<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (Fee Required)
For The Year Ended December 31, 1997
or
[_] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For The Transition Period from ________ to _______
Commission File Number 00107923
HANDLEMAN COMPANY SALARY DEFERRAL
AND STOCK PLAN
--------------
(Full title of the Plan)
HANDLEMAN COMPANY
-----------------
(Name of issuer of the securities held pursuant to the Plan)
500 Kirts Boulevard
Troy, Michigan 48084
--------------------
(Address of principal executive offices)
<PAGE>
The following financial statements and exhibits are presented pursuant to
Section 15(d) of the Securities Exchange Act of 1934:
<TABLE>
<CAPTION>
Page
----
<S> <C>
(a) Financial Statements:
Report of Independent Accountants I-1
Statement of Assets Available for Benefits
as of December 31, 1997 and 1996 I-2
Statement of Changes in Assets Available for
Benefits for the year ended December 31, 1997 I-3
Notes to Financial Statements I-4 to I-10
Item 27a -- Schedule of Assets Held for Investment
Purposes as of December 31, 1997 I-11
Item 27d -- Schedule of Reportable Transactions I-12 to I-13
for the year ended December 31, 1997
Schedules:
Schedule I, II and III have been omitted because
the required information is shown in the financial
statements or notes thereto, or in another schedule -
<CAPTION>
Exhibit
Number
------
(b) 1. Consent of Independent Accountants with
respect to their report on their audit of the
financial statements of the Handleman Company
Salary Deferral and Stock Plan as of and for
the year ended December 31, 1997 28.1
</TABLE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
HANDLEMAN COMPANY SALARY DEFERRAL AND STOCK PLAN
By: /s/ Leonard A. Brams
-------------------------------------------------------------------
Leonard A. Brams, Senior Vice President and Chief Financial Officer
Handleman Company
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
PAGES
-----
<S> <C>
Report of Independent Accountants 4
Financial Statements:
Statement of Assets Available for
Benefits as of December 31, 1997 and 1996 5
Statement of Changes in Assets Available
for Benefits for the year ended
December 31, 1997 6
Notes to Financial Statements 7-13
Supplemental Schedules:
Item 27a - Schedule of Assets Held for
Investment Purposes as of December 31, 1997 14
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1997 15-16
</TABLE>
<PAGE>
[COOPERS & LYBRAND LETTERHEAD]
Report of Independent Accountants
To the Administrative Committee of the
Handleman Company Salary Deferral and Stock Plan:
We have audited the accompanying statement of assets available for benefits of
the Handleman Company Salary Deferral and Stock Plan as of December 31, 1997 and
1996, and the related statement of changes in assets available for benefits for
the year ended December 31, 1997. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of Handleman Company
Salary Deferral and Stock Plan as of December 31, 1997 and 1996, and the changes
in assets available for benefits for the year ended December 31, 1997, in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules on pages 14
through 16 of this Form 11-K are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
June 18, 1998
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
December 31, 1997 and 1996
--------------------------
<TABLE>
<CAPTION>
1997 1996
--------------- ---------------
ASSETS:
<S> <C> <C>
Accrued dividends and interest $ 52 $ 44
Employee contributions receivable 133,511 125,503
Employer contribution receivable 23,341 23,548
Investments at Estimated Fair Value
KeyCorp Investments:
Employee Benefit Money Market Fund(1), 3,697 3,142
(3,697 shares and 3,142 shares at
December 31, 1997 and 1996, respectively)
EB-Managed Guaranteed Investment Contract(2) 851,905 733,508
70,217 shares and 64,083 shares at December 31,
1997 and 1996, respectively)
Investments at Fair Value as Determined
by Quoted Market Price
KeyCorp Investments
Victory U.S. Government Obligations Fund(3), 694,535 676,714
(62,719 shares and 64,236 shares at December 31,
1997 and 1996, respectively)
American Balanced Fund(4), (163,906 shares and 2,570,048 1,797,521
123,540 shares at December 31, 1997 and 1996,
respectively)
Victory Stock Index Fund(5), (231,092 shares and 4,321,425 2,911,769
191,312 shares at December 31, 1997 and 1996,
respectively)
Handleman Company common stock (6), (192,835 1,337,889 1,462,153
shares and 169,525 shares at December 31,
1997 and 1996, respectively)
Loans to participants at rates of 9.5% 207,884 112,321
to 10.0%, maturing in 1 to 5 years
--------------- ---------------
ASSETS AVAILABLE FOR BENEFITS $10,144,287 $7,846,223
</TABLE>
(1) The Plan's cost of the investment in the KeyCorp Employee Benefit Money
Market Fund was $3,697 and $3,142 as of December 31, 1997 and 1996,
respectively.
(2) The Plan's cost of the investment in the EB-Managed Guaranteed Investment
Contract was $772,446 and $685,078 as of December 31, 1997 and 1996,
respectively.
(3) The Plan's cost of the investment in the Victory U.S. Government
Obligations Fund was $645,075 and $646,623 as of December 31, 1997 and
1996, respectively.
(4) The Plan's cost of the investment in the American Balanced Fund was
$2,444,702 and $1,793,599 as of December 31, 1997 and 1996, respectively.
(5) The Plan's cost of investment in the Victory Stock Index Fund was
$3,330,768 and $2,465,095 as of December 31, 1997 and 1996, respectively.
(6) The Plan's cost of the common stock was $1,749,053 and $1,672,524 as of
December 31, 1997 and 1996, respectively.
The accompanying notes are an integral part of the financial statements.
I-2
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
STATEMENT OF CHANGES IN ASSETS
AVAILABLE FOR BENEFITS
for the year ended December 31, 1997
------------------------------------
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
Additions:
Employer contributions $ 325,198
Employee authorized contributions 1,924,171
Dividend income 573,929
Interest income 20,066
Net appreciation in fair value of investments 638,692
Other 4,950
-----------
Total additions 3,487,006
Deductions:
Participants' benefits 1,160,138
Other 28,804
-----------
Total deductions 1,188,942
Net increase 2,298,064
Assets available for benefits,
beginning of year 7,846,223
-----------
Assets available for benefits,
end of year $10,144,287
</TABLE>
The accompanying notes are an integral part of the financial statements.
I-3
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
NOTES TO FINANCIAL STATEMENTS
-----------------------------
1. Description of Plan
The following description of the Handleman Company Salary Deferral and
Stock Plan (the "Plan") provides only general information. Participants
should refer to the Plan Document for a complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan which includes salary deferral and
employee stock ownership provisions. The Plan covers all employees of the
Handleman Company (the "Company") and subsidiaries and affiliates that have
adopted the Plan who have one year of service and who are not covered by
collective bargaining agreements (unless they specifically refer to the
Plan). The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
Contributions
Employee authorized contributions of tax deferred compensation are limited
in any one year to the lesser of fifteen percent of employee compensation
or $9,500. In addition, total contributions by highly compensated employees
cannot exceed specific percentage limitations of the aggregate
contributions of all other employees as set forth in the Internal Revenue
Code.
The Company provides for a matching contribution equal to 25 percent of the
elective contribution made by each participant, up to six percent of such
participant's compensation, to be invested in company stock.
Plan Assets
To the extent practicable, Plan assets related to the Company stock portion
of the Plan are invested in Company stock. Employees may direct investment
of employee authorized contributions to the Plan into various investment
funds which are established by the Company from time to time.
Participant Accounts
Each participant's account is credited with employee authorized
contributions, in addition to an allocation of any Company contribution and
Plan earnings, net of Plan expenses. A participant must be employed by the
Company on the last day of the Company's fiscal year to receive the
allocation of Company contributions.
Salary Deferral Portion - Company contributions to the Salary Deferral
portion of the Plan are allocated to participants who are eligible as
defined by the Plan. There are certain limitations on the amounts
which can be allocated.
Stock Ownership Portion - Effective May 2, 1994, the Plan was amended
to discontinue Company contributions for employees hired after April
30, 1994. As of December 31, 1996, Company contributions for all
employees has been discontinued.
I-4
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
-----------------------------
1. Description of Plan, continued
Loans to Participants
The Plan allows participants to borrow against their account balances. The
maximum loan to any participant is the lesser of 50% of the participant's
non-forfeitable salary deferral account balance or $50,000.
Plan Expenses
Expenses of the Trustee and Administrative Committee are charged to
participant accounts unless the Company at its discretion elects to pay
these expenses. The Company paid such expenses for the year ended December
31, 1997.
Vesting
Participants are fully vested in amounts credited to their accounts prior
to July 1995.
Effective July 1, 1995, the Plan was amended to include a graded vesting
schedule for matching contributions of 20 percent for each year of service,
resulting in 100 percent vesting after five years of service. Nonvested
company contributions for terminated participants are forfeited by the
participant and are used to reduce future employer contributions to the
Plan.
Payment of Benefits
On termination of service, a participant will be eligible to receive the
plan assets allocated to the participant's account and which have vested or
an equivalent amount in cash. At December 31, 1997 and 1996, $325,337 and
$277,805 respectively, were reported as benefits payable on the Form 5500.
2. Summary of Accounting Policies
Company Contributions
Company contributions are accrued in the plan year to which the
contributions relate. Company contributions are in the form of Company
stock.
Investments
At the end of the plan year, Company stock is valued at the closing market
price of the stock on the last business day of the Plan's year. The EB-
Managed Guaranteed Investment Contract Fund, Victory U.S. Government
Obligations Fund, American Balanced Fund, Victory Stock Index Fund and
Employee Benefit Money Market Fund are reflected at estimated fair values
or at the fair value as determined by quoted market prices at the year-end
date as reported by the Plan's investment custodian, KeyCorp.
The basis on which cost is determined to compute realized gains or losses
from sales of investments, other than the Company stock, is average cost.
The basis on which cost is determined for the Company stock is specific
identification.
The Plan presents in the statement of changes in assets the net
appreciation (depreciation) in fair value of investments which consists of
the realized gains or losses and the unrealized appreciation (depreciation)
on those investments.
For purposes of determining Company contributions, Company stock received
as the Company contribution is valued at the closing price on the day the
contribution is made.
I-5
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
-----------------------------
2. Summary of Accounting Policies, continued
Dividend Income
Dividend income is recognized on the ex-dividend date. Dividend income on
Company stock for the year ended December 31, 1997 was $0.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of changes in
assets during the reporting period. Actual results could differ from these
estimates.
3. Investments
During the Plan year ended December 31, 1997, the Plan's investments
(including investments bought and sold, as well as held during the year)
appreciated (depreciated) in value by $638,692 as follows:
<TABLE>
<CAPTION>
Investments at Estimated Fair Value
-----------------------------------
<S> <C>
KeyCorp Investment:
EB-Managed Guaranteed Investment Contract $ 47,078
Investments at Fair Value Determined
by Quoted Market Price
----------------------
KeyCorp Investments:
Victory U.S. Government Obligation Fund 34,485
American Balanced Fund 147,199
Victory Stock Index Fund 709,301
Handleman Company Common Stock (299,371)
---------
$ 638,692
=========
</TABLE>
I-6
<PAGE>
Fund Information
- ----------------
The following is a summary of assets for each investment fund option for the
years ended December 31, 1997 and 1996 and of changes by investment fund for the
year ended December 31, 1997. The Handleman Common Stock Fund includes both
participant directed investments as well as investments of company matching
contributions.
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
ASSETS AND LIABILITIES BY INVESTMENT PROGRAM
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------
EB-MANAGED VICTORY U.S.
GUARANTEED GOVERNMENT AMERICAN VICTORY
HANDLEMAN HANDLEMAN INVESTMENT OBLIGATIONS BALANCED STOCK LOAN
ESOP FUND COMMON STOCK CONTRACT FUND FUND INDEX FUND FUND
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Accrued Dividends and Interest $ 2 $ 50 - - - - -
Employer Contributions Receivable - 23,341 - - - - -
Employee Contributions Receivable - 7,107 $ 13,635 $ 9,960 $ 40,601 $ 62,208 -
KeyCorp Investments:
Employee Benefit Money Market Fund 274 3,423 - - - - -
EB-Managed Guaranteed Investment Contract - - 851,905 - - - -
Victory U.S. Government Obligations Fund - - - 694,535 - - -
American Balanced Fund - - - - 2,570,048 - -
Victory Stock Index Fund - - - - - 4,321,425 -
Handleman Company Common Stock 518,831 819,058 - - - - -
192,835 Shares
Loans to Participants - - - - - - 207,884
--------- -------- -------- -------- ---------- ---------- --------
ASSETS AVAILABLE FOR BENEFITS $ 519,107 $852,979 $865,540 $704,495 $2,610,649 $4,383,633 $207,884
========= ======== ======== ======== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
TOTAL
-----------
<S> <C>
Assets:
Accrued Dividends and Interest $ 52
Employer Contributions Receivable 23,341
Employee Contributions Receivable 133,511
KeyCorp Investments:
Employee Benefit Money Market Fund 3,697
EB-Managed Guaranteed Investment Contract 851,905
Victory U.S. Government Obligations Fund 694,535
American Balanced Fund 2,570,048
Victory Stock Index Fund 4,321,425
Handleman Company Common Stock 1,337,889
192,835 Shares
Loans to Participants 207,884
-----------
ASSETS AVAILABLE FOR BENEFITS $10,144,287
===========
</TABLE>
I-7
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
ASSETS AND LIABILITIES BY INVESTMENT PROGRAM
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------
EB-MANAGED VICTORY U.S.
GUARANTEED GOVERNMENT AMERICAN VICTORY
HANDLEMAN HANDLEMAN INVESTMENT OBLIGATIONS BALANCED STOCK LOAN
ESOP FUND COMMON STOCK CONTRACT FUND FUND INDEX FUND FUND
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets:
Accrued Dividends and Interest $ 1 $ 38 - - $ 1 $ 4 -
Employee Contributions Receivable - 23,548 - - - - -
Employer Contributions Receivable - 7,894 $ 13,730 $ 11,057 38,254 54,568 -
KeyCorp Investments:
Employee Benefit Money Market Fund 35 3,107 - - - - -
EB-Managed Guaranteed Investment Contract - - 733,508 - - - -
Victory U.S. Government Obligations Fund - - - 676,714 - - -
American Balanced Fund - - - - 1,797,521 - -
Victory Stock Index Fund - - - - - 2,911,769 -
Handleman Company Common Stock
133,751 Shares 800,728 661,425 - - - - -
Loans to Participants - - - - - - 112,321
--------- ------------ ---------- ------------ ---------- ---------- --------
ASSETS AVAILABLE FOR BENEFITS $ 800,764 $ 696,012 $ 747,238 $ 687,771 $1,835,776 $2,966,341 $112,321
========= ============ ========== ============ ========== =========== ========
</TABLE>
<TABLE>
<CAPTION>
TOTAL
----------
<S> <C>
Assets:
Accrued Dividends and Interest $ 44
Employee Contributions Receivable 23,548
Employer Contributions Receivable 125,503
KeyCorp Investments:
Employee Benefit Money Market Fund 3,142
EB-Managed Guaranteed Investment Contract 733,508
Victory U.S. Government Obligations Fund 676,714
American Balanced Fund 1,797,521
Victory Stock Index Fund 2,911,769
Handleman Company Common Stock
133,751 Shares 1,462,153
Loans to Participants 112,321
---------
ASSETS AVAILABLE FOR BENEFITS $7,846,223
==========
</TABLE>
I-8
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
INCOME ANC CHANGES IN EQUITY TO INVESTMENT PROGRAM
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------------
EB-MANAGED VICTORY U.S.
GUARANTEED GOVERNMENT AMERICAN VICTORY
HANDLEMAN HANDLEMAN INVESTMENT OBLIGATIONS BALANCED STOCK
ESOP FUND COMMON STOCK CONTRACT FUND FUND INDEX FUND
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Additions:
Employer Contributions $ (6,596) $ 336,446 $ (10) $ (3,646) $ (240) $ (756)
Employee Contributions - 109,142 194,885 142,399 593,149 884,596
Dividend Income - - - 7 272,881 301,041
Total Interest Income 664 832 518 434 1,329 3,044
Net appreciation in fair value
of investments (154,222) (145,149) 47,078 34,485 147,199 709,301
Other Receipts - - - 4,950 - -
--------- --------- -------- -------- ---------- ----------
Total Additions (160,154) 301,271 242,471 178,629 1,014,318 1,897,226
--------- --------- -------- -------- ---------- ----------
Deductions:
Participants' benefits 114,854 72,709 115,466 171,824 174,170 511,115
Transfers Between Funds 2,477 66,801 8,640 (9,919) 65,021 (31,667)
Other 4,172 4,794 63 - 254 486
--------- --------- -------- -------- ---------- ----------
Total Deductions 121,503 144,304 124,169 161,905 239,445 479,934
--------- --------- -------- -------- ---------- ----------
Net Increase (281,657) 156,967 118,302 16,724 774,873 1,417,292
--------- --------- -------- -------- ---------- ----------
Assets Available for Benefits,
beginning of year 800,764 696,012 747,238 687,771 1,835,776 2,966,341
Assets Available for Benefits,
end of year $ 519,107 $ 852,979 $865,540 $704,495 $2,610,649 $4,383,633
========= ========= ======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
LOAN
FUND TOTAL
-----------------------
<S> <C> <C>
Additions:
Employer Contributions - $ 325,198
Employee Contributions - 1,924,171
Dividend Income - 573,929
Total Interest Income $ 13,245 20,066
Net appreciation in fair value
of investments - 638,692
Other Receipts - 4,950
--------- -----------
Total Additions 13,245 3,487,006
--------- -----------
Deductions:
Participants' benefits - 1,160,138
Transfers Between Funds (101,353) 0
Other 19,035 28,804
--------- -----------
Total Deductions (82,318) 1,188,942
--------- -----------
Net Increase 95,563 2,298,064
--------- -----------
Assets Available for Benefits,
beginning of year 112,321 7,846,223
Available for Benefits, end of year $ 207,884 $10,144,287
========= ===========
</TABLE>
I-9
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
NOTES TO FINANCIAL STATEMENTS, Continued
-----------------------------
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
6. Tax Status
The Internal Revenue Service has ruled that the Plan qualifies under
Section 401 of the Internal Revenue Code ("IRC") and is, therefore, not
subject to tax under present income tax laws. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its
qualification. The plan administrator is not aware of any course or action
or series of events that have occurred that might adversely affect the
Plan's qualified status.
The Plan obtained its latest determination letter on November 24, 1997, in
which the Internal Revenue Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the IRC.
I-10
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
Form 5500
Calendar Plan year 1997
ITEM 27a, SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
---------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Asterisk Identity of
denotes party- issue, borrower Description
in-interest to lessor, or of Current
the Plan similar party Investment Cost Value
- -------------- --------------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Reporting Criteria I:
Investment assets held by
the Plan on the last day
of the Plan year
Employee Benefit Cash Equivalents $ 3,697 $ 3,697
* Money Market
Fund
* EB-Managed Investment $ 772,446 $ 851,905
Guaranteed Contracts
Investment Contract
* Victory U.S. Short Term U.S. $ 645,075 $ 694,535
Government Obligations Treasury Securities
Fund
* American Common Stock and $2,444,702 $2,570,048
Balanced Fund Bond Fund
* Victory Stock Common Stock Fund $3,330,768 $4,321,425
Index Fund
* Handleman Common Stock $1,749,053 $1,337,889
Company $.01 par value
Common Stock
* Loans to Interest rates of $ 0 $ 207,884
Participants 9.5% to 10% and
maturing in 1 to
5 years
</TABLE>
I-11
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Current Value
of Asset on
Purchase Selling Cost Transaction Net Gain
Identity of Party Involved Description of Asset Price Price of Asset Date or (Loss)
- -------------------------- -------------------- -------- ------- -------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
REPORTING CRITERION I: Any transaction within the
- ---------------------- plan year, with respect to
any plan asset, involving
an amount in excess of five
percent of the current
value of plan assets.
None
REPORTING CRITERION II: Any series of transactions
- ----------------------- (other than transactions
with respect to securities)
within the plan year with or
in conjunction with the same
person which, when
aggregated, regardless of
the category of asset and
the gain or loss on any
transaction, involves an
amount in excess of five
percent of the current value
of plan assets.
None
REPORTING CRITERION III: Any transaction within the
- ------------------------ plan year involving
securities of the same issue
if within the plan year any
series of transactions with
respect to such securities,
when aggregated, involves an
amount in excess of five
percent of the current value
of plan assets.
KeyCorp Employee Benefit Money
Market Fund
157 purchases - 787,737 units $ 787,737 $ 787,737 $ 787,737
201 sales - 787,183 units $787,183 787,183 787,183
KeyCorp American /Balanced Fund
87 purchases - 59,784 shares 935,808 935,808 935,808
KeyCorp Victory Stock Index Fund
109 purchases - 74,955 shares 1,344,740 1,344,740 1,344,740
52 sales - 35,175 shares 644,384 479,066 644,384 $165,318
KeyCorp Handleman Company Stock
25 purchases - 56,373 shares 401,551 401,551 401,551
</TABLE>
I-12
<PAGE>
HANDLEMAN COMPANY
SALARY DEFERRAL AND STOCK PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS, Concluded
for the year ended December 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Current Value
of Asset on
Purchase Selling Cost Transaction Net Gain
Identity of Party Involved Description of Asset Price Price of Asset Date or (Loss)
- -------------------------- -------------------- -------- ------- -------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
REPORTING CRITERION IV: Any transaction within the
- ----------------------- plan year with respect to
securities with or in
conjunction with a person
if any prior or subsequent
single transaction within
the plan year with such
person with respect to
securities exceeds five
percent of the current
value of plan assets.
None
</TABLE>
I-13
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND]
EXHIBIT 28.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
the Handleman Company on Form S-8 (File No. 33-69030) of our report dated
June 18, 1998, on our audits of the financial statements and financial statement
schedules of the Handleman Company Salary Deferral and Stock Plan as of and for
the year ended December 31, 1997, which report is included in this Annual Report
on Form 11-K.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
June 18, 1998
[LETTERHEAD OF COOPERS & LYBRAND]
