-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KbyzAij9ocgY1V9yhcnmtHequEimYso3epv4jO2Ru2EMw4GDiBNdCqaNdGfaCDrb +wYTGostjuZ4hpgHGR8wVg== 0000891554-99-001273.txt : 19990618 0000891554-99-001273.hdr.sgml : 19990618 ACCESSION NUMBER: 0000891554-99-001273 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990617 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AUDIO BOOK CLUB INC CENTRAL INDEX KEY: 0001040973 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 650429858 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-52737 FILM NUMBER: 99648113 BUSINESS ADDRESS: STREET 1: 2295 CORPORATE BLVD STE 222 CITY: BOCA RATON STATE: FL ZIP: 33431 BUSINESS PHONE: 5612411426 MAIL ADDRESS: STREET 1: 2295 CORPORATE BLVD 222 CITY: BOCA RATON STATE: FL ZIP: 33431 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HERRICK NORTON CENTRAL INDEX KEY: 0000904829 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2295 CORPORATE BLVD N W SUITE 222 CITY: BOCA RATON STATE: FL ZIP: 33431 MAIL ADDRESS: STREET 1: AUDIO BOOK CLUB INC STREET 2: 2295 CORPORATE BLVD STE 222 CITY: BOCA RATON STATE: FL ZIP: 33431 SC 13D/A 1 AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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) (Amendment No. 1)* Audio Book Club, Inc. (Name of Issuer) Common Stock, no par value (Title of Class of Securities) 05068R 10 8 (CUSIP Number) Brad Shiffman, Esq. Tenzer Greenblatt LLP 405 Lexington Avenue, New York, New York 10174 (212) 885-5442 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notice and Communications) June 11, 1999 (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 which 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 |_|. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 6 Pages - --------------------- ----------------- CUSIP NO. 05068R-10-8 Page 2 of 6 Pages - --------------------- ----------------- ________________________________________________________________________________ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Norton Herrick ________________________________________________________________________________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [X] ________________________________________________________________________________ 3 SEC USE ONLY ________________________________________________________________________________ 4 SOURCE OF FUNDS* PF, OO ________________________________________________________________________________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ________________________________________________________________________________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States ________________________________________________________________________________ 7 SOLE VOTING POWER 3,307,638 (includes options, warrants and a convertible note NUMBER OF to acquire an aggregate of 3,299,438 shares of Common Stock) as of June 16, 1999 SHARES _________________________________________________________________ 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9 SOLE DISPOSITIVE POWER 4,284,558 (includes options, warrants and a convertible note REPORTING to acquire an aggregate of 3,299,438 shares of Common Stock) as of June 16, 1999 PERSON _________________________________________________________________ 10 SHARED DISPOSITIVE POWER WITH 0 ________________________________________________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,284,558 (includes options, warrants and a convertible note to acquire an aggregate of 3,299,438 shares of Common Stock) as of June 16, 1999 ________________________________________________________________________________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X] Does not include (i) 2,714,180 shares held by N. Herrick Irrevocable ABC Trust (the "N. Herrick Trust"), of which Norton Herrick is the sole beneficiary and in which he therefore may be deemed to have an economic interest and (ii) 775,000 shares issuable upon exercise of options which are not exercisable until October 9, 1999. Mr. Herrick does not have voting power or dispositive power with respect to the 2,714,180 shares held by the N. Herrick Trust. ________________________________________________________________________________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 38.6% ________________________________________________________________________________ 14 TYPE OF REPORTING PERSON* IN ________________________________________________________________________________ *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEM 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. Page 2 of 6 Pages Item 1. Security and Issuer. This statement relates to the Common Stock, no par value ("Common Stock") issued by Audio Book Club, Inc., a Florida corporation (the "Company"), whose principal executive offices are located at 2295 Corporate Boulevard, Suite 222, Boca Raton, Florida 33431. All share information in this statement gives retroactive effect to a 16,282-for-1 split of the Common Stock effected in October 1997. Item 2. Identity and Background. This statement is filed by Norton Herrick, Co-Chief Executive Officer and a principal shareholder of the Company (the "Reporting Person"). The business address of the Reporting Person is c/o Audio Book Club, Inc., 2295 Corporate Boulevard, Suite 222, Boca Raton, Florida 33431. The Reporting Person is a United States citizen. Mr. Herrick has not, during the last five years (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is 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 violations with respect to such laws. Item 3. Source and Amount of Funds or other Consideration. On June 11, 1999, the Company issued to the Reporting Person a convertible note (the "Note") initially convertible into 391,011 shares of Common Stock at any time until the earlier of the repayment of the Note or December 31, 2004. The Note was issued to the Reporting Person in consideration of his loan to the Company in the principal amount of $4,350,000 (the "Loan") the proceeds of which were used by the Company to fund a portion of the purchase price of the Audiobooks Direct business of Doubleday Direct, Inc. which was acquired by the Company on June 14, 1999. The number of shares issuable upon conversion of the Note are subject to certain anti-dilution and other adjustments. Item 4. Purpose of Transaction. The Note was acquired by the Reporting Person to provide the Company with the funds necessary to complete the acquisition referred to in Item 3 above. The Reporting Persons may make additional purchases of Common Stock from time to time Page 3 of 6 Pages and may dispose of any or all of the shares of Common Stock held by him at any time. The Reporting Person has no plans or proposals which relate to, or could result in any of the matters referred to in Paragraphs (b) through (j) of Item 4 of Schedule 13D although in his capacity as a director and executive officer of the Company he will be involved in any decisions of the Company to issue additional securities and to continue the Company's strategy which includes pursuing acquisitions of complementary businesses. The Reporting Person may review or reconsider his position with respect to the Company or to formulate plans or proposals with respect to any such matters, but, except as noted above, has no present intention of doing so. Item 5. Interest in Securities of the Issuer. As of the June 16, 1999, the Reporting Person beneficially owned an aggregate of 4,284,558 shares of Common Stock constituting approximately 38.6% of the outstanding Common Stock. The amount includes: (i) 8,200 shares owned of record by the Reporting Person, (ii) 1,000,000 shares issuable upon Plan options granted to the Reporting Person, (iii) 500,000 shares issuable upon exercise of the Warrants, (iv) 1,258,427 shares issuable upon conversion of a promissory note issued to the Reporting Person on December 31, 1998 (the "December Note"), (v) 488,460 shares owned of record by H. Herrick, of which the Reporting Person has sole dispositive but no voting power, (vi) 488,460 shares owned of record by the M. E. Herrick Trust, of which the Reporting Person has sole dispositive but no voting power, (vii) 150,000 shares issuable upon exercise of Plan options granted to Evan Herrick, of which the Reporting Person has sole voting and dispositive power, and (viii) 391,011 shares issuable upon conversion of the Note. The foregoing calculation does not include the 2,714,180 shares owned of record by the N. Herrick Trust, of which the Reporting Person is the sole beneficiary but has no voting or dispositive power. The percentage used herein is calculated based upon the 7,828,920 shares of Common Stock issued and outstanding at June 16, 1999, as provided by the Company. Except for the shares owned of record by H. Herrick and the M.E. Herrick Trust as to which the Reporting Person has sole dispositive power, but no voting power, the Reporting Person has sole voting and dispositive power with respect to all the shares of Common Stock to which this statement relates. The Reporting Person has not effected any transactions in shares of the Common Stock in the past 60 days other than as indicated above. Except as noted below, no person other than the Reporting Person has the right to receive or the power to direct receipt of dividends from, or the proceeds of, the sale of the shares of Common Stock. H. Herrick has the right to receive Page 4 of 6 Pages dividends and proceeds from any disposition of shares of Common Stock owned of record by him. The M.E. Herrick Trust, whose sole beneficiary is M. Herrick, has the right to receive any dividends on any shares owned of record by the M.E. Herrick Trust and the proceeds from any sale of Common Stock by the M.E. Herrick Trust. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Other than as set forth above, there are no contracts, arrangements, understandings or relationships with the Reporting Persons or any other person with respect to the securities of the Issuer, including but not limited to transfer or voting of any other securities, finders' fees, joint ventures, loan or option arrangements, puts or calls, guaranties of profits, divisions of profits or loss or the giving or withholding of proxies except that pursuant to (i) a December 31, 1998 letter agreement between the Reporting Person and the Company, the Company may be obligated to issue to the Reporting Person warrants to purchase 350,000 shares of Common Stock at $12.00 per share in certain circumstances involving the refinancing of the December Note and (ii) pursuant to a June 11, 1999 letter agreement between the Reporting Person and the Company, the Company may be obligated to issue to the Reporting Person warrants to purchase 125,000 shares of Common Stock at a price of $12.00 per share in certain circumstances involving the refinancing of the Note. The Reporting Person has received certain registration rights with respect to the shares of Common Stock beneficially owned by him. Item 7. Materials to be filed as Exhibits. Exhibit 1 June 11, 1999 financing letter agreement between the Company and the Reporting Person. Page 5 of 6 Pages SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. DATE: June 16, 1999 /s/ Norton Herrick ------------------------- Norton Herric Page 6 of 6 Pages EX-1 2 FINANCING LETTER AGREEMENT Exhibit 1 AUDIO BOOK CLUB, INC. 20 COMMUNITY PLACE P.O. BOX 2346 MORRISTOWN, NJ 07962-2346 June 11, 1999 Mr. Norton Herrick 2295 Corporate Blvd., N.W. Suite 222 P.O. Box 5010 Boca Raton, FL 33431 Dear Mr. Herrick: As an inducement to, and in consideration of, your purchase from Audio Book Club, Inc. (the "Company"), of the Company's 9% Convertible Senior Subordinated Promissory Note Due December 31, 2004 (the "Note") in the principal amount of $4,350,000, the Company hereby agrees as follows (capitalized terms used and not otherwise defined herein having the meanings ascribed to them in the Note): 1. The officers of the Company (other than Norton, Michael or Howard Herrick) shall use their best efforts to seek to refinance or replace the Note with debt or equity financing and will consider all proposals and accept a proposal (which is permitted under the Senior Credit Facilities or consented to by the lenders thereunder) whether or not (i) as favorable as the terms of the Note, including, without limitation, those providing for a principal amount of up to $6.5 million, a higher interest rate, the issuance of warrants, a lower conversion price (or a variable conversion price based on the future market price of the Company's Common Stock) for the Note; (ii) involving the issuance of equity securities, including shares of preferred stock with a variable conversion rate and mandatory redemption features; and/or (iii) requiring the payment of financing, placement or other fees. 2. In the event refinancing is obtained from anyone other than the Herricks or an Affiliate of any of the Herricks, upon receipt of approval of the Company's shareholders (which the Company's Board of Directors has agreed to recommend to the Company's shareholders), you shall be issued additional warrants (identical to the Warrants) to purchase 125,000 shares of Common Stock. -1- 3. In the event that (i) an offer is presented to the Company's Board of Directors to provide debt or equity refinancing of the Note (which is permitted under the Senior Credit Facilities or consented to by the lenders thereunder) and such refinancing is not accepted by the Company's board of directors or (ii) debt or equity refinancing is not obtained by the Company on or prior to July 15, 1999, in either case, at your option, after July 15, 1999, and upon receipt of approval of the Company's shareholders (which the Company's Board of Directors has agreed to recommend to the Company's shareholders), (a) the interest rate on the Note will increase to 11%, except that no increase in the interest rate on the Note shall be permitted or may be effected prior to January 1, 2000 other than non-current pay interest which accrues and is not payable in cash until final maturity of the Note, (b) the conversion price of the Note will be decreased to the lesser of the conversion price then in effect or the average of the closing bid price of the Common Stock for the five trading days prior to conversion, and (c) you shall have all other rights and remedies available to you. 4. If the Herricks or any of them are the holder of the Note and make a Demand Registration Request (as defined in Section 3(a) of the Registration Rights Agreement dated as of the date hereof between you and the Company), the Company shall make and maintain the filings called for by said Section 3(a) so as to permit a public offering and sale of all of the Registrable Securities (as defined in the Registration Rights Agreement) by the holders thereof for a period of twenty-four (24) months or until the seventh anniversary of the date hereof, whichever is longer. The Company acknowledges that your holding of the Note (notwithstanding the terms thereof) from the Company was intended to be short-term financing and serve as a bridge to replacement financing. However, Fleet National Bank requires the Note to mature following the expiration of the Senior Credit Facilities and, therefore, you agreed to the terms of the Note as an accommodation to the Company. AUDIO BOOK CLUB, INC. By: /s/ John F. Levy --------------------------- Name: John F. Levy Title: EVP/CFO Accepted and Agreed: /s/ Norton Herrick - ---------------------------- Norton Herrick -2- -----END PRIVACY-ENHANCED MESSAGE-----