice President, Broadcasting of Corridor Broadcast. From October 1990
to September 1992, Mr. Jones served as Vice President and General Sales Manager
of WDAS AM/FM in Philadelphia.
Scott A. Lindquist has served as the Company's Vice President,
Administration since November 1995. Prior to joining the Company, Mr.
Lindquist served as County Assessor for St. Louis County, Minnesota, from May
1984 to November 1995.
Robert J. Korkowski has been a director of the Company since May 1993.
From 1989 to 1996 Mr. Korkowski was the Senior Vice President of Finance and a
Director of Opus Corporation, a privately held real estate developer and
construction company. From 1986 to 1989 Mr. Korkowski was the Vice President
and Chief Financial Officer of National Computer Systems, Inc., a publicly held
information system company based in Minneapolis, and from 1974 to 1986 he was
Executive Vice President and Chief Financial Officer of G. Heileman Brewing
Company.
Marshall S. Geller has been a director of the Company since May 1993
and Vice Chairman of the Board since August 1994. Mr. Geller is currently the
Chairman, CEO, and Founding Partner of Geller & Friend Capital Partners, Inc.,
which was formed in November 1995. From 1991 to October 1995, Mr. Geller was
the Senior Managing Partner and founder of Golenberg and Geller, Inc., a
merchant banking investment company. From 1988 to 1990, he was Vice-Chairman
of Gruntal & Co., a New York Stock Exchange investment banking firm. Prior to
1988, Mr. Geller spent 21 years with Bear Stearns & Co., an investment banking
firm, where he served as senior managing director of the Los Angeles, San
Francisco, Chicago and Hong Kong offices and specialized in the areas of
corporate finance, public finance, and institutional equities and debt.
Marshall Geller formerly served as Interim Co-Chairman of Hexcel Corporation
and is still currently on the Board of Directors. Mr. Geller was also Interim
President and Chief Operating Officer of Players, Inc., and now serves on their
board and is Chairman of their Investment Committee. Mr. Geller also serves on
the Boards of the following companies: Ballantyne of Omaha, Inc.,
Styles-on-Video, Inc., Dycam, Inc. and Cabletel Communications Corporation.
Paul D. Tosetti has been a director of the Company since August 1996.
Mr. Tosetti is a partner in the Los Angeles office of the law firm of Latham &
Watkins, a position he has held since 1989. Mr. Tosetti has been associated
with Latham & Watkins since 1982, and is Chairman of that firm's Mergers and
Acquisitions group and a member of its Corporate Department. His principal
areas of practice specialization are mergers and acquisitions and corporate
finance.
4
<PAGE> 5
John Workman has been a director of the Company since August 1995.
Mr. Workman has been Executive Vice President, Chief Financial Officer and
Assistant Secretary of Montgomery Ward Holding Corp. since January 1994. Prior
thereto, he served as Senior Vice President, Chief Financial Officer and
Assistant Secretary of Montgomery Ward Holding Corp. since August 1992 and Vice
President and Assistant Secretary since May 1992. Mr. Workman has been
Executive Vice President and Chief Financial Officer of Montgomery Ward since
January 1994 and served as Senior Vice President and Chief Financial Officer of
Montgomery Ward from August 1992 to January 1994. Prior thereto, he served as
Vice President and Corporate Controller of Montgomery Ward from January 1991
through August 1992 and Corporate Controller of Montgomery Ward from August
1988 through January 1991. Mr. Workman has announced his intention to resign
from Montgomery Ward Holding Corp. While his departure date has not been
determined, it is likely not to be before the third quarter of 1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of the Company's common stock to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of the Company. Officers, directors
and greater than ten percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they file. To the
Company's knowledge, based solely on review of the copies of such reports
furnished to the Company during fiscal 1997, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten percent
beneficial owners were complied with, except with respect to Paul D. Tosetti, a
director of the Company, and Gary Kazmer, a former executive officer of the
Company, each of who filed one late report.
5
<PAGE> 6
ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain summary information with
respect to compensation paid or accrued during the fiscal years ended January
31, 1997, 1996 and 1995 for the Company's Chief Executive Officer and each of
the Company's four other most highly compensated executive officers who were
serving as executive officers on January 31, 1997, and whose salary and bonus
exceeded $100,000 during fiscal year ended January 31, 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
-------------------------------------------------- ------------
Awards
Securities
Fiscal Other Annual Underlying
Name and Principal Position Year Salary Bonus Compensation (1) Options/SARs
- --------------------------- ---- ------ ----- ---------------- ------------
($) ($) ($) (#)
<S> <C> <C> <C> <C> <C>
Robert L. Johander 1997 237,500 -- 6,000 --
Chief Executive Officer 1996 181,442 -- 6,000 --
and Chairman of the Board 1995 125,000 -- 6,000 --
Nicholas M. Jaksich 1997 237,500 -- 6,000 --
Chief Operating Officer 1996 165,635 -- 6,000 --
and President 1995 115,000 -- 6,000 --
Edward A. Karr 1997 153,125 -- 5,400 --
Executive Vice President, 1996 134,231 -- 5,400 100,000
Merchandising & Programming 1995 125,000 -- 3,150 50,000
Stuart R. Romenesko 1997 123,654 30,000 5,400 10,000
Senior Vice President Finance, 1996 115,000 -- 5,400 40,000
Chief Financial Officer, Treasurer 1995 83,333 -- 2,700 30,000
and Assistant Secretary
Michael L. Jones 1997 120,000 -- 5,400 --
Vice President, 1996 120,000 -- 5,400 --
Television Broadcasting 1995 108,462 -- 3,150 115,000
</TABLE>
- --------------------------------------
(1) Automobile allowance.
6
<PAGE> 7
OPTION GRANTS DURING FISCAL YEAR ENDED JANUARY 31, 1997
The following table sets forth information with respect to options to
purchase shares of the Company's common stock granted during the fiscal year
ended January 31, 1997 to each of the executive officers in the Summary
Compensation Table above. No stock appreciation rights ("SARs") were granted
to any of the persons listed on the table below during fiscal 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION> Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options/ Price Appreciation for
Underlying SARs Granted Exercise or Option Term (1)
Options/SARs to Employees Base Price Expiration ---------------------------
Name Granted (#) in Fiscal Year (3) ($/Sh) Date (2) 5% ($) 10% ($)
- ---- ----------- ------------------ ------ -------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Johander -- 0% -- -- -- --
Nicholas M. Jaksich -- 0% -- -- -- --
Edward A. Karr -- 0% -- -- -- --
Stuart R. Romenesko 10,000 2.2% $5.75 9/4/06 $36,161 $91,640
Michael L. Jones -- 0% -- -- -- --
</TABLE>
(1) The amounts shown in these columns are the result of calculations at
assumed annual rates required by the Securities and Exchange
Commission and are not intended to forecast possible future
appreciation, if any, of the price of the Company's common stock.
Actual gains, if any, on stock option exercises are dependent on the
future performance of the common stock and overall stock market
conditions. The amounts reflected in this table may not necessarily
be achieved. The Company did not use an alternative formula for a
grant date valuation, as the Company is not aware of any formula that
will determine with reasonable accuracy a present value based on
future unknown or volatile factors.
(2) Options were granted at an exercise price equal to the fair market
value of the Company's common stock on the date of grant and vest
over a five year term in increments of 20% each on the anniversary of
the date of grant. Such options will expire five years after
vesting.
(3) Percentage calculations in this column are based solely on the number
of options granted to employees of the Company and do not take into
account options granted to non-employee consultants or directors of
the Company.
7
<PAGE> 8
OPTION EXERCISES AND YEAR-END OPTION VALUE TABLE
The following table sets forth information with respect to the
unexercised options held by each of the executive officers named in the Summary
Compensation Table above, as of January 31, 1997. None of such persons
exercised any options during fiscal 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
at January 31, 1997 (#) at January 31, 1997 ($)
----------------------- -----------------------
(Exercisable/ (Exercisable/
Name Unexercisable) Unexercisable) (1)
------------------------------------------------------------ ---------------------
<S> <C> <C>
Robert L. Johander 450,000 / 300,000 0 / 0
Nicholas M. Jaksich 450,000 / 300,000 0 / 0
Edward A. Karr 140,000 / 110,000 2,500 / 3,750
Stuart R. Romenesko 45,000 / 35,000 0 / 0
Michael L. Jones 115,000 / 0 0 / 0
</TABLE>
(1) The dollar amount represents the positive spread between the exercise
price of the options and the closing price per share of the Company's
common stock on the Nasdaq National Market of $4.625 on January 31, 1997.
8
<PAGE> 9
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with each of Robert L.
Johander and Nicholas M. Jaksich which expire on January 31, 1999. Effective
July 1, 1995, the annual base salaries for Messrs. Johander and Jaksich were
$220,000 and $200,000 respectively. Messrs. Johander and Jaksich are eligible
to receive discretionary bonuses, as determined by the Board of Directors.
Their base salaries will be increased by 5% annually, or by a higher amount if
the Company achieves certain pre-tax net income goals. The base salaries of
both Messrs. Johander and Jaksich were increased to $237,500 on January 31,
1996, due to the Company achieving minimum pre-tax income of at least $7.25
million, for the fiscal year ended on such date (the "Fiscal 1996 Net Income
Goals"). The base salaries of both Messrs. Johander and Jaksich were increased
to $293,750 on January 31, 1997, due to the Company achieving minimum pre-tax
income of at least $8.5 million, for the fiscal year ended on such date (the
"Fiscal 1997 Net Income Goals"). The base salaries of Messrs. Johander and
Jaksich will be increased to $350,000 on January 31, 1998 if the Company
achieves minimum pre-tax income of at least $11.75 million in the fiscal year
ending on such date (together with the fiscal 1996 and 1997 Net Income Goals,
the "Net Income Goals"). Messrs. Johander and Jaksich cannot be terminated
except for disability or cause. Messrs. Johander and Jaksich have agreed not
to compete in the television home shopping business or in any other business in
which the Company has engaged during the six months prior to the employee's
termination, during the term of the employment agreement and for the period
ending (i) one year after the expiration of the employment agreement and any
extension thereof, (ii) two years after termination for cause due to a willful
failure to perform under the terms of the employment agreement, or (iii) five
years after termination for any other reason other than cause, including the
employee's voluntary termination.
In September 1993 and in connection with entering into employment
agreements with Messrs. Johander and Jaksich, the employment agreements
provided for the grant to each of Messrs. Johander and Jaksich of options to
purchase 500,000 shares of common stock at $15.00 (in excess of the then fair
market value) per share exercisable until January 31, 2002 and 500,000 shares
of common stock at $25.00 (in excess of the then fair market value) per share
exercisable until January 31, 2005 on each of January 31, 1995, 1996, 1997,
1998 and 1999 if the Company achieved certain pre-tax income goals, as defined.
In the event that the Company fails to achieve a Net Income Goal in any year,
Messrs. Johander and Jaksich will vest in the options attributable to such
"missed" year if in a subsequent year the Company's pre-tax net income is
greater than or equal to such subsequent year's Net Income Goal plus the Net
Income Goal for the missed year. In August 1995, pursuant to an independent
compensation study, the Compensation Committee, consisting of non-employee
Directors, recommended and with the approval of the Board of Directors,
approved and repriced the exercise price of the granted options with original
exercise prices of $15.00 and $25.00 per share to $8.50 and $10.50 per share
(in excess of the then fair market value), respectively. In addition, the
number of shares available per each respective grant was reduced from 500,000
to 375,000 options and the options vest and become exercisable at the earlier
of meeting the Net Income Goal or in September 2003, assuming that either of
Messrs. Johander or Jaksich is still an employee of the Company. The Board of
Directors repriced the exercise price of the options granted because the Board
of Directors believed that, due to the decline in the Company's stock price
since the grant of the options, the options did not provide sufficient
long-term stock based incentive and such incentive would be provided by the
repricings. The Board of Directors believes that the option grants with
deferred vesting to executive officers are important in retaining executive
officers and providing them with incentives consistent with the shareholders'
objectives for appreciation in the value of the Company's stock.
9
<PAGE> 10
On September 1, 1995 the Company entered into an employment agreement with
Edward A. Karr (the "Karr Employment Agreement") and continuing on a full-time
basis for a period of thirty-six (36) months. Pursuant to the Karr Employment
Agreement, the Company has agreed to pay Mr. Karr $150,000 annually, reimburse
him for reasonable and necessary business expenses and granted him options to
purchase 100,000 shares of the Company's common stock. Mr. Karr has agreed not
to compete with the Company in the television home shopping business for a
period of thirty-six (36) months following termination of Mr. Karr's employment
by the Company.
DIRECTOR COMPENSATION
For the fiscal year ended January 31, 1997, the Company paid non-employee
directors (except the Montgomery Ward nominee, Mr. Workman) a $20,000 annual
retainer (paid quarterly on a pro rata basis), plus $1,000 for each board of
directors and committee meeting attended, and $750 for each board of directors
and committee meeting in which such director participated by telephone. The
Company also reimburses directors for costs and expenses they incur to attend
board of directors and committee meetings. The Company does not intend to pay
any cash compensation or issue any stock options to the director named by
Montgomery Ward. On September 4, 1996 the Company granted Mr. Paul D.Tosetti
options to purchase 25,000 shares of the Company's common stock at an exercise
price of $5.75 per share. Such options vest on September 4, 1997 and expire on
September 4, 2002. Effective March 3, 1997, to reflect the outside directors
increasing role in evaluating strategic opportunities intended to enhance
shareholder value, the annual retainer to be paid to Messrs. Geller and
Korkowski was increased to $125,000 and $30,000, respectively, and the Company
granted Messrs. Geller, Korkowski and Tosetti options to purchase 37,500,
75,000 and 37,500 shares, respectively, of the Company's common stock at an
exercise price of $4.625 per share. Such options vest the earlier of (i) the
eighth anniversary of the date of grant, (ii) one-third (1/3) each when the
common stock has a closing (last trade) price for twenty consecutive trading
days at or above $6.25, $7.25 and $8.25, respectively, provided that such
vesting shall be limited to one-third (1/3) in any twelve-month period measured
by the anniversary date of the date of the option grant, or (iii) when the
common stock has a closing (last trade) price for sixty consecutive trading
days at or above $8.25.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, the Company's Compensation Committee consisted of two
non-employee directors, Paul D. Tosetti and Marshall S. Geller. Mr.
Tosetti is a partner at Latham & Watkins, a law firm that has provided legal
services to the Company.
10
<PAGE> 11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of May 19, 1997, certain information
regarding the beneficial ownership of securities of the Company by (i) each
person known by the Company to be the beneficial owner of more than 5% of the
outstanding shares, (ii) each of the directors of the Board of Directors of the
Company, (iii) the Chief Executive Officer and each of the executive officers
named in the Summary Compensation Table, and (iv) all directors and executive
officers of the Company as a group. Each shareholder possesses sole voting and
investment power with respect to the shares listed opposite the holder's name
except as otherwise indicated herein. As of May 19, 1997 there were 27,976,112
shares of common stock outstanding.
<TABLE>
<CAPTION>
Number of Shares
Name and Address Beneficially Owned Percent
- ---------------- ------------------ --------
<S> <C> <C>
Montgomery Ward & Co, Incorporated (1) 5,122,143 18.31
Montgomery Ward Plaza
Chicago, IL 60671
Snyder Capital Management, Inc. (2) 3,222,000 11.52
350 California Street
San Francisco, CA 94104
Wellington Management Co LLP (3) 1,729,200 6.18
75 State Street
Boston, MA 02109
Merchant Partners L P (4) 1,526,414 5.46
4200 Piney Grove Road
Glyndon, MD 21071
Robert L. Johander (5) 1,656,911 5.83
6740 Shady Oak Road
Eden Prarie, MN 55344
Nicholas M. Jaksich (6) 1,607,822 5.66
6740 Shady Oak Road
Eden Prarie, MN 55344
Robert J. Korkowski (7) 222,066 *
Marshall S. Geller (8) 169,600 *
Edward A. Karr (9) 150,000 *
Michael L. Jones (10) 115,000 *
Stuart R. Romenesko (11) 45,000 *
Paul D. Tosetti - *
John Workman (12) - *
All directors and executive officers as a 3,974,399 13.50
group (eleven persons) (11) (13)
</TABLE>
*Less than 1%
- -------------------------------
11
<PAGE> 12
(1) Based on information contained in Amendment No. 4 of Schedule 13 D of
Montgomery Ward & Co, Incorporated ("Montgomery Ward") and Montgomery
Ward Holding Corp., Bernard F. Brennan, Chairman and Chief Executive
Officer of Montgomery Ward, Montgomery Ward Direct L.P., and MW Direct
General, Inc. (collectively, the "MW Filers"), dated September 28,
1996. Includes unexercised warrants to purchase 3,842,143 shares of the
Company's common stock that are exercisable within 60 days. The
Schedule 13 D filed by the MW Filers states that, pursuant to Rule 13d -
3 (d) (1) (i) promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), the MW Filers through their relationship with
Montgomery Ward may be deemed to own such shares and warrants
beneficially owned by Montgomery Ward.
(2) Based upon information contained in the Schedule 13G of Snyder Capital
Management Inc. dated February 14, 1997.
(3) Based upon information contained in the Schedule 13G of Wellington
Management Co LLP dated February 10, 1997.
(4) Based upon information contained in the Schedule 13G of Merchant
Partners LP dated February 14, 1997.
(5) Such shares include 437,632 shares beneficially owned by Mr. Johander in
his capacity as General Partner to the Robert L. Johander Limited
Partnership. Includes 7,200 shares owned by Mr. Johander's children, as
to which shares Mr. Johander disclaims beneficial ownership. Includes
450,000 shares that are exercisable or will become exercisable within 60
days.
(6) Such shares include 423,632 shares beneficially owned by Mr. Jaksich in
his capacity as General Partner to the Nicholas M. Jaksich Limited
Partnership. Includes 11,060 shares owned by Mr. Jaksich's child, as to
which shares Mr. Jaksich disclaims beneficial ownership. Includes
450,000 shares that are exercisable or will become exercisable within
60 days.
(7) Includes 100,000 shares that are exercisable or will become exercisable
within 60 days. Includes 2,250 shares owned by Mr. Korkowski's child,
as to which shares Mr. Korkowski disclaims beneficial ownership.
(8) Includes 160,000 shares that are exercisable or will become exercisable
within 60 days.
(9) Includes 140,000 shares that are exercisable or will become exercisable
within 60 days.
(10) Represents 115,000 shares that are exercisable or will become
exercisable within 60 days.
(11) Represents 45,000 shares that are exercisable or will become exercisable
within 60 days.
(12) Does not include shares or warrants that are beneficially owned by
Montgomery Ward. Mr. Workman is a director designated by Montgomery
Ward and is an executive officer of Montgomery Ward.
(13) Includes 1,467,000 shares that are issuable upon exercise of stock
options exercisable or will become exercisable within 60 days and 20,510
shares as to which the reporting persons disclaim beneficial ownership.
12
<PAGE> 13
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
MANAGEMENT INDEBTEDNESS
As of May 19, 1997, the Company had loaned $225,000 to Robert L. Johander,
the Company's Chief Executive Officer and Chairman, in the form of four
promissory notes. The promissory notes bear interest at 5.63% and are due one
year after each date of issuance. Such loans were utilized by Mr. Johander for
personal purposes. As collateral for the promissory notes, Mr. Johander has
pledged common stock of the Company owned directly by Mr. Johander. As of May
19, 1997, principal and accrued interest thereon of approximately $226,000 was
due the Company by Mr. Johander and such amount represents the largest
aggregate amount of indebtedness outstanding since the beginning of the
Company's last fiscal year.
As of May 19, 1997, the Company had loaned $550,000 to Nicholas M. Jaksich,
the Company's President and Chief Operating Officer, in the form of two
promissory notes. The first promissory note of $50,000 in principal was due May
15, 1997, bears interest at 6.80% and has been extended until May 15, 1998. Mr.
Jaksich has pledged stock as collateral against the note. The second promissory
note of $500,000 in principal was due November 20, 1996, bears interest at 5
7/8% and has been extended until November 20, 1997. Such loans were utilized by
Mr. Jaksich in the purchase of his home. The promissory notes are secured by a
security interest in certain shares of common stock of the Company owned by Mr.
Jaksich and by a Mortgage on certain real property. As of May 19, 1997,
principal and accrued interest thereon of approximately $600,000 was due the
Company by Mr. Jaksich and such amount represents the largest aggregate amount
of indebtedness outstanding since the beginning of the Company's last fiscal
year.
OTHER RELATIONSHIPS
Paul D. Tosetti, a director of the Company, is a partner at Latham &
Watkins, a law firm that has provided legal services to the Company.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized on May 28,
1997.
ValueVision International, Inc.
(registrant)
By: /s/ Stuart R. Romenesko
------------------------------
Stuart R. Romenesko
Senior Vice President Finance and Chief Financial
Officer
(Principal Financial and Accounting Officer)
14
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 10-K/A No. 1, into the Company's previously
filed Registration Statements File Nos. 33-60549, 33-68646, 33-68648, 33-86616,
33-93006 and 33-96950.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
May 28, 1997
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