As filed with the Securities and Exchange Commission on March 7, 1996
Registration No. 333-00545
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
American List Corporation
(Exact Name of Registrant as Specified in Its Charter)
----------
Delaware 11-2050322
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
330 Old Country Road
Mineola, New York 11501
(516) 248-6100
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
----------
Martin Lerner, President
American List Corporation
330 Old Country Road
Mineola, New York 11501
(516) 248-6100
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
----------
Copies to:
Fran M. Stoller, Esq. Marc Weingarten, Esq.
Bachner, Tally, Polevoy & Misher LLP Schulte Roth & Zabel
380 Madison Avenue 900 Third Avenue
New York, New York 10017 New York, New York 10022
(212) 687-7000 (212) 758-0404
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. |_|
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. |_|
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. |_|
================================================================================
(Continued on following page)
<PAGE>
(Continued from previous page)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
Title of Proposed Proposed
Shares Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $.01 ............... 1,380,000(2) $28.875 $39,847,500 $13,740.52(3)
=============================================================================================================================
</TABLE>
- ----------
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rules 457(c), based on the average of the high and low sale
prices of the Registrant's Common Stock on January 24, 1996, as
reported by the American Stock Exchange.
(2) Includes 180,000 shares which the Underwriters have the option to
purchase, solely to cover over-allotments, if any.
(3) Previously paid.
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 Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- --------------------------------------------------------------------------------
Subject to Completion, Dated March 7, 1996
1,200,000 Shares
[LOGO] American List Corporation
Common Stock
------------
All of the 1,200,000 shares of Common Stock of American List Corporation
(the "Company") offered hereby are being sold by the Selling Stockholders. See
"Principal and Selling Stockholders." The Company will not receive any proceeds
from the sale of the shares offered hereby.
The Common Stock is traded on the American Stock Exchange under the symbol
"AMZ." On March 6, 1996, the last reported sale price of the Common Stock was
$33.875 per share. See "Price Range of Common Stock."
See "Risk Factors" beginning on page 6 for a discussion of certain factors
that should be considered by prospective purchasers of the Common Stock.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
Proceeds to
Price to Underwriting Selling
Public Discount (1) Stockholders (2)
- --------------------------------------------------------------------------------
Per Share .................. $ $ $
Total (3) ................. $ $ $
================================================================================
(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other information.
(2) Before deducting expenses of the offering estimated at $413,225 payable by
the Selling Stockholders.
(3) One of the Selling Stockholders has granted the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to 180,000
additional shares of Common Stock at the Price to Public per share, less
the Underwriting Discount, for the purpose of covering over-allotments, if
any. If the Underwriters exercise such option in full, the total Price to
Public, Underwriting Discount and Proceeds to Selling Stockholders will be
$ , $ , and $ , respectively. See "Underwriting."
------------
The shares of Common Stock are offered by the Underwriters when, as and if
delivered to and accepted by them, subject to their right to withdraw, cancel or
reject orders in whole or in part and subject to certain other conditions. It is
expected that delivery of certificates representing the Shares will be made
against payment on or about , 1996 at the office of Oppenheimer & Co., Inc.,
Oppenheimer Tower, World Financial Center, New York, New York 10281.
------------
Oppenheimer & Co., Inc. Furman Selz
The date of this Prospectus is , 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations thereunder, and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such materials may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's regional offices located at 7
World Trade Center, 13th Floor, New York, New York 10048 and Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 filed by the Company with the Commission (the
"Registration Statement") with respect to the securities to which this
Prospectus relates, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. For further information with respect to
the Company and the shares offered hereby, reference is made to the Registration
Statement, including the exhibits thereto. Each summary in this Prospectus of
information included in the Registration Statement or any exhibit thereto is
qualified in its entirety by reference to such information or exhibit.
------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE AMERICAN STOCK EXCHANGE OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless otherwise indicated, information in this Prospectus assumes no exercise
of options to purchase 187,005 shares of Common Stock outstanding under the
Company's stock option plan. All share and per share information gives
retroactive effect to a 3-for-2 stock split effected in July 1993 and a 10%
stock dividend effected in March 1994.
The Company
American List Corporation ("American List" or the "Company") develops,
maintains and markets one of the largest and most comprehensive databases of
high school, college, and pre-school through junior high school students in the
United States, currently containing information on approximately 30 million
individuals. The Company rents lists derived from its database for use primarily
in direct mail and telemarketing programs. During the fiscal year ended February
28, 1995, the Company rented its lists to approximately 3,200 customers,
including financial institutions, list brokers and advertising agencies,
retailers and educational institutions.
The Company's computerized database contains information such as name,
address, gender and, if available, date of birth and telephone number of the
individuals included. From this database, the Company extracts, manipulates and
sorts information to create its multiple list products which are available in a
variety of formats, including prospect lists, mailing labels, 3" x 5" index
cards and computer magnetic tapes, cartridges and disks. American List's
computer processing facility provides it with the ability to customize its lists
to best serve each customer's marketing goals.
The information contained in the Company's database is derived from a
number of sources which are the result of long-term relationships developed by
the Company over the past 30 years, as well as from certain publicly available
sources. The Company believes that its relationships with many of its
information sources make it difficult for others to obtain comparable data and,
accordingly, provide the Company with a competitive advantage.
The Company's total revenues have grown from $8.8 million in fiscal 1991 to
$15.5 million in fiscal 1995, reflecting a compound annual growth rate of 15.2%.
During this same period, operating income has grown from $4.7 million to $9.7
million, reflecting a compound annual growth rate of 19.9%. Management believes
this growth was primarily attributable to increased use of the Company's
products by new and existing customers, due in part to growth in the use of
direct marketing generally during this period. Additionally, the Company's
operating margins increased from 53.5% in fiscal 1991 to 62.5% in fiscal 1995,
reflecting the Company's ability to leverage the high component of fixed costs
inherent in its business.
Direct mail and telemarketing provide convenient and cost-effective means
for organizations to appeal directly to selected segments of the population. In
recent years, the use of direct marketing has grown substantially. According to
the U.S. Department of Commerce, between 1989 and 1994, total advertising
expenditures grew at a compound annual rate of 3.75%, while direct mail
expenditures grew at 5.96%. The growth in direct marketing has increased the
need for comprehensive, current and accurate information to identify high
probability purchasers. This information, combined with direct marketing
programs, results in lower expense per sales contact and increased revenue from
identified customers.
The Company's strategy is to focus on developing and marketing
comprehensive list products utilizing its database. The Company's strategy
consists of the following elements:
o Maintain a comprehensive and accurate database. The Company will
continue to emphasize its commitment to maintaining the accuracy of
its database and to enhancing its content.
o Increase sales to existing customers. The Company will continue to
expand marketing efforts to existing customers. Generally, customers
initially utilize only a small portion of the Company's database, and
increase their usage after successful implementation.
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
o Broaden customer base; identify new markets. The Company will continue
to broaden its customer base by identifying new markets to utilize the
Company's existing products and services. For example, the Company
recently began marketing its products to operators of camps and
amusement parks.
o Introduce new list products. The Company intends to continue to expand
its product offerings and plans to introduce new lists which appeal to
the Company's current customers. Recently, the Company began marketing
data on newly engaged couples and has rented these lists to many of
the Company's existing customers, including photographers and formal
wear retailers.
o Maintain a high level of customer service. The Company will continue
to emphasize its ability to quickly fill and ship customer orders, to
provide a high rate of deliverable names and to customize its database
to meet customer specifications.
o Develop other products and services. In addition to its list products,
the Company is continually investigating new opportunities to provide
other products and services. Examples include the acquisition in June
1995 of a business engaged in the sale of software incorporating
mapping and demographic information which is used for the generation
of sales leads, and the possible establishment of a web site on the
Internet.
The Company's principal executive offices are located at 330 Old Country
Road, Mineola, New York 11501, and its telephone number is (516) 248-6100.
References to the Company and to American List include the operations of its
wholly-owned subsidiaries, American Student List Company, Inc. and GeoDemX
Corporation.
The Offering
Common Stock offered by the Selling Stockholders .......... 1,200,000 shares(1)
Common Stock outstanding before and after this offering ... 4,542,403 shares
American Stock Exchange Symbol ............................ AMZ
- ------------
(1) Does not include up to 180,000 additional shares which would be sold by one
of the Selling Stockholders in the event the Underwriters exercise their
over-allotment option. See "Principal and Selling Stockholders" and
"Underwriting."
- --------------------------------------------------------------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share information)
<TABLE>
<CAPTION>
Nine Month Period
Fiscal Year Ended February 28 or 29, Ended November 30,
----------------------------------------------- ------------------
1991 1992 1993 1994 1995 1994 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues .............................. $8,753 $8,788 $10,108 $12,635 $15,494 $10,601 $13,222
Cost of operations .................... 1,488 1,777 1,985 1,992 2,201 1,635 2,026
Selling, general and
administrative expenses ............. 2,582 2,528 2,734 3,391 3,615 2,694 3,252
Operating income ...................... 4,683 4,483 5,389 7,252 9,678 6,272 7,944
Net earnings .......................... 3,190 2,945 3,512 4,574 6,176 3,959 5,119
Net earnings per common share ......... $.70 $.65 $.77 $1.00 $1.36 $.87 $1.13
Weighted average shares outstanding ... 4,557 4,557 4,557 4,557 4,557 4,558 4,543
Dividends per common share(1) ......... $.27 $.61 $.61 $.79 $.60 $.40 $.70
</TABLE>
February 28, 1995 November 30, 1995
----------------- -----------------
Balance Sheet Data:
Cash, cash equivalents and
marketable securities ....... $10,548 $11,370
Working capital ............... 14,495 15,581
Total assets .................. 20,112 21,204
Total liabilities ............. 3,742 3,339
Stockholders' equity .......... 16,370 17,865
- ------------
(1) The Company commenced paying regular quarterly dividends of $.20 per share
in February 1994, which amount was increased to $.25 per share in June
1995. Reported dividends during fiscal 1995 and the nine months ended
November 30, 1995 reflect timing differences in the declaration and payment
of dividends. See "Dividend Policy."
- --------------------------------------------------------------------------------
5
<PAGE>
RISK FACTORS
In evaluating the Company and its business, prospective purchasers of the
Common Stock offered hereby should consider carefully the following factors:
Competition
The Company competes with a number of small and large companies, including
list compilers, list brokers, marketing consultants and advertising agencies,
many of which have substantially greater resources and provide a broader array
of services than does the Company. Although the Company believes that the
comprehensiveness of its database and its long-standing relationships with
certain of its list sources provide a competitive advantage, competitors may
enter the market and there can be no assurance that the Company will not face
increased competition in the future. See "Business -- Competition."
Dependence on Key Personnel; Need to Attract and Retain Key Personnel
The Company's success depends, in part, upon the continued contributions of
Martin Lerner, Chief Executive Officer and President, and Jan Stumacher, Vice
President. Although the Company has entered into employment agreements with each
of Messrs. Lerner and Stumacher, the loss of services of, or a material
reduction in the amount of time devoted to the Company by, such individuals
could materially adversely affect the business of the Company. The Company is
the beneficiary under a key-man life insurance policy in the amount of $1.8
million on the life of Mr. Lerner. At March 6, 1996, the Company had only 37
employees. Therefore, the Company's success will depend, in part, upon its
ability to retain such employees and attract and retain additional qualified
personnel. There can be no assurance that the Company will be successful in its
efforts to recruit or retain sufficient qualified personnel. See "Management."
Reliance on Certain Categories of Customers
Historically, a substantial portion of the Company's revenues has been
derived from sales to the following categories of customers: banks and financial
institutions, list brokers and advertising agencies, educational institutions
and the armed forces. Accordingly, factors which might negatively impact these
categories of customers and their use of direct marketing could also have an
adverse impact on the Company's business and results of operations. For example,
a significant portion of the Company's recent growth has been the result of
increased marketing expenditures by financial institutions relating to the
promotion of credit cards and other products. A reduction in marketing
expenditures for such purposes, as a result of any number of factors, would have
a material adverse impact on the Company's future operating results. See
"Business -- Customers."
Possible Charges Arising From GeoDemX Business
The Company has not yet determined the extent to which it will continue to
develop the software business of its GeoDemX Corporation subsidiary ("GeoDemX")
beyond its remaining $65,000 commitment. While it is the Company's present
intention to pursue the marketing and commercialization of the GeoDemX
technology, in the event the Company determines not to fund further development
of this business, it may be required to recognize certain charges relating to
the discontinuation or disposition of the business. Such charges, which
management believes would not exceed $400,000 before taxes at November 30, 1995,
may be expected to have a material adverse effect on the Company's net earnings
and earnings per share during the quarter in which such determination is made.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Business -- Products and
Services."
Lack of Proprietary Rights
Although the Company attempts to protect its database and certain of its
software by relying on trade secret laws and seeding its lists with decoy names
to identify unauthorized usage, there can be no assurance that confidentiality
or trade secrets will be maintained or that others will not independently
develop or obtain access to the same or comparable sources of list information.
Although the Company has long-term relationships with many of its information
sources, it has no contracts with such sources and such sources are not
necessarily exclusive to the Company. In addition, a substantial portion of the
Company's database is derived from publicly available documents. The Company has
not filed for copyright protection of its database or list products. A patent
6
<PAGE>
application relating to the Company's geodemographic software product has been
filed with the United States Patent and Trademark Office (the "PTO"). There can
be no assurance that this patent application will result in a patent being
issued, or that any issued patent will afford adequate protection to the Company
in the event that this product is successfully commercialized (as to which there
can be no assurance). See "Business -- Rights to Data."
Factors Impacting Direct Marketing
The end users of the Company's list products are primarily entities engaged
in direct marketing programs. Accordingly, factors which would negatively impact
the direct mail industry, including substantial increases in postal rates,
delivery costs, printing and paper costs, or a decrease in overall advertising
budgets could cause such entities to reduce the extent of their mailings which,
in turn, could adversely impact the Company's business and results of
operations. See "Business -- Sales and Marketing."
Potential Adverse Impact of Legislation and Privacy Issues
In recent years numerous legislation has been proposed before federal and
state legislatures which would limit the use of direct marketing and the
dissemination of information by certain sources of list information. Several
bills are pending before Congress which, if enacted, will regulate the use of
credit and other personal information. The Company's database does not include
credit information. However, there can be no assurance that legislation will not
ultimately be adopted which results in reduced use of direct mail marketing
which, in turn, would adversely impact the Company's business and results of
operations. Further, the loss of important sources of information as a result of
such legislation as well as changes in public policy regarding issues of privacy
could have a material adverse impact on the Company's ability to obtain complete
and accurate information needed for the compilation of its list products.
Loss of Computer Center
The Company's business is dependent upon the successful operation of the
computer system maintained at its executive offices. The Company has no present
intention of establishing additional computer centers in other locations.
Although the information contained in the Company's database is backed up and is
stored off site as it is updated, and is protected by fire suppression systems,
there can be no assurance that a fire or other disaster will not disable the
Company's computer system, which event could have a material adverse effect on
the Company. See "Business -- Products and Services."
Control by Insiders
Upon completion of this offering, the executive officers and directors of
the Company will beneficially own approximately 30% of the outstanding Common
Stock of the Company. As a result, these stockholders will determine or
substantially affect the election of the Company's directors and, in general,
determine or substantially influence the outcome of corporate transactions or
other matters submitted for stockholder approval, including mergers,
consolidations, the sale of all or substantially all of the Company's assets and
a change in control of the Company. See "Principal and Selling Stockholders."
Effect of Outstanding Options
The Company has outstanding options to purchase approximately 187,005
shares of Common Stock under the Company's stock option plan at a weighted
average price of $18.12 per share. Holders of such options are likely to
exercise them when, in all likelihood, the Company could obtain additional
capital on terms more favorable than those provided by the options. See
"Capitalization" and "Management -- Stock Option Plan."
Shares Eligible for Future Sale
Of the shares of Common Stock outstanding immediately upon completion of
this offering, 1,300,665 are "restricted securities" as that term is defined in
Rule 144 ("Rule 144") promulgated under the Securities Act of 1933, as amended
(the "Securities Act") and are eligible for immediate sale in the public market
subject to certain timing and volume restrictions without registration pursuant
to Rule 144. The Company has also registered under the Securities Act the
300,000 shares of Common Stock issuable upon exercise of options granted or
available for grant under its stock option plan. Holders of 1,311,642 shares and
7
<PAGE>
options to purchase 158,150 additional shares after this offering have agreed
not to publicly sell such shares for a period of 180 days from the date of this
Prospectus without the consent of Oppenheimer & Co., Inc.; provided, however,
that up to 180,000 of such shares may be sold pursuant to the Underwriters'
over-allotment option. The Company has also agreed not to issue shares of Common
Stock for a period of 180 days after the date hereof, subject to certain
exceptions, without the consent of Oppenheimer & Co., Inc. Future sales of
shares by existing stockholders could adversely affect the market price
prevailing from time to time of the Common Stock and could impair the Company's
ability to raise additional capital through the sale of its equity securities.
See "Management -- Stock Option Plan," "Shares Eligible for Future Sale" and
"Underwriting."
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the American Stock Exchange under
the symbol AMZ. The following sets forth the high and low closing prices for the
last three fiscal years as reported by the American Stock Exchange:
High Low
---- ---
Year ended February 28, 1994
First Quarter ....................................... $12.90 $10.88
Second Quarter ...................................... 14.33 11.70
Third Quarter ....................................... 16.20 12.49
Fourth Quarter ...................................... 16.09 14.29
Year ended February 28, 1995
First Quarter ....................................... 17.88 16.13
Second Quarter ...................................... 18.75 17.00
Third Quarter ....................................... 19.25 17.00
Fourth Quarter ...................................... 20.25 16.13
Year ending February 28, 1996
First Quarter ....................................... 25.13 20.13
Second Quarter ...................................... 30.75 23.63
Third Quarter ....................................... 29.63 24.50
Fourth Quarter ...................................... 37.50 25.50
The number of holders of record of the Company's Common Stock as of March
6, 1996 was 316. On that date, the last reported sale price of the Company's
Common Stock was $33.875 per share.
DIVIDEND POLICY
The Company currently pays regular quarterly dividends to holders of its
Common Stock. For the second and third quarters of fiscal 1996, the Company
declared quarterly dividends of $.25 per share. The fourth quarter dividend of
$.25 per share was declared on January 12, 1996 and was paid on February 6, 1996
to stockholders of record on January 31, 1996. The current dividend rate
represents an increase over the prior quarterly dividend rate of $.20 per share
which was implemented by the Company in the fourth quarter of fiscal 1994.
Although the Company currently intends to maintain the current dividend rate,
future dividends will be at the discretion of the Board of Directors and will
depend on the actual cash available for distribution by the Company, the
Company's financial condition, capital requirements and such other factors as
the Board of Directors deems relevant.
8
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at
November 30, 1995:
November 30, 1995
-----------------
Cash, cash equivalents and marketable securities ......... $11,370,224
==========
Current portion of long-term debt(1) ..................... $ 437,665
==========
Long-term debt, less current portion(1) .................. $ 1,901,244
----------
Stockholders' equity:
Common Stock, $.01 par value, 10,000,000 shares
authorized; 4,541,703 shares issued and outstanding .. 45,417
Additional paid-in capital ............................. 6,466,642
Unrealized gain on marketable securities ............... 7,107
Retained earnings ...................................... 11,353,170
Less: treasury stock at cost ........................... (7,634)
----------
Total stockholders' equity ............................... 17,864,702
----------
Total capitalization ................................... $19,765,946
==========
- ------------
(1) All of the Company's outstanding debt relates to a license agreement. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and Note E to the Consolidated Financial Statements.
9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands, except per share information)
The selected consolidated financial information presented below for each of
the fiscal years ended February 28, 1993, 1994 and 1995 and the nine month
period ended November 30, 1995 are derived from and are qualified by reference
to the Company's Consolidated Financial Statements which have been audited by
Grant Thornton LLP, independent certified public accountants, as indicated in
their report included elsewhere in this Prospectus. The consolidated financial
data for the years ended February 28, 1991 and February 29, 1992 are derived
from financial statements audited by Grant Thornton LLP but not included in this
Prospectus. This data should be read in conjunction with the Company's
Consolidated Financial Statements and the Notes thereto. The selected
consolidated financial data for the nine month period ended November 30, 1994 is
derived from unaudited financial statements which, in the opinion of management,
reflect all adjustments, consisting only of normal recurring accrual
adjustments, necessary to present fairly the information set forth therein. The
results for the nine months ended November 30, 1995 are not necessarily
indicative of the results that may be expected for the full year.
<TABLE>
<CAPTION>
Nine Month Period
Fiscal Year Ended February 28 or 29, Ended November 30,
----------------------------------------------- ------------------
1991 1992 1993 1994 1995 1994 1995
---- ---- ---- ---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenues .............................. $8,753 $8,788 $10,108 $12,635 $15,494 $10,601 $13,222
Cost of operations .................... 1,488 1,777 1,985 1,992 2,201 1,635 2,026
Selling, general and
administrative expenses ............. 2,582 2,528 2,734 3,391 3,615 2,694 3,252
------ ------ ------- ------- ------- ------- -------
Operating income ...................... 4,683 4,483 5,389 7,252 9,678 6,272 7,944
Investment income...................... 496 373 271 193 378 256 361
Interest expense....................... -- -- -- -- 129 78 141
Earnings before provision
for income taxes..................... 5,179 4,856 5,660 7,445 9,927 6,450 8,164
Provision for income taxes............. 1,989 1,911 2,148 2,871 3,751 2,491 3,045
------ ------ ------- ------- ------- ------- -------
Net earnings .......................... $3,190 $2,945 $ 3,512 $ 4,574 $ 6,176 $ 3,959 $ 5,119
====== ====== ======= ======= ======= ======= =======
Net earnings per common share ......... $ .70 $ .65 $ .77 $ 1.00 $ 1.36 $ .87 $ 1.13
====== ====== ======= ======= ======= ======= =======
Weighted average shares outstanding ... 4,557 4,557 4,557 4,557 4,557 4,558 4,543
Dividends per common share (1) ........ $ .27 $ .61 $ .61 $ .79 $ .60 $ .40 $ .70
</TABLE>
February 28, 1995 November 30, 1995
----------------- -----------------
Balance Sheet Data:
Cash, cash equivalents and
marketable securities $10,548 $11,370
Working capital ....................... 14,495 15,581
Total assets .......................... 20,112 21,204
Total liabilities ..................... 3,742 3,339
Stockholders' equity .................. 16,370 17,865
- ------------
(1) The Company commenced paying regular quarterly dividends of $.20 per share
in February 1994, which amount was increased to $.25 per share in June
1995. Reported dividends during fiscal 1995 and the nine months ended
November 30, 1995 reflect timing differences in the declaration and payment
of dividends. See "Dividend Policy."
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company develops, maintains and markets one of the largest and most
comprehensive databases of high school, college and pre-school through junior
high school students. The Company's revenues and operating income in fiscal 1995
were $15.5 million and $9.7 million, respectively. For the nine months ended
November 30, 1995, the Company's revenues and operating income were $13.2
million and $7.9 million, respectively. The Company's revenues and operating
income have grown at compound annual growth rates of 15.2% and 19.9%,
respectively, from fiscal 1991 through fiscal 1995. Management believes this
growth was primarily attributable to increased use of the Company's products by
new and existing customers, due in part to the growth in the use of direct
marketing generally. To a lesser extent, this increase in revenues is
attributable to price increases implemented by the Company. During this same
period, the Company's operating margins increased from 53.5% to 62.5%,
reflecting the Company's ability to leverage the high component of fixed costs
inherent in its business.
The Company's recent growth in revenues and operating income can be
attributed to the Company's operating and growth strategy designed to (i)
maintain a comprehensive and accurate database; (ii) increase sales to existing
customers; (iii) broaden its customer base and identify new markets; (iv)
introduce new list products; (v) maintain a high level of customer service; and
(vi) develop other products and services.
The following table sets forth the amount of, and percentage relationship
to revenues of, certain items included in the Company's Consolidated Statements
of Earnings for the fiscal years ended February 28, 1993, 1994 and 1995 and the
nine month periods ended November 30, 1994 and 1995.
<TABLE>
<CAPTION>
Nine Month Period Ended
Fiscal Year Ended February 28, November 30,
------------------------------------------------- -------------------------------
1993 1994 1995 1994 1995
-------------- ------------- ------------- ------------- -------------
Amount % Amount % Amount % Amount % Amount %
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
(dollar amounts in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues ............. $10,108 100.0% $12,635 100.0% $15,494 100.0% $10,601 100.0% $13,222 100.0%
Cost of operations ... 1,985 19.6 1,992 15.8 2,201 14.2 1,635 15.4 2,026 15.3
Selling, general and
administrative
expenses ........... 2,734 27.1 3,391 26.8 3,615 23.3 2,694 25.4 3,252 24.6
Operating income ..... 5,389 53.5 7,252 57.4 9,678 62.5 6,272 59.2 7,944 60.1
Net earnings ......... 3,512 34.7 4,574 36.2 6,176 39.9 3,959 37.3 5,119 38.7
</TABLE>
Results of Operations
Nine Months Ended November 30, 1995
Compared to Nine Months Ended November 30, 1994
Revenues increased by approximately $2.6 million (25%) for the nine months
ended November 30, 1995 (the "1995 nine months") from the nine months ended
November 30, 1994 (the "1994 nine months"). The increase in revenues is
primarily attributable to increased sales to existing and new customers, price
increases which took effect in September 1994 and April 1995 and revenues
generated by GeoDemX.
Cost of operations increased by approximately $391,000 (24%) for the 1995
nine months as compared to the 1994 nine months primarily due to the
amortization of deferred license costs and costs associated with GeoDemX. As a
percentage of sales, cost of operations remained relatively constant during the
1994 and 1995 nine months, reflecting the inclusion of sales of lower margin
GeoDemX products.
Selling, general and administrative expenses increased by approximately
$558,000 (21%) for the 1995 nine months from the 1994 nine months primarily due
to expenses associated with GeoDemX and the Company's hiring of additional
personnel. As a percentage of sales, such expenses decreased during the 1995
nine months to 24.6% as compared to 25.4% during the 1994 nine months.
Investment income increased by approximately $105,000 (41%) for the 1995
nine months from the 1994 nine months primarily due to an increase in interest
rates and a greater amount of funds available for investment.
Interest expense increased by approximately $63,000 (81%) for the 1995 nine
months as compared to the 1994 nine months as a result of the debt associated
with a license agreement entered into in July 1994. See Note E to the
Consolidated Financial Statements.
11
<PAGE>
The effective tax rate decreased to 37.3% for the 1995 nine months as
compared to 38.6% for the 1994 nine months primarily due to increased
non-taxable municipal bond interest income.
Fiscal Year Ended February 28, 1995
Compared to Fiscal Year Ended February 28, 1994
Revenues increased by approximately $2.9 million (23%) for the fiscal year
ended February 28, 1995 ("fiscal 1995") from the fiscal year ended February 28,
1994 ("fiscal 1994"). The increase in revenues is primarily attributable to
increased sales to existing and new customers, price increases which took effect
in January and September 1994 and a license agreement entered into in July 1994.
See Note E to the Consolidated Financial Statements.
Cost of operations increased by approximately $209,000 (10%) for fiscal
1995 as compared to fiscal 1994 primarily due to the amortization of deferred
license costs. See Note E to the Consolidated Financial Statements. As a
percentage of sales, cost of operations decreased from 16% during fiscal 1994 to
14% during fiscal 1995 due to increased sales volume in excess of the growth in
cost of operations.
Selling, general and administrative expenses increased by approximately
$224,000 (7%) for fiscal 1995 from fiscal 1994 primarily due to an increase in
personnel costs and consulting fees related to the upgrade of the Company's
computer networking system. As a percentage of revenues, such expenses decreased
during fiscal 1995 to 23% as compared to 27% during fiscal 1994. This decrease
resulted from changes to an executive officer's compensation agreement which
kept such costs constant for fiscal 1995 as compared to fiscal 1994.
Investment income increased by approximately $184,000 (95%) for fiscal 1995
from fiscal 1994 primarily due to an increase in interest rates and to a lesser
extent the adoption of Statement of Financial Accounting Standards No. 115
"Accounting for Certain Investments in Debt and Equity Securities" which
requires the Company to record any unrealized gains and losses from securities
available for sale as a component of stockholders' equity. In contrast, during
fiscal 1994, the Company recorded an unrealized loss as a reduction of
investment income.
Interest expense of approximately $129,000 for fiscal 1995 resulted from a
license agreement entered into in July 1994. See Note E to the Consolidated
Financial Statements.
The effective tax rate decreased to 37.8% for fiscal 1995 as compared to
38.6% for fiscal 1994 as a result of an increase of tax-free municipal bond
interest earned in fiscal 1995.
Fiscal Year Ended February 28, 1994
Compared to Fiscal Year Ended February 28, 1993
Revenues increased by approximately $2.5 million (25%) for fiscal 1994 from
the fiscal year ended February 28, 1993 ("fiscal 1993"). The increase in
revenues is primarily attributable to increased sales to existing and new
customers. Price increases which took effect in October 1992 and January 1994
also impacted revenues favorably during fiscal 1994.
Cost of operations remained constant during fiscal 1993 and 1994, but
decreased as a percentage of revenues from 19.6% during fiscal 1993 to 15.8%
during fiscal 1994 due to increased sales volume.
Selling, general and administrative expenses increased by approximately
$657,000 (24%) for fiscal 1994 from fiscal 1993 primarily due to an increase in
executive compensation which was based upon Company performance.
Investment income decreased by approximately $77,000 (28%) for fiscal 1994
compared to fiscal 1993, primarily due to a decline in the market value of
certain investments.
There was no significant change in the effective tax rate during fiscal
1993 and 1994.
Liquidity and Capital Resources
Historically, the Company has financed its cash flow requirements with
funds generated from operations. At November 30, 1995, the Company had cash,
cash equivalents and marketable securities of approximately $11.4 million and
working capital of approximately $15.6 million.
Net cash flows from operating activities amounted to approximately $4.7
million and $5.4 million during fiscal 1995 and the 1995 nine months,
respectively.
12
<PAGE>
Net cash used in investing activities amounted to approximately $2.6
million and $1.1 million during fiscal 1995 and the 1995 nine months,
respectively. Approximately 84% of the 1995 nine month amount reflects the
purchase of marketable securities. The remainder reflects expenditures for
capital equipment and the purchase of GeoDemX, net of cash acquired.
Net cash used in financing activities amounted to approximately $3.5
million and $4.2 million during fiscal 1995 and the 1995 nine months,
respectively. Approximately 75% of the 1995 nine month amount reflects the
payment of dividends. The remainder reflects the purchase of treasury stock and
the payment of long-term debt pursuant to the licensing agreement described
below.
Effective July 1, 1994, the Company entered into a licensing agreement
pursuant to which it became obligated to pay the licensor a total of $4,200,000
payable in decreasing annual installments through July 2003. See Note E to the
Consolidated Financial Statements.
On March 22, 1995, the Board of Directors authorized the repurchase of up
to 200,000 shares of the Company's Common Stock. On April 7, 1995, the Company
purchased 24,600 shares of its Common Stock for an aggregate price of $509,238.
An additional 300 shares were repurchased on November 16, 1995 for an aggregate
price of $7,634. The Company may from time to time repurchase additional shares
after the completion of this offering.
On June 22, 1995, the Company consummated an agreement (the "GeoDemX
Agreement") pursuant to which it acquired, through GeoDemX, a wholly-owned
subsidiary of the Company, a business engaged in the sale of geodemographic
software -- an emerging category of software defined by the combination of
computerized maps with electronic demographic data -- for use in the generation
of sales leads. See "Business -- Products and Services." Pursuant to the GeoDemX
Agreement, the Company agreed to advance GeoDemX $750,000 to fund its working
capital requirements and other operating expenses, of which $685,000 had been
advanced as of January 24, 1996. The Company has not yet determined the extent
to which it will continue to invest in the GeoDemX technology beyond the
remaining $65,000 commitment and there can be no assurance that the GeoDemX
technology will ever be successfully commercialized. Although it is the
Company's present intention to pursue the marketing and commercialization of the
GeoDemX technology, in the event the Company determines not to fund further
development of the GeoDemX business, it may be required to recognize certain
charges relating to the discontinuation or disposition of the business. Such
charges, which management believes would not exceed $400,000 before taxes at
November 30, 1995, may be expected to have a material adverse effect on the
Company's net earnings and earnings per share during the quarter in which such
determination is made. Continued investments in GeoDemX, if made, are not
expected to have a material effect on the Company's liquidity.
Pursuant to the GeoDemX Agreement, additional consideration for the
acquisition will involve the issuance by the Company of shares of its Common
Stock having a market value equal to between 40% and 50% of the Pre-Tax Earnings
(as defined), if any, of the GeoDemX business during the fiscal years ending
February 28 or 29, 1996, 1997, 1998 and 1999. Any payment required during the
second year will be reduced in the event the GeoDemX operations generate a
Pre-Tax Loss (as defined) during the first year. The GeoDemX Agreement grants
the sellers the option to receive a portion of any payments earned in cash.
The Company believes that available cash, together with revenues generated
from operations, will be sufficient to fund the Company's continuing operations
and the payment of dividends for the foreseeable future. The Company may also
from time to time consider the acquisition of complementary businesses, products
or technologies which may require the Company to obtain additional financing.
The Company has no present understandings, commitments or agreements, nor is it
engaged in any discussions or negotiations, with respect to any such
transaction.
Backlog
The Company does not consider its backlog of orders to be significant to
its business since all orders are filled shortly after receipt.
Seasonality
Historically, the Company has experienced higher sales and earnings in the
fourth and first fiscal quarters as its new lists become available and customers
prepare for spring mailings in order to take advantage of seasonal events such
as graduations and proms. The Company experiences lower demand during the summer
months of the Company's second fiscal quarter, when schools are not in session.
13
<PAGE>
BUSINESS
American List develops, maintains and markets one of the largest and most
comprehensive databases of high school, college, and pre-school through junior
high school students in the United States, currently containing information on
approximately 30 million individuals. The Company rents lists derived from its
database for use primarily in direct mail and telemarketing programs. During the
fiscal year ended February 28, 1995, the Company rented its lists to
approximately 3,200 customers, including list brokers and advertising agencies,
financial institutions, retailers and educational institutions.
The Company's computerized database contains information such as name,
address, gender and, if available, date of birth and telephone number of the
individuals included. From this database, the Company extracts, manipulates and
sorts information to create its multiple list products which are available in a
variety of formats, including prospect lists, mailing labels, 3" x 5" index
cards and computer magnetic tapes, cartridges and disks. American List's
computer processing facility provides it with the ability to customize its lists
to best serve each customer's marketing goals.
The information contained in the Company's database is derived from a
number of sources which are the result of long-term relationships developed by
the Company over the past 30 years, as well as from certain publicly available
sources. The Company believes that its relationships with many of its
information sources make it difficult for others to obtain comparable data and,
accordingly, provide the Company with a competitive advantage.
The Company's total revenues have grown from $8.8 million in fiscal 1991 to
$15.5 million in fiscal 1995, reflecting a compound annual growth rate of 15.2%.
During this same period, operating income has grown from $4.7 million to $9.7
million, reflecting a compound annual growth rate of 19.9%. Management believes
this growth was primarily attributable to increased use of the Company's
products by new and existing customers, due in part to growth in the use of
direct marketing generally during this period. Additionally, the Company's
operating margins increased from 53.5% in fiscal 1991 to 62.5% in fiscal 1995,
reflecting the Company's ability to leverage the high component of fixed costs
inherent in its business.
The Company's strategy is to focus on developing and marketing
comprehensive lists utilizing its proprietary database. The Company's strategy
consists of the following elements:
o Maintain a comprehensive and accurate database. The Company will
continue to emphasize its commitment to maintaining the accuracy of
its database and to enhancing its content.
o Increase sales to existing customers. The Company will continue to
expand marketing efforts to existing customers. Generally, customers
initially utilize only a small portion of the Company's database, and
increase their usage after successful implementation.
o Broaden customer base; identify new markets. The Company will continue
to broaden its customer base by identifying new markets which can
utilize the Company's existing products and services. For example, the
Company recently began marketing its products to operators of camps
and amusement parks.
o Introduce new list products. The Company intends to continue to expand
its product offerings and plans to introduce new lists which appeal to
the Company's current customers. Recently, the Company began marketing
data on newly engaged couples and has rented these lists to many of
the Company's existing customers, including photographers and formal
wear retailers.
o Maintain a high level of customer service. The Company will continue
to emphasize its ability to quickly fill and ship customer orders, to
provide a high rate of deliverable names and to customize its database
to meet customer specifications.
o Develop other products and services. In addition to its list products,
the Company is continually investigating new opportunities to provide
other products and services. Examples include the acquisition in June
1995 of a business engaged in the sale of software incorporating
mapping and demographic information which is used for the generation
of sales leads, and the possible establishment of a web site on the
Internet.
14
<PAGE>
The Direct Marketing Industry
The direct marketing industry is composed of businesses that use direct
mail and other methods of direct consumer contact to promote their products and
services. Unlike traditional forms of advertising, which are aimed at promoting
a product or service to a broad audience through print or broadcast media,
direct marketing solicits a direct response from the consumer and targets
potential customers most likely to purchase a company's products and services.
The use of direct marketing has increased steadily over the last decade. In
the years prior to and during the 1970's, the costs associated with selling
products and services on a mass market basis were relatively low, while the
costs of computer processing and data management were prohibitive for all but
the largest businesses. In the 1980's, the cost of computer technology declined
while marketing and selling costs increased dramatically. Businesses have
responded to these trends by increasing the use of computer technology to use
direct marketing techniques to target potential customers more precisely and
efficiently. In addition, the declining costs of computer resources have
afforded businesses, particularly smaller businesses, the opportunity to develop
and implement more sophisticated marketing programs in-house.
In recent years, the use of direct marketing has grown substantially.
According to the U.S. Department of Commerce, between 1989 and 1994, total
advertising expenditures grew at a compound annual rate of 3.75%, while direct
mail expenditures grew at 5.96%. The growth in direct marketing has increased
the need for comprehensive, current and accurate information to identify high
probability purchasers. This information, combined with direct marketing
programs, results in lower expense per sales contact and increased revenue from
identified customers.
Products and Services
The Company markets a variety of products and services, which are created
from the information contained in its database. The Company has devoted
significant time and effort to developing, maintaining and enhancing its
database. The Company utilizes an IBM 4381 mainframe system for data compilation
and list production. Data inputting is outsourced to third party vendors. Data
is backed up as information is updated and is then stored off site.
Sophisticated computer hardware and software enable the rapid compilation,
processing, storage, sorting and quality control of inputted data. The Company
also utilizes software to check the accuracy of the inputted data, including
spelling, zip code information, address and date of birth, as well as to perform
the valuable task of removing duplication from the Company's list products. Each
of the Company's lists is guaranteed to be at least 95% deliverable if the
mailing takes place within 30 days after receipt of the list. To date, refunds
pursuant to this guarantee arrangement have not been material.
The Company typically will rent its lists for a one-time use unless other
arrangements are made. Rental prices for a one-time use generally range from $60
to $120 per thousand names depending upon the criteria selected. Rates for
unlimited use of a list for a one year period typically range from $150 to $250
per thousand names. In order to protect the lists from unauthorized usage, the
Company seeds its lists with decoy names.
The Company currently markets its lists in the following categories:
High School Students
According to the U.S. Department of Education's Digest of Education
Statistics 1995, there were approximately 14.0 million individuals enrolled in
high school for the 1995-96 school year. The Company has compiled a database of
approximately 9 million names, or 64% of this population segment, which it has
divided from grades 9 through 12. The Company believes this is the most complete
and accurate list of high school students available. For fiscal 1995, rentals of
high school student lists accounted for approximately 58% of the Company's
revenues. The high school student list is used by marketers of credit cards,
scholarships, colleges, the armed services, catalogue items, formal wear,
magazines, computers, software and accessories. This segment, as well as the
college segment of the Company's database, has significant appeal to direct
marketing companies, which place a very strong emphasis on effectively reaching
younger consumers, as they are seen as important first-time buyers who are in a
position to form their own long-term buying habits and develop brand loyalties.
The Company updates this list as new information becomes available, which is
generally on a monthly basis.
15
<PAGE>
College Students
The college student market is attractive to direct marketing companies
because of the significant amount of money college students have available for
discretionary spending. Additionally, marketers generally wish to cultivate the
development of first-time buying habits of this group. Furthermore, the
Company's information is extremely valuable to marketers because the transient
nature of college students makes them often difficult to reach.
American List has compiled a database of approximately 6 million names of
students attending approximately 1,200 institutions in all 50 states. This
represents approximately 42% of the 14.4 million students enrolled in
institutions of higher education in 1995, according to the U.S. Department of
Education's Digest of Education Statistics 1995. The Company offers its
customers this list segmented by school, class and/or major. Customers
purchasing this list include companies marketing automobiles, credit cards,
clothing and scholarships. The Company recreates its college student list
primarily in the late fall and winter when student addresses become available.
Pre-School Through Junior High School Students
In 1995, there were an estimated 44.7 million children in this population
segment in the United States, according to the U.S. Department of Education's
Digest of Education Statistics 1995. American List has compiled a database of
approximately 34%, or 15 million names, of these children between the ages of
two and 13. Applications of this list include the marketing of encyclopedias and
books, children's magazines, children's catalogue items, summer camps and
amusement parks. The Company updates this list as information becomes available,
generally on a monthly basis.
Young Adults
American List has compiled a database of over 40 million names of young
adults between the ages of 19 and 36. This list represents approximately 55% of
the estimated 72.8 million individuals in this population segment in 1995, based
on data compiled by the Population Division, U.S. Bureau of the Census, 1990.
Applications of this list include the marketing of automobiles, trade schools
and the armed services. The Company updates this list as information becomes
available which is generally on a monthly basis. Historically, this list has
accounted for less than 5% of the Company's revenues.
Other List Products and Services
In order to expand its customer base and increase sales to its existing
customers, the Company is focusing on new list products and new applications of
its database. The Company has recently introduced the following new list
compilations: (i) a list of newly engaged couples which it markets for use by
caterers, musicians, photographers and other product and service providers in
the wedding market as well as to insurance companies and others seeking to
target newlyweds; and (ii) religious and ethnic compilations which it will
market for use by religious and ethnic publications and colleges and
universities, as well as existing customers. These lists are designed to further
a company's ability to distinctly target customers through direct marketing
programs.
Additionally, the Company offers its customers a full range of data
processing services which enable them to maintain their current customer files
and prospect files for ongoing mailings. Among the services offered by the
Company are carrier route coding, address standardization, postal presorting,
file overlays, back end mailing analysis, tape/diskette conversions, telephone
appending, merge/purge and custom programming.
New Products and Services
In June 1995, the Company, through its GeoDemX subsidiary, acquired certain
assets and liabilities of an early stage business engaged in the sale of
software that incorporates computerized maps and electronic demographic data for
the generation of sales leads. The GeoDemX software is designed to permit an
organization to selectively target a prospective customer base that is similar
to that organization's existing customer base. GeoDemX also resells software
manufactured by MapInfo Corp.
As part of the Company's strategy to expand the applications of its
database, the Company is contemplating the establishment of a web site on the
Internet, which would incorporate programming designed to appeal primarily to
high school and college students. Revenues are anticipated to be derived from
the sale of advertising space, initially to the existing customers of the
16
<PAGE>
Company who wish to employ another medium as part of their overall marketing
strategy.
Customers
The Company's customer base is comprised of list brokers and advertising
agencies which resell the Company's list products as well as end users employing
direct mail and telemarketing campaigns as part of their marketing efforts.
Among the numerous large and small entities who have utilized the Company's
lists over the years are banks and other financial institutions, educational
institutions such as colleges and trade schools, the armed forces, record
companies, publishers, catalogue companies, retailers and consumer goods
marketers. A significant portion of the Company's recent growth has been the
result of increased marketing expenditures by financial institutions relating to
the promotion of credit cards and other products. List brokers and advertising
agencies, which are resellers of the Company's products, generally account for
between 40% and 50% of annual revenues. These customers generally receive a 20%
brokerage commission on their sales. The Company's revenues are calculated net
of such brokerage commissions. In each of the past 10 years, no single customer
has accounted for in excess of 5% of the Company's revenues.
The Company's in-house marketing staff continually seeks new and innovative
applications for the Company's list products in order to expand the Company's
customer base. During fiscal 1995 for example, the Company substantially
increased the marketing of its child and student lists to amusement parks,
summer camps, zoos, bowling alleys and photographers.
To date, the Company's experience has been that customers initially rent
only a small portion of the Company's database and generally increase their
usage over time. The Company believes this results from customers' increasing
familiarity with the effectiveness of the Company's products in their direct
marketing programs.
Sales and Marketing
The Company markets its products and services to existing and prospective
customers through a 10-person marketing staff which conducts telemarketing and
direct sales, and through third party resellers such as independent list brokers
and advertising agencies. The Company also continually seeks to broaden its
customer base by attending trade shows and conventions. The Company has recently
increased expenditures for in-house advertising and expects that revenues from
direct sales as a percentage of total revenues will increase in the future.
Competition
The Company competes with a number of small and large companies, many of
which have substantially greater resources and provide a broader array of
services than does the Company. These companies include list compilers, list
brokers, marketing consultants and advertising agencies and include companies
such as MetroMail Corp., a subsidiary of R.R. Donnelley & Sons Co., Donnelley
Marketing, Inc., TRW, Inc. and Equifax, Inc. The primary competitive factors in
the children and student list business are the reliability of the information,
the level of service provided and pricing. The Company believes the accuracy and
breadth of its database, its service and its prices enable it to remain
competitive. The Company maintains long-term relationships with many of its
customers and information sources and considers this a competitive advantage, as
well as a significant barrier to entry to the student list business. Although
Educational Testing Services of Princeton, New Jersey also provides lists of
high school students, it does so only for non-profit institutions and,
accordingly, competes with the Company solely in this limited market.
Rights to Data
The Company attempts to protect its database and certain of its software by
relying on trade secret laws and seeding its lists with decoy names to identify
unauthorized usage. The Company has not filed for copyright protection of its
database or list products. There can be no assurance that the steps taken by the
Company will be adequate to deter misappropriation of its data or independent
third party development of substantially similar products and technology.
A patent application relating to the GeoDemX software product has been
filed with the PTO. There can be no assurance that this patent application will
result in a patent being issued or that any issued patent will afford adequate
protection to the Company in the event that the GeoDemX product is successfully
commercialized.
17
<PAGE>
Facilities
The Company's principal executive offices and computer facility are located
in approximately 8,300 square feet of space at 330 Old Country Road, Mineola,
New York, and are occupied pursuant to a lease which terminates on June 15,
2001. Rent expense was $288,000 during the year ended February 28, 1995. The
lease contains an escalation clause relating to increases in real estate taxes.
GeoDemX currently occupies approximately 2,300 square feet of office space
at 17117 West Nine Mile Road, Southfield, Michigan pursuant to a lease which
terminates on May 31, 1996. The base monthly rental is $2,204. The Company
believes it will be able to renew its lease or lease new space at the same
building should it determine to do so.
Employees
At March 6, 1996, the Company had 37 employees, including 10 in marketing
and sales, seven in administration, five in data compilation, eight in data
processing operations and seven in its GeoDemX operations. None of the Company's
employees is subject to a collective bargaining agreement nor has the Company
ever experienced a work stoppage. The Company believes that its employee
relations are good.
Legal Proceedings
There are currently no legal proceedings to which the Company is a party.
18
<PAGE>
MANAGEMENT
Executive Officers and Directors
The following table sets forth the names, ages and positions of the
executive officers and directors of the Company:
<TABLE>
<CAPTION>
Name Position Age
---- ------ ---
<S> <C> <C>
Martin Lerner (1)..................... Chief Executive Officer, President, 63
Treasurer and Director
Jan Stumacher (1)..................... Vice President and Director 43
J. Morton Davis ...................... Director 67
Kenton Wood .......................... Director 48
Ben Ermini (2) ....................... Director 59
Philip Lubitz (2) .................... Director 62
</TABLE>
- ------------
(1) Member of the Stock Option Committee
(2) Member of the Audit Committee
Martin Lerner has served as Chief Executive Officer, President, Treasurer
and Director of the Company since 1965. Mr. Lerner also serves on the Board of
Directors of the National Center for Missing and Exploited Children.
Jan Stumacher joined the Company in 1971 and has been a Vice President of
the Company in charge of sales and marketing since 1984 and a director of the
Company since 1988.
J. Morton Davis has been Chairman of D.H. Blair Investment Banking Corp., a
member of the New York Stock Exchange, or its predecessor entity for more than
the last five years. He has been a director of the Company since 1983.
Kenton Wood has been Chairman and Chief Executive Officer of D.H. Blair &
Co., Inc., a member of the New York Stock Exchange, since January 1992 and
served as its President for more than five years prior thereto. He has been a
director of the Company since 1992.
Ben Ermini has been Director of Case Management of the National Center for
Missing and Exploited Children for more than the last five years. He has been a
director of the Company since 1992.
Philip Lubitz has been President of the Dover Group, an employee benefits
consulting firm, for more than the last five years. He has been a director of
the Company since 1992.
Directors serve until the next annual meeting or until their successors are
elected and qualified. Officers serve at the discretion of the Board of
Directors, subject to rights, if any, under contracts of employment. See
"Management -- Employment Agreements."
The Securities and Exchange Commission is conducting an investigation
concerning various business activities of D.H. Blair Investment Banking Corp.
and D.H. Blair & Co., Inc. (collectively, the "Blair Companies"). The
investigation appears to be broad in scope, involving numerous aspects of the
Blair Companies' compliance with Federal securities laws and compliance with
Federal securities laws by issuers whose securities were underwritten by the
Blair Companies, or in which the Blair Companies made over-the-counter markets.
The Company has been advised by the Blair Companies that the investigation has
been ongoing since at least 1989, that the Blair Companies are cooperating with
the investigation and that they cannot predict whether this investigation will
ever result in any type of formal enforcement action against the Blair
Companies.
Board Committees
The Board of Directors has a Stock Option Committee which administer's the
Company's stock option plan. See "Management -- Stock Option Plan." The Board of
Directors also has an Audit Committee which reviews the results and scope of the
audit and other accounting related matters.
19
<PAGE>
Director Compensation
Directors do not receive compensation for Board or committee meetings
attended but are reimbursed for their expenses in attending such meetings.
Directors are not precluded from serving the Company in any other capacity and
receiving compensation therefor.
Executive Compensation
The following summary compensation table sets forth the aggregate
compensation paid or accrued by the Company to the Chief Executive Officer and
to executive officers whose annual compensation exceeded $100,000 during fiscal
1995 (collectively, the "Named Executive Officers") for services during fiscal
1995, 1994 and 1993:
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
------------------------ -----------------------------
Name and All Other
Principal Position Year Salary($) Bonus($) Options(#) Compensation($)(1)
------------------ ---- --------- -------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
Martin Lerner .................. 1995 212,881 737,119 50,000 24,250
President and Chief 1994 207,470 727,576 -- 30,000
Executive Officer 1993 201,625 524,792 -- 30,000
Jan Stumacher .................. 1995 425,000 191,654 90,000 24,250
Vice President 1994 82,981 503,616 8,250 30,000
1993 80,642 276,207 8,250 30,000
</TABLE>
- ----------
(1) Includes amounts paid pursuant to pension and profit sharing plans. The
pension plan contributions by the Company are credited to the account of
each employee and are based upon a percentage of salary, including bonus.
Contributions for the profit sharing plan are allocated proportionately by
salary and bonus to each employee's account.
The following table sets forth certain information with respect to
individual grants of stock options made during the fiscal year ended February
28, 1995 to each of the Named Executive Officers:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (1)
----------------------------------------------------- ---------------------
% of
Total Options
Granted to Exercise
Options Employees or Base Expiration
Name Granted(#) in Fiscal Year Price($/Sh) Date 5%($) 10%($)
---- --------- -------------- ----------- ----------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Martin Lerner ........ -- -- -- -- -- --
Jan Stumacher ......... 90,000 90% $18.00 07/19/04 $81,000 $162,000
</TABLE>
- ----------
(1) Amounts for the Named Executive Officers shown under the "Potential
Realizable Value" columns above have been calculated by multiplying the
exercise price per share by the annual appreciation rate shown (compounded
for the term of the options), subtracting the exercise price per share and
multiplying the resulting gain per share by the number of shares covered by
the options.
20
<PAGE>
The following table sets forth certain information with respect to the
number and value of unexercised options held by the Named Executive Officers as
of February 28, 1995:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise(#) Realized($) Unexercisable Unexercisable
---- ------------ -------- ----------- ----------
<S> <C> <C> <C> <C>
Martin Lerner ............. -- -- -- --
Jan Stumacher ............. -- -- 16,500/90,000 $158,500/$202,500
</TABLE>
Employment Agreements
On August 15, 1983, Martin Lerner entered into an employment agreement (the
"Lerner Agreement") with the Company to serve as President of the Company. The
Lerner Agreement presently provides for a current base annual salary of $220,678
plus an incentive bonus equal to the sum of (i) 5% of the pre-tax net income of
the Company provided pre-tax income is at least $1,943,082 (which amount is
subject to annual cost of living adjustments), (ii) 7 1/2% of the next $200,000
of pre-tax net income and (iii) 10% of any pre-tax net income in excess thereof.
The Lerner Agreement provides for annual cost of living adjustments based on the
increase in the Cost of Living Index as of July of each employment year over the
Cost of Living Index for the month of July 1985. On April 12, 1995, the Lerner
Agreement was amended to provide that the maximum annual compensation in the
form of salary and incentive bonus payable to Mr. Lerner for any employment year
would be $950,000. In addition, Mr. Lerner was granted 10-year options to
purchase 50,000 shares of Common Stock at an exercise price of $21 per share.
The Lerner Agreement is currently subject to automatic renewal from year to
year unless either the Company or Mr. Lerner gives six months written notice of
termination, which notice shall become effective as of August 15 in any year.
The Lerner Agreement contains confidentiality provisions and a five-year post
termination non-competition provision with respect to the high school list
business.
In July 1994, Jan Stumacher entered into an employment agreement (the
"Stumacher Agreement") with American Student List Company, Inc. ("ASL"), the
Company's wholly-owned subsidiary, to serve as Executive Vice President of ASL
for a base annual salary of $425,000 per annum retroactive to March 1, 1994. The
Stumacher Agreement also provides for an incentive bonus equal to 8% of any
annual increase in the pre-bonus operating income (as defined) of the Company
over the preceding year. In the event the pre-bonus operating income of the
Company decreases for any given fiscal year, the amount used as the preceding
year's pre-bonus operating income in the calculation of the ensuing year's bonus
will be the highest pre-bonus operating income determined in any previous year.
Pursuant to the Stumacher Agreement, the Company granted Mr. Stumacher options
to purchase 90,000 shares at an exercise price of $18.00 per share, which
options vest incrementally from March 1996 through March 2001.
The initial term of the Stumacher Agreement expires on February 28, 2001
after which time it is renewable at Mr. Stumacher's option for up to three
additional one-year periods; provided, however, that ASL is not obligated to
renew for the second or third renewal period if the Company's pre-bonus
operating income for the fiscal years ending February 28, 2002 or 2003,
respectively, is less than that of the fiscal year ending February 28, 2001. The
Stumacher Agreement contains confidentiality provisions and a two-year post
termination non-competition provision.
Stock Option Plan
In 1992 the Board of Directors adopted, and the Company's stockholders
approved, the 1992 Stock Option Plan (the "Plan") covering 300,000 shares of the
Company's Common Stock pursuant to which employees, officers and directors of,
and consultants or advisers to, the Company and any subsidiary corporations are
eligible to receive incentive stock options ("incentive options") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and/or options that do not qualify as incentive options ("non-qualified
21
<PAGE>
options"). The Plan, which expires in May 2002, is administered by the Board of
Directors or a committee of the Board of Directors currently comprised of Martin
Lerner and Jan Stumacher.
Incentive options granted under the Plan are exercisable for a period of up
to 10 years from the date of grant at an exercise price which is not less than
the fair market value of the Common Stock on the date of the grant, except that
the term of an incentive option granted under the Plan to a stockholder owning
more than 10% of the outstanding voting power may not exceed five years and its
exercise price may not be less than 110% of the fair market value of the Common
Stock on the date of the grant. To the extent that the aggregate fair market
value, as of the date of grant, of the shares for which incentive options become
exercisable for the first time by an optionee during the calendar year exceeds
$100,000, the portion of such option which is in excess of the $100,000
limitation will be treated as a nonqualified option. Options granted under the
Plan to officers, directors or employees of the Company may be exercised only
while the optionee is employed or retained by the Company or within 90 days of
the date of termination of the employment relationship or directorship. However,
options which are exercisable at the time of termination by reason of death or
permanent disability of the optionee may be exercised within 12 months of the
date of termination of the employment relationship or directorship. Upon the
exercise of an option, payment may be made by cash or by any other means that
the Board of Directors or the committee determines.
As of March 6, 1996, options to purchase 187,005 shares have been granted
under the Plan at exercise prices ranging from $9.39 to $29.875 per share, with
a weighted average exercise price of $18.12 per share.
Limitation of Liability and Indemnification Matters
The Company's Certificate of Incorporation eliminates in certain
circumstances the liability of directors of the Company for monetary damages for
breach of their fiduciary duty as directors. This provision does not eliminate
the liability of a director (i) for breach of the director's duty of loyalty to
the Company or its stockholders; (ii) for acts or omissions by the director not
in good faith or which involve intentional misconduct or a knowing violation of
law; (iii) for willful or negligent declaration of an unlawful dividend, stock
purchase or redemption; or (iv) for transactions from which the director derived
an improper personal benefit. Such limitation of liability does not affect the
availability of equitable remedies such as injunctive relief or rescission.
The Company believes that it is the position of the Commission that insofar
as the foregoing provision may be invoked to disclaim liability for damages
arising under the Securities Act, the provision is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Company's By-laws provide that the Company shall indemnify its
directors, officers, employees or agents to the full extent permitted by the
Delaware General Corporation Law ("DGCL").
At present, there is no pending litigation or proceeding involving a
director, officer, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding which may result in a claim for indemnification.
22
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information concerning beneficial
ownership of Common Stock at March 6, 1996 and as adjusted to reflect the sale
of the 1,200,000 Shares offered hereby by the Selling Stockholders, by (i) each
person known by the Company to own beneficially 5% or more of the outstanding
shares of the Company's Common Stock; (ii) each director; (iii) each Named
Executive Officer; and (iv) all executive officers and directors of the Company
as a group and their percentage ownership of Common Stock after completion of
this offering:
<TABLE>
<CAPTION>
Shares Beneficially Shares Beneficially
Owned Before Owned After
Name and Address the Offering the Offering (1)
of Beneficial Owner ------------------------- Shares to --------------------------
or Selling Stockholder Number Percentage be Offered Number Percentage
---------------------- --------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
D.H. Blair Investment
Banking Corp. .................. 2,121,021(2) 46.69% 1,000,000 1,121,021(2) 24.68%
44 Wall Street
New York, NY 10005
Martin Lerner .................... 427,089(3) 9.30% 200,000 227,089(3) 4.94%
330 Old Country Road
Mineola, NY 11501
J. Morton Davis .................. 2,121,021(4) 46.69% 1,000,000(5) 1,121,021(4) 24.68%
44 Wall Street
New York, NY 10005
Jan Stumacher .................... 44,422(5) * -- 44,422(5) *
Kenton Wood ...................... -- -- -- -- --
Ben Ermini ....................... -- -- -- -- --
Philip Lubitz .................... 610 * -- 610 *
All directors and
executive officers
as a group (six persons) ....... 2,593,142 56.08% 1,200,000 1,393,142 30.13%
</TABLE>
- ---------
* Less than 1%.
(1) In the event the Underwriters exercise their over-allotment option, up to
180,000 additional Shares will be sold by Blair. If the over-allotment
option is exercised in full, Blair's percentage ownership after the
offering will be 20.71%. Mr. Lerner will not participate in the
over-allotment option.
(2) Includes 200,000 shares held by Blair Holdings.
(3) Includes (i) 3,564 shares held by his wife and (ii) 50,000 shares
underlying immediately exercisable options. See "Management."
(4) Represents shares owned by Blair and Blair Holdings. Mr. Davis is Chairman
and Chief Executive Officer of Blair and is the sole stockholder of Blair
Holdings.
(5) Includes (i) 1,072 shares held by his wife; (ii) 6,000 shares held in
custodial accounts for the benefit of his children; and (iii) 31,500 shares
underlying immediately exercisable options. See "Management." Mr. Stumacher
is a party to a non-recourse loan payable from the proceeds of the sale of
his securities at any time after September 30, 1996.
23
<PAGE>
DESCRIPTION OF CAPITAL STOCK
Common Stock
The Company's authorized capital stock consists of 10,000,000 shares of
Common Stock, $.01 par value. As of March 6, 1996, 4,542,403 shares of Common
Stock were outstanding.
Holders of shares of Common Stock are entitled to one vote at all meetings
of stockholders for each share held by them and are not entitled to cumulative
voting. Holders of Common Stock have no preemptive rights and have no other
rights to subscribe for additional shares of the Company nor does the Common
Stock have any conversion rights or rights of redemption. Holders of Common
Stock are entitled to receive ratably such dividends as may be declared by the
Board of Directors out of funds legally available therefor. See "Dividend
Policy." Upon liquidation, all holders of Common Stock are entitled to
participate pro rata in the assets of the Company available for distribution.
All of the outstanding shares of Common Stock are fully paid and nonassessable.
Transfer Agent
Continental Stock Transfer & Trust Company, 2 Broadway, New York, New York,
serves as Transfer Agent and Registrar for the Company's Common Stock.
Certain Provisions of Delaware Law
Section 203 of the DGCL is applicable to corporate takeovers in Delaware.
Subject to certain exceptions set forth therein, Section 203 of the DGCL
provides that a corporation shall not engage in any business combination with
any "interested stockholder" for a three-year period following the date that
such stockholder becomes an interested stockholder unless (a) prior to such
date, the board of directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder, (b) upon consummation of the transaction which resulted
in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction was commenced (excluding certain shares)
or (c) on or subsequent to such date, the business combination is approved by
the board of directors of the corporation and by the affirmative vote of at
least 662/3% of the outstanding voting stock which is not owned by the
interested stockholder. Except as specified therein, an interested stockholder
is defined to include any person that is (a) the owner of 15% or more of the
outstanding voting stock of the corporation, (b) an affiliate or associate of
the corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation, at any time within three years immediately prior to the
relevant date, and (c) the affiliates and associates of (a) or (b). Under
certain circumstances, Section 203 of the DGCL makes it more difficult for an
interested stockholder to effect various business combinations with a
corporation for a three-year period, although the stockholders may, by adopting
an amendment to the corporation's certificate of incorporation or by-laws, elect
not to be governed by this section, effective twelve months after adoption.
Neither the Certificate of Incorporation nor the By-Laws exclude the Company
from the restrictions imposed under Section 203 of the DGCL. It is anticipated
that the provisions of Section 203 of the DGCL may encourage companies
interested in acquiring the Company to negotiate in advance with the Board of
Directors of the Company since the stockholder approval requirement would be
avoided if a majority of the directors then in office approve either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder.
24
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
The Company has outstanding 4,542,403 shares of Common Stock. Upon
completion of this offering (assuming no exercise of the Underwriters'
over-allotment option), 3,241,738 of such shares will be freely transferable
without restriction or further registration under the Securities Act, unless
purchased by affiliates of the Company as that term is defined in Rule 144 under
the Securities Act. The remaining 1,300,665 shares outstanding (assuming no
exercise of the Underwriters' over-allotment option) will be "restricted
securities" or owned by affiliates within the meaning of Rule 144 and may not be
sold publicly unless they are registered under the Securities Act or are sold
pursuant to Rule 144 or other exemption from registration. All of such shares
are currently eligible for sale pursuant to Rule 144. Notwithstanding the
foregoing, the officers and directors of the Company and the Selling
Stockholders have agreed not to publicly sell any shares of the Company's Common
Stock without the prior consent of Oppenheimer & Co., Inc. for a period of 180
days after the date of this Prospectus, except for up to 180,000 shares which
may be sold by one of the Selling Stockholders pursuant to this Prospectus to
cover over-allotments, if any. The Company has also agreed not to issue shares
of Common Stock for a period of 180 days after the date hereof, subject to
certain exceptions, without the consent of Oppenheimer & Co., Inc. See
"Underwriting."
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated), including persons who may be deemed to be
"affiliates" of the Company as that term is defined under the Securities Act, is
entitled to sell within any three-month period a number of restricted shares
beneficially owned for at least two years that does not exceed the greater of
(i) 1% of the then outstanding shares of Common Stock (45,424 shares immediately
after the offering) or (ii) the average weekly trading volume in the Common
Stock during the four calendar weeks preceding such sale. Sales under Rule 144
are also subject to certain requirements as to the manner of sale, notice and
the availability of current public information about the Company. However, a
person who is not an affiliate and has beneficially owned such shares for at
least three years is entitled to sell such shares without regard to the volume
or other resale requirements.
The Company has reserved an aggregate of 300,000 shares of Common Stock for
issuance pursuant to its stock option plan. As of March 6, 1996, there were
options outstanding to purchase 187,005 shares. The Company has registered the
shares of Common Stock for issuance under the Plan under the Securities Act.
Shares of Common Stock issued under the Plan will be freely tradeable in the
public market, subject in the case of sale by affiliates to the amount, manner
of sale, notice and public information requirements of Rule 144. See "Management
- -- Stock Option Plan."
Sales of substantial amounts of Common Stock in the public market could
have a material adverse effect on the market price of the Common Stock and could
impair the Company's future ability to raise capital through the sale of its
equity securities. See "Underwriting."
25
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
among the Company, the Selling Stockholders and Oppenheimer & Co., Inc. and
Furman Selz LLC, as representatives (the "Representatives") of the Underwriters,
the Underwriters named below have severally agreed to purchase from the Selling
Stockholders, and the Selling Stockholders have agreed to sell to the several
Underwriters, the number of shares of Common Stock set forth opposite their
names below:
Number
Underwriters of Shares
---------- ---------
Oppenheimer & Co., Inc. ................................
Furman Selz LLC ........................................
---------
Total .......................................... 1,200,000
=========
The Underwriting Agreement provides that the obligations of the several
Underwriters thereunder are subject to approval of certain legal matters by
counsel and to various other conditions. The nature of the Underwriters'
obligations is such that they are committed to purchase all of the above shares
offered hereby if any are purchased.
The Underwriters propose to offer the shares of Common Stock directly to
the public at the offering price set forth on the cover page of this Prospectus,
and at such price less a concession of not in excess of $ per share to certain
securities dealers of which a concession not in excess of $ per share
may be reallowed to certain other securities dealers. After this offering,
the public offering price and other selling terms may be changed by the
Underwriters.
D.H. Blair Investment Banking Corp., one of the Selling Stockholders, has
granted to the Underwriters an option, exercisable within 30 days after the date
of this Prospectus, to purchase from such Selling Stockholder up to an aggregate
of 180,000 additional shares of Common Stock to cover over-allotments, if any,
at the public offering price less the underwriting discount set forth on the
cover page of this Prospectus. If the Underwriters exercise such over-allotment
option to purchase any of the 180,000 additional shares of Common Stock, the
Underwriters have severally agreed, subject to certain conditions, to purchase
approximately the same percentage thereof as the number of shares to be
purchased by each of them bears to the 1,200,000 shares offered hereby.
The officers and directors of the Company and the Selling Stockholders
beneficially owning 1,311,642 shares in the aggregate and options to purchase an
additional 158,150 shares after completion of this offering have agreed,
pursuant to lock-up agreements, that they will not publicly sell, transfer or
dispose of any shares of Common Stock of the Company for a period of 180 days
after the date of this Prospectus without the consent of Oppenheimer & Co.,
Inc.; provided, however, that Blair may sell up to 180,000 shares in connection
with the Underwriters' over-allotment option.
The Company has agreed not to offer for sale, sell, distribute or otherwise
dispose of, directly or indirectly, shares of Common Stock (or any securities
convertible into, exercisable for or exchangeable for such shares) for a period
of 180 days after the date of this Prospectus without the prior written consent
of Oppenheimer & Co., Inc.; provided, however, that the Company may issue shares
of Common Stock upon exercise of outstanding options or in connection with the
GeoDemX Agreement.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act, and to contribute to certain payments that the Underwriters may
be required to make in respect thereof.
The Underwriters have advised the Company that they do not intend to
confirm sales of the shares offered hereby to any account over which they
exercise discretionary authority.
26
<PAGE>
LEGAL MATTERS
The validity of the Common Stock offered hereby is being passed upon for
the Company and the Selling Stockholders by Bachner, Tally, Polevoy & Misher
LLP, 380 Madison Avenue, New York, New York 10017. Certain legal matters
relating to the offering will be passed upon for the Underwriters by Schulte
Roth & Zabel, 900 Third Avenue, New York, New York 10022.
EXPERTS
The consolidated balance sheets of the Company as of February 28, 1994 and
1995 and November 30, 1995 and the statements of earnings, stockholders' equity
and cash flows for each of the years in the three year period ended February 28,
1995 and for the nine month period ended November 30, 1995, have been included
herein in reliance on the report of Grant Thornton LLP, independent certified
public accountants, given on the authority of that firm as experts in accounting
and auditing.
27
<PAGE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference the following documents filed
with the Commission pursuant to the Exchange Act:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
February 28, 1995;
2. The Company's Quarterly Report on Form 10-Q for the period ended May
31, 1995;
3. The Company's Quarterly Report on Form 10-Q for the period ended
August 31, 1995;
4. The Company's Quarterly Report on Form 10-Q for the period ended
November 30, 1995;
5. The Company's Proxy Statement dated June 23, 1995;
6. The Company's Current Report on Form 8-K dated June 23, 1995.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof, and
prior to the termination of the offering made hereby, shall be deemed to be
incorporated by reference into this Prospectus. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
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 a copy of any documents incorporated by reference
herein (excluding exhibits to the documents so incorporated, unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates), free of charge, to each person to whom this
Prospectus is delivered, upon written or oral request to American List
Corporation, 330 Old Country Road, Mineola, New York 11501, Attention:
Controller; Telephone: (516) 248-6100.
28
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Certified Public
Accountants ................................................ F-2
Consolidated Balance Sheets
February 28, 1994 and 1995 and
November 30, 1995 .......................................... F-3
Consolidated Statements of Earnings
Year Ended February 28, 1993, 1994 and
1995, and the Nine Months Ended
November 30, 1994 (unaudited) and 1995 ..................... F-4
Consolidated Statement of Stockholders' Equity
Year Ended February 28, 1993, 1994
and 1995, and the Nine Months
Ended November 30, 1995 .................................... F-5
Consolidated Statements of Cash Flows
Year Ended February 28, 1993, 1994 and 1995,
and the Nine Months Ended November 30,
1994 (unaudited) and 1995 .................................. F-6
Notes to Consolidated Financial Statements ..................... F-7
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Stockholders
American List Corporation
We have audited the accompanying consolidated balance sheets of American
List Corporation and Subsidiaries as of November 30, 1995, February 28, 1995 and
1994, and the related consolidated statements of earnings, stockholders' equity
and cash flows for the nine months ended November 30, 1995 and for each of the
years in the three-year period ended February 28, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of American List
Corporation and Subsidiaries as of November 30, 1995, February 28, 1995 and
1994, and the consolidated results of their operations and their consolidated
cash flows for the nine months ended November 30, 1995 and for each of the years
in the three-year period ended February 28, 1995, in conformity with generally
accepted accounting principles.
GRANT THORNTON LLP
Melville, New York
January 16, 1996
F-2
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 28,
------------------------- November 30,
ASSETS 1994 1995 1995
----------- ----------- -----------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents ...................... $4,700,262 $3,196,634 $3,227,013
Marketable securities .......................... 5,668,423 7,351,410 8,143,211
Trade accounts receivable, net of allowance
for doubtful accounts of $90,000, $50,000
and $60,000, respectively ................... 2,938,516 4,393,107 4,310,980
Unamortized costs of lists ..................... 961,195 933,669 872,639
Prepaid income taxes ........................... -- -- 395,152
Prepaid expenses and other ..................... 65,478 37,042 70,761
----------- ----------- -----------
Total current assets ........................ 14,333,874 15,911,862 17,019,756
PROPERTY AND EQUIPMENT - AT COST
Furniture and fixtures ......................... 212,916 226,601 256,881
Computer equipment ............................. 585,254 642,745 987,429
Leasehold improvements ......................... 10,959 10,959 10,959
----------- ----------- -----------
809,129 880,305 1,255,269
Less accumulated depreciation .................. 601,769 690,427 812,232
----------- ----------- -----------
207,360 189,878 443,037
DEFERRED LICENSE COST, net of accumulated
amortization of $213,586 and
$465,672, respectively ........................... -- 3,125,873 2,873,787
UNAMORTIZED COSTS OF LISTS ......................... 822,713 654,402 475,877
OTHER ASSETS ....................................... 170,195 230,414 391,834
----------- ----------- -----------
$15,534,142 $20,112,429 $21,204,291
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES
Current portion of long-term debt ................ $ -- $ 414,569 $ 437,665
Accounts payable ................................. 132,417 97,653 259,460
Accrued pension and profit-sharing contributions . 186,513 192,049 151,000
Accrued salaries ................................. 540,414 363,441 439,272
Accrued expenses ................................. 22,145 179,125 150,948
Income taxes payable ............................. 915,596 170,337 --
Dividends payable ................................ 828,511 -- --
---------- ---------- ----------
Total current liabilities ................... 2,625,596 1,417,174 1,438,345
LONG-TERM DEBT ..................................... -- 2,324,890 1,901,244
COMMITMENTS
STOCKHOLDERS' EQUITY
Common stock, par value $.01 per share;
authorized 5,000,000 and 10,000,000 shares
in 1994 and 1995, respectively; issued
4,142,556, 4,560,013 and 4,541,703 shares,
respectively .................................. 41,426 45,600 45,417
Additional paid-in capital ....................... -- 6,913,311 6,466,642
Unrealized gain (loss) on marketable securities .. -- (11,833) 7,107
Retained earnings ................................ 12,867,120 9,423,287 11,353,170
Less: treasury stock at cost - 300 shares ........ -- -- (7,634)
----------- ----------- -----------
12,908,546 16,370,365 17,864,702
----------- ----------- -----------
$15,534,142 $20,112,429 $21,204,291
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Nine months ended
Year ended February 28, November 30,
----------------------------------------------- ----------------------------
1993 1994 1995 1994 1995
----------- ----------- ----------- ----------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues ................................... $10,108,463 $12,634,919 $15,494,219 $10,601,178 $13,221,531
----------- ----------- ----------- ----------- -----------
Costs and expenses
Cost of operations ....................... 1,984,965 1,992,093 2,200,784 1,635,193 2,025,687
Selling, general and
administrative expenses ............... 2,734,063 3,391,260 3,615,328 2,694,247 3,252,192
----------- ----------- ----------- ----------- -----------
4,719,028 5,383,353 5,816,112 4,329,440 5,277,879
----------- ----------- ----------- ----------- -----------
Operating income ...................... 5,389,435 7,251,566 9,678,107 6,271,738 7,943,652
Other income (expense)
Investment income ........................ 270,922 193,580 378,430 256,692 361,478
Interest expense -- -- (129,487) (78,109) (141,477)
----------- ----------- ----------- ----------- -----------
Earnings before provision
for income taxes .................... 5,660,357 7,445,146 9,927,050 6,450,321 8,163,653
Provision for income taxes ................. 2,148,000 2,871,000 3,751,000 2,491,000 3,045,000
----------- ----------- ----------- ----------- -----------
NET EARNINGS .......................... $3,512,357 $4,574,146 $6,176,050 $3,959,321 $5,118,653
========== ========== ========== ========== ==========
Net earnings per common share .............. $.77 $1.00 $1.36 $.87 $1.13
==== ===== ===== ==== =====
Weighted average shares outstanding ........ 4,556,881 4,556,881 4,557,445 4,557,810 4,542,742
========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
Years ended February 28, 1993, 1994 and 1995 and nine months ended November 30, 1995
Unrealized
Additional gain (loss) on
paid-in marketable Retained Treasury
Shares Amount capital securities earnings stock Total
------ ------ ------- ---------- -------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at March 1, 1992 ................ 2,761,732 $27,618 $11,146,400 $11,174,018
Net earnings ............................ -- -- 3,512,357 3,512,357
Cash dividends declared on
common stock - $.61
per share, as adjusted ............... -- -- (2,761,732) (2,761,732)
--------- ------- ----------- -----------
Balance at February 28, 1993 ............ 2,761,732 27,618 11,897,025 11,924,643
Net earnings ............................ -- -- 4,574,146 4,574,146
Cash dividends declared on
common stock - $.79
per share, as adjusted ............... -- -- (3,590,243) (3,590,243)
Issuance of common stock in connection
with the 3-for-2 stock split ......... 1,380,824 13,808 (13,808) --
--------- ------ ----------- -----------
Balance at February 28, 1994 ............ 4,142,556 41,426 12,867,120 12,908,546
Issuance of common stock in connec-
tion with 10% stock dividend ......... 414,157 4,141 $6,881,219 (6,885,360) --
Issuance of common stock in connec-
tion with exercise of stock options .. 3,300 33 32,092 -- 32,125
Unrealized loss on marketable securities -- -- -- $(11,833) -- (11,833)
Net earnings ............................ -- -- -- -- 6,176,050 6,176,050
Cash dividends declared on
common stock - $.60 per share ........ -- -- -- -- (2,734,523) (2,734,523)
--------- ------- ---------- ------ ----------- -----------
Balance at February 28, 1995 ............ 4,560,013 45,600 6,913,311 (11,833) 9,423,287 16,370,365
Issuance of common stock in connection
with exercise of stock options ....... 6,290 63 62,323 -- -- 62,386
Purchase of common stock for treasury ... -- -- -- -- -- $(516,872) (516,872)
Retirement of treasury stock ............ (24,600) (246) (508,992) -- -- 509,238 --
Unrealized gain on marketable securities -- -- -- 18,940 -- -- 18,940
Net earnings ............................ -- -- -- -- 5,118,653 -- 5,118,653
Cash dividends declared on
common stock - $.70 per share ....... -- -- -- -- (3,188,770) -- (3,188,770)
--------- ------- ---------- ------ ----------- ------- -----------
Balance at November 30, 1995 ............ 4,541,703 $45,417 $6,466,642 $7,107 $11,353,170 $(7,634) $17,864,702
========= ======= ========== ====== =========== ======= ===========
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
Year ended February 28, November 30,
--------------------------------------- -------------------------
1993 1994 1995 1994 1995
----------- ----------- ----------- ----------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net earnings ................................................. $ 3,512,357 $ 4,574,146 $ 6,176,050 $ 3,959,321 $ 5,118,653
Adjustments to reconcile net earnings to net cash
provided by operating activities
Depreciation ............................................ 118,586 92,288 88,658 65,115 121,805
Provision for losses on accounts receivable ............. 60,000 (60,210) (22,955) -- 10,000
Amortization of bond premiums ........................... 68,765 193,265 256,992 195,178 164,931
Amortization of deferred license cost ................... -- -- 213,586 131,124 252,086
Amortization of goodwill ................................ -- -- -- -- 13,068
Unrealized (gains) losses on marketable securities ...... (11,588) 52,329 -- -- --
Gain on sale of investments ............................. (21,661) (20,715) -- -- --
Changes in operating assets and liabilities,
net of acquisition in 1995
Accounts receivable ............................... (533,513) (30,321) (1,431,636) (244,337) 86,607
Unamortized costs of lists ........................ 66,656 276,158 195,837 240,729 239,555
Prepaid income taxes .............................. 223,017 -- -- (244,064) (395,152)
Prepaid expenses and other ........................ (26,915) 7,038 28,436 10,725 (27,719)
Other assets ...................................... (50,493) (10,002) (52,219) 9,780 (94,845)
Accounts payable .................................. 296 41,031 (34,764) 58,559 (45,681)
Accrued pension and profit-sharing contributions .. 22,977 14,489 5,536 (41,013) (41,049)
Accrued salaries .................................. (114,779) 277,613 (176,973) (118,851) 49,712
Accrued expenses .................................. 55,129 (55,107) 156,980 91,524 94,849
Income taxes payable .............................. 93,185 822,411 (745,259) (915,596) (170,337)
----------- ----------- ----------- ----------- -----------
Net cash provided by operating activities .. 3,462,019 6,174,413 4,658,269 3,198,194 5,376,483
----------- ----------- ----------- ----------- -----------
Cash flows from investing activities
Capital expenditures .............................. (40,650) (71,306) (71,176) (60,691) (105,672)
Sale of temporary investments, net ................ 426,281 1,147,626 -- -- --
Purchase of marketable securities ................. (2,264,779) (3,137,513) (1,959,812) (1,837,217) (927,642)
Acquisition of Subsidiary, net of cash acquired ... -- -- -- -- (69,534)
Proceeds from sale of marketable securities ....... 453,436 200,423 -- -- --
Deferred license costs ............................ -- -- (600,000) (600,000) --
----------- ----------- ----------- ----------- -----------
Net cash used in investing activities ...... (1,425,712) (1,860,770) (2,630,988) (2,497,908) (1,102,848)
----------- ----------- ----------- ----------- -----------
Cash flows from financing activities
Proceeds from issuance of common stock ............ -- -- 32,125 16,625 62,386
Cash dividends paid ............................... (2,761,732) (2,761,732) (3,563,034) (2,651,361) (3,188,770)
Acquisition of common stock for treasury .......... -- -- -- -- (516,872)
Payment of long-term debt ......................... -- -- -- -- (600,000)
----------- ----------- ----------- ----------- -----------
Net cash used in financing activities ...... (2,761,732) (2,761,732) (3,530,909) (2,634,736) (4,243,256)
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS .................... (725,425) 1,551,911 (1,503,628) (1,934,450) 30,379
Cash and cash equivalents at beginning of period ....... 3,873,776 3,148,351 4,700,262 4,700,262 3,196,634
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents at end of period ............. $ 3,148,351 $ 4,700,262 $ 3,196,634 $ 2,765,812 $ 3,227,013
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
American List Corporation ("ALC"), through its wholly owned subsidiary,
American Student List Company, Inc. ("ASL"), primarily develops, maintains and
markets databases of high school, college and pre-school through junior high
school students in the United States. ASL rents lists to its customers derived
from its database for use primarily in direct mail and marketing programs. ASL's
customers consist mainly of list brokers and advertising agencies, financial
institutions, retailers and educational institutions. ALC's wholly-owned
subsidiary, GeoDemX Corporation ("GeoDemX"), is engaged in the sale of software
that incorporates computerized map and electronic demographic data for the
generation of sales leads.
A summary of the significant accounting policies applied on a consistent
basis in the preparation of the accompanying consolidated financial statements
follows:
1. Principles Applied in Consolidation
The consolidated financial statements include the accounts of American
List Corporation and its wholly-owned subsidiaries, American Student List
Company, Inc. and GeoDemX Corporation (the "Company"). All significant
intercompany balances and transactions have been eliminated.
2. Depreciation and Amortization
Depreciation and amortization of property and equipment are provided
primarily on the straight-line basis over the estimated useful lives of the
respective assets, generally ranging from 3 to 7 years.
3. Revenue Recognition
Revenues from the sale of lists are recognized upon the shipment to
customers of lists on computerized labels, magnetic tape or computer
diskettes for a one-time usage. Additional billings are made by the Company
for additional usage by the customers.
4. Costs of Lists
Costs of purchased lists are amortized on a straight-line basis over
their estimated useful lives, generally one to five years. The Company
determines the useful lives of its lists based upon the estimated period of
time such lists are salable. The Company periodically reviews the
salability of its lists and, accordingly, the respective estimated useful
lives. Such reviews to date have not resulted in revised estimates of
useful lives of the lists.
5. Earnings and Dividends per Share
Earnings and dividends per share are based upon the weighted average
number of shares of common stock outstanding during the year, as
retroactively adjusted for the July 6, 1993 stock-split and the March 16,
1994 stock dividend. Common stock equivalents are not included in the
computation as they are not materially dilutive. Dividends per share have
been retroactively adjusted for the above stock split and stock dividend.
6. Income Taxes
Effective March 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
109"). Such adoption did not have a material effect on the Company's
consolidated financial position or results of operations. In accordance
with the provisions of SFAS No. 109, deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates in effect for the year
in which those temporary differences are expected to be recovered or
settled. Under SFAS No. 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date.
F-7
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE A - DESCRIPTION OF BUSINESS AND SUMMARY OF
ACCOUNTING POLICIES (continued)
7. Marketable Securities
Effective March 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" ("SFAS No. 115"). Such adoption did not have a
material effect on the Company's consolidated financial position or results
of operations. In accordance with the provisions of SFAS No. 115,
investments should be classified into three categories. Those securities
classified as "trading" or "available-for-sale" are reported at market
value. Debt securities are classified as "held to maturity" which are
reported at amortized cost. Cost is determined using the specific
identification methods. Unrealized gains and losses from securities
"available-for-sale" are reported as a separate component of stockholders'
equity, net of related tax effects. Prior to the adoption of SFAS No. 115,
unrealized losses were charged to operations.
8. Costs in Excess of the Fair Value of Net Assets Acquired
Costs in excess of the fair value of net assets acquired arising from
the acquisition of GeoDemX (Note H) are being amortized on a straight-line
basis over a period of five years. In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121
("SFAS No. 121") that established accounting standards for the impairment
of long-lived assets, certain intangibles and goodwill related to those
assets to be held and used, and for long-lived assets and certain
identifiable intangibles to be disposed of. In accordance with SFAS No.
121, it is the Company's policy to periodically review and evaluate whether
there has been any permanent impairment in the value of recorded amounts.
Factors considered in the valuation include current operating results,
trends and anticipated undiscounted future cash flows.
9. Statement of Cash Flows
The Company considers all highly liquid debt instruments purchased
with an original maturity of three months or less to be cash equivalents.
The Company paid income taxes for the years ended February 28, 1993, 1994
and 1995 and the nine months ended November 30, 1995 of $1,880,203,
$2,065,163, $4,553,686 and $3,636,541, respectively. During fiscal 1995,
the Company had noncash investing and financing activities in connection
with the acquisition of a licensing agreement of approximately $3,339,000.
10. Financial Instruments and Credit Risk
Financial instruments which potentially subject the Company to
concentrations of credit risk are primarily cash and cash equivalents,
marketable securities and accounts receivable. The Company places its
investments in highly rated financial institutions, United States Treasury
bills, investment grade short-term debt instruments and state and local
municipalities, while limiting the amount of credit exposure to any one
entity. Concentrations of credit risk with respect to accounts receivable
are limited due to the large number of customers, generally short payment
terms, and their dispersion across geographic areas.
F-8
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE B - MARKETABLE SECURITIES
The amortized cost, unrealized gains and losses, and market values of the
Company's held-to-maturity and available-for-sale securities held at November
30, 1995 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Market
cost gains losses value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Held to maturity, maturing in less
than one year
State and municipal bonds ....... $ 6,782,120 $ 3,992 $ (4,112) $ 6,782,000
U.S. Treasury bills ............. 500,460 2,874 503,334
Certificates of deposit ......... 281,955 (1,283) 280,672
----------- ----------- ----------- -----------
$ 7,564,535 $ 6,866 $ (5,395) $ 7,566,006
=========== =========== =========== ===========
Available for sale
Equity securities ................ $ 177,289 $ 9,066 $ (36,095) $ 150,260
Government income securities ..... 462,190 (33,774) 428,416
----------- ----------- ----------- -----------
$ 639,479 $ 9,066 $ (69,869) $ 578,676
=========== =========== =========== ===========
</TABLE>
The amortized cost, unrealized gains and losses, and market values of the
Company's held-to-maturity and available-for-sale securities held at February
28, 1995 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Market
cost gains losses value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Held to maturity, maturing in less
than one year
State and municipal bonds ....... $ 6,214,203 $ 3,566 $ (15,947) $ 6,201,822
U.S. Treasury bills ............. 613,840 14,362 628,202
----------- ----------- ----------- -----------
$ 6,828,043 $ 17,928 $ (15,947) $ 6,830,024
=========== =========== =========== ===========
Available for sale
Equity securities ................ $ 173,293 $ 803 $ (43,763) $ 130,333
Government income securities ..... 439,968 (46,934) 393,034
----------- ----------- ----------- -----------
$ 613,261 $ 803 $ (90,697) $ 523,367
=========== =========== =========== ===========
</TABLE>
As a result of changes in market value of the available-for-sale security
portfolio, a valuation adjustment of $(11,833) and $7,107, net of deferred
taxes, is recorded as a separate component of stockholders' equity at February
28, 1995 and November 30, 1995, respectively.
The amortized cost, unrealized gains and losses, and market values of the
Company's held-to-maturity and available-for-sale securities at February 28,
1994 are summarized as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized unrealized unrealized Market
cost gains losses value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Held to maturity
State and municipal bonds ....... $5,160,105 $ 2,892 $ (11,625) $5,151,372
========== ========== ========== ==========
Available for sale
Equity securities ............... $ 167,867 $ 1,009 $ (47,243) $ 121,633
Government income securities .... 410,512 -- (23,827) 386,685
---------- ---------- ---------- ----------
$ 578,379 $ 1,009 $ (71,070) $ 508,318
========== ========== ========== ==========
</TABLE>
F-9
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE C - INCOME TAXES
The Company files a consolidated Federal income tax return.
Income tax expense is comprised of the following elements:
<TABLE>
<CAPTION>
February 28, November 30,
------------------------------------------- ----------------------------
1993 1994 1995 1994 1995
----------- ----------- ----------- ----------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Current
Federal ........ $1,794,000 $2,369,000 $3,126,000 $2,081,000 $2,552,000
State .......... 354,000 502,000 625,000 410,000 493,000
---------- ---------- ---------- ---------- ----------
$2,148,000 $2,871,000 $3,751,000 $2,491,000 $3,045,000
========== ========== ========== ========== ==========
</TABLE>
The difference between these amounts and amounts computed by applying the
statutory Federal income tax rate to earnings before taxes is as follows:
<TABLE>
<CAPTION>
Nine months ended
Year ended February 28, November 30,
-------------------------------------------------------------- ---------------------------------------
1993 1994 1995 1994 1995
----------------- ---------------- ----------------- ---------------- -----------------
(unaudited)
% of % of % of % of % of
pretax pretax pretax pretax pretax
Amount income Amount income Amount income Amount income Amount income
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Computed "expected"
tax expense ........ $1,924,500 34.0% $2,531,350 34.0% $3,375,200 34.0% $2,193,100 34.0% $2,775,600 34.0%
Increases
(reductions) in
taxes resulting
from
State income
taxes, net of
Federal income
tax benefit ... 233,600 4.1 331,320 4.5 412,500 4.2 270,600 4.2 325,400 4.0
Other ........... (10,100) (.2) 8,330 .1 (36,700) (.4) 27,300 .4 (56,000) (.7)
---------- ---- ---------- ---- ---------- ---- ---------- ---- ---------- ----
Actual tax expense ... $2,148,000 37.9% $2,871,000 38.6% $3,751,000 37.8% $2,491,000 38.6% $3,045,000 37.3%
========== ==== ========== ==== ========== ==== ========== ==== ========== ====
</TABLE>
NOTE D - PENSION AND PROFIT-SHARING PLANS
Effective March 1, 1974, the Company adopted both pension and
profit-sharing plans covering all full-time employees, as defined, which provide
for death and retirement benefits. The noncontributory plans are funded through
the purchase of insurance policies and contributions to trust funds.
Contributions and trust earnings of the plans are credited to the account
of each employee. The plans are defined contribution plans and, accordingly,
individual benefits are limited to the balance of the trust funds and amounts
payable under the insurance policies.
Pension and profit-sharing expenses have been charged as follows:
<TABLE>
<CAPTION>
Nine months ended
Year ended February 28, November 30,
------------------------------------- ----------------------------
1993 1994 1995 1994 1995
-------- -------- -------- -------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Pension expense ................ $158,006 $171,327 $174,222 $132,346 $132,783
Profit-sharing expense ......... 18,000 20,000 23,000 17,250 18,750
-------- -------- -------- -------- --------
$176,006 $191,327 $197,222 $149,596 $151,533
======== ======== ======== ======== ========
</TABLE>
F-10
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE E - LICENSE AGREEMENT
Effective July 1, 1994, the Company entered into an exclusive licensing
agreement, whereby the Company has obtained a ten-year license to use, reproduce
and distribute a defined segment of the licensor's lists and to use their
sources and customer list to compile and market the Company's own lists. The
licensor will have the nonexclusive right to broker the licensed list to third
parties in return for a commission.
As consideration for the granting of the license, the Company will pay a
total of $4,200,000. The license fee is payable in three annual installments of
$600,000 which began July 1994; three annual installments of $500,000 beginning
July 1997; three annual installments of $250,000 beginning July 2000; and a
final installment of $150,000 in July 2003.
The Company has recorded the cost and related obligation for the license,
net of imputed interest at 7.25%, which approximated $3.3 million. The net cost
of the license is being amortized on a straight-line basis over the ten-year
term of the license agreement.
NOTE F - COMMITMENTS
The Company currently occupies an office and computer facility under an
operating lease which commenced June 15, 1991 and expires June 15, 2001. The
lease currently provides for an annual base rent of $235,952 which will increase
ratably over the term of the lease to a maximum of $299,191. The lease contains
an escalation clause relating to increases in real estate taxes.
The approximate minimum rental commitments under these operating leases are
as follows:
Twelve months ending November 30,
1996 ............................................... $ 264,000
1997 ............................................... 271,000
1998 ............................................... 279,000
1999 ............................................... 287,000
2000 ............................................... 295,000
2001 ............................................... 159,000
-----------
Total minimum payments required ....................... $ 1,555,000
===========
Total rent expense for the years ended February 28, 1993, 1994 and 1995 and
the nine months ended November 30, 1994 and 1995, including escalation payments,
amounted to approximately $252,000, $268,000, $288,000, $205,000 and $224,000,
respectively.
Pursuant to an employment agreement expiring in March 2001, the Company is
obligated to pay an executive a base annual salary of $425,000, plus an
incentive bonus based on increases in operating income (as defined).
NOTE G - STOCKHOLDERS' EQUITY
In May 1992, the Company adopted the 1992 Stock Option Plan (the "Plan")
which provided for the issuance of options to purchase up to 82,500 shares, as
adjusted, of common stock. The Plan provides for the issuance of both incentive
stock options to purchase the Company's common stock at not less than fair
market value on the date of the grant and nonqualified options to purchase
shares at exercise prices determined by the Board of Directors. On July 17,
1995, the Company's stockholders approved an amendment to the Plan increasing
the number of options available for issuance to 300,000 shares.
F-11
<PAGE>
AMERICAN LIST CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
February 28, 1993, 1994 and 1995 and November 30, 1995
(Information with respect to the nine-month period ended
November 30, 1994 is unaudited)
NOTE G - STOCKHOLDERS' EQUITY (continued)
A summary of stock option activity related to the Company's 1992 Stock
Option Plan is as follows:
<TABLE>
<CAPTION>
Incentive Nonqualified
Stock Options Stock Options
-------------------------------- ------------------------------
Price Range Shares Price Range Shares
---------------- -------- ----------- ------
<S> <C> <C> <C> <C> <C>
Outstanding at March 1, 1992
Granted ................................ $ 9.39 - $10.08 23,595
---------------- --------
Outstanding at February 28, 1993 ....... 9.39 - 10.08 23,595
Granted ................................ 11.89 15,675 $11.89 1,650
Expired ................................ 10.08 (825)
---------------- -------- ------ -----
Outstanding at February 28, 1994 ....... 9.39 - 11.89 38,445 11.89 1,650
Granted ................................ 18.00 100,000
Exercised .............................. 9.39 - 10.08 (3,300)
---------------- -------- ------ -----
Outstanding at February 28, 1995 ....... 9.39 - 18.00 135,145 11.89 1,650
Granted ................................ 21.00 - 29.38 56,000
Exercised .............................. 9.39 - 11.89 (6,290)
---------------- -------- ------ -----
Outstanding at November 30, 1995 ....... $ 9.39 - $29.38 184,855 $11.89 1,650
================ ======== ====== =====
Exercisable at November 30, 1995 ....... $ 9.39 - 29.38 94,855 $11.89 1,650
================ ======== ====== =====
</TABLE>
On March 22, 1995, the Board of Directors authorized the repurchase of up
to 200,000 shares of the Company's common stock. On April 7 and November 16,
1995, the Company purchased 24,600 and 300 shares of its common stock for
$509,238 and $7,634, respectively.
NOTE H - ACQUISITION OF GEODEMX
On June 22, 1995, the Company acquired substantially all of the operating
assets and liabilities of GeoDemX for nominal consideration. The purchase
agreement provides for, among other things, additional consideration to be paid
based on a percentage of GeoDemX's annual pretax earnings through February 28,
1999. Such additional consideration shall be paid through the issuance of the
Company's common stock. However, the sellers may elect to receive up to 50% of
such additional consideration in cash. The excess of the costs over the net
assets acquired, approximating $125,000, has been included in other assets.
Historical pro forma information is not presented as the pro forma results would
not be materially different from those of the Company.
At the date of acquisition, the Company set forth certain conditions and
expectations for the GeoDemX business. Ultimately, the Company may decide to
dispose of GeoDemX should these conditions and expectations not materialize.
Under the Company's current plan, the net assets of GeoDemX (approximately
$400,000 at November 30, 1995) are estimated to be fully recoverable.
F-12
<PAGE>
================================================================================
No dealer, salesman or other person has been authorized to give any
information or to make any representations in connection with this offering
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, any Underwriter or Selling Stockholder or by any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than the registered securities to which it
relates or an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither the delivery of this
Prospectus nor any sale or distribution made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date.
------------
TABLE OF CONTENTS
Page
---
Available Information ......................................... 2
Prospectus Summary ............................................ 3
Risk Factors .................................................. 6
Price Range of Common Stock ................................... 8
Dividend Policy ............................................... 8
Capitalization ................................................ 9
Selected Consolidated
Financial Information ....................................... 10
Management's Discussion and
Analysis of Financial
Condition and Results of Operations ......................... 11
Business ...................................................... 14
Management .................................................... 19
Principal and Selling Stockholders ............................ 23
Description of Capital Stock .................................. 25
Shares Eligible for Future Sale ............................... 26
Underwriting .................................................. 27
Legal Matters ................................................. 28
Experts ....................................................... 28
Incorporation of Certain
Information by Reference.................................... 29
================================================================================
================================================================================
1,200,000 Shares
[LOGO] American List Corporation
Common Stock
---------------------
PROSPECTUS
--------------------------
Oppenheimer & Co., Inc.
Furman Selz
, 1996
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuances and Distribution
SEC Filing Fee ............................... $ 13,740.52
NASD Filing Fee .............................. 4,484.75
Printing Expenses ............................ 85,000.00
Accountants' Fees and Expenses................ 50,000.00
Legal Fees and Expenses....................... 185,000.00
Blue Sky Fees and Expenses.................... 15,000.00
Miscellaneous................................. 60,000.00
-----------
Total......................................... $413,225.27
===========
Item 15. Indemnification of Directors and Officers.
The Registrant is a Delaware corporation. Section 145 of the Delaware
General Corporation Law (the "DGCL") generally provides that a corporation is
empowered to indemnify any person who is made a party to any threatened, pending
or completed action, suit or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of the corporation or is or was serving,
at the request of the corporation, in any capacities of another corporation or
other enterprise, if such director, officer, employee or agent acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. This
statute describes in detail the right of the Registrant to indemnify any such
person. Reference is made to Article Twelfth of the Registrant's Certificate of
Incorporation and Article V of the Registrant's By-Laws, which provide for
indemnification by the Registrant in the manner and to the full extent permitted
by Delaware law.
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
1.1 Form of Underwriting Agreement
5.1 Opinion of Bachner, Tally, Polevoy & Misher LLP.
23.1 Consent of Grant Thornton LLP.*
23.2 Consent of Bachner, Tally, Polevoy & Misher LLP
(included in Exhibit 5.1).
- ----------
* Previously filed.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of the registration
statement as of the time it was declared effective.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-1
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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-2
<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 or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Village of Mineola, State of New York, on this
6th day of March, 1996.
AMERICAN LIST CORPORATION
By: /s/ Martin Lerner
----------------------------------------
Martin Lerner, President and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Martin Lerner Chairman of the Board, March 6, 1996
- ---------------------- President and Treasurer
Martin Lerner (Principal Executive, Financial
and Accounting Officer)
* Vice President, Secretary March 6, 1996
- ---------------------
Jan Stumacher and Director
* Director March 6, 1996
- ---------------------
J. Morton Davis
* Director March 6, 1996
- ---------------------
Kenton Wood
* Director March 6, 1996
- ---------------------
Ben Ermini
* Director March 6, 1996
- ---------------------
Philip Lubitz
* By: /s/ Martin Lerner
--------------------
Martin Lerner
Attorney-in-fact
II-3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
1.1 Form of Underwriting Agreement
5.1 Opinion of Bachner, Tally, Polevoy & Misher LLP.
23.1 Consent of Grant Thornton LLP.*
23.2 Consent of Bachner, Tally, Polevoy & Misher LLP
(included in Exhibit 5.1).
- ----------
* Previously filed.
1,200,000 Shares
AMERICAN LIST CORPORATION
Common Stock
UNDERWRITING AGREEMENT
[ ] , 1996
Oppenheimer & Co., Inc.
Furman Selz
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
On behalf of the Several
Underwriters named on
Schedule I attached hereto.
Ladies and Gentlemen:
Certain stockholders of American List Corporation, a Delaware corporation
(the "Company") named on Schedule II to this Agreement (the "Selling
Stockholders") propose to sell to you and the other underwriters named on
Schedule I to this Agreement (the "Underwriters"), for whom you are acting as
Representatives, an aggregate of 1,200,000 shares (the "Firm Shares") of the
Company's Common Stock, $0.01 par value (the "Common Stock"). In addition, one
of the Selling Stockholders, named on Schedule III to this Agreement (the
"Option Selling Stockholder") proposes to grant to the Underwriters an option to
purchase up to an additional 180,000 shares (the "Option Shares") of Common
Stock from such Option Selling Stockholder for the purpose of covering
over-allotments in connection with the sale of the Firm Shares. The Firm Shares
and the Option Shares are together called the "Shares."
1. Sale and Purchase of the Shares. On the basis of the representations,
warranties and agreements contained in, and subject to the terms and conditions
of, this Agreement:
(a) The Selling Stockholders agree, severally and not jointly, to sell
<PAGE>
to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase, at $[ ] per share (the "Initial
Price"), the number of Firm Shares (adjusted by the Representatives to
eliminate fractions) which bears the same proportion to the total number of
Firm Shares to be sold by the Selling Stockholders as the number of Firm
Shares set forth opposite the name of such Underwriter on Schedule I to
this Agreement bears to the total number of Firm Shares to be sold by the
Selling Stockholders.
(b) The Option Selling Stockholder grants to the several Underwriters
an option to purchase, severally and not jointly, all or any part of the
Option Shares at the Initial Price. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage (adjusted by the
Representatives to eliminate fractions) of the total number of Option
Shares to be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised only to cover
over-allotments in the sales of the Firm Shares by the Underwriters and may
be exercised in whole or in part at any time on or before 12:00 noon, New
York City time, on the business day before the Firm Shares Closing Date (as
defined below), and only once thereafter within 30 days after the date of
this Agreement, in each case upon written or telegraphic notice, or verbal
or telephonic notice confirmed by written or telegraphic notice, by the
Representatives to the Option Selling Stockholder no later than 12:00 noon,
New York City time, on the business day before the Firm Shares Closing Date
or at least two business days before the Option Shares Closing Date (as
defined below), as the case may be, setting forth the number of Option
Shares to be purchased and the time and date (if other than the Firm Shares
Closing Date) of such purchase.
2. Delivery and Payment. Delivery of the certificates for the Firm Shares
shall be made by the Custodian (as hereinafter defined) on behalf of the Selling
Stockholders to the Representatives for the respective accounts of the
Underwriters, and payment of the purchase price by certified or official bank
check or checks payable in New York Clearing House (next day) funds to the
Custodian, shall take place at the offices of Oppenheimer & Co., Inc., at
Oppenheimer Tower, World Financial Center, New York, New York 10281, at 10:00
a.m., New York City time, on the third business day following the date of this
Agreement, provided, however, that if the Shares sold hereunder are priced and
this Agreement is entered into after 4:30 p.m., New York City time, on any
business day, payment and delivery in respect of the Firm Shares shall take
place on the fourth business day following the date of this Agreement; in either
case unless another time shall be agreed upon by the Selling Stockholders and
the Representatives (such time and date of delivery and payment are called the
"Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised,
delivery of the certificates for the Option Shares shall be made by the
Custodian to the Representatives for the respective accounts of the Underwriters
and payment of the purchase price by certified or official bank check or checks
payable in New York Clearing House (next day) funds to the Custodian shall take
place at the offices of Oppenheimer & Co., Inc. specified above at the time and
on the date (which may be the same date as, but in no event shall be earlier
than, the Firm Shares Closing Date) specified in the notice referred to in
Section 1(b) (such time and date of delivery and payment are called the "Option
Shares Closing Date"). The Firm Shares Closing Date and the Option Shares
Closing Date are called, individually, a "Closing Date" and, together, the
"Closing Dates."
-2-
<PAGE>
Certificates evidencing the Shares shall be registered in such names and
shall be in such denominations as the Representatives shall request at least two
full business days before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the options, as described in Section
l(b), and shall be made available to the Representatives for checking and
packaging at such place as is designated by the Representatives, on the business
day before the Firm Shares Closing Date (or the Option Shares Closing Date in
the case of the Option Shares).
3. Registration Statement and Prospectus; Public Offering. The Company has
prepared in conformity with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the published rules and regulations
thereunder (the "Rules") adopted by the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-00545), including a
preliminary prospectus relating to the Shares, and has filed with the Commission
the Registration Statement (as hereinafter defined) and such amendments thereof
as may have been required to the date of this Agreement. Copies of such
Registration Statement (including all amendments thereof) and of the related
preliminary prospectus have heretofore been delivered by the Company to you. The
term "preliminary prospectus" means the preliminary prospectus (as described in
Rule 430 of the Rules) included at any time as a part of the Registration
Statement or filed with the Commission by the Company with the consent of the
Representatives pursuant to Rule 424(a) of the Rules, including all information
incorporated by reference therein. The Registration Statement, as amended at the
time and on the date it becomes effective (the "Effective Date"), including
information incorporated by reference therein and all exhibits and information,
if any, deemed to be part of the Registration Statement pursuant to Rule 424(b)
and Rule 430A of the Rules, is called the "Registration Statement." The term
"Prospectus" means the prospectus, including all information incorporated by
reference therein in the form first used to confirm sales of the Shares (whether
such prospectus was included in the Registration Statement at the time of
effectiveness or was subsequently filed with the Commission pursuant to Rule
424(b) of the Rules). If the Company files a registration statement to register
a portion of the Shares and relies on Rule 462(b) for such registration
statement to become effective upon filing with the Commission (the "Rule 462(b)
Registration Statement"), then any reference to the "Registration Statement"
herein shall be deemed to include both the registration statement referred to
above (No. 333-00545) and the Rule 462(b) Registration Statement, as each such
registration statement may be amended pursuant to the Securities Act.
The Company and the Selling Stockholders understand that the Underwriters
propose to make a public offering of the Shares, as set forth in and pursuant to
the Prospectus, as soon after the Effective Date and the date of this Agreement
as the Representatives deem advisable. The Company and the Selling Stockholders
hereby confirm that the Underwriters and dealers have been authorized to
distribute or cause to be distributed each preliminary prospectus and are
authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Underwriter as follows:
-3-
<PAGE>
(a) On the Effective Date, the Registration Statement and all other
registration statements and reports filed with the Commission by the
Company complied, and on the date of the Prospectus, on the date any
post-effective amendment to the Registration Statement shall become
effective, on the date any supplement or amendment to the Prospectus is
filed with the Commission, at all times that a prospectus must be delivered
by the Underwriters pursuant to the Securities Act and on each Closing
Date, the Registration Statement and the Prospectus (and any amendment
thereof or supplement thereto) and all other registration statements and
reports filed with the Commission by the Company will comply, in all
material respects, with the applicable provisions of the Securities Act and
the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder; the Registration Statement did not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and on the other dates referred to
above neither the Registration Statement nor the Prospectus, nor any
amendment thereof or supplement thereto, will contain any untrue statement
of a material fact or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. When any related preliminary prospectus was first filed with
the Commission (whether filed as part of the Registration Statement or any
amendment thereto or pursuant to Rule 424(a) of the Rules) and when any
amendment thereof or supplement thereto was first filed with the
Commission, such preliminary prospectus, as amended or supplemented,
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. Notwithstanding the foregoing, the Company and the Selling
Stockholders make no representation or warranty as to the last paragraph of
the cover page of the Prospectus, the paragraph with respect to
stabilization on the inside front cover page of the Prospectus and the
statements contained under the caption "Underwriting" in the Prospectus (to
the extent such statements relate to the Underwriters). The Company and
each of the Selling Stockholders acknowledge that the statements referred
to in the previous sentence constitute the only information furnished in
writing by the Representatives on behalf of the several Underwriters
specifically for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. The documents incorporated by reference in
the Registration Statement and the Prospectus, when they were first filed
with the Commission, complied in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations of the
Commission thereunder and any document filed under the Exchange Act after
the Effective Date of the Registration Statement, the date of the
preliminary prospectus or the date of the Prospectus, as the case may be,
which is incorporated therein by reference will, when they are filed with
the Commission, comply in all material respects with the applicable
provisions of the Exchange Act and the rules and regulations of the
Commission thereunder.
(b) All contracts and other documents required to be filed as exhibits
to the Registration Statement have been filed with the Commission or
incorporated by reference as exhibits to the Registration Statement.
-4-
<PAGE>
(c) The consolidated financial statements of the Company (including
all notes and schedules thereto) included in the Registration Statement and
the Prospectus comply as to form in all material respects with the
Securities Act and the Exchange Act and present fairly on a consolidated
basis the financial position, the results of operations and cash flows and
the stockholders' equity and the other information purported to be shown
therein of the Company at the respective dates and for the respective
periods to which they apply; and such financial statements have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such periods have been
made; and the other financial and statistical information and the
supporting schedules included or incorporated by reference in the
Prospectus and in the Registration Statement present fairly, in all
material respects, the information required to be stated therein.
(d) Grant Thornton LLP, whose reports are filed with the Commission as
a part of the Registration Statement, are, and during the periods covered
by their reports were, independent public accountants as required by the
Securities Act and the Rules.
(e) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
Except for GeoDemX Corporation, a corporation organized under the laws of
the State of Michigan, and American Student List Company, Inc., a
corporation organized under the laws of the State of New York
(collectively, the "Subsidiaries"), the Company has no subsidiary or
subsidiaries and does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business organization.
Each of the Subsidiaries has been duly organized and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries is duly qualified
and in good standing as a foreign corporation in each jurisdiction in which
the character or location of its assets or properties (owned, leased or
licensed) or the nature of its business makes such qualification necessary,
except for such jurisdictions where the failure to so qualify would not
have a material adverse effect on the assets or properties, business,
results of operations, prospects or condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole. Except as disclosed in
the Registration Statement and the Prospectus, neither the Company nor any
of its Subsidiaries owns, leases or licenses any asset or property or
conducts any business outside the United States of America. Each of the
Company and its Subsidiaries has all requisite power and authority, and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits of and from all governmental or regulatory bodies,
or any other person or entity, to own, lease and license its assets and
properties and conduct its businesses as now being conducted and as
described in the Registration Statement and the Prospectus, except for such
authorizations, approvals, consents, orders, licenses, certificates and
permits the failure to so obtain would not have a material adverse effect
upon the assets or properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole; no such authorization, approval, consent, order, license,
certificate or permit contains a materially burdensome restriction other
than as disclosed in the Registration Statement and the Prospectus; and the
-5-
<PAGE>
Company has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses, certificates and
permits, to enter into, deliver and perform this Agreement (except as may
be required under the Securities Act and state and foreign Blue Sky laws).
(f) Neither the Commission nor the Blue Sky or securities authorities
of any jurisdiction has issued an order suspending the effectiveness of the
Registration Statement, preventing or suspending the use of any preliminary
prospectus, the Prospectus, the Registration Statement, or any amendment or
supplement thereto, refusing to permit the effectiveness of the
Registration Statement or suspending the registration or qualification of
the Shares, nor has any of such authorities instituted or threatened to
institute any proceedings with respect to such an order in any jurisdiction
in which the Shares are to be sold.
(g) Each of the Company and its Subsidiaries owns, or possesses
adequate and enforceable rights to use, all trademarks, trademark
applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively, "Intangibles") necessary for the conduct of its
business as described in the Registration Statement and the Prospectus.
Neither the Company nor any Subsidiary has received any notice of, or to
its best knowledge is aware of, any infringement of or conflict with
asserted rights of others with respect to any Intangibles which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole.
(h) Each of the Company and its Subsidiaries has good title to each of
the items of real and personal property which are reflected in the
financial statements referred to in Section 4(c) or are referred to in the
Registration Statement and the Prospectus as being owned by it and valid
and enforceable leasehold interests in each of the items of real and
personal property which are referred to in the Registration Statement and
the Prospectus as being leased by it, in each case free and clear of all
liens, encumbrances, claims, security interests and defects, other than
those described in the Registration Statement and the Prospectus and those
which do not and will not have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole.
(i) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board,
pending or, to the best knowledge of the Company, threatened (and the
Company does not know of any basis therefor) against, or involving the
assets, properties or business of, the Company or any of its Subsidiaries
which would materially adversely affect the value or the operation of any
-6-
<PAGE>
such assets or properties or the business, results of operations, prospects
or condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, which would prevent the consummation of the transactions
contemplated by this Agreement or is required to be disclosed in the
Prospectus.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the assets
or properties, business, results of operations, prospects or condition
(financial or otherwise), of the Company or any of its Subsidiaries,
whether or not arising from transactions in the ordinary course of
business; (ii) neither the Company nor any of its Subsidiaries has
sustained any material loss or interference with its assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
hurricane, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or legislative or other governmental
action, order or decree; and (iii) and since the date of the latest balance
sheet included in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor any of its Subsidiaries has (A)
issued any securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except such liabilities or obligations
incurred in the ordinary course of business, (B) entered into any
transaction not in the ordinary course of business or (C) declared or paid
any dividend, other than its regular quarterly dividend, or made any
distribution on any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any shares of
its stock or other securities.
(k) There is no document or contract of a character required to be
listed as an exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended February 28, 1995 (the "1995 10K") which is not described
or filed as required. Each agreement listed as an exhibit to the 1995 10K
is in full force and effect and is valid and enforceable by and against the
Company or one or more of its Subsidiaries, as the case may be, in
accordance with its terms, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto. Neither the Company
nor any of its Subsidiaries, nor, to the best knowledge of the Company, any
other party is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement, and no event has
occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event would have a material
adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole. No default exists, and no event has
occurred which with notice or lapse of time or both would constitute a
default, in the due performance and observance of any term, covenant or
condition, by the Company or any of its Subsidiaries, of any other
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which it or its properties or business may be bound or
affected which default or event would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as whole.
(l) Neither the Company nor any of its Subsidiaries is in violation of
any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation would have a material adverse
-7-
<PAGE>
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
(m) Neither the execution, delivery and performance of this Agreement
by the Company nor the consummation of any of the transactions contemplated
hereby (including, without limitation, the sale by the Selling Stockholders
of the Shares) will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets
of the Company or any of its Subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries or any of its properties or businesses
is bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation, applicable to the Company or any of its
Subsidiaries or violate any provision of the Articles of Incorporation or
By-laws of the Company, except for such consents or waivers which have
already been obtained and are in full force and effect.
(n) The Company has an authorized and outstanding capital stock as set
forth under the captions "Capitalization" and "Description of Capital
Stock" in the Prospectus. All of the outstanding shares of the Company's
Common Stock, $0.01 par value (the "Common Stock") have been duly and
validly issued and are fully paid and nonassessable and none of them was
issued in violation of any preemptive or other similar right. Except as
disclosed in the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance of, and
there is no commitment, plan or arrangement to issue, any share of stock of
the Company, or any security convertible into, or exercisable or
exchangeable for, such stock. The Common Stock and the Shares conform in
all material respects to all statements in relation thereto contained in
the Registration Statement and the Prospectus.
(o) Except as described in the Registration Statement and the
Prospectus, no holder of any security of the Company has the right to have
any security owned by such holder included in the Registration Statement or
to demand registration of any security owned by such holder during the
period ending 180 days after the date of this Agreement. Each Stockholder
listed on Schedule IV hereto, director and executive officer of the Company
has delivered to the Representatives his or her enforceable written
agreement that, he or she will not, for a period of 180 days after the date
of this Agreement, directly or indirectly, offer, sell (including "short
sales"), assign, encumber or otherwise transfer or dispose of
(collectively, "Transfer"), or contract to Transfer, any shares of Common
Stock or any other securities convertible into or exchangeable for shares
of Common Stock, or any other equity securities of the Company owned by him
or her, without the prior written consent of Oppenheimer & Co., Inc.
("Oppenheimer"), except for (i) sales to the several Underwriters pursuant
to this Agreement, (ii) privately negotiated sales to an individual (a
"Restricted Person") of the Company's Common Stock, provided that such
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Restricted Person agrees in writing to be bound by the foregoing
restrictions, or (iii) pursuant to will or the laws of intestate
succession, provided the transferee agrees in writing to be bound by such
restrictions.
(p) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of this
Agreement. The Agreement has been duly and validly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (ii) to the extent that
rights to indemnity or contribution under this Agreement may be limited by
Federal and state securities laws or the public policy underlying such
laws.
(q) Neither the Company nor any of its Subsidiaries is involved in any
labor dispute nor, to the best knowledge of the Company, is any such
dispute threatened, which dispute would have a material adverse effect on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole; and the Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors which would have a material adverse effect on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole.
(r) No transaction has occurred between or among the Company or any of
its Subsidiaries and any of its officers or directors or any affiliate or
affiliates of any such officer or director, that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(s) Neither the Company nor any of its Subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed to or
which might reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of any of the Shares.
(t) Each of the Company and its Subsidiaries has filed all Federal,
state, local and foreign tax returns which are required to be filed through
the date hereof, or has received valid extensions thereof, and has paid all
taxes shown on such returns and all assessments received by it to the
extent that the same are material and have become due.
(u) The Shares have been duly authorized for quotation on the American
Stock Exchange, Inc.
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(v) The Company has complied with all of the requirements and filed
the required forms as specified in Florida Statutes Section 517.075.
(w) The Company is not an "investment company" or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an "investment
company," as each such term is defined in the Investment Company Act of
1940, as amended.
(x) Each of the Company and its Subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are customary in the business in which it is engaged; and
the Company has no reason to believe that it or any Subsidiary will not be
able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
Subsidiaries, taken as a whole, except as described in or contemplated by
the Prospectus.
(y) Neither the Company nor any of its Subsidiaries has, directly or
indirectly, paid or delivered any fee, commission or other sum of money or
item of property, however characterized, to any finder, agent, government
official or other party, in the United States or any other country, which
is in any manner related to the business or operations of the Company or
such Subsidiary, which the Company knows or has reason to believe to have
been illegal under any federal, state or local laws of the United States or
any other country having jurisdiction; and neither the Company nor any of
its Subsidiaries has participated, directly or indirectly, in any boycotts
or other similar practices in contravention of law affecting any of its
actual or potential customers.
(z) The Company meets, and on the Effective Date of the Registration
Statement and on each Closing Date will meet, the conditions for use of
Form S-3 under the Securities Act and the Rules.
5. Representations and Warranties of the Selling Stockholders. Each of the
Selling Stockholders, severally and not jointly, represents and warrants to each
Underwriter that:
(a) Such Selling Stockholder is, and on each Closing Date will be, the
sole lawful owner of the Shares to be sold by it hereunder, and has, and on
such date will have, good and marketable title to the Shares to be sold by
such Selling Stockholder hereunder, free and clear of any lien, charge,
claim, encumbrance, security interest, stockholders' agreement, voting
trust, restriction on transfer or other defect in title, except for the
stockholders' agreement and voting trust agreement described in the
Prospectus, provided that all restrictions on the sale of the Shares as
contemplated hereby have been waived and the purchasers of the Shares shall
acquire the Shares free of such agreements and restrictions as more fully
provided in Section 5(b) hereof.
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(b) Such Selling Stockholder has, and on each Closing Date will have,
full legal right, power and authority, and every approval required by law,
to sell, assign, transfer and deliver such Shares in the manner provided in
this Agreement; delivery of certificates for the Shares to be sold by such
Selling Stockholder pursuant hereto will, upon payment therefor, pass good
and valid title thereto to each Underwriter, free and clear of any lien,
charge, claim, encumbrance, security interest, stockholders' agreement,
voting trust, restriction on transfer or other defect in title; and there
are no outstanding options, warrants, rights or other agreements or
arrangements requiring such Selling Stockholder at any time to transfer any
Shares which may be sold to the Underwriters pursuant to this Agreement.
(c) Such Selling Stockholder has duly executed and delivered a power
of attorney (the "Power of Attorney"), in the form heretofore delivered to
the Representatives, appointing J. Morton Davis and Martin A. Bell as such
Selling Stockholder's attorneys-in-fact (the "Attorneys-in-Fact"), each of
them, together or individually, with full power and authority to execute,
deliver and perform this Agreement on behalf of such Selling Stockholder.
(d) Such Selling Stockholder has duly executed and delivered a custody
agreement (the "Custody Agreement"), in the form heretofore delivered to
the Representatives pursuant to which certificates in negotiable form for
the Shares to be sold by such Selling Stockholder under this Agreement were
deposited with Continental Stock Transfer & Trust Company, as a custodian
(the "Custodian"). The Custody Agreement and the Custodian's authority
thereunder and the appointment of the Attorneys-in-Fact are irrevocable and
the obligations of such Selling Stockholder hereunder and under the Custody
Agreement are not subject to termination by such Selling Stockholder,
except as provided in this Agreement, the Power of Attorney or the Custody
Agreement, or by operation of law, whether by the death or incapacity of
such Selling Stockholder (if such Selling Stockholder is an individual),
the death or incapacity of any trustee or executor or the termination of
any trust or estate (if such Selling Stockholder is a trust or estate), the
dissolution or liquidation of any corporation or partnership (if such
Selling Stockholder is a corporation or a partnership), or the occurrence
of any other event. If any event referred to in the preceding sentence
should occur before the delivery of the Shares hereunder, the certificates
for the Shares to be sold by such Selling Stockholder shall be delivered by
the Custodian on behalf of such Selling Stockholder in accordance with the
terms and conditions of this Agreement and the Custody Agreement, and
action taken by the Custodian pursuant to the Custody Agreement shall be as
valid as if such event had not occurred, whether or not the Custodian or
the Attorneys-in-Fact, or any one of them, shall have received notice of
such event.
(e) The execution, delivery and performance of this Agreement, the
Power of Attorney and the Custody Agreement and the consummation of the
transactions to be performed by such Selling Stockholder contemplated
hereby and thereby, including the delivery and sale of the Shares to be
delivered and sold by such Selling Stockholder hereunder and thereunder,
will not conflict with or result in a violation by such Selling Stockholder
of, or constitute a default under, any agreement, indenture or other
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instrument to which such Selling Stockholder is a party or by which it is
bound, or to which any of its properties is subject, nor will the
performance by such Selling Stockholder of its obligations hereunder or
thereunder violate any law, rule, administrative regulation, or decree of
any court or any governmental agency or body, having jurisdiction over such
Selling Stockholder or any of its properties or result in the creation or
imposition of any lien, charge, claim, security interest, encumbrance or
restriction whatsoever upon such Shares.
(f) Except for permits and similar authorizations required under the
Securities Act, the securities or Blue Sky laws of certain jurisdictions,
and such permits and authorizations which have been obtained, no consent,
approval, authorization or order of any court, governmental agency or body,
or financial institution is required in connection with the consummation of
the transactions to be performed by such Selling Stockholder contemplated
by this Agreement, including the delivery and sale of the Shares to be sold
by such Selling Stockholder.
(g) Each of this Agreement, the Power of Attorney and the Custody
Agreement has been duly and validly authorized, executed and delivered by
such Selling Stockholder and constitutes a legal, valid and binding
obligation of such Selling Stockholder, enforceable against such Selling
Stockholder in accordance with its terms, except (i) as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles and (ii)
to the extent that rights to indemnity or contribution under this Agreement
may be limited by Federal and state securities laws or the public policy
underlying such laws.
(h) The sale by such Selling Stockholder of Shares pursuant hereto is
not prompted by any adverse information concerning the Company.
(i) Such Selling Stockholder has not since the filing of the
Registration Statement (i) sold, bid for, purchased, attempted to induce
any person to purchase, or paid anyone any compensation for soliciting
purchases of, the Common Stock or (ii) paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of the
Company, except for the sale of the Shares by the Selling Stockholders
under this Agreement.
(j) Such Selling Stockholder has not taken and will not take, directly
or indirectly, any action designed to cause or result in, or which has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.
(k) All information furnished to the Company by such Selling
Stockholder or on such Selling Stockholder's behalf for use in connection
with the preparation of the Registration Statement and Prospectus
(including, without limiting the generality of the foregoing, all
representations and warranties of such Selling Stockholder in such Selling
Stockholder's Power of Attorney and the information relating to such
Selling Stockholder which is set forth in the Registration Statement under
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the caption "Principal and Selling Stockholders") is true and correct and
does not omit any material fact necessary to make such information not
misleading.
6. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 7(A)(a) of this Agreement. The Registration
Statement shall have become effective no later than 5:00 p.m., New York
City time, on the date of this Agreement or such later time and date as
shall be consented to in writing by the Representatives.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
satisfaction of the Representatives.
(c) The representations and warranties of the Company and the Selling
Stockholders contained in this Agreement and in the certificates delivered
pursuant to Section 6(d) and 6(e), respectively, shall be true and correct
when made and on and as of each Closing Date as if made on such date and
the Company and the Selling Stockholders shall have performed all covenants
and agreements and satisfied all the conditions contained in this Agreement
required to be performed or satisfied by it or them at or before such
Closing Date.
(d) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date,
of the chief executive or chief operating officer and the chief financial
officer or chief accounting officer of the Company to the effect that the
signers of such certificate have carefully examined the Registration
Statement, the Prospectus and this Agreement and that the representations
and warranties of the Company in this Agreement are true and correct on and
as of such Closing Date with the same effect as if made on such Closing
Date and the Company has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required to be
performed or satisfied by it at or prior to such Closing Date.
(e) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives and dated such Closing Date,
of each Selling Stockholder, to the effect that such Selling Stockholder
has carefully examined the Registration Statement, the Prospectus and this
Agreement and that the representations and warranties of such Selling
Stockholder contained in this Agreement are true and correct as if made on
and as of such Closing Date, with the same effect as if made on such
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Closing Date, and such Selling Stockholder has performed all covenants and
agreements and satisfied all conditions contained in this Agreement
required to be performed or satisfied by such Selling Stockholder at or
prior to such Closing Date.
(f) The Representatives shall have received on the Effective Date, at
the time this Agreement is executed and on each Closing Date a signed
letter from Grant Thornton LLP addressed to the Representatives and dated,
respectively, the Effective Date, the date of this Agreement and each such
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the
Securities Act and the Rules, that the response to Item 10 of the
Registration Statement is correct insofar as it relates to them and stating
in effect that:
(i) in their opinion the audited financial statements and the
schedules to the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus and
reported on by them comply as to form in all material respects with
the applicable accounting requirements of the Securities Act and the
Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Consolidated Financial Information," "Selected Consolidated Financial
Information," "Capitalization" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," carrying
out certain procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter, a reading of the minutes of the meetings of the
stockholders and directors of the Company (including committees
thereof), and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company, as
to transactions and events subsequent to the date of the latest
audited financial statements, except as disclosed in the Registration
Statement and the Prospectus, nothing came to their attention which
caused them to believe that:
(A) the amounts in "Summary Consolidated Financial
Information," "Selected Consolidated Financial Information,"
"Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," included in the
Registration Statement and the Prospectus do not agree with the
corresponding amounts in the audited financial statements from
which such amounts were derived; or
(B) (x) there were, at a specified date not more than five
business days prior to the date of the letter, any changes in the
short-term or long-term debt of the Company or capital stock of
the Company or any decreases in net assets or in working capital
or the stockholders' equity in the Company, as compared with the
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amounts shown on the Company's audited November 30, 1995 balance
sheet included in the Registration Statement, or (y) for the
period from November 30, 1995 to such specified business date not
more than five business days prior to the date of this letter,
there were any decreases, as compared with the corresponding
period in the preceding year, in net revenues or in the total or
per share amounts of net income in which case the Company shall
deliver to the Representatives a letter containing an explanation
by the Company as to the significance thereof unless said
explanation is not deemed necessary by the Representatives or is
set forth in or contemplated by the Registration Statement.
(iii) on the basis of a reading of the pro forma financial
statements included in the Registration Statement and the Prospectus,
carrying out certain procedures that would not necessarily reveal
matters of significance with respect to the comments set forth in this
clause (iii), inquiries of certain officials of the Company who have
responsibility for financial and accounting matters and proving the
arithmetic accuracy of the application of the pro forma adjustments to
the historical amounts in the pro forma financial statements, nothing
came to their attention that caused them to believe that the pro forma
financial statements included in the Prospectus do not comply in form
in all material respects with the applicable accounting requirements
of Rule 11-02 of Regulation S-X, or that the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements; and
(iv) they have performed certain other procedures as a result of
which they have determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in the Registration
Statement and reasonably specified by the Representatives agrees with
the accounting records of the Company.
References to the Registration Statement and the Prospectus in
this paragraph (f) are to such documents as amended and supplemented
at the date of the letter.
(g) The Representatives shall have received on each Closing Date an
opinion from Bachner, Tally, Polevoy & Misher LLP, counsel for the Company
and the Selling Stockholders, addressed to the Representatives, dated such
Closing Date, stating in effect that:
(A) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. To the best of such counsel's knowledge, except for the
Subsidiaries, the Company has no other subsidiary and does not
control, directly or indirectly, any corporation, partnership, joint
venture, association or other business organization. Each of the
Subsidiaries has been duly organized and is validly existing as a
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corporation in good standing under the laws of the jurisdiction of its
organization. Each of the Company and its Subsidiaries is duly
qualified and in good standing as a foreign corporation in each
jurisdiction in which the character or location of its assets or
properties (owned, leased or licensed) or the nature of its businesses
makes such qualification necessary, except for such jurisdictions
where the failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
(B) Each of the Company and its Subsidiaries has all requisite
power and authority to own, lease and license its assets and
properties and conduct its business as now being conducted and as
described in the Registration Statement and the Prospectus; and the
Company has all requisite corporate power and authority and all
necessary authorizations, approvals, consents, orders, licenses,
certificates and permits, other than those required under the state
Blue Sky laws, to enter into, deliver and perform this Agreement.
(C) The Company has authorized and issued capital stock as set
forth in the Registration Statement and the Prospectus. The
certificates evidencing the Shares are in due and proper legal form
and have been duly issued by the Company. All of the outstanding
shares of Common Stock of the Company have been duly and validly
authorized and have been duly and validly issued and are fully paid
and nonassessable and none of them was issued in violation of any
preemptive or other similar right. To the best of such counsel's
knowledge, except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or arrangement to
issue, any share of stock of the Company or any security convertible
into, exercisable for, or exchangeable for stock of the Company. The
Common Stock and the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(D) The agreement of Mr. Lerner and Blair Investment Banking
stating that, for a period of 180 days from the date of this Agreement
they will not, without Oppenheimer's prior written consent, directly
or indirectly offer, sell (including "short sales"), assign, encumber
or Transfer, or contract to Transfer, any shares of Common Stock, or
any other securities convertible into or exchangeable for shares of
Common Stock or any other equity securities owned by them, except for
(i) sales to the several Underwriters pursuant to this Agreement, (ii)
privately negotiated sales to a Restricted Person of the Company's
Common Stock, provided that such Restricted Person agrees in writing
to be bound by the foregoing restrictions, or (iii) pursuant to will
or the laws of intestate succession, provided the transferee agrees in
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writing to be bound by such restrictions, has been duly and validly
executed and delivered by such persons and constitutes the legal,
valid and binding obligation of each such person enforceable against
each such person in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles.
(E) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement. This Agreement has been duly and
validly authorized, executed and delivered by the Company and
constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except
(i) as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles and (ii) to the extent that rights
to indemnity or contribution under this Agreement may be limited by
Federal or state securities laws or the public policy underlying such
laws.
(F) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the
transactions contemplated hereby (including, without limitation, the
sale by the Selling Stockholders of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or violate or conflict with or result in the breach of any term
or provision of, or constitute a default (or any event which with
notice or lapse of time, or both, would constitute a default) under,
or require consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or
assets of the Company or any of its Subsidiaries pursuant to the terms
of, any indenture, mortgage, deed of trust, note or other agreement or
instrument of which such counsel is aware and to which the Company or
any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of its respective properties or businesses is
bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation of which such counsel is aware or violate
any provision of the Articles of Incorporation or the By-laws of the
Company or the charter or by-laws of any of the Subsidiaries.
(G) To the best of such counsel's knowledge, no default exists,
and no event has occurred which with notice or lapse of time, or both,
would constitute a default, in the due performance and observance of
any term, covenant or condition by the Company or any of its
Subsidiaries of any indenture, mortgage, deed of trust, note or any
other agreement or instrument to which the Company or any of its
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Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective assets or properties or
businesses may be bound or affected, where the consequences of such
default would have a material and adverse effect on the assets,
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as
a whole.
(H) To the best of such counsel's knowledge, neither the Company
nor any of its Subsidiaries is in violation of any term or provision
of its Articles of Incorporation or By-laws, or any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation would have a material adverse
effect on the assets or properties, businesses, results of operations,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
(I) No consent, approval, authorization or order of any court or
governmental agency or body is required for the performance of this
Agreement by the Company or the consummation of the transactions
contemplated hereby, except such as have been obtained under the
Securities Act and such as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Shares by the several Underwriters.
(J) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation before
any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company or any of its Subsidiaries which might have a material
adverse effect upon the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole.
(K) The statements in the Prospectus under the captions
"Description of Capital Stock," "Shares Eligible for Future Sale,"
"Management -- Employment Agreements" and "Principal and Selling
Stockholders" insofar as such statements constitute a summary of
documents referred to therein or matters of law, are fair summaries in
all material respects and accurately present the information called
for with respect to such documents and matters. All contracts and
other documents required to be filed as exhibits to, or described in,
the Registration Statement have been so filed with the Commission or
are fairly described in the Registration Statement, as the case may
be.
(L) The Registration Statement, all preliminary prospectuses and
the Prospectus and each amendment or supplement thereto (except for
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the financial statements and schedules and other financial data
included therein, as to which such counsel expresses no opinion)
comply as to form in all material respects with the requirements of
the Securities Act and the Rules. To such counsel's knowledge, the
documents filed by the Company under the Exchange Act and incorporated
by reference in the Registration Statement and the Prospectus or any
amendment or supplement thereto (except for the financial statements
and schedules and other financial and statistical data included
therein, as to which such counsel expresses no opinion) at the time
they were filed complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder.
(M) The Registration Statement has become effective under the
Securities Act, and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to such counsel's
knowledge, are threatened or contemplated.
(N) Assuming that the Underwriters acquire their respective
interests in the Shares to be sold by the Selling Stockholders in good
faith and without notice of any adverse claims (within the meaning of
Section 8-302 of the Uniform Commercial Code), upon delivery to the
Underwriters of such Shares registered in their names, the
Underwriters will acquire good and marketable title to such Shares
free and clear of all liens, charges, claims, security interests,
encumbrances, pledges, stockholders' agreements, voting trusts and any
other restrictions whatsoever.
(O) To the best of such counsel's knowledge, the execution,
delivery and performance of this Agreement, the Power of Attorney and
the Custody Agreement and the consummation of the transactions to be
performed by each such Selling Stockholder contemplated hereby and
thereby (including, without limitation, the delivery and sale of the
Shares to be delivered and sold by such Selling Stockholder hereunder
and thereunder), will not give rise to a right to terminate or
accelerate the due date of any payment due under, or violate or
conflict with or result in the breach of any term or provision of, or
constitute a default (or any event which with notice or lapse of time,
or both, would constitute a default) under, or require consent or
waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of such Selling
Stockholder pursuant to the terms of any indenture, mortgage, deed of
trust, note or other agreement or instrument of which such counsel is
aware and to which such Selling Stockholder is a party or by which it
or any of such Selling Stockholder's properties or businesses is
bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation of which such counsel is aware or result
in the creation of imposition of any lien, charge, claim, encumbrance,
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security interest or restriction whatsoever upon the Shares to be sold
by such Selling Stockholder.
(P) No consent, approval, authorization or order of any court,
governmental agency or body or financial institution is required in
connection with the performance of this Agreement by each Selling
Stockholder or the consummation of the transactions contemplated
hereby, including the delivery and sale of the Shares to be delivered
and sold by such Selling Stockholder, except such as have been
obtained under the Securities Act and such as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the several Underwriters.
(Q) Each of this Agreement, the Power of Attorney and the Custody
Agreement has been duly and validly, executed and delivered by each
Selling Stockholder and constitutes a legal, valid and binding
obligation of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with its terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (ii) to the extent
that rights to indemnity or contribution under this Agreement may be
limited by Federal and state securities laws or the public policy
underlying such laws.
To the extent deemed advisable by such counsel, they may rely as to matters
of fact on certificates of responsible officers of the Company, the Selling
Stockholders and public officials and on the opinions of other counsel
satisfactory to the Representatives as to matters which are governed by laws
other than the laws of the State of New York, the General Corporation Law of the
State of Delaware and the Federal laws of the United States; provided that such
counsel shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such certificates and
other opinions shall be furnished to the Representatives and counsel for the
Underwriters.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company and the
Selling Stockholders, representatives of the Representatives and representatives
of the independent certified public accountants of the Company, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the
foregoing, no facts have come to the attention of such counsel which lead such
counsel to believe that the Registration Statement at the time it became
effective (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
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to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need
express no belief) on the date thereof contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel
and the Underwriters shall have received from Schulte Roth & Zabel a
favorable opinion, addressed to the Representatives and dated each Closing
Date, with respect to the Shares, the Registration Statement and the
Prospectus, and such other related matters, as the Representatives may
reasonably request, and the Company shall have furnished to Schulte Roth &
Zabel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(i) The Representatives shall have received on each Closing Date a
certificate, addressed to the Representatives, and dated such Closing Date,
of an executive officer of the Company to the effect that the signer of
such certificate has reviewed and understands the provisions of Section
517.075 of the Florida Statutes, and represents that the Company has
complied, and at all times will comply, with all provisions of Section
517.075 and further, that as of such Closing Date, neither the Company nor
any of its affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba.
(j) The Representatives shall have received from each of the
stockholders listed on Schedule IV hereto and each director and executive
officer of the Company the enforceable written agreements described in
Section 4(o).
(k) On each Closing Date, a certificate, dated such Closing Date and
addressed to you, signed by or on behalf of each of the Selling
Stockholders to the effect that the representations and warranties of such
Selling Stockholders in this Agreement are true and correct, as if made at
and as of each Closing Date, and such Selling Stockholder has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied prior to each Closing Date.
(l) The Company shall have furnished or caused to be furnished to the
Representatives such further certificates and documents as the
Representatives shall have reasonably requested.
7. Covenants of the Company. (A) The Company covenants and agrees as
follows:
(a) The Company shall prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under the
Securities Act not later than the Commission's close of business on the
second business day following the execution and delivery of this Agreement,
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or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act, and shall promptly advise the Representatives (i)
when any amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any amendment of the
Registration Statement or the Prospectus or for any additional information,
(iii) of the prevention or suspension of the use of any preliminary
prospectus or the Prospectus or of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and (iv)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The
Company shall not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished the
Representatives a copy for their review prior to filing and shall not file
any such proposed amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it shall be necessary to amend or supplement the Prospectus to comply
with the Securities Act or the Rules, the Company promptly shall prepare
and file with the Commission, subject to the second sentence of paragraph
(a) of this Section 7(A), an amendment or supplement which shall correct
such statement or omission or an amendment which shall effect such
compliance.
(c) The Company shall make generally available to its security holders
and to the Representatives as soon as practicable, but not later than 45
days after the end of the 12-month period beginning at the end of the
fiscal quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company, covering
such 12-month period, which shall satisfy the provisions of Section 11(a)
of the Securities Act or Rule 158 of the Rules.
(d) The Company shall furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof) and to
each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Securities
Act or the Rules, as many copies of any preliminary prospectus and the
Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
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(e) The Company shall cooperate with the Representatives and their
counsel in endeavoring to qualify the Shares for offer and sale under the
laws of such jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the Company shall not
be required in connection therewith, as a condition thereof, to qualify as
a foreign corporation or to execute a general consent to service of process
in any jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(f) For a period of five years after the date of this Agreement, the
Company shall supply to the Representatives, and to each other Underwriter
who may so request in writing, copies of such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock and
to furnish to the Representatives a copy of each annual or other report it
shall be required to file with the Commission.
(g) Without the prior written consent of Oppenheimer, for a period of
180 days after the date of this Agreement, the Company shall not directly
or indirectly, offer, sell (including "short sales"), assign, encumber or
Transfer, or contract to Transfer, any shares of Common Stock, or any other
securities convertible into or exchangeable for shares of Common Stock, or
any other equity securities of the Company, except for (i) the issuance of
shares of Common Stock pursuant to stock options outstanding on the date
hereof or the issuance of shares of Common Stock or stock options thereon
pursuant to the Company's 1992 Stock Option Plan, as amended, (the "Plan"),
(ii) the issuance of shares of Common Stock in connection with the
Company's acquisition (the "GeoDemX Acquisition") of the assets of the
former GeoDemX Corporation, and (iii) the issuance of shares of Common
Stock in connection with any acquisition of another entity. In the event
that during this period, (i) any shares of Common Stock are issued pursuant
to the Plan pursuant to stock options not outstanding on the date hereof,
(ii) any shares of Common Stock are issued in connection with any
acquisition of another entity, or (iii) any registration is effected on
Form S-8 or on any successor form pursuant to stock options not outstanding
on the date hereof, the Company shall obtain the enforceable written
agreement of such grantee or purchaser or holder of such securities that,
for a period of 180 days after the date of this Agreement, such person will
not directly or indirectly, without the prior written consent of
Oppenheimer, offer, sell (including "short sales"), assign, encumber or
Transfer, or contract to Transfer or exercise any registration rights with
respect to, any shares of Common Stock (or any other securities convertible
into or exchangeable for any shares of Common Stock, or any other equity
securities) owned by such person.
(h) The Company shall cause each director and executive officer of the
Company, and each stockholder set forth on Schedule IV to this Agreement to
deliver to the Representatives his or her enforceable written agreement
that, except, in the case of a Selling Stockholder, for the sale of the
Shares to be sold by such Selling Stockholder pursuant to the Registration
Statement, he or she will not, for a period of 180 days after the date of
this Agreement, directly or indirectly, without the prior written consent
of Oppenheimer, offer, sell (including "short sales"), assign, encumber or
Transfer, or contract to Transfer any shares of Common Stock or any other
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securities convertible into or exercisable or exchangeable for, shares of
Common Stock, or any other equity securities of the Company except for (i)
sales to the several Underwriters pursuant to this Agreement, (ii)
privately negotiated sales to a Restricted Person of the Company's Common
Stock, provided that such Restricted Person agrees in writing to be bound
by the foregoing restrictions, or (iii) pursuant to will or the laws of
intestate succession, provided the transferee agrees in writing to be bound
by such restrictions.
(i) On or before completion of this offering, the Company shall make
all filings required under applicable securities laws and by the American
Stock Exchange, Inc. (including any required registration under the
Exchange Act).
(j) The Company shall file timely and accurate reports in accordance
with the provisions of Florida Statutes Section 517.075, or any successor
provision, and any regulations promulgated thereunder, if at any time after
the Effective Date, the Company or any of its affiliates commences engaging
in business with the government of Cuba or any person or affiliate located
in Cuba.
(B) The Selling Stockholders agree to pay, or reimburse if paid
by the Representatives, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs and
expenses incident to the public offering of the Shares and the
performance of the obligations of the Company and of the Selling
Stockholders under this Agreement including those relating to: (i) the
preparation, printing, filing and distribution of the Registration
Statement including all exhibits thereto, each preliminary prospectus,
the Prospectus, all amendments and supplements to the Registration
Statement, the Prospectus, and the printing, filing and distribution
of this Agreement; (ii) the fees and disbursements of counsel for the
Company and the Selling Stockholders and of the Company's independent
public accountants; (iii) the preparation and delivery of certificates
for the Shares to the Underwriters; (iv) the registration or
qualification of the Shares for offer and sale under the securities or
Blue Sky laws of the various jurisdictions referred to in Section
7(A)(e), including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such registration and
qualification and the preparation, printing, distribution and shipment
of preliminary and supplementary Blue Sky memoranda; (v) the
furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to
be so furnished, as may be reasonably requested for use in connection
with the offering and sale of the Shares by the Underwriters or by
dealers to whom Shares may be sold; (vi) the filing fees of the
National Association of Securities Dealers, Inc. in connection with
its review of the terms of the public offering; (vii) the furnishing
(including costs of shipping and mailing) to the Representatives and
to the Underwriters of copies of all reports and information required
by Section 7(A)(f); (viii) all transfer taxes, if any, with respect to
the sale and delivery of the Shares by the Selling Stockholders to the
Underwriters. Subject to the provisions of Section 10, the
Underwriters agree to pay, whether or not the transactions
contemplated hereby are consummated or this Agreement is terminated,
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all costs and expenses incident to the performance of the obligations
of the Underwriters under this Agreement not payable by the Selling
Stockholders pursuant to the preceding sentence, including, without
limitation, the fees and disbursements of counsel for the
Underwriters.
8. Indemnification.
(a) The Company and each Selling Stockholder agree, jointly and severally,
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act against any and all losses, claims, damages
and liabilities, joint or several (including any reasonable investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted), to which
they, or any of them, may become subject under the Securities Act, the Exchange
Act or other Federal or state law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration Statement, the
Prospectus or any amendment thereof or supplement thereto, or arise out of or
are based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising from the sale of
the Shares to any person by such Underwriter if such untrue statement or
omission or alleged untrue statement or omission was made in such preliminary
prospectus, the Registration Statement, the Prospectus, or such amendment or
supplement, and was contained in the last paragraph of the cover page of the
Prospectus, in the paragraph relating to stabilization on the inside front cover
page of the Prospectus or under the caption "Underwriting" in the Prospectus (to
the extent such statements relate to the Underwriters). Notwithstanding the
foregoing, the liability of the Selling Stockholders pursuant to the provisions
of this Section 8(a) shall be limited to an amount equal to the aggregate net
proceeds received by each Selling Stockholder from the sale of the Shares sold
by each Selling Stockholder hereunder. This indemnity agreement will be in
addition to any liability which the Company and each Selling Stockholder may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, the Selling Stockholders, each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement, to the same extent
as the foregoing indemnities from the Company or such Selling Stockholder to
each Underwriter, but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or omission or
alleged untrue statement or omission which was made in any preliminary
prospectus, the Registration Statement, the Prospectus, or any amendment thereof
or supplement thereto, and was contained in the last paragraph of the cover page
of the Prospectus, in the paragraph relating to stabilization on the inside
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front cover page of the Prospectus or under the caption "Underwriting" in the
Prospectus (to the extent such statements relate to the Underwriters); provided,
however, that the obligation of each Underwriter to indemnify the Company or any
Selling Stockholder (including any controlling person, director or officer
thereof), as the case may be, shall be limited to the net proceeds received by
the Company or the Selling Stockholder, as the case may be, from such
Underwriter.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 8(a) or 8(b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was materially prejudiced by the failure to give such notice, but the omission
so to notify such indemnifying party of any such action, suit or proceeding
shall not relieve it from any liability that it may have to any indemnified
party for contribution or otherwise than under this Section. In case any such
action, suit or proceeding shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the defense
thereof. The indemnified party shall have the right to employ its counsel in any
such action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying parties,
(ii) the indemnified party shall have reasonably concluded that there may be a
conflict of interest between the indemnifying parties and the indemnified party
in the conduct of the defense of such action (in which case the indemnifying
parties shall not have the right to direct the defense of such action on behalf
of the indemnified party) or (iii) the indemnifying parties shall not have
employed counsel, as provided above, to assume the defense of such action within
a reasonable time after notice of the commencement thereof, in each of which
cases the fees and expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
9. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 8(a) or 8(b)
for any reason is unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b), then each indemnifying party shall contribute
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to the aggregate losses, claims, damages and liabilities (including any
investigation, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claims asserted) to which the indemnified party may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Selling Stockholders on the one hand and the Underwriters on the other from the
offering of the Shares or, if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Selling
Stockholders and the Underwriters shall be deemed to be in the same proportion
as (x) the total proceeds from the offering (net of underwriting discounts but
before deducting expenses) received by the Selling Stockholders, as set forth in
the table on the cover page of the Prospectus, bear to (y) the underwriting
discounts received by the Underwriters, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company, the Selling
Stockholders or the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company, the Selling Stockholders or the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Selling Stockholders and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters) be liable or responsible for any amount in
excess of the underwriting discount applicable to the Shares purchased by such
Underwriter hereunder less the amount of any damages which such Underwriter has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission which was made in any preliminary
prospectus, the Registration Statement, the Prospectus or any amendment thereof
or supplement thereto; and (ii) the Company shall be liable and responsible for
any amount in excess of the amount set forth in clause (i) of this sentence; and
(iii) in no case shall any Selling Stockholder be liable and responsible for any
amount in excess of the aggregate net proceeds of the sale of the Shares
received by such Selling Stockholder hereunder; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 9, each person, if any, who controls an Underwriter within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act shall
have the same rights to contribution as such Underwriter and each person, if
any, who controls the Company within the meaning of the Section 15 of the
Securities Act or Section 20(a) of the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to clauses (i), (ii) and (iii) in the immediately preceding sentence
of this Section 9. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made against another
party or parties under this Section, notify such party or parties from whom
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contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
10. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives notifying the
Company and the Selling Stockholders at any time:
(a) in the absolute discretion of the Representatives at or before any
Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Representatives will in the future materially disrupt,
the securities markets; (ii) if the Company or any of its Subsidiaries
shall have sustained a loss or interference with its business by fire,
flood, accident, hurricane, earthquake, theft, sabotage or other calamity
or malicious act which is material to the Company and its Subsidiaries,
taken as a whole, whether or not said loss shall have been insured, or by
court or governmental action, order or decree which will, in the opinion of
the Representatives, make it inadvisable or impractical to proceed with the
offering; (iii) if there has been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, whether or not arising in the ordinary course of
business; (iv) if there has occurred any new outbreak or material
escalation of hostilities or other calamity or crisis the effect of which
on the financial markets of the United States is such as to make it, in the
judgment of the Representatives, inadvisable or impractical to proceed with
the offering; (v) if there shall be such a material adverse change in
general financial, political or economic conditions in the United States or
elsewhere or the effect of international conditions on the financial
markets in the United States is such as to make it, in the judgment of the
Representatives, inadvisable or impractical to proceed with the offering;
(vi) if trading in the Shares has been suspended by the Commission or
trading generally on The New York Stock Exchange, Inc., on the American
Stock Exchange, Inc. or the National Association of Securities Dealers,
Inc. Automated Quotation National Market has been suspended or limited, or
minimum or maximum ranges for prices for securities shall have been fixed,
or maximum ranges for prices for securities have been required, by said
exchanges or automated quotation system or by order of the Commission, the
National Association of Securities Dealers, Inc., or any other governmental
or regulatory authority; or (vii) if a banking moratorium has been declared
by any state or Federal authority, or
(b) at or before any Closing Date, that any of the conditions
specified in Section 6 shall not have been fulfilled when and as required
by this Agreement.
If this Agreement is terminated pursuant to any of its provisions, neither
the Company nor any of the Selling Stockholders shall be under any liability to
any Underwriter (except as otherwise provided in Section 7(B)), and no
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Underwriter shall be under any liability to the Company or the Selling
Stockholders except that (y) if this Agreement is terminated by the
Representatives because of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to comply with the terms or to fulfill any
of the conditions of this Agreement, the Company will reimburse the Underwriters
for all out-of-pocket expenses (including the reasonable fees and disbursements
of their counsel) incurred by them in connection with the proposed purchase and
sale of the Shares or in contemplation of performing their obligations hereunder
and (z) no Underwriter who shall have failed or refused to purchase the Shares
agreed to be purchased by it under this Agreement, without some reason
sufficient hereunder to justify cancellation or termination of its obligations
under this Agreement, shall be relieved of liability to the Company, the Selling
Stockholders or to the other Underwriters for damages occasioned by its failure
or refusal.
11. Substitution of Underwriters. If one or more of the Underwriters shall
fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 10) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing Date, then
each of the nondefaulting Underwriters shall be obligated to purchase such
Shares on the terms herein set forth in proportion to their respective
obligations hereunder; provided, that in no event shall the maximum number
of Shares that any Underwriter has agreed to purchase pursuant to Section 1
be increased pursuant to this Section 11 by more than one-ninth of such
number of Shares without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then the
Company shall be entitled to an additional business day within which it
may, but is not obligated to, find one or more substitute underwriters
reasonably satisfactory to the Representatives to purchase such Shares upon
the terms set forth in this Agreement.
In any such case, either the Representatives or the Company shall have the
right to postpone the applicable Closing Date for a period of not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or Prospectus)
may be effected by the Representatives and the Company. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
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<PAGE>
Underwriters shall exceed 10% of the Shares that all the Underwriters are
obligated to purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this Section
within the period stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate with respect to
the Shares to be purchased on such Closing Date without liability on the part of
any nondefaulting Underwriter to the Company or the Selling Stockholders, and
without liability on the part of the Company or the Selling Stockholders, except
in both cases as provided in Sections 7(B), 8, 9 and 10. The provisions of this
Section shall not in any way affect the liability of any defaulting Underwriter
to the Company, the Selling Stockholders or to the nondefaulting Underwriters
arising out of such default. A substitute underwriter hereunder shall become an
Underwriter for all purposes of this Agreement.
12. Miscellaneous. The respective agreements, representations, warranties,
indemnities and other statements of the Company or its directors or officers, of
the Selling Stockholders and of the Underwriters set forth in or made pursuant
to this Agreement shall remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or the
Selling Stockholders or any of the officers, directors or controlling persons
referred to in Sections 8 and 9 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 7(B), 8, 9 and 10 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters,
the Company and the Selling Stockholders and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the Underwriters and the Company, and directors and officers
of the Company, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares from any
Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing and mailed or
delivered or by telephone, telex or facsimile transmission if subsequently
confirmed in writing, (a) if to the Representatives, c/o Oppenheimer & Co.,
Inc., Oppenheimer Tower, World Financial Center, New York, New York 10281
Attention: Mark A. Leavitt; (b) if to the Company or the Selling Stockholders,
to the Company's agent for service as such agent's address appears on the cover
page of the Registration Statement.
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<PAGE>
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York without regard to principles of conflict of laws.
This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement among
us.
Very truly yours,
AMERICAN LIST CORPORATION
By:_________________________
Name:
Title:
SELLING STOCKHOLDERS NAMED ON
SCHEDULE II ANNEXED HERETO
Confirmed:
By:_________________________
OPPENHEIMER & CO., INC. Attorney-in-Fact for the
FURMAN SELZ Selling Stockholders listed
on Schedule II annexed hereto
Acting severally on behalf of themselves
and as representatives of the several
Underwriters named in Schedule I annexed
hereto.
By: OPPENHEIMER & CO., INC.
By:______________________________
Name:
Title:
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<PAGE>
SCHEDULE I
Number of Firm
Name Shares to Be Purchased
- ---- ----------------------
Oppenheimer & Co., Inc.
Furman Selz
---------------
Total
===============
<PAGE>
SCHEDULE II
SELLING STOCKHOLDERS
Number of Firm
Selling Stockholder Shares to be Sold
- ------------------- -----------------
D.H. Blair Investment Banking Corp. 1,000,000
Martin Lerner 200,000
---------
Total 1,200,000
=========
<PAGE>
SCHEDULE III
OPTION SELLING STOCKHOLDER
Number of Option
Selling Stockholder Shares to be Sold
- ------------------- -----------------
D.H. Blair Investment Banking Corp. 180,000
-------
Total 180,000
=======
<PAGE>
SCHEDULE IV
STOCKHOLDERS EXECUTING CERTAIN
AGREEMENTS PURSUANT TO SECTION 7(A)(h)
D.H. Blair Investment Banking Corp.
[LETTERHEAD OF BACHNER, TALLEY, POLEVOY & MISHER LLP]
March 6, 1996
American List Corporation
330 Old Country Road
Mineola, NY 11501
Gentlemen:
You have requested our opinion with respect to the public offering and sale
by certain stockholders of the Company (the "Selling Stockholders") of 1,200,000
shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock"), of American List Corporation, a Delaware corporation (the "Company"),
pursuant to a Registration Statement on Form S-3 (No. 333-00545) (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), plus an additional 180,000 shares of Common Stock (the "Over-allotment
Shares") subject to an option granted by one of the Selling Stockholders to the
Underwriters to cover over-allotments in connection with the offering.
We have examined originals, or copies certified or otherwise identified to
our satisfaction, of such documents and corporate and public records as we deem
necessary as a basis for the opinion hereinafter expressed. With respect to
such, we have assumed the genuineness of all signatures appearing on all
documents presented to us as originals, and the conformity to the originals of
all documents presented to us as conformed or reproduced copies. Where factual
matters relevant to such opinion were not independently established, we have
relied upon certificates of officers and responsible employees and agents of the
Company.
Based upon the foregoing, it is our opinion that the Shares and the
Over-allotment Shares have been duly and validly authorized and when sold, paid
for and issued as contemplated by the Registration Statement will be duly and
validly issued and fully paid and nonassessable.
We hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement, and to the use of our name as counsel to the Company in
connection with the Registration Statement and in the Prospectus forming a part
thereof. In giving this consent, we do not thereby concede that we come within
the categories of persons whose consent is required by the Act or the General
Rules and Regulations promulgated thereunder.
Very truly yours,
/S/ BACHNER, TALLEY, POLEVOY & MISHER LLP
Bachner, Talley, Polevoy & Misher LLP
