AUDIO BOOK CLUB, INC.
Supplement dated August 16, 1999 to
Prospectus dated May 5, 1999
The following table updates information contained in the table under the
caption "Selling Shareholders" in our May 5, 1999 prospectus.
<TABLE>
<CAPTION>
Beneficial
Ownership of Shares % of Shares
Shares of Common Beneficially Beneficially
Selling Stock Prior to Shares to be Sold Owned Owned After
Shareholder(1) Offering in the Offering(2) After Offering(3) Offering(3)
- -------------- -------- ------------------ ----------------- -----------
<S> <C> <C> <C> <C>
Norton Herrick 4,219,109(4) 1,308,989(5) 2,910,120 26.4%
Carl Wolf 95,000(6) 75,000 20,000 *
The Columbia House
Company 225,000 225,000 0 0
Sony Music
Entertainment Inc. 325,000(7) 325,000(8) 0 0
WCI Music Group,
Inc. 325,000(7) 325,000(8) 0 0
Premier Electronic
Laboratories, Inc. 125,000(9) 125,000 0 *
Metacom, Inc. 50,000(10) 50,000 0 *
Carl Amari 547,875(11) 547,875 0 *
Denis Levin 31,250(12) 31,250 0 0
Vince Amari 20,875(13) 20,875 0 0
Karen Olsen 5,000(14) 5,000 0 0
Christina Vrba 10,000(15) 10,000 0 0
Fleet National
Bank 98,725(16) 98,725 0 0
ING (U.S.) Captial
Corporation 98,725(17) 98,725 0 0
800 Long Distance,
Inc. 21,600(18) 21,600 0 0
Jeffrey Busche 20,000(19) 20,000 0 0
Louis Lichtenfeld 10,000(20) 10,000 0 0
Gregory Presson 31,625(21) 31,625 0 0
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Beneficial
Ownership of Shares % of Shares
Shares of Common Beneficially Beneficially
Selling Stock Prior to Shares to be Sold Owned Owned After
Shareholder(1) Offering in the Offering(2) After Offering(3) Offering(3)
- -------------- ----------------- ------------------ ----------------- -----------
<S> <C> <C> <C> <C>
Stephen Weinress 20,334(22) 20,334 0 0
Carl Frankson 27,125(23) 27,125 0 0
Patrick Bannister 6,291(24) 6,291 0 0
Darren Friend 23,000(25) 23,000 0 0
Andre Guardi 29,340(26) 29,340 0 0
Doug Dust 2,250(27) 2,250 0 0
Marjorie Goddard 5,518(28) 5,518 0 0
Michael Chenery 5,017(29) 5,017 0 0
Steven Kornfeld 20,000(30) 20,000 0 0
Steven Rothstein 49,400(31) 49,400 0 0
Craig Gould 7,500(32) 7,500 0 0
National Securities
Corporation 27,600(33) 27,600 0 0
Steven McLaughlin 158,000(34) 158,000 0 0
Frankfurt, Garbus,
Klein & Selz 20,000(35) 20,000 0 0
Quantum Partners
LDC 750,000 750,000 0 0
ABC Investment
L.L.C. 449,438 449,438 0 0
</TABLE>
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* Less than one percent.
(1) None of the selling shareholders has a material relationship with our
company other than, Norton Herrick who is a Director, Chairman of the Board
and Co-Chief Executive Officer, Michael Herrick who is a Director and
Co-Chief Executive Officer, Howard Herrick who is a Director and Executive
Vice President, Steven McLaughlin who is an Executive Vice President and
Chief Technology Officer, Carl Wolf who is a Director and Carl Amari who is
President of a wholly-owned subsidiary of our company.
(2) Assumes as to each selling shareholder the exercise of all of the warrants,
options and other convertible securities owned by such selling shareholder
relating to the shares offered under this prospectus whether or not
currently exercisable and the sale of all of the shares. We cannot assure
you that any warrants, options or convertible securities will be exercised
or converted, as the case may be, or that any shares of common stock
offered by selling shareholders hereby will be sold.
(3) Each selling shareholder's beneficial ownership and percentage ownership is
determined by assuming that options, warrants or convertible securities
that are held by such selling shareholder
<PAGE>
(but not held by any other selling shareholder or person) and are
exercisable within 60 days from the date of this prospectus have been
exercised and converted.
(4) Includes (i) 8,200 shares of common stock held by Norton Herrick, (ii)
488,460 shares of common stock held by Howard Herrick, (iii) 488,460 shares
of common stock held by the M.E. Herrick Irrevocable Trust, of which
Michael Herrick is the sole beneficiary and Howard Herrick is the sole
trustee, (iv) 1,000,000 shares issuable upon exercise of options granted
under the 1997 Stock Option Plan (the "97 Plan"), (v) 150,000 shares of
common stock issuable upon exercise of options granted to Evan Herrick
under the 97 Plan, (vi) 808,989 shares of common stock issuable upon
conversion of $9,000,000 principal amount of the Note at an initial
conversion price of $11.125 per share (vii) 500,000 shares of common stock
issuable upon exercise of a warrant issued on December 31, 1998 at an
initial exercise price of $12.00 per share and (viii) 775,000 shares of
common stock issuable upon exercise of options granted under our 1999 Stock
Incentive Plan. Does not include 2,714,180 shares held by the Norton
Herrick Irrevocable ABC Trust of which Norton Herrick is the sole
beneficiary and Howard Herrick is the sole trustee. The Norton Herrick
Irrevocable ABC Trust agreement provides that Howard Herrick shall have
sole voting and dispositive power over the shares held by the trust. Howard
Herrick has irrevocably granted to Norton Herrick sole dispositive power
with respect to the shares of common stock held by Howard Herrick in his
own behalf and on behalf of the M.E. Herrick Irrevocable Trust. Evan
Herrick has irrevocably granted to Norton Herrick sole voting and
dispositive power with respect to the shares of common stock issuable upon
exercise of the 150,000 options granted to Evan Herrick on November 5, 1998
under the 97 Plan.
(5) Represents shares issuable upon exercise of the Note and the Warrant.
(6) Includes (i) 50,000 shares of common stock issuable upon exercise of
options granted March 18, 1998 at an exercise price of $5.00 per share,
(ii) 25,000 shares of common stock issuable upon exercise of options
purchased September 18, 1998 at an exercise price of $5.00 per share, and
(iii) 15,000 shares of common stock issuable upon exercise of options
granted on March 18, 1998 under our stock option plan at an exercise price
of $5.00 per share. Does not include options to purchase 7,500 shares of
common stock granted under our stock option plan which vest on March 18,
2000.
(7) Represents (i) 50,000 shares of common stock separately held by each of the
named selling shareholders, (ii) 225,000 shares of common stock held of
record by The Columbia House Company and which may be deemed to be
beneficially owned by each of the named selling shareholders and (iii)
50,000 shares of common stock issuable to each of the named selling
shareholders upon exercise of warrants issued to each of them on December
31, 1998 with an exercise price of $11.125. The shares of common stock and
warrants were issued in connection with our purchase of certain assets of
The Columbia House Company on December 31, 1998.
(8) Includes 225,000 shares owned of record by The Columbia House Company which
is separately listed as a selling shareholder of such shares.
(9) Represents 125,000 shares of common stock of our company issued in
connection with our purchase of certain assets of Premier Electronic
Laboratories, Inc. on December 31, 1998.
(10) Represents 50,000 shares of common stock issuable upon exercise of options
issued December 14, 1998 with an exercise price of $8.125 per share. The
options were issued in connection with our purchase of certain assets of
Metacom, Inc. Does not include 50,000 shares of common stock sold by
Metacom, Inc. under this prospectus prior to the date of this prospectus
<PAGE>
supplement.
(11) Includes 395,125 shares of common stock (of which 100,000 are held in
escrow and are subject to release if certain "EBITDA" levels for the
acquired companies are met for the year ending December 31, 1999) and
152,750 shares issuable upon exercise of options issued on December 14,
1998 with an exercise price of $13.125 (of which 100,000 options are held
in escrow and subject to release if certain "EBITDA" levels for the
acquired companies are met for the year ended December 31, 2000). The
shares of common stock and options were issued in connection with our
purchase of certain assets of Radio Spirits, Inc.and Buffalo Productions,
Inc. and Carl Amari's interest in a joint venture.
(12) Represents (i) 13,750 shares of common stock and an additional 2,500 shares
of common stock issuable upon exercise of options with an exercise price of
$13.125 per share, all of which was issued on December 14, 1998 in
connection with our purchase of certain assets of Radio Spirits, Inc. and
(ii) 15,000 shares issuable upon exercise of options with an exercise price
of $13.125 per share granted on December 14, 1998 in connection with a
consulting agreement.
(13) Represents (i) 16,125 shares of Common Stock and (ii) 4,750 shares of
Common Stock issuable upon exercise of an option issued on December 14,
1998 with an exercise price of $13.125 per share. The shares of Common
Stock and options were issued in connection with our purchase of certain
assets of Radio Spirits, Inc.
(14) Represents 5,000 shares of Common Stock issuable upon exercise of options
issued on December 14, 1998 with an exercise price of $13.125 per share.
The options were issued in connection with our purchase of certain assets
of Radio Spirits, Inc.
(15) Represents 10,000 shares of Common Stock issuable upon exercise of options
issued on December 14, 1998 with an exercise price of $13.125 per share.
The options were issued in connection with our purchase of certain assets
of Radio Spirits, Inc.
(16) Represents 98,725 shares of common stock issuable upon exercise of warrants
with an exercise price of $9.967 per share (after giving effect to
anti-dilution adjustsments) issued to Fleet National Bank in connection
with the Credit Agreement on December 31, 1998.
(17) Represents 98,725 shares of common stock issuable upon exercise of warrants
with an exercise price of $9.967 per share (after giving effect to
anti-dilution adjustsments) issued to ING (U.S.) Capital Corporation in
connection with the Credit Agreement on December 31, 1998.
(18) Represents 21,600 shares of common stock issuable upon exercise of options
granted on April 17, 1998 at an exercise price of $4.40 per share.
(19) Represents 20,000 shares issuable upon exercise of options granted on May
30, 1998 exercisable at $4.81 per share.
(20) Represents 10,000 shares of common stock issuable upon exercise of options
granted on December 31, 1998 with an exercise price of $11.125 per share.
(21) Represents (i) 23,000 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share and (ii) 8,625 shares of common stock issuable upon
exercise of warrants issued on November 2, 1998 with an exercise price of
$8.375 per share.
<PAGE>
(22) Represents (i) 17,125 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share and (ii) 3,209 shares of common stock issuable upon
exercise of warrants issued on November 2, 1998 with an exercise price of
$8.375 per share.
(23) Represents (i) 23,000 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share and (ii) 4,125 shares of common stock issuable upon
exercise of warrants issued on November 2, 1998 with an exercise price of
$8.375 per share.
(24) Represents (i) 4,000 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share and (ii) 2,291 shares of common stock issuable upon
exercise of warrants issued on November 2, 1998 with an exercise price of
$8.375 per share.
(25) Represents (i) 23,000 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(26) Represents (i) 24,840 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share and (ii) 4,500 shares of common stock issuable upon
exercise of warrants issued on November 2, 1998 with an exercise price of
$8.375 per share.
(27) Represents 2,250 shares of common stock issuable upon exercise of warrants
issued on November 2, 1998 with an exercise price of $8.375 per share.
(28) Represents 5,518 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(29) Represents 5,017 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(30) Represents 20,000 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(31) Represents 49,400 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(32) Represents 7,500 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(33) Represents 27,600 shares of common stock issuable upon exercise of
underwriters' warrants issued in connection with our initial public
offering and are exercisable until October 22, 2002 at an exercise price of
$16.50 per share.
(34) Represents (i) 8,000 shares of common stock issuable upon exercise of
options granted on
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February 15, 1999 with an exercise price of $.10 per share and (ii) 150,000
shares of common stock issuable upon exercise of options granted on
February 15, 1999 with an exercise price of $9.75 per share.
(35) Represents 20,000 shares of common stock issuable upon exercise of options
granted on March 5, 1999 with an exercise price of $10.00 per share.
(36) Represents 449,438 shares of common stock issuable upon conversion of
$5,000,000 principal amount of the Note at an initial conversion price of
$11.125 per share.