-----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, VdxlaO+WhG9D7fYQXyWSu9K3Xx9JyMqEGchzUWdooKD39DGz8hZ+imygkrGWC5fO AqIefFCektcerLzn5m3fxg== 0001047469-98-038470.txt : 19981029 0001047469-98-038470.hdr.sgml : 19981029 ACCESSION NUMBER: 0001047469-98-038470 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981028 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARMONY HOLDINGS INC CENTRAL INDEX KEY: 0000878246 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 954333330 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 000-19577 FILM NUMBER: 98732269 BUSINESS ADDRESS: STREET 1: 1990 WESTWOOD BLVD STREET 2: SUITE 310 CITY: LOS ANGELES STATE: CA ZIP: 90025-4676 BUSINESS PHONE: 3104467700 MAIL ADDRESS: STREET 1: 724 FIRST STREET NORTH CITY: MINNEAPOLIS STATE: MN ZIP: 55401 10-K405/A 1 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K/A (Mark One) [x] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year ended June 30, 1998; or [-] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period from ______ to ______ Commission File Number 1-19577 HARMONY HOLDINGS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 95-4333330 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 724 First Street North, Fourth Floor 55401 Minneapolis, Minnesota (Address of Principal Executive (Zip Code) Offices) Registrant's Telephone Number, Including Area Code:(612) 338-3300 Securities Registered Pursuant to Section 12(b) of the Act: NONE Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $.01 par value(Title of Class) Indicate by check mark whether the Registrant (1) has 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 pursuant 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. [X] State the aggregate market value of the voting stock held by non-affiliates of the Registrant (based upon the closing price of such stock as reported on the National Association of Securities Dealers Automated Quotation System as of October 23, 1998):Common Stock, $.01 par value; $4,517,123 Indicate the number of shares outstanding of each of the Registrant's classes of Common Stock, as of the latest practicable date. Class Outstanding at October 23, 1998 Common Stock, par value 7,237,429 shares $.01 per share PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS The information relating to the Company's executive officers as of October 5, 1998 is contained in the following table:
Name Age Position ----- --- -------- Christopher T. Dahl 55 Chairman of the Board and Chief Executive Officer Richard W. Perkins 67 Director William E. Cameron 53 Director Gerald Germain 56 Director William M. Toles 51 Director James G. Gilbertson 37 Chief Operating Officer and Chief Financial Officer Lance W. Riley 47 Secretary and General Counsel
CHRISTOPHER T. DAHL has been Chairman of the Company since July 22, 1997 and Chief Executive Officer since November 3, 1997. Since its inception in February, 1990, Mr. Dahl has been the President, Chief Executive Officer and Chairman of the Board of Directors of Children's Broadcasting Corporation ("CBC"), a publicly traded company and the Company's largest shareholder. He is also Chairman and Chief Executive Officer of Community Airwaves Corporation ("CAC"), a company that owns and operates radio stations in Hawaii. Mr. Dahl serves as the managing partner of Radio Management, L.L.C. ("RMLLC"), a company that provides corporate, legal, accounting and financial services to the Company and CBC. From 1969 to 1979, he was the founder and President of a group of companies involved in photo finishing, retail photo sales, home sewing notions, toy distribution and retail craft stores. He was employed by Campbell-Mithun and Knox Reeves Advertising from 1965 through 1969. RICHARD W. PERKINS has been a director of the Company since July 22, 1997. Mr. Perkins has also been a director of CBC since its inception. For more than five years, Mr. Perkins has been President and Chief Executive Officer of Perkins Capital Management, Inc., a registered investment advisor. Mr. Perkins is also Partner of RMLLC, as well as a director of the following publicly held companies: Bio-Vascular, Inc., a medical products manufacturer; CNS, Inc., a consumer products manufacturer; Lifecore Biomedical, Inc., a medical device manufacturer; Nortech Systems, Inc., an electronic sub-systems manufacturer; Eagle Pacific Industries, Inc., a manufacturer of plastic pipe; and Quantech LTD., a developer or immunological tests. WILLIAM E. CAMERON has been a director of the Company since July 22, 1997. Mr. Cameron has also been a director of CBC since April 2, 1998. For more than five years, Mr. Cameron has been Head of International Business Development for Universal Health Communications, the largest medical/health/wellness video library in the world. GERALD GERMAIN has been a director of the Company since May 13, 1998. For the past four years, Mr. Germain has been recognized as a television commercial production industry authority on a large variety of financial and operations issues. From 1984 to 1994, he served as Chief Financial Officer and, towards the end, as Vice Chairman of Doyle Dane Bernbach (now known as DDB Needham). In 1978, Mr. Germain became Chief Financial Officer of Compton Communications, Inc. (now known as Saatchi & Saatchi Worldwide) and became its Executive Vice President in 1982. In 1967, Mr. Germain was also a staff accountant with the advertising agency D'Arcy, Masius, Benton & Bowles, where he eventually became Senior Vice President, Worldwide Treasurer. Mr. Germain graduated from Brooklyn College and received a J.D. degree from the New York University of Law School. WILLIAM M. TOLES has been a director of the Company since July 22, 1997. For more than five years, Mr. Toles has been the President and Chief Executive Officer of Tol-O-Matic, a privately held manufacturer of motion control products. JAMES G. GILBERTSON has served as the Company's Chief Operating Officer since November, 1997, as of October 2, 1998 as the Company's Chief Financial Officer. Mr. Gilbertson has also served as CBC's Chief Operation Officer since April 1996 and its Chief Financial Officer since July 1992. From June 1988 to July 1992, he was the Chief Financial Officer of Parker Communications, which operated a group of radio stations. From 1985 to June 1988, he was Controller of the radio division of Palmer Communications located in Des Moines, Iowa. Prior to joining Palmer Communications, Mr. Gilbertson was practicing certified public accountant with the firm of Ernst & Young LLP. Mr. Gilbertson received a B.A. from the University of Iowa and an MBA from the Carlson School of Management at the University of Minnesota. LANCE W. RILEY became Secretary of the Company in November, 1997, and General Counsel of the Company in July, 1998. Mr. Riley is also Secretary and General Counsel of CBC, and has been practicing law since 1977. Mr. Riley held the position of Chairman of the Communications Law Section of the Minnesota State Bar Association from 1990 to 1994. He is also Of Counsel with the firm of Hessian & McKasy, P.A. (formerly known as Hessian, McKasy & Soderburg, P.A.), located in Minnesota, since 1994. Prior to joining CBC, Mr. Riley was partner in the firm of Courey, Albers, Gilbert and Riley, P.A. Mr. Riley received B.A., Magna cum laude, from Hamline University and a J.D., cum laude, from the University of Minnesota School of Law. Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and Directors, and persons who beneficially own more than 10% of the Company's Common Stock, to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Executive officers, Directors and beneficial owners of more than 10% of the Company's Common Stock are required by the Commission's regulations to furnish the Company with copies of all Section 16(a) forms that they file. Based solely on a review of the copies of such forms furnished to the Company, or written representations that no reports on Form 5 were required, the Company believes that for the period from July 1, 1997 through June 30, 1998, all of its executive officers, Directors and beneficial owners of more than 10% of the Company's Common Stock complied with Section 16(a) filing requirements applicable to them. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth the aggregate cash compensation paid to or accrued by all persons who have served as the Company's Chief Executive Officer during the last fiscal year and by each of the Company's other executive officers receiving in excess of $100,000 (the "Named Executive Officers") for services rendered to the Company and its subsidiaries during the fiscal years ended June 30, 1998, 1997 and 1996. SUMMARY COMPENSATION TABLE
Long-Term Compensation Annual Awards Compensation ------------------------- Name and -------------------------- Securities Underlying Principal Position Year Salary ($) Bonus ($) Options (#) --------------------------------------------------------------------------------------------------------- Christopher T. Dahl (1) Chief Executive Officer and Chairman of the Board 1998 68,750 15,000 375,000 1997 - - - 1996 - - - Harvey Bibicoff (1) Chief Executive Officer 1998 274,600 - - 1997 247,200 - 350,000 1996 165,000 - - Brian Rackohn (2) Chief Financial Officer 1998 149,507 10,000 75,000 (3) 1997 133,900 - - 1996 114,900 - 25,000
(1) Mr. Bibicoff served as the Company's Chief Executive Officer until November 3, 1997, at which time Mr. Dahl became Chief Executive Officer of the Company. (2) Mr. Rackohn's employment with the Company terminated on June 15, 1998. (3) 75,000 options were originally granted January 2, 1997 at an exercise price of $1.50 per share. These options were repriced, therefore considered terminated and reissued March 10, 1998 pursuant to a board resolution of the same date. They now carry an exercise price of $1.44 per share. The following table sets forth the number of securities underlying options granted in 1998 to the named officers, the percent the grant represents of the total options granted to employees during such fiscal year, the per-share exercise price of the options granted, the expiration date of the options for the Named Executive Officers, and the potential realized value. OPTION GRANTS IN LAST FISCAL YEAR
Potential Realized Value at Assumed Annual Rates of Stock Price Number of Percent of Total Appreciation Securities Options Granted to Exercise for Option Term (1) Underlying Options Employees in Price Expiration ------------------------- Name Granted (#) Fiscal Year ($/Share) Date 5% ($) 10% ($) ----------------------------------------------------------------------------------------------------------------- Christopher T. Dahl 375,000 18.2% 1.38 03/02/03 142,875 315,863 Harvey Bibicoff - - - - - - Brian Rackohn (2) 75,000 3.6% 1.44 12/31/98 3,038 6,075
(1) Sets forth potential option gains based on assumed annualized rates of stock price appreciation from the exercise price at the date of grant of 5% and 10% (compounded annually) over the full term of the grant with appreciation determined as of the expiration date. The 5% and 10% assumed rates of appreciation are mandated by the rules of the Securities and Exchange Commission and do not represent the Company's estimate or projection of future Common Stock prices. (2) 75,000 options were originally granted January 2, 1997 at an exercise price of $1.50 per share. These options were repriced March 10, 1998 pursuant to a board resolution of the same date. The following table sets forth certain information regarding options exercised by the Named Executive Officers during 1998 and the number and value of unexercised in-the-money options for the Named Executive Officers at June 30, 1998. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Number of Securities Underlying Unexercised Value of Unexercised in- Shares Value Options at the-Money Options at Acquired on Realized Fiscal Year Ended (#) Fiscal Year Ended (1) ($) ----------------------------------------------------------- Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable --------------------------------------------------------------------------------------------------------- Christopher T. Dahl - - 125,000/250,000 30,625/61,250 Harvey Bibicoff - - 300,000/- 34,375/- Brian Rackohn - - 75,000/- 13,875/-
(1) Market value of underlying securities at fiscal year-end minus the exercise price. COMPENSATION OF DIRECTORS No fees are paid to Directors of the Company for their services as members of the Board of Directors. The Company reimbursed all Directors for reasonable travel and lodging expenses incurred in attending meetings of the Board of Directors. Concurrently with his election as a Director and Chairman of the Board of the Company on July 22, 1997, Christopher T. Dahl was appointed the Company's President. Mr. Dahl presently receives an annual salary of $75,000 for his services as President. On August 1, 1997 the Company entered into an independent contractor agreement with William Cameron, a Director of the Company. Under the agreement Mr. Cameron will be providing non-exclusive services to the Company including, without limitation, the initiation, promotion, development and maintenance of business and investment contacts relating to increasing the Company's sales, marketing and investment opportunities. The contract is at will and compensation under the contract is $3,000 for every month that it is in force. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table contains certain information as of October 23, 1998, regarding the beneficial ownership of the Company's Common Stock by (i) each person known by the Company to own beneficially more than 5% of the Company's Common Stock, (ii) each director of the Company, (iii) the executive officers of the Company and directors as a group, and (iv) each Named Executive Officer, and as to the percentage of the outstanding shares held by them on such date. Any shares which are subject to an option or a warrant exercisable within 60 days are reflected in the following table and are deemed to be outstanding for the purpose of computing the percentage of Common Stock owned by the option or warrant holder but are not deemed to be outstanding for the purpose of computing the percentage of Common Stock owned by any other person. The business address of Messrs., Dahl, and Cameron is 724 First Street North, Minneapolis, Minnesota 55401.
Shares Percent Beneficially of Owned (1) Class --------- ----- Children's Broadcasting Corporation ............................. 3,188,731(2) 44.1% 724 First Street North Minneapolis, Minnesota 55401 Perkins Capital Management, Inc ................................. 300,000(3) 4.2% 730 East Lake St. Wayzata, Minnesota 55319 Harvey Bibicoff ................................................. 300,000(4) 4.0% Christopher T. Dahl ............................................. 160,000(5) 2.2% Richard W. Perkins .............................................. 125,000(6) 1.7% Brian Rackohn ................................................... 75,000(7) 1.0% William E. Cameron .............................................. 25,000(6) * William M. Toles ................................................ 25,000(6) * Gerald Germain .................................................. 25,000(6) * All Directors and Executive Officers as a Group (Seven persons) ............................................ 410,000(8) 9.4%
- ------------- * Less than 1 %. 1. Securities "beneficially owned" by a person are determined in accordance with the definition of "beneficial ownership" set forth in the regulations of the Commission and, accordingly, may include securities owned by or for, among others, the spouse, children or certain other relatives of such person as well as other securities as to which the person has or shares voting or investment power or has the option or right to acquire Common Stock within 60 days. 2. Based upon statements filed with the Commission on July 30, 1997 and August 5, 1997, Children's Broadcasting Corporation has the sole right to sell such shares and has sole voting power over such shares. 3. Based upon statements filed with the Commission, Perkins Capital Management, Inc. is a registered investment adviser of which Richard W. Perkins, a director of the Company, is President. As set forth in Schedule 13G filed with the Commission May 7, 1998, Perkins Capital Management, Inc. has the sole right to sell such shares and has sole voting power over such shares. Mr. Perkins and Perkins Capital Management, Inc. disclaim any beneficial interest in such shares. 4. Includes 300,000 shares purchasable upon the exercise of options. 5. Includes 125,000 shares purchasable upon the exercise of options. 6. Includes 25,000 shares purchasable upon the exercise of options. 7. Includes 75,000 shares purchasable upon the exercise of options. 8. Includes 600,000 shares purchasable upon exercise of options. SIGNATURES Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized. Date: October 28, 1998 HARMONY HOLDINGS, INC. By: /s/ James G. Gilbertson -------------------------------- James G. Gilbertson Chief Operating Officer and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----