As filed with the Securities and Exchange Commission on April 13, 1998
File No. 333-44109
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT No. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AMERICAN BANKNOTE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
13-0460520
(IRS Employer
Identification No.)
200 Park Avenue
New York, New York 10166
(212) 557-9100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Harvey J. Kesner, Esq.
General Counsel
American Banknote Corporation
200 Park Avenue
New York, New York 10166
(212) 557-9100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Scott S. Rosenblum, Esq.
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
(212) 715-9100
Approximate date of commencement of proposed sale of the securities to the
public: From time to time after this Registration Statement becomes effective,
as determined by market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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PROSPECTUS
Subject to Completion, Dated April 13, 1998
1,755,503 SHARES
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AMERICAN BANKNOTE CORPORATION
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COMMON STOCK
($.01 Par Value)
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This Prospectus relates to the offer and sale of up to 1,755,503 shares
(the "Shares") of the common stock, $.01 par value (the "Common Stock"), of
American Banknote Corporation, a Delaware corporation ("American Banknote" or
the "Company"). The Shares will be offered for sale by certain stockholders of
the Company (the "Selling Stockholders"), or by pledgees, donees, transferees or
other successors in interest, from time to time in one or more transactions
(which may involve block transactions) effected on the New York Stock Exchange
(or any national securities exchange or U.S. inter-dealer quotation system of a
registered national securities association, on which the Shares are then
listed), in sales occurring in the public market off such exchange, in privately
negotiated transactions, through the purchase or writing of options on the
Shares, short sales or in a combination of such methods of sale. Such methods of
sale may be conducted at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The Selling
Stockholders may effect such transactions directly, or indirectly through
broker-dealers or agents acting on their behalf, and in connection with such
sales, such broker-dealers or agents may receive compensation in the form of
commissions or discounts from the Selling Stockholders and/or the purchasers of
the Shares for whom they may act as agent or to whom they sell Shares as
principal or both (which commissions or discounts are not anticipated to exceed
those customary in the types of transactions involved). To the extent required,
the names of any agents or broker-dealers, and applicable commissions or
discounts and any other required information with respect to any particular
offer of Shares by the Selling Stockholders, will be set forth in a Prospectus
Supplement. Any securities covered by this Prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"), may be sold under Rule 144 rather than pursuant to this
Prospectus. See "Selling Stockholders" and "Plan of Distribution."
The 1,755,503 shares of Common Stock referred to above is an estimate of
the number of shares offered hereby and includes up to 1,600,000 shares issuable
upon conversion of the Zero Coupon Convertible Subordinated Debentures of the
Company dated November 25, 1997 (the "Debentures") and the exercise of the
Warrants and Redemption Warrants issued in connection with the Debentures
(collectively, the "Warrants"). For purposes of estimating the number of shares
of Common Stock to be included in this Prospectus, the Company calculated the
number of shares of Common Stock issuable in connection with the conversion of
the Debentures and the exercise of the Warrants using an arbitrary conversion
price and exercise price. In addition to the 1,600,000 shares referred to above,
which represents a good faith estimate of the number of shares underlying the
Debentures and the Warrants, the amount to be registered includes an
indeterminate number of shares issuable upon conversion or in respect of the
Debentures and upon exercise of the Warrants, as such number may be adjusted as
a result of stock splits, stock dividends and anti-dilution provisions
(including the floating rate conversion mechanism set
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forth in the Debentures) in accordance with Rule 416 under the Securities Act.
The number of shares included in the registration statement of which this
Prospectus is a part could be materially less or more than such estimated number
depending on factors which cannot be predicted at this date. See "Selling
Stockholders."
None of the proceeds from the sale of the Shares by the Selling Stockholder
will be received by the Company. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all brokerage
commissions and other expenses incurred by the Selling Stockholders will be
borne by the Selling Stockholders.
The Selling Stockholders and any dealer acting in connection with the
offering of any of the Shares or any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the Securities Act"), in
which event any profit on the sale of any or all of the Shares by them and any
discounts or concessions received by any such brokers or dealers may be deemed
to be underwriting discounts and commissions under the Securities Act.
The Common Stock is traded on the New York Stock Exchange ("NYSE") under
the symbol "ABN." The last reported sale price of the Common Stock on April 10,
1998 was $4.25 per share.
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SEE RISK FACTORS BEGINNING ON PAGE 5 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY POTENTIAL INVESTORS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is April __, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Copies of reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and also are available for
inspection at the Commission's regional offices located at 500 West Madison,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New
York, New York 10048 and the Commission website at (http://www.sec.gov). Copies
of such material also can be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. Such reports, proxy statements and other information may also be
inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments thereto, the "Registration Statement") under
the Securities Act with respect to the Shares. This Prospectus does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete
and, with respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement is
deemed qualified in its entirety by such reference. The Registration Statement
and the exhibits thereto can be inspected and copied at the public reference
facilities maintained by the Commission, regional offices and the offices of the
Commission and of the NYSE referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1997 and the Company's Current Report on Form 8-K/A Amendment No.1 dated
August 16, 1996.
All reports and other documents filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of the filing of such reports and documents.
Any statement contained in a document, all or a portion of which is
incorporated or deemed to be incorporated by reference herein, or contained in
this Prospectus, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on the
written or oral request of such person, a copy of any and all of the information
that has been or may be incorporated by reference in this Prospectus (not
including exhibits to the information that is incorporated by reference into the
information that this Prospectus incorporates). Such written or oral request
should be directed to the Secretary, American Banknote Corporation, 200 Park
Avenue, New York, New York 10166.
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THE COMPANY
The Company is a leading global provider of secure transaction solutions,
documents and systems. The Company designs solutions and manufactures products
that incorporate anti-fraud and counterfeit resistant technologies, including
stored-value telephone, magnetic-stripe, memory and microprocessor-based (smart
cards) transaction cards, holograms, currencies, travelers' and other checks,
stock and bond certificates and a wide variety of electronically or digitally
produced personalized documents. The Company sells these products and services
worldwide to financial institutions, governments and corporations through its
operations in the United States, Brazil, Australia, New Zealand and France.
Through selective acquisitions and strategic realignment, the Company has
positioned itself as a full service provider of technology-based solutions for
its customers' secure transaction needs. The Company's products and services are
divided into three principal groups: Transaction Cards & Systems, Printing
Services & Document Management and Security Printing Solutions.
Unless the context otherwise indicates, references herein to American Bank
Note or the Company are to American Banknote Corporation and its subsidiaries.
The principal executive offices of the Company are located at 200 Park Avenue,
New York, New York 10166, and its telephone number is (212) 557-9100.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares. All of the proceeds from the sale of the Shares will be received by the
Selling Stockholders. Any proceeds received by the Company upon exercise of the
Warrants will be used for general corporate purposes.
RISK FACTORS
Prospective purchasers of Shares should carefully consider all of the
information set forth in this Prospectus and, in particular, the following
factors:
SUBSTANTIAL LEVERAGE AND ABILITY TO SERVICE DEBT
The Company is highly leveraged. At December 31, 1997, the Company had: (i)
total consolidated long-term debt, including the current portion, of $311.1
million; (ii) total stockholders' equity of $55.0 million; and (iii) a ratio of
earnings to fixed charges for the year ended December 31, 1997 of 1.1 to 1.
The degree to which the Company is leveraged could have important
consequences including: (i) the Company's ability to obtain additional financing
for working capital, capital expenditures or acquisitions in the future may be
limited; (ii) a substantial portion of the Company's cash flow from operations
may be dedicated to the payment of the principal of and interest on its
indebtedness, thereby reducing funds available for future operation; (iii)
certain of the Company's borrowings, including all borrowings under the
Company's credit facilities are at variable rates of interest, which exposes the
Company to the risk of increased interest rates; and (iv) the Company may be
more vulnerable to economic downturns and be limited in its ability to withstand
competitive pressures. Certain of the Company's competitors may currently
operate on a less leveraged basis and therefore the Company could be placed at a
disadvantage relative to its competitors which have significantly greater
operating and financing flexibility than the Company. The Company's ability to
make scheduled payments of the principal or interest on, or to refinance, its
indebtedness will depend on its future operating performance and cash flow,
which are subject to prevailing economic conditions, prevailing interest rate
levels, and financial, competitive, business and other factors, many of which
are beyond its control.
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The Company believes that, based on current levels of operations, it should
be able to meet its debt obligations when due. However, if the Company cannot
generate sufficient cash flow from operations to meet its debt service
obligations, then the Company might be required to refinance its indebtedness
and may be forced to adopt an alternative strategy that may include actions such
as reducing or delaying capital expenditures, selling assets, restructuring or
refinancing its indebtedness, or seeking additional equity capital. There is no
assurance that refinancings would be permitted by the terms of $20.0 million
revolving credit facility among ABN, ABNH and The Chase Manhattan Bank (as
successor to Chemical Bank) (the "Existing Credit Facility"), the indenture (the
"10 3/8% Notes Indenture") governing the Company's 10 3/8% Senior Notes due 2002
(the "10 3/8% Notes"), the indenture (the 11 1/4% Notes Indenture") governing
the 11 1/4% Notes or any other lending arrangements then in effect or, along
with the alternative strategies, could be effected on satisfactory terms.
RESTRICTIONS IMPOSED BY TERMS OF INDEBTEDNESS
The Company's indentures, the Existing Credit Facility and terms of other
indebtedness contain numerous restrictive covenants that limit the discretion of
the Company's management with respect to certain business matters. These
covenants place significant restrictions on, among other things, the ability of
the Company to incur additional indebtedness, to create liens or other
encumbrances, to pay dividends or make certain other payments, investments,
loans and guarantees and to sell or otherwise dispose of assets and merge or
consolidate with another entity. The Company's credit facilities also contain a
number of financial covenants that will require the Company to meet certain
financial ratios and financial condition tests. The Company's ability to meet
these financial ratios and financial condition tests can be affected by events
beyond its control, and there can be no assurance that the Company will meet
such ratios or such tests. A failure to comply with the obligations in its
credit facilities or indentures could result in an event of default under other
agreements or instruments to which the Company is a party that, if not cured or
waived, could permit acceleration of the relevant indebtedness and acceleration
of indebtedness under other instruments that may contain cross-acceleration or
cross-default provisions. In the event of an event of default the lenders
thereunder could elect to declare all amounts outstanding thereunder, together
with accrued and unpaid interest, to be immediately due and payable. If
indebtedness were to be accelerated, there can be no assurance that the assets
of the Company would be sufficient to repay in full that indebtedness and the
other indebtedness of the Company. Other indebtedness of the Company and its
subsidiaries that may be incurred in the future may contain financial or other
covenants more restrictive than those described herein.
SUBORDINATION; HOLDING COMPANY STRUCTURE
The Company is a holding company that has no significant assets other than
its direct and indirect investments in its operating subsidiaries. Accordingly,
the Company must rely on its subsidiaries to generate the funds necessary to
meet its obligations, including the payment of principal of and interest on its
debt instruments. The ability of the subsidiaries to pay dividends or make other
payments or advances will depend upon their operating results and will be
subject to applicable laws and contractual restrictions contained in the
instruments governing any indebtedness of such subsidiaries. Certain of the
Company's subsidiaries have incurred, and in the future may incur, indebtedness.
As a result, cash flow from the operations of such subsidiaries may be dedicated
to the payment of principal of and interest on the indebtedness of such
subsidiaries, thereby limiting the ability of such subsidiaries to pay
dividends. In addition, any dividends declared by a less than wholly owned
subsidiary will be paid on a pro rata basis to the owners of such subsidiary.
FOREIGN OPERATIONS
The Company's financial performance on a dollar-denominated basis can be
significantly affected by changes in currency exchange rates. The Company's
foreign exchange exposure policy generally calls
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for selling its domestic manufactured product in US dollars and, in the case of
its foreign manufactured product, selling in the national currencies of the
countries in which such subsidiaries operate, in order to minimize transactions
occurring in currencies other than those of the originating country. The Company
may, from time to time, enter into foreign currency option contracts to limit
the effect of currency fluctuations on future expected cash receipts to be used
for parent company purposes, including debt service. Such activities may be
discontinued at any time depending on, among other things, management's views
concerning future exchange rates and the cost of such contracts. The Company has
not engaged in material hedging activities in connection with foreign
operations. Adverse changes in foreign interest and exchange rates could
adversely affect the Company's ability to meet its interest and principal
obligations as well as applicable financial covenants with respect to its debt.
Earnings on foreign investments, including operations and earnings of
foreign companies in which the Company may invest or upon which it may rely for
sales, are subject to a number of general risks, including high rates of
inflation, currency exchange rate fluctuations, trade barriers, exchange
controls, government expropriation and political instability and other risks.
These factors may affect the results of operations in selected markets included
in the Company's growth strategy. Dividends or distributions from the Company's
foreign operations could be subject to government restrictions in the future.
Currently, repatriation of earnings from the Company's foreign operations is
permitted.
The Company operates in Brazil, which in past years suffered
hyperinflationary conditions; however, the inflation rate in Brazil has
decreased substantially to approximately 4.5% for 1997, 10% for 1996 and 23% for
1995 as compared to 941% for 1994. Inflation and currency exchange rate
fluctuation in countries in which the Company generates a large portion of its
sales and earnings (including Brazil, Australia and France, which accounted for
approximately 42%, 24% and 3%, respectively, of sales and approximately 41%, 26%
and 1%, respectively, of operating earnings, respectively, in 1997, before
allocation of corporate overhead) could in the future adversely affect the
Company.
Actions taken by foreign governments could have an important effect on the
Company's foreign operations, including those in Brazil, France and
Australia/New Zealand. Political, economic or social instability or other
developments could adversely affect these companies' financial conditions or
results of operations and thereby adversely affect the Company's ability to
repay its indebtedness and that of its subsidiaries. As a result of market
conditions, the Brazilian government has recently imposed various economic
austerity measures which may impact the Brazilian economy. There can be no
assurance that substantially greater governmental restrictions will not be
imposed in the future, including restrictions or prohibitions on the
repatriation of funds. Furthermore, remittances of dividends from any foreign
subsidiaries acquired or formed by the Company in the future may be subject to
certain withholding taxes and other governmental restrictions.
FOREIGN TAXES
Earnings of foreign subsidiaries are subject to foreign income taxes that
reduce cash flow available to meet required debt service and other obligations
of the Company. The Company presently cannot utilize foreign tax credits in the
United States until its domestic net operating loss carry forwards are
exhausted.
The Company has from time to time reorganized and restructured, and may in
the future reorganize and restructure, its foreign operations based on certain
assumptions about the various tax laws (including capital gains and withholding
tax), foreign currency exchange and capital repatriation laws and other relevant
laws of a variety of foreign jurisdictions. While management believes that such
assumptions are correct, there can be no assurance that foreign taxing or other
authorities will reach the same conclusion. If such assumptions are incorrect,
or if such foreign jurisdictions were to change or
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modify such laws, the Company may suffer adverse tax and other financial
consequences which could impair the Company's ability to meet its payment
obligations on the Notes and its other indebtedness.
MAJOR CUSTOMERS; GOVERNMENT SALES
The Company has several key customers. Sales under contracts of
stored-value phone cards to Telebras, the Brazilian national telephone company,
accounted for approximately 13%, 24% and 11% of the Company's consolidated sales
for the years ended December 31, 1995, 1996 and 1997, respectively. The
Company's contracts with Telebras extend through December 1998 and may be
further extended through December 1999 at the option of each of the six Telebras
affiliated companies which have executed contracts with ABNB. Sales and services
in connection with the Company's assumption of the in-house check and document
printing, processing and distribution operations of Bradesco accounted for 12%,
14% and 12% of the Company's consolidated sales for the years ended December 31,
1995, 1996 and l997, respectively. Sales of food coupons to the United States
Department of Agriculture ("USDA") accounted for approximately 11%, 5% and 5% of
the Company's consolidated sales for the years ended December 31, 1995, 1996 and
1997, respectively. In September 1996, the USDA awarded ABN a contract for the
production of food coupons through September 30, 1997 with a one-year option,
which option has been exercised by USDA. The contract is expected to represent
sales of approximately $10 million in 1998.
There can be no assurance as to whether, or when, or on what terms, the
Company will be awarded any contracts from these customers, including Telebras,
in the future, especially those that are subject to competitive bids. There also
can be no assurance that any options for continued production under any of the
Company's contracts will be exercised. In addition, the Brazilian government is
expected to proceed with a plan for the privatization of Telebras, which could
result in a split up of Telebras into five or six smaller companies, which may
result in multiple competitive bids in future years. The loss of all or a
significant portion of the Company's business with these entities would have a
material adverse effect on the sales and earnings of the Company.
Each of the agencies of the United States government for which the Company
provides products or services acts independently of the others in soliciting
bids. Government contracts are generally awarded on the basis of a competitive
bidding process and a variety of other factors, which may include price, plant
security, manufacturing controls, a preference for domestic contractors and past
performance. In addition, contracts with governmental agencies generally contain
provisions permitting termination at any time at the convenience of the agency
and give the agency the right to audit contract compliance and adjust the
contract amount for noncompliance.
ABILITY TO INTEGRATE ACQUISITIONS
A core part of the Company's business strategy is to grow through strategic
acquisitions, joint ventures and alliances. The Company's financial condition
could be adversely affected if the Company cannot successfully integrate
acquired businesses into its existing operations or if the Company is required
to materially increase the amount of its financial commitment to such
acquisitions, joint ventures or alliances. In addition, the Company may seek
strategic acquisitions, joint ventures or alliances in countries or markets in
which it does not currently operate. There can be no assurance that the Company
will be able to successfully integrate or manage such operations.
COMPETITION
The Company's principal subsidiaries conduct their businesses in highly
competitive markets. Competition in the Company's product markets is based upon
service, quality, reliability and price. In
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certain markets in which the Company competes, some of the Company's competitors
have greater financial and other resources than the Company.
The future of the Company's food coupon printing is subject to competition
from electronic card-based Electronic Benefits Transaction (EBT) systems. In
addition, benefit reforms and levels of food coupon inventory caused a reduction
in the Company's 1996 food coupon production volume and continues to impact the
USDA's food coupon orders. The elimination or a reduction in the use of paper
food coupons would have a material adverse effect on the sales and earnings of
the Company.
SALES OF STOCK AND BOND CERTIFICATES
Stock and bond printing accounted for approximately 11%, 8% and 7% of the
Company's consolidated sales for the years ended December 31, 1995, 1996 and
1997, respectively. The Company's overall volume of sales of stock and bond
certificates increased in 1997, but declined as a percent of sales as a result
of increases in consolidated sales. Sales of stock and bond certificates,
primarily a domestic product, are a function of trading activity, the number of
public offerings, the mix of debt and equity security issuances and regulatory
considerations. The elimination of certificates has been advocated by various
organizations in favor of the use of book-entry systems for recording security
ownership. Security sales to institutions, which have been growing, have reduced
demand for printed certificates, particularly for debt issues. Domestic stock
and bond printing has historically accounted for a sizeable portion of the
security printing sales of the Company. No assurance can be given, however, that
the high level of activity in the domestic securities markets will continue. The
elimination of or a substantial reduction in the use of certificates would have
a material adverse effect on the sales and earnings of the Company.
DEPENDENCE ON KEY PERSONNEL
The Company is dependent on the services of its senior management,
including Morris Weissman, Chairman of the Board and Chief Executive Officer,
and the loss of their services could have an adverse effect on the Company. The
Company has entered into employment agreements with several members of its
senior management, including Mr. Weissman.
CERTAIN ANTI-TAKEOVER EFFECTS
Certain provisions of the Company's Certificate of Incorporation and
By-laws, each as amended to date, may inhibit charges in control of the Company
not approved by the Company's Board of Directors. These provisions, among other
things, (i) authorize the Board of Directors to issue preferred stock ranking
senior to the Common Stock without any action on the part of the stockholders
and (ii) establish certain advance notice procedures for stockholder proposals
(including nominations of directors) to be considered at stockholders' meetings.
In addition, Section 203 of the Delaware General Corporation Law restricts
certain persons from engaging in business combinations with the Company. See
"Description of Capital Stock."
RESTRICTIONS ON PAYMENT OF DIVIDENDS ON COMMON STOCK
To date, the Company has not declared or paid any cash dividends on the
Common Stock and does not expect to pay cash dividends on the Common Stock in
the foreseeable future. The Company's outstanding indebtedness, including the 10
3/8% Notes, the 11 1/4% Notes and the Existing Credit Facility, restrict the
ability of the Company to pay dividends.
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ABSENCE OF PUBLIC MARKET COULD ADVERSELY AFFECT THE VALUE OF WARRANTS
The Warrants were issued to, and the Company believes are currently owned
by, a relatively small number of beneficial owners. There is no existing trading
market for the Warrants, and there can be no assurance regarding the future
development of a market for the Warrants, or the ability of holders of the
Warrants, or the price at which such holders may be able to sell their Warrants.
The Company does not intend to list the Warrants on any national securities
exchange or seek the admission thereof to trading in the National Association of
Securities Dealers Automated Quotation System.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company presently consists of
50,000,000 shares of Common Stock, and 5,000,000 shares of Preferred Stock, $.01
par value per share (the "Preferred Stock"). At March 17, 1997, there were
outstanding 20,871,604 shares of Common Stock. There were no shares of Preferred
Stock outstanding.
The following are summaries of the terms of the Common Stock and the
Preferred Stock. Such summaries do not purport to be complete and are subject in
all respects to the Certificate of Incorporation and By-laws of the Company.
COMMON STOCK
The holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor, subject to the terms of any Preferred Stock of the Company then
outstanding. See "Risk Factors-Restrictions on Payment of Dividends on Common
Stock."
The holders of Common Stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors. Shares
of Common Stock do not have cumulative voting rights, which means that the
holders of more than 50% of such shares voting for the election of directors can
elect 100% of the directors if they choose to do so and, in such event, the
holders of the remaining shares so voting will not be able to elect any
directors. Holders of Common Stock do not have any conversion, redemption or
preemptive rights. In the event of the dissolution, liquidation or winding up
the Company, holders of Common Stock will be entitled to share ratably, together
with any participating preferred shares then outstanding, in any assets
remaining after the satisfaction in full of the prior rights of creditors,
including holder of Company indebtedness, and the liquidation preference of any
preferred shares then outstanding.
The Common Stock is presently listed on the NYSE.
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ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURES
The Company sold Zero Coupon Convertible Subordinated Debentures due 2002
(the "Convertible Debentures"), plus warrants, in private placements in July and
November 1997. As of the date of this Prospectus, there were approximately $9.1
million accreted value of Convertible Debentures outstanding. At maturity, the
outstanding Convertible Debentures are automatically converted into Common Stock
resulting in the Convertible Debentures being treated as components of
stockholders' equity.
PREFERRED STOCK
Under Delaware law, the Company's Board of Directors has authority to
issue, without further action by stockholders, one or more series of Preferred
Stock, and to determine at the time of issuance of each such series the rights
and preferences thereof (including dividend rate, liquidation priority, and
conversion and voting rights, if any). The issuance of Preferred Stock, while
providing flexibility in connection with possible acquisitions and other
corporate purposes, could, among other things, adversely affect the voting power
or other rights of the holders of Common Stock.
The holders of the Preferred Stock are entitled to receive dividends, as
specifically provided with respect to each series, prior to the payment or
declaration of any dividends for the Common Stock.
PREFERRED STOCK PURCHASE RIGHTS PLAN
On March 23, 1994, the Company's Board of Directors adopted a Preferred
Stock Purchase Rights Plan providing for the terms described below. In
accordance therewith, the Board of Directors declared a dividend of one
Preferred Stock Purchase Right (the "Rights") for each outstanding share of
Common Stock. The dividend is payable as of March 24, 1994 to Stockholders of
record on that date. Each Right entitles the registered holder to purchase from
the Company one-hundredth (1/100) of a share of preferred stock of the Company,
designated as Series A Junior Preferred Stock (the "Series A Preferred Stock")
at a price of $15.50 per one-hundredth (1/100) of a share ("Rights Exercise
Price"), subject to certain adjustments. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and Chemical Bank, as Rights Agent (the "Rights Agent"), dated as of March 24,
1994.
Initially, the Rights are not exercisable, certificates will not be sent to
stockholders and the Rights will automatically trade with the Common Stock. The
Rights, unless earlier redeemed by the Board of Directors, become exercisable
upon the close of business on the day (the "Distribution Date") which is the
earlier of (i) the tenth day following a public announcement that a person or
group of affiliated or associated persons, with certain exceptions set forth
below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") and (ii) the tenth business
day (or such later date as may be determined by the Board of Directors prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) after the date of the commencement or announcement of a
person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 30% or more of the
Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of March 24, 1994, by such Common Stock certificate with a copy of a summary of
Rights attached thereto. An Acquiring Person does not include (A) the Company,
(B) any subsidiary of the Company, (C) any employee benefit plan or employee
stock plan of the Company or of any subsidiary of the Company, or any trust or
other entity organized, appointed, established or holding Common Stock for or
pursuant to the terms of any such plan or (D) any
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<PAGE>
person or group whose ownership of 15% or more of the shares of voting stock of
the Company then outstanding results solely from (i) any action or transaction
or transactions approved by the Board of Directors before such person or group
became an Acquiring Person or (ii) a reduction in the number of issued and
outstanding shares of voting stock of the Company pursuant to a transaction or
transactions approved by the Board of Directors (provided that any person or
group that does not become an Acquiring Person by reason of clause (i) or (ii)
above shall become an Acquiring Person upon acquisition of an additional 1% of
the Company's voting stock unless such acquisition of additional voting stock
will not result in such person or group becoming an Acquiring Person by reason
of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after March 24, 1994 will contain
a legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates outstanding as of March 24,
1994 with or without a copy of a summary of Rights attached, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date. The Rights are
not exercisable until the Distribution Date. The Rights will expire at the close
of business on March 24, 2004, unless earlier redeemed by the Company as
described below.
The Series A Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of Preferred
Stock, subordinate to any other series of the Company's Preferred Stock. The
Series A Preferred Stock will not be issued except upon exercise of Rights. Each
share of Series A Preferred Stock will be entitled to receive when, as and if
declared, a quarterly dividend in an amount equal to the greater of $5.00 per
share and 100 times the cash dividends declared on the Company's Common Stock.
In addition, Series A Preferred Stock is entitled to 100 times any non-cash
dividends (other than dividends payable in equity securities) declared on the
Common Stock, in like kind. In the event of the liquidation of the Company, the
holders of Series A Preferred Stock will be entitled to receive a payment in an
amount equal to the greater of $10.00 per one-hundredth share or 100 times the
payment made per share of Common Stock. Each share of Series A Preferred Stock
will have 100 votes, voting together with the Common Stock. In the event of any
merger, consolidation or other transaction in which Common Stock is exchanged,
each share of Series A Preferred Stock will be entitled to receive 100 times the
amount received per share of Common Stock. The rights of Series A Preferred
Stock as to dividends, liquidation and voting are protected by anti-dilution
provisions.
The number of shares of Series A Preferred Stock issuable upon exercise of
the Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Rights Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after the time
that the Rights become exercisable, the Company were to be acquired in a merger
or other business combination (in which any shares of Common Stock are changed
into or exchanged for other securities or assets) or more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) were to
be sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of
record of a Right will from and after such date have the right to receive, upon
payment of the Rights Exercise Price, that number of shares of common stock of
the acquiring company having a market value at the time of such transaction
equal to two times the Rights Exercise Price. In addition, unless the Rights are
earlier redeemed, if a person or group becomes the beneficial owner of 15% or
more of the Company's voting stock (other than pursuant to a tender or exchange
offer (a "Qualifying Tender Offer") for all outstanding shares of Common Stock
that is
11
<PAGE>
approved by the Board of Directors, after taking into account the long-term
value of the Company and all other factors they consider relevant in the
circumstances), the Rights Agreement provides that proper provisions will be
made so that each holder of record of a Right, other than the Acquiring Person
(whose Rights will thereupon become null and void), will thereafter have the
right to receive, upon payment of the Rights Exercise Price, that number of
shares of the Series A Preferred Stock having a market value at the time of the
transaction equal to two times the Rights Exercise Price (such market value to
be determined with reference to the market value of the Company's Common Stock
as provided in the Rights Agreement).
Fractions of shares of Series A Preferred Stock (other than fractions which
are integral multiples of one-hundredth (1/100) of a share) may, at the election
of the Company, be evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral multiples of
one-hundredth (1/100) of a share.
At any time on or prior to the close of business on the tenth day after the
time that a person has become an Acquiring Person (or such later date as a
majority of the Board of Directors and a majority of the Continuing Directors
(as defined in the Rights Agreement) may determine), the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The Rights may be redeemed after the time that any Person has become an
Acquiring Person only if approved by a majority of the Continuing Directors.
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may, except with
respect to the redemption price or date of expiration of the Rights, amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then redeemable,
the Company may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such. Amendments to
the Rights Agreement from and after the time that any Person becomes an
Acquiring Person requires the approval of a majority of the Continuing Directors
(as provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Current Report on Form 8-K
dated March 24, 1994. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
which is incorporated in this summary description herein by reference.
Certain Potential "Anti-Takeover" Effects. The exercise of the Rights by
the holders thereof upon the acquisition by a person or group of 15% or more of
the outstanding Common Stock or upon a merger or other acquisition transaction
involving the Company could cause substantial dilution to the value and voting
power of the Common Stock held by the acquiring person or group, whose Rights
would be null and void. Accordingly, the Rights may have the effect of making
more difficult or discouraging, absent the support of the Company's Board of
Directors, certain tender offers and other transactions that are viewed
favorably by stockholders that could give holders of Common Stock the
opportunity to realize a premium over the then-prevailing market price for their
shares of Common Stock. This feature of the Rights also could assist management
in retaining their positions with the Company.
The Company's Board of Directors believes the Rights increase the Board's
ability to effectively represent the collective interests of stockholders. The
Preferred Stock Purchase Rights Plan is designed
12
<PAGE>
to encourage persons interested in acquiring the Company to consult and
negotiate with the Board, which, in its view, is in a more advantageous position
that stockholders to negotiate effectively with potential acquirors. The Rights
are also intended to provide the Board with the time to appropriately evaluate
acquisition proposals and alternative means to maximize stockholder values.
The Company is not aware of any proposals or efforts by any person or group
to acquire the Company.
SECTION 203 OF THE DELAWARE LAW
Generally, Section 203 of the Delaware General Corporation Law prohibits a
publicly held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless (i)
prior to the date of the business combination, the transaction is approved by
the board of directors of the corporation, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owns at least 85% of the outstanding
voting stock, or (iii) on or after such date the business combination is
approved by the board and by the affirmative vote of holders of at least 66 2/3%
of the outstanding voting stock which is not owned by the interested
stockholder. A "business combination" includes mergers, asset sales and other
transactions resulting in a financial benefit to the stockholder. An "interested
stockholder" is a person who together with affiliates and associates owns (or
within three years, did own) 15% or more of the corporation's voting stock.
CERTAIN BY-LAW PROVISIONS
The Company's By-laws provide additional notice requirements for
stockholder nominations of candidates for election to the Board of Directors and
proposals for other business that may be properly brought before a meeting by
stockholders. At annual meetings, stockholders will be entitled to submit
nominations for directors and proposals for such other business only upon
advance written notice to the Secretary of the Company within the time period
specified in the Company's By-laws. At special meetings held for the election of
directors, stockholders will be entitled to submit nominations for directors
only upon advance written notice to the Secretary of the Company made by the
seventh day following the notice to stockholders of the special meeting.
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York, 525 Washington Avenue, Jersey
City, New Jersey 07303-2535, is the transfer agent and registrar for the Common
Stock.
13
<PAGE>
SELLING STOCKHOLDERS
The Shares were issued in private placement transactions to the Selling
Stockholders. The following table sets forth certain information with respect to
the Selling Stockholders as of December 31, 1997, as follows: (i) the name and
address of the Selling Stockholders; (ii) the number of the Company's
outstanding shares of Common Stock beneficially owned by each Selling
Stockholder (including shares obtainable under options exercisable within sixty
(60) days of such date) prior to the offering hereby; (iii) the number of shares
of Common Stock being offered hereby; and (iv) the number and percentage of the
Company's outstanding shares of Common Stock to be beneficially owned by the
Selling Stockholders after completion of the sale of Common Stock being offered
hereby. There can be no assurance that the Selling Stockholders will sell all of
the shares being offered hereby.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
at March 17, 1998(1) Number of After Offering
---------------- Shares Covered ------------------------------
Number by this Number Percent
Selling Stockholder of Shares Prospectus of Shares of Class
- ------------------- --------- ---------- --------- --------
<S> <C> <C> <C> <C>
RGC International 2,377,759(2) 1,280,000 1,097,759 4.9%(2)
Investors LDC
Halifax Fund L.P. 320,000(3) 320,000 0 *
Financiere Jet 155,503 155,503 0 *
Services S.A
- ----------------------------------------------------------------------------------------------------------
Total 2,853,262 1,755,503 1,097,759 4.9%
* Less than 1%
</TABLE>
(1) The information contained in the table above reflects "beneficial"
ownership of the Common Stock within the meaning of Rule 13d-3 under the
Exchange Act. On March 17, 1998, there were 20,871,604 shares of Common
Stock outstanding.
(2) The number of shares set forth in the table represents an estimate of the
number of shares of Common Stock to be offered by this Selling Stockholder
hereby, as well as an estimate of the number of shares issuable upon
conversion of the outstanding principal amount of the Company's Zero Coupon
Convertible Subordinated Debenture dated July 24, 1997 (the "July
Debenture"), plus warrants to purchase 215,000 shares of Common Stock
issued in connection therewith (the "July Warrants"). The actual number of
shares of Common Stock issuable upon conversion of the Debentures and the
July Debenture and exercise of the Warrants and the July Warrants is
indeterminate, is subject to adjustment and could be materially less or
more than such estimated number depending on factors which cannot be
predicted by the Company at this time, including, among other factors, the
future market price of the Common Stock. The actual number of shares
of Common Stock offered hereby, and included in the Registration Statement
of which this Prospectus is a part, includes such additional number of
shares of Common Stock as may be issued or issuable upon conversion of the
Debentures and exercise of the Warrants by reason of the floating rate
conversion price mechanism or other adjustment mechanisms described
therein, or by reason of any stock split, stock dividend or similar
transaction involving the Common Stock, in order to prevent dilution, in
accordance with Rule 416 under the Securities Act. Pursuant to the
14
<PAGE>
terms of the Debentures, the Warrants, the July Debenture and the July
Warrants, the Debentures, the Warrants, the July Debenture and the July
Warrants are convertible or exercisable by any holder only to the extent
that the number of shares of Common Stock thereby issuable, together with
the number of shares of Common Stock owned by such holder and its
affiliates (but not including shares of Common Stock underlying the
unconverted portion of the Debentures or the July Debenture or the
unexercised portions of the Warrants or July Warrants) would not exceed
4.9% of the then outstanding Common Stock as determined in accordance with
Section 13(a) of the Exchange Act. Accordingly, the number of shares of
Common Stock set forth in the table for this Selling Stockholder exceeds
the number of shares of Common Stock that this Selling Stockholder could
own beneficially at any given time through their ownership of the
Debentures, the Warrants, the July Debenture and the July Warrants. In that
regard, beneficial ownership of this Selling Stockholder set forth in the
table is not determined in accordance with Rule 13d-3 under the Exchange
Act.
(3) The number of shares set forth in the table represents an estimate of the
number of shares of Common Stock to be offered by this Selling Stockholder.
The actual number of shares of Common Stock issuable upon conversion of the
Debentures and exercise of the Warrants is indeterminate, is subject to
adjustment and could be materially less or more than such estimated number
depending on factors which cannot be predicted by the Company at this time,
including, among other factors, the future market price of the Common
Stock. The actual number of shares of Common Stock offered hereby, and
included in the Registration Statement of which this Prospectus is a part,
includes such additional number of shares of Common Stock as may be issued
or issuable upon conversion of the Debentures and exercise of the Warrants
by reason of the floating rate conversion price mechanism or other
adjustment mechanisms described therein, or by reason of any stock split,
stock dividend or similar transaction involving the Common Stock, in order
to prevent dilution, in accordance with Rule 416 under the Securities Act.
Pursuant to the terms of the Debentures and the Warrants, the Debentures
and the Warrants are convertible or exercisable by any holder only to the
extent that the number of shares of Common Stock thereby issuable, together
with the number of shares of Common Stock owned by such holder and its
affiliates (but not including shares of Common Stock underlying the
unconverted portion of the Debentures or the unexercised portions of the
Warrants) would not exceed 4.9% of the then outstanding Common Stock as
determined in accordance with Section 13(a) of the Exchange Act.
Accordingly, the number of shares of Common Stock set forth in the table
for this Selling Stockholder exceeds the number of shares of Common Stock
that this Selling Stockholder could own beneficially at any given time
through their ownership of the Debentures and the Warrants. In that regard,
beneficial ownership of this Selling Stockholder set forth in the table is
not determined in accordance with Rule 13d-3 under the Exchange Act.
15
<PAGE>
PLAN OF DISTRIBUTION
The Selling Stockholders have advised the Company that the Shares may be
sold from time to time by the Selling Stockholders, or by their respective
pledgees, donees, transferees or other successors in interest, in one or more
transactions on the New York Stock Exchange (or any national securities exchange
or U.S. automated interdealer quotation system of a registered national
securities association on which shares of Common Stock are then listed), in
sales occurring in the public market off such exchange, in negotiated
transactions, through the purchase or writing of options on the Shares, short
sales or in a combination of such methods of sale. The Shares will be sold at
prices and on terms then prevailing, at prices related to the then-current
market price of the Shares, or at negotiated prices. The Company has been
advised that the Selling Stockholders may effect sales of the Shares directly,
or indirectly by or through agents or broker-dealers and that the Shares may be
sold by one or more of the following methods: (a) ordinary brokerage
transactions, (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account, and (c) in "block" sale transactions. At the
time a particular offer is made, a Prospectus Supplement, if required, will be
distributed that sets forth the name or names of agents or broker-dealers, any
commissions and other terms constituting selling compensation and any other
required information. Moreover, in effecting sales, broker-dealers engaged by
the Selling Stockholders and/or the purchasers of the Shares may arrange for
other broker-dealers to participate in the sale process. Broker-dealers will
receive discounts or commissions from the Selling Stockholders and/or the
purchasers of the Shares in amounts which will be negotiated prior to the time
of sale. Sales will be made only through broker-dealers registered as such in a
subject jurisdiction or in transactions exempt from such registration. The
Company has not been advised of any definitive selling arrangement at the date
of this Prospectus between the Selling Stockholders and any broker-dealer or
agent. It is also possible that the Selling Stockholders will attempt to sell
shares of Common Stock in block transactions to purchasers at a price per share
which may be below the then market price. Any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than pursuant to this Prospectus. The Shares
are being sold by the Selling Stockholders acting as principals for their own
respective accounts. The Company will not be entitled to any proceeds from the
sale of any Shares sold by the Selling Stockholders as part of this offering.
All expenses of registration incurred in connection with this offering are being
borne by the Company, but all brokerage commissions and other expenses incurred
by the Selling Stockholders will be borne by the Selling Stockholders.
In connection with the distribution of the Shares, the Selling Stockholders
may enter into hedging transactions with broker-dealers. In connection with such
transactions, broker-dealers may engage in short sales of the Shares in the
course of hedging the positions they assume with the Selling Stockholders. The
Selling Stockholders may also sell the Shares short and redeliver the Shares to
close out the short positions. The Selling Stockholders may also enter into
option or other transactions with broker-dealers which require the delivery to
the broker-dealer of the Shares. The Selling Stockholders may also loan or
pledge the Shares and such lender or pledgee may sell the Shares so loaned or
upon a default may effect sales of the pledged shares.
The Selling Stockholders and any dealer participating in the distribution
of Shares or any broker executing selling orders on behalf of the Selling
Stockholders may be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any profit on the sale of any or all of the
Shares by them and any discounts or commissions received by any such brokers or
dealers may be deemed to be underwriting discounts and commissions under the
Securities Act. Any broker or dealer participating in any distribution of Shares
in connection with the offering made hereby may be deemed to be an "underwriter"
within the meaning of the Securities Act and may be required to deliver a copy
of this Prospectus, including a Prospectus Supplement, to any person who
purchases any of the Shares from or through such broker or dealer.
16
<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by its General Counsel.
EXPERTS
The consolidated financial statements of American Banknote Corporation and
subsidiaries as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997 incorporated in this Prospectus by reference
from the Company's annual Report on Form 10-K for the year ended December 31,
1997 have been audited by Deloitte & Touche LLP, independent auditors, as stated
in their report which is incorporated herein by reference and have been so
incorporated in reliance upon the report of such firm given upon their authority
as experts in accounting and auditing.
The special purpose financial statements of Leigh Mardon Security Division
as of June 30, 1995 and 1994 and for each of the three years in the period ended
June 30, 1995 incorporated in this Prospectus by reference from the Company's
Current Report on Form 8-K/A Amendment No. 1 dated August 16, 1996 have been
audited by KPMG, Chartered Accountants, as stated in their report, which is
incorporated herein by reference and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
17
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF
COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY SHARES OF COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
Available Information............................................. 3
Incorporation of Certain Documents
by Reference..................................................... 3
The Company....................................................... 4
Use of Proceeds.................................................... 4
Risk Factors....................................................... 4
Description of Capital Stock ......................................9
Selling Stockholders ..............................................14
Plan of Distribution .............................................16
Legal Matters..................................................... 17
Experts............................................................17
================================================================================
1,755,503 SHARES
AMERICAN BANKNOTE
CORPORATION
Common Stock
-----------
PROSPECTUS
-----------
April __, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The table below sets forth the expenses expected to be incurred and borne
solely by the Company in connection with the registration of the shares of
Common Stock offered hereby:
SEC registration fee............................ $2,597
Legal fees and expenses......................... 5,000
Accounting fees and expenses.................... 5,000
Miscellaneous................................... 2,581
Total....................................... $15,178
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for indemnification of directors and officers. If a director or officer is
successful on the merits or otherwise in a legal proceeding, he must be
indemnified against expenses, including attorney's fees, actually and reasonably
incurred by him in connection therewith. Further, indemnification is permitted
in both third-party and certain derivative suits if such director or officer
acted in good faith and for a purpose he reasonably believed was in the best
interests of the Company, and if, in the case of a criminal proceeding, he had
no reasonable cause to believe his conduct was unlawful. Indemnification under
this provision applies to judgments, fines, amounts paid in settlement and
reasonable expenses, in the case of third party actions, and amounts paid in
settlement and reasonable expenses, in the case of derivative actions. In a
derivative action, however, a director or officer may not be indemnified for any
claim, issue or matters as to which such person shall have been adjudged to be
liable to the Company unless and to the extent that a court determines that the
person is fairly and reasonably entitled to indemnity. Under Delaware law,
expenses may be advanced upon receipt of an undertaking by or on behalf of the
director or officer to repay the amounts in the event the recipient is
ultimately found not to be entitled to indemnification.
The Company's Certificate of Incorporation provides that, to the fullest
extent that the DGCL permits the limitation or elimination of the liability of
directors, no director of the Company shall be personally liable to the Company
or its stockholders for monetary damages for breach of fiduciary duties as a
director. In addition, the Certificate of Incorporation provides that the
Company shall advance expenses to the fullest extent permitted by the DGCL. The
Company maintains directors' and officers' liability insurance to cover its
directors and officers against certain liabilities they may incur when acting in
their capacity as directors or officers.
Article VI of the Company's By-laws provides that any person made a party
to any action, suit or proceeding by reason of the fact that he is or was a
director or officer of the Company, shall be indemnified by the Company against
the expenses, including attorney's fees, actually and reasonably
II-1
<PAGE>
incurred by him in connection with such action, or in connection with any appeal
therein, if he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to any
criminal action, had no reasonable cause to believe such conduct was unlawful.
Such right of indemnification shall not be deemed exclusive of any other rights
to which such director or officer may be entitled under any statute, By-Law,
agreement, vote of shareholders or otherwise.
Item 16. Exhibits.
4.1 Certificate of Incorporation of American Banknote Corporation (the
"Company"), including Amendment No. 1 thereto is incorporated herein by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1995 (the "June 1995 10-Q").
4.2 Certificate of Designation of the Company authorizing Preferred Stock
as Series A is incorporated herein by reference to Exhibit 4 to the
Company's Report on Form 8-A filed April 6, 1994.
4.3 By-laws of the Company are incorporated herein by reference to Exhibit
3.2 to the June 1995 10-Q.
4.4 Rights Agreement dated as of March 24, 1994 between the Company and The
Chase Manhattan Bank (as successor to Chemical Bank, N.A.), as Rights
Agent, including the form of Rights Certificate is incorporated herein
by reference to Exhibit 1 to the Company's Current Report on Form 8-K
dated March 24, 1994.
10.1 Securities Purchase Agreement by and among the Company, RGC
International Investors, LDC and Halifax Fund, L.P., dated as of
November 25, 1997 is incorporated herein by reference to Exhibit 10.1
to the Company's Current Report on Form 8-K dated December 10, 1997
(the "December 10, 1997 Form 8-K").
10.2 Form of Zero Coupon Convertible Subordinated Debenture, dated November
25, 1997 is incorporated herein by reference to Exhibit 10.2 to the
December 10, 1997 Form 8-K.
10.3 Form of Warrant to purchase 150,000 shares of common stock of the
Company, dated November 25, 1997 is incorporated herein by reference to
Exhibit 10.3 to the December 10, 1997 Form 8-K.
10.4 Registration Rights Agreement by and among the Company, RGC
International Investors, LDC and Halifax Fund, L.P., dated as of
November 25, 1997 is incorporated herein by reference to Exhibit 10.4
to the December 10, 1997 Form 8-K.
10.5 Registration Rights Agreement between the Company and Financiere Jet
Services, dated as of March 18, 1998**
5 Opinion of the Company's General Counsel.**
23.1 Consent of Deloitte & Touche LLP.*
23.2 Consent of KPMG.*
II-2
<PAGE>
23.3 Consent of the Company's General Counsel. (Included in Exhibit 5).*
* Filed herewith
** Previously filed
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York on this 13th day of
April, 1998.
AMERICAN BANKNOTE CORPORATION
By: /s/ John T. Gorman
------------------------------
John T. Gorman
Executive Vice President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act, this registration
statement has been signed below by or on behalf of the following persons on
April 13, 1998 in the capacities indicated below.
Signature Title
--------- -----
* Chairman of the Board of Directors and Chief
- ------------------------- Executive Officer (principal executive officer)
(Morris Weissman)
*
- ------------------------- Executive Vice President and Chief Financial
(John T. Gorman) Officer (principal financial and accounting
officer)
* Director
- -------------------------
(Bette B. Anderson)
* Director
- -------------------------
(Dr. Oscar S. Arias)
* Director
- -------------------------
(C. Gerald Goldsmith)
* Director
- -------------------------
(Ira J. Hechler)
* Director
- -------------------------
(David S. Rowe-Beddoe)
* Director
- -------------------------
(Alfred Teo)
By: /s/ John T. Gorman
----------------------------
John T. Gorman
(Attorney-in-fact)
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to Registration
Statement No. 333-44109 of American Banknote Corporation on Form S-3 of our
report dated March 17, 1998, included in the Annual Report on Form 10-K of
American Banknote Corporation for the year ended December 31, 1997, and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 10, 1998
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference, in this Registration Statement of
American Banknote Corporation on Form S-3, of our report dated 14 August 1996 on
the special purpose financial statements of Leigh Mardon Security Division (the
"Economic Entity") as defined in Note 1 thereto, as included in Form 8-K/A
Amendment No. 1 dated August 16, 1996, of American Banknote Corporation, and to
the reference to us under the heading "Experts" which is part of this
Registration Statement.
KPMG
Melbourne, Australia
April 9, 1998
