SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
AMENDMENT NO.2
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended July 31, 1997
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 1-10880
BET HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 52-1742995
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE BET PLAZA
1900 W PLACE, N.W., WASHINGTON, D.C. 20018-1211
(Address of principal executive offices)
(202) 608-2000
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
CLASS A COMMON STOCK, NEW YORK STOCK EXCHANGE
$.02 PAR VALUE
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.
AS OF OCTOBER 17, 1997, THERE WERE 10,055,048 SHARES OF THE
REGISTRANT'S CLASS A COMMON STOCK, $.02 PAR VALUE PER SHARE (THE "CLASS
A STOCK"), OUTSTANDING. THE AGGREGATE MARKET VALUE OF SHARES HELD BY
NON-AFFILIATES OF THE REGISTRANT (BASED ON THE CLOSING PRICE OF SUCH
SHARES ON THE NEW YORK STOCK EXCHANGE COMPOSITE TAPE ON OCTOBER 17,
1997) WAS APPROXIMATELY $340,371,000. AS OF OCTOBER 17, 1997, THERE
WERE 1,831,600 SHARES AND 4,820,000 SHARES OF THE REGISTRANT'S CLASS B
COMMON STOCK (THE "CLASS B STOCK") AND CLASS C COMMON STOCK (THE "CLASS
C STOCK"), RESPECTIVELY, OUTSTANDING, NONE OF WHICH WERE HELD BY NON-
AFFILIATES OF THE REGISTRANT.
EXPLANATORY NOTE
This Amendment No. 2 on Form 10-K/A to the Annual Report on Form
10-K of BET Holdings, Inc. ("BET Holdings"or the "Company") for the
fiscal year ended July 31, 1997, as amended by Form 10-K/A (the "Form
10-K"), amends and restates in its entirety Items 10, 11 and 12 of
Part III thereof. Capitalized terms used and not defined herein shall
have the meanings ascribed to them in the Form 10-K.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.
A. DIRECTORS OF THE COMPANY
The directors of the Company as of October 17, 1997 and their
ages, terms of office and a brief description of their business
experience during the past five years, including any positions with the
Company, are set forth below.
Director
Name Age Since Description
---- --- -------- -----------
Robert L. Johnson 51 1991 Mr. Johnson founded Black
Entertainment Television
("BET"), the Company's primary
operating subsidiary, in 1979.
Mr. Johnson has served as
President, Chief Executive
Officer and a director of BET
since its creation. Since 1991,
Mr. Johnson has served as the
Chairman of the Company's Board
of Directors. Since 1991, Mr.
Johnson has also served as
Chief Executive Officer of the
Company and has served as its
President from 1991 until March
1996. Mr. Johnson is also the
Chairman of District
Cablevision, Inc. ("DCI"), a
Washington, D.C. cable
operating company which he
founded in 1980, and has served
as a director of Liberty Media
Corporation ("Liberty") since
December 1991. Since January
1994, Mr. Johnson has served as
a director of Hilton Hotels
Corporation.
John C. Malone, Ph.D. 56 1991 Since December 1996, Dr. Malone
has served as Chairman of the
Board and Chief Executive
Officer of Tele-Communications,
Inc. ("TCI"), the largest
owner/operator of cable
television systems in the
United States. From 1973
through November 1996, Dr.
Malone served as President and
Chief Executive Officer of TCI.
Dr. Malone has also served as
the Chairman and a director of
Liberty since 1991, and is a
director of a variety of other
affiliates of TCI, The Bank of
New York and Discovery
Communications, Inc. Dr. Malone
has served as a director of BET
since 1979 and as its Chairman
from 1979 to 1991.
Herbert P. Wilkins, Sr. 55 1991 Since 1990, Mr. Wilkins has
been the President of Syncom
Management Company, Inc.,
formally, W&J Management
Company, Inc., which manages a
group of minority oriented
venture capital funds,
including Syndicated
Communications, Inc., Syncom
Capital Corporation, Syndicated
Communications Venture Partners
II, L.P. and Syndicated
Communications Venture Partners
III, L.P. From 1977 to 1989,
Mr. Wilkins served as President
of Syndicated Communications,
Inc. He has also been a
director of DCI since 1982. Of
the funds managed by Syncom
Management Company, Inc.,
Syndicated Communications, Inc.
is a shareholder of DCI. Mr.
Wilkins has served as a
director of BET, since 1983 and
as a director of Cowles Media
Company since 1992.
Delano E. Lewis 59 1994 Mr. Lewis has been President
and Chief Executive Officer of
National Public Radio since
January 1994. From January 1990
to January 1994, Mr. Lewis
served as Chief Executive
Officer of C&P Telephone
Company, a subsidiary of Bell
Atlantic. From July 1988 to
January 1990, Mr. Lewis was
President of C&P Telephone
Company. Mr. Lewis also serves
as a director of Colgate
Palmolive, Guest Services and
Halliburton Company.
Denzel Washington 42 1996 Mr. Washington is an Academy
Award winning and critically
acclaimed feature film actor.
Mr. Washington also serves as
director of the Sundance
Institute.
Sheila Crump Johnson 48 1991 Mrs. Johnson has served as
Executive Vice President,
Corporate Affairs of the
Company since September 1992.
From September 1991 to
September 1992, she served as
Vice President, Corporate
Affairs of the Company. Since
1979 she has served as a
director of BET and, since
1990, as Vice President,
Corporate Affairs of BET. Prior
to 1990, Mrs. Johnson was a
lecturer and author in the area
of early childhood music
education.
Robert R. Bennett 39 1997 Since April 1997, Mr. Bennett
has served as President and
Chief Executive Officer of
Liberty. Mr. Bennett served as
Liberty's principal financial
officer from 1990 to April
1997. Mr. Bennett has also
served as an Executive Vice
President of TCI. From 1987 to
1990, Mr. Bennett served as a
Vice President and Director of
Finance at TCI. Mr. Bennett has
also served in the
Communications Entertainment
and Publishing Division of the
Bank of New York. He also
serves as a director of
Discovery Communications Inc.
Robert L. Johnson and Sheila Crump Johnson are married to one
another. No other family relationships exist among any executive
officers or directors of the Company.
There is a shareholders' agreement among the Company, Mr. Johnson,
TW/BET Holding Co. ("TW/BET") and LMC BET, Inc. dated November 6, 1991
which states that as long as Mr. Johnson, TW/BET and LMC BET, Inc. each
continue to hold not less than 1,500,000 shares of Class B Stock or
Class C Stock, each such shareholder will have the right to designate
one nominee to the Company's Board of Directors (the "Board") and that
each such other shareholder will use his or its best efforts to cause
the election of the nominee of such shareholder. In December 1995, the
Company repurchased 1,518,300 shares of Class A Stock and 1,518,300
shares of Class B Stock owned by TW/BET, after which TW/BET ceased to
be a shareholder and no longer has a nominee serving on the Board. Mr.
Bennett has been designated as LMC BET Inc.'s nominee to the Board.
Mr. Lewis was designated as Mr. Johnson's nominee to the Board in
connection with the Company's 1996 Annual Meeting of Shareholders.
B. EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of October 17, 1997 and
their ages and positions with the Company are set forth below.
Name Age Position
---- --- --------
Robert L. Johnson 51 Chairman of the Board of Directors,
Chief Executive Officer
Debra L. Lee 43 President and Chief Operating Officer
William T. Gordon, III 44 Executive Vice President, Chief Financial
Officer and Treasurer
James A. Ebron 43 Executive Vice President, Corporate Media
Sales
Sheila Crump Johnson 48 Executive Vice President, Corporate
Affairs and Director
Jefferi K. Lee 40 Executive Vice President, Network
Operations and Programming
Curtis N. Symonds 42 Executive Vice President, Affiliate Sales
and Marketing
Janis P. Thomas 42 Executive Vice President, Brand Marketing
and Licensing
The executive officers of the Company serve at the pleasure of the
Board of Directors. The following is a brief description for at least
the past five years of the current executive officers of the Company.
Mr. Johnson founded BET, the Company's primary operating
subsidiary, in 1979. Mr. Johnson has served as President, Chief
Executive Officer and a director of BET since its creation. Since 1991
Mr. Johnson has served as the Chairman of the Company's Board of
Directors. Since 1991, Mr. Johnson also served as Chief Executive
Officer of the Company and has served as its President from 1991 until
March 1996. Mr. Johnson is also the Chairman of District Cablevision,
Inc., a Washington, D.C. cable system operating company which he
founded in 1980, and has served as a director of Liberty Media
Corporation since December 1991. Since January 1994, Mr. Johnson has
served as a director of Hilton Hotels Corporation.
Ms. Lee has served as President and Chief Operating Officer since
March 1996. Prior to that time Ms. Lee served as an Executive Vice
President of the Company since September 1992. From September 1991 until
May 1997, she served as the General Counsel and Secretary of the
Company. From September 1991 to September 1992, she served as a Vice
President of the Company. Ms. Lee has also served as Vice President and
General Counsel of BET since April 1986. In July 1991, she became the
Secretary of BET.
Mr. Gordon has served as Executive Vice President, Chief Financial
Officer and Treasurer since August 1993. From 1987 to 1993, Mr. Gordon
was a partner with the accounting firm of Price Waterhouse LLP. Mr.
Gordon was BET's audit partner on behalf of Price Waterhouse, LLP
between 1989 and early 1992. Mr. Gordon joined Price Waterhouse in 1975.
Mr. Ebron has served as Executive Vice President, Corporate Media
Sales since September 1995. He previously served as Executive Vice
President, Media Sales since 1992. Prior to that time, Mr. Ebron served
as Vice President, Network Sales of the Company from September 1991 to
September 1992 and as Vice President, Network Sales of BET from August
1983 until September 1991.
Mrs. Johnson has served as Executive Vice President, Corporate
Affairs of the Company since September 1992. From September 1991 to
September 1992, she served as Vice President, Corporate Affairs of the
Company. Since 1979 she has served as a director of BET and, since 1990,
as Vice President, Corporate Affairs of BET. Prior to 1990, Mrs. Johnson
was a lecturer and author in the area of early childhood music
education.
Mr. Lee has served as Executive Vice President, Network Operations
and Programming since September 1992. Mr. Lee served as Vice President,
Network Operations of the Company from September 1991 to September 1992
and of BET since September 1982.
Mr. Symonds has served as Executive Vice President, Affiliate Sales
and Marketing since September 1992. Mr. Symonds served as Vice
President, Affiliate Marketing of the Company from September 1991 to
September 1992 and of BET since July 1988.
Ms. Thomas has served as Executive Vice President, Brand Marketing
and Licensing since August 1997. She previously served as Executive Vice
President, Marketing and Merchandising from May 1996 to August 1997. Ms.
Thomas served as Executive Vice President, Direct Marketing and
Advertising Services from September 1992 to April 1996. Ms. Thomas
served as Vice President, Advertising Services of the Company from
September 1991 to September 1992 and of BET since September 1982.
C. OTHER SIGNIFICANT EMPLOYEES OF THE COMPANY
Certain other significant employees of the Company as of October
17, 1997 and their ages and positions with the Company are set forth
below.
Name Age Position
---- --- --------
Louis Carr 41 Senior Vice President, National Media Sales
Maurita Coley 41 Senior Vice President, Network Operations and
Programming
Byron Marchant 40 Senior Vice President and General Counsel
Scott Mills 29 Senior Vice President, Business Development
Mr. Carr has served as Senior Vice President, National Media Sales
since January 1995. Prior to that time, Mr. Carr served as Vice
President, Midwest Advertising from August 1992 to January 1995. From
August 1989 to August 1992, he served as Director, Midwest Advertising.
He joined the Company as an account executive in August 1986.
Ms. Coley has served as Senior Vice President, Network Operations
and Programming, since August 1995. Prior to that time, Ms. Coley served
as Senior Vice President, Legal Affairs of the Company from February
1993 through August 1995. Prior to February 1993, Ms. Coley was a
partner with the Washington D.C. law firm of Cole, Raywid and Braverman.
Ms. Coley joined Cole, Raywid & Braverman in November 1983.
Mr. Marchant has served as Senior Vice President and General
Counsel since May 1997. Mr. Marchant was a partner at Patton Boggs,
L.L.P. from 1996 to 1997. Prior to 1996, Mr. Marchant was Senior Vice
President and General Counsel for TeleCommunications Systems, Inc. Mr.
Marchant has also held previous positions as senior legal advisor to
Commissioner Andrew Barrett of the Federal Communications Commission
and as an attorney with the law firm of Sidley & Austin.
Mr. Mills has served as Senior Vice President, Business Development
since September 1997. Prior to that time, Mr. Mills was a Vice President
with the investment banking firm of Lehman Brothers since 1993.
D. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially own more
than ten percent (10%) of the Company's stock, to file initial reports
of ownership and reports of changes in ownership with the Commission and
the New York Stock Exchange. Executive officers, directors and greater
than ten percent (10%) beneficial owners are required by Commission
regulations to furnish the Company with copies of all Section 16(a)
forms they file. Based solely on a review of the copies of such forms
furnished to the Company and written representations from the executive
officers, directors and certain shareholders, the Company believes that
its executive officers, directors and greater than ten percent (10%)
beneficial owners complied with all applicable Section 16(a) filing
requirements, except for: (i) the failure of Mr. Wilkins to file a Form
5 for the fiscal year ended July 31, 1997 to reflect the distribution of
Class A Stock to him from Syndicated Communications Venture Partners II,
L.P.; (ii) the failure of Mr. Johnson to file a Form 4 to account for
stock options which were granted to him during fiscal 1997; and (iii) a
Form 3 which was filed by Mr. Lewis on October 6, 1997 which was
originally due when Mr. Lewis first became a director of the Company.
The Form 3 filed by Mr. Lewis indicates that he does not beneficially
own any securities of the Company.
ITEM 11. EXECUTIVE COMPENSATION
A. COMPENSATION OF DIRECTORS
Directors of the Company currently receive $25,000 per annum as
compensation for attending meetings of the Board, reimbursement for
travel and out-of-pocket expenses incurred in connection with Board
meetings and otherwise with respect to their duties as directors.
As discussed in Item 12(C) below, the Board has appointed Mr.
Delano E. Lewis to serve on an independent committee (the "Independent
Committee") which was established to review, evaluate and report to the
Board its determination regarding an unsolicited proposal from Mr.
Johnson and Liberty Media Corporation to acquire all of the outstanding
shares of the Company's Class A Stock which they do not own at a price
per share of $48.00 cash. The Company has agreed to compensate Mr. Lewis
at the rate of $1,000 per Independent Committee meeting and to reimburse
him for all reasonable expenses incurred in connection with his
responsibilities thereto.
B. EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid or accrued for the last three complete fiscal years
ended July 31, 1997 to or on behalf of the Company's chief executive
officer and the four other most highly paid executive officers of the
Company during fiscal year 1997 for services in all capacities for the
Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
-------------------------------------------- Awards
------------
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary($) Bonus($)(2) Compensation($)(3) Options(#) Compensation($)(4)
--------------------------- ---- --------- ----------- ------------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Johnson (1) 1997 877,121 381,121 0 78,000 111,746
Chairman and CEO 1996 625,039 261,250 0 0 95,456
1995 581,182 288,691 9,820 172,000 169,730
Debra L. Lee 1997 383,809 210,500 0 0 4,750
President and Chief 1996 227,771 243,925 0 0 4,750
Operating Officer 1995 196,419 134,774 7,998 85,000 4,620
William Gordon 1997 248,531 127,230 0 0 4,750
Executive Vice President and 1996 229,187 123,925 0 0 4,750
Chief Financial Officer 1995 193,769 133,684 9,365 85,000 4,620
Janis P. Thomas 1997 244,655 125,324 0 0 5,195
Executive Vice President, 1996 225,614 123,925 0 0 5,079
Brand Marketing and Licensing 1995 192,866 133,684 7,811 85,000 3,446
James A. Ebron 1997 268,164 92,924 0 0 5,916
Executive Vice President, 1996 248,113 123,925 0 0 9,458
Media Sales 1995 227,941 159,103 9,380 85,000 9,143
</TABLE>
(1) Includes for Mr. Johnson director's fees paid for each fiscal year,
but excludes salary, director's fees, bonus, options and other
amounts paid or accrued to or on behalf of Mrs. Johnson in each
fiscal year.
(2) Includes Christmas bonuses for fiscal 1997, 1996 and 1995. Includes
for Mr. Johnson amounts earned under the President's Incentive Plan
for 1995. Includes for Messrs. Ebron and Gordon, and Ms. Lee and
Ms. Thomas amounts earned under the Executive Incentive Plan for
1995. Includes amounts earned under a Special Retroactive Bonus
program in fiscal 1995 for Messrs. Ebron and Gordon, and for Ms.
Lee and Ms. Thomas.
(3) Includes for fiscal 1995 amounts reimbursed for the payment of
taxes on benefits.
(4) Includes the payment by the Company of annual premiums of $111,746
paid during fiscal 1997, $95,456 during fiscal 1996 and $169,730
paid during fiscal 1995 for Split-Dollar Life insurance policies
for Mr. Johnson. The Company is entitled to recover all premiums
paid by the Company from any amounts paid by the insurer on such
Split-Dollar Life insurance policies, and the Company has retained
a collateral interest in each policy to the extent of the premiums
paid by the Company with respect to such policy. Also included are:
(i) contributions in 1997 by the Company pursuant to the Black
Entertainment Television, Inc. 401(k) Plan for Mr. Ebron ($5,575),
Ms. Lee ($4,750), Mr. Gordon ($4,750) and Ms. Thomas ($5,195); (ii)
contributions in 1996 by the Company pursuant to the Black
Entertainment Television, Inc. 401(k) Plan for Mr. Ebron ($4,935),
Ms. Lee ($4,750), Mr. Gordon ($4,750) and Ms. Thomas ($5,079); and
(iii) contributions in 1995 by the Company pursuant to the Black
Entertainment Television, Inc. 401(k) Plan for Mr. Ebron ($4,620),
Ms. Lee ($4,620), Mr. Gordon ($4,620) and Ms. Thomas ($3,446). The
amount also includes in 1997, 1996 and 1995, below market interest
of $341, $4,523 and $4,523, respectively, attributable to loans
made by the Company to Mr. Ebron.
C. STOCK OPTION GRANTS IN FISCAL 1997
The following table sets forth information concerning stock
options granted to Mr. Johnson during fiscal year 1997.
OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
Number of % of Total Market
Securities Options Exercise Price Grant
Underlying Granted to or Base on Date
Options Employees in Price Grant Expiration Present
Name Granted#(1) Fiscal 1997 (S/Share)(1) Date Date(2) Value (3)
---- ----------- ------------ ------------ ------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Johnson.... 78,000 100.0% $22.70 $28.375 12/9/2006 $1,350,083
</TABLE>
(1) This grant was made on December 9, 1996 pursuant to the Company's
1991 Executive Stock Option Plan, as amended. The options granted
to Mr. Johnson vest as follows: (a) 15,600 as of December 9, 1996;
(b) 15,600 as of December 9, 1997; (c) 15,600 as of December 9,
1998; (d) 15,600 as of December 9, 1999; and (e) 15,600 as of
December 9, 2000. All of the options are non-qualified. To the
extent not previously vested and exercisable, the options will vest
and become exercisable in the event of Mr. Johnson's death,
disability or retirement or in the event of a change in control of
the Company.
(2) The expiration date for the options is the earlier of either (a)
December 9, 2006; or (b) three months following the date Mr.
Johnson ceases to be employed by the Company.
(3) This calculation is based on the Black-Scholes option pricing model
adapted for use in valuing stock options. The actual value, if any,
Mr. Johnson may ultimately realize depends on the market value of
the Class A Stock at a future date. There is no assurance that the
value realized by Mr. Johnson will be at or near the value
estimated by the Black-Scholes Model. The estimated values under
that model are based on arbitrary assumptions as to variables such
as interest rates, stock pricing volatility and future dividend
yield. In calculating the grant date present value set forth in the
table, the Company used the following assumptions: (a) expected
volatility of 0.257; (b) risk- free rate of return of 6.3%; (c)
dividend yield of 0%; and (d) exercise at the end of the ten year
period from the date of grant. No adjustments have been made for
non-transferability or risk of forfeiture.
D. AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND VALUE OF OPTIONS AT
END OF FISCAL 1997
The following table provides certain information concerning the
exercise of stock options by the named executive officers during fiscal
year 1997 and the number and value of unexercised options held by the
named executive officers as of July 31, 1997.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at End of In-the-Money Options at
Fiscal 1997(#) End of Fiscal 1997($)(1)
Shares ---------------------------- ---------------------------
Acquired Value
Name on Exercise Realized Exercisable Nonexercisable Exercisable Unexercisable
---- ----------- -------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Johnson 0 0 130,800 131,200 $2,842,080 $2,610,320
James A. Ebron 10,000 $ 204,500 150,800 41,000 $3,826,000 $ 946,900
William Gordon 0 0 176,000 41,000 $4,443,398 $ 946,900
Debra L. Lee 0 0 191,000 41,000 $4,859,850 $ 946,900
Janis Thomas 0 0 191,000 41,000 $4,859,850 $ 946,900
</TABLE>
(1) These amounts represent the excess of the fair market value of the
Class A Stock of $40.00 per share as of July 31, 1997, above the
exercise price of the options.
E. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, Herbert P. Wilkins, Sr. and Delano E. Lewis
served as members of the Company's Compensation Committee. In addition
to serving on the Company's Compensation Committee, Mr. Wilkins and Mr.
Lewis also serve on the Company's Audit Committee.
Mr. Wilkins also serves as a director of TCI Great Lakes, Inc.,
one of TCI's six regional operating companies, and is also a director
and stockholder of DCI.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
A. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Except as otherwise noted, the following table sets forth
information with respect to the beneficial ownership of the Company's
Class A Stock, Class B Stock and Class C Stock as of October 17, 1997
by each person known to the Company to own beneficially more than 5% of
the outstanding shares of any class of the Common Stock. The persons
indicated below have sole voting and investment power with respect to
the shares indicated as owned by them, except as otherwise stated in
the notes to the table.
<TABLE>
<CAPTION>
Class A Stock Class B Stock Class C Stock
-------------------- ---------------- ------------------- Percent of vote
Number of Number of Number of of All Classes of
Name of Beneficial Owner Shares %(a) Shares % Shares % Common Stock(a)
------------------------ ------------ ---- --------- --- --------- --- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert L. Johnson (b)........... 2,179,103(c) 21.1 0 0.0 4,820,000 100.0 65.6
Tele-Communications, Inc. (d)... 1,831,600(e) 18.2 1,831,600 100 0 0.0 26.3
GAMCO Investors, Inc.
et al. (f)................... 1,640,050 16.3 0 0.0 0 0.0 2.1
Capital Group Cos., Inc.
et al & affiliates (g)........ 662,100 6.6 0 0.0 0 0.0 0.9
</TABLE>
(a) Shares issuable upon exercise of options that are exercisable
currently or within the next sixty days are deemed to be
outstanding for the purpose of computing the percentage ownership
and overall voting power of persons beneficially owning such
options, but have not been deemed to be outstanding for the purpose
of computing the percentage ownership or overall voting power of
any other person.
(b) The business address for such person is One BET Plaza, 1900 W
Street, N.E., Washington, D.C. 20018.
(c) Includes (i) 146,400 shares of Class A Stock which are subject to
purchase upon exercise of options and (ii) 103,600 shares of Class
A Stock owned beneficially by Sheila Crump Johnson, Mr. Johnson's
wife, of which 103,500 shares are subject to purchase upon exercise
of options. Mr. Johnson disclaims beneficial ownership of all
shares owned by his wife. Excludes Class A Stock issuable upon
conversion of Class C Stock, which is convertible into Class A
Stock on a one for one basis, and is entitled to 10 votes per
Share, since such Class C Stock is shown separately above. If such
Class C Stock were converted into Class A Stock, Mr. Johnson would
beneficially own 46.3% of such Class A Stock.
(d) Based solely on information contained in Amendment No. 2 to TCI's
report on Schedule 13D dated December 30, 1997 relative to
ownership in the Company's Common Stock as of December 22, 1997.
The business address for TCI is Terrace Tower II, 5619 DTC Parkway,
Englewood, Colorado 80111. The record holder of these shares is LMC
BET, Inc., a wholly-owned subsidiary of Liberty. Mr. Bennett is an
Executive Vice President of TCI and the President and Chief
Executive Officer of Liberty. Mr. Bennett has been designated as
LMC BET, Inc.'s nominee to the Company's Board. John Malone, a
director of the Company, is the Chairman of the Board and Chief
Executive Officer of TCI.
(e) Excludes Class A Stock issuable upon conversion of Class B Stock,
which is convertible into Class A Stock on a one for one basis and
is entitled to 10 votes per Share, since such Class B Stock is
shown separately above. If such Class B Stock were converted into
Class A Stock, TCI would beneficially own 44.1% of the Class A
Stock.
(f) Based solely on information contained in Amendment No. 11 to the
report on Schedule 13D dated December 19, 1997 relative to
ownership in the Company's Class A Stock as of December 16, 1997.
The shares listed consist of shares held by Gabelli Funds, Inc.
(509,500), GAMCO Investors, Inc. (1,116,550), Gabelli Asset
Management Company International Advisory Services Ltd. (3,000),
Gabelli Associates Limited (3,000), Gabelli International Limited
(5,000) and Gabelli International II Limited (3,000). Mr. Mario
Gabelli is deemed to have beneficial ownership of all such shares,
and Gabelli Funds, Inc. is deemed to have beneficial ownership of
all such shares. The business address for such persons is One
Corporate Center, Rye, New York 10580-1434. Of the 1,640,050 shares
of Class A Stock reported, each entity has the sole power to vote
or direct the vote and sole power to dispose or to direct the
disposition of the securities reported for it, either for its own
benefit or for the benefit of its investment clients or its
partners, as the case may be, except that: (i) GAMCO Investors,
Inc. does not have authority to vote 16,000 of the reported shares;
(ii) Gabelli Funds, Inc., which currently provides management
services for various funds which are registered investment
companies (the "Funds"), has sole dispositive and voting power with
respect to the 509,500 shares held by the Funds, so long as the
aggregate voting interest of all joint filers does not exceed 25%
of their voting interest in the Company and in that event, each of
the Funds shall respectively vote that Fund's shares; (iii) at any
time, each Fund may take and exercise in its sole discretion the
entire voting power with respect to the shares held by such Fund
under special circumstances such as regulatory considerations; and
(iv) the power of Mr. Gabelli and Gabelli Funds, Inc. is indirect
with respect to the shares beneficially owned directly by the other
entities.
(g) Based solely upon information contained in their report on Schedule
13G dated February 12, 1997 filed jointly by The Capital Group
Companies, Inc., Capital Research and Management Company and SMALL
CAP World Fund, Inc. relative to ownership in the Company's Common
Stock as of February 12, 1997. Capital Research and Management
Company, a wholly owned subsidiary of The Capital Group Companies,
Inc., serves as investment adviser to SMALLCAP World Fund, Inc. The
business address for such person is 333 South Hope Street, Los
Angeles, California 90071. The Capital Group Companies, Inc. and
Capital Research and Management Company both have dispositive power
over the 662,100 shares and SMALLCAP World Fund, Inc. has sole
voting power over the 662,100 shares.
B. SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Common Stock by each of the Company's
directors and nominees, each executive officer named in the Summary
Compensation Table, and by all executive officers, directors and
nominees of the Company as a group as of October 17, 1997. Under the
rules of the Securities and Exchange Commission, generally, a person is
deemed to be a "beneficial owner" of a security if he has or shares the
power to vote or direct the voting of such security, or the power to
dispose or to direct the disposition of such security. Thus, more than
one person may be deemed a beneficial owner of the same security.
Except as otherwise indicated, each person listed below has informed
the Company that such person has (i) sole voting and investment power
with respect to such person's shares of stock, except to the extent
that authority is shared by spouses under applicable law, and (ii)
record and beneficial ownership with respect to such person's shares of
stock.
<TABLE>
<CAPTION>
Class A Stock Class B Stock Class C Stock
----------------- --------------- ----------------
Number of Number of Number of
Name of Beneficial Owner Shares %(a) Shares % Shares %
------------------------ --------- ---- --------- -- --------- --
<S> <C> <C> <C> <C> <C>
Robert L. Johnson (b).......... 2,179,103 21.1 0 * 4,820,000 100.0
William Gordon (c)............. 176,842 1.7 0 * 0 *
Sheila Crump Johnson (d)....... 103,600 1.0 0 * 0 *
John C. Malone, Ph.D. (e)...... 0 * 0 * 0 *
Robert R. Bennett (f).......... 0 * 0 * 0 *
Denzel Washington.............. 0 * 0 * 0 *
Herbert P. Wilkins, Sr. (g).... 5,113 * 0 * 0 *
Delano E. Lewis................ 0 * 0 * 0 *
James A. Ebron (h)............. 150,800 1.5 0 * 0 *
Debra L. Lee (i)............... 191,550 1.9 0 * 0 *
Janis P. Thomas (j)............ 191,100 1.9 0 * 0 *
All Directors, Officers and
Nominees as a Group (k)........ 3,205,103 28.3 0 * 4,820,000 100.0
</TABLE>
_______________
* Less than one percent (1%).
(a) Shares issuable upon exercise of options that are exercisable
currently or within the next sixty days are deemed to be
outstanding for the purpose of computing the percentage ownership
and overall voting power of persons beneficially owning such
options, but have not been deemed to be outstanding for the purpose
of computing the percentage ownership or overall voting power of
any other person.
(b) Includes (i) 146,400 shares of Class A Stock which are subject to
purchase upon exercise of options and (ii) 103,600 shares of Class
A Stock owned by Sheila Crump Johnson, Mr. Johnson's wife, of which
103,500 shares are subject to purchase upon exercise of options.
Mr. Johnson disclaims beneficial ownership of all shares owned by
his wife. Excludes Class A Stock issuable upon conversion of Class
C Stock, which is convertible into Class A Stock on a one for one
basis, and is entitled to 10 votes per share, since such Class C
Stock is shown separately above. If such Class C Stock were
converted into Class A Stock, Mr. Johnson would beneficially own
46.3% of such Class A Stock. By virtue of his ownership of the
Class A Stock and the Class C Stock, Mr. Johnson is entitled to
65.6% of the vote of all classes of the Company's common stock.
(c) Includes 176,000 shares of Class A Common Stock subject to purchase
upon exercise of options by Mr. Gordon. The remaining 842 shares
are directly owned by Mr. Gordon.
(d) Excludes shares of Common Stock owned by Robert L. Johnson, Mrs.
Johnson's husband, as to which Mrs. Johnson disclaims beneficial
ownership. Includes 103,500 shares of Class A Common Stock which
are subject to purchase upon exercise of options. The remaining 100
shares are directly owned by Mrs. Johnson.
(e) Dr. Malone is a director and Chairman of the Board of Liberty, a
wholly owned subsidiary of TCI. Dr. Malone is also Chairman of the
Board and Chief Executive Officer of TCI. Dr. Malone disclaims
beneficial ownership of 1,831,600 shares of Class A Stock and
1,831,600 shares of Class B Stock owned of record by LMC BET, Inc.
(a wholly-owned subsidiary of Liberty Media Corporation) and
beneficially owned by TCI, none of which have been attributed to
him in the table.
(f) Mr. Bennett is an Executive Vice President of TCI and the President
and Chief Executive Officer of Liberty. Mr. Bennett disclaims
beneficial ownership of 1,831,600 shares of Class A Stock and
1,831,600 shares of Class B Stock owned of record by LMC BET, Inc.
(a wholly-owned subsidiary of Liberty Media Corporation) and
beneficially owned by TCI, none of which have been attributed to
him in the table.
(g) Includes 4,436 shares as to which Mr. Wilkins shares voting and
investment power with two limited partners of Syndicated
Communications Venture Partners II, L.P.
(h) Includes 150,800 shares of Class A Stock subject to purchase upon
exercise of options by Mr. Ebron.
(i) Includes (i) 191,000 shares of Class A Stock subject to purchase
upon exercise of options by Ms. Lee; (ii) 100 shares of Class A
Stock held by her spouse, with respect to which Ms. Lee disclaims
beneficial ownership; and (iii) 100 shares of Class A Stock held by
an investment club in which Ms. Lee is a member, with respect to
which Ms. Lee disclaims beneficial ownership. The remaining 350
shares are directly owned by Ms. Lee.
(j) Includes 191,000 shares of Class A Stock subject to purchase upon
exercise of options by Ms. Thomas. Ms. Thomas shares voting and
investment power in the remaining 100 shares with her spouse.
(k) Excludes shares of Class A Stock and Class B Stock which have not
been attributed to any director in the table and Class A Stock
issuable upon conversion of Class C Stock. Includes 1,269,395
shares of Class A Stock, which are subject to purchase upon
exercise of options. Ownership of the Class A Stock and the Class C
Stock by the directors, officers and nominees as a group entitles
them to 66.0% of the vote of all classes of the Company's common
stock.
C. CHANGES IN CONTROL - - PROPOSED OFFER
On September 10, 1997 the Board of Directors received an
unsolicited proposal from Mr. Johnson and Liberty Media Corporation to
acquire, through an acquisition corporation to be formed by them, all
of the outstanding shares of the Company's Class A Stock which they do
not own at a price per share of $48.00 cash (the "Offer").
Mr. Johnson and Liberty are holders of approximately 38.9% of the
Company's outstanding shares of Class A Stock. However, Mr. Johnson
owns 100% of the Class C Stock and Liberty owns 100% of the Class B
Stock. Such Class B Stock and Class C Stock are convertible into Class
A Stock on a one for one basis. If such Class B Stock and Class C
Stock were converted into Class A Stock, Mr. Johnson and Liberty would
beneficially own 62.9% of the Company's outstanding shares of Class A
Stock. Because of the voting power attributable to the Class B Stock
and the Class C Stock beneficially owned by Mr. Johnson and Liberty,
the shares beneficially owned by Mr. Johnson and Liberty constitute
approximately 91.8% of the outstanding voting power of all of the
outstanding shares of Company.
At a meeting held on September 15, 1997, the Board appointed an
independent committee, consisting of Mr. Delano E. Lewis, to review,
evaluate, and report to the Board its determination regarding the
Offer.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BET HOLDINGS, INC.
By: /s/ Robert L. Johnson
----------------------------
Robert L. Johnson
Chairman of the Board and
Chief Executive Officer
Date: January 14,1998
Pursuant to the requirements of the securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- -----
/s/ Robert L. Johnson Chief Executive Officer January 14, 1998
-------------------------- and Executive Officer
Robert L. Johnson
/s/ William T. Gordon, III Chief Financial Officer and January 14, 1998
-------------------------- Treasurer (Principal
William T. Gordon, III Financial and Accounting
Officer)
/s/ Robert R. Bennett Director January 14, 1998
---------------------------
Robert R. Bennett
/s/ Sheila Crump Johnson Director January 14, 1998
---------------------------
Sheila Crump Johnson
/s/ Delano E. Lewis Director January 14, 1998
---------------------------
Delano E. Lewis
/s/ John C. Malone Director January 14, 1998
---------------------------
John C. Malone
/s/ Denzel Washington Director January 14, 1998
---------------------------
Denzel Washington
/s/ Herbert P. Wilkins, Sr. Director January 14, 1998
---------------------------
Herbert P. Wilkins, Sr.