-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JzdjeEIeFosG6neST3vPIyNVF7PKAFxroWZ0HE8AxNMPLA5KpGRhNcRydFu3x2/r icvq0QhpOYQnOF/2/Z3aRw== 0000899140-05-000130.txt : 20050214 0000899140-05-000130.hdr.sgml : 20050214 20050214164418 ACCESSION NUMBER: 0000899140-05-000130 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050214 DATE AS OF CHANGE: 20050214 GROUP MEMBERS: DANIEL S. LOEB GROUP MEMBERS: THIRD POINT OFFSHORE FUND, LTD. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SALTON INC CENTRAL INDEX KEY: 0000878280 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC HOUSEWARES & FANS [3634] IRS NUMBER: 363777824 STATE OF INCORPORATION: DE FISCAL YEAR END: 0626 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42085 FILM NUMBER: 05611372 BUSINESS ADDRESS: STREET 1: 1955 FIELD COURT STREET 2: - CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 8478034600 MAIL ADDRESS: STREET 1: 1955 FIELD COURT CITY: LAKE FOREST STATE: IL ZIP: 60045 FORMER COMPANY: FORMER CONFORMED NAME: SALTON MAXIM HOUSEWARES INC DATE OF NAME CHANGE: 19930328 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Third Point LLC CENTRAL INDEX KEY: 0001040273 IRS NUMBER: 133922602 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2122247400 MAIL ADDRESS: STREET 1: 12 EAST 49TH ST STREET 2: 28TH FL CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: THIRD POINT MANAGEMENT CO LLC DATE OF NAME CHANGE: 19970602 SC 13D/A 1 t2774611.txt AMENDMENT NO. 2 TO SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Amendment No. 2 Under the Securities Exchange Act of 1934* Salton, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.01 par value - -------------------------------------------------------------------------------- (Title of Class of Securities) 795757103 - -------------------------------------------------------------------------------- (CUSIP Number of Class of Securities) Daniel S. Loeb Third Point LLC 360 Madison Avenue, 24th Floor New York, NY 10017 (212) 224-7400 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Jack H. Nusbaum, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 February 14, 2005 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Schedule) 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 ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-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 240.13d-7 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). SCHEDULE 13D - ------------------- ----------------- CUSIP No. 795757103 Page 1 of 6 Pages - ------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Daniel S. Loeb - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,025,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 1,025,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,025,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ----------- -------------------------------------------------------------------- SCHEDULE 13D - ------------------- ----------------- CUSIP No. 795757103 Page 2 of 6 Pages - ------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point LLC (f/k/a Third Point Management Company L.L.C. I.D. #13-3922602 - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 1,025,000 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 1,025,000 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 1,025,000 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.0% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- -------------------------------------------------------------------- SCHEDULE 13D - ------------------- ----------------- CUSIP No. 795757103 Page 3 of 6 Pages - ------------------- ----------------- - ----------- -------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Third Point Offshore Fund, Ltd. - ----------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - ----------- -------------------------------------------------------------------- 3 SEC USE ONLY - ----------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS* AF - ----------- -------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - --------------------- --------- ------------------------------------------------ 7 SOLE VOTING POWER 0 --------- ------------------------------------------------ NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 602,800 OWNED BY --------- ------------------------------------------------ EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON WITH 0 --------- ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 602,800 - ----------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 602,800 - ----------- -------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - ----------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.3% - ----------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - ----------- -------------------------------------------------------------------- This Amendment No. 2 to Schedule 13D (this "Amendment No. 2") is being filed on behalf of Third Point LLC, a Delaware limited liability company formerly known as Third Point Management Company L.L.C. (the "Management Company"), Third Point Offshore Fund, Ltd., a Cayman Islands limited liability exempted company (the "Offshore Fund"), and Daniel S. Loeb, an individual ("Mr. Loeb" and, together with the Offshore Fund and the Management Company, the "Reporting Persons"). This Amendment No. 2 relates to the Common Stock, par value $.01 per share, of Salton, Inc., a Delaware corporation (the "Company"), and amends the 13D filed by the Reporting Persons with respect to the Company on September 20, 2004 (together with amendments filed prior to this Amendment No. 2, the "Schedule 13D"). Unless the context otherwise requires, references herein to the "Common Stock" are to such common stock of the Company. The Management Company is the investment manager or adviser to a variety of hedge funds and managed accounts (such funds and accounts, collectively, the "Funds"). The Funds directly own the Common Stock to which this Amendment No. 2 relates, and the Reporting Persons may be deemed to have beneficial ownership over such Common Stock, by virtue of the authority granted to the Management Company by the Funds to vote and to dispose of the securities held by the Funds. Item 4. Purpose of Transaction. Item 4 of the Schedule 13D is hereby amended and restated as follows: The purpose of the acquisition of the shares of Common Stock held by the Funds is for investment. The Reporting Persons may cause the Funds to make further acquisitions of Common Stock from time to time or to dispose of any or all of the shares of Common Stock held by the Funds at any time. As further detailed in a letter, dated February 14, 2005, from Mr. Loeb as managing member of the Management Company, to the Board of Directors of the Company (a copy of which is attached hereto as Exhibit 1), Mr. Loeb (on behalf of the Reporting Persons) has suggested that, among other things, Mr. Leonhard Dreimann, Chief Executive Officer of the Company, be terminated and replaced. The Reporting Persons are engaged in the investment business. In pursuing this business, the Reporting Persons analyze the operations, capital structure and markets of companies, including the Company, on a continuous basis through 4 analysis of documentation and discussions with knowledgeable industry and market observers and with representatives of such companies (often at the invitation of management). From time to time, one or more of the Reporting Persons may hold discussions with third parties or with management of such companies in which the Reporting Persons may suggest or take a position with respect to potential changes in the operations, management or capital structure of such companies as a means of enhancing shareholder value. Such suggestions or positions may relate to one or more of the transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Exchange Act, including, without limitation, such matters as disposing of or selling all or a portion of the company or acquiring another company or business, changing operating or marketing strategies, adopting or not adopting certain types of anti-takeover measures and restructuring the company's capitalization or dividend policy. Except as set forth above, and in the letter attached hereto as Exhibit 1, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions required to be described in Item 4 of Schedule 13D. Each of the Reporting Persons may, at any time, review or reconsider its position with respect to the Company and formulate plans or proposals with respect to any of such matters, but has no present intention of doing so. Item 7. Material to be Filed as Exhibits. 1. Letter from the Management Company to the Board of Directors of the Company, dated February 14, 2005. [THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.] 5 SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: February 14, 2005 THIRD POINT LLC By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Managing Member THIRD POINT OFFSHORE FUND, LTD. By: /s/ Daniel S. Loeb ------------------------------ Name: Daniel S. Loeb Title: Director /s/ Daniel S. Loeb ------------------------------ Daniel S. Loeb EX-1 3 t2775852.txt LETTER [Third Point LLC] February 14, 2005 VIA FACSIMILE & U.S. MAIL Board of Directors c/o Mr. Leonhard Dreimann, Chief Executive Officer Salton, Inc. 1955 Field Court Lake Forest, IL 60045 Facsimile (847) 803-1186 Dear Sirs: As you know, Third Point LLC is one of the two largest shareholders of Salton, Inc. ("Salton" or the "Company") (NYSE: SFP). We also hold a significant interest in the Company's public debt issues. In the short time that we have owned the Company's stock and bonds, we have seen the shares rise briefly in the mistaken belief that the Company would successfully restructure its debt burden, and fall to an all-time low for this century of $3.44. We have seen the Company's corporate rating downgraded in November to "CCC," and the rating for its subordinated debt lowered to "CC," all of which suggests that the Company is on financial life support. In the most recent quarterly results announced Wednesday, February 9th, the Company reported yet another "miss" on both lower revenues and poor margins. Short interest is one of the few benchmarks that seem to remain stable, with nearly 50% of the shares lent out to speculators who are betting that Mr. Dreimann will lead this Company into bankruptcy. Meanwhile, the Company's proposed restructuring, which has been in the works for over a year, remains a chimera. What is most astounding about the Company's apparent death spiral is Mr. Dreimann's inexplicably insouciant attitude and the fact that he remains in charge. His tone and demeanor in our meeting last summer and on the conference call seemed to me to be one of denial and arrogance. I was disappointed that he refused to allow me to speak on the Company's conference call, but I might have forgiven him had he called me personally to apologize rather than having his lackey, Ken Sgro, insult my intelligence by blaming the slight on a "conference call administrator malfunction." The conference call debacle pales in comparison to what I witnessed last summer when I attended the U.S. Open tennis final. You can only imagine my consternation when I looked around the stadium and saw the Salton name emblazoned all around the interior of the stadium walls next to such robust companies as IBM, JP Morgan and Mass Mutual. I had to wonder how much precious capital had been squandered in such a poorly conceived marketing scheme to promote the Salton name when the Company was in such dire financial straits. My bewilderment quickly turned to anger when I saw the crowd seeking autographs from the Olsen twins just below the private box that seemed to be occupied by Mr. Dreimann and others who were enjoying the match and summer sun while hobnobbing, snacking on shrimp cocktails and sipping chilled Gewurztraminer. While Mr. Dreimann hobnobs at such social events and is driven around in a chauffeured limousine -- I can only assume he has a chauffeur paid for by the Company; how else can one explain the $52,966 annual car allowance disclosed in the Company's proxy statement? -- Salton's shareholders and bondholders suffer the consequences. What is equally shocking as Mr. Dreimann's poor management, behavior and the fact that he is awarded anything more than subway tokens for his transportation needs is that this Board of Directors has sat idly by while he lays waste to this Company. In addition to the car allowance, how can the Board's compensation committee possibly justify granting Mr. Dreimann's exorbitant $600,000 annual salary? One would assume that only a Board of Directors with no vested interest would look on while a CEO wastes corporate assets, is accused of irregularities with respect to the Company's distribution channel and is accused of trying to bully customers into engaging in uncompetitive behavior with respect to pricing. On the contrary, Centre Partners holds a $40 million preferred stock investment in the Company. Unfortunately for Centre, these preferred shares convert at a price of $17.00 per share, which was a very substantial premium to start with and is an astronomical 494% premium to Friday's closing price. Nevertheless, one would think that Centre would want to protect the value of its preferred shares and perform its fiduciary duty, which in our opinion would involve relieving Leonhard Dreimann of his management duties as well as canceling his chauffeur-driven limousine. In the course of my investigation into corporate governance matters at Salton I decided it would be worthwhile to understand Centre's operating philosophy and culture and to see why Centre managing directors, Robert A. Bergmann and Bruce A. Pollack, have not taken swift action to terminate the Company's bungling CEO. What struck me about Centre's website (www.centrepartners.com) was the wishy washy tone replete with business school jargon, buzz-words and cliches but little substance. Two examples are below: "Our reputation rests firmly on the integrity, commitment and intelligence of our professionals." "Responsiveness has always been an essential, core value of our firm. Whenever we are called by our partners, we react quickly to provide counsel or services they need, and stay by their side through challenging times." With all due respect to the professional staff at Centre, how intelligent was making a $40 million investment in Salton at a very substantial conversion premium, which could all be lost in a "cram down" should the Company have to file for bankruptcy? Secondly, one can only wonder how responsive Centre has actually been in light of the value destruction. I looked through the entire website and found it curious that there was no mention of holding management accountable or of Centre's own investment performance, which I imagine is probably pretty mediocre and inferior to that of the firm I manage. Third Point's culture differs from Centre's in our emphasis on performance, money making and accountability, in stark contrast to Centre's affable "Mr. Rogers" approach to investing. I suppose that if Third Point were to have a website, rather than the feel-good background of two shaking hands, we would likely depict a well-worn boot colliding with the backside of an incompetent manager. It is admirable that Centre describes itself on its home page as a "firm with a middle market focus that seeks to make friendly acquisitions and equity investments," but the time for friendship with this CEO should end now. We at Third Point demand that Leonhard Dreimann be terminated immediately and replaced by either David Sabin or William Rue as interim CEO until such time as a qualified executive can be found to lead the Company back to the level of performance and prosperity that we believe is possible under new leadership. Sincerely, /s/ Daniel S. Loeb Daniel S. Loeb Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----