SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB/A (No. 1)
Annual Report Under Section 13
of
The Securities Exchange Act of 1934
For the fiscal year Commission File
ended March 31, 1997 Number: 0-8505
NORTHWEST TELEPRODUCTIONS, INC.
(Name of Small Business Issuer in its Charter)
Minnesota 41-0641789
(State of Incorporation) (I.R.S. Employer
Identification Number
4000 West 77th Street
Minneapolis, Minnesota 55435
(Address of principal executive officers) (Zip Code)
Telephone Number: 612-835-6450
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.01
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B, and no disclosure will 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-KSB or any amendment to this Form 10-KSB.
[ ]
The issuer's revenues for the fiscal year ended March 31, 1997 were $11,852,758.
The aggregate market value of the Common Stock held by shareholders other than
officers, directors or holders of more than 5% of the outstanding stock of the
registrant as of June 30, 1997 was approximately $1,241,130 (based upon the
closing sale price of the registrant's Common Stock on such date).
Shares of $.01 par value Common Stock outstanding at June 30, 1997: 1,356,425
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended March 31, 1997 are incorporated by reference into Part II.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors and Officers
The following table sets forth certain information concerning the
Registrant's directors and executive officers:
<TABLE>
<CAPTION>
Current
Position(s) Principal Occupation(s) During Director
Name Age With Company Past Five Years Since
<S> <C> <C> <C> <C>
James S. Fish 81 Director Sole owner of Ad-Ventures in Wayzata (a 1979
private marketing communications
consulting firm) from June 1979 to
present; Dean Emeritus of Graduate
Programs in Business Communications at
the University of St. Thomas in St.
Paul, Minnesota from December 1983 to
June 1987.
C. Dale Haworth 64 Director Retired; Chief Executive Officer from 1996
1970 to 1995 of Haworth Group, Inc. (a
media buying service); Marketing
Advertising Executive with General Mills
from 1954 to 1970.
Ronald V. Kelly 61 Director Retired; Senior Vice President from 1996
September 1992 to August 1996 of
Pentair, Inc. (a diversified industrial
manufacturer); Vice President and
Specialty Products Group President at
Pentair from March 1989 to September
1992.
John G. Lindell 65 Chairman/Director Chairman of the Board effective February 1970
5, 1996 and interim President of the
Company from April 1, 1996 to November
3, 1996. Prior to his retirement,
President (from January 1981 to December
1985) and Chief Operating Officer (from
November 1979 to December 1985) of
RayGo, Inc. (a heavy equipment
manufacturer
Steven Lose 38 Director Director of North American Sales of 1997
Scitex Digital Video, Inc. (a video
equipment manufacturer) since April
1995. Regional Sales Manager of Accom,
Inc. (a video equipment manufacturer)
from March 1992 to April 1995.
John C. McGrath 39 President/Director President and Chief Executive Officer of 1996
the Company since November 4, 1996.
Chief Operating Officer of Cutters, Inc.
(a nationally recognized post-production
and design facility) from January 1990
to November 1996.
Gerald W. Simonson 67 Director Venture capital investor since June 1976
1978; President and Chief Executive
Officer of Omnetics Connector
Corporation (manufacturer of
microminiature connectors) since March
1991. Also currently a director of
Medtronic, Inc.
Phillip A. Staden 40 Vice President Vice President, Secretary and Treasurer N/A
Secretary & of the Company since November 4, 1996.
Treasurer Controller of the Registrant from
April 1991 to November 3, 1996.
</TABLE>
<PAGE>
The term of office of each director is one year from the date of the most
recent annual meeting of shareholders or until his successor is elected. The
term of office of each executive officer is from one annual meeting of directors
until the next annual meeting of directors or until a successor is elected.
There are no family relationships among any of the Registrant's directors or
executive officers.
Compliance with Section 16(A) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10 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
10% shareholders ("Insiders") are required by SEC regulations to furnish the
Company with copies of all Section 16(a) forms they file.
To the company's knowledge, based on a review of the copies of such reports
furnished to the Company, during the fiscal year ended March 31, 1997, all
Section 16(a) filing requirements applicable to Insiders were complied with
except that Mr. Ronald V. Kelly's Form 3 was filed late and Messrs. James S.
Fish and John G. Lindell were each late filing a form to report one transaction.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information regarding compensation
paid during the Company's last fiscal year to the Company's President (who
serves as chief executive officer) and to each other executive officer whose
total salary and bonus for fiscal 1997 exceeded $100,000. Such persons became
executive officers of the Company during fiscal 1997.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------- ----------------------
Awards Payouts
------------ -------
All Other
Restricted LTIP Compen-
Name and Fiscal Salary Bonus Stock Awards Options/ Payouts sation
Principal Position Year ($)(1) ($)(2) Other ($) SARs (#) ($) ($)(3)
------------------ ---- ------ ------ ----- ------------ -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John C. McGrath
President 1997 82,981(4) 12,084 0 None 50,000 None 2,075
Phillip A. Staden
Vice President 1997 100,635 10,000 0 None 15,000 None 3,007
</TABLE>
- ----------------------------------------------------------------------------
(1) Amounts under "Salary" also include the executive's salary deferral
contributions to the Company's 401(k) profit sharing plan.
(2) Bonus amounts are accrued and not yet paid.
(3) Amounts reflect Company contributions to the Company's 401(k) profit
sharing plan.
(4) Amounts reflect payments received from his hiring date of November 4, 1997.
Option/SAR Grants During 1997 Fiscal Year
The following table sets forth the options that have been granted to the
executive officers listed in the Summary Compensation Table during the Company's
last fiscal year ended March 31, 1997:
<TABLE>
<CAPTION>
Percent of Total
Number of Securities Options/SARs Granted
Underlying to Employees in
Options/SARs Fiscal Exercise or Base
Name Granted Year Price ($/Share) Expiration Date
<S> <C> <C> <C> <C>
John C. McGrath 50,000(1) 77.0% $2.00 11/3/01
Phillip A. Staden 15,000(2) 23.0% $2.00 11/3/01
</TABLE>
- --------------------------------------------------------------------
(1) Such option is exercisable in annual increments of 16,666 shares each,
commencing November 4, 1997.
(2) Such option is exercisable in annual increments of 5,000 shares each,
commencing November 4, 1997.
<PAGE>
Option/SAR Exercises During Fiscal 1997 and Fiscal Year End Option/SAR Values
The following table provides certain information regarding the exercise of
stock options during fiscal 1997 by the officers named in the Summary
Compensation Table and the fiscal year-end value of unexercised options held by
such officers.
<TABLE>
<CAPTION>
Number of Number of Unexercised Value of Unexercised
Shares Options at Fiscal Year In-the-Money Options at
Acquired on Value Realized End Fiscal year End ($)
Name Exercise ($) (exercisable/unexercisable) exercisable/unexercisable (1)
---- -------------- ------------- --------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
John C. McGrath 0 0 0 50,000 0 $43,750
Phillip A. Staden 0 0 0 15,000 0 $13,125
</TABLE>
- -------------------------
(1) Market value of underlying securities at March 27, 1997, the last day of
fiscal 1997 on which there was a stock trade $2,875), minus the exercise price.
Employment Contracts
The Company has an Employment Agreement, dated November 2, 1996, with John
C. McGrath whereby Mr. McGrath will serve as President and Chief Executive
Officer for a term continuing until October 31, 1998 and renewable annually
thereafter for one-year terms. Mr. McGrath receives a base annual salary of
$200,000 and is eligible to receive an incentive bonus based upon 5% of pre-tax
earnings for a fiscal year in excess of 8% of shareholder equity at the
beginning of the fiscal year. The Agreement is terminable by written agreement
of the parties, by the Company for cause or by Mr. McGrath without cause upon 60
days written notice to the Company, in which case the Company has no further
obligation to Mr. McGrath except for accrued benefits and any compensation
earned through the last day of employment. The Agreement may also be terminated
by the Company without cause, in which case the Company is obligated to pay Mr.
McGrath's base salary and accrued benefits for the greater of (i) the unexpired
initial term of employment (or, if the Agreement has been renewed, the unexpired
portion of the one-year renewal term) and (ii) the one-year period following
termination of employment provided Mr. McGrath continues to abide by the
noncompete provisions of the Agreement. If the Agreement is terminated without
cause either by Mr. McGrath or the Company within one year of a "change of
control" of the Company, the Company is obligated to pay Mr. McGrath's base
salary and accrued benefits for the greater if (i) the unexpired initial term of
employment (or, if the Agreement has been renewed, the unexpired portion of the
one-year renewal term) and (ii) the one-year period following termination of
employment so long as Mr. McGrath continues to abide by the noncompete
provisions of the Agreement; provided, however, Mr. McGrath will not receive any
payments under the Employment Agreement or any other agreement with the Company
which would constitute a "parachute payment" under Section 280G of the Internal
Revenue Code.
<PAGE>
Directors Fees
Each director who is not an employee of the Company receives $200 for each
Board of Directors or Committee meeting attended by him or her, with an annual
maximum of 42,000, and annual fees of $4,000 payable at a rate of $1,000 for
each fiscal quarter during which he or she serves as a director.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principal Shareholders
The following table provides information concerning the only persons known
to the Company to be the beneficial owners of more than five percent (5%) of the
Company's outstanding Common Stock:
<TABLE>
<CAPTION>
Amount and Nature of Shares
Name and Address of Beneficial Owner Beneficially Owned(1) Percent of Class
<S> <C> <C>
James H. Binger Revocable Trust
80 South Eighth Street
Minneapolis, Minnesota 185,109 13.6%
McDonald & Co. Securities
800 Superior Avenue
Cleveland, Ohio 104,630 7.7%
</TABLE>
- -----------------------
(1) Unless otherwise indicated, the person listed as the beneficial owner
of the shares has sole voting and sole investment power over the
shares. The share amounts are based upon information set forth in the
shareholder's latest filing with the Company or the Securities and
Exchange Commission, as updated by any subsequent information
voluntarily provided to the Company by the shareholder.
Management Shareholdings
The following table sets forth the number of shares of the Company's Common
Stock beneficially owned by each executive officer of the Company named in the
Summary Compensation Table, by each of the Company's current directors and by
all of such directors and executive officers (including the named individuals)
as a group.
<PAGE>
<TABLE>
<CAPTION>
Name of Director or Beneficially Owned(1) Percent of Class
Officer or Identity of Group
<S> <C> <C>
James S. Fish 27,000(2) *
C. Dale Haworth 2,000(3) *
Ronald V. Kelly 17,500(2) *
John G. Lindell 126,937(4) 4.2%
Steven Lose 250 *
John C. McGrath 0 0
Gerald W. Simonson 43,160(2) 2.1%
Phillip A. Staden 300
Directors and Executive Officers
as a group (8 persons) 217,147(5) 14.7
</TABLE>
- --------------------
*Less than 1%
(1) Unless otherwise indicated, the person listed as the beneficial owner of the
shares has sole voting and sole investment power over the shares.
(2) Includes 17,000 shares which may be purchased upon exercise of currently
exercisable options and warrants.
(3) Such shares are not outstanding but may be purchased upon exercise of
currently exercisable options.
(4) Mr. Lindell has sole voting and sole investment power over 44,012 shares
owned directly by him and shares voting and investment power with his wife
over 10,925 shares. Amount includes 72,000 shares which may be purchased
upon exercise of currently exercisable options and warrants.
(5) Includes 125,000 shares which may be purchased upon exercise of currently
exercisable options and warrants.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In order to facilitate restructure of the Company's bank line and to
provide funding for operations, in July 1996 and February 1997 the Board
authorized the issuance of $562,500 of 10.5% Subordinated Notes with a Warrant
to each investor to purchase, at $2.50 per share, a number of shares of Common
Stock of the Company equal to the principal amount of such investor's Note
divided by the Warrant exercise price. The directors of the Company purchased
$412,500 of the Notes in July 1996 and $150,000 of the Notes in February 1997.
The shares purchasable upon exercise of the Warrants granted by the Company have
been included in the Management Shareholdings table in Item 11.
<PAGE>
SIGNATURES
In accordance with Section 13 of the Exchange Act, the Registrant has duly
caused this report to be signed on its behalf of the undersigned, thereunto duly
authorized.
NORTHWEST TELEPRODUCTIONS, INC.
Date: August 6, 1997 By /s/ John C. McGrath
John C. McGrath, President
