SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(RULE 13d-101)
Information to be Included in Statements Filed Pursuant to Rule 13d-1(a) and
Amendments Thereto Filed Pursuant to Rule 13d-2(a)
Under the Securities Exchange Act of 1934
CIRCUIT RESEARCH LABS, INC.
(Name of Issuer)
COMMON STOCK, $0.10 PAR VALUE
(Title of Class of Securities)
172743205
(CUSIP Number)
EDWIN SUMMERS
VICE PRESIDENT AND GENERAL COUNSEL
HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
8500 BALBOA BLVD.
NORTHRIDGE, CALIFORNIA 91329
(218) 893-8411
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
with a copy to:
James E. O'Bannon
Jones, Day, Reavis & Pogue
2727 North Harwood
Dallas, Texas 75201
(214) 220-3939
MAY 31, 2000
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. |_|
(continued on following pages)
(Page 1 of 104 Pages)
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CUSIP NO. 172743205 13D PAGE 2 OF 104 PAGES
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1 Name of Reporting Person
Harman Acquisition Corp.
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2 Check the Appropriate Box if a Member of a Group (a) |_|
(b) |_|
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3 SEC Use Only
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4 Source of Funds
00
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) |_|
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6 Citizenship or Place of Organization
Delaware
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Number of 7 Sole Voting Power
Shares 1,279,775(1)
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Beneficially 8 Shared Voting Power
0
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Owned by 9 Sole Dispositive Power
Each 1,279,775(1)
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Reporting 10 Shared Dispositive Power
Person With 0
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,279,775(1)
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12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_|
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13 Percent of Class Represented by Amount in Row (11)
26.0%(2)
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14 Type of Reporting Person
CO
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(1) All shares of common stock, par value $.10 per share ("Common Stock") of
Circuit Research Labs, Inc., an Arizona corporation ("CRL"), covered by
this Schedule 13D may be acquired by Harman Acquisition Corp. ("HAC") upon
exercise of a warrant issued to HAC as of May 31, 2000 (the "Warrant").
Prior to the exercise of the Warrant, HAC is not entitled to any rights as
a stockholder of CRL.
(2) Based on 2,388,880 shares outstanding at September 30, 2001 according to
the Quarterly Report on Form 10-Q filed by Circuit Research Labs, Inc. for
the quarter ended September 30, 2001, plus 1,250,000 shares issued in
connection with an acquisition by CRL, plus 1,279,775 shares issuable upon
exercise of the Warrant described in Item 6 below.
(Page 2 of 104 Pages)
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CUSIP NO. 172743205 13D PAGE 3 OF 104 PAGES
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1 Name of Reporting Person
Harman International Industries, Incorporated
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2 Check the Appropriate Box if a Member of a Group (a) |_|
(b) |_|
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3 SEC Use Only
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4 Source of Funds
00
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5 Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e) |_|
------- --------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware
------------------------------ ------ --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 0
------ --------------------------------------------------------------------------------
Beneficially 8 Shared Voting Power
1,279,775(1)
------ --------------------------------------------------------------------------------
Owned by 9 Sole Dispositive Power
Each 0
------ --------------------------------------------------------------------------------
Reporting 10 Shared Dispositive Power
Person With 1,279,775(1)
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,279,775(1)
------- --------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares |_|
------- --------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
26.0%(2)
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14 Type of Reporting Person
CO
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(1) All shares of Common Stock covered by this Schedule 13D may be acquired by
HAC upon exercise of the Warrant described in Item 6 below. HAC is a
wholly owned subsidiary of Harman International Industries, Incorporated
("Harman"). As such, Harman may be deemed to have shared voting and
dispositive power with respect to the shares covered by this Schedule 13D.
(2) Based on 2,388,880 shares outstanding at September 30, 2001 according to
the Quarterly Report on Form 10-Q filed by Circuit Research Labs, Inc. for
the quarter ended September 30, 2001, plus 1,250,000 shares issued in
connection with an acquisition by CRL, plus 1,279,775 shares issuable upon
exercise of the Warrant described in Item 6 below.
(Page 3 of 104 Pages)
ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, par value $0.10 per
share (the "Common Stock"), of Circuit Research Labs, Inc., an Arizona
corporation ("CRL"). CRL's principal executive office is located at 2522 West
Geneva Drive, Tempe, Arizona 85282.
ITEM 2. IDENTITY AND BACKGROUND.
This joint Schedule 13D is filed by Harman International Industries,
Incorporated ("Harman") and its wholly owned subsidiary, Harman Acquisition
Corp. ("HAC").
1. (a) HAC is a Delaware corporation.
(b) HAC's principal office is located at Balboa Blvd.,
Northridge, California 91329.
(c) HAC is a holding company. Its sole purpose is to hold
a warrant dated May 31, 2000 (the "Warrant") to
purchase Common Stock as described in Item 6 below
and two notes, one for $5,000,000 and one for
$3,500,000, of CRL Systems, Inc., a Nevada
corporation ("Systems"), and a wholly owned
subsidiary of CRL, as described in Item 6 below.
(d) HAC has not, and, to the best of its knowledge, none
of the persons listed on SCHEDULE A hereto has,
during the last five years been convicted in any
criminal proceeding (excluding traffic violations or
similar misdemeanors).
(e) HAC has not, and, to the best of its knowledge, none
of the persons listed on SCHEDULE A hereto has,
during the last five years been a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such
proceeding is or was subject to a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
2. (a) Harman is a Delaware corporation.
(b) Harman's principal office is located at Harman is
1101 Pennsylvania Avenue, Washington, D.C. 20004.
(c) The principal business of Harman is the manufacture
of high-quality, high-fidelity audio products
targeted at the consumer and professional audio
markets.
(d) Harman has not, and, to the best of its knowledge,
none of the persons listed on SCHEDULE A hereto has,
during the last five years been convicted in any
criminal proceeding (excluding traffic violations or
similar misdemeanors).
(Page 4 of 104 Pages)
(e) Harman has not, and, to the best of its knowledge,
none of the persons listed on SCHEDULE A hereto has,
during the last five years been a party to a civil
proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such
proceeding is or was subject to a judgment, decree or
final order enjoining future violations of, or
prohibiting or mandating activities subject to,
federal or state securities laws or finding any
violation with respect to such laws.
The name, citizenship, business address and present principal
occupation or employment, as well as the name and address of any corporation or
other organization in which such occupation or employment is conducted, of each
of the directors and executive officers of each of HAC and Harman are set forth
on SCHEDULE A hereto, which SCHEDULE A is incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
In connection with the sale by HAC of substantially all of the assets
of HAC to Systems, CRL issued the Warrant to HAC. The Warrant is exercisable for
Common Stock, as more fully described in the response to Item 6. The beneficial
ownership of Common Stock by Harman and HAC reported in this Schedule 13D is
based solely on the ownership of the Warrant. No cash consideration was paid for
the Warrant.
ITEM 4. PURPOSE OF TRANSACTION.
In connection with the sale by HAC of substantially all of the assets
of HAC to Systems, CRL issued the Warrant to HAC. The beneficial ownership of
Common Stock by Harman and HAC reported in this Schedule 13D is based solely on
the ownership of the Warrant.
HAC has no present intent to exercise the Warrant.
Except as described in the response to Item 6, neither Harman nor HAC
have formulated any plans or proposals which relate to or would result in: (i)
acquisition or disposition of securities of CRL; (ii) an extraordinary corporate
transaction involving CRL or any of its subsidiaries; (iii) a sale or transfer
of a material amount of the assets of CRL or any of its subsidiaries; (iv) any
change in the present board of directors or management of CRL; (v) any material
change in CRL's capitalization or dividend policy; (vi) any other material
change in CRL's business or corporate structure; (vii) any change in CRL's
charter or bylaws or other instruments corresponding thereto or other action
which may impede the acquisition of control of CRL by any person; (viii) causing
a class of CRL's securities becoming deregistered or delisted; (ix) an action
similar to any of those enumerated above.
The response to Item 6 is incorporated herein by reference.
(Page 5 of 104 Pages)
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As a result of HAC's ownership of the Warrant, HAC is deemed to
beneficially own 1,279,775 shares of Common Stock or approximately 26.0% of the
Common Stock that would be outstanding after giving effect to the exercise in
full of the Warrant. Harman owns all of the outstanding capital stock of HAC and
as a result, Harman is deemed to also beneficially own these 1,279,775 shares of
Common Stock or approximately 26.0% of the Common Stock that would be
outstanding after giving effect to the exercise in full of the Warrant.
(b) Under SEC regulations, HAC is deemed to have sole voting and
dispositive power with respect to 1,279,775 shares of Common Stock as a result
of its ownership of the Warrant. HAC is a wholly owned subsidiary of Harman. As
such, under SEC regulations Harman may be deemed to also have shared voting and
dispositive power with respect to 1,279,775 shares of Common Stock as a result
of HAC's ownership of the Warrant.
(c) None.
(d) Not applicable
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.
On May 31, 2000, Systems and HAC entered into an Asset Sale Agreement
(the "Asset Sale Agreement") pursuant to which Systems acquired substantially
all of the assets of HAC (the "Transaction"). As consideration for the assets of
HAC, HAC received $1,500,000 in cash, a $3.5 million short-term note (the
"Tranche B Note"), a $5 million long-term note (the "Tranche A Note" and,
together with the Tranche B Note, the "Notes") and the Warrant to purchase
1,000,000 shares of Common Stock, exercisable for $2.25 per share.
The Warrant expires on May 31, 2003 and can be exercised either (i) by
payment in cash, (ii) by reducing the amount of the unpaid principal on the
Tranche A Note or the Tranche B Note, or (iii) by any combination of (i) and
(ii). The provisions of the Warrant also provide HAC with anti-dilution
protection under certain circumstances, including for stock splits, stock
dividends, combinations, reclassifications and issuances of Common Stock at
prices below the current trading price or the exercise price of the Warrant. As
a result of certain transactions effected by CRL subsequent to the issuance of
the Warrant, the aggregate number of shares of Common Stock issuable upon
exercise of the Warrant increased to 1,279,775 shares, and the exercise price
per share decreased to $1.7386 per share.
The provisions of the Warrant further provide HAC with certain rights
to cause CRL to register the shares of Common Stock issuable to HAC upon
exercise of the Warrant. CRL has filed a registration statement registering the
sale by HAC of the shares issuable upon exercise of the Warrant.
(Page 6 of 104 Pages)
Under the terms of the Asset Purchase Agreement, Systems and HAC
entered into an $8,500,000 Credit Agreement (the "Credit Agreement") that
governs the repayment of the Notes. In addition, CRL, Systems and HAC entered
into a Guarantee and Collateral Agreement (the "Guarantee") whereby each of CRL
and Systems pledged all of their respective assets, including the stock of
Systems, as collateral for the repayment of the Notes. Among other things, the
Guarantee provides that the cash proceeds received by CRL from any sale of debt
or equity securities or sales of assets by CRL will be applied to pay amounts
owed under the Notes.
Between May 31, 2000 and October 31, 2001, HAC and Systems agreed to
several payment extensions on the Notes. On October 1, 2001, Systems and HAC
entered into an amendment to the Credit Agreement under which both Notes were
amended and restated (the "Amended Credit Agreement"). Under the Amended Credit
Agreement, the Notes were converted to demand notes payable on the demand of HAC
or if no demand is sooner made, on the dates and in the amounts specified in the
Amended Credit Agreement. Interest only payments remain payable from time to
time for both Notes and are also due on demand. Additionally, under the Amended
Credit Agreement, the first principal payment on the Tranche A Note of $250,000
was increased to $1,250,000 and is now due April 30, 2002, unless HAC demands
payment at an earlier date.
HAC acquired the Warrant (and as a result, beneficial ownership of the
Common Stock issuable upon exercise of the Warrant) as consideration received in
the Transaction. HAC from time to time intends to review its investment in CRL
on the basis of various factors, including CRL's business, financial condition,
results of operations and prospects, general economic and industry conditions,
the securities markets in general and for CRL's securities in particular, as
well as other developments and other investment opportunities. Based upon such
review, it will take such actions in the future as it may deem appropriate in
light of the circumstances existing from time to time, including but not limited
to demanding payment of all or a portion of the principal and interest due under
the Notes and/or exercising its rights under the Credit Agreement, as amended,
the Guarantee or the Asset Sale Agreement. Depending on market and other
factors, HAC may determine to dispose of some or all of the Notes and/or the
Warrant.
The foregoing descriptions of the Asset Sale Agreement, the Warrant,
and the Guarantee are qualified in their entirety by reference to the copies of
such agreements which have been filed as exhibits to this Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following are filed herewith as Exhibits to the Schedule 13D:
Exhibit No. Description
----------- -----------
1 Asset Sale Agreement, dated as of May 31, 2000, between Harman Acquisition Corp.
(F/K/A Orban, Inc.) and CRL Systems, Inc.
2 Warrant, dated May 31, 2000, issued by Circuit Research Labs, Inc. to Harman
Acquisition Corp.
3 Guarantee and Collateral Agreement, dated as of May 31, 2000, made by Circuit
Research Labs, Inc., as Parent, CRL Systems, Inc., as Borrower, in favor of Harman
Acquisition Corp., as Lender.
4 Joint Filing Agreement
(Page 7 of 104 Pages)
SIGNATURE
After reasonable inquiry and to the best of my knowledge and believe, I
certify that the information set forth in this Schedule 13D is true, complete
and correct.
Dated: March 13, 2002 HARMAN ACQUISITION CORP.
By: /s/ Frank Meredith
---------------------------------
Frank Meredith, Secretary
HARMAN INTERNATIONAL
INDUSTRIES, INCORPORATED
By: /s/ Frank Meredith
-----------------------------------
Frank Meredith, Executive Vice President
and Chief Financial Officer
(Page 8 of 104 Pages)
SCHEDULE A
CERTAIN INFORMATION REGARDING DIRECTORS
AND EXECUTIVE OFFICERS OF HARMAN ACQUISITION CORP.
AND HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED
Set forth below are the names, positions with HAC and/or Harman,
business addresses and principal occupations of the directors and executive
officers of HAC and Harman. Each individual is a United States citizen.
HAC
Names, Positions and Business Addresses Present Principal Occupation
--------------------------------------- ----------------------------
Dr. Sidney Harman Executive Chairman and
Director and President Chairman of the Board of Harman
1101 Pennsylvania Avenue
Suite 1010
Washington, D.C. 20004
Bernard A. Girod Chief Executive Officer of Harman
Director and Vice President and Secretary
8500 Balboa Blvd.
Northridge, CA 91329
Frank Meredith Chief Financial Officer of Harman
Chief Financial Officer and Assistant Secretary
8500 Balboa Blvd.
Northridge, CA 91329
HARMAN
Names, Positions and Business Addresses Present Principal Occupation
--------------------------------------- ----------------------------
Dr. Sidney Harman Executive Chairman and
Executive Chairman and Chairman of the Chairman of the Board of Harman
Board of Harman
1101 Pennsylvania Avenue
Suite 1010
Washington, D.C. 20004
Bernard A. Girod Chief Executive Officer of Harman
Vice Chairman of the Board and Chief
Executive Office of Harman
8500 Balboa Blvd.
Northridge, CA 91329
(Page 9 of 104 Pages)
Names, Positions and Business Addresses Present Principal Occupation
--------------------------------------- ----------------------------
Gregory P. Stapleton President of Harman
President, Chief Operating Officer and a
Director of Harman
8500 Balboa Blvd.
Northridge, CA 91329
Frank Meredith Chief Financial Officer of Harman
Executive Vice President and Chief
Financial Officer of Harmon
8500 Balboa Blvd.
Northridge, CA 91329
William S. Palin Vice President-Controller of Harman
Vice President - Controller of Harman
8500 Balboa Blvd.
Northridge, CA 91329
Shirley M. Hufstedler Senior Counsel, Morrison &
Director Foerster, LLP., the address of
555 West Fifth Street which is the same as that for Ms.
Suite 3500 Hufstedler
Los Angeles, CA 90013-1024
Ann McLaughlin Korologos Senior Advisor, Benedetto Gartland
Director & Company, Inc., 728 Post Road
1155 23rd Street, N.W. East, Suite 202, Westport, CT 06880
Suite 7B
Washington, D.C. 20037
Edward H. Meyer Chairman of the Board, Chief
Director Executive Officer and President of
777 Third Avenue Grey Global Group, Inc., the
New York, NY 10017 address of which is the same as
that for Mr. Meyer
Stanley A. Weiss Chairman of Business Executives for
Director National Security, the address of
1717 Pennsylvania Avenue, N.W. which is the same as that for Mr.
Suite 350 Weiss
Washington, DC 20006
(Page 10 of 104 Pages)