SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Amendment to
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended March 30, 1996
Commission file number 1-13656
OMNI MULTIMEDIA GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 04-2729490
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(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification No.)
50 Howe Avenue, Millbury, Massachusetts 01527-3298
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(Address of principal executive offices) (Zip Code)
(508) 865-4451
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(Registrant's telephone number, including area code)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report for the fiscal year
ended March 30, 1996 on Form 10-KSB as set forth in the pages attached hereto:
1. Part III: Item 9 - Directors, Executive Officers and Control
Persons; Compliance With Section 16(a) of
the Exchange Act
2. Part III: Item 10 - Executive Compensation
3. Part III: Item 11 - Security Ownership of Certain Beneficial
Owners and Management
4. Part III: Item 12 - Certain Relationships and Related
Transactions
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
OMNI MULTIMEDIA GROUP, INC.
By: /s/ Paul F. Johnson
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Paul F. Johnson
Chief Executive Officer
ITEM 9. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Section 16(a) ("Section 16(a)") of the Securities Exchange Act of 1934,
as amended (the Exchange Act"), requires executive officers and directors, and
persons who beneficially own more than ten percent (10%) of the Company's Common
Stock, to file initial reports of ownership on Form 3 and reports of changes in
ownership on Form 4 with the Securities and Exchange Commission (the "SEC") and
any national securities exchange on which the Company's securities are
registered. Executive officers, directors and greater than ten percent (10%)
beneficial owners are required by SEC 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 and directors
that no other reports were required, the Company believes that during the fiscal
year ended March 30, 1996, its executive officers, directors and greater than
ten percent (10%) beneficial owners complied with all applicable Section 16(a)
filing requirements.
ITEM 10. EXECUTIVE COMPENSATION OF OFFICERS AND DIRECTORS.
EXECUTIVE OFFICER COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for services rendered to the Company for the fiscal years
ended April 2, 1994, April 1, 1995 and March 30, 1996, of those persons who were
at March 30, 1996 (i) the chief executive officer and (ii) each other executive
officer of the Company whose annual compensation exceeded $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation (2)
--------------------------
Annual Compensation (1) Awards Payouts
----------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Name and Restricted Underlying
Principal Other Annual Stock Options/ LTIP All Other
Position(3) Year Salary($) Bonus($) Compensation($)(4) Award(s) SARs (#) Payouts($) Compensation($)
-------- ---- --------- -------- --------------- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Paul F. Johnson........... 1996 $202,320 -- $22,850 -- -- -- --
President, Chief 1995 $150,000 -- $10,750 -- -- -- --
Executive Officer, 1994 $147,075 -- $24,198 -- -- -- --
Secretary and
Director
Robert E. Lee............. 1996 $154,300 -- $20,610 -- -- -- --
Executive Vice
President, Treasurer
and Director
Richard A. Pilotte........ 1996 $174,150 -- $14,500 -- -- -- --
Vice President of 1995 $130,000 -- $25,425 -- -- -- --
Operations and 1994 $130,000 -- $25,717 -- -- -- --
Director
</TABLE>
(1) Amounts shown indicate cash compensation earned and received by
executive officers. Executive officers participate in group health and
other benefits generally available to all employees of the Company.
(2) See "Employee Agreements."
(3) Mr. Lee served as a consultant to the Company for the period ended
prior to the Company's initial public offering in April 1995. During
this time, Mr. Lee's annual consulting fees did not exceed $100,000.
(4) The Company pays for country club dues, club memberships and for an
automobile for each of the named executive officers, including payment
for automobile insurance and repairs.
EMPLOYMENT AGREEMENTS
Effective as of April 1, 1995, the Company entered into employment and
non-competition agreements (the "Agreements") with each of Messrs. Johnson, Lee,
and Pilotte, all of which expire on December 30, 1998. The Agreements provide
for base salaries of $175,000, $160,000 and $150,000, respectively, plus
bonuses, car allowances, life and disability insurance and certain other
benefits as may be determined by the Compensation Committee of the Company's
Board of Directors. Base salaries may not be increased in an amount in excess of
10% per year without the prior written consent of Schneider Securities, Inc.,
the representative of the underwriters of the Company's initial public offering,
until April 20, 1997. Each individual is entitled to receive benefits offered to
the Company's employees generally. Each individual is also entitled to receive
three years' base salary as severance in the event his employment is terminated
by the Company without cause. In the event of a change in control in the Company
(defined as any individual or entity not a current stockholder of the Company or
affiliated with the Company acquiring 50% or more of the Company's outstanding
shares of Common Stock), each individual will receive: (i) an annual
compensation of $300,000 in base salary (assuming 100% of the individual's time
is devoted to the operations of the Company) and all other benefits and bonuses;
(ii) an equal one-third share in a performance bonus equal to twenty percent of
net income of the Company before income taxes, amortization and depreciation;
(iii) fringe benefits as are customary for the individual's position; and (iv)
upon termination or a reduction in the individual's duties, such individual has
the right to (1) sell his shares of Common Stock to the Company at the greater
of $5.10, the then current bid and ask price, book value per share or appraisal
value per share, (2) receive in a lump sum the remainder of any compensation
payable under the Agreement, (3) receive an executive fee equal to $100,000 in
exchange for the covenant not to compete, and (4) immediate removal of all loan
guarantees and repayment of all loans placed by the individual on behalf of or
for the benefit of the Company. Each Agreement also contains non-competition
provisions for a period of one year following termination, a confidentiality
provision and an ownership provision in the Company's
favor for techniques, discoveries and inventions arising during the term of
employment. The Agreements provide for successive three-year renewals after the
initial term.
COMPENSATION OF DIRECTORS
Each of the non-management Directors of the Company receives a fee of
$500 per meeting plus out-of-pocket expenses and the annual grant of an option
to purchase 5,000 shares of the Company's Common Stock pursuant to the Company's
1994 Director Formula Stock Option Plan.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of July 29, 1996, certain
information concerning the ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially five percent (5%) or more of the
outstanding shares of the Company's Common Stock; (ii) each of the Company's
Directors; and (iii) all executive officers and Directors as a group. Except as
otherwise indicated, the Stockholders listed in the table have sole voting and
investment powers with respect to the shares indicated. This table excludes the
impact of the issuance of additional shares of Common Stock upon conversion of
the Series A Preferred Stock held by investors, none of whom is an officer or
director of the Company.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS NUMBER OF SHARES OUTSTANDING
OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED(2) COMMON STOCK
<S> <C> <C>
Paul F. Johnson(3)(4)..................................... 426,508 10.9%
Charanjit S. Anand(3) .................................... 291,483 7.5%
Richard A. Pilotte(3)..................................... 426,508 10.9%
Robert E. Lee(3)(5)....................................... 410,410 10.5%
Ronald F. Ladner(6)....................................... 6,000 *
Richard L. Wise(6)........................................ 6,000 *
All Executive Officers and Directors
as a Group (five persons)(3)(4)(5)(6).....................
- ------------------
* Less than 1%
</TABLE>
(1) The address for all executive officers and Directors is c/o OMNI
MultiMedia Group, Inc., 50 Howe Avenue, Millbury, Massachusetts. Mr.
Anand's address is One Saxon Lane, Shrewsbury, Massachusetts.
(2) Except as otherwise indicated, the Company believes each person named
in the table has sole voting and investment power with respect to all
shares of Common Stock beneficially owned by him. Pursuant to the rules
of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within
60 days pursuant to the exercise of presently exercisable or
outstanding options, warrants or conversion privileges are deemed to be
outstanding for the purpose of computing the percentage ownership of
such individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown
in the table. Information with respect to beneficial ownership is based
upon information furnished by such stockholder.
(3) Includes 16,666 shares of Common Stock issuable upon the exercise of an
option to purchase 25,000 shares of the Company's Common Stock at an
exercise price of $5.10. The option expires on April 20, 2005 and vests
as follows: 8,333 shares on April 20, 1995, 8,333 shares on April 20,
1996 and 8,334 shares on April 20, 1997.
(4) Excludes an option to purchase up to 12,385 shares of Common Stock at
an exercise price of $6.125 per share pursuant to an option granted on
August 9, 1995 to Elaine Johnson, the spouse of Paul Johnson. Mr.
Johnson disclaims any beneficial ownership of these options.
(5) Includes an option granted to Mr. Lee by each of Messrs. Johnson and
Pilotte in February 1992 to purchase up to 16,091 of their shares of
Common Stock at $4.75 per share for an aggregate of 32,182 shares of
Common Stock, which options expire on January 31, 2002.
(6) Includes an option to purchase 1,000 shares of Common Stock at an
exercise price of $5.10 per share, which expires on May 11, 2005, and
an option to purchase 5,000 shares of Common Stock at an exercise price
of $6.38 per share, which expires on March 31, 2006.
ITEM 12. CERTAIN TRANSACTIONS.
The Company maintains its principal executive offices and manufacturing
operations in an approximately 150,000 square foot facility in Millbury,
Massachusetts leased from AAA Turnpike, a corporation in which Ronald Ladner, a
director of the Company, is a director and a stockholder. The Company currently
pays base rent in the amount of approximately $35,000 per month plus its
pro-rata portion of real estate taxes and other operational and maintenance
expenses, pursuant to a lease that expires on June 30, 2001. The lease further
provides for an option to purchase the premises, which consist of 265,000 square
feet, for $6,000,000 at any time during the term of the lease. The option price
is $10,000 per month payable at the same time as the lease payments are due. The
Company has made such additional monthly payments on the option totalling
$240,000 since April 1994, and if it decides to exercise the option, the
additional amounts paid will be credited toward the $6,000,000. The Company
believes that these arrangements are on terms at least as favorable as could be
obtained from non-affiliated third parties.
The law firm of Gordon & Wise provides legal services to the Company.
Richard Wise, who serves as a director of the Company, is a partner of Gordon &
Wise. In connection with services rendered to the Company during the fiscal
years ended April 1, 1995 and March 30, 1996, Gordon & Wise has received legal
fees of approximately $144,000 and $132,000, respectively.
In January 1990, Messrs. Johnson, Lee, Pilotte and Anand formed North
Stratford Oil Company ("North Stratford") and its wholly owned subsidiary,
Campbell Envelope Co., Inc. ("Campbell Envelope"). Campbell Envelope purchased
the assets of an envelope Company in New Hampshire in January 1990. North
Stratford purchased the land on which the envelope Company was located and
leased the land to Campbell Envelope. In order to finance the purchase of the
envelope Company, Campbell Envelope took out a $1.25 million loan from First NH
Bank. In order to finance the purchase of the land, North Stratford took out a
$1 million loan from First NH Bank. These loans were personally guaranteed by
each of Messrs. Johnson, Lee, Pilotte and Anand. In March 1992, Campbell
Envelope and North Stratford ceased doing business. Campbell Envelope and North
Stratford sold off their assets and reduced the balance of the loans owed to
First NH Bank from approximately $3.2 million, including amounts borrowed under
revolving credit arrangements used primarily to finance working capital
requirements, to $1.3 million. Campbell Envelope and North Stratford
restructured their agreement with First NH Bank in March 1992, which included,
among other items, the addition of Omni Resources as a guarantor of the loan
from First NH Bank and 40 quarterly payments of $25,000 in principal and monthly
interest payments. Messrs. Johnson, Lee, Pilotte and Anand made these payments
under these loans through funds advanced to them from Omni Resources. In October
1994, the balance under the loan was approximately $1,161,135. This amount was
satisfied in full by the payment of approximately $350,000, of which $325,000
was paid by Messrs. Johnson, Lee, Pilotte and Anand through funds advanced to
them by Omni Resources in exchange for promissory notes (the "Advance"). In
order to finance the Advance, Omni Resources used a portion of its $700,000 term
loan with its primary bank. In October 1994, each of Messrs. Johnson, Lee,
Pilotte and Anand issued five year promissory notes to Omni Resources which bear
interest at the rate of 6.32% per annum. Payment of the principal and interest
under these notes is due and payable on December 30, 1999. The notes can be
prepaid without penalty. All of the principal stockholders of the Company have
agreed to apply any proceeds, after payment of brokerage commissions and income
taxes, from any sales of their shares of Common Stock toward repayment of any
outstanding loans made to them by the Company. As of March 30, 1996, Messrs.
Johnson, Pilotte and Anand each owed Omni Resources approximately $106,000, and
Mr. Lee owed Omni Resources approximately $163,000 as a result of the
aforementioned advances by Omni Resources.
In January 1994, River Capital Corporation ("RCC"), in its bankruptcy
case, commenced an adversary proceeding against Omni Resources, Messrs. Johnson,
Pilotte, and Anand, alleging its right to sell back its 95,600 shares of the
Company's Common Stock to the Company pursuant to an agreement entered into in
1989. The parties settled this dispute in November 1994, and RCC received
$350,000 representing full payment.
Any future transactions between the Company and its officers,
directors, principal stockholders or other affiliates will be on terms no less
favorable than could be obtained from independent third parties and will be
subject to approval by a majority of the independent and disinterested
directors.
