2011-11-14T13:42:20-06:00 2010-12-31 BDO USA LLP 7101 WISCONSIN AVE SUITE 800 BETHESDA MD 208144827 990 2010-01-01 760742496 SOUNDEXCHANGE INC SOUN 2026405858 1121 14TH STREET NW NO 700 WASHINGTON DC 20005 ANJULA SINGH 2026405858 2011-11-14 1 JOYCE M UNDERWOOD 3016544900 2010 2016-02-24 21:20:13Z MICHEAL HUPPE 1121 14TH STREET NW NO 700 WASHINGTON DC 20005 20958592 0 X WWW.SOUNDEXCHANGE.COM X 2003 DE SOUNDEXCHANGE'S PRIMARY EXEMPT PURPOSE IS TO COLLECT AND DISTRIBUTE ROYALTIES FOR SOUND RECORDINGS COPYRIGHT OWNERS, FEATURED ARTISTS AND NON-FEATURED ARTISTS. 18 18 77 0 0 0 0 0 18283495 20090413 1594724 868179 0 0 19878219 20958592 0 0 0 0 4501656 6014939 0 0 0 15207208 14906077 19708864 20921016 169355 37576 294945519 305842704 293889338 304786523 1056181 1056181 X SEE SCHEDULE O 0 0 DURING FY2010, SOUNDEXCHANGE REPRESENTED THE INTERESTS OF ALL SOUND RECORDING COPYRIGHT OWNERS AND RECORDING ARTISTS ON WHOSE BEHALF IT IS AUTHORIZED TO COLLECT AND DISTRIBUTE ROYALTIES PAID UNDER THE STATUTORY LICENSES SET FORTH IN SECTIONS 112 AND 114 OF TITLE 17 OF THE UNITED STATES CODE. AS THE SOLE ENTITY DESIGNATED TO RECEIVE PAYMENTS FROM SERVICES OPERATING UNDER STATUTORY LICENSE, SOUNDEXCHANGE REPRESENTS THE INTERESTS OF ALL COPYRIGHT OWNERS AND RECORDING ARTISTS WHOSE WORKS HAVE BEEN PERFORMED. SOUNDEXCHANGE COLLECTED ROYALTIES FROM VARIOUS CLASSES OF LICENSEES, INCLUDING PREEXISTING SUBSCRIPTION SERVICES, PREEXISTING SATELLITE DIGITAL AUDIO RADIO SERVICES, INTERNET-ONLY WEBCASTERS, BROADCAST SIMULCASTERS AND NONCOMMERCIAL ENTITIES. SOUNDEXCHANGE COLLECTED ROYALTIES FROM OVER 1,000 LICENSEES AND DISTRIBUTED ROYALTIES TO OVER 12,000 SOUND RECORDING COPYRIGHT OWNERS AND FEATURED ARTISTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS AUTHORIZED BY STATUTE TO DISTRIBUTE ROYALTIES TO NONFEATURED MUSICIANS AND NONFEATURED VOCALISTS. 0 0 0 1 0 0 0 0 0 1 0 0 0 1 1 1 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 12390 0 1 77 1 0 0 0 0 0 0 X 18 18 0 0 0 0 1 1 0 1 0 0 0 0 1 1 1 0 0 1 1 0 DC X ANJULA SINGH 2026405870 1121 14TH STREET NW NO 700 WASHINGTON DC 20005 ALASDAIR MCMULLAN 1.00 X 0 0 0 TUCKER MCCRADY 1.00 X 0 0 0 JEFF HARLESTON 1.00 X 0 0 0 ANDREA FINKELSTEIN 1.00 X 0 0 0 STEVE MARKS 1.00 X 0 0 0 TOM SILVERMAN 1.00 X 0 0 0 DICK HUEY 1.00 X 0 0 0 RICHARD BENGLOFF 1.00 X 0 0 0 MITCH BAINWOL 1.00 X 0 0 0 PATRICIA POLACH 1.00 X 0 0 0 KIM ROBERTS-HEDGPETH 1.00 X 0 0 0 PATRICK RAINS 1.00 X 0 0 0 KENDALL MINTER 1.00 X 0 0 0 MARTHA REEVES 1.00 X 0 0 0 PERRY RESNICK 1.00 X 0 0 0 JAY L COOPER 1.00 X 0 0 0 WALTER F MCDONOUGH 1.00 X 0 0 0 MICHAEL HAUSMAN 1.00 X 0 0 0 JOHN SIMSON 40.00 X 352457 0 19801 BARRIE KESSLER 40.00 X 350762 0 16806 MICHAEL HUPPE 40.00 X 368609 0 28358 COLIN RUSHING 40.00 X 205949 0 16645 ANJULA SINGH 40.00 X 195404 0 12920 RYAN LEHNING 40.00 X 184966 0 18486 BRYAN CALHOUN 40.00 X 170616 0 12410 BRADLEY PRENDERGAST 40.00 X 144662 0 3366 1973425 0 128792 9 0 1 0 JENNER & BLOCK LLP 353 N CLARK STREET CHICAGO IL 606543456 LEGAL SERVICES 3270826 ACUMEN SOLUTIONS INC 8614 WESTWOOD CENTER DR STE 700 VIENNA VA 22182 IS&T SERVICES 1988376 COGNIZANT TECHNOLOGY SOLUTIONS US CORP 24721 NETWORK PL CHICAGO IL 606731247 CONSULTING SERVICES 505468 ERIS GROUP LLC 439 NEW JERSEY AVENUE SE WASHINGTON DC 20003 MUSICFIRST COALITION MANAGEMENT 374406 LMG INC C/O HASS COMPANY119 RIDGEPOINT P GAITHERSBURG MD 20878 MUSICFIRST PR MANAGEMENT 307805 20 ROYALTY COLLECTION 900099 17819408 17819408 COST RECOVERY FEES 900099 2271005 2271005 20090413 868179 868179 20958592 20090413 0 868179 1745332 3339785 134549 500165 295108 682099 72055 180713 309294 1969853 307409 2129956 631024 309038 67650 20976 5632516 88535 COST RECOVERY EXPENSES 2271005 DUES & SUBCRIPTIONS 126522 MISCELLANEOUS 73456 MEMBERSHIP 18409 EDUCATION & TRAINING 15567 20921016 100 100 41764884 55335181 238161 244380 11256288 7941548 3933504 3314740 238806777 238668084 10202093 8280219 294945519 305842704 2204925 2626591 784703 734686 290899710 301425246 293889338 304786523 X 1056181 1056181 1056181 1056181 294945519 305842704 X 37576 -37576 X X 0 1 0 X 0 1 0 0 1173074 414392 758682 1010256 742097 268159 9072958 6785059 2287899 3314740 CAPITAL LEASES PAYABLE 172763 FUNDS HELD IN AGENCY (SEE PART XIV) 301252483 301425246 20958592 20921016 37576 -37576 -37576 0 20649298 0 20649298 309294 309294 20958592 20649298 37576 37576 20611722 309294 309294 20921016 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: ON DECEMBER 1, 2009 THE ORGANIZATION ADOPTED THE PROVISIONS OF ACCOUNTING STANDARDS CODIFICATION (ASC) 740-10 RELATED TO ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES WITH NO CUMULATIVE EFFECT ADJUSTMENT REQUIRED. INCOME TAX BENEFITS ARE RECOGNIZED FOR INCOME TAX POSITIONS TAKEN OR EXPECTED TO BE TAKEN IN A TAX RETURN, ONLY WHEN IT IS DETERMINED THAT THE INCOME TAX POSITION WILL MORE-LIKELY-THAN-NOT BE SUSTAINED UPON EXAMINATION BY TAXING AUTHORITIES. THE ORGANIZATION ANALYZED TAX POSITIONS TAKEN FOR FILING WITH THE INTERNAL REVENUE SERVICE AND ALL STATE JURISDICTIONS WHERE IT OPERATES. THE ORGANIZATION BELIEVES THAT INCOME TAX FILING POSITIONS WILL BE SUSTAINED UPON EXAMINATION AND DOES NOT ANTICIPATE ANY ADJUSTMENTS THAT WOULD RESULT IN A MATERIAL ADVERSE EFFECT ON THE ORGANIZATION'S FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS. ACCORDINGLY, THE ORGANIZATION HAS NOT RECORDED ANY RESERVES, OR RELATED ACCRUALS FOR INTEREST AND PENALTIES FOR UNCERTAIN INCOME TAX POSITION TAX POSITIONS AT DECEMBER 31, 2010 AND 2009 RESPECTIVELY. PART XIII, LINE 2D - OTHER ADJUSTMENTS: NET UNREALIZED LOSS ON INVESTMENTS 37,576. PART X - FUNDS HELD IN AGENCY ROYALTIES PAYMENTS ARE DUE 45 DAYS AFTER THE END OF THE MONTH. A RECEIVABLE AND CORRESPONDING LIABILITY ARE RECORDED FOR ROYALTIES RELATING TO 2010 BUT COLLECTED AFTER DECEMBER 31, 2010. THE FUNDS HELD IN AGENCY BALANCE OF $301,252,483 AT DECEMBER 31, 2010 INCLUDED A $48.7 MILLION ACCRUAL FOR SUCH ROYALTIES. X 1 1 X X X 1 0 0 JOHN SIMSON 327457 0 25000 0 0 0 15730 0 4071 0 372258 0 0 0 BARRIE KESSLER 284775 0 0 0 65987 0 12735 0 4071 0 367568 0 0 0 MICHAEL HUPPE 272690 0 95000 0 919 0 15678 0 12680 0 396967 0 0 0 COLIN RUSHING 188260 0 17000 0 689 0 11909 0 4736 0 222594 0 0 0 ANJULA SINGH 174750 0 20000 0 654 0 10410 0 2510 0 208324 0 0 0 RYAN LEHNING 176800 0 7500 0 666 0 11342 0 7144 0 203452 0 0 0 BRYAN CALHOUN 160000 0 10000 0 616 0 10082 0 2328 0 183026 0 0 0 PART I, LINE 1A 4C, TAX INDEMNIFICATION AND GROSS-UP PAYMENTS - WHERE APPLICABLE THE TAX ON SHORT-TERM AND LONG-TERM DISABILITY IS GROSSED UP. PART I, LINE 4A BARRIE KESSLER WAS PAID $65,102 IN SEVERANCE PAYMENTS IN 2010, BASED ON HER SERVICE TO THE COMPANY AND SUBJECT TO TERMS AND CONDITIONS THAT ARE CONSISTENT WITH INDUSTRY PRACTICE. ORGANIZATION MISSION STATEMENT FORM 990, PART III, LINE 1 SOUNDEXCHANGE'S PRIMARY EXEMPT PURPOSE IS TO COLLECT AND DISTRIBUTE ROYALTIES FOR SOUND RECORDING COPYRIGHT OWNERS, FEATURED ARTISTS AND NON-FEATURED ARTISTS. DURING FY2010, SOUNDEXCHANGE REPRESENTED THE INTERESTS OF ALL SOUND RECORDING COPYRIGHT OWNERS AND RECORDING ARTISTS ON WHOSE BEHALF IT IS AUTHORIZED TO COLLECT AND DISTRIBUTE ROYALTIES PAID UNDER THE STATUTORY LICENSES SET FORTH IN SECTIONS 112 AND 114 OF TITLE 17 OF THE UNITED STATES CODE. AS THE SOLE ENTITY DESIGNATED TO RECEIVE PAYMENTS FROM SERVICES OPERATING UNDER STATUTORY LICENSE, SOUNDEXCHANGE REPRESENTS THE INTERESTS OF ALL COPYRIGHT OWNERS AND RECORDING ARTISTS WHOSE WORKS HAVE BEEN PERFORMED. SOUNDEXCHANGE COLLECTED ROYALTIES FROM VARIOUS CLASSES OF LICENSEES, INCLUDING PRE-EXISTING SUBSCRIPTION SERVICES, PRE-EXISTING SATELLITE DIGITAL AUDIO RADIO SERVICES, INTERNET-ONLY WEBCASTERS, BROADCAST SIMULCASTERS AND NONCOMMERCIAL ENTITIES. SOUNDEXCHANGE COLLECTED ROYALTIES FROM OVER 1,000 LICENSEES AND DISTRIBUTED ROYALTIES TO OVER 12,000 SOUND RECORDING COPYRIGHT OWNERS AND FEATURED ARTISTS. SOUNDEXCHANGE ALSO DISTRIBUTED ROYALTIES TO THE INDEPENDENT ADMINISTRATORS. FORM 990, PART VI, SECTION A, LINE 6 SOUNDEXCHANGE DOES NOT HAVE STOCKHOLDERS BUT IS GOVERNED BY AN 18 MEMBER BOARD OF DIRECTORS, 9 REPRESENTING THE INTERESTS OF SOUND RECORDING COPYRIGHT OWNERS, AND 9 REPRESENTING THE INTERESTS OF RECORDING ARTISTS. FORM 990, PART VI, SECTION A, LINE 7A THE SOUNDEXCHANGE BOARD IS COMPOSED OF 18 DIRECTORS, 9 REPRESENTING THE INTERESTS OF SOUND RECORDING COPYRIGHT OWNERS AND 9 REPRESENTING THE INTERESTS OF RECORDING ARTISTS. SOME DIRECTORS ARE APPOINTED BY OTHER ORGANIZATIONS AND SOME SIT ON THE BOARD BY VIRTUE OF THEIR POSITIONS WITHIN SOME ORGANIZATIONS. IN ADDITION, MANY OF THE DIRECTORS ARE SELECTED BY THEIR PEERS. FORM 990, PART VI, SECTION A, LINE 8B SOUNDEXCHANGE DOES NOT KEEP WRITTEN MINUTES OF ALL OF ITS COMMITTEE MEETINGS DUE TO THE SENSITIVITY OF MATTERS DISCUSSED IN THE COMMITTEE MEETINGS. OUR BYLAWS MAKE CLEAR THAT MINUTES ARE NOT MANDATORY. WE DO KEEP WRITTEN MINUTES OF ALL BOARD MEETINGS IN WHICH BUSINESS IS TRANSACTED. FORM 990, PART VI, SECTION B, LINE 11 MANAGEMENT WILL REVIEW THE 990 PRIOR TO FILING, AND A DRAFT IS PROVIDED TO THE FINANCE COMMITTEE PRIOR TO FILING. A COPY OF THE FILED 990 WILL BE PROVIDED TO THE FULL BOARD. FORM 990, PART VI, SECTION B, LINE 12C SOUNDEXCHANGE BY-LAWS REQUIRE THE DISCLOSURE OF ANY POTENTIAL CONFLICTS OF INTEREST. IN ADDITION, THE MEMBERS OF THE BOARD OF DIRECTORS COMPLETE AN ANNUAL QUESTIONNAIRE THAT ASKS IF THERE HAVE BEEN ANY CONFLICTS OF INTEREST IN THE REPORTING YEAR. FORM 990, PART VI, SECTION B, LINE 15 THE EXECUTIVE DIRECTOR AND COO ARE UNDER CONTRACT AGREEMENTS THAT ARE APPROVED BY THE BOARD. THE GENERAL COUNSEL'S SALARY IS REVIEWED BY THE FINANCE AND COMPENSATION COMMITTEES, RECOMMENDED TO THE BOARD AND BOARD APPROVES VIA THE BUDGET APPROVAL PROCESS. FORM 990, PART VI, SECTION C, LINE 19 THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT MADE AVAILABLE TO THE PUBLIC. A NON-GAAP VERSION OF THE FINANCIAL STATEMENTS IS MADE AVAILABLE ON SOUNDEXCHANGE'S WEBSITE. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -37,576. OVERSIGHT OF AUDIT FORM 990, PART XII, LINE 2C THERE HAVE BEEN NO CHANGES DURING THE YEAR IN THE PROCESS FOR OVERSIGHT OF THE AUDIT OF THE FINANCIAL STATEMENTS.