<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE YEAR ENDED DECEMBER 31, 1996,
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 0-14333
------------------------
ALL AMERICAN COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-3803222
(STATE OF OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
808 WILSHIRE BOULEVARD, 90401-1810
SANTA MONICA, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (310) 656-1100
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12 (B) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:
COMMON STOCK, $0.0001 PAR VALUE
COMMON STOCK, CLASS B, $0.0001 PAR VALUE
------------------------
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. [ ]
================================================================================
<PAGE> 2
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
EXECUTIVE OFFICERS AND DIRECTORS
<TABLE>
<CAPTION>
NAME POSITION AGE
- --------------------------- -------------------------------------------------------- ---
<S> <C> <C>
Anthony J. Scotti** Chief Executive Officer and Chairman of the Board 57
Myron I. Roth** President, Chief Operating Officer and Director 64
Thomas Bradshaw** Chief Financial Officer, Senior Executive Vice President 54
and Director
Sydney D. Vinnedge Senior Executive Vice President and Director 53
Benjamin J. Scotti Senior Executive Vice President; Executive Vice 59
President -- All American Music Group and Director
Lawrence E. Lamattina Chief Executive Officer and President -- All 51
American/Fremantle Television Group and Director
Gordon C. Luce*+ Director 71
R. Timothy O'Donnell*+ ++ Director 41
David A. Mount*+ ++ Director 53
Eugene P. Beard Director 62
</TABLE>
- ---------------
* Member of Stock Option Committee
** Member of Executive Committee
+ Member of Compensation Committee
++ Member of Audit Committee
Each of the persons listed above (other than Messrs. Lamattina, O'Donnell,
Mount and Beard) assumed the positions listed above on February 25, 1991, the
date on which Scotti Brothers Entertainment Industries, Inc. ("SBEI") merged
into All American Television, Inc. ("AATV"), which was the legal predecessor to
the registrant, All American Communications, Inc. (the "Company"). Prior to such
date, Anthony J. Scotti and Mr. Vinnedge were already directors of AATV.
ANTHONY J. SCOTTI was a co-founder of the Company and has been a director
of the Company since its inception in 1982. He became Chief Executive Officer
and Chairman of the Board on February 25, 1991. Mr. Scotti served as a
consultant to Carolco Pictures Inc. (motion picture production) and was a
director of LIVE Entertainment, Inc. (entertainment software) from November 1988
until his resignation in May 1996. Mr. Scotti was the non-executive Chairman of
the Board of LIVE Entertainment from November 1992 until his resignation from
such position in March 1996.
MYRON I. ROTH joined SBEI in December 1990 as President and Chief Operating
Officer, and he assumed the same titles and became a director of the Company on
February 25, 1991. Mr. Roth is a member of the Board of Directors of the Record
Industry Association of America.
THOMAS BRADSHAW was a director, Senior Executive Vice President and Chief
Financial Officer of SBEI from 1985 and, on February 25, 1991, he assumed the
same positions at the Company. In addition, Mr. Bradshaw was a director of LIVE
Entertainment, Inc. from December 1988 to November 1993.
SYDNEY D. VINNEDGE was a co-founder of the Company and has been a director
of the Company since its inception in 1982. Since February 25, 1991, Mr.
Vinnedge has served as a Senior Executive Vice President of the Company.
BENJAMIN J. SCOTTI co-founded the predecessor to SBEI in 1974 and served as
Co-Chairman of SBEI until February 25, 1991. Since such date, Mr. Scotti has
been Senior Executive Vice President of the Company, Senior Executive Vice
President of All American Music Group (a subsidiary of the Company) and a
director of the Company. He is the brother of Anthony J. Scotti.
2
<PAGE> 3
LAWRENCE E. LAMATTINA became Chief Executive Officer and President of All
American/Fremantle Television Group, an operating division of the Company, on
August 3, 1994 and a director of the Company on October 12, 1994. Since May
1989, he has been Chairman of the Board of Fremantle International, Inc. and
Chairman and Chief Executive officer of EC TV, a division of The Interpublic
Group of Companies, Inc. ("Interpublic"). Mr. Lamattina also continues to act as
a consultant to Interpublic with respect to areas that are not competitive with
the Company.
GORDON C. LUCE is a senior advisor to Eastman & Benirschke Financial Group
(financial planning and insurance brokerage), a position he has held from July
1990 to the present. Mr. Luce is a member of the Board of Directors of PS Group
(a diversified investment company) and Molecular Biosystems, Inc. (a medical
research enterprise) and is currently a member of the Board of Trustees of the
University of Southern California and the Chairman of Scripps Health. He became
a director of the Company on February 25, 1991. Mr. Luce was a director of
Carolco Pictures, Inc. until his resignation in November 1995; on November 10,
1995, Carolco Pictures filed a voluntary petition under Chapter 11 of the U.S.
Bankruptcy Code.
R. TIMOTHY O'DONNELL was elected to the Company's Board of Directors
effective January 2, 1992. He is President of Jefferson Capital Group, Ltd., a
privately held investment banking group co-founded by Mr. O'Donnell in September
1989. In February 1996, Mr. O'Donnell resigned from his directorship of LIVE
Entertainment, Inc. which he had held since 1988. Mr. O'Donnell has been a
director of Shorewood Packaging Corporation (packager for records, videos and
cassettes) since October 1991 and a director of Cinergi Pictures Entertainment,
Inc. (motion picture production) since March 1994.
DAVID A. MOUNT was appointed to the Board of Directors on May 5, 1994. In
March 1995, Mr. Mount was named Chairman and Chief Executive Officer of WEA,
Inc. Prior thereto, Mr. Mount had been President and Chief Executive Officer of
WEA, Inc. since October 1993. Mr. Mount was President and Chief Executive
Officer of LIVE Entertainment Inc. from August 1988 through September 1993. In
addition, Mr. Mount served as a director of LIVE Entertainment in 1989 and from
January 1992 to the present. On February 2, 1993, LIVE Entertainment filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code and emerged
pursuant to a plan of reorganization on March 17, 1993. From August 1989 to June
1993, Mr. Mount was President of LIVE Home Video, Inc., a subsidiary of LIVE
Entertainment, Inc. He was also Chief Executive Officer of LIVE Home Video, Inc.
from August 1989 to October 1993.
EUGENE P. BEARD became a member of the Board of Directors on October 12,
1994. Mr. Beard has been the Vice Chairman -- Finance and Operations of
Interpublic since October 1995, was Executive Vice President -- Finance and
Operations of Interpublic prior to that time and has served as a director of
Interpublic since 1982. Mr. Beard is a member of the Board of Directors of Brown
Brothers Harriman, 59 Wall Street Fund, Inc. (diversified investment fund) and
Micrografx, Inc. (computer software).
Interpublic has entered into a voting agreement with certain management
stockholders of the Company (including Anthony J. Scotti) to vote for the
election of one member of the Company's Board of Directors nominated by
Interpublic.
DIRECTORS' REMUNERATION
The Company does not pay any compensation to any person serving as a member
of the Board of Directors of the Company if such person is also an employee of
the Company. All outside directors are paid an annual fee of $25,000 for serving
as a director, except that Mr. Beard serves as a director without compensation
for such services and Mr. O'Donnell receives $25,000 for investment banking
advisory services in lieu of a directors fee. Non-employee directors receive
automatic stock option grants of 3,000 shares per year, with the exception of
Mr. Beard who has waived his right to stock options. Prior to 1996, such options
had been granted for the right to purchase the Company's common stock, $0.0001
par value ("Common Stock"). In 1996 and 1997, such options were granted for the
right to purchase the Company's Class B common stock, $0.0001 par value ("Class
B Common Stock").
3
<PAGE> 4
COMMITTEES OF THE BOARD OF DIRECTORS; ATTENDANCE
During the year ended December 31, 1996, there were three meetings of the
Board of Directors. All members participated in one meeting, Messrs. O'Donnell
and Vinnedge each were absent from one meeting and Mr. Mount was absent from two
meetings. Additionally, the Board of Directors acted by unanimous written
consent on two occasions. To assist in carrying out its duties and
responsibilities, the Board of Directors of the Company has appointed a Stock
Option Committee to administer the Company's Incentive Stock Option Plan, as
amended (the "1991 Plan"), and the Company's 1994 Stock Incentive Plan (the
"1994 Plan"). The members of the Stock Option Committee were R. Timothy
O'Donnell, Gordon C. Luce and David A. Mount. During the year ended December 31,
1996, the Stock Option Committee had no formal meetings but acted by unanimous
written consent on one occasion. The Board of Directors of the Company has
appointed an Executive Committee to assist the Board in the overall management
of the business and affairs of the Company. The members of the Executive
Committee are Anthony J. Scotti, Myron Roth and Thomas Bradshaw. During the year
ended December 31, 1996, the Executive Committee had no formal meetings but
acted by unanimous written consent on one occasion. The Company has an Audit
Committee, the members of which are R. Timothy O'Donnell and David A. Mount. For
the year ended December 31, 1996, the Audit Committee held one meeting, and both
members participated. The Board of Directors has appointed a Compensation
Committee to assist in the establishing of executive compensation and the
performance goals of the Company and its executive officers. The members of the
Compensation Committee are Gordon C. Luce, R. Timothy O'Donnell and David A.
Mount. During the year ended December 31, 1996, there were no formal meetings of
the Compensation Committee which acted by unanimous written consent on one
occasion.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
executive officers and directors and persons who beneficially own more than 10%
of the Company's stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC").
Executive officers, directors and greater than 10% beneficial owners are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms filed by them.
Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with, except that (i) Jefferson Capital Group, Ltd., an
affiliate of Director R. Timothy O'Donnell, failed to file a Form 4 in November
1996 relating to its exercise of a warrant for 62,500 shares of Common Stock in
October 1996, and (ii) R. Timothy O'Donnell, a director, failed to timely file a
Form 5 in February 1997 relating to the grant of 3,000 stock options in February
1996.
4
<PAGE> 5
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by
the Company to the Chief Executive Officer and the four most highly compensated
executive officers of the Company who served in such capacities during fiscal
1996 (the "Named Executive Officers") for services rendered during each of the
last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS
-------------------------------------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
-------------------------- RESTRICTED OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS SAR'S(#) (1)
- ----------------------------- ----- -------- -------- ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Anthony J. Scotti............ 1996 $895,000 $ -- $ -- 1,500,000(2) $ --
Chief Executive Officer 1995 813,000 -- -- 100,000(3) --
1994 719,000 -- -- 100,000(3) --
Myron I. Roth................ 1996 $425,000 $ -- $ -- 50,000(4) $ --
President and Chief 1995 425,000 79,000 -- 50,000(3) --
Operating
Officer 1994 408,000 79,000 -- 50,000(3) --
Thomas Bradshaw.............. 1996 $467,000 $ -- $ -- 250,000(4) $ --
Chief Financial Officer and 1995 419,000 43,000 -- 35,000(3) --
Senior Executive 1994 399,000 43,000 -- 35,000(3) --
Vice President
Sydney D. Vinnedge........... 1996 $273,000 $ -- $ -- 6,000(4) $ --
Senior Executive 1995 396,000 13,000 -- 6,000(3) --
Vice President 1994 371,000 13,000 -- 6,000(3) --
Lawrence E. Lamattina(5)..... 1996 $590,000 $550,000 $ -- 25,000(4) $ --
Chief Executive Officer and 1995 561,000 550,000 -- 25,000(3) --
President, All American/ 1994 229,000 229,000 218,000(6) 150,000(3) --
Fremantle Television Group
</TABLE>
- ---------------
(1) The Named Executive Officers received compensation in the form of personal
benefits, including automobile allowances, premiums for health insurance,
disability insurance and life insurance, which did not exceed the lesser of
$50,000 or 10% of the total annual salary and bonus reported for each year.
(2) Mr. Anthony Scotti was granted options to purchase 300,000 shares of Common
Stock and options to purchase 1,200,000 shares of Class B Common Stock
during 1996.
(3) Options granted to purchase shares of Common Stock.
(4) Options granted to purchase shares of Class B Common Stock.
(5) Mr. Lamattina's employment with the Company commenced on August 3, 1994.
(6) In accordance with his employment agreement dated August 3, 1994, Mr.
Lamattina was granted restricted stock awards ("RSAs") under the 1994 Plan,
as of July 6, 1994, for 30,000 shares of Common Stock, with a vesting date
of July 5, 1998. The shares have been valued using the closing bid price on
July 6, 1994 of $7.25.
5
<PAGE> 6
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL EXERCISE
SECURITIES OPTIONS OR BASE
UNDERLYING GRANTED TO PRICE GRANT DATE
OPTIONS EMPLOYEES IN ($/SHARE) PRESENT
NAME GRANTED(#) 1996 (1) EXPIRATION DATE VALUE(2)
- ------------------------------- ---------- ------------ --------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Anthony J. Scotti.............. 50,000(3) 2.20% $10.863 February 26, 2001 $ 149,000
250,000(4) 11.01% 9.875 February 26, 2006 833,000
1,200,000(5) 52.84% 7.875 February 26, 2006 3,180,000
Myron I. Roth.................. 50,000(6) 2.20% $ 7.875 February 26, 2006 $ 133,000
Thomas Bradshaw................ 250,000(7) 11.01% $ 7.875 February 26, 2006 $ 663,000
Sydney Vinnedge................ 6,000(6) 0.26% $ 7.875 February 26, 2006 $ 16,000
Lawrence Lamattina............. 25,000(6) 1.10% $ 7.875 February 26, 2006 $ 66,000
</TABLE>
- ---------------
(1) Exercise price is based upon the closing sale price of the Common Stock or
Class B Common Stock, as the case may be, on the date of grant.
(2) Grant date present value is determined using the Black-Scholes option
valuation model.
(3) Options to purchase shares of Common Stock which vested immediately with an
exercise price equal to 110% of the closing sales price of the Common Stock
on the date of grant.
(4) Options to purchase shares of Common Stock which vested immediately.
(5) Options to purchase 300,000 shares of Class B Common Stock have vested
subsequent to December 31, 1996 upon the Company's achievement of the
specified performance targets. The remaining options to purchase 900,000
shares of Class B Common Stock are subject to vesting in tranches of 300,000
shares over each of the next three years upon the Company's achievement of
specified performance targets or nine years and nine months from the date of
grant, to the extent not previously vested, if such specified performance
targets are not achieved. See "-- Employment Agreements."
(6) These options to purchase shares of Class B Common Stock vest in varying
percentages based upon the satisfaction of certain performance targets. None
of these options had vested as of December 31, 1996. All of these options
became fully vested subsequent to December 31, 1996 upon the Company's
achievement of the specified performance targets.
(7) Options to purchase 100,000 shares of Class B Common Stock vested on the
date of grant. Options to purchase 30,000 shares of Class B Common Stock
have vested subsequent to December 31, 1996 upon the Company's achievement
of the specified performance targets. The remaining options to purchase
120,000 shares of Class B Common Stock are subject to vesting in tranches of
30,000 shares over each of the next four years upon the Company's
achievement of specified performance targets or nine years and nine months
from the date of grant, to the extent not previously vested, if such
specified performance targets are not achieved. See "-- Employment
Agreements."
6
<PAGE> 7
OPTION EXERCISES IN 1996 AND YEAR END OPTION VALUES
The following table provides certain information concerning the exercise of
stock options and shows the number of shares covered by both exercisable and
non-exercisable stock options held as of the end of 1996. Also shown are values
for "in-the-money" options, which represent the positive difference between the
exercise price of such options and the price of the Common Stock or the Class B
Common Stock, as the case may be, at year end.
AGGREGATED OPTION EXERCISES DURING 1996 AND
OPTION VALUES ON DECEMBER 31, 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
ON VALUE 1996 DECEMBER 31, 1996
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ----------------------------------- -------- --------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Anthony J. Scotti.................. -- -- 500,000/1,200,000 $1,850,625/$2,550,000
Myron I. Roth...................... -- -- 100,000/50,000 $443,750/$106,250
Thomas Bradshaw.................... -- -- 170,000/150,000 $523,125/$318,750
Sydney D. Vinnedge................. -- -- 12,000/6,000 $53,250/$12,750
Lawrence E. Lamattina.............. -- -- 100,000/100,000 $525,000/$475,000
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with the following Named
Executive Officers: Anthony J. Scotti, Thomas Bradshaw, Sydney D. Vinnedge and
Lawrence Lamattina. The employment agreement with Mr. Scotti, originally entered
into in February 1991 and amended most recently in February 1996, provides that
Mr. Scotti shall serve as Chief Executive Officer of the Company through
February 25, 2001 (unless earlier terminated in accordance with the terms of
such agreement), commencing at a base salary of $907,500 in 1996 and increasing
by 10% per year (subject to a maximum base salary of $1,000,000 per year). Mr.
Scotti's current salary is $998,250. He is required to render his services on a
full-time basis to the Company, except that he may devote such reasonable amount
of time, as he determines, to other business activities which may be conducted
in the entertainment industry. The term of the agreement may be terminated by
the Company for good cause (as defined) or by Mr. Scotti in the event of the
"Company's Material Breach" (as defined) or a "Change in Control" or other
"Event" as defined in the 1994 Plan.
The employment agreement with Mr. Bradshaw, originally entered into in
February 1991 and amended most recently in February 1996, provides that Mr.
Bradshaw shall serve as Senior Executive Vice President, Finance and Chief
Financial Officer of the Company through February 25, 2001 (unless earlier
terminated), commencing at a base salary of $476,650 in 1996 and increasing by a
minimum of 6% per year. Mr. Bradshaw's current salary is $505,249. The five-year
term employment agreement with Mr. Vinnedge, originally entered into in February
1991, which provides that he will serve as a Senior Executive Vice President of
the Company, has been extended through August 25, 1997, commencing at a base
compensation of $250,000 per year, plus contingent compensation of up to
$250,000 per year at the Company's discretion. The employment agreement with Mr.
Lamattina, entered into in August 1994, provides that Mr. Lamattina shall serve
as the Chief Executive Officer and President of the All American/Fremantle
Television Group through August 3, 1999 (unless earlier terminated), commencing
at a base salary of $550,000 and increasing by 5% per year. His current salary
is $606,375. Mr. Lamattina is also entitled to receive annual incentive
compensation up to $550,000 per year if certain operating income targets are
achieved by the All American/Fremantle Television Group. Under Mr. Lamattina's
employment agreement, he is entitled to annual grants of options to purchase
25,000 shares of the Company's common stock. See "Security Ownership of Certain
Beneficial Owners and Management" for a description of the vesting of Mr.
Lamattina's stock options. The employment agreement for Mr. Roth, originally
entered into in February 1991, has expired, but he continues his employment with
the Company as President and Chief Operating Officer without an
7
<PAGE> 8
employment agreement under substantially the same terms as those in effect in
the last year of his employment agreement. Mr. Roth's current salary is $425,000
per year. Each of the Named Executive Officers is provided with an automobile
expense reimbursement allowance and an annual allowance to cover premiums for
life, health and disability insurance.
Under his employment agreement, prior to its amendment in February 1996,
Mr. Scotti was entitled to receive, as long-term incentive compensation, 100,000
stock options annually (from 1994 to 1999). In February 1996, subject to Mr.
Scotti relinquishing his remaining contractual right to future grants under his
employment agreement, the Option Committee granted to Mr. Scotti options (under
the 1994 Plan) to purchase 250,000 shares of Common Stock at the market price
($9.875 per share) on the date of grant and options (under the 1991 Plan) to
purchase 50,000 shares of Common Stock at 110% of the fair market value
($10.8625 per share) on the date of grant. All such stock options vested on the
date of grant in February 1996.
In addition, in connection with the extension of Mr. Scotti's employment
agreement, the Option Committee granted to Mr. Scotti options (under the 1994
Plan) to purchase 1,200,000 shares of Class B Common Stock at an exercise price
equal to the market price ($7.875 per share) on the date of grant. These options
vest subject to Mr. Scotti's staying in the continuous employment of the Company
for a period of 9 years and 9 months from the date of grant and are entitled to
accelerated vesting in four equal annual tranches upon the achievement of
certain performance targets set annually by the Option Committee or the Board of
Directors or earlier upon the occurrence, with certain exceptions, of a "Change
in Control" or other "Event" (as defined in the 1994 Plan). The Company has also
agreed to reimburse Mr. Scotti for any federal, state or local excise tax
("Excise Tax"), and any additional taxes to which he may be subject, on any
payments to Mr. Scotti from the Company as a result of accelerated vesting of
this option grant upon a "Change in Control" or otherwise, up to a maximum
reimbursement equal to two times the amount of such Excise Tax.
As part of the amendment of Mr. Bradshaw's employment agreement, the Option
Committee granted to Mr. Bradshaw options to purchase 250,000 shares of Class B
Common Stock at the market price ($7.875 per share) on the date of grant. One
hundred thousand of such options vested on the date of grant in February 1996.
The remainder vests in a substantially similar manner to the vesting provisions
described above with respect to Mr. Scotti's options to purchase Class B Common
Stock.
On July 16, 1996, at the Company's Annual Meeting, the Company's
stockholders approved all options granted during 1996 including, but not limited
to, those granted to Messrs. Scotti and Bradshaw discussed above.
8
<PAGE> 9
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 21, 1997 concerning
the beneficial ownership of certain securities of the Company by: (i) each
person who is known to the Company to be a beneficial owner of more than 5% of
each class of the outstanding common stock of the Company; (ii) each of the
current directors of the Company; and (iii) all current directors and Named
Executive Officers of the Company as a group. Unless otherwise specified, the
address of each beneficial owner listed below is 808 Wilshire Boulevard, Santa
Monica, California 90401.
<TABLE>
<CAPTION>
PERCENT OF
PERCENT OF CLASS B CLASS B
COMMON COMMON COMMON COMMON
STOCK STOCK STOCK STOCK
BENEFICIALLY BENEFICIALLY BENEFICIALLY BENEFICIALLY
OWNED(1) OWNED OWNED (1) OWNED
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Anthony J. Scotti(2) 3,434,465 38.75% 300,000 5.46%
Benjamin J. Scotti(3) 1,445,995 20.82% 20,000 *
Myron I. Roth(4) 440,850 6.27% 50,000 *
Thomas Bradshaw(5) 385,850 5.51% 130,000 2.44%
Sydney D. Vinnedge(6) 153,875 2.22% 6,000 *
Lawrence Lamattina(7) 155,000 2.20% 25,000 *
Gordon C. Luce(8) 4,000 * 6,000 *
David A. Mount(8) 3,000 * 6,000 *
R. Timothy O'Donnell(9) 98,600 1.42% 6,000 *
Jefferson Capital Group, Ltd.
One James Center, 901 East Cary Street Suite
1400
Richmond, Virginia 23219
Eugene P. Beard(10) -- -- -- --
The Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
The Interpublic Group of Companies, Inc.(11),
(12) 630,000 9.09% 2,520,000 48.47%
1271 Avenue of the Americas
New York, New York 10020
The Capital Group Companies, Inc.(13) -- -- 540,000 10.39%
333 South Hope Street, 52nd Floor
Los Angeles, California 90071
FMR Corp.(14) 1,246,234 17.97% -- --
82 Devonshire Street
Boston Massachusetts 02109
Janus Capital Corp.(15) -- -- 500,000 9.62%
100 Fillmore Street, Suite 300
Denver, Colorado 80206
All Directors and Executive Officers as a
group (10 persons) 5,044,710 62.18% 549,000 9.55%
</TABLE>
- ---------------
* less than 1%
(1) Amounts include options and other securities exercisable into shares of
Common Stock or Class B Common Stock, as the case may be, held by such
beneficial owner, unless such securities are not exercisable within 60
days.
(2) Common Stock includes 1,429,775 shares beneficially owned by Messrs. Roth,
Bradshaw, Vinnedge, Lamattina and certain other employees which Anthony J.
Scotti has a proxy to vote. Includes vested options to purchase 500,000
shares of Common Stock and 300,000 shares of Class B Common Stock. Does not
include 900,000 shares of Class B Common Stock issuable to Mr. Scotti upon
exercise of options which have not vested and are not subject to vesting
within the next 60 days.
9
<PAGE> 10
(3) Includes time vesting options to purchase 10,000 shares of Common Stock
which have vested and vested performance options to purchase 20,000 shares
of Class B Common Stock. Does not include options to purchase 10,000 shares
of Common Stock which have not vested and are not subject to vesting within
the next 60 days. Also excludes 80,000 shares of Class B Common Stock
issuable to Mr. B. Scotti upon exercise of options which have not vested
and are not subject to vesting within the next 60 days.
(4) 415,850 of such Common Stock shares are subject to a voting proxy granted
to Anthony J. Scotti. Includes vested performance options to purchase
100,000 shares of Common Stock and 50,000 shares of Class B Common Stock.
(5) 385,850 of such Common Stock shares are subject to a voting proxy granted
to Anthony J. Scotti. Includes vested performance options to purchase
70,000 shares of Common Stock and 130,000 shares of Class B Common Stock.
Does not include 120,000 shares of Class B Common Stock issuable to Mr.
Bradshaw upon exercise of options which have not vested and are not subject
to vesting within the next 60 days.
(6) 120,225 of such Common Stock shares are subject to a voting proxy granted
to Anthony J. Scotti. Includes vested performance options to purchase
12,000 shares of Common Stock and 6,000 shares of Class B Common Stock.
Does not include 6,000 shares of Class B Common Stock issuable to Mr.
Vinnedge upon exercise of options which have not vested and are not subject
to vesting within the next 60 days.
(7) Mr. Lamattina owns 30,000 shares of restricted Common Stock which vest in
July 1998, is vested in time vesting options to purchase 75,000 shares of
Common Stock and is vested in performance options to purchase 50,000 shares
of Common Stock and 25,000 shares of Class B Common Stock. All such Common
Stock shares are subject to a voting proxy granted to Anthony J. Scotti.
Excludes time vesting options to purchase 50,000 shares of Common Stock
which have not vested and are not subject to vesting within the next 60
days. Also excludes 25,000 shares of Class B Common Stock issuable upon
exercise of options which have not vested and are not subject to vesting
within the next 60 days.
(8) Includes time vesting options to purchase 3,000 shares of Common Stock
which have vested and vested options to purchase 6,000 shares of Class B
Common Stock. Excludes time vesting options to purchase 3,000 shares of
Common Stock which have not vested and are not subject to vesting within
the next 60 days.
(9) Mr. O'Donnell owns 33,100 shares of Common Stock, and his affiliate,
Jefferson Capital Group, Ltd., owns 62,500 shares of Common Stock. Includes
time vesting options to purchase 3,000 shares of Common Stock which have
vested and vested options to purchase 6,000 shares of Class B Common Stock.
Excludes time vesting options to purchase 3,000 shares of Common Stock
which have not vested and are not subject to vesting within the next 60
days.
(10) Mr. Beard was appointed to the Board of Directors on October 12, 1994 to
fill a vacancy. Mr. Beard does not own any shares of Common Stock or Class
B Common Stock directly and disclaims beneficial ownership of the 630,000
shares of Common Stock and the 2,520,000 shares of Class B Common Stock
owned by Interpublic.
(11) As disclosed on a Schedule 13D, dated August 12, 1994.
(12) Represents approximately 26% (approximately 20% on a fully-diluted basis)
of common stock when Common Stock and Class B Common Stock are aggregated
as one class.
(13) As disclosed on a Schedule 13G, dated February 12, 1997.
(14) As disclosed on a Schedule 13G, dated February 10, 1997.
(15) As disclosed on a Schedule 13G, dated February 13, 1996.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In October 1994, the Company provided a loan of $250,000 to Thomas
Bradshaw. Such loan is secured by a pledge of shares of Common Stock owned by
Mr. Bradshaw, bears interest at a rate equal to a market
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rate determined by reference to the Company's working capital line (8%) and has
been extended to mature upon the expiration of Mr. Bradshaw's current employment
agreement (February 2001).
In December 1995, the Company entered into a domestic distribution
agreement for recorded music with WEA, Inc. A member of the Company's Board of
Directors is currently Chairman and Chief Executive Officer of WEA, Inc.
In January 1996, the Company acquired from Interpublic the remaining 50%
interest of Mark Goodson Productions LLC. As a result, the Company is
responsible for the full share of the contingent purchase price, to the extent
earned by the sellers. Such contingent purchase price, which may total $48.5
million by the fifth anniversary of the initial acquisition in October 1995,
will be treated as an increase in goodwill and will be amortized coterminously
with the original 25 year period. Through December 31, 1996, accrued contingent
purchase price totaled $10.1 million (including Interpublic's share through
December 31, 1995 of $0.9 million). As of December 31, 1996, goodwill, including
the total initial purchase price of $53.8 million (including deal costs of $0.9
million) and contingent purchase price totals $60.0 million (before accumulated
amortization of $2.7 million).
The Company currently leases, on a month to month basis, a building from
Anthony J. Scotti and Benjamin J. Scotti at a cost to the Company of
approximately $4,500 per month, which the Company believes is a market rate.
This building is used for office and warehouse space for the Company's
television production operations.
The Company believes that the term of the lease described above is
substantially comparable to those that would have been obtainable in similar or
analogous transactions with unaffiliated parties.
MANAGEMENT STOCKHOLDERS AGREEMENT
The Company has entered into a stockholders' agreement with Anthony J.
Scotti, Benjamin J. Scotti, Thomas Bradshaw, and Sydney D. Vinnedge (the
"Management Stockholders Agreement"), pursuant to which (i) each of Messrs.
Bradshaw and Vinnedge granted (a) to Anthony J. Scotti and Benjamin J. Scotti a
right of first refusal on all shares of the Common Stock owned by Mr. Bradshaw
and 108,225 shares of Common Stock held by Mr. Vinnedge and a right to purchase
all such shares upon termination of their employment for a reason other than
"cause" (as defined in their respective employment agreements), and (b) to
Anthony J. Scotti an irrevocable proxy to vote substantially all such shares
until August 25, 2001; and (ii) each of the individuals was granted certain
registration rights for such shares owned by him (such shares having been
subsequently registered on a registration statement which was declared effective
on January 29, 1997). Additionally, Myron Roth, on August 26, 1996, granted to
Anthony J. Scotti an irrevocable proxy to vote 340,850 shares of Common Stock
for the lesser of five years (August 25, 2001) or the period of Mr. Roth's
employment by the Company. The proxies granted to Anthony J. Scotti gives him
the ability to control the voting of 2,274,615 shares of the 6,933,713 shares
(or approximately 33%) of the Common Stock outstanding. Additionally, Messrs.
Roth, Bradshaw and Vinnedge have granted to Anthony J. Scotti an irrevocable
proxy to vote all shares of Common Stock acquired upon exercise of their options
to purchase an aggregate of 182,000 shares of Common Stock.
Lawrence E. Lamattina and all other employees have granted to Anthony J.
Scotti an irrevocable proxy to vote all shares of Common Stock acquired upon
exercise of their options to purchase an aggregate of 477,850 shares of Common
Stock and, in Mr. Lamattina's case, 30,000 shares of restricted Common Stock
granted pursuant to the 1994 Plan.
In the aggregate, Mr. Scotti owns 1,504,690 shares of Common Stock, has
vested options to purchase 500,000 shares of Common Stock, has an irrevocable
proxy to vote 769,925 shares of Common Stock (including 30,000 shares of
restricted Common Stock) and has irrevocable proxies to vote 659,850 shares of
Common Stock when acquired upon exercise of vested options.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly cause this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: April 30, 1997
ALL AMERICAN COMMUNICATIONS, INC.
By: /s/ ANTHONY J. SCOTTI
------------------------------------
Anthony J. Scotti
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ ANTHONY J. SCOTTI Chairman of the Board and Chief April 30, 1997
- --------------------------------------------- Executive Officer (principal
Anthony J. Scotti executive officer)
/s/ THOMAS BRADSHAW Director, Chief Financial April 30, 1997
- --------------------------------------------- Officer and Treasurer
Thomas Bradshaw (principal financial officer
and principal accounting
officer)
/s/ EUGENE BEARD Director April 30, 1997
- ---------------------------------------------
Eugene Beard
/s/ LAWRENCE E. LAMATTINA Director April 30, 1997
- ---------------------------------------------
Lawrence E. Lamattina
/s/ GORDON C. LUCE Director April 30, 1997
- ---------------------------------------------
Gordon C. Luce
/s/ DAVID A. MOUNT Director April 30, 1997
- ---------------------------------------------
David A. Mount
/s/ R. TIMOTHY O'DONNELL Director April 30, 1997
- ---------------------------------------------
R. Timothy O'Donnell
/s/ MYRON ROTH Director April 30, 1997
- ---------------------------------------------
Myron Roth
/s/ BENJAMIN J. SCOTTI Director April 30, 1997
- ---------------------------------------------
Benjamin J. Scotti
/s/ SYDNEY D. VINNEDGE Director April 30, 1997
- ---------------------------------------------
Sydney D. Vinnedge
</TABLE>
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