SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
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 June 30, 1999
Transition report pursuant to Section 13 or 15(d) of the Securities
- -----
Exchange Act of 1934
Commission file number 0-20311
DATA BROADCASTING CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3668779
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
7050 Union Park Center
Suite 600 3490 Clubhouse Drive, I-2
Midvale, Utah 84047 Jackson, Wyoming 83014
(Address of Principal (Address of Principal Executive Offices)
Administrative Offices)
Registrant's telephone number, including area code:
(801) 562-2252 (307) 733-9742
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value
(Title of Class)
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. X
--------
As of September 22, 1999, the aggregate market value of the Common Stock of
the Registrant (based upon the closing transaction price) on such date held by
nonaffiliates of the Registrant was approximately $241,022,000.
As of September 22, 1999, there were 34,393,397 shares of Common Stock of the
Registrant outstanding.
Introduction
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On September 28, 1999, Data Broadcasting Corporation ("DBC" or the "Company"),
filed with the Securities and Exchange Commission (the "Commission") its
Annual Report on Form 10-K for its fiscal year June 30, 1999 (the "1999 Form
10-K"). The information called for by items 10, 11, 12 and 13 of Part III of
Form 10-K was not included in the body of the 1999 Form 10-K as filed, but was
incorporated by reference to the Company's Proxy Statement which was expected
to be filed with the Commission within the 120-day period. Because the
Company is not in fact filing its Proxy Statement within such 120 day period,
this Form 10-K/A amends the 1999 Form 10-K by deleting therefrom the caption
and first paragraph and substituting therefore the following replacements for
Items 10, 11, 12 and 13.
Item 10 - Executive Officers and Directors of the Registrant
- ------------------------------------------------------------
The Company's directors are as follows:
The names of the nominees and certain information about them are set forth
below:
Director Office Held with
Name Since Age(1) the Company
- ---- -------- --- ----------------
Alan J. Hirschfield 1992 64 Co-Chairman of the Board, Co-CEO
Allan R. Tessler 1992 63 Co-Chairman of the Board, Co-CEO
James A. Kaplan 1994 56 Vice Chairman of the Board
Dwight H. Egan 1995 46 Executive Vice President -
Sales and Marketing
Charles M. Diker 1993 64 Director
Donald P. Greenberg 1996 65 Director
David R. Markin 1992 68 Director
Herbert S. Schlosser 1995 73 Director
Carl Spielvogel 1996 70 Director
ALAN J. HIRSCHFIELD and ALLAN R. TESSLER serve as Co-Chairmen of the Board and
Co-Chief Executive Officers of the Company.
Prior to becoming Co-Chief Executive Officer of the Company in June, 1992, Mr.
Hirschfield served as Managing Director of Schroder Wertheim & Co. Inc. and as
a consultant to the entertainment and media industry. He formerly served as
Chief Executive Officer of Twentieth Century Fox Film Corp. and Columbia
Pictures Inc. from 1980 to 1985 and 1973 to 1978, respectively. Mr.
Hirschfield currently serves on the boards of MarketWatch.com, Inc.
("MarketWatch"), an Internet provider of financial news, Cantel Industries,
Inc., ("Cantel") a distributor of medical and scientific equipment and Chyron
Corporation, ("Chyron") a designer and manufacturer of digital equipment for
the broadcast industry.
In addition to serving as Co-Chief Executive Officer since June 1992, Mr.
Tessler has been Chairman of the Board and CEO of International Financial
Group, Inc., an international merchant banking firm, since 1987. He is also
Chairman of the Board of Enhance Financial Services Group Inc. ("Enhance"), a
municipal bond reinsurer, and Jackpot Enterprises, Inc. ("Jackpot"), a gaming
machine route operator. From 1989 to 1996 he was Chairman of the Board of
Great Dane Holdings, Inc. ("Great Dane"), a diversified holding company.
Since January 1997, Mr. Tessler has also served as Chairman of Checker
Holdings Corp. IV ("Checker Holdings"), a private holding company. From
December 1991 through September 1993 Mr. Tessler was Chairman of the Board and
CEO of Ameriscribe Inc., a national provider of facilities management
services. Mr. Tessler also serves on the boards of MarketWatch, The Limited,
Inc., a specialty retailer, and Allis-Chalmers Corporation, a machine repair
business.
JAMES A. KAPLAN served as President of Capital Management Sciences ("CMS"), a
division of the Company during the last five years and is currently President
of Commontech LLC. He retired as President of CMS as of June 30, 1999 but
remains Vice Chairman of the Board.
DWIGHT H. EGAN became Executive Vice President-Sales and Marketing in October,
1998. He was the President and Chief Executive Officer of Broadcast
International, Inc. ("BII"), a subsidiary of the Company, until its sale in
August 1999. BII supplied business information, real-time financial market
data and communications services to retail, financial and other business
customers. Mr. Egan also serves on the Board of Directors of Gentner
Communications, Inc., a manufacturer of teleconferencing equipment.
CHARLES M. DIKER is a non-managing partner with the investment management
company of Weiss, Peck & Greer, having been associated with that firm since
1976. He serves as Chairman of the Board of Cantel Industries, Inc. Mr.
Diker currently serves on the Board of Directors of BeautiControl Cosmetics, a
direct marketer of cosmetics; Chyron; International Specialty Products, a
chemical company; and AMF Bowling, Inc., an owner and operator of, and
manufacturer of equipment for, commercial bowling centers.
DONALD P. GREENBERG has been a professor at Cornell University, Ithaca, New
York, for the past 32 years. He is the Jacob Gould Sherman professor of
computer graphics and director, program of computer graphics at Cornell
University, Ithaca, New York. In 1987, Dr. Greenberg received the ACM
SIGGRAPH Steven A. Coons award for outstanding creative contributions to
computer graphics and in 1991 was named a member of the National Academy of
Engineering. He is the founding director of the National Science Foundation's
Science and Technology Center for Computer Graphics and Scientific
Visualization. Dr. Greenberg currently serves on the Board of Directors of
Chyron.
DAVID R. MARKIN has been President and Chairman of the Board of Checker Motors
Corporation ("Checker"), a manufacturer of transportation equipment, since
1970. Mr. Markin is also presently President and Chief Executive Officer of
Checker Holdings, the parent of Checker, and was President of Great Dane from
1989 to 1996. Mr. Markin also serves as a director of Jackpot and Enhance.
HERBERT S. SCHLOSSER has been Senior Advisor, Broadcasting and Entertainment,
of Schroder & Co. Inc., since 1986 and for almost 30 years was employed by
National Broadcasting Company, Inc. ("NBC") and RCA Corporation ("RCA") in
various capacities, including President and CEO of NBC and Executive Vice
President of RCA in charge of its entertainment group of activities other than
NBC. Mr. Schlosser is a member of the Boards of Directors of U.S. Satellite
Broadcasting Company, Inc. and Central European Media Enterprises LTD. He is
Chairman of the Board of Trustees of the American Museum of the Moving Image.
CARL SPIELVOGEL is Chairman and CEO of Carl Spielvogel Associates, Inc. and
also served as the Chairman and Chief Executive Officer of the United Auto
Group, Inc., a publicly traded operator of multiple-franchise auto dealerships
until April 1997. Mr. Spielvogel was associated with Backer Spielvogel Bates
Worldwide, Inc. ("Bates") an advertising and marketing communications company,
from July 1987 until January 1, 1994. He served in various positions with
Bates, including Chairman and Chief Executive Officer. He was Vice
Chairman and a member of the Board of Directors of Interpublic Group of
Companies, Inc. for approximately 20 years. Mr. Spielvogel is a member of the
Boards of Directors of Hasbro, Inc., a designer and manufacturer of toys, and
Barney's, Inc., a clothing retailer.
There are no family relationships among the directors or executive officers of
the Company. Information regarding Executive Officers of the Company is
located under the heading "Executive Officers of the Registrant" included in
Part I of the Form 10-K.
Compliance with Section 16(a) of the Exchange Act
Section 16 of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and any person who owns more
than 10% of a registered class of the Company's equity securities, to file
with the SEC and the Company, initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Based upon the information supplied it by such persons, the Company
is required to report and known failure to file these reports within the
period specified by the instructions to the reporting forms. To the
knowledge of the Company, based upon a review of the Section 16(a) reports
furnished to the Company and the written representations of officers and
directors, all these filing requirements were satisfied by the Company's
directors and executive officers.
Item 11 - Executive Compensation
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The following table sets forth certain summary information concerning
compensation paid or accrued to or on behalf of the Company's Co-Chief
Executive Officers and each of the three other most highly compensated
executive officers of the Company (determined as of the end of the last fiscal
year) for each of the three year periods ended June 30, 1999, 1998, and 1997.
Summary Compensation Table
Long Term
Compensation
Awards
------------
Name and Annual Compensation All Other
-------------------
Principal Options Compensation
Position Year Salary($) Bonus($) (#) ($)
-------- ---- --------- -------- -------- ------------
Alan J. Hirschfield 1999 $375,000 $500,000 - -
Co-Chairman of the 1998 $337,500 - - -
Board and Co-Chief 1997 $324,000 - 125,000 -
Executive Officer
Allan R. Tessler 1999 $375,000 $500,000 - -
Co-Chairman of the 1998 $337,000 - - -
Board and Co-Chief 1997 $324,000 $125,000 125,000 -
Executive Officer
James A. Kaplan 1999 $475,008 - - $3,300 (1)
President - CMS 1998 $475,008 - 100,000 $3,300 (1)
Vice-Chairman of 1997 $454,168 - - $3,135 (1)
the Board
Mark F. Imperiale 1999 $312,500 $375,000 - $3,300 (1)
President, Chief 1998 $287,508 $175,000 50,000 $3,300 (1)
Operating Officer 1997 $261,477 $125,000 100,000 $3,135 (1)
and Chief Financial
Officer
Dwight H. Egan 1999 $240,576 - - $3,300 (1)
Director, Executive 1998 $230,715 - - $3,300 (1)
Vice President - 1997 $229,392 - - $3,135 (1)
(1) Matching contribution to the Company's 401(k) plan.
Stock Option Grants
There were no stock options granted to executive officers for the period
July 1, 1998 to June 30, 1999.
Aggregated Stock Option Exercises
The following table provides information concerning the exercise of
stock options during the last fiscal year and unexercised stock options
held as of the end of the fiscal year by the named executive officers.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Unexercised Options at FY-End
----------------------------
Number Dollar Value
Shares Dollar ---------------- -----------------
Acquired Value Exer- Un-exer- Exer- Un-exer-
Name on Exercise Realized cisable cisable cisable cisable
- ---------------- ----------- -------- ------- ------- ------- -------
Alan J. Hirschfield 0 0 233,333 41,667 1,418,616 132,709
Allan R. Tessler 0 0 233,333 41,667 1,418,616 132,709
Dwight H. Egan 339,858 6,892,308 25,000 0 100,000 0
James A. Kaplan 66,000 930,561 667 33,333 3,168 158,332
Mark F. Imperiale 233,333 4,931,022 0 66,667 0 279,002
The value of unexercised options at fiscal year-end is the difference
between the option exercise price and the average of the high ask and low bid
price for the Company's common stock as reported by the Nasdaq Stock Market's
National Market ("Nasdaq") for June 30, 1999, which was $10 1/8. These
amounts have not been, and may never be, realized. Actual amounts realized
will depend on the value of the Company's common stock if and when options
become exercisable and are exercised.
Compensation of Directors
Effective, February 1, 1999, the annual fee for directors was raised to
$12,000, with the chairmen of the audit and compensation committees receiving
a $3,000 premium. During fiscal year 1999, all non-employee directors of the
Company received fees of $7,500 and reimbursement for travel expenses for
service to the Board of Directors. The Chairmen of the Audit and Compensation
committees received an additional $1,250 during fiscal year 1999. No employee
director received compensation for service to the Board.
Each non-employee director of the Company holding such position on the
third business day after the Company publicly announces its summary fiscal
year-end statement of sales and earnings shall, at the discretion of the Stock
Option Committee, receive an option to acquire 10,000 shares of common stock
with an exercise price equal to the fair market value of the stock on such
date. On September 13, 1999, each non-employee director was granted options
for 10,000 shares of common stock at an exercise price of $8.625, which become
exercisable on the date of grant. Each option terminates, to the extent not
exercised prior thereto, upon the earlier of (i) the tenth anniversary of the
grant or (ii) the first anniversary of the cessation of the optionee's service
as a director of the Company.
Effective as of September 15, 1996, the Company entered into a
consulting agreement with Mr. Herbert S. Schlosser, a director of the Company.
The Consulting Agreement provides for: (i) a three-year term; (ii) payment
for consulting services of $250,000 payable in installments of approximately
$21,000 per quarter; and (iii) the grant of options to purchase 25,000 shares
of Company common stock. Aggregate consulting fee payments made by the
Company during the fiscal year ended June 30, 1999 was $83,333.
Employment Contracts and Termination of Employment and Change of Control
Arrangements
The Company entered in employment agreements with Messrs. Hirschfield
and Tessler effective as of January 1, 1997 and continuing until December 31,
2000 unless extended by either the executive or the Company for successive
one-year terms. The agreement provides for a base salary of $325,000 with
scheduled increases in future years and a performance based bonus of up to
100% of the base salary as determined by the Compensation Committee upon an
evaluation of the performance of the executive and the Company during the
previous fiscal year. In the event of certain involuntary terminations and in
the event of a change of control wherein the executive exercises his right to
terminate the agreement, he shall receive a lump sum payment equal to 150% of
the base salary for the greater of two years or the remainder of the
employment term. In addition, in the event of a change of control, the
executive will receive an amount equal to the price per share paid to the
Company shareholders less the pre-announcement share price multiplied by
125,000. Pursuant to the agreement each of the executives was also granted
options to purchase 125,000 shares of Company stock.
The Company entered into an employment agreement with Mark F. Imperiale,
President, Chief Operating Officer and Chief Financial Officer, effective as
of January 1, 1997. The agreement provides for a four-year term, a base
salary of $275,000 with scheduled increases in future years, and a
performance-based bonus of up to 100% of the base salary as determined by the
Compensation Committee upon an evaluation of the performance of the executive
and the Company during the previous fiscal year. In the event of certain
involuntary terminations and in the event of a change of control wherein Mr.
Imperiale exercises his right to terminate the agreement, he shall receive a
lump sum payment equal to 150% of the base salary for the greater of two years
or the remainder of the employment term. In addition, in the event of a
change of control, he will receive an amount equal to the price per share paid
to the Company shareholders less the pre-announcement price multiplied by
100,000. Pursuant to the agreement Mr. Imperiale was also granted options to
acquire 100,000 shares of Company stock.
The Company entered into an employment agreement with Mr. Kaplan,
President of CMS, effective April 29, 1994. The agreement provided for a
three-year term of employment and base salaries in each of the years. The
agreement was extended in April of 1997 for two years from its scheduled
termination, but Mr. Kaplan is only required to be available 80% of his time
and was granted options to purchase 100,000 shares of Company common stock.
His salary remained at $475,000 for the extension years. Mr. Kaplan continues
to work under the terms of the extension and his compensation has remained
constant. The agreement also provides for a subsequent three-year consultancy
period during which Mr. Kaplan will be paid $333,333 a year for part-time
consulting services. Mr. Kaplan is prohibited from competing with the Company
during the entire term of the agreement. Mr. Kaplan's right to receive the
compensation specified in the latter three-year period is subject only to his
continuing compliance with the non-compete restrictions.
On October 7, 1999, the Compensation Committee of the Board of Directors
approved new employment agreements for Messrs. Hirschfield, Tessler and
Imperiale. Such agreements will be filed as exhibits to the Company's Form
10-Q for the period ended September 30, 1999.
The Company currently has no other compensation plan or arrangement with
respect to any of the executive officers named on the Summary Compensation
Table, which results or will result from the resignation, retirement, or other
termination of such individual's employment with the Company or from a change
in control of the Company or a change in the individual's responsibilities
following a change in control. However, as noted under the Stock Option Grant
Table above, the Stock Option Committee of the Board may accelerate the
exercisability of employee stock options granted under the Option Plan upon a
change in control of the Company.
Compensation Committee Interlocks and Insider Participation
During the past fiscal year, Messrs. Hirschfield and Tessler served on
the Stock Option Committee.
Mr. Markin, Chairman of the Company's Compensation Committee, was,
during the fiscal year, President of Checker Holdings, an entity which does
not have a compensation committee. Mr. Tessler, Co-Chief Executive Officer
of the Company, was a member and Chairman of the Board of Directors of Checker
Holdings.
Item 12 - Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
The following table sets forth the beneficial ownership of the common
stock of the Company, at September 22, 1999, by each director, nominee,
executive officer named in the Summary Compensation Table appearing below, and
each person who, to the knowledge of the Company, owned beneficially more than
5% of the Company's common stock.
Beneficial Ownership 1
--------------------
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Total 2
- ---------------- -------------------- -------
Allan R. Tessler 3 1,762,892 - Indirect 4 5.09%
Co-Chairman of the Board,
Co-CEO
Alan J. Hirschfield 1,445,478 - Indirect 5 4.17%
Co-Chairman of the Board,
Co-CEO
Charles M. Diker 220,900 - Direct 6 *
Director 45,500 - Indirect 7
Dwight H. Egan 25,330 - Direct 8 *
Director
Executive Vice President -
Sales and Marketing
James A. Kaplan 33,333 - Direct 9 *
Director
Vice Chairman of the Board
David R. Markin 210,000 - Direct 9 1.14%
Director 185,000 - Indirect 10
Herbert S. Schlosser 45,070 - Direct 11 *
Director
Donald P. Greenberg 35,000 - Direct 9 *
Director
Carl Spielvogel 23,000 - Direct 12 *
Director
Mark F. Imperiale 16,666 - Direct 9 *
President, Chief Operating
Officer and Chief Financial
Officer
All current directors, nominees
and executive officers as a
group (10 persons) 4,048,169 13 11.42%
* Less than one percent
1 The table in this section is based upon information supplied by officers,
directors and principal stockholders and Schedules 13D and 13G, if any, filed
with the SEC. Unless otherwise indicated in the footnotes to the table and
subject to the community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares shown as beneficially owned by him.
2 Applicable percentage of ownership for the officers and directors is based
on 37,374,747 shares of common stock, which were outstanding on September 22,
1999, less 2,981,350 treasury shares.
3 Owner's address is in care of Karla Tessler, 4020 Moose-Wilson Road, P. O.
Box 11749, Jackson, Wyoming 83002.
4 Includes 983,545 shares held by ART/FGT Family Partners Ltd. and 545,000
shares held by Tessler Family Limited Partnership. Includes 233,333 shares
which may be acquired upon exercise of presently exercisable options.
5 Held of record directly by Alan J. Hirschfield Living Trust. Includes
233,333 shares which may be acquired upon exercise of presently exercisable
options.
6 Includes 110,000 shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Compensation of Directors," below.
7 Includes 34,500 shares in investment accounts managed by Mr. Diker, over
which he exercises shared investment power. Includes 11,000 shares in an
investment account held by Mr. Diker's wife, over which he exercises shared
investment power.
8 Includes 25,000 shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Compensation of Directors," below.
9 Represents shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Compensation of Directors," below.
10 Includes 180,000 shares held by Sophie Limited Partnership, an entity in
which Mr. Markin has shared voting control, and 5,000 shares in an investment
account held by Mr. Markin's wife, over which he exercises shared investment
power. Includes 200,000 shares which may be acquired upon exercise of
presently exercisable options. See "Executive Compensation and Other
Information - Compensation of Directors," below.
11 Includes 40,000 shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Compensation to Directors," below.
12 Includes 20,000 shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Stock Option Grants" below.
13 Includes 956,665 shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Stock Option Grants" and "Executive Compensation and Other
Information - Compensation of Directors," below.
Item 13 - Certain Relationships and Related Transactions
- --------------------------------------------------------
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-K/A to be signed on its
behalf by the undersigned, hereunto duly authorized.
DATA BROADCASTING CORPORATION
By: /s/ Alan J. Hirschfield
---------------------------
Alan J. Hirschfield
Co-Chief Executive Officer
By: /s/ Allan R. Tessler
---------------------------
Allan R. Tessler
Co-Chief Executive Officer
By: /s/ Mark F. Imperiale
---------------------------
Mark F. Imperiale
President, Chief Operating
Officer and Chief Financial
Officer
Date: October 27, 1999